1946-07-05

[Stage Direction]
Mr. W. A. TUCKER (for Mr. Cleaver) moved the first reading of bill No. 244, respecting the Army and Navy Veterans in Canada.
Motion agreed to and bill read the first time.


[Stage Direction]
On the orders of the day:
Mr. JOHN BRACKEN (Leader of the Opposition) :: I wish to direct a question to the Prime Minister. It has to do with the announcement of the peace conference to begin on July 29. The question is this: Has the Prime Minister or the government been invited to that conference and, if so, is it the intention of the Prime Minister to go? Perhaps I might be permitted to observe that in my judgment this country would expect him to go, and I think parliament would expect it. I may add, for those whom I represent, that if he should go we shall be disposed to facilitate the work of the house during his absence.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: May I say to my hon. friend in reply that up to the present no invitation has been received by the government of Canada to be represented at the Paris conference on July 29. I have no doubt that it will come in due course, and as soon as the invitation has been received I shall endeavour to inform the house as to the action the government is prepared to take upon it. May I say to my hon. friend at once that I appreciate the words which he has just addressed to myself and to the house, and thank him for them. What decision may be ultimately reached, as I have just said, will be made known in due course.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: May I answer a question which was addressed to the Minister of Trade and Commerce yesterday by the hon. member for Peel (Mr. Graydon). The question was:
Will the minister make a statement as to what steps are being taken and what progress is being made by the united nations economic and social
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council by way of the preparation for the prospective world conference? Is there a possibility that the conference will be called this year?
The answer to the question is as follows: Following the adoption of a resolution by the economic and social council, the secretary-general of the united nations has announced that arrangements are being made for a preparatory committee to meet in London on the 15th October, 1946, "so that a further constructive step may be taken towards freeing the productive forces of the world."
The following nations are members of the preparatory committee: Australia, Belgium-Luxembourg, Brazil, Canada, Chile, China, Cuba, Czechoslovakia, France, India, Lebanon, the Netherlands, New Zealand, Norway, Union of South Africa, the U.S.S.R., the United States and the United Kingdom. The suggested basis of discussion is as follows:
(a) International agreement relating to the achievement and maintenance of high and stable levels of employment and economic activity; (b) International agreement relating to regulations, restrictions and discriminations affecting international trade; (e) International agreement relating to restrictive business practices; (d) International agreement relating to intergovernmental commodity arrangements; (e) Establishment of an international trade organization, as a specialized agency of the united nations, having responsibilities in the fields of (b), (c) and (d) above.
The secretary-general announced that in view of the scope and complexity of the preparatory work which will be necessary before the international conference on trade and employment can be held, it will not be possible to hold the conference until next year.
Negotiations relating to tariff changes will, it is expected, be held early in 1947. Work is now being done in various countries on this specific aspect of the proposals, but it is not possible for a date to be fixed at this time.
The second question is answered by what I have already said.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: I should like to give the house, such information as I am in a position to give in answer to the question which was asked a day or two ago by my hon. friend opposite as to the further business of the house this session. I would preface anything I have to say by making clear that one or two matters might come up that I have over-{Mr. Mackenzie Kin?.]
looked or have not in mind at the moment, or of which the government has no knowledge at the moment, which will require consideration before the session is over. But I believe I can outline in pretty complete fashion the measures which still remain to be considered, and generally the amount of work which will have to be covered before the session comes to a close.
First of all, I need not enumerate the bills or resolutions which are already on the order paper, and I need not enumerate the measures which are before the Senate. I would regard anything that is now on the order paper either of the House of Commons or of the Senate as part of the business that is still to be completed before the session is over. The chief item of business, of course, will be the consideration of the budget. The debate on the budget will begin on Monday of next week, and it is the intention of the government to have the debate proceed pretty much without interruption, save that possibly one day a week may be devoted to taking up bills which are on the order paper so that a little more latitude may be allowed for consideration apart from debate of certain aspects of the budget debate, also to help keep the order paper cleared of some of the bills which may be accumulating and which it might be well to have before the other house without too much in the way of delay. How long the budget debate may continue I am not in a position to say. I leave it to the members to judge for themselves as to how far it may be advisable for the different parties in the house to seek to agree among themselves as to the amount of time they would wish to take in the discussion of the general resolutions. It may be that by conference between the whips and by agreement of the members of the different parties themselves it would be possible to limit the number of speeches that will be made.
May I make it clear that I do not wish in any way to shorten the business of this session or cause it to be pressed on unduly. Any suggestion I am making is what I believe to be in accordance with the wish of hon. members that we should if possible conclude the business before we get into the autumn. Looking at what there remains to be done I confess that unless there is some kind of organization among the different parties of the house, I see no prospect of the house adjourning for some little time to come. I do think that a little more organization will help to get over that possibility.
There will be in addition to the main debate, the several resolutions and bills based on the budget. Their consideration will take some

Further Legislation
time. They will constitute one of the major subjects of discussion. There are, of course, the estimates that still remain to be passed, and they are considerable in volume.
The next category of measures which may take some little time, it seems to me, are the bills which have to do with veterans' affairs. Some of these measures cannot be introduced until after the committee which has been considering veterans' affairs has made its final report. There are several of these bills. I hear the minister saying twelve. I am prepared to accept that at the moment, but I should be surprised if there may not be more before we are through. However, that brings me to something which I shall state very clearly to the house
Some bills will be necessary which otherwise would not unless it is possible to obtain from the house permission to continue a little longer than is at present provided in the statute the time allotted for the continuance of the National Emergency Transitional Powers Act. As hon. members are aware, that act expires within fifteen days after the meeting of the house, at whatever time parliament reassembles. In considering the situation very carefully the government has come to the conclusion that there are some powers now exercisable under order in council that will have to be continued under special enactments at this session unless the house is agreeable to extending a little longer than is at present provided the powers that are now granted under order in council. I am going to ask the house to consider very carefully whether it would not be prepared to allow the government to have, instead of fifteen days after the reassembling of parliament, a period of sixty days during which such orders in council as it may seem desirable to have maintained, may be continued. It will be apparent from what we have seen elsewhere that were certain powers to have to be discontinued at a definite moment, almost immediately thereafter regret might be experienced that the existing powers had not been continued a little longer. The government does not wish to exercise any powers that are not absolutely necessary. On the other hand we do not wish to run the risk of not having the powers that may be necessary to meet emergent situations that may still continue. I am going to ask on behalf of the government, as I have said, that parliament consider amending the National Emergency Transitional Powers Act in one particular. Section 6 at present reads:
Subject as hereinafter provided, this act shall expire on the thirty-first day of December, one thousand nine hundred and forty-six, if parliament meets during November or December, one
thousand nine hundred and forty-six, but if parliament does not so meet it shall expire on the fifteenth day after parliament first meets during the year one thousand nine hundred and forty-seven . . .
That is the fifteenth day after parliament meets in 1947. The government would like to bring in a measure under which this section would be amended to extend the time to the sixtieth day after parliament meets instead of the fifteenth day after parliament meets.
I realize that in considering this proposed amendment hon. members will wish to know at what time parliament is likely to reassemble.
I believe it would be meeting the wishes of hon. members generally if I were to give an immediate undertaking that, unless something unforeseen may occasion us to call parliament sooner than the time I am going to mention, or something occur which might render it desirable to take an extra week or two before calling parliament, parliament will be called before the end of January, probably the last week in January.. That would mean we would be asking to be authorized to continue in force orders in council with respect to a number of matters that we regard as more or less essential, until sixty days after the time parliament reassembles. If we are not granted that power, of course we shall have to introduce a number of bills to give us authority under statute to continue until that time powers we feel may be essential to meet emergent situations.
For the past several months officers of the Department of Justice and officials of the other departments most directly concerned have had under close examination all the orders in council which derive their authority from these statutes, that is the National Emergency Transitional Powers Act, 1945 and the War Measures Act, with a view to the elimination of those no longer necessary to enable the government to deal effectively with problems of the transition period which are national in scope. As a result I am now in a position to make a report to the house on this important subject and to indicate the extent and nature of the problem, giving certain of the more significant figures involved.
Of the total of 7,103 orders in council under the emergency powers, no less than 4,015 already have been revoked or have expired or are spent. Some 90 more can and will be revoked very shortly. Some 624 will be allowed to expire with the expiry of the National Emergency Transtional Powers Act, 1945. It has been found that 127 can be re-enacted adequately under other statutes. Of the balance of 2,247, some 1,541 are minutes authorizing war duties supplements for government
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employees. The remaining 706 orders in council constitute the real body of the government's existing emergency powers. They cover such miscellaneous and important subjects as the following: the constitution and operation of the various agricultural and fish products boards, by means of which Canadian supplies are maintained and contract commitments met in the critical world food situation; the maintenance and operation of price controls, rationing and distribution; regulations respecting enemy patents and other enemy property; wage control and emergency labour relations regulations: entry into Canada of dependents of ex-service men; the winding up of ex-servicemen's estates; procedure for salvage operations by naval vessels; controls upon the supplies of fuel, timber, steel and construction materials; control of exports, and the operations of the Canadian wheat board. That is not an exhaustive list, but these are specimens.
It will be evident at once that until the peace treaties have been signed and until world conditions have become more settled, many if not all the powers conferred by this group of orders in council will have to be continued for periods of time which will vary according to circumstances. At the same time it will be recognized that it would be a task of major proportions to translate into legislation all the orders in council which in the national interest need to be retained during the transition period.
I might leave the matter at that and give hon. members an opportunity to carefully consider what attitude they may wish to take when the measure is brought forward; but it is the intention of the government to bring in a bill to amend the act as I have just indicated, asking for that extension of time. It may be that hon. members may wish to ascertain the attitude of the government toward some measures I have not mentioned. In connection with anything of the. kind the government will endeavour to give the fullest possible information.
In addition to what I have mentioned as to the bills already on the order paper and those that may come to us from the senate, I should mention that there may be some bills arising out of the reports of the committees of the house. One cannot say exactly what they will be until we know what is contained in the reports of the committees. However, I have here a further list of bills that we expect to bring in and dispose of during the present session. They are bills respecting the financing of the Canadian National Railways; to amend the criminal code; to amend the Immigration Act, consequent upon the Canadian
FMr. Mackenzie King.]
Citizenship Act; respecting the Department of National Defence, having to do with the ministers and deputy ministers of the department; to amend the Canadian broadcasting act; respecting the Canadian information service; to amend the Federal District Commission Act; respecting Quebec branch line construction, Canadian National Railways; respecting the Toronto harbour commissioners; respecting merchant seamen's compensation; to amend the National Housing Act, 1944; to amend the Militia Pension Act; to ratify Canada-United Kingdom tax agreements; re Canadian war crimes regulations; possible legislation respecting Canada's membership in the united nations organization, and a possible amendment to the Superannuation Act.
That is quite a list, but most of the measures I have mentioned are I believe, noncontroversial and will not involve much in the way of discussion. It is nevertheless a lengthy bill of fare, and if we are to conclude the work of the session reasonably soon it will, I think be necessary, as I have said, for the whips of the different parties to meet together and see if they cannot arrange some general plan of organization that will help expedite the business.
Some hon. members have spoken about when we will begin morning sessions.


Mr. MacNICOL:: And Wednesday evening.


William Lyon Mackenzie King: And Wednesday evening, as my hon. friend says. I can see there is a disposition to expedite matters and a readiness to begin morning sessions fairly soon. However, I doubt if it would be wise to attempt the morning sessions until we conclude the debate on the budget. It has been customary not to begin morning sessions until the reports of the different committees have been made to the house, and I should hope that the reports of most committees might be in by the time the debate on the budget is concluded. If that should be so, then I think the government would be prepared, if the house is willing and so desires, to begin morning sessions about that time.
Hon. members will have seen that I have a notice on the order paper to take Wednesday evenings. I have learned, since having the notice inserted, that in some parts of the house there is the feeling that if we are to have morning, afternoon and evening sittings, we ought to have one evening in the middle of the week which we can call our own. If that is so, I shall not press the motion now on the order paper.


John Ritchie MacNicol: I was only Lying to help.

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John Bracken: Mr. Speaker, the Prime Minister lias referred to the programme of work for the remainder of the session, and the means for expediting it. If I understood him correctly he indiqated that the work now on the order paper in the form of bills or resolutions should be proceeded with, that any work before the other chamber should be proceeded with, and that any work arising out of reports of committees should be proceeded with; and has read a dozen or more bills which are still to come before the house. From all that, on top of the budget and the estimates, it is apparent that we have a heavy programme of work still to complete, without adding anything more.
The Prime Minister has indicated further that if the National Emergency Transitional Powers Act is to be discontinued fifteen days after the next session, still another batch of legislation will have to come in at this session; and he has raised the question whether the house would agree to extending that measure from fifteen days to sixty days after the next session meets, in order to obviate the necessity of considering a large number of additional bills at this session. I believe I have stated correctly his summary of the situation.


William Lyon Mackenzie King: Yes.


John Bracken: I would say, speaking
for this party, that in view of the heavy programme we now have before us it would be better to approve the amendment, rather than to have still another lot of legislation, some of which might be contentious, brought before us. But I do that on one condition, and that is that the house meet in January, not in March. If we meet in January instead of March, even with the extension of the Emergency Powers Act from fifteen days to sixty days after the time of opening of the next session, the bill would still terminate as early as under the present legislation. I gather that the Prime Minister, speaking for the government, is prepared to follow the suggestion he has made as to the date of opening the next session. That, suggestion, I believe, meets with the wishes of this section of the house, and I should hope with those of other sections.
No further observations would seem necessary at this time. If the government wishes to hold consultations with respect to the means by which the work of the house can be expedited, we should be glad to sit in either with representatives of the government, or with the whips, or any other persons with authority to speak.


Mr. ANGUS MacINNIS (Vancouver East):: Mr. Speaker, the Prime Minister has outlined a heavy programme of legislation. I would say that if we are going to deal with it, following the ordinary process and giving the consideration which is usually given to legislation of this kind, we should not try to do it by forced marches-that is by sitting morning, noon and night-because we cannot do it properly in that way.
The othey matter to which he referred was the extension of the National Emergency Transitional Powers Act for about sixty days after the house meets. This party has not discussed that point, and I cannot speak for it with authority, although I believe we would be agreeable. I would point out, however, something which perhaps affects hon. members to my right more than it affects us. During the last four or five years, while the Prime Minister was passing these several thousand orders in council to which reference has been made, we were panning the government because it was legislating by order in council. Now we are willing to extend that power for some time longer in order to get home a little earlier. It does not look good to me. If it is wrong to legislate by order in council, then it is wrong to do it even though it would allow us to return to our homes a little earlier.
As to the matter of arranging the business of the house and trying to expedite it in some way, I believe I can say that this group will be ready to assist in that-and when we do, it will include all our members. There will not be any free lances who are not subject to the decisions arrived at.


Mr. CASSELMAN:: What about the agreement last year with regard to closing? You had a lot of free lances then.


Angus MacInnis: No; we carried out our agreement. We were not the party which violated that agreement.


Mr. ROSS (Souris):: You were the first to do it.


Angus MacInnis: Not at all. As to the matter of morning and Wednesday evening sittings, we shall have something to say about that when the proposals in respect thereto come before the house.
Mr. SOLON E. LOW (Peace River): Mr. Speaker, I have little to add to what has already been said about the projected programme, except this, that I think it might be wise if the Prime Minister were to give consideration to having the Wednesday sittings extend to seven o'clock. This would give us four hours instead of three on that day, with the understanding that the members would

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not be called back for the remainder of the evening. In my opinion this extension would serve a usefvd purpose because on Wednesdays we do not get very much done in three hours. Anything we consider is, as a rule, something of an innocuous or unimportant nature. Four hours would give us a chance to do something more important on that day.
So far as the extension of the National Emergency Transitional Powers Act is concerned, I believe I am speaking for this group when I say we would be prepared to support the Prime Minister's suggestion provided that the next session is called in the latter part of January. If it is to be called later than that, then of course the extension would not be wise.
We shall be prepared to work with the Prime Minister in having frequent discussions to see if it is not possible to arrive at decisions which will expedite the business as much as possible, consistent with care.


Mr. KNOWLES:: I should like to ask the Prime Minister if in giving the list of additional bills he forgot the promise made by the Minister of National Health and Welfare (Mr. Claxton) that legislation would be introduced respecting old age pensions. This promise was made on June 24 and will be found reported on page 2793 of Hansard.


William Lyon Mackenzie King: I should like to just look at the promise and then perhaps give my hon. friend a word in relation to it a little later.


Mr. ADAMSON:: Is it the intention of the government to introduce a resolution based upon the recommendations of the special committee on standing orders for expediting the business of the house, made earlier this session and reported in Votes and Proceedings of April 10? Is the committee to sit again?


William Lyon Mackenzie King: If we are anxious to expedite the business of the house I imagine it would be advisable to go on with the legislative programme I announced this afternoon and leave the consideration of the report of the committee on the rules of the house until we see what progress we make with other things.



HOUSING


[Stage Direction]
On the orders of the day:
James Arthur Ross: Mr. Speaker, I should like to ask a question of the Minister of Veterans Affairs, based upon a report in this morning's press to the effect that the

Royal Canadian Mounted Police in Montreal have exposed an alleged black market of homes built for war veterans in a government-approved Veterans Land Act project at Boucherville, across the St. Lawrence river and east of the city of Montreal. The article is headed, "Say Veterans Charged $4,000 Extra for Homes". Will the minister say what foundation there is for this report?
Hon. IAN A. MACKENZIE (Minister of Veterans Affairs): Mr. Speaker, I received no notice of my hon. friend's question. I saw the report in the press this morning. May I inform the hon. member that I received notice in January, before I went west to Winnipeg, and in five minutes I directed the Royal Canadian Mounted Police to have investigations made immediately. Their final report has not yet come in. If any impropriety is discovered, we shall promptly rest the matter with the courts for final disposition.


James Arthur Ross: But the minister has had reports on it?


Mr. MACKENZIE:: We have had suggestions of impropriety, but no final report.



NEGOTIATIONS BETWEEN BRITISH AND CANADIAN GOVERNMENTS

[Stage Direction]
On the orders of the day:
John Bracken: Mr. Speaker, I should like to ask a question of the Minister of Trade and Commerce. Will he inform the house as to the present standing of negotiations between the British and Canadian governments with respect to the sale of Canadian wheat?


Hon. J. A. MacKINNON (Minister of Trade and Commerce):: In addition to the question of the leader of the opposition I have received a somewhat similar inquiry from the hon. member for Melfort (Mr. Wright). In reply I would say that I have nothing to add to the statement I made in the house a few days ago. There is nothing mysterious about the delay. Conversations have just been adjourned for the time being.
1943-44 WHEAT BOARD REPORT-QUESTION OF REFERENCE TO COMMITTEE
On the orders of the day:


Mr. T. J. BENTLEY (Swift Current):: I should like to ask the Minister of Trade and Commerce a question, of which I sent him notice. Is it the intention of the government to refer the 1943-44 wheat board report to the agriculture committee of the house at this session?

Reconstruction Councils


James Angus MacKinnon: No consideration has been given to referring the 1943-44 wheat board report to the agriculture committee, but I see no objection. I am perfectly agreeable to doing this if there is a general desire on the part of hon. members that it should be done. I am not just aware of the formula, but my understanding is that it can be done by any hon. member or members asking the chairman of the agriculture committee that it be done.



SHORT SUPPLY IN CENTRAL PROVINCES

[Stage Direction]
On the orders of the day:
['I thank the hon. member for giving me notice of his question. Yesterday, at the request of Hon. George S. Pearson, Minister of Labour for British Columbia, I appointed an industrial disputes inquiry commission composed of Brigadier Sherwood Lett, K.C. as chairman, C. B. Delbridge, and R. K. Gervin, to deal with the dispute affecting the Vancouver Province division of the Southam Company Limited and the international typographical union.']
John Ritchie MacNicol: I
should like to ask a question of the Minister of Reconstruction. I have not sent him notice, because I know he will be capable of answering it without notice. My question is based upon an interview I had last Saturday with one of the most prominent coal dealers in Toronto. He thoroughly alarmed me as to the serious outlook of obtaining coal for the city during the coming fall and winter. The minister has a thorough knowledge of the situation, and I wish he would reassure the house and the country that there will be ample chance of getting coal.


Right Hon. C. D. HOWE (Minister of Reconstruction and Supply):: I regret that 1 cannot give a more optimistic report than I have given in the past. Shipping is returning to normal; the coal mining situation is normal at present and shipments are much improved. However, I should be a very bold man indeed if I predicted that there would be sufficient coal in any city in the provinces of Ontario and Quebec next winter to meet the full requirements for heating purposes. The government is doing its best to improve the situation. A little later in the session I shall give a more detailed report.



[Stage Direction]
On the orders of the day:
Mr. GORDON GRAYDON (Peel):: For the purpose of bringing the house up to date on the matter I wonder if the Minister of National Defence could inform us approximately how many Canadian service men and women still remain overseas, and also approximately how many Canadian war brides and their children are awaiting transportation from 63260-2001
the United Kingdom* to Canada? Perhaps the minister could indicate when he expects this movement to. be completed.


Hon. DOUGLAS ABBOTT (Minister of National Defence):: My hon. friend was good enough to give me notice of his question. As the house is aware, these figures change almost from day to day. As of June 30 there were approximately 11.500 army personnel and 2.400 air force personnel, or a total of approximately 13.900 still overseas. There were approximately 18,500 women and 5.200 children, or a total of approximately 23,700 still overseas. Our arrangements for shipping continue to be satisfactory. I cannot hazard a prophecy as to the exact date when they will all be returned, but it should be before the end of the year.


RECONSTRUCTION COUNCILS
[Stage Direction]
On the orders of the day:
Mr. H. C. GREEN (Vancouver South):: I should like to direct a question to the Minister of Reconstruction and Supply. Press dispatches in the last day or two have intimated that it is the intention of the government to do. away with the regional reconstruction councils. Is the minister prepared to make a statement on this matter.


Clarence Decatur Howe: It is the intention of the government to do away with the regional reconstruction councils. These councils were established to act as advisers to the government on matters affecting the transition from war to peace. They have served a very useful purpose indeed. They have given the government excellent advice on matters having to do with that transition. To-day the transition has largely been effected. Canada's private construction programme is heavier than was expected with the result that the work of the councils has declined to a point that does not justify continuing them indefinitely; therefore arrangements have been made to terminate their work at an early date.


Howard Charles Green: Did they not have the duty also of advising on research questions and other work of the kind.


Clarence Decatur Howe: Yes. A representative of the research council was attached to each regional council, and this representative will be kept at work in the locality. The services of these representatives have been much in demand, and will not be withdrawn.
Emergency Powers


EMERGENCY POWERS
[Stage Direction]
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: In view of the recent decision of the privy council with regard to a local option case in Ontario and the doubts cast on the power of parliament to pass legislation, and also in view of the fact that provincial rights under section 92 will be interfered with by the extension that is to be asked for and which was referred to to-day by the Prime Minister, may I ask if the provinces will be consulted in regard to this matter?
Right Hon. L. S. ST. LAURENT (Minister of Justice): I am sorry but I cannot agree with the hon. member for Lake Centre as to the construction to be put upon the judgment of the privy council in the Canada Temperance Act case. I do not think it is necessary or desirable to consult the provinces on the extension of the emergency powers legislation for forty-five days when this parliament will be in session in 1947. If it appears that there are matters which should no longer be dealt with on the basis of a national emergency, I think the house will be prepared to trust the government to make the necessary repeals. In my view many of the matters referred to a few moments ago by the Prime Minister present an emergency situation and still require to be dealt with on a national basis. There are only one of two courses to adopt. We should ask parliament to provide by legislation at this session for the situation which may still exist after the fifteenth day after the opening of the next session, or we can wait until the next session to have a look at the situation then and ask parliament to deal with it at that time. I think parliament would probably be in a better position at that time to dispose of these matters than it would be if it attempted now to foresee what might be the requirements of the months of February and March, 1947.


John George Diefenbaker: Is that the reason for the extension?
Mr. ST. LAURENT: Yes.


LABOUR CONDITIONS
[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Is the Minister of Labour in a position to report any progress in settlement of the dispute between the international typo-

graphical union and the Southam newspapers? May I ask in particular about the situation in Vancouver?


Hon. HUMPHREY MITCHELL (Minister of Labour) :: I thank the hon. member for giving me notice of his question. Yesterday, at the request of Hon. George S. Pearson, Minister of Labour for British Columbia, I appointed an industrial disputes inquiry commission composed of Brigadier Sherwood Lett, K.C. as chairman, C. B. Delbridge, and R. K. Gervin, to deal with the dispute affecting the Vancouver Province division of the Southam Company Limited and the international typographical union.



UNEMPLOYMENT INSURANCE ACT


[Stage Direction]
Hon. HUMPHREY MITCHELL (Minister of Labour) moved the third reading of bill No. 243, to amend the Unemployment Insurance Act, 1940.
Motion agreed to and bill read the third time and passed.


[Stage Direction]
Hon. J. A. GLEN (Minister of Mines and Resources) moved the second reading of and concurrence in amendments made by the senate to bill No. 62, to amend the Yukon Placer Mining Act.
He said: Mr. Speaker, this bill which was before the house went to the other place and has come back with several amendments. In section 2 there are two words which I think have been properly deleted. That is, after the word "both" the word "such" has been deleted. I think that adds strength to the section. In subsection 2, the word "shall" has been deleted and the words "may in his discretion" have been substituted therefor. That leaves it in the discretion of the magistrate to confiscate any gold that may be taken. On page 2, in line 5 of the bill, the word "evidence" has been substituted for "proof". On page 2, line 7, the words "has reason to suspect" have been deleted and "has reasonable and probable grounds for believing" have been substituted. That I think adds to the strength of the section. A similar amendment is made in line 8, where the words "has reason to believe that any person" have been inserted. The amended subsection 4 now reads:
Where any peace officer has reasonable and probable grounds for believing that any person has committed or has reason to believe .that any

Export Credits Insurance
person is about to commit an offence described in subsection one or has in his possession or in his belongings any gold . . .
And so forth.
The important amendment made by the senate deals with subsection 5, where the following is inserted:
No female shall be searched pursuant to this section except by a suitable woman who is a peace officer or is authorized by the peace officer to make the search.
That is in line with the practice. I think that these amendments should be concurred in.
Mr. GEORGE BLACK (Yukon):: Mr. Speaker, I have considered the amendments made by the senate to the bill as it passed this house, and I think that their general effect is to improve the bill; therefore they should be accepted. In that I agree with the minister.
Motion agreed to; amendments read the second time and concurred in.



EXPORT CREDITS INSURANCE ACT


[Stage Direction]
The house resumed from Thursday, July 4, consideration of the motion of Mr. MacKinnon for the second reading of bill No. 126, to amend the Export Credits Insurance Act.
James Angus MacKinnon: Mr. Speaker, at eleven o'clock last night the hon. member for Vancouver East (Mr. Maclnnis) suggested that I make a statement on the bill. I am glad to do that.
This bill is being presented as an amendment to the Export Credits Insurance Act for two main purposes: first, in order to extend the authority of the Export Credits Insurance Corporation so that it may offer to Canadian exporters insurance protection equivalent to that which can be obtained by exporters in foreign countries; second, to enlarge the purpose for which the credits granted to foreign governments or their agencies may be used.
The Export Credits Insurance Corporation has been set up under part I of the act to assist in the development and expansion of Canada's export trade by offering Canadian exporters insurance protection against the main risks of loss involved in foreign trade.
The main changes to part I which are being requested as a result of the experience which the corporation has gained during the first six months of its active operations, are as follows:
(a)	To allow the corporation to insure an exporter against any risk of loss under an agreement for the export of goods as well as any risk of loss involved in the actual export of the goods. The original act authorized the corporation to insure an exporter only after the goods had been shipped, whereas it is desirable, in order to promote the increase of Canada's foreign trade, to insure exporters immediately they enter into contracts with foreign buyers:
(b)	To allow the corporation to insure an exporter against all risks of loss involved in foreign trade arising from events which are beyond the control of the exporter, whereas the original act allowed the corporation to insure against certain specific risks only; and
(c)	To allow the corporation to insure all goods which are exported from Canada, whether they be Canadian-produced goods or imported goods which are reexported. The reexport of goods forms a minor but integrated part of Canada's export trade.
These extensions of the insurance protection which should be offered by the corporation have been authorized under order in council P.C. 5845 of August 31, 1945, which order in council will, of course, be cancelled upon passage of this bill.
The amendments to part II of the act are designed chiefly to enlarge the purpose for which credits may be used and fall into three main classes.
(a)	There are first the amendments designed to enable a credit to be used for the purpose of paving for Canadian services. Under the act as it now stands, a credit can only be used for the purpose of paying the cost of Canadian-produced, goods. There has been a demand by some countries for Canadian shipping services, engineering services, etc. and it is considered that the act should be wide enough in terms to meet reasonable demands of this nature.
(b)	The second class of amendments is designed to enable a foreign country to make the credit available to private importers in the country concerned. As the act now stands it is necessary for the foreign government itself or some agency of the foreign government to purchase goods directly from an exporter. It is considered to be most desirable that ordinary channels of trade be established as quickly as possible and that private importers in the various countries to which credits have been granted should get in touch with their opposite numbers in Canada.
(c)	The third class of amendments, enlarging purposes for which credits can be used, would enable foreign governments to purchase Canadian-produced goods from the crown or
Export Credits Insurance

crown corporations such as War Assets Corporation. Under the act a foreign government is required to purchase from an "exporter", and doubt has arisen whether the crown or a crown corporation is an "exporter" within the meaning of the act. It is desirable that foreign governments should be allowed to use the credits to purchase Canadian-produced goods from the crown or agencies of the crown, for example, that foreign governments should be allowed to purchase surplus equipment and supplies from AVar Assets Corporation.
Last evening the hon. member for Peterborough West (Mr. Fraser) asked me a question from which I gathered that he is interested in the views of the Canadian chambers of commerce and of the Canadian Manufacturers Association with regard to the decision of the government to provide export credit insurance. I am glad to say that the Export Credits Insurance Corporation has received the active support and cooperation of the Canadian Manufacturers Association, the Canadian chambers of commerce and the Canadian Exporters Association. At the recent chamber of commerce foreign trade conference held in Hamilton in May, and at the Canadian Manufacturers Association annual convention held in Toronto in June, officials of the Export Credits Insurance Corporation were present to explain the services offered by the corporation. A number of questions were asked which indicated considerable interest in the proposal, but I am informed that no formal resolutions were passed dealing with the matter.
I might add that I was personally present at the annual meeting of the Canadian chambers of commerce at Hamilton in May, and this matter was discussed there informally, and also formally I believe, when I received nothing but the greatest support from people in business so far as this legislation is concerned.


Mr. H. R. JACKMAN (Rosedale):: Undoubtedly every Canadian will support any programme of the government to facilitate exports, particularly in a time of declining employment. There is one point, however, on which the minister may be able to give us some enlightenment. The total income of our people, the so-called gross national product as compiled by the Dominion Bureau of Statistics, is now at least double what it was in normal times. With that amount of purchasing power in the hands of our Canadian people, I believe the total domestic consumption of goods will be much greater than formerly, and it follows that in connection with certain products we as a government or a

parliament may be putting too much emphasis upon the export of certain products which might be used by our own people.
AATiat I am suggesting is that whereas Canadians as a whole used X number of shirts and shoes in 1939, now with the greatly expanded income we may expect to find that those who were on the narrow margin of subsistence, with merely one pair of shoes or one extra shirt, will have a better supply of this world's commodities. Therefore we must realize that Canadian industry must provide for the higher standard of living represented by the present higher national income which we are striving to maintain.
Of course we must direct our greatest attention to facilitating exports of many of our basic raw materials, the products of the mine, the forest and agriculture. But of some of the secondary products of industry I wonder whether we are not taking from our own people and endeavouring to find export markets when we have right at our front door a home market which is always much better than an export market. Perhaps the minister's economists have given some thought to this question. Certainly it is something we should seriously consider when granting insurance credits to companies that manufacture locomotives, let us say, and other products which are not, if I may use the expression, indigenous to Canada, where workmen and products entering into the manufacture of such articles might be used for building homes and supplying other needs for Canadians.
I have been at a loss to follow the working of the Export Credits Insurance Act because I do not find available yet the report of the corporation authorized under that act, namely, the Export Credits Insurance Corporation.


James Angus MacKinnon: It was tabled.


Harry Rutherford Jackman: I inquired for it at the distribution office as late as this morning, but I could not get it there, nor did they have a record of it.


James Angus MacKinnon: I may be wrong, but my understanding is that the report was tabled some weeks ago.


Harry Rutherford Jackman: I shall try to get it from the parliamentary papers branch, but I think it should be made available to all members, and they should receive the usual notification from that department, where one usually obtains such documents. On inquiry of certain business men I have found that the corporation has not been used extensively, though the report may show what the volume has been. I hope that in his reply the minister will give us some idea of the loss up to date. Perhaps

Export Credits Insurance
sufficient time has not yet expired to enable the officials to find out whether or not some of these insurance credits will involve us in any loss, and what the premium cost to the insurers has been. In one or two cases I have heard the criticism that the cost is fairly high. However, I should think the question whether the department has had losses in the running of the corporation might indicate the facts in that regard.
The minister said that the amendment before us will also help to provide working capital to manufacturers in Canada who intend to export their products. If it is necessary, it is a good idea, but I think the state of most corporations in Canada to-day is such that they have adequate working capital. If they are efficient corporations and have come through the war period doing a large volume of business, most of them have sufficient working capital. I should be glad if the minister would let us know just what need this amendment is to provide. Have there been many requests from manufacturers in Canada for payments in advance of finishing the products which they intend to export? As a rule if a company has no working capital it is not a very strong company financially, and it is not strong financially because it is not efficient.
The minister also said that the amendment would include a guarantee of payment to Canadians who are rendering service particularly in shipping to foreign countries. I hope that guaranteeing services of this kind will not run the country into losses, because it is a dangerous thing to guarantee services such as shipping if we cannot compete economically. We also run the danger here, as we do so frequently when governments intervene in business, of having a race with other countries. If we guarantee a country which employs our shipping, then the Scandinavian countries, or Britain, or some other country, must also guarantee their shippers against loss. It is a difficulty which one always runs into when governments take a hand in subsidizing exports, whether of goods or services.
The only other point I wish to draw to the attention of the government has to do with a question which the Canadian Chamber of Commerce has under consideration in a recent issue of their periodical, namely, that they do not look with favour upon the government entering into trade associations with other countries. Their suggestion was that the actual trading should always be left to the individuals or concerns in the particular country, and that the government itself should not become involved in these matters.
Any other questions that I wish to bring to the attention of the minister can be discussed in committee on the relevant sections.


Mr. N. J. M. LOCKHART (Lincoln):: Can the minister indicate the number of employees that will be required to carry on all these services-the advisory council, the corporation, and so forth-and the extent to which he feels that this work is necessary? I may be a little pessimistic, but in looking over some of the returns which have been brought down in answer to hon. members' questions, the thought struck me that here another large group of employees will probably be required. The minister might be able to get experienced men from the wartime prices and trade board, which has 5,106 employees, costing $842,000 a month. That was the number on June 1, and there has been only a small reduction since the first of the year.
I suggest to the minister that the criticism I have received about the setting up of these advisory councils is that a doubt arises in the public mind as to the ramifications of these bodies and whether we are creating other groups of civil servants. Can the minister give us some idea of the personnel which will be required? Then I suggest to him the place from which he could get any help that may be needed.


John Ritchie MacNicol: Mr. Speaker, I wish to say that I support the bill sponsored by the minister; and may I first compliment the hon. member for Rosedale (Mr. Jackman) on his constructive thoughts. The house should take to heart the warnings of the hon. member for Rosedale. In our laudable anxiety to advance and increase foreign trade, we may forget the home market. I believe we have to export on the horizontal line not less than twenty-five per cent of what we produce. That figure may be a little high, but it is approximately correct. Judging from official figures released by the United States, they have to export ten per cent of what they produce; therefore I suppose I am not far out when I say that we have to export twenty-five per cent of what we produce. Any assistance we can give to increasing foreign trade, without doing injury to the home trade, should be given.
I should like to elaborate in a general way on what the hon. member for Rosedale said about our home trade. All our brilliant younger members, perhaps the ablest of them, devote much' of their time to the foreign affairs committee. That is all to the good; but I hope that this house will establish a home affairs committee which will have as its
Export Credits Insurance

chief object the increasing of trade in Canada. One way in which we could do that would be to create more home trade on the Alaska highway. I fear that we are not doing all we should in the matter of development along that great highway, looking to the creation of a great deal of trade.
I agree with the hon. member for Rosedale that our great market is our home market. While supporting foreign trade we must not neglect our major opportunities at home. I notice that gold has been discovered in substantial quantities near Watson Lake. Those who have been over the Alaska highway know that it is one of the most outstanding scenic routes in the world. I can see a great deal of trade along that route if we develop it. I believe that thousands and thousands of United States tourists would go to their great country of Alaska. I may be out of order in making these remarks on the bill now before the house, but I wanted to interject them so that we would not devote so much of our time-I shall not say too much of it- to the question of foreign trade. We must have foreign trade and foreign establishments, but I want to see more attention paid by our brilliant younger members to the development of home trade. I want to see every effort made to create a much wider market in Canada. Having said that I repeat that I am in favour of the general principle of the bill.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Macdonald (Brantford City) in the chair.
On section 1-Preamble repealed.
Mr. BLACKMORE:: Will the minister give us a little exposition of what good he believes this measure is going to do, and why it is worth while passing it?


James Angus MacKinnon: I am not sure whether the hon. member was in the house when I *attempted a few minutes ago to give that information at some length. If the hon. member did not happen to be in his seat I am sure he will find a satisfactory explanation in Hansard.


John Horne Blackmore: I am agreeable to having a summary at this time.


Howard Charles Green: Will the minister give us some idea of just how much money is involved under the Export Audits Insurance Act? It would appear that the policy of the government is to go out and buy export trade. In other words, under this act we are putting up our own money to buy goods produced in Canada to be sold to a foreign country in the hope that that will increase our external

trade indefinitely, and I suppose in the hope that we shall get most of the money back, although I am doubtful as to how much will come back. How much is involved in this legislation? The act provides for guarantees by the dominion government up to $200 million, and for loans to other governments up to $750 million. In other words almost $1 billion is involved here. It may be that we are being reckless with our hundreds of millions of dollars where we should watch carefully the expenditure of a million dollars in another direction. We should know how much is already involved; how many loans have been made; how many guarantees have been given; to whom they have been made, and how much will be involved within the next year.


James Angus MacKinnon: The hon. member is now dealing with part II of the act.


Howard Charles Green: On section 1 of the bill, Air. Chairman, it is customary to have a general discussion of the whole bill.


James Angus MacKinnon: Just as a suggestion, Mr. Chairman, if hon. members are agreeable I should very much prefer to deal with these matters as we come to them. As. a matter of fact part I of the bill is under the direction of the Minister of Trade and Commerce, while part II, with which I am going to attempt to deal also to-day, is under both the Minister of Finance and the Minister of Trade and Commerce. If my hon. friend will agree, it would be very much more satisfactory to me to have his questions dealt with under part II. Just on that point, the loans to which the hon. member has referred have all been passed and approved.


Howard Charles Green: By whom?


James Angus MacKinnon: By this house.


Howard Charles Green: Individual loans are not approved by this house.


James Angus MacKinnon: Under authority
granted by this house. We can give the information asked for, but I suggest that it be given on part II of the bill when we come to it.


Howard Charles Green: I am trying to get at the background of this whole measure, dealing not only with part I but also with part II. The very section which is now under review deals with part II as well as part I.


James Angus MacKinnon: I am not arguing that.


Howard Charles Green: It is a section which deletes the preamble to the bill, and the preamble deals not only with part I but also with part II. It seems obvious that the amendments alter the purpose of the bill to quite a large

Export Credits Insurance
extent, and for that reason the department has found it necessary to repeal the preamble.
I	think we are entitled to an answer to the question I asked a few' moments ago. Tell us just how deeply wTe are involved under the act at the present time, and how deeply we are going to be involved during the coming year.


James Angus MacKinnon: I do not wish to argue the point, because I think I would come out a poor second in an argument with the hon member for Vancouver South.


Howard Charles Green: It all depends on your case. You must have a poor case.


James Angus MacKinnon: No, I think my case is all right. If the hon. member insists, as he has insisted, that this be dealt with now I am quite agreeable. He suggests that this bill grants increased amounts which can be lent by the dominion government to foreign governments or agencies. That is not correct.


Howard Charles Green: That was done last year.


James Angus MacKinnon: I have before me a summary of the loan agreements under pari
II	of the act as at March 31, 1946. I had intended, when in my opinion the proper time had come, to submit this summary to the committee. I should be very glad to place the statement on Hansard after I have referred to it in order to answer my hon. friend's questions. The total purchasing programme amounts to $744,600,000.


Howard Charles Green: Does that mean the amount already lent under the act?


James Angus MacKinnon: The total purchases to be made by the borrowing countries amount to $744,600,000. Of that amount Canada is putting up in credit $577,500,000, the difference being put up in cash by the borrowing countries. That difference totals $170,100,000. Perhaps I should go on and give additional information which might be asked for later. The commitments as at March 31, 1946, total $343,367,000.


Howard Charles Green: What does the minister mean by commitments?


James Angus MacKinnon: The amount of actual purchases made by the borrowing countries. The interim advances amount to $102,048,000, and the amount drawn on the loans up to March 31, 1946, is $67,413,000.


Howard Charles Green: That is the amount that has been actually paid by Canada?


James Angus MacKinnon: Canada has actually made the interim advances and the amounts drawn on the loans, the total of the last two items of $102,048,000 and $67,413,000.


Howard Charles Green: Then we are already committed to expenditures by Canada of approximately $577,000,000?


James Angus MacKinnon: That is correct.


Howard Charles Green: To what countries are those goods going?


James Angus MacKinnon: All the information asked for by the hon. member was presented to this house in a report tabled by the Minister of Finance some days ago. The countries to which these loans have been made are France, Belgium, China, Czechoslovakia, the Netherlands, Netherlands East Indies, Norway and U.S.S.R.


Howard Charles Green: Can the minister give the approximate amount to each country?


James Angus MacKinnon: Yes. The amounts are
as follows:
France	 $242,500,000
Belgium	 100,000,000
China	 60,000,000
Czechoslovakia	 19,000,000
Netherlands	 125,000,000
Netherlands East Indies		15,000,000
Norway	 13,000,000
U.S.S.R	 3,000,000


John Ritchie MacNicol: Nothing to the near east, Egypt, or Palestine?


James Angus MacKinnon: These loans are all apart from the loans to the United Kingdom and the sterling area.


John Ritchie MacNicol: I asked if we had made any arrangements or commitments in the near east, for instance to Algiers or Tunis.


James Angus MacKinnon: I have given the complete list of loans.


John Ritchie MacNicol: But I did not hear any names of countries in the near east.


James Angus MacKinnon: There are none.


The ACTING CHAIRMAN (Mr. Golding):: Has the minister the consent of the committee to place this table on Hansard?


Some hon. MEMBERS:: Agreed.
(See table on following page.)


Harry Rutherford Jackman: Has sufficient time
elapsed to indicate whether recoveries in connection with guarantees or repayment of loans will be good?


James Angus MacKinnon: The hon. member has gone back to a discussion of "corporation", which I understand he has a perfect right to do. During the limited time the act has been in force there has been no real opportunity to establish a record. As a matter of fact no losses have been established.
316S
Export Credits Insurance



SUMMARY OF LOAN AGREEMENTS UNDER PART IX EXPORT CREDITS INSURANCE ACT

[Stage Direction]
Country .	Date of Loan	Total Purchasing Program	Amount of Credit	Amount to be paid in Cash	Position as at March 31, 1946	Commit- ments	Interim Advances	Amount Drawn on LoanApril 9/46 April 12/46 Feb. 7/46 June 26/45 Feb. 5/46 Oct. 9/45 June 25/45 Aug. 21/45	345.000.	000 125.000.	000 72.000.	000 19.000.	000 150.000.	000 18.000.	000 15,600,000 Not applicable	242,500,000 100,000,000 60,000,000 19,900,000 125,000,000 15.000.	000 13.000.	000 3,000,000	102,500,000 25.000.	000 12.000.	000	186,660,000 81.950.000 7.150.000 3.296.000 46.668.000 5.510.000 9.357.000 2.776.000	82,019,000 4,632,000	
25,000,00
							
Czechoslovakia								
							3.192.000 25.150.00 1.800.000 9.495.000 2.776.000
				25,000,000 3,000,000 2,600,000 Not applicable		15,397,000	
Neth. Indies								
Norwav								
							
							
		744,600,000	577,500,000	170,100,000	343,367,000	102,048,000	67,413,000
Mr. STEWART (Winnipeg North):: Who would guarantee a loan to, for instance, the Netherlands East Indies? Is that $15 million guaranteed by the East Indies or by the Netherlands government?


James Angus MacKinnon: This is a direct loan from the government of Canada to the government of the Netherlands East Indies, against which $1,800,000 has been advanced.


Alistair McLeod Stewart: What government would that be precisely?


James Angus MacKinnon: I can understand the reason for the hon. member's question. The loan was made to the government of the day, which is described as the government of the Netherlands Indies, through the Netherlands minister in Ottawa.


Alistair McLeod Stewart: What goods were shipped for that $1,800,000?


James Angus MacKinnon: The principal pur-shases included trucks, motor cars, carriers, flour, and payments for the ferrying of passenger aircraft.


John Ritchie MacNicol: Did we not sell them a large number of oups to catch the rubber sap from rubber trees?


James Angus MacKinnon: I have no record of that as yet. Either the purchase has not yet come through, or it has been financed in some other way.


Alistair McLeod Stewart: Was
any of this material for military purposes?


James Angus MacKinnon: The items speak for themselves. I have no knowledge of any military goods having been shipped to the Netherlands Indies.


Air. QUELCH:: What was the total amount of business done last year under this measure?


James Angus MacKinnon: We are back to part I of the bill. If the hon, member for Vancouver South has not seen the Export Credits Insurance Corporation annual report, which

was tabled on Alay 23, it might be worth while if I were to place some of it on Hansard. It states:
Canadian exports during 1945 were at record levels, but for the most part the volume represented goods purchased by foreign governments and .the United Nations Relief and Rehabilitation Administration, or by shipments financed under mutual aid and by direct Canadian government loans. As a consequence of this situation, which will continue in decreasing measure through 1946 and into 1947, there has not as yet been an opportunity to assess the ultimate demand for the corporation's services. It does mean, however, that the corporation has a most useful period in which to canvass, study, and prepare to meet the situation that will be encountered with the return of more normal trading conditions.
Notwithstanding these conditions, and despite the fact that no extensive effort has been made to publicize its services, the corporation has in the last six months of the fiscal year issued forty-five policies, covering an estimated annual sales volume of over $12 million. Policies have been issued to exporters in the maritimes, central Canada and the west, and cover shipments, to some 60 different countries, of agricultural products, raw materials and manufactured goods. The classification of these policies by estimated export volume is as follows:
Estimated Annual Export Volume	Number of Policies	Amount$25,000 and under	
7 $	62,000$25,000 to $100,000 	
15	875,000$100,000 to $250,000 	
13	2.075,500$250,000 to $1,000,000 . .	
7	3,610,300$1,000,000 and over ....	
3	6,238,00045 $12,860,800	
All the policies issued to March 31, 1946, cover general commodities sold on short credit terms. Quotations have been made on a number of contracts covering capital goods sold on medium-term credit, some of which are pending at the present time.


Victor Quelch: I understand the important part this corporation has to play, especially in the world of to-day where conditions are unsettled. If we want to expand exports we have to make certain that those who export goods are paid for them. After all, inter-

Export Credits hisurance
national trade is a two-way street, with the result that we are keenly interested in the imports which will come into Canada. I understood some form of imports board was established last year. What was the amount of business done by that board, and what are its duties?


James Angus MacKinnon: It was not a board, but rather an imports branch of the department. Its duties are to stimulate imports into Canada. No complete record can be kept of what is actually done.


Victor Quelch: Is it done through
advertising?


James Angus MacKinnon: Perhaps this matter might more properly be discussed when my estimates are before the committee. I might state briefly, however, that the imports branch, working in cooperation with trade commissioners in those countries of the world in which Canada is represented, does its utmost to see that our trade commissioners arrange to let Canadian importers know about goods which, while not available in Canada, are available in surplus quantities in other countries. In this way imports are encouraged.


John Ritchie MacNicol: I have some questions to ask. and if it is not convenient to give the answers under this bill I shall be content to receive them later. The minister has stated that we have given credit of about $240 million to France and about $100 million to Belgium. There was also a credit of some $15 million to the Netherlands East Indies, but in this later case the products shipped were manufactured products. I should like to know what was shipped to France and Belgium. Did we ship only raw materials such as wheat and other products? What may we expect to get back from them? I am thinking of the workers in the plants in my riding where there are perhaps more factories than in any other riding in Canada, and I must be on guard to see that their jobs are not jeopardized by imports from these other countries.


James Angus MacKinnon: The question asked by the hon. member for Davenport should really be asked on the estimates of the department. I would point out that what we actually obtain from France bears no relation to what we sell France as against these credits.


John Ritchie MacNicol: The answer will do when the estimates are before us.


Alistair McLeod Stewart: The minister said that we had extended a line of credit of some $125 million to the Netherlands. Will any part of that credit be used for the purchase of military equipment and material?


James Angus MacKinnon: Up until March 31 the principal Netherlands purchases were trucks, agricultural implements, lead, wheat, leather, horses, seed, paper, meats, hides and various foodstuffs.


Howard Charles Green: I understand that under part I of the act which deals with insurance of export trade there have been forty-five policies issued; also, that there has not been the demand that the government expected there would be for this insurance. Under part II of the act Canada has been committed to extend credits of approximately $577 million, but it has not been suggested how much of that is by way of guarantee and how much by way of loans.


James Angus MacKinnon: There are no guarantees.


Howard Charles Green: None of that is by way of guarantee?


James Angus MacKinnon: No; it is all loans.


Howard Charles Green: We would still have available approximately $175 million in order to make up the total of $750 million by way of loans?


James Angus MacKinnon: As of March 31.


Howard Charles Green: Are further loans being negotiated and, if so, what are they? Will it now be possible for these other countries to purchase goods direct from producers in Canada without the Canadian government lending . the money?


James Angus MacKinnon: A number of other countries have been asking for loans.


Howard Charles Green: What countries?


James Angus MacKinnon: I do not think it would be fair to answer that question just now. I have no special reason for making that answer except that I do not think we should place on the record what countries have approached us informally for loans. While this matter relates to the Department of Finance, I know other countries have approached us for loans and that matter will be dealt with by the Department of Finance. At the present time these are the only loans in existence.
The hon. member for Vancouver South asked about the demand for this legislation. This legislation follows similar legislation which has proved to be extremely helpful to the trade of Great Britain and of the United States. Our legislation is patterned on that of the United Kingdom, and I may say that at
Export Credits Insurance

the present time the United States are amending their legislation along the lines of our legislation. The demand for the loans has been general. We have not received any criticism-and we would be quick to get it if the public were in a critical mood-about this legislation. Everything that has been said has been in commendation of the department for its efforts to follow leads to increase export trade.
Just at this point I think it would be proper if I made a brief statement which has a bearing on some of the remarks which have been made by hon. members to the effect that we are interfering with private business. We are not doing that and there is no intention to do it. I want to emphasize that as strongly as I can. It is contrary to the entire purpose of the Export Credits Insurance Corporation to have the corporation do work that can or should be done by private agencies. The corporation does not invade the field of private enterprise in any way. Its one objective is to provide Canadian exporters with services and facilities that cannot be furnished by private insurance companies.
There are only two insurance companies in Canada, the American Credit Indemnity and the Employers Reinsurance which, in addition to accepting insurance for domestic sales that form the bulk of their business, also insure exports. But these exports must be sent to the United States or Newfoundland if any insurance is to be granted. The Export Credits Insurance Corporation, therefore, while insuring exports to all parts of the world, is willing to exclude the United States and Newfoundland from its contracts on the ground that alternative services from private agencies may be obtained. That is to say, whenever a Canadian exporter wishes to obtain insurance on goods shipped to the United States and Newfoundland, he is advised by the corporation that such insurance can be obtained, if desired, from a private agency. If the Canadian businessman, however, after receiving this information still wishes to use the facilities of the corporation, these are, of course, made available to him by the Export Credits Insurance Corporation. I do not think there could be any more convincing proof of the determination of the Export Credits Insurance Corporation not to invade the field of services rendered by private companies.


Mr. PEARKES:: In listing the items which have been sent to the Netherlands, the minister mentioned trucks and other vehicles. In view of the shortage of motor vehicles and the urgent demand for trucks by veterans

who are trying to reestablish themselves in this country, would the minister give the total number of trucks and motor vehicles which have been sent out to all the countries lie mentioned.


James Angus MacKinnon: I have not that information before me, but I shall be glad to get it and give it later.


George Randolph Pearkes: That would be satisfactory. I think we should be given some idea of the extent to which trucks and motor vehicles are being sent out of this country.


John George Diefenbaker: I have two questions to ask in regard to trade. Recently I was in Bermuda attending the parliamentary conference, and amongst the matters discussed was trade as between Canada and the colonies. The attitude of all the colonies was that they were desirous of trading with Canada, and Bermuda was most anxious to increase her trade with us. The great difficulty was the shipping situation. One of the great fears of the representatives of the colonies at that conference was that the colonies were to be sacrificed because of the necessity of doing away in part or in whole with the British preference. I think a statement from the minister in regard to the attitude of his department and of the government would be most helpful. The representatives of the colonies are serious about this matter and fearful of what may happen.


William Henry Golding: I would ask the hon. member to keep to the section.


John George Diefenbaker: I am dealing with trade, Mr. Chairman. General questions have been asked, and I am sure the minister has no objection to my asking a question about a matter that is causing grave concern.


William Henry Golding: We are considering an act to amend the Export Credits Insurance Acts.


John George Diefenbaker: You were allowing unusual latitude, Mr. Chairman, up to a few moments ago, until I asked this question. Of course, if it is disconcerting, I shall not press it.


James Angus MacKinnon: Not at all.


John George Diefenbaker: Then, possibly with the consent of the committee, Mr. Chairman, you will allow my question, as well as another one I have to ask at this time. My second question has to do with a news item in the July 8 issue of Time. This is a matter of concern to the farmers of this country, and it has been referred to also by our own press.

Export Credits Insurance
Time's article is to the effect that the wheat agreement between Canada and Great Britain cannot be or is not being entered into at this time because of the antagonism of the United States. The article in Time says:
Canada's family ties with Britain and her neighbourly ties with the U.S.A. were strained last week. The irritant was wheat, which Canada and the U.S.A. have to sell and Britain wants to buy.
It goes on to speak of the visit here of Britain's Food Minister John Strachey and says that he was ready to sign an agreement but:
At this point the U.S.A. stuck its neighbourly nose into the deal . . .
And prevented an agreement being arrived at.
Furthermore, the state department warned that the British loan, still awaiting U.S.A. approval would be endangered.
That article, I think, requires an answer from the minister. The Minister of Agriculture, during the course of his recent trip through western Canada, has spoken of the wheat agreement as though it were an accomplished fact. Is that agreement being held up because of any interference or criticism from the United States as set forth in Time's article.
Mr. MacIvINNON: The hon. member's question is clearly out of order but, since it is now on Hansard, I should like to reply briefly. I am interested in his comments. After his visit to Bermuda, I am glad that we shall have his cooperation and assistance in developing trade with these friendly sister countries, shall I call them, in the Atlantic. The department in every way is pressing for increased mutual trade with these countries.
I have already made two statements on the wheat negotiations, one of them to-day. If there is any truth in the article from which the hon. member has just quoted I can only say that I know nothing of it. The reason why the wheat negotiations are not proceeding at the present time is that it suited the experts of each government and the members of the governments themselves to postpone the discussions for the time being.


[Stage Direction]
Section agreed to.
On section 2-Definitions.
Howard Charles Green: Would the minister explain the new subsection 2 of section 2? It says:
For the purposes of this act a sale of goods to a buyer who intends to export them shall be deemed to be an export ami the seller shall be deemed to be an exporter.
Does that apply to a sale to another firm in Canada or only to a foreign firm which takes over responsibility for the goods in Canada? It is not clear to me.


James Angus MacKinnon: It applies only to a foreign firm.


Howard Charles Green: The section does not make any restriction of that kind. It says "a sale of goods to a buyer", which is broad enough to cover any buyer, Canadian or foreign.


James Angus MacKinnon: I can see where the hon. member may have some reason for doubting the exact meaning, but the intention is that the clause applies only to a foreign buyer.


Harry Rutherford Jackman: The definition of "person" does not include a corporation, although it includes any association. Further on in the act, in section 11 it is provided in paragraph (b), line 9, on page 5 of the bill, that the governor in council may:
(b) make a loan to the government or any agency of the government of any such other country to enable such government or such agency or any person ordinarily resident in such other country to pay the cost of Canadian-produced goods purchased from an exporter or the cost of Canadian services.
Should "corporation" not be included, or does the word "association" embrace a corporation for the purposes of this bill?


James Angus MacKinnon: I am advised that under the Interpretation Act the word ' person" includes a corporation.


Harry Rutherford Jackman: This bill has its own interpretation clause, and definitely says that "person" includes any association or partnership. Whether the definition of "person" in the Interpretation Act overrides that definition, I do not know. It would seem to me it -was specific rather than exclusive. If the minister says otherwise, I am quite content.


[Stage Direction]
Section agreed to.
On section 4-Board of Directors.
Alistair McLeod Stewart: Who
are the directors of the corporation?


James Angus MacKinnon: M. W. Mackenzie,
Deputy Minister of Trade and Commerce, chairman; W. C. Clark, Deputy Minister of Finance; J. A. Chapdelaine, Department of External Affairs; G. F. Towers. Governor of the Bank of Canada; H. T. Aitken, Chief Executive Officer.
Mr. STEWART. (Winnipeg North): What fees are paid?


James Angus MacKinnon: No fees whatever.


[Stage Direction]
Section agreed to.
Export Credits Insurance
[Stage Direction]
Sections 5 and 6 agreed to.
On section 7-Contract of insurance.
John Ritchie MacNicol: Is any part or purpose of the corporation the establishing of depots in foreign countries to which exporters in this country can ship large numbers of trucks or boilers or radiators or tubs or manufacturing equipment, and to which dealers in the other countries can go and purchase and take away such equipment?


James Angus MacKinnon: No.


[Stage Direction]
Section agreed to.
On section 8-Liability under contracts outstanding.
John Horne Blackmore: What page are we on?


William Henry Golding: Page 4.


John Horne Blackmore: Would it not be possible to have the bill drafted in such a form as to enable members to know exactly what it will look like when it is finished? As it stands, certain portions are repealed and other portions substituted therefor, and it would take a Philadelphia lawyer to tell what it really looks like in its completed form. I object strenuously to passing the bill in this way.
Mr. ST. LAURENT: The bill is drawn in the usual form of amending bills. There are rules of the house which govern the manner in which amending statutes are to be submitted. The rule is that if a change is to made in a section or subsection the section is to be repealed and reenacted with the change, and it is usual to set out in the explanatory note showing the form in which it was before. I understand the hon. gentleman's suggestion to be that the whole act should be repealed and reenacted so that he would have the entire statute before him. But that is not required by the rules of the house, and I think it would occasion considerable delay in dealing with amendments if, in order to have an amendment, you had to repeal and reenact the whole statute. It would substantially increase the time devoted to its consideration.


John Horne Blackmore: I grant all that, but my feeling is that this act is an important one, and nothing has been said in my hearing up to the present time, nor anything that I have so far apprehended, that suffices to show why the preamble should be repealed. The preamble is to be repealed, we are told, because it is not consistent with certain amendments made in the act. Well, the preamble looks like a very good one and, if it is to be

repealed, I find it difficult to understand what the act is all about. I raise the question because I think we are going too fast, and I seriously doubt whether many members can get anything like a comprehensive and consistent grasp of that which we are undertaking to do.


James Angus MacKinnon: I am quite sure the
hon. gentleman could not have been in the house when I made my statement. May I point out to him that the preamble has been carried. However, perhaps I shall be allowed to make this brief comment in answer to what he has said. The preamble to the act is being deleted since in itself it has no force and effect and is referred to only in the event of clarification being required in connection with any particular clause of the act. Rather than have the preamble amended to make sure that it clearly reflects all the proposed changes, we are deleting it entirely.


John Horne Blackmore: That is precisely the kind of thing that would fill me with apprehension. May I read what the preamble says? It is true we have already passed it, but I am raising this question because, as I have pointed out, I think we are now going too fast, or at any rate fast enough to tax the ordinary member's ability to follow the proceedings, when the bill is made up of a hodge-podge of repeals and substitutions. The preamble looks consistent to me and, if something is being changed in the act which renders the preamble not in accordance with the act itself, then I find myself really concerned as to what the act will look like when it is finished. May I read the preamble to show what I am driving at?
Whereas it is desirable-


William Henry Golding: Order. We are on section 8.


John Horne Blackmore: Very well, Mr. Chairman; I. am in your hands. However, on behalf of the ordinary member of parliament, I protest. It is entirely impossible to tell where we are going; we are going so fast. If that, is your decision I must fall in line with other members, but once more I say we are going too fast to know what we are doing.


Stanley Howard Knowles: I suggest that one of the reasons we are having difficulty with this is not the form of the admendment on the lefthand .page of the document but the form of the explanatory note on the righthand page. We have had previously during this session bills that have been complicated, but the

Export Credits Insurance
explanatory notes have been sufficient to give us an idea of what we were doing. In this instance, however, the explanatory notes just seem to confuse the picture.


Douglas Charles Abbott: Or perhaps it is the fact that some members have not read the bill ahead of time.


John Horne Blackmore: I cannot hear what the minister is saying. I do not know what he is saying. It is to be understood that when a man speaks just a little above a whisper, so that Hansard gets it and ordinary members do not, it is not fair. I should like to hear what the Minister of National Defence said.


Gordon Graydon: You are not missing as much as you think you are.


An hon. MEMBER:: You would be surprised.


John Horne Blackmore: We are doing a whole lot more than we think we are doing.


Ian Alistair Mackenzie: This is good for beet sugar.


John Horne Blackmore: That is another bit of smart aleckism. One of the reasons why the member for Lake Centre, a few minutes ago, had to raise a question which was so embarrassing was the fact that this house last fall went too fast and committed itself to a great many things it did not dream it was undertaking, and now the chickens are coming home to roost. I suspect that in this measure there are many things which we do not realize we are committing ourselves to, and the speed at which we are going, as well as the general confusion resulting from the hodge-podge we have before us, makes it much more conducive to misapprehension.


[Stage Direction]
Section agreed to.
On section 9-Fiscal year.
John Ritchie MacNicol: I wish to say a word on this section and to compliment the person who drafted the bill upon making this provision:
The fiscal year of the corporation shall be the year ending on the thirty-first day of December.
I hope the day is not far distant when the thirty-first of December will be the end of the year in all government business.


[Stage Direction]
Section agreed to.
On section 10-Statement of accounts.
Harry Rutherford Jackman: May I suggest to the minister that when the annual report comes down next year he be sure to have it distributed to all hon. members as is done with the Bank of Canada report, and not just table it in the
sessional papers' office. Will the minister make it available to all hon. members in their boxes?


James Angus MacKinnon: I should be delighted to see that that is done. My information and my understanding are that copies of the annual report were not only tabled but went to every hon. member. I am sorry if that is not so.


[Stage Direction]
Section agreed to.
On section 11-Definitions.
James Angus MacKinnon: I have four minor amendments to section 11 which I shall ask my colleague, the Minister of Justice, to move.
Mr. ST. LAURENT: I beg leave to move:
That section 11 of the bill be amended by striking out paragraph (a) and substituting therefor the following:
(a) "Canadian-produced goods" means goods wholly or partly produced or manufactured in Canada or goods belonging to His Majesty in right of Canada, or to His Majesty in right of any province.


Alistair McLeod Stewart: Can
the minister give us a definition of "Canadian-produced goods?" What amount of work has to go into them to make them Canadian-produced goods?


James Angus MacKinnon: I did not hear the question.


Alistair McLeod Stewart: Suppose we buy an unfinished article from another country, how much work have we to put into it in this country to put it in the category of Canadian-produced goods?


James Angus MacKinnon: That is not definitely spelled out in any way. Canadian-produced goods are goods which are wholly or partly [DOT] produced or manufactured in Canada.


John Ritchie MacNicol: In Great Britain prior to the war I believe that British-made goods had to have a British content of over fifty per cent.


Howard Charles Green: I take it that this amendment means that goods belonging to a province can now be sold to a foreign country and the dominion government put up the money by way of loan to that country. Why is it necessary to do that? What is the purpose of the amendment?


James Angus MacKinnon: This amendment would permit foreign governments to purchase from cooperative organizations in a province or a provincial crown corporation.


Howard Charles Green: Why does the dominion government have to finance a foreign government to purchase goods from a provincial govern*
Export Credits Insurance

ment in Canada? That is what we are doing. Why cannot a provincial government make its own deal without bringing in-


Mr. PROBE:: Why cannot an exporter do the same thing?


Howard Charles Green: Why does the dominion government have to finance a provincial government?


Ian Alistair Mackenzie: It is all trade for the nation.


James Angus MacKinnon: Provincial governments are not in the foreign loan business. They are not equipped or they have not the facilities to make these loans.


Howard Charles Green: The same thing applies to sales by the dominion. This act is now extended for the first time to cover goods belonging to the dominion. Apparently that is done primarily to cover goods sold by War Assets Corporation. Where does the Canadian buyer come into the picture? Why is War Assets Corporation selling goods to a foreign government and the Canadian government putting up the money? That is what is happening. If we do not get repayment of these loans it will be the Canadian people who will be paying for the goods which go to the foreign countries. Why is it necessary to have War Assets Corporation selling to a foreign country?


Stanley Howard Knowles: If trade is good for the country does it matter who carries it on?


James Angus MacKinnon: These loans are largely for the rehabilitation of the countries to which the loans are made. A province may have goods which are necessary to their rehabilitation, and may be the only available source of supply. We think it good business to arrange so that these goods can be purchased.


Howard Charles Green: The minister did not answer my question about War Assets Corporation. What type of goods is being sold to a foreign government by War Assets Corporation?


James Angus MacKinnon: A variety of products, machinery and supplies, is being sold. It might be hospital equipment. I have not the various items before me, but many items might be sold by War Assets Corporation.


Howard Charles Green: Is there any priority established in connection with the sale of these goods? Does the Canadian get a priority over the foreign government?


James Angus MacKinnon: I do not think that is a proper question to ask when we are discussing this bill; it is a matter for War Assets.


Stanley Howard Knowles: The minister said that the primary purpose of this bill was to rehabilitate devastated countries. If that is so, is it not also true, according to the preamble which we have discarded over the protest of the hon. member for Lethbridge, that part of the purpose is to promote the revival of trade.


James Angus MacKinnon: Certainly.


Stanley Howard Knowles: I just wanted to get back to that and to repeat the question I asked a moment ago. That is the purpose, and if it is recognized that trade is good for all concerned what does it matter whether the exporter on this side is one of those so-and-so private enterprises or the dominion government, a provincial government or a cooperative.


John Ritchie MacNicol: Just one word; I am not going to use the words "so-and-so" because they might mean any adjective which would not look good on Hansard, but I am going to say one word for a provincial government. I thought some hon. member to my left would have said it. In my opinion the Saskatchewan government is doing a good job in processing a large number of horses, I believe about 500,000. I was in the factory-


Howard Charles Green: Did the hon. member eat any of it?


John Ritchie MacNicol: I do not know whether I did or not. In fact the cabinet told me they did and they did not know they were eating it. It was good meat anyway. The doctor in charge said it was excellent meat. I asked where they were shipping it and they told me, Belgium. I can quite understand that Belgium may not be able to buy No. 1 cattle meat, and if they are quite satisfied with horsemeat I see no objection to this government facilitating the sale of 500,000 horses processed in Saskatchewan into meat for Belgium.


James Angus MacKinnon: That is one of the items, I may say.


Stanley Howard Knowles: Since horsemeat has been referred to, may I point out-and I do so for the purpose of asking a question-that it is being processed by a cooperative in Saskatchewan, not by a crown company. My question is this. Is exporting on the part of a cooperative covered by this measure as well?


James Angus MacKinnon: Yes, it is.


Victor Quelch: Can the minister say
whether or not any other loans being made by this corporation will be handled by the international bank of reconstruction after it is set
[Mr. Green. 1

Export Credits Insurance
up? If not, will he explain where the line of demarcation is as between the international bank of reconstructon and this corporation?


James Angus MacKinnon: This corporation is not lending money at all; it is insuring sales. The loans in part II of the act are from government to government.


Stanley Howard Knowles: Probably the last comment by the minister answers the question I was going to ask, but may I go ahead just to get it perfectly clear. I notice away down in section 11, on page 5, paragraph (b) refers to "any person ordinarily resident in such other country." Those words are being added to the act, so that loans now may be made, not only to a government or the agency of a government, but to any person ordinarily resident in such other country. Is it clear that loans are made to persons in other countries only with the backing of the governments of such other countries?


James Angus MacKinnon: I would suggest that we wait until wre reach that section.
Amendment (Mr. St. Laurent) agreed to.
Mr. ST. LAURENT: I move:
That section 11 of the bill be amended by striking out. paragraph (b) and substituting therefor the following:
"(b) 'Canadian services' means services performed by persons ordinarily resident in Canada, or by Ilis Majesty in right of Canada or in right of any province."
Hon. members will notice that the amendment merely adds "or by His Majesty in right of Canada or in right of any province." That is because services are required to handle the goods.


Howard Charles Green: This is the first section of part II of the act, and part II deals with loans to foreign countries. When the bill was originally introduced we understood that those loans would be made only during the period of transition from war to peace, and those words actually appeared in the preamble which is being struck out by the present bill. Has there been any change in the intention? Are these loans still to be made only during the transitional period, or is it now to be a permanent plan running into the years that Canada is to make loans to foreign governments under this measure?


James Angus MacKinnon: This provision merely extends the time to the end of 1947.


Howard Charles Green: I am asking whether there has been any change in governmental policy.


James Angus MacKinnon: There has been no change in the intention.


Howard Charles Green: Then we have been told that a crown company known as Canadian Commercial Corporation is to be set up to assist in the promotion of both import and export trade. A resolution to that effect is on the order paper at the present time. Where does that new corporation fit into the working of the bill we are now considering?


James Angus MacKinnon: It has nothing whatsoever to do with this bill.


Howard Charles Green: It will have nothing whatever to do with the Export Credits Insurance Act?


James Angus MacKinnon: No.
Amendment (Mr. St. Laurent) agreed to.
Mr. ST. LAURENT: I move:
That section 11 of the bill be amended by striking out paragraph (e) and substituting therefor the following:
"(e) 'exporter' means a person, including His Majesty in right of Canada or in right of any province, who exports or agrees to export goods from Canada."


Harry Rutherford Jackman: May I just ask the minister a question, not so much in regard to this particular amendment, but as to the working of the whole act, since many of us are relatively unfamiliar with it. As I understand it, we do not expect that the government or the export corporation will lose any money. It is on a self-supporting basis; I believe that was in the original statement by the minister. This is a measure, including the amendment wre are now discussing, designed to help exporters in Canada, who cannot afford to assume the risk in connection with sales to foreigners during this reconversion period. If that statement is correct, w'hy does the government need to help any financially strong corporation, and more particularly why does it need to help the government itself or. War Assets Corporation, which is an emanation from the crown? In this particular case, why does the dominion government need to help a province, which we must assume is financially strong, in connection with exports to some of these countries which may turn out to be buyers? Unless the dominion government sees that it is going to face a loss on these exports and believes that loss is worth while in order to stimulate employment during the next year or two, I do nol understand why the dominion government, much less a provincial government or even a strong corporation, should receive benefits under this act.


James Angus MacKinnon: I think the hon. member is somewhat confusing the two parts of the act. I would point out that part I, which
Export Credits Insurance

has been passed, is concerned with providing insurance for exporters, that is, firms exporting from Canada to other countries.


Harry Rutherford Jackman: Part II has to do with the corporation, under the act, buying-


James Angus MacKinnon: Part II of the act has nothing whatever to do with the corporation. It provides for the making of loans to foreign countries.
Amendment (Mr. St. Laurent) agreed to.
Mr. ST. LAURENT: I move:
That section 11 of the bill be further amended by striking out paragraph (g) and substituting therefor the following:
"(g) 'security' includes bills, promissory notes, bonds, debentures, and any other evidences of indebtedness, shares and any agreement to pay amounts drawn or to be drawn under a letter of credit."


Howard Charles Green: Will the minister explain what types of securities have been taken up to the present time to cover the various loans that have been made?


James Angus MacKinnon: This has to do with the guarantee provision in part II, and no guarantees have been issued to date.


Howard Charles Green: Have any securities been taken in connection with any of the loans made to foreign governments?	[DOT]


James Angus MacKinnon: None.


Howard Charles Green: Canada has merely a written agreement?


James Angus MacKinnon: We have their promise to pay.


Howard Charles Green: No securities at all?


James Angus MacKinnon: No.
Amendment (Mr. St. Laurent) agreed to.


Stanley Howard Knowles: Before the section carries, will the minister give the assurance I asked for a little while ago that loans to persons in other countries are in all cases either at the request of, or guaranteed by the governments of those other countries. I note the expression "or any person ordinarily resident in such other country".


James Angus MacKinnon: Previously the government had to do the purchasing as well. The loan is made to the government, but a person may do the purchasing for the government. This encourages the return to private trading.


Howard Charles Green: Is it not that the purchasing is done by the private buyer in the foreign country? He does not make the purchase for the foreign government, but the foreign government stands behind his purchase. Is that not what happens?

Mr. ST. LAURENT: The foreign government allows the private purchaser to use the money borrowed on the credit of the foreign government to pay the amount of the purchase.


John Oliver Probe: In other words, it covers all transactions envisaged in this bill as between this and foreign governments?


James Angus MacKinnon: Yes.
Section as amended agreed to.
Sections 12 and 13 agreed to.
On section 14-Coming into force of section 11.


Howard Charles Green: What is the position respecting the loan to the U.S.S.R.? When the minister gave the figures a few minutes ago I think he said that loan amounted to only S3 million.


James Angus MacKinnon: I would refer the hon. member to the report respecting these loans under date of May 28, 1946, which was tabled by the Minister of Finance, and in which a detailed explanation of the loan to the U.S.S.R. is given.


Howard Charles Green: Would the minister give us a summary in so far as the U.SJS.R. is concerned?


James Angus MacKinnon: Agreement was reached with .the government of that country for a small credit to enable it to pay for certain hydro-electric equipment being purchased from Canadian manufacturers.


Howard Charles Green: Has there been any difficulty in promoting trade with Russia?


Ian Alistair Mackenzie: That's a hot one.


Howard Charles Green: I ask that question because I have 'here a press dispatch dated May 2, taken from the Vancouver Sun. The heading is, "Exports to Soviet wait cash or loan; Rail supplies rusting in B.C. while Russia passes up credit". Then in the first paragraph it states:
If the U.S.S.R. wants the flat cars, cranes, rails and other railway equipment now stored on the Pacific coast she can have them by negotiating a loan to pay for them or by making other financial arrangements.
This was the reply of government spokesmen when asked what was delaying shipment of large stock-piles of the khaki-coloured equipment in railway yards at Vancouver and in the Port Mann district.
Could the minister give any further explanation?


James Angus MacKinnon: There is nothing I wish to say in regard to the newspaper report. The only loan made to the U.S.S.R. is one for $3 million. At the present time negotiations for further loans are not in progress.

Judges Act Amendment


Angus MacInnis: Has the whole of the loan of S3 million been used up?


James Angus MacKinnon: Of the total amount,
S2,776,000	has been used.


Victor Quelch: Have applications from any nations for loans from Canada been turned down? If so, from what countries?


James Angus MacKinnon: I do not know of any that have been actually turned down.


Alistair McLeod Stewart: Why has the coming into force of the act been made retroactive?


James Angus MacKinnon: Only this section was made retroactive, and this has been done as a result of operating experience.


Alistair McLeod Stewart: Do I understand that something was done which was ultra vires of the original act?


James Angus MacKinnon: The opinion was expressed that the crown might not be an exporter, and we wanted to make that clear.


Howard Charles Green: Has the crown already been an exporter?


James Angus MacKinnon: Yes.


John Horne Blackmore: What matters are considered by the government before granting a loan to a given applicant? Do we consider the possibility of Canada's being in a position to import the goods that country can produce, or are there other considerations? Might this be called an element in a mutual aid arrangement?


James Angus MacKinnon: There are many reasons for the legislation, one of which is that we ' consider it a contribution toward the rehabilitation of those countries the economies of which have been temporarily disrupted and which have been overrun by the enemy. It is an act on the part of Canada to assist in the rehabilitation of countries which in the past have been good credit risks and which we hope in the future will again be in that position.
These loans are being made also with a view to increasing mutual trade in the future. We have looked at the records of the countries concerned, the experiences through which they have passed and their prospects for the future.


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


[Stage Direction]
Hon. H. F. G. BRIDGES (Minister of Fisheries) moved the second reading of bill No. 164, to amend the Meat and Canned Foods Act.
John Bracken: Has the minister given an explanation of this bill?


Mr. BRIDGES:: I can only repeat what I said when the bill was introduced on June 3. It is a small bill being comprised of just two sections. The first section is to amend the Meat and Canned Foods Act so that it will no longer be compulsory for dealers to have cans of fish or shellfish labeled with the name of the place and/or province where the same are packed. The present requirement causes unnecessary hardship to assemblers who pack or buy a number of products in more than one province, in which case labels have to be made for each type of product and for each province where it was packed. The amendment will make this no longer necessary.
I might also say that the present requirement is now unnecessary, because under the regulations all cans are required to be embossed with the registered mark or number of the cannery in which they are packed.
The second section of the bill substitutes "fish or shellfish" for the word "lobster". This change will provide statutory authority for the establishment of standards of quality and grades for canned fish or shellfish in addition to lobster if the need for such is established to the satisfaction of the governor in council.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on marine and fisheries.

[Stage Direction]
Right Hon. L. S. ST. LAURENT (Minister of Justice) moved that the house go into committee to consider the following resolution:
That it is expedient to present a measure to amend the Exchequer Court Act to increase the number of puisne judges of the court from two to three, and also to present a measure to consolidate and amend the Judges Act to include provision for the appointment, tenure of office and duties of the judges of the dominion and provincial courts, fixing judges' salaries and providing for the payment of salaries, and for the payment of increased salaries, travelling allowances and annuities to judges and annuities to their wives and widows in certain cases and subject to conditions therein set out.
He said: Mr. Speaker, this resolution contemplates the introduction of two bills. The first one will increase the number of judges of the Exchequer Court from three to four, while the second will increase the salary of all superior courts or district court or county court judges by one-third as from January 1,
1947.	As to the first part of the resolution, the Exchequer Court Act was amended in
Judges Act Amendment
[Stage Direction]
1944 to provide the court with three judges instead of two, but that increase has proved to be insufficient to cope expeditiously with the business coming before the court. It is felt that it is desirable to make all possible efforts to have litigation disposed of in an expeditious manner.
Moreover, it is felt that with one more judge on the court it will be possible to restrict the calls being made on judges of provincial courts to preside over or take part in royal commissions, special boards or other agencies it may become necessary to set up from time to time to deal with matters which cannot come before the courts in the usual way but which require to be considered in the judicial and strictly impartial way that characterizes the work of our courts of justice.
Hon. members have from time to time expressed concern over the fact that, especially during the war, it was considered necessary to take judges away from their ordinary duties and ask them to assume other important functions for the state which it was necessary to have discharged by gentlemen of their calibre and repute. I have always shared that concern. But other functions needed to be discharged, and it seemed to be in the interest of the state that they be discharged by the persons best fitted to convince the public that they were being discharged in an impartial, competent and objective way.
Similar situations will probably continue to arise, but I hope that with an additional judge on the exchequer court bench it will be possible to draw more frequently from that bench and less frequently take from their ordinary judicial duties the .judges of the provincial courts.
The second part of the resolution deals with judges' salaries. The salaries now being paid are those which were fixed in 1920. I think it is fair to say that those salaries are only about two-thirds as high as those being paid for like public service in any of the countries where the administration of justice is modelled on the British system. What is proposed here will make some improvement. If we take 100 as the index of the salaries prevailing generally in those countries where the courts are modelled on the British system, our judicial salaries at the present time would rate about 66.
John Bracken: What countries does the minister refer to?
Mr. ST. LAURENT: The United Kingdom, countries of the British commonwealth and the United States of America all of which

have courts modelled more or less on the British system. The provision now being proposed would bring our rate up to about 88. It is suggested that it is time that this should be done. Those hon. members who were here in 1929 will probably remember that this matter received serious consideration at that time, but a depression overtook the country and it was felt that it was not the proper time to consider judicial salaries. Many people consider that this increase is long overdue. For at least twenty years the Canadian bar association has been urging that this matter be dealt with by parliament. The last committee appointed by the Canadian bar association to deal with the matter looks as if it might be a standing committee of this house. Of the six members comprising the committee, one is the hon. member for Vancouver South and another, the hon. member for Lake Centre.


Howard Charles Green: I was not on that committee; I was never called in to any of the committee meetings.
Mr. ST. LAURENT: I have a list of the members of the committee and I read: "Howard C. Green, M.P., Rogers Building, Vancouver."


Howard Charles Green: I was never called to a meeting.
Mr. ST. LAURENT: I hope other members of the committee have been more active than the hon. member for Vancouver South.


Howard Charles Green: I never even got notice of any meeting.
Mr. ST. LAURENT: Perhaps they had such confidence in the Minister of Justice that they did not feel that any further meetings were required since the annual meeting of last summer. Two other members of the committee are the hon. member for Stanstead (Mr. Haekett) and the hon. member for St. Antoine-Westmount (Mr. Abbott).
But quite seriously there is no doubt that we are all highly appreciative of the services rendered to the state by the judicial body. The salaries that are being paid at this time are those that were fixed in 1920. Personally I feel that they are out of line, not only with what are the salaries elsewhere, but also with what prevails for salaries and income in our own country. The suggestion is, now that there is being some relaxation in the controls over wages and salaries, that a provision which will come into effect on January 1. 1947, will not be out of line *with what will

Judges Act Amendment
be happening generally in the readjustment of the post-war period. The increase would be an increase of one-third. The increase would reflect itself automatically in the number of dollars for the retirement pensions but will not be wholly reflected in those provisions. There were provisions in the Judges Act of 1920 whereby judges who were compelled to retire at the age of seventy-five, whether of the federal courts or of the district or count3r courts, would retire on an allowance equal to full salary. It is not proposed to increase the number of dollars for such cases, and it is not proposed to take from the number of dollars provided by the statute as it at present exists. Thus a county or district court judge is entitled to retire on full salary of S5,000, which is the full salary at the * present time, though under this resolution the salary would be increased as from January 1. 1947, his retiring allowance would not go beyond $5,000.


John George Diefenbaker: Is there a provision for the retirement of judges at seventy?
Mr. ST. LAURENT: No; that provision is not changed. The only judges we can retire are judges of the federal courts or judges of the district and county courts. The retiring age is still seventy-five, and I am not proposing to change that at this time.


John George Diefenbaker: Is there a provision for the pension being the same after seventy-five years of age, regardless of the number of years served thereafter by a judge rather than retiring voluntarily at seventy-five?
Mr. ST. LAURENT: That provision has existed heretofore. A judge did not increase his pension rights by serving beyond seventy-five years of age.
If I might be permitted to suggest it, I think the house would be in a better position to consider and discuss the proposals if it allowed the resolution to pass and the bills to be introduced and read a first time. Then they would be immediately available for distribution. Hon. members need not feel they are being committed by the adoption of the resolution, but further discussion might, I think with more advantage take place on the second reading of the bill when hon. members will have before them exactly what the proposals are in the form in which they would appear on the statute book if the bills were adopted.


Harry Rutherford Jackman: Can the minister say how much the increase will amount to in dollars?
Mr. ST. LAURENT: It will be an increase of one-third.


Harry Rutherford Jackman: In dollars?
Mr. ST. LAURENT: One-third of the total amount in dollars that is required for the judicial salaries. I did not make the calculation, and the figures in the estimates include travelling allowances. There is no increase in that regard. It would not be an increase of one-third of the total amount that appears in the estimates but an increase of something of the order of $600,000.


John Bracken: Would the minister say a word about the last sentence of the resolution dealing with the payment of annuities to wives and widows in certain cases?
Mr. ST. LAURENT: There is no change in principle there. The hon. member knows that two years ago we provided that a judge on appointment could declare his option to take for himself in his own name only two-thirds of what he would otherwise be entitled to as pension rights and to have the other one-third placed in the name of his wife. If the pension were thus divided, the survivor kept his or her portion after the death of the consort. There is no change in that regard. But perhaps anticipating an objection such as that made this afternoon by the hon. member for Lethbridge (Mr. Blackmore), instead of amending merely the figures, the bill that is being proposed is a consolidation of the whole act so that hon. members will have before them in the bill just what the Judges Act would look like if the bill were adopted.


John Bracken: It means no change in principle?
Mr. ST. LAURENT: It means no change in principle.


[Stage Direction]
Motion agreed to, and the house went into committee, Mr. Golding in the chair.
Resolution reported, read the second time and concurred in. Mr. St. Laurent thereupon moved to introduce bill No. 249, to amend, the Exchequer Court Act.
Motion agreed to and bill read the first time.
Mr. ST. LAURENT moved for leave to introduce bill No. 250, respecting judges of dominion and provincial courts.
Motion agreed to and bill read the first time.
At six o'clock the house took recess.
31S0
[Stage Direction]
Economic and Financial Policy
After Recess
The house resumed at eight o'clock.


Right Hon. J. L. ILSLEY (Minister of Finance):: I wish to announce to the house several important steps which the government is taking in the economic and financial field in order to prevent undue increases in the cost of living and costs of production, improve the effectiveness of price control, encourage a greater supply of scarce goods which we import from other countries, and generally strengthen the stabilization programme and facilitate an orderly post-war adjustment of the Canadian economy while protecting it from the major effects of adverse developments outside our borders.
It is now almost six months since the Prime Minister in a public statement gave a comprehensive review of the anti-inflation policy in the light of the post-war situation. At that time it was said that essential controls would be maintained so long as emergency economic conditions arising out of or resulting from the war required special action to preserve economic stabilty. But it was also stated that, in order to assist the process of conversion from war to peace production and the many adjustments that had to be made to postwar conditions, a degree of flexibility would be recognized in the administration of price control, and that progress would be made in removing controls that were, no longer necessary or desirable.
Early post-war developments were not unfavourable. Reconversion unemployment did not occur on the scale which some had feared, demobilization proceeded with comparative smoothness and rapidity, and the evils of both inflation and deflation were avoided. In many lines there has been a marked increase in the supply of goods and services available to consumers, and this will be further apparent to civilian consumers in the near future as the special requirements of demobilized members of the armed forces are satisfied. In the case of some other goods, however, various interruptions have seriously delayed the progress of production and distribution.
When parliament gave its approval to the National Emergency Transitional Powers Act last December, it recognized that the emergency economic conditions which prevailed at that time would continue to endanger the

stability of the Canadan economy for at least another year, and that certain measures such as price controls and rationing would have to be continued. Most of us hoped that the situation which made these controls necessary would gradually improve. In recent months and weeks, however, a series of developments of increasing seriousness have combined to create a great and growing threat to our national stabilization programme.
Perhaps the greatest threat to the stability of prices in Canada comes from the rise in prices in the United States and, to a lesser extent, in other countries. The present position with respect to the future of price control in the United States is confused and uncertain. Without presuming to forecast what will happen in the legislative sphere, recent developments would seem to suggest that further increases in prices in that country are likely to occur. Indeed, quite aside from recent congressional developments, the fact is that prices in the United States have been rising steadily for some time and are already at a level substantially above the Canadian level when compared with the normal or pre-war position. In view of the strong commercial ties between this country and the United States, this trend has naturally exercised an increasingly strong upward pressure upon Canadian costs and prices, which we have sought to resist or neutralize as best we could. To a lesser extent ,increases in prices in other countries than the United States have had the same effect. Higher prices for Canadian imports tend to push up production costs and the cost of living in Canada, except to the extent that these increases are offset by subsidy payments, or absorbed by Canadian importers and distributors. Every increase in foreign prices for our own export products also stimulates pressures for increases in the domestic price of such commodities. It tends to divert more of these commodities to the export market, and compels us to strengthen our controls over distribution so as to retain sufficient supplies for use in Canada itself.
But while the greatest threat to the stability of prices in Canada arises outside our own borders, the situation in Canada itself is not free from difficulty. The same tendencies that are present in almost every other country to-day are working in Canada also to raise prices. Most of the price increases which have been authorized in Canada in recent months, and which have naturally given rise to concern on the part of the public, were the result of an accumulation of cost increases (increases in labour and material costs and the like) which have been going on for five years. Moreover,

Economic and Financial Policy
the continued shortage of materials, and shortages of labour in certain lines, are tending to raise costs of production still further and to push prices up.
Still other price increases have resulted from the necessity of encouraging the production of needed but less profitable lines of goods as against the more profitable alternatives available to the same producers. The removal or reduction of subsidy payments on certain imports and domestic products have also given rise to price increases in recent months.
On the other side of the picture, it is clear to every observer that, with employment and consumer spending power being maintained the way they have, the demand for goods has continued to rise ever since the end of the war. In this situation many goods are still relatively scarce and this, too, creates another upward pressure on prices.
The whole combination of actual and prospective price rises abroad, shortages of goods which we urgently need from abroad, and delays in domestic production, taken in conjunction with the difficulties of providing effective administration of controls in a transitional period, undoubtedly threaten to undermine price control in Canada unless strenuous measures of defence are taken now.
Accordingly I wish to announce the government's decision to take four major steps to implement this country's determination to maintain order, stability and independence in its economic and financial affairs. These measures we feel will go a long way toward insulating Canada against unfavourable external conditions and easing the inflationary pressures which are now so strong.
The first of these is the issuance of a long but simple and clear list of all goods and services which continue subject to price control, a list which includes practically all articles of significance in the normal household budget and in the costs of production of farmers, fishermen and other primary producers. The result of this will be to suspend from price control a number of less important articles which create administrative trouble and red tape out of all proportion to their importance.
That list is contained in an order of the wartime prices and trade board, of which I am tabling copies now. It tells exactly what goods are subject to price control. The next question is, how is control to be exercised? As regards domestic products the answer is that the principles of price control remain the same as heretofore, that is, maximum prices are based on prices in effect in October 1941, or
on specific price ceilings or regulated prices named in orders of the prices board, and price increases are in general authorized by the board only where over-all financial need is proved. As regards imported goods, however, a change is being made which constitutes the second of the major announcements which I have to make. Hereafter all imported goods of a kind subject to price control, unless specifically dealt with on another basis in orders of the board, will be priced on the basis of the importer's landed costs, plus a prescribed maximum mark-up in each case which will be somewhat less than the markup normally obtained by distributors of similar domestic goods.
Thirdly, for reasons which I shall discuss at some length later on, it has been decided to adjust the rate of exchange of the Canadian dollar to parity with the United States dollar. This change is effective immediately, that is to say, at 8 p.m. eastern daylight saving time. Banks and other authorized agents of the foreign exchange control board will now buy United States dollars at SI Canadian funds, and sell at $1,005. Similarly, the buying rate for pounds sterling will now be $4.02, and the selling rate $4.04. I wish to draw special attention to the fact that persons accepting United States dollars from tourists should now do so at ,par, that is to say, dollar for dollar, instead of at a premium.
The fourth matter which I wish to mention Is that the policy of paying subsidies will remain in effect in order to prevent undue increases in prices of articles of major importance in the consumer's cost of living or in primary producer's costs of production.
Having described in brief the four main features of this programme, I should like now to give the house and the people of Canada some more detailed description and explanation of the steps we are taking.
First, in order to reassure the public and industry that the government has no intention of dismantling the system of price control so long as the emergency exists, we have prepared a definitive and detailed list of all the goods and services which will remain under price control. I am aware that the decision made several months ago to suspend certain goods and services from price control, necessary as that was, has been followed by a certain amount of public confusion and uneasiness. But it will be agreed as a general principle that, as part of our gradual progress towards decontrol, and in order to lighten the heavy burden of administration, it is desirable to remove price ceilings from items which are

Economic and Financial Policy
trivial or unimportant to most consumers or producers, and from all items which are in such ample supply that price ceilings are no longer needed to keep prices within reasonable bounds. The present measure recognizes this and has the effect of removing from control a substantial number of individual items. This measure has the further merit that, by concentrating its attention on those things which matter most, the prices board will be able to make more effective use of the staff at its disposal.
The list of goods and groups of goods and services still under control is very large, so large that some may feel it should be further reduced. It is intended to cover virtually all of the items which are of everyday importance in the household budget, and many more; and also all the items of chief importance in costs of production. In general, basic materials are included and almost all parts and components of consumer goods. So far as the consumer is concerned, practically all food, fuel, clothing, textiles and leather goods remain under control, as well as the significant items under the headings of kitchenware, hardware, household appliances, radios, automobiles, furniture, house furnishings and building materials. The farmer or fisherman will observe that most of the goods he needs to purchase to assist him in production are also included. The control of rents, I should add, 'remains unchanged.
At this point I want to emphasize that nd increase in the ceiling prices of domestic goods remaining under control is involved in this step. The basis of price control continues to be the prices already authorized by the wartime prices and trade board. Demands for price increases will continue to be resisted, except in cases where the financial need of the producer concerned make some upward adjustment imperative.
The second step which the government has authorized the prices board to take, that relating to prices of imported goods, is one which has been forced by external circumstances over which we have no control. The new system may be briefly described as follows: an order of the prices board will be issued establishing maximum mark-ups over landed costs for a wide list of imported consumer goods. The mark-up will be somewhat less than normal, in order to minimize any adverse effect on consumer prices in Canada, prevent pyramiding of foreign price increases, and remove any temptation to handle imported goods rather than domestic goods if domestic goods are available in adequate quantity.

It will be recalled that, commencing in February last, the prices board has been permitting imports from the United Kingdom and those war-ravaged countries which were so recently our allies to enter this country on somewhat the same terms as those now-extended to all countries. It is expected that as a result of this action, goods which were in danger of being excluded from Canada in the operation of our own price control policy will begin to be imported more freely as conditions of supply improve. We are taking the view that it is better to get the goods, even at a higher price, than to insist that domestic price ceilings must be maintained on imports, which in many cases makes importation impossible. In so doing we are taking a step towards decontrol and providing for >an extension of a two-way system of trade without seriously endangering our price control programme at large. Needless to say, this decision will also assist considerably in easing the administrative burden of the prices board. Applications for specific price increases on imported goods, with the exceptions noted, will no longer be necessary. The general law applicable to such goods is simple and clear, and provides for automatic flexibility in accordance with movements of foreign prices w-hether up or down.
It should be noted, however, that the new system does not apply to imported foods or to imports of goods eligible for subsidy. Existing price control orders will continue to apply to such goods. There are also a number of other classes of goods such as imported motor vehicles, farm implements and household appliances, which will not be in this list because they are already controlled by specific board orders on a somewhat similar basis, or will be so controlled upon application and investigation.
The adjustment in the exchange rate will help to offset the effect of high and rising prices in other countries. It will mean that the cost of imports will be 10 per cent less, in Canadian-dollar terms, than would otherwise have been the case. This is important in respect of machinery, equipment and supplies, and a wide variety of consumers' goods. In fact, we may hope that in some cases there will be an actual decrease below present costs of imports. In any event, as a result of the movement of the rate, actual or prospective increases in other countries' prices of such items as coal, crude oil, gasoline, farm implements, sisal for binder twine, clothing and textiles, citrus fruits, bananas, coffee, tea, sugar, etc., will be restricted in their effect upon Canadian prices, and the task of hold-

Economic and Financial Policy
ing a reasonable level of costs by means of subsidies on essential imports will be kept within manageable proportions.
Another benefit from this change will be that prices of goods which we normally buy from England, France and a number of other countries will now be more in line with our prices with the result that we will receive more goods from them. They will receive more Canadian dollars from their commerce with us and so be less dependent on inter-governmental loans to finance their purchases from us.
Before dealing further with the question of exchange rate, it will be convenient here to comment on the policy with respect to subsidies. The change in import price policy does not affect imports of materials basic to the cost of living which are presently being subsidized. We may find it necessary to increase these subsidy payments, notwithstanding the government's desire to reduce and ultimately eliminate all wartime subsidies of this character. And the same will be true of certain important domestic subsidies. It had originally been intended that the prices board would be able to withdraw from practically all subsidy arrangements by the end of 1946, and actually a good deal of progress has already been made in this direction. However, as I have said, the government feels the time is not opportune for any further major removal of subsidies and, having in mind the likelihood of rising prices in foreign markets, it is possible that we may not be able to reduce our total subsidy bill for this current year to the extent that we had expected.
I come now to the question of the exchange rate. The other proposals, it might be said, are principles of policy, and make for greater administrative efficiency, and for greater public assurance as to what is under price control, and as to how that control is to be exercised, but they do not actually attack the inflationary pressures at their source, except perhaps through subsidies.
Undoubtedly the greatest present source of inflationary pressure lies in the high and still rising price levels of other countries. Prices in other countries directly affect the prices of our exports and imports, and ultimately, through their influence on costs, affect the prices of virtually all our goods and services. Foreign prices are translated into Canadian equivalents through the medium of the exchange rate, and the question of the appropriate rate of exchange for the Canadian dollar is a matter of major importance in its own right, as well as in relation to price control.
Our present situation is that a very marked difference has developed between the general price levels of Canada and the United States, 63260-201
especially if American prices are translated into Canadian funds by the addition of 10 per cent exchange premium. The depreciation of the Canadian dollar by 10 per cent at the beginning of the war caused an immediate increase in many of our prices as compared with the United States. In the course of time our entire price structure might have reflected, on the average, the full 10 per cent difference in the values of our two currencies. The application of price ceilings, however, came sooner in Canada, and had a more restraining influence on price increases here than in the United States. The result was that by the end of the war our general 'level of wholesale prices had increased on the whole no more than theirs, despite the 10 per cent exchange differential. In respect of retail prices and the cost of living the disparity is even more marked, for the United States index had by May of this year increased 33 per cent over the level of August, 1939, compared with an increase of 21 per cent in Canada.
It has become increasingly clear that we could not continue to maintain a price structure which is roughly 10 per cent out of balance in terms of our exchange rate, or, looking at it the other way round, to maintain an exchange rate which is roughly 10 per cent out of line with our price structure.
If world prices, or at least American prices, had declined soon after the war, or showed any likelihood now of an early decline, no doubt it would be better for us to continue without changing the rate; but instead United States prices and costs have risen, and it is most unlikely that a major decline of the general price level can occur during the transitional period when both the foreign and the domestic demand for goods is so strong.
Accordingly, when this trend became clear, we were faced with the alternative of either changing the exchange rate, or of setting in motion, as the process of decontrol continued, an increase in our own price and cost structure, more or less to the American level plus 10 per cent. What this last would mean in terms of high cost of living, social unrest, and wage conflicts, can readily be imagined. The government has decided that such an extra measure of inflation, additional to whatever price increases may otherwise be necessary if we are ever to complete the adjustment to post-war conditions, would have the most serious disruptive effects on the entire economic and social structure of our country, and must be prevented by the only action which in the long run can prevent it.
There are a number of further points I should mention, to avoid misunderstanding. I would not want anyone to think that by this



Economic and Financial Policy
action we were conflicting with the rules of the international monetary fund or using up our freedom of action to make other changes at a later time if we saw fit to do so. We propose to notify the fund that the new rate is the proper initial rate for Canada at the time the fund commences to operate. We believe that the circumstances are such as to make this new rate acceptable to the fund as the initial rate for the Canadian dollar. In such event we retain the same freedom as any other member to move the rate later up or down by as much as 10 per cent without the fund's approval, and by other amounts in accordance with the provisions of the fund agreement, if circumstances should arise which made such a move on our part seem necessary and desirable.
I have emphasized, for the sake of clarity, our future freedom of action in this regard. But we do not propose-no Canadian government would ever propose-to move the exchange rate with every passing wind. The present move is only being made after very careful study and deliberation over a considerable period. I should like to reaffirm what I said on June 17 last, when introducing in this house the foreign exchange control bill, with reference to the great advantages obtainable by maintaining exchange stability for as long a period as economic conditions may justify. To maintain that desirable degree of stability, to avoid erratic and frequent fluctuations, as well as to protect ourselves against speculative or otherwise undesirable capital movements, we must maintain the principles and the administrative machinery of foreign exchange control. The present action does not in any way change that, for exchange control is as necessary at one level of rates as at another.
The alteration of the exchange rate at this time takes on added significance in the light of very recent developments in the United States. Even before the recent difficulties over price control legislation, however, price increases in the United States and further increases in prospect as a result of cost increases, were such as to make the case for restoring parity of exchange a strong one on economic grounds. The rapid deterioration in price control in the United States in recent weeks aggravated the situation, and emphasized the need for our action on practical grounds, to cushion the immediate impact of higher United States prices. But whatever the United States may do in the future to revive the office of price administration and restore price ceilings in the United States, the divergence of the price levels in our two countries 
had already gone too far to permit the continuation of what had become an unrealistic exchange rate.
I have spoken several times of the general level of prices, and of the fact that our price structure as a whole has been prevented, so far, from showing the effects of the 10 per cent exchange premium. The total price level is composed of many different prices, some of which have been held far below the American level; others have, in respect of exports at least, already fully reflected the increases in the United States and the 10 per cent exchange premium as well. It is a fact, therefore, that some industries which export chiefly to the United States have already obtained, for their exports though not for their domestic sales, the benefit of higher American prices which, when converted to Canadian currency, yielded them an additional premium of 10 per cent which will no longer be available.
We must recognize that the disappearance of that premium will have some unfavourable effects for a number of industries. But I think we must also recognize that the action which is being taken is clearly desirable in the interest of the country as a whole, and that therefore it will also be in the long-run interest of Canadian industry. Moreover, this action is being taken at a time when the unfavourable effects will be minimized for practically every one of our great export industries with the exception of gold mining. In the case of agricultural products, for example, export prices are now almost entirely expressed in Canadian dollars rather than in foreign currencies; the same is true of a number of other products, and to the extent that exports to certain markets are still priced in foreign currency, there is in most cases a firm and rising price level in such markets. In any event, our export industries share with our domestic industry the benefits of our stabilization policy and the lower costs of production which it makes possible.
Indeed, unless we absolutely refuse to consider the possibility of ever restoring our dollar to parity with the American dollar regardless of their intrinsic values, it would be difficult to conceive of an occasion more appropriate than the present time.
That completes what I wish to say at this time about specific measures, the strenuous measures which I said earlier the present situation calls for. I believe they are necessary, and that they are also adequate for the job we have to do until full peace-time production is restored and supply is in better balance with demand. But that job is not

Labour Conditions
easy, and success will continue to depend, as we must all recognize it has always depended, upon public understanding and support. That support implies a widespread feeling of responsibility, of restraint, of moderation in individual and collective action.
When all is said and done, the objectives of our national stabilization programme are the preservation of real social values, the protection of the value of real wages, of the real incomes of primary producers, of the real value of the income of pensioners, and teachers and office workers, and of the wartime savings of so many millions of Canadians.
Demands for increases in actual money wages, if pushed to extremes, lead only to conflict and turmoil, and in the end are worthless if they result in skyrocketing prices and a corresponding fall in the value of money. It is to protect the real value of the workman's wage and the purchasing power of the housewife's dollar that we are continuing the struggle to avoid price and wage increases beyond such reasonable amounts as are seen to be justified by changed conditions.
The same is true of farm prices and costs, both the farm household's living costs and the farm operator's costs of production.. The farmer above all has reason to fear a substantial increase in his costs, for one thing because he knows how rigid those costs prove to be at a time when his own prices may be depressed. The government has endeavoured by its policy of floor prices to insure farmers against sharp declines in agricultural prices in the future. But in the meantime, and for the future as well, it will be recognized by all farmers as essential to their welfare to keep their costs of production, I do not say absolutely fixed, but within reasonable limits. For this purpose, no amount of increase in farm prices, to be followed by an inevitable decline in the usual boom and collapse cycle could, possibly provide adequate compensation. It is the preservation of a reasonable balance that we must strive for, and it is by holding in check the farmer's costs that we can do him the best service.
The war, and the experience of other countries, have indeed taught us the vital importance of keeping all inflationary pressures under firm control until supply and demand conditions are in a more normal relationship. The present Canadian programme should strengthen our hands in that regard. We have removed uncertainties and simplified administration by preparing a specific list of goods and services whose prices are under control. We have reaffirmed the principles of price con-63260-2011
trol, and of adjustments where necessity is proved, in respect of Canadian products. We have established a simple and workable pricing principle for imports, which among other things will ensure a continued flow of whatever goods are available from other countries despite fluctuations in foreign prices. We will reduce the impact of increases in foreign prices of the . most essential goods by continuing and if necessary increasing subsidies. Finally, we have taken a step which will reduce the cost of imported goods, or will offset increases that would otherwise occur, through our action in moving the exchange rate to a point which more accurately reflects the true international and domestic value of the Canadian dollar.



LABOUR CONDITIONS


Humphrey Mitchell: With the consent of the house I might announce that I have just been in conversation with Chief Justice Sloan in Vancouver. The terms of settlement in the strike in the interior area box factories in British Columbia are ten cents across the board; time and a half after forty-four hours, and a number of minor adjustments. The basic adjustment is an increase of ten cents an hour across the board, and I should like to say that I think that would be a very fair yardstick for the settlement of industrial disputes in Canada, where they are of a serious nature.



PRIVATE BILLS


[Stage Direction]
Mr. SARTO FOURNIER (Maisonneuve-Rosemont) moved that the house go into committee on bill No. 196, to consolidate and amend the acts relating to La Societe des Artisans Canadiens-Frangais.
Motion agreed to and the house went into committee, Mr. Macdonald (Brantford City) in the chair.
Sections 1 to 16 inclusive agreed to.
On the preamble.
John Ritchie MacNicol: Just to show you, Mr. Chairman, how well you are doing, may I say that while you have been reading out the sections I have been making a search to find the bill, but I have not yet found it.


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

[Stage Direction]
Bill No. 201, for the relief of Marie Olivette Marthe Pepin Giguere.-Mr. Maybank.
Bill No. 202, for the relief of Evelyn Helen Deeb Kouri.-Mr. Maybank.
Bill No. 203, for the relief of Rose Dawson Brady.-Mr. Stuart (Charlotte).
Bill No. 204, for the relief of Shirley Boyd Fuller Dichow.-Mr. Maybank.
Bill No. 205, for the relief of Beatrice Emily Young Crane.-Mr. Maybank.
Bill No. 206, for the relief of Martin Thomas Walsh.-Mr. Maybank.
Bill No. 207, for the relief of Anna Blu-menthal Gillman.-Mr. Maybank.
Bill No. 208, for the relief of Annie Solomon Birnbaum.-Mr. Maybank.
Bill No. 209, for the relief of Katherina Demidovich Zouikin.-Mr. Maybank.
Bill	No.	210,	for	the	relief	of	Herbert
Beatson De Gruchy.-Mr. Maybank.
Bill No. 211, for the relief of Luc Chadillon. Mr. Stuart (Charlotte).
Bill No. 212, for the relief of Mary Innocent Gorman Martin	Gillean.-Mr. Weir.
Bill	No.	213,	for	the	relief	of	Maurice
Olivier Singfield.-Mr. MacLean.
Bill No. 214, for the relief of Myrtle Ethel Anderson Hamill-Mr. Maybank.
Bill No. 215, for the relief of Allan Reginald Duncan Woolley.-Mr. Maybank.
Bill No. 216, for the relief of Ida Portnoff Clarke.-Mr. Maybank.
Bill No. 217, for the relief of May Andria Thistle Shirres Richardson-Mr. Maybank.
Bill	No.	218,	for	the	relief	of	Florence
Margaret Louise Jekill Wiggett.

Mr. MacLean.
Bill	No.	219,	for	the relief	of	Pauline
Frances Beaton Bridgeman.-Mr. Maybank.
Bill No. 220, for the relief of Mildred Helen Cavers Watson.-Mr. Maybank.
Bill No. 221, for the relief of Paul Maurice Chevalier.-Mr. Maybank.
Bill	No.	222,	for	the	relief	of	Dorothy
Catherine Benson Hunter.-Mr. Stuart (Charlotte) .
Bill	No.	223,	for	the	relief	of	Pauline
Francesca Evans Gladwish.-Mr. Emmerson.
Bill No. 224, for the relief of Mary MacDonald Short Browne.-Mr. Maybank.
Bill	No.	225,	for	the	relief	of	Solomon
Shulman.-Mr. Maybank.
Bill No. 226, for the relief of Robert Patrick Warren.-Mr. Maybank.
Bill No. 227, for the relief of Elsie Alvina Hirsdh Sidaway.-Mr. Maybank.
Bill No. 228, for the relief of Sadie Joseph Saikaley Charles.-Mr. Maybank.

Bill No. 229, for the relief of Arthur Corey Thomson.-Mr. Maybank.
Bill No. 230, for the relief of Jean Wilbur Cassils Dawes.-Mr. Maybank.
Bill No. 231, for the relief of Jean St. Claire Macdonald Routledge.-Mr. Maybank.
Bill No. 232, for the relief of John Anderson Hutchins.-Mr. Maybank.
Bill No. 233, for the relief of Ivy May Baylis Lariviere.-Mr. Maybank.
Bill	No.	234,	for	the	relief	of Muriel
Gertrude McKnight Carroll.-Mr. Maybank.
Bill No. 235, for the relief of Erminia Taccani Roncarelli.-Mr. Maybank.
Bill No. 236, for the relief of Violet May Armour Smith.-Mr. Maybank.
Bill	No.	237,	for	the	relief	of	Beatrice
Caroline Lock Norman.-Mr. Maybank.
Bill	No.	238,	for	the	relief	of	Blanche
Belanger Mullin.-Mr. Maybank.
Bill No. 239, for the relief of Alfred Goodman.-Mr. Maybank.
Bill	No.	240,	for	the	relief	of	Charles
Thomson.-Mr. Maybank.
Bill No. 241, for the relief of Hannah Green Turton.-Mr. Maybank.
Bill No. 242, for the relief of Ida Solomon Caplan.-Mr. MacLean.


[Stage Direction]
Hon. PAUL MARTIN (Secretary of State) moved the second reading of bill No. 245, to amend the Department of Public Printing and Stationery Act.
Gordon Graydon: I suggest that the minister ought to give us a full explanation.


Mr. MARTIN:: I did last night.


Gordon Graydon: I must have been out of the house at the time.


Paul Joseph James Martin: Yes; the hon. member was.


Gordon Graydon: Perhaps the minister
would give us a summary.


Paul Joseph James Martin: The purpose of the bill is to increase advances to the king's printer. Some years before the war, the advance was $700,000. The auditor general has had to call the attention of the king's printer to the fact that he was spending an amount greater than that on hand. All we are doing is to put into legislative form something that is now provided for by order in council.


Gordon Graydon: I have no objection to second reading, but I shall have some questions to ask in committee.

Printing and Stationery
Motion, agreed to, bill read the second time and the house went into committee thereon, Mr. Golding in the chair.
On section 1-How expenses shall be met.


Gordon Graydon: In dollars and cents, to what extent has the business in the office of public printing and stationery increased from the time the act was originally passed until the present time, when the maximum expenditure may amount to $2 million? I do not suggest that office is spending $2 million, but that is the amount in prospect.


Paul Joseph James Martin: I have not the figures to show the expenditures when the office of king's printer was established. I would answer, however, by pointing out that the total expenditures by the king's printer, covering both inside and outside printing and stationery, and other miscellaneous revenue, wTere, in 1939, $4,995,000. In 1945-46 it was about $12 million, or almost three times as much. Of course that was due to a great extent to necessarily increased business during the war. The king's printer estimates that, while the amount in 1946-47 will not be in the neighbourhood of $12 million, it will likely be somewhere between $4 million and $12 million. This is largely due to the increased pressure of business and the demands made on the office of the king's printer. In any event, the amount is well over the $2 million advance.


Gordon Graydon: What is the difference between the amount spent by the government for printing in the year before the war broke out and the amount spent in the present year?


Paul Joseph James Martin: I cannot say what it will be next year. However, it will be somewhere between $4 million and $12 million; perhaps about $6 million.


Gordon Graydon: What about the year before the war?


Paul Joseph James Martin: In that year, 1938-39, the
gross turnover was about $5 million.


Ian Alistair Mackenzie: May I point out that this year we have more committees doing more detailed work than has been done at any time in the last fifteen years. They have all asked that their reports be printed.


Gordon Graydon: I fancy the work of printing which can be related directly to parliament is only a small percentage of the work done by the king's printer. I imagine the increase in work in that office arises to a great extent from documents sent in to the office from outside for printing. For instance, I fancy that the printing charges for the House of Commons, including the printing of
Hansard and other house documents, while possibly of considerable extent in themselves, at the same time do not comprise the greater share of the work done by the king's printer.
I am wondering whether it is the policy of the government to cut down on unnecessary printing done by the king's printer. An enormous amount of money is being spent by the government upon all kinds of informational and publicity work. This matter has been up before the house on a previous occasion, and I should not like to consent to this bill going through committee unless there was some undertaking by the government that there will be a definite and effective curb upon the printing being put out by the government. If there ever was a government that seemed to be printing-ink conscious, it is this one. I hope the minister will be able to give some undertaking that economies will be effected.


Paul Joseph James Martin: Special attention is being given to that particular point. While it is not a new post, there is a controller, an official of the department, who pays strict attention to unnecessary expenditure. I may say that the king's printer has so much business to do even now that he cannot possibly handle the full requirements with his own staff and equipment; and every effort is being made, both by the administration and the king's printer, to avoid unnecessary work which means unnecessary expenditure.


Gordon Graydon: Is any work that would normally be done by the king's printer farmed out or sublet to other firms in Canada?


Paul Joseph James Martin: During the war there was a great amount. During that period the king's printer was unable to handle forty per cent of the requisitions that were made. That work was farmed out, as it has always been farmed out in varying amounts almost from the time the office of king's printer was established in 1889. Of course, during the days of peace the amount farmed out is not as much as it was during the days of war; but in the light of the present state of the equipment and in the light of the space which the king's printer has at his disposal, there is not much hope of our giving assurance that we can handle all the work, even exercising the greatest diligence on the side of economy. However, the king's printer does a substantial part of it, and to the extent that he does the cost, as compared with work done by commercial firms, is on the side of economy.


Mr. BOUCHER:: Could the minister give more details as to the amount of work done outside during the past three years?
Printing and Stationery


Paul Joseph James Martin: If the hon. member will look at parliamentary return, reference number 164, be will find the details by provinces for the period he has mentioned.


John Ritchie MacNicol: The king's printer does good work, and one of the best jobs he does is to print the speeches of the members of parliament which are mailed out to the ridings in Canada. By this means we are able to keep those whom we represent in touch with what we are doing and saying here. If they read the Hansard we send them they will be able to judge whether we should be returned or left at home. Why has the cost gone up so much that to-day it costs almost a small fortune to send out a few thousand copies containing five or six, rpeeches?


Paul Joseph James Martin: It is simply a question of increased costs which are made up of additional wages paid to the staff and so on.


John Ritchie MacNicol: Is there a cost department in the office of the king's printer?


Paul Joseph James Martin: Yes.


John Ritchie MacNicol: Who would ascertain the exact cost in each case?


Paul Joseph James Martin: There is a specialist in cost accounting in the department.


Mr. FERGUSON:: Prior to the war, the
estimates for this branch were given as $3,000,000, but now they run between $4,000,000 and $12,000,000. I have seen several of the pamphlets that are put out by the government. One was an expensive lithographed pamphlet advising employers to establish in their plants suggestion boxes into which employees would, be able to drop suggestions for improving the business. To my own knowledge, that practice has been in operation for at least twenty-five years and there are a thousand plants in Canada that have had it for over ten years. If the government is to take its money and distribute twenty or twenty-five thousand pamphlets like that, then with the greatest respect I say to the minister that he had better watch some of the departments that are placing orders with the king's printer.


Paul Joseph James Martin: The minister has been accused of being too strict in that particular, but I can assure my hon. friend that he intends to continue in that regard.


Stanley Howard Knowles: May I ask two questions? How many printers employed in the king's printer's establishment here in Ottawa are members of a trade union? When the king's

printer places an order for printing with an outside commercial firm, is it always placed with a union shop?


Paul Joseph James Martin: I shall have to defer replying to the first question. With regard to the second question I may say that during the war there were some instances, particularly with respect to some very rush requisitions, where that policy was not lived up to. I can assure my hon. friend that every endeavour is made in normal times to give business to such firms, where possible.


Stanley Howard Knowles: It is .the policy of the government that printing farmed out is to be placed with union shops?


Paul Joseph James Martin: It is the policy.


Stanley Howard Knowles: Has consideration been given to placing the union label on such printing?


Paul Joseph James Martin: Consideration has been given to that.


Stanley Howard Knowles: If it is the government's policy that farmed-out printing is to be placed with trade union shops will the minister indicate whether consideration has been given to entering into a collective agreement with the printing employees at the printing bureau here in Ottawa?


Paul Joseph James Martin: Yes.


Stanley Howard Knowles: When vacancies occur in the higher posts in the department of public printing and stationery are they filled by promotion of employees who have been working there, or are outside persons brought in?


Paul Joseph James Martin: By promotion as far as is humanly possible.


Stanley Howard Knowles: How far up does that policy apply?


Paul Joseph James Martin: The office of king's printer of course is one that is filled at the pleasure of the crown, but the principle applies to all others.


Julian Harcourt Ferguson: Surely small printing offices which do not belong to a trade union will not be debarred from tendering, provided that they do efficient work?


Paul Joseph James Martin: That is why I said that every endeavour was made to do that wherever possible.


Stanley Howard Knowles: You cannot suit both of us.


Julian Harcourt Ferguson: He can suit the citizens.


Mr. HAZEN:: The last sentence in the explanatory note reads:

Printing and Stationery
The amount of two million dollars is considered requisite to meet adequately normal expenses incurred in advance for the printing and stationery requirements of parliament and the departments of government.
Where in the estimates is the cost of printing and stationer}' requirements shown?


Paul Joseph James Martin: Office of the king's printer.


Mr. THATCHER:: According to information
which the minister gave me earlier in the session, 98 per cent of the printing for the government which was done by outside firms this year was printed in Ontario and Quebec. Could the king's printer not give a little more printing to firms in western Canada and the mari times?


Paul Joseph James Martin: I anticipated this because the hon. member asked me the question privately some time ago. The king's printer found it almost impossible to place orders with far-away firms under the limitations of the statute, which provided that no orders involving an expenditure over $500 should be placed with outside printing plants without competitive prices having been secured. As a [DOT]result, the king's printer during the war, through the then secretary of state, asked for authority under the W'ar Measures Act to extend this amount to 82,500. This helped considerably in placing more orders with firms located in the eastern and the western provinces. This privilege could not be used as extensively as we would have liked because of the urgency of so many of the orders and the constant pressure which was placed on the king's printer by various government departments calling for almost immediate production and delivery of the requirements ordered on their requisitions, with the result that in .many cases orders had to be placed at most convenient points. Another thing preventing more orders going through firms located at a distance from Ottawa was the difficulty of transportation and the extra cost of shipping stock and returning the finished product to Ottawa.
In an endeavour to give work outside Ottawa during the war, the king's printer gave the privilege to many agents of the government to place orders locally, especially the war finance committee, the wartime prices and trade board, the national defence department, and more especially the directorate of recruiting, on the condition that a complete report of every item was referred to the king's printer, showing the price paid in each case. Since these orders were paid for out of funds of the department placing the order, the statements I submitted in a return some time
ago do not fully indicate the exact cost under the operation of the king's printer. However, in no case was authority granted for orders involving more than $500.
In comparing the amounts spent in each province under these conditions and realizing the difficulties under which the department laboured all through the war period, one must keep in mind the facilities of the printing plants in each province. In this regard, I could give a statement of the capital expenditure, personnel, and salaries and wages paid in each province in connection with the printing industry. It would seem reasonable that under the circumstances more orders should be placed in those provinces where the printing facilities were greater, more varied and more adaptable to the nature of the printing material which had to be produced.
With regard to the different amounts of money spent with each printing plant, it is quite difficult to explain the many differences existing between the plants. First of all, there is the difference in their equipment. Then, there is their ability to quote low enough to secure a job and to make delivery in the time allowed. So that every endeavour is made in farming out material to give every province as fair a distribution as possible. The return which I tabled some weeks ago will indicate that while the heaviest expenditure occurred in Quebec and Ontario, that was due in many cases to the ability of printing firms to make prompt delivery, particularly during the war period, and also due to transportation costs and factors of that kind. During the days of peace, when the urgency is not so great, it should be possible to effect a more equitable distribution, and to the extent that that is possible, having in mind all the exigencies, I can assure the hon. gentleman that that will be done.


George Russell Boucher: An increase from $700,000 to $2,000,000 is substantial. I wonder if the minister feels that it is really necessary, now that we are through the period where there was such a rush of printing because of the war. The statement which the minister has just made does throw some light on the situation. He said that previously the king's printer had been able to farm out work without competitive bidding up to an amount of $500 and that was later increased to $2,500.


Paul Joseph James Martin: That was during the war.


George Russell Boucher: We who believe in competitive bidding for printing should insist on that rule being adhered to as much as possible, because otherwise we have not that check which has hitherto prevailed. I can appreciate that, while $700,000 may have been sufficient
Printing and Stationery

in 1928 it may not be adequate for present requirements, but $2,000,000 is almost three times the $700,000 in 1928, and this is being asked for when the heaviest strain on the printing bureau is over. In the economy which the people of Canada are demanding to-day, we believe that they will demand much greater economy in the printing bureau than we have seen in the last six or seven years, and when that economy is brought into effect it should cut down the necessity for such substantial advances. I believe that, before asking us to raise this $700,000 to $2,000,000, the minister should give a full explanation why such an increase is required.


Paul Joseph James Martin: My hon. friend, may I say with great respect, is confusing what I had to say about competitive bidding with the bill before the committee. This proposal to raise the advances to the king's printer from $700,000 to $2,000,000 has nothing to do with competitive bidding. The king's printer is not only the king's printer but the supplier to all departments of government of their stationery requirements, such as inks, paper, machines and other supplies. This amount of $2,000,000 does not represent an expenditure of money. It is part of a revolving fund. It is an advance to the king's printer of money which he must have in order to meet current obligations. Otherwise he would get himself into the same position he was in when the auditor general had to point out that he had spent more money than he was authorized to spend out of the then revolving fund. I repeat, it is not an expenditure. It is simply a fund out of which the king's printer is able to pay for stocks and supplies which he must hand out to the various departments of the government in return for which at a later date he receives payment from the departments concerned.


George Russell Boucher: I appreciate that this is only working capital; but in view of what the minister has said of the king's printer farming out such a great quantity of work to private enterprise, and since the amount that he can farm out without competitive bidding has been increased from $500 to $2,500, and since we have passed through the period where there was such a strain on the king's printer, I think we should be careful about increasing these advances from $700,000 to $2,000,000 when there is such a demand for economy and the cutting down of expenses in this country. Certainly raising from $500 to $2,500 the value of the work which the king's printer can hand out without competitive bidding at least lends itself to a lack of economy.


Mr. McIVOR:: It does seem a big increase from $700,000 in 1928 to $2,000,000. But I
would ask the minister, by how much have the general expenses of the labour department, say, and some other departments, increased in that period? As we extend our work we have to pay for it. What I rose to ask, however, was whether the linotype operators or typesetters of the king's printer belong to the civil service?


Paul Joseph James Martin: Yes.


Daniel (Dan) McIvor: Are they eligible to join a union?


Paul Joseph James Martin: Yes.


Stanley Howard Knowles: And most of them are members.


John Ritchie MacNicol: Should there not be four words added after the word "requisitions", so that the sentence would read:
. . . for the execution of orders given or requisitions made under the provisions of the act, and to pay the wages of workmen engaged in the execution of such orders or requisitions the established union rate.


Paul Joseph James Martin: With regard to wages paid men who work in the office of the king's printer, the wage paid is the average of the wage paid in the cities of Montreal and Toronto. An adjustment was made last fall. There is a periodical revision and the last revision was made at that time.


John Ritchie MacNicol: Where you farm orders of the king's printer around the country, are the men engaged in printing in the smaller shops assured the average union rate?


Paul Joseph James Martin: They are paid the prevailing rates.


John Ritchie MacNicol: If the Department of Public Works lets a contract for the erection of a building it is stipulated in the contract that the men engaged in the work are to receive for all trades the standard established union rate.


Angus MacInnis: I understand that the printing staff are all what we call prevailing-rate employees; that is to say, they get the prevailing rate in that particular trade in localities surrounding Ottawa.
Regarding the point raised by the hon. member for Davenport, my understanding was that in all contracts let by the government there is a fair wage clause, and that would also mean the prevailing wage for the particular kind of work where government work was being done. Did the minister indicate that that was not the case in regard to these contracts?

Commercial Corporation


Paul Joseph James Martin: As far as possible that is done. A small order amounting to $450 was given the other day to a small shop in a little town. In such a case it is difficult, where the order is small, to exercise a full supervisory direction. I am going to have that matter looked into and possibly we can take a definite step in that direction. Perhaps by the time my estimates come up I shall have something more definite to report.


Mr. SMITH (Calgary West):: I am going to show the minister how he can save a great deal of money. My suggestion is that he cease printing menu cards in the restaurant. We have all been here for three months now. Our memories are not all bad and we all know the particular kind of poor food that we shall get every day. The food may be all right when it reaches the restaurant, but when it reaches us it is simply terrible, so let us not bother about printing these cards any more. Just let us go and take chuck. If they mix it all together and make a good stew it will be infinitely better than the courses we get now.


Stanley Howard Knowles: When a member gets the answer "yes" he should be satisfied, but I wish the minister would be a little more enthusiastic, to say the least, about this question of whether or not consideration that is really worth anything is being given the matter of a collective agreement with the employees and also the use of the union label. So often we get the answer that consideration is being given that it is not always convincing. Hence I ask the minister to indicate to the committee the precise stage at which that consideration now stands.


Paul Joseph James Martin: The matter is actively under consideration. The hon. gentleman knows that when I say ''yes" in answer to that kind of question I mean this.


Stanley Howard Knowles: Thank you.


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


[Stage Direction]
Hon. J. A. MacKINNON (Minister of Trade and Commerce) moved that the house go into committee to consider the following resolution:
That it is expedient to present a bill to establish a corporation to be known as the Canadian Commercial Corporation empowered to assist in the development of trade between Canada and other nations and to assist persons in Canada to
obtain goods and commodities from outside Canada and to dispose of goods and commodities that are available for export from Canada. Provision is made for grants to the corporation from unappropriated moneys of the consolidated revenue fund of amounts not exceeding in the aggregate ten million dollars and other grants out of the consolidated revenue fund as authorized.
He said: On April 2 of this year I tabled in the house an order in council establishing the Canadian Commercial Corporation. At that time I pointed out that in the present disturbed condition of world trade there are many transactions which cannot be handled entirely by private business and that, in order to deal effectively with many urgent transactions then in hand, it was necessary to bring the corporation into being as rapidly as possible by order in council.
That order in council, P.C. 1218 of March 29, 1946, became effective on the first day of May, and on that date the property, obligations and rights of the Canadian export board were assumed by the Canadian Commercial Corporation.
The legislation now before the house will enable the corporation to serve the needs of Canadian business on a continuing basis so long as the requirements of international trade demand.
As I have already mentioned, one of the principal obligations which the Canadian Commercial Corporation will be called upon to discharge is the work hitherto performed by the Canadian export board which made purchases in Canada for foreign governments and for the united nations relief and rehabilitation administration. I should refer here to the work done by the Canadian export board in this very important field.
The Canadian export board was established in January, 1944, to buy essential non-military supplies in Canada for other governments. Its work has developed steadily in scope and importance since that date. Among the countries for whom purchases have been made by the Canadian export board are the United Kingdom, and the United Kingdom crown colonies, Australia, India, Southern Rhodesia, France, Russia, South Africa, New Zealand, Belgium, the Netherlands, the Netherlands East Indies, Norway, Czechoslovakia, Denmark, China and also, of course, purchases for UNRRA. The actual value of the contracts placed by the board as of April 30, 1946, totalled $404,274,550. The value of goods on requisitions raised by the board and transferred to the Canadian Commercial Corporation for future action is estimated to be $41,142,310.
[Stage Direction]
Commercial Corporation
[Stage Direction]
In order to accommodate large quantities of goods such as clothing, soap, farm implements, leather and fertilizer purchased by the Canadian export board on behalf of UNRRA it became necessary for the board to establish several packaging and storage warehouses. These are located at Halifax, Saint John, St. Lambert, Lachine, Beauharnois and Winnipeg. The stores are held in the warehouses and shipped overseas from time to time as vessels become available.
It is beyond question that the services rendered during difficult war years by the Canadian export board in obtaining essential civilian goods for members of the British commonwealth and foreign governments were of great importance to the export trade of Canada. Wartime restrictions made normal trading activities impossible in most instances and consequently the establishment of this government agency was invaluable both to buyers and sellers. In many cases the purchases made by the Canadian export board for the governmental agencies of other countries provided the only means whereby Canadians were able, at least in part, to supply traditional markets, in addition to which they assisted in introducing Canadian goods into new export markets.
The work which the Canadian Commercial Corporation will undertake, however, will embrace both the export and the import fields, and I believe that it will be useful to the house if I summarize in broad outline the projected activities of the corporation under both these heads, and refer briefly to the policies of government which underlie them.
All contracts placed by the Canadian export board and not completed as of May 1 were automatically transferred to the Canadian Commercial Corporation without specific amendment. I should like to emphasize, as a point of considerable importance, that while the corporation is government owned and controlled, the contractual relationship between buyer and seller is greatly improved by the establishment of the corporation. As a separate entity, the corporation may sue or be sued in its own name in an appropriate court of justice.
In general, the corporation acts only as an agent and does not of itself initiate purchases in Canada. Nevertheless, at the request of Canadian suppliers, it will bring commodities available in Canada to the attention of those whom it represents, supplementing in this regard the foreign trade service of my department. Should such inquiries result in orders, the contracts would then be let by the corporation. One exception to this is the purchase by the corporation of canned fish, surplus to Canadian requirements, at prices arranged in IMr. MacKinnon.]	, j
collaboration with the Department of Fisheries. The stocks so purchased are held in storage awaiting release on allocation by the combined food board.
The corporation will not encroach upon the activities of private business; in fact, one of its primary objectives will be to assist it directly in many important ways. For example, in the import field, it will aid Canadian traders in obtaining essential supplies from ex-enemy territories under military occupation. It is impossible now, and may be for some years, to permit private business to be transacted in a normal fashion between ex-enemy nationals and private concerns in other countries, including Canada-this will apply particularly during the process of reorientating the Japanese and German economies toward peaceful occupations. During this period it will be the responsibility of the occupation administrations to control all industry in these countries and foreign commerce will, of necessity, have to be transacted through government agancies. The measuring-rod for the entrance into Canada of supplies from these areas will be the needs of Canadian business, it being borne in mind that exports from such countries must be permitted in order to pay for necessary imports.
The situation regarding goods available for export from ex-enemy countries is still obscure. Some commodities certainly will be available for export from these areas before long. The corporation is at present endeavouring to arrange for representatives abroad through whom specific information will be obtainable in response to enquiries from Canadian businessmen. In the meantime, the corporation will welcome inquiries from those interested, but it must be emphasized that it may be difficult for some time to obtain precise information.
As far as these ex-enemy areas are concerned, the function of the corporation would be to assist the Canadian importer by acting as an intermediary, having a position of prestige recognizable by the export licensing and foreign exchange government organizations of the foreign governments or military occupation administrations concerned.	The
corporation would he expected to certify that the goods would be permitted entry into Canada and that the necessary foreign exchange will be provided in payment. It would thus enable a private shipper in the other country to obtain an export licence.	The
terms of the transactions, for example arrangements as to shipment, insurance coverage, and the purchase from the foreign exchange control board of the foreign exchange involved

Commercial Corporation
would all rest in private hands to the fullest extent permitted by the exigencies of international trade.
The corporation in all instances, except when purchasing on government account, will require suitable coverage in the appropriate foreign exchange, in the form of guarantees on acceptance of the order, and actual exchange on acceptance at seaboard in the countries of origin.
The Canadian Commercial Corporation also will provide a means which, if desirable, can be used, in the future, for purchasing commodities under international allocation or foreign government control such as sugar, tea, oils and fats which may, owing to the shortages which now exist, continue under such governmental regulation for some time to come. Although the corporation thus provides machinery capable of assuming responsibility for the bulk purchasing now carried out by the Commodity Prices Stabilization Corporation, it is not proposed that it shall do so, so long as profit control and subsidies remain in effect.
In its capacity of purchasing agent, the Canadian Commercial Corporation will award contracts on the basis of competitive sealed tenders in all cases where it is practicable to do so-having regard, of course, to the utilization of surplus stocks owned by the crown. Save where the goods to be exported are in free supply, a clearance is obtained from the export permit branch of my department, before purchase action is initiated, so that there is no danger of the domestic market being stripped of essential supplies by the export purchasing of the Canadian Commercial Corporation.
The Canadian Commercial Corporation will make a small charge for its services for the purpose only of covering the cost of its administration expenses.
Despite the fact that there is no compulsion on any of the agencies representing other governments to avail themselves of the purchasing machinery of the corporation, the extensive u=e made of its facilities and those of its predecessor, the Canadian export board, indicates clearly the appreciation of such governments of the manner in which the work has been carried out and the ready access to the Canadian market thus afforded them.
I have spoken at this length to give the house as full a statement as possible of the purposes which the Canadian Commercial Corporation was incorporated to serve and the principles under which it will operate. There is, however, one point I cannot stress too strongly; that is, that the policy of 63260-202J
government by which the Canadian Commercial Corporation will be guided is that it shall, at all times, seek to provide supplementary services necessary to assist Canadian traders to obtain access to world markets. I do not propose that it shall occupy, or in any way trespass upon, the field normally reserved for private business. I would like to make that assurance as clear and emphatic as possible. I believe that this corporation will play a role of growing magnitude in assisting the vigorous expansion of Canadian trade which, during the years immediately ahead, will be of such vital importance to us all. That is why I respectfully commend this Bill to the favourable consideration of the house. It is not practicable at this time to anticipate just what calls for assistance may be made upon the corporation by private business from time to time, as, for instance, in the case of state trading by other nations, and it is felt that it would be unwise to delimit its purposes and usefulness by a too precise detailing of its activities. These functions inevitably will be influenced by practical experience, the acknowledged needs of Canadian business, and the changes occurring so swiftly in the pattern of world trade in these difficult days, but the welcome already extended to the Canadian Commercial Corporation by the Canadian business community provides ample proof that this new agency is destined to make a most constructive contribution to the restoration, development and enlargement of our trade.
Harry Rutherford Jackman: Mr. Speaker, the remarks of the minister on the resolution concerning the Canadian Commercial Corporation have been interesting, and I am sure the house took it as a matter of some importance that already this organization had purchased some 8404,000,000 worth of goods, probably mainly for other countries the minister did not name and for UNRRA.


James Angus MacKinnon: That was the predecessor of this organization.


Harry Rutherford Jackman: That is right. As I understand it, this bill is to incorporate by statute the Canadian Commercial Corporation which was set up under P.C. 1218, dated March 29, 1946. The minister did remark, however, that he expected this agency would have a continuing basis. While Canadian businessmen may have found it of some use during the transition period following the close of the war, I wonder whether or not it really has a function in our economy as a permanent fixture. I say that because Canadian business does not want to see our government engage
Commercial Corporation

in state trading. While Canadian business is willing to accept what help the government should provide in the way of information, consular service and so on, I believe its opinion is that the actual trading, the buying and selling, should be left to the businessmen themselves.
May I just say that one approaches this resolution without as much knowledge of the background as one might wish, with the exception of that which the minister was good enough to give us this evening. It is not often that a government department will get requests from this side of the house for more publicity, but I think it was news to most of us on this side that this agency had purchased $404,000,000 worth of commodities for the account of others. That is an item of some importance, and if we knew about these matters as we went along we would be able to grasp more fully exactly what this resolution envisages.
I was glad to hear the minister say that it was not the intention of this corporation to encroach upon private business, but merely to be helpful. May I point out, however, that in the order in council are certain provisions which, I take it, will be incorporated in the bill when it comes down, pretty much in their present form, and those provisions are extraordinarily broad in their wording. For instance, the corporation may carry on the business of-
(a)	importing goods and commodities into Canada,
(b)	exporting goods and commodities from Canada, and
(c)	storing and processing goods and commodities, either as principal or as agent, in such manner and to such extent as it deems advisable to achieve the said purposes.
It will depend a great deal upon who is running the corporation as to whether or not there will be conflict and interference with those endeavouring to carry on private businesses. The powers contained in the order in council, which, I suggest, will be incorporated pretty much word for word in the bill, are great, and perhaps the minister ought to consider limiting those powers if that can be done without too severely hampering the purposes of the corporation. Certainly in the hands of some we can see that these powers are so broad that they could deal a deathblow to free enterprise.
As I said, we have not had much information about this corporation heretofore. Perhaps we do not fully appreciate all the purposes it serves, and it is a little too much to expect that even after the remarks of the minister we can understand exactly what it

means. But if there is an economic need to be filled by this corporation; if the providing of it is not a matter of charity on the part of the government; if it is economically sound and not likely to involve the country in loss, then I do not see why those who are engaged in exporting and importing, even though they be foreign governments or foreign agencies, cannot provide the necessary machinery themselves instead of relying upon the government to do so. If there is a particular reason why Canadians-and I refer to businessmen particularly-are not as adventurous in the export field as one might expect them to be, it cannot be that they are short of capital. As everyone knows, our savings deposits are to-day greater than ever before. More capital is awaiting investment, and much of it is willing to adventure; but I suggest that if this money is not adventuring in the foreign field to develop some of these markets the minister has in mind, it is because the tax rate on businessmen is such that there is very little advantage to them in venturing their money where there is a substantial degree of speculation and risk. May I just quote from the Ottawa Journal of this evening a statement by Mr. Gordon Cockshutt, president of the Canadian chamber of commerce, who said:
This year's budget ignored the relief Canadians had a right to expect and which was promised in the previous budget address. There is no tax relief announced for the current year and only niggardly gestures for 1947 . . .
Instead of offering hope and encouragement to individuals and business to stimulate production, the reverse is the case. We cannot emphasize too much that maximum production alone can provide the goods for consumers at home and abroad and, equally important, that maximum production is the most effective anti-inflationary measure.
I merely quote that statement to indicate how the taxation laws of this country are interfering with all business, and the export business in particular. If companies wish to engage in the export business I believe there is a real need for the grouping of potential exporters into little organizations so that they can afford to send a man abroad to take orders and investigate markets for their particular products. But if they do engage in the hazardous occupation of endeavouring to sell in foreign markets and thus provide work for our own workmen, they will find that their little corporation is taxed thirty per cent on any earnings it may have, with the possibility of a provincial tax being levied in addition. If they are a new corporation they probably will have a fixed rate of earnings under the excess profits tax, and any earnings above the fixed rate, which would be only perhaps five, six or seven per cent, which is a niggardly return when one risks one's

Commercial Corporation
capital and may easily lose it in a foreign country, would be subject to the excess profits tax. One has to have a higher premium than that in order to break even, because of the large number of failures. So that if the small corporation does succeed in making something, it is first of all subject to a thirty per cent plus tax, and those individuals who would risk their money-and 1 hope they would not be widows and orphans, because theirs is not the type of money which should go into adventurous enterprises connected with the development of foreign trade-those businessmen who have incomes of $10,000 a year or more are taxed very heavily. If a man has $10,000 a year and he invests his money in this little corporation to develop trade and to fulfil the function w'hich apparently the government is trying to do at the present time for him, he will find that what is left to him after the corporation tax is paid will be taxed in the personal income brackets at not less than forty-six per cent. If he happens to be a man with $13,000 a year or over in income, all the earnings he gets out of the corporation by way of dividends will be taxed fifty per cent. If he happens to be a man who can really afford to go into this type of development in Central America or South America or the orient, where the risk is very high, and where one finds not only business risks but also political risks, and if he is a man with an income of $100,000 he will find that all the money he gets as income from the corporation is taxed by the government at the rate of seventy-five per cent.


Mr. NICHOLSON:: How much does that leave him?


Harry Rutherford Jackman: If he has made $10,000 from the corporation, in addition to his ordinary income, $3,000 of it would be taxed away in the corporation itself, which leaves $7,000. And seventy-five per cent of the $7,000, which would be three-quarters of it, would be taken away, with the result that he would get about $2,000, after risking his capital in the company. Therefore, so far as the government is concerned, it is a case of heads we win, tails you lose, because, if he loses, 100 per cent of his money is gone and he gets no reimbursement for it.
If we wish to stimulate activity and adventure we must offer commensurate returns. My suggestion is that, so far as our export market is concerned, the tax rate in this country does a great deal to prohibit, if indeed it does not completely prohibit those who would venture their money in foreign fields in order to expand markets for Canadian products and give work to Canadians.
So I suggest to the minister it might very well be that if he finds his department has to go into certain fields which ordinarily would be taken care of by businessmen themselves, it is not because those men lack adventure or lack capital, but because, if they are successful, they get little or no returns for their effort, owing to our tax laws. If they are not successful they have to bear the full brunt themselves.
Mr. ANGUS MaeINNIS (Vancouver East): Mr. Speaker, I was not in the chamber during the whole of the minister's statement, but from reading the resolution I see no reason why we should not welcome a bill such as is proposed at this time.
The speech made by the hon. member for Rosedale (Mr. Jackman) reminded me of some adventure books I read about thirty-five or forty years ago.


An hon. MEMBER:: "Good Manners"?
Mr. MaeINNIS: One of them, I remember quite vividly, was entitled "Under Drake's Flag". Evidently the hon. member is living in those days.


Harry Rutherford Jackman: Those good old days-
Mr. MaeINNIS: Yes, good old days

although I do not think most people would want to go back to them. They were good old days, in those days; but I believe, if we use our intelligence, sufficient things have happened since the time of Queen Elizabeth to enable us to have a much better life than the people of those days ever thought about. As a matter of fact, I think we are having a much better life. There is, for one thing, a great deal more humanity in the world to-day.
But, may I ask, why in the world should the people of Canada have to depend upgn a group of individuals, who have got control of a little money, to develop trade between Canada and other countries?


Harry Rutherford Jackman: Because they can do it so much better.
Mr. MaeINNIS: It does not appear that they can. As a matter of fact, there was no such measure as that now proposed by the minister on the statute books of Canada prior to 1930. What happened to Canada's trade at that time?
Mr. J \CKMAN: Political interference.
Mr. MaeINNIS: Political interference? It was not political interference at all. It was the failure of private business to venture capital. They had ventured so much that
Commercial Corporation

they did not know what to do about it. They could not venture any more under the system of scarcity which is essential to private capital.


Harry Rutherford Jackman: They had ventured too much.


Angus MacInnis: The hon. member for
Rosedale remarked that Canadian business does not want the government to engage in trade. But fortunately the government is not just representing Canadian business. The number of businessmen who have put this government into office, or, for that matter, any other government which might hold office here, are infinitesimal as compared with the population of Canada. Surely the rest of Canada should receive some consideration.


Harry Rutherford Jackman: I was speaking for all of them.


Angus MacInnis: My hon. friend failed to speak for all when he spoke. But he did speak definitely for Canadian business. He told us what Canadian business did not want jind what it did want.
3 am satisfied that whether we in this house like it or not, we have entered into a period of bulk buying and bulk selling. I quite understand that this bill is not intended for that purpose. Nevertheless it is a step in that direction, and one which is made necessary by developing conditions. I am willing to take one step at a time, provided that those steps are taken soon and often enough.
This party welcomes the measure, and that is all we shall say until we have an opportunity of studying the bill.
Motion agreed to and the house went into committee, Mr. Golding in the chair.


Howard Charles Green: After the enthusiastic remarks of the hon. member for Vancouver East, I suggest that the government should give careful consideration to the bill. When there is such enthusiastic support of a measure which appears to be moving toward socialism it is time that ordinary Liberals, or those members who call themselves Liberals, should look under the bed to see just what the measure contains.


Mr. CRUICKSHANK:: We might find a Tory under there.


Howard Charles Green: Is this corporation intended to be a permanent agency of the government, or is it only temporary and intended to operate during the transitional period from war to peace? I gathered from the minister's statement that the government intends to have the corporation carry on permanently.

That is directly contrary to the intention shown by the order in council. I would refer hon. members to the preamble of the order in council which reads:
Whereas the Minister of Trade and Commerce reports that by reason of the continued existence of the national emergency arising out of the war against Germany and Japan, it is advisable for the purpose of facilitating the readjustment of industry and commerce to the requirements of the community in time of peace that the order hereinafter set forth be made.
That preamble clearly shows that when the order in council was drawn the intention was that this corporation would be of a temporary nature. Paragraph 4 of the order sets out:
The corporation is established for the following purposes:
(a)	to assist transition in the development of trade between Canada and other nations during the period of transition to normal from the exceptional trading conditions existing during the war. and
(b)	to assist during the aforesaid period His Majesty's Canadian subjects

(i)	to obtain goods or commodities from outside Canada, and
(ii)	to dispose of goods and commodities that are available for export from Canada.
I think there are one or two other references in the order in council which would lead one to believe that the corporation is to be just of a temporary nature.


James Angus MacKinnon: That is correct.


Howard Charles Green: What is the intention of the government with regard to the permanency of this corporation?


James Angus MacKinnon: The bill is intended to take care of the needs of Canadian business during the transitional period and only as long as it is required by Canadian business.


Howard Charles Green: Can the minister give us an estimate of the length of time the corporation will be required? The government must have given consideration to this factor and it would be helpful if we knew.


James Angus MacKinnon: From appearances at the present time we expect it will be a short period.


Howard Charles Green: Two or three years?


James Angus MacKinnon: Two or three years.


Howard Charles Green: Can the minister explain why this work could not be carried on by the Canadian export board? Apparently that board operated effectively during the war in purchasing non-war goods for export, and it does seem questionable that a corporation should be set up. There is a further feature. The Canadian export board was directly under the department and therefore more closely under the control of parliament. I may be wrong,

Commercial Corporation
but I think that was the picture. Now a corporation is to be set up which will be practically out of the control of parliament. According to the order in council setting up the corporation, no provision is made for a report to be filed in parliament. In effect, there will be no control over the corporation. Why is it necessary to set up a corporation to take over the business of the board, particularly when it is to continue for only two or three years?


James Angus MacKinnon: There are a number of reasons why it. was necessary to have the powers that will be asked for in the bill to carry on the work formerly carried on by the Canadian export board. I would much prefer to go into the details of these matters when we are in committee and my officials are before me. I should like to comment upon the suggestion by the hon. member for Vancouver South that this corporation will not be as close to the department as was the Canadian export board.


Howard Charles Green: Not as close to parliament.


James Angus MacKinnon: Not as close to the department and to parliament. I think, through the department, it will be just as close to parliament as was the Canadian export board.


Howard Charles Green: How much will the activities of this corporation cost the country? Can the minister give the approximate number of employees who will be working for this crown company and state whether they will be subject to the Civil Service Act? I notice that the order in council setting up the corporation provides, just as have other measures setting up crown companies, that employees may be hired quite apart from the civil service commission. In other words, this appears to be another example of setting up a super civil service.


James Angus MacKinnon: It is impossible at this time to give details of the cost of the operations of this corporation. It is taking over the Canadian export board which now employs approximately 120 individuals. We have also secured the services of four of special experience. One or two of these have been with the Department of Munitions and Supply, at present the Department of Reconstruction and Supply, while the chief official has been secured on loan from the Canadian National Railways.


Howard Charles Green: At what salary?


James Angus MacKinnon: I am not sure at the moment what the salary is, but I can get that information. In answer to the second question I may say that the individuals at present employed by the Canadian export board, whether temporaries or on loan from other departments, are being retained. The salaries of the extra officials to whom I have referred will be along the lines of civil service salaries.


Howard Charles Green: What are the salaries of the executive officers?


James Angus MacKinnon: Surely that is information I could give while the officials are in front of me.


Howard Charles Green: The minister says he can give only an idea of the cost. Surely there will have to be a vote to cover the cost of this corporation and careful consideration must have been given to what the cost will be. For example, the order in council provides for a capital of $10,000,000. Have we already paid out that $10,000,000? What additional sum will be required during the fiscal year?


James Angus MacKinnon: Surely my answer that I could not give the exact figures as to the cost of this organization was a proper one. It is a large organization, comprising 120 or 125 employees. It is impossible to state what the cost would be for a year, but I could give the figures as they exist to-day. It is an organization that will expand or possibly contract according to the needs of Canadian business and the demands made upon the services of the corporation.


Howard Charles Green: Is the minister not asking for a vote to cover the expenses of the corporation during the fiscal year?


James Angus MacKinnon: Yes.


Howard Charles Green: Can the minister tell us to-night how much he is asking for that purpose?


James Angus MacKinnon: No.


Wilbert Ross Thatcher: What can this corporation do which the trade commissioners cannot do? If the corporation is set up, will our trade commissioners come under it?


James Angus MacKinnon: No; this is a corporation entirely outside of the trade commissioners.


Wilbert Ross Thatcher: Will there not be
duplication there?


James Angus MacKinnon: No. The work of the corporation will not cause any duplication.


Harry Rutherford Jackman: Will the minister explain to the committee, although he may feel that he has explained it already in presenting the resolution when he said that the corporation had purchased on behalf of foreign governments and others goods to the value of $404,-
Commercial Corporation

000,000, what there is that the corporation can do in the months to come that cannot be done by businessmen for themselves if they are willing to do it? Why do we need the interposition of this government agency to do something in connection with business? Is there something so peculiar about these arrangements that we must set up an organization with 120 employees, taking them out of production and putting them on the backs of the taxpayers, so that we can never get any incentive restored to business itself?
May I say in regard to the second part of the resolution, which says that this corporation is to create export markets for Canadian products, that surely that has been the purpose of the Department of Trade and Commerce for many years, practically ever since it has existed. Is this corporation now to take over that function?


James Angus MacKinnon: I do not remember making any such statement.


Harry Rutherford Jackman: The two copies of the order in council were sent up to the debates office and are not available to us, but it consisted of two sections, and the purpose was
(a)	to find goods for import into Canada and
(b)	to find outlets for Canadian goods. I think I am correct in that statement. I should like to know whether or not this corporation is to find markets for Canadian goods or find out what there is to know about such markets. Take, for example, the bacon market in Great Britain. Is that to be the function of this corporation? I do not understand the real need for this corporation apart from the fact that it is handling business for UNRRA and foreign governments. What is it going to do that business cannot do for itself? I do not think I can put it any more clearly than that. I do not know whether the minister can give me a clearer statement of exactly what it is going to do that Canadian business cannot do for itself. For the benefit of my hon. friend the member for Vancouver East, when I say Canadian business I mean the whole Canadian people, but it is the businessmen who must take the responsibility and leadership in these matters. I do not see what this corporation can do that businessmen cannot do for themselves if given a fair break.


Angus MacInnis: Mr. Chairman, this resolution-


Harry Rutherford Jackman: Just a moment. I was waiting for an answer from the minister. I do not want to go back to the days of Drake, but even in those days we had those who would scuttle the ship.
[Mr. Jackman.1


James Angus MacKinnon: This corporation is not set up to find markets for our goods. It is set up to make purchases in Canada for foreign demands. It provides machinery not now available to private trade.


Harry Rutherford Jackman: Is the minister speaking of exports or imports?


James Angus MacKinnon: I am speaking of
exports.


Angus MacInnis: This resolution has been on the order paper since May 28, and I imagine that since that time business firms and business organizations such as chambers of commerce and boards of trade have had an opportunity to see it and study its implications. I would ask the minister how many protests against this measure he has received from business organizations.


James Angus MacKinnon: No protests, no adverse criticism, no objections whatsoever; nothing but commendation, and a great deal of commendation, from business generally.


Howard Charles Green: Of course nobody knew anything about the bill until to-night.


Angus MacInnis: The resolution has been on the order paper since May 28, and its purpose is clearly outlined by its language. Businessmen would realize its implications just as quickly as we would, and would be in just as good a position to judge of the value of the measure as we are. So I would suggest that there is really something wrong here to-night; either businessmen do not know their own business, or they are not properly represented in this house.


Mr. ARCHIBALD:: I think this resolution has been brought about, not so much from the desires of the government, as from necessity, because of the trend there is in the world to-day. I have a clipping here from the Montreal Standard of June 22, giving an interview with Robert W. Keyserlingk, managing director of the British United Press. He points out:
Canada, hoping for trade in post-war Europe, is confronted by the fact that in order for them to buy from us we must first lend them the money.
She is confronted, too, with the ceaseless and boundaryless conflict between individualism and collectivism. For collectivism has already gone further in fact in Europe than it has even in theory over here.
The point is this. Over in Europe, in the major trade centres of the world, our government is entering into business direct with other governments, buying and selling, because that business cannot be handled by individual businessmen. They can work only in

Commercial Corporation
and through this corporation. The nations of Europe are demanding long-term loans and trade and commerce; and only governments, not private individuals, can carry on trade with them. If, as suggested by members of the Progressive Conservative party here tonight, the government did not bring in such a bill as this, it would mean that we would be isolated from the major trade routes of the world. It is not a question of what you want or do not want. It is a question of what you have to do when you are facing a given condition. It would be nonsensical not to put through such a bill as this, and the government has come to that conclusion through being faced with hard facts. More and more this government will have to enter into this form of enterprise, whether they like it or not. Some of the ministers have stated that they are going to solve our problems through good old Manchester Liberalism. But here is proof that this government is entering into trade relations with other governments.


Harry Rutherford Jackman: In answer to one or two suggestions made by the hon. member for Vancouver East, I am sure that the help the government is getting from the left wing must be valuable. The hon. member who last spoke said that this is a clear example of the manner in which our government is being forced into the position of trading with other governments. Certainly that is not what we believe, and what I think the majority of Canadians believe, is the best thing for Canadian prosperity and our standard of living. The hon. member for Vancouver East did have a word or two to say on the question whether or not business in Canada liked this measure. May I say to the minister that those of us in the official opposition who may appear to be critical of the measure are not necessarily against it; but even if certain organizations may or not have put their imprimatur on it that is no reason why we should not carefully examine the legislation instead of passing it without looking into it, as our friends of the C.C.F. would do. There is a strong tinge of socialism in it and that is to them proof of its goodness. I suggest to the minister that, while we may seem unduly critical at times, so far as this measure is concerned, all we wish is to understand it and to make sure that it is in the interests of the Canadian people, because we represent all the people in our ridings and not any particular section, as those in some parties may or may not do. We want to know what it is about, and it is a fair question to ask whether the minister intends this measure to have a long life or a short one during the transition period. He has told us that he expects it will expire in the
course of two or three years. I hope that is the story that he is telling the able men whom he is getting to administer the legislation, because you cannot pick good men out of the hat, offer them employment for a few years and then drop them unless the department will find a place for them afterwards. That is, I suggest again, another reason that the less government has to do with business, the better it will be all around. Business is a continuing affair; at any rate it strives to be continuing, and you cannot keep the best brains employed and expect them to serve you for a few years if you do not provide some other place for them when you cease to have need of them. The minister has said that the life of this corporation will be, he expects, only two or three years.


Howard Charles Green: The minister spoke of the purchasing of commodities under international control. When he made his statement on April 2 he referred to sugar, tea, oils and fats. Will he tell us how these commodities have been purchased hitherto for Canadians?


James Angus MacKinnon: The commodities mentioned have been purchased by the Canadian export board up to the present time.


Howard Charles Green: For how many years has that been done? Have they been buying all the tea, oils, fats, and sugar?


James Angus MacKinnon: I would not like to give a definite answer to that question at the moment. I think it is only reasonable and fair when a minister is presenting a bill, while he is being questioned on the technical aspects of the legislation, that he should have his officials in front of him. It is only a short time before we shall be going over the whole question again, and I suggest that the questions which are being asked now can best be answered when the officials are here.


Howard Charles Green: The house is in committee now. Ordinarily the minister would have his officials before him at this very time. If they are not here it is not our fault; it is his own fault, and he has no right to suggest that a member of the opposition asking questions should wait until the house is in committee on the bill. When the house is in committee on the bill it will be after the second reading and the principle of the bill will have been approved.	[DOT]


James Angus MacKinnon: Whether correctly or not, I have been informed that the officials are not allowed on the floor of the house until a bill is before the committee after second reading.


Howard Charles Green: That is not right.
Commercial Corporation


James Angus MacKinnon: That is why they are not here.


Howard Charles Green: That, I submit, is not correct. I would ask the opinion of the leader of the house.


Ian Alistair Mackenzie: The officials may be present at any time the minister desires to have them here.


James Angus MacKinnon: They would have been here if I had understood that.


Howard Charles Green: The minister in his statement dealing with the purchasing of those commodities under international control said something about the Canadian export board importing them. I had understood that the work of the Canadian export board was to purchase goods in Canada and export them. We would like to know whether the work of the board went farther and included the purchase of goods to be imported into Canada and, if so, how far the board went in that direction. We are entitled to know that while we are in committee on the resolution.


Mr. JOHNSTON:: As far as I can see, the bill goes beyond the ordinary conception of trading relations. How does this Canadian Commercial Corporation handle the goods it gets from outside countries when it brings them into Canada? What will happen after they get into Canada? I take it that the government would not go into the business of retail selling, but would distribute, for example, to a firm or other distributors. What would be the method of disposing of merchandise once it came into the country?


James Angus MacKinnon: When Canadian firms wish to buy in foreign countries where there is at present no machinery for private trading, this corporation will step in and do that buying.


Charles Edward Johnston: It will take the orders.


James Angus MacKinnon: Yes, just as agents.


Charles Edward Johnston: It will purchase the goods and bring them back and turn them over to companies in Canada?


James Angus MacKinnon: That is correct.


Mr. JAENICKE:: Will the corporation handle, grain and other agricultural products?
Mr. MacKinnon:	No, because there are
facilities for handling those commodities at the present time.


Thomas John Bentley: I presume the corporation will act as agent or broker for the federated consumer cooperatives and other organizations 
of that nature doing business in this country in bringing supplies from overseas, the same as for private business.


James Angus MacKinnon: The corporation will act for anyone in need of the special services which it will provide.


Howard Charles Green: Will- the minister answer the question I asked a few minutes ago as to the way in which the Canadian export board has been purchasing and importing commodities under international control such as sugar, tea, oils and fats?


James Angus MacKinnon: I did not give the hon. member for Vancouver South the correct information earlier. I am informed that up to the present time none of these articles has been purchased by the Canadian export board but has been handled by the commodity prices stabilization corporation of the Department of Finance.


Howard Charles Green: Then this importing business is to be transferred from the stabilization board to the new corporation. Is that the plan?


James Angus MacKinnon: Eventually that may happen. This corporation is not taking over the commodity prices stabilization board, but is actually performing certain operations which are not being dealt with by the stabilization board. I am informed that this corporation is not going to become involved in subsidies in any way. The purchases which are being made by the commodity prices stabilization board have to do with subsidies.


Howard Charles Green: Then the commodity prices stabilization board will continue to import sugar, tea, oils and fats. These commodities will not be imported by the new corporation.


James Angus MacKinnon: Not at present.
Resolution reported, read the second time and concurred in. Mr. MacKinnon thereupon moved for leave to introduce bill No. 251, to establish the Canadian Commercial Corporation.
Motion agreed to and bill read the first time.

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



DEPARTMENT OP JUSTICE

[Stage Direction]
Demobilization and reconversion-
510. To provide for expenses in connection with prize courts, $10,000.
John Ritchie MacNicol: Have the prize courts been performing any functions during the year 1945-46?

Supply-Mounted Police
Mr. ST. LAURENT: No. The expenditure to December 31, 1945, was $2,764.18, and there were accounts which had not then been received, for work previously done.


Harry Rutherford Jackman: Are these prize courts and the matters with which they concern themselves not somewhat of a relic of the Elizabethan days, and not having much to do with modern progress? I am just wondering whether or not the whole thing is necessary, although it is not that aspect of it to which I wish to direct the minister's attention; but inasmuch as the costs of the court have to be paid by someone, is it not reasonable to make the recommendation that the prize money itself should bear the burden of the legal administration of the court?
Mr. ST. LAURENT: If there were prize money which was coming to the government it would go into the consolidated revenue fund and would not be available for expenditure. The principle of responsible government, as I understand it, is that expenditures, even though they be made for the purpose of creating revenue, have to be voted by parliament; that all the receipts go -into the one fund, and whatever is required as expenditure has to be voted by parliament out of that fund.


Harry Rutherford Jackman: I am glad to accept the minister's explanation of it; but may I at the same time direct his attention to the fact that that principle has been grossly violated in a number of the government operated companies now set up under the Department of Reconstruction?
Mr. ST. LAURENT: At the present time the committee is not considering the financing of crown companies, but the items the Department of Justice requests to have voted under the old system.


[Stage Direction]
Item agreed to.

[Stage Direction]
S.}8. General administration, $266,379.
Alistair McLeod Stewart: Some time ago I tried to have the following question placed on the order paper:
Do the Royal Canadian Mounted Police have files containing information concerning Canadian citizens; and if so, what members of parliament are covered by such dossiers?
The question was rejected on grounds which I believe were adequate, and I have no complaint at all about the rejection. Nevertheless I said then that I would raise this matter when these estimates came up. One of the most vicious practices in Europe before the war, and many years before the war, was the
collection and maintenance of dossiers on private individuals. They were used in a sinister manner; they were used to spy on individuals and to collect-


Mr. SKEY:: The hon. member's party lost on that in Ontario; why bother with it now?


Alistair McLeod Stewart: The hon. member's party won. The dossiers were kept and were exposed. Do not say you lost.


Lawrence Wilton Skey: The hon. member's party did.
Mr. STEWART (Winnipeg North); They were used not only in Europe but in some parts of Ontario in a sinister manner to spy on individuals. I do not for a moment deny that the Royal Canadian Mounted Police have the right to investigate Canadian citizens whom they may suspect of crminal intent or criminal practices, but I do not believe the mounted police have any right whatsoever to retain such a file on an individual once its purpose has been served. I call to the attention of the minister a section of a proposed charter which was drawn up by a group of private citizens in the United Kingdom before the war. The chairman of this group was Lord Sankey, who was lord chancellor from 1929 to 1935. The section I wish to quote reads as follows:
All administrative registration and records about a man shall be open to his personal and private inspection. There shall be no secret dossiers in any administrative department. All dossiers shall be accessible to the man concerned and subject to correction and verification at his challenge. A dossier is merely a memorandum; it cannot be used as evidence without proper confirmation in open court.
As I said before, I believe that on occasion dossiers are necessary, but I do not think they should be maintained perpetually, containing information about citizens in this country. I should now like to ask the Minister of Justice the question I attempted to place on the order paper. Do the Royal Canadian Mounted Police have files containing information concerning Canadian citizens? That is the first question I wish to ask.
Mr. ST. LAURENT; Yes; they have files containing reports of investigations made whenever it appeared in the interests of the public that such investigations should be conducted. The hon. member also asks if there are any dossiers on members of parliament. There are no dossiers on members of parliament as such. There was a dossier that consisted of reports of investigations concerning a man who is now a member of parliament, but investigations that were made at a time when he was not a member of parliament but was a fugitive, during the period of a couple
Supply-Mounted Police

of years while he was looked for by the mounted police to execute an order for his detention that had been made prior to December, 1941, when I became minister.


Alistair McLeod Stewart: Might I ask if there are dossiers on members of parliament as individuals, whether there are dossiers on present members before they became such?


George Alexander Cruickshank: Getting nervous?


Alistair McLeod Stewart: Not a bit.
Mr. ST. LAURENT: No. I have here a report that the sole exception with respect to members of parliament at the present time is this dossier which had been compiled before the person became a member of parliament, concerning the activities of the hon. member for Cartier while he was being looked for under this order for detention that had been made.


Alistair McLeod Stewart: Can the right hon. gentleman tell me if dossiers are prepared on immigrants coming to this country, and, if so, what is the final disposition of such dossiers after the applicants have been granted citizenship?
Mr. ST. LAURENT: I cannot tell the hon. member that dossiers are prepared on immigrants to this country; I am quite sure that is not done as a general practice. There may be cases particularly pointed out to the Royal Canadian Mounted Police, and requests may be made to them to report upon certain individuals; but it is not the practice to investigate all those who migrate to this country.


John Oliver Probe: Because my constituency is Regina City, which at present is one of the headquarters of the mounted police; because I have been a citizen of Saskatchewan for quite a number of years, I should like to say a few words about the mounted police. I remember them with considerable affection as individuals who used to patrol the plains when we homesteaded. We looked forward to the visit of the redcoat, riding his lovely horse, who would spend the night with us discussing matters of local interest. Those of us who are native to the prairies have a feeling of admiration and friendship for the rank and file of the mounted police. At the present time, as I understand it, by agreement they are officially charged with the maintenance of law and order in six provinces, excluding Quebec, Ontario and British Columbia. Their duties have increased to a tremendous extent. They are technical experts in many fields going far beyond the mere maintenance of law and order. In my humble opinion, however, the [Mr. St. Laurent.l
men in the service are not receiving from the national exchequer the consideration to which the nature of their duties entitles them. I am
referring now especially to the non-commissioned officers and constables.
Quite a number of what I consider to be definitely anti-social regulations still apply to members of the mounted police. The seven-year marriage clause is, I think, an anti-social regulation, and I suggest to the minister that it is time we got away from the restriction on this splendid body of men which compels them to remain celibate and potential prey of people who become enamoured of the uniform, while they must live in a manner which I consider not entirely normal. I have in mind a constable who is a personal friend who left the force to enter His Majesty's service. As the minister is aware, limited permission was given members of the R.C.M.P. to enlist when the war began; but in order to maintain their full civilian rights, as I remember it they had to enlist in No. 1 provost company. That was all very well; but the members of the force who enlisted in other organizations, who occupied responsible positions during the war, who received both promotion and high honour, many of whom were decorated, should not, as a result, be penalized by our government in a way they would not permit civilian employers to treat returned men coming back to civil employment. Under the regulations, when a man returns to his pre-war employment he must be given the regular promotions he would have received had he remained at that work during the war. That is not the case in connection with the non-commissioned members of the mounted police, and I think they are being done an injustice in that regard. In the case of the individual I have in mind, the young constable who was decorated for gallantry while in the air force, during the interval that he was absent from the mounted police he got married. When he returned to this country and resumed his status as a constable in the mounted police he was penalized to the extent that he is still on a single constable's pay. I believe the pay for a first-class constable is not to exceed $2.75 a day. That, of course, is a ridiculous rate of pay for a man who is on call twenty-four hours a day and every day of the week.
Mr. ST. LAURENT: The hon. member is aware, is he not, that for the last three years that has been increased by 75 cents.


John Oliver Probe: I understood that there were certain supplements. However, the nature of those supplements does not appear in Commissioner Wood's report. The rate of pay for this specialized branch of our constabulary,

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our protective force in Canada, should be considerably increased for the men at the lower end of the scale.
There is another matter which concerns the personal comfort of the members of the Royal Canadian Mounted Police when on duty. 1 refer to those men who are on show in front of our buildings, who add dignity and, shall I say, some interest to the tourist trade. I think that is a fair description of their role out there. They stand in front of these buildings in the sweltering heat, clad in full regalia, with high boots. These men are splendidly equipped, but it seems to me that they are not comfortably dressed for their job. I suggest that the minister should take up with Commissioner Wood the matter of issuing to those men some form of sensible summer garb to be worn during the time when they are employed in positions where they cannot get under a tree and enjoy a cool breeze for a few moments, and also change regulations to permit them to remove their tunics.
There is another matter which looks like discrimination against non-commissioned officers in the Royal Canadian Mounted Police, and to which I would direct the minister's attention. It may be that he will make a statement on the point, because I notice that in his annual report Commissioner Wood has drawn attention to it. Commissioned officers in the Royal Canadian Mounted Police are in receipt of pension rights for their wives to which the commissioned officers contribute nothing. That grant to the widows, by virtue of the fact that the commissioned personnel do not pay into the fund, is not on an actuarial basis. The widows are entitled to one-half of the pension allowance of the husband before his decease.
What is the position in respect of the noncommissioned officers and men? The men receive pensions, without contributions having been made. But to assure the payment of pensions to their wives, in the event of marriage, since 1934 it has been compulsory for non-commissioned officers and constables to pay into a fund which is kept actuarially sound. This is where the discrimination arises, when we compare that fund with pensions payable to judges' wives, and the like. Those noncommissioned officers and constables must pay into the widows' pension fund five per cent of their salaries. On their decease an actuarial calculation is made, and a petty pension is granted to their widows.
This savours of class distinction which is not in the best interests of the members of the force. To my personal knowledge their esprit de corps has always been excellent. I believe that in general they command the respect of
all Canadians, because of the manner in which they conduct their police duties. I regret that instances have arisen carrying the suggestion that there has been a policy under which they should spy on individuals across Canada. I assume that they do carry on a form of investigation, and I should hope that that practice would not be continued.
Would the minister give us some assurance respecting the marriage privileges of single constables? Will he, too, give some suggestion as to what relief may be expected in connection with the widows' fund for non-commissioned officers and men, and respecting a general increase in pay for those at the lower end of the scale? Then, too, he might discuss some remedy for the condition of the men who stand out here on parade each day in their regular garb.


John George Diefenbaker: The Royal Canadian Mounted Police require no commendation, because all of us realize that their achievements and the heritage that is theirs are unequalled anywhere in the world. My experience with the Royal Canadian Mounted Police extends over many years. I can remember some of the old-timers who served with the original force.
With much of what my hon. friend has said I am in agreement, but I must say that after an extensive practice in. the courts, running over a period of twenty-five years, I have yet to see a member of the Royal Canadian Mounted Police who has been engaged in anything bordering on spying. Their actions and activities, in all my experience, have always been consonant with the highest traditions of the force to which they belong. While there have been suggestions to the contrary-and suggestions are easily made when proof is not required-I say the mounted police, as a whole, have performed a work which needs no commendation either in the house or out of it, a work that has resulted in the building up of our western country, and making it a law-abiding land, unequalled anywhere.
I join with the hon. member in his reference to the marriage provision, a matter which has been discussed before. I am familiar with the reasons given by the commissioner and the minister for not allowing constables to marry at an earlier age. But I believe to-day that, when it is so necessary to have efficient men in the mounted police, nothing should be permitted to exist which in any way would cause deterioration in the force.
In addition to what the hon. member has said, I would refer to the difficulty experienced by young constables with nine or ten years experience receiving promotion. To-day those promotions are too slow. Many able

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young men who are fully qualified for police work would be only too willing to join the force, were it not for the fact that, having regard to the small numbers in the force, it is impossible for them to be assured of early promotion.
There is one other matter to which I would refer, before I direct my remarks to the matter which caused me to rise at this time. I have in mind those young men who served overseas, who left the mounted police in order to perform that service. To-day, when they rejoin they are denied the privilege of rvear-ing their stars of service. I think a change should be made in that regard so that their broken sendee should not deny them the privilege and honour of showing the years of service they have given.
This gives me an opportunity to ask the minister for information in connection with the coupon racket revealed by the issue of a press release on June 25 in connection with La Banque Provinciate du Canada. When this matter was brought to the attention of the house on June 26 we were told that an opportunity would be given on these estimates to ascertain the situation. I do not want to go into anything that would prejudice the trial of those who have been charged, but there is one thing in connection with which the committee should be given information.
In the release to the press it was stated that the bank had been warned on several occasions about the manner in which it was handling coupons and that it had failed to carry out instructions as to changed procedure that were given. The other evening the parliamentary assistant to the Minister of Finance stated that certain clerks in the employ of the bank had been arrested. I do not believe it is fair that proceedings should be taken against clerks who have given good service in all banks during the period of the war. If the head office or the officials of the bank received instructions from the wartime prices and trade board regarding illicit dealing in coupons, the committee and the country should be given some information as to what instructions were given, to whom they were given, w'hen they were given and the extent to which the officials of the bank, not minor clerks, are responsible for what actually took place.
When the minister is explaining this, perhaps he would be willing to enlarge upon what is set out in the commissioner's report with reference to illicit coupons and the extent to which trading in illicit coupons has been carried on. I refer particularly to page 
29 of the report for the year ended March 31, 1945, where the following statement is made in connection with sugar coupons:
. . . the rationing of sugar has resulted in the appearance of a certain quantity of counterfeit sugar coupons. Shortly after the new year a "black market" operator in Montreal was found to have dispensed some 40,000 spurious coupons to the trade. It is anticipated, however, that a system of coupon audit centres now being set up by the wartime prices and trade board will result in a marked decline of offences of this type.
Has the hope expressed by the commissioner been justified by subsequent events, and to what extent are these rackets now being controlled by the activity of the mounted police and of the crime detection laboratory at Rockcliffe which was set up for the purpose of preventing a continuation of these rackets?


Mr. RICHARD (Ottawa East):: I agree with all that has been said about the quality of the Royal Canadian Mounted Police, but I think something should be done about their comfort. I have in mind the uniform the men on parliament hill are required to wear during these hot summer days. Although they may prove good subjects for photography, I think these men should be permitted to dress according to the weather. '


George Alexander Cruickshank: I intend to follow the request made this afternoon by the Prime Minister and the leader of the opposition and be brief. I endorse everything said by the hon. member for Lake Centre about the admirable qualities of the mounted police and I wish all hon. members would do the same. These police constitute one of the finest tourist attractions we have in Canada.


John Oliver Probe: Do you want the police to suffer?


George Alexander Cruickshank: Anyone who came from your province would suffer.


John Oliver Probe: Some of my people have suffered for a long time.


George Alexander Cruickshank: These men have been sent over to London in their uniforms, and they have been sent to Washington, the capital of the great United States, in their uniforms. They are the greatest attraction we have. I appreciate the suffering they may have to undergo because of the weather, but perhaps they could be relieved at shorter intervals. I am strenuously opposed to changing this uniform, the most famous uniform of the Dominion of Canada. Our tourist industry is the one industry which brings in money and which takes away none of our natural resources.

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John Oliver Probe: They took the kilts away from our soldiers.


George Alexander Cruickshank: Yes, and I am sorry they did not put them on some others. While the kilts may have detracted from the appearance of some because of their natural physical disabilites, they added to the appearance of others.
The mounted police are definitely underpaid for the work they are doing and the respon-sibilites they must assume. I had the privilege of visiting the headquarters of the F.BI. in Washington, and I know something of the work they are doing and the class of man and the educational qualifications they require. Those men are paid according to the work they are doing and I think we should pay our mounted police in the same way.
The Minister of Justice should consider the young men who want to take up this work. I understand that they cannot get married until they have attained a certain salary and years of service. Some members of parliament get a certain amount, while others are ministers in the cabinet and receive greater amounts, and yet they are still single. I am not referring to any particular individual. I want to repeat that I do not think the department is doing its duty to these people who provide the best safeguards we have, as was demonstrated not so many months ago right in this parliament and throughout Canada.


Lawrence Wilton Skey: I want to endorse what the
lion, member for Fraser Valley has just said, not only with reference to shorter tours of duty but with reference to the pay they should receive. I happened to mention to a distinguished and able member of the press gallery that I intended to advocate higher pay for the members of this estimable force and he turned to me with a rather cynical look and said, "You know, that is nothing but an annual parade." With that, my hopes fell. "An annual parade", he said, "that takes place every year at this time." I am a new member, Mr. Chairman; this is my first year in the house and this information made me feel rather sick at heart.
Mr. ST. LAURENT:	Would the hon.
member allow me to put a little balm on his sick heart by saying that the first-class constable receives $2.75 a day; but also, in addition to that, seventy-five cents for war duties, and $2.25 for living allowance; making in all $5.75 a day for 365 days, which amounts to $2,098.75. I am not boasting about it, but I wish to point out that when his pay is referred to as $2.75. a day a lot i3 being left
out. This is the third year war duties supplements are being paid.


Gordon Graydon: It should be made
permanent.


John Oliver Probe: What does a single constable get?
Mr. ST. LAURENT:	A single constable
gets the same pay, $2.75, plus seventy-five cents a day, but his living allowance is $1.50 a day instead of $2.25.


George Alexander Cruickshank: What would he get in a shipyard?
Mr. ST. LAURENT:	He might get a
higher wage in a shipyard, but he would not have the feeling of performing for the country the service that this corps feels that it is performing. There are no men conscripted for this corps. They join it because they wish to serve their country in that capacity, because of the prestige they have in the community and because of the pension provisions, which are such that I have not asked to have them revised. If they were revised, there are certain dispositions in the act which I am afraid I would lose.


Lawrence Wilton Skey: I am willing to bow to what the minister says with regard to the rates of pay of the Royal Canadian Mounted Police Force. But I would ask him now if he really does not feel that these men should be put on a permanent and guaranteed basic rate of pay instead of having these unreliable bonuses for war duty, et cetera. I do not think there is a decent man or woman in Canada who is not proud of the Royal Canadian Mounted Police and of the reputation it has won throughout the world. Surely we can guarantee them a decent basic rate of pay, and put them on a permanent basis at reasonable rates.
The minister has mentioned pensions. There is a subject which I believe is very close to the hearts of these men. Take the case of an ordinary constable killed on duty. Even if he dies in the service of his country, his widow, unless he has signed the pension agreement of 1934, I think it was, does not receive any guaranteed pension. Cannot these men be put on the same basis as the armed forces of the country?
Mr. ST. LAURENT: They could, and if it were felt that it would be a good thing that that should be done it would be accepted at once by treasury board. But I have been holding out against it.


Lawrence Wilton Skey: Would the minister tell the committee why?
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Mr. ST. LAURENT: Because there are provisions in the Royal Canadian Mounted Police pension statute which are more favourable to them on account of the manner in which the force is recruited and the periods for which members serve than would be the terms of the army pension act. If the hon. member will compare the two he will see that the Royal Canadian Mounted Police have special provisions which are not allowed in the superannuation fund or in the army pension act.


Lawrence Wilton Skey: As I understand the army pension, a service man is not even guaranteed a pension. I understand now that there are men with seventeen years' service in the R.C.A.F. who are being asked to leave the forces with one month's pay for every year of service and no pension, and that if a man elects or asks for his pension he is only allowed two-thirds of the pension to which he is rightfully entitled. If the minister wants to talk about the army or navy or air force pension-
Mr. ST. LAURENT: No, I do not, and the members of the Royal Canadian Mounted Police do not.


Lawrence Wilton Skey: Of course I am open to reason in what I am advocating, but it has been represented to me that the constable in the Royal Canadian Mounted Police is far less well provided for than the army pensioner, in spite of the unfortunate regulations. I do not wish to delay the committee, and I see it is almost eleven o'clock.
I would just say, in conclusion, that as a returned service man I feel that the Royal Canadian Mounted Police should be considered on an absolutely equitable basis with the armed forces of Canada in every respect. They should lose no seniority through any service for their country and lose no pension rights. The man's family should be protected equally with the members of the armed forces because he and his family are a part of our community, and so long as we provide for the Royal Canadian Mounted Police as well as we provide for the men of our armed forces I feel that we shall be doing for these men what the people of Canada would agree is the right thing to do.
Mr. ST. LAURENT: May I be allowed one minute, in fairness to La Banque Pro-vinciale. I shall be glad to show the hon. member for Lake Centre all the reports that I have received in connection with that incident, and then we can proceed further with the discussion. But I wish to say at this time, and I say it after having said to the hon.

member for Lake Centre that I am going to show him all the reports I have, that there are no grounds for casting reflections upon the bank itself. There are grounds for casting reflections upon certain individuals in the employ of the bank who did not carry out diligently and correctly the instructions they had received as to how coupons were to be handled. But the situation is not one that reflects upon the bank generally.


John George Diefenbaker: That was an unfortunate press release, then.
Mr. ST. LAURENT: It was unfortunate as to the form in which it was made, and it has already caused some anxiety to the customers of the bank and has caused the displacing of some accounts with the bank. For that reason I thought it was only fair that I should make this general statement this evening, because it may be some time before we come back to the estimates of the department. In the meantime I should be glad to let my hon. friend see all the reports I have on that incident.


John George Diefenbaker: Would the minister clarify one point. Why in view of these facts were the rights of the bank to continue its coupon procedure cancelled as of July 31?
Mr. ST. LALTRENT: There were a few branches with which the wartime prices and trade board had had these difficulties. They could not get these staffs to keep a proper and timely accounting of the coupons, and, could not make them realize that it was quite as necessary to keep that accounting up to the minute as it was to keep the dollars and cents accounting of the ordinary banking business up to the minute. The board came to the conclusion that, having made these representations to these branch offices more than once, and inasmuch as they were not having their instructions fully complied with, they would say to the bank that from and after July 31 they would not allow its branches to deal with these coupon accounts. I think the very fact that they made the 31st of July the deadline shows that they wanted it to be a warning to the head office to take the matter seriously, and in the meantime, between the date the statement was issued and July 31, they expected satisfactory assurances might be obtained and the order cancelled. This is not one of the large banks. This bank does about 1-8 per cent of the banking business of the chartered banks of Canada, of which there are only ten. It has a large number of small branches. I have the figures here. It is a bank that is doing a retail banking

Questions
business and, though it is one-tenth of the number of banks, it does 1-8 per cent of the business.


John George Diefenbaker: How many false coupons were found, approximately?
Mr. ST. LAURENT: In connection with this incident, it is not a matter of false coupons; it is a matter of the coupon accounts being overdrawn by the orders made for coupons. That was not a case of forged coupons being used; it was a case of the coupon accounts in certain branches being overdrawn.


John George Diefenbaker: To what extent, approximately?
Mr. ST. LAURENT: I do not remember exactly what it is, but I will let the hon. member see the full reports I have on the investigation, and he will realize what can be stated publicly about it at the present time without embarrassing the continuation of the investigation. Black market operations have to be checked constantly and those investigations are being continued to ascertain what outsiders were involved. When the hon. member sees the reports he will- realize how far we should go in giving out details of what has been uncovered up to the present time.
Item stands.
Progress reported.
It being seven minutes past eleven o'clock, the house adjourned, without question put, pursuant to standing order.
Monday, July 8, 1946