1948-06-19

Mr. DEPUTY SPEAKER:: I have the
honour to inform the house that the Clerk of the House has received from the chief electoral officer certificate of the election and return of the following member:
Of Rodney Young, Esquire, for the electoral district of Vancouver Centre.



EUROPEAN RECOVERY PROGRAM


Right Hon. C. D. HOWE (Minister of Trade and Commerce):: As promised last evening I now table copies of the list of Canadian commodities available to European recovery program countries for the period July 1, 1948, to June 30, 1949.



YUKON PLACER MINING ACT


[Stage Direction]
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs) moved the first reading of Bill No. 362 (from the senate) to amend the Yukon Placer Mining Act.
Motion agreed to and bill read the first time.


[Stage Direction]
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs) moved the first reading of Bill No. 363 (from the senate) to amend the Yukon Quartz Mining Act.
Motion agreed to and bill read the first time.


[Stage Direction]
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs) moved the first reading of Bill No. 364 (from the senate) to amend the Saskatchewan Natural Resources Act.
Motion agreed to and bill read the first time.

Mr. RALPH MAYBANK (Winnipeg South Centre) moved:: That pursuant to the resolution adopted yesterday, hills Nos. 336 to 361 inclusive, appearing on the order paper today, be read a second time and referred to the committee on miscellaneous private bills.
Yesterday a resolution was adopted to the effect that private bills from the senate may be given first and second readings when received from that house and referred to the appropriate committee.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Bill No. 336, for the relief of Paul Char-bonneau.-Mr. Maybank.
Bill No. 352, for the relief of Samuel Lankszner.-Mr. Maybank.
Bill No. 353, for the relief of Audrey Maude Victora Giles Findlay.-Mr. Maybank.
Bill No. 354, for the relief of George Elias Heydenreich.-Mr. Maybank.
Bill No. 355, for the relief of Guiseppina Cannuli Catalfamo.-Mr. Maybank.
Bill No. 356. for the relief of Ann Laurie Willett Allan.-Mr. Maybank.
Bill No. 357, for the relief of Leon Schechter. -Mr. Maybank.
Bill No. 358, for the relief of Beatrice Evelyn Tutill Bobinsky.-Mr. Maybank.
Bill No. 359, for the relief of Una Mary Phillips Slavin.-Mr. Maybank.
Bill No. 360, for the relief of Margaret Laidley Lawrie Burke.-Mr. Maybank.
Bill No. 361, for the relief of Albert Kenworthy.-Mr. Maybank.


[Stage Direction]
Hon. ALPHONSE FOURNIER (Minister of Public Works, for the Minister of National Defence) moved that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to bring in a measure to amend the Department of National Defence Act to release from the consolidated revenue fund certain moneys which were contributed to contingents of the Canadian officers training corps established at various educational institu-
Inquiries oj the Ministry
[Stage Direction]
tions throughout Canada by the members thereof by way of assigned pay and otherwise and by other persons.
Hon. COLIN GIBSON (Secretary of State):: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Hon. MILTON F. GREGG (Minister of Veterans Affairs) moved that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to bring in a measure to remove the time limits in which an application for pension in respect of death may be made under parts I and X of the Civilian War Pensions and Allowances Act.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. E. B. McKAY (Weyburn):: Mr. Speaker, I should like to ask a question, either of the parliamentary iassistant to the Minister of Agriculture, or of the appropriate minister. What steps have been taken by the federal government to assist Saskatchewan in combating the serious scourge of grasshopper infestation which is destroying thousands of acres of prairie crops?


Clarence Decatur Howe: Mr. Speaker, at the request of the Minister of Agriculture, who is in Saskatchewan, considerable quantities of poison have been flown in from the United States, and are now being distributed.


Mr. KNOWLES:: You are right, there. COMMUNISTS



PRESS REPORT AS TO INVESTIGATION IN CIVIL SERVICE

[Stage Direction]
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: Mr. Speaker, I should like to ask a question of the Minister of Justice with respect to a press

dispatch appearing yesterday to the effect that some investigation was being made in the civil service with regard to communist propaganda. I should like to ask whether that is so, and what is being done, and in particular whether a statement made in the house last February by the hon. member for Athabaska (Mr. Dechene) to the effect that meetings were being held in Ottawa, including members of the civil service, designed to sabotage the service in case a call should come from overseas, has been investigated. Is there any foundation for that statement?


Right Hon. J. L. ILSLEY (Minister of Justice):: Mr. Speaker, I have not read nor have I seen the news item in question. I did notice a headline-I believe it was in the Montreal Gazette

but I did not have time to read the article; therefore I am not in a position to answer the hon. member's question. I doubt whether I am the minister to answer it. Of course the question which relates to meetings to be held in Ottawa would come under the jurisdiction of my department.


John George Diefenbaker: Was any investigation made of the statement?


James Lorimer Ilsley: I shall give consideration to the answer which ought to be given to the hon. member's question. I doubt whether I should give an answer as to any investigations being made by the Royal Canadian Mounted Police.


John George Diefenbaker: Does the minister say that investigation in the civil service is or is not taking place? Surely as the head of his department he knows that.


James Lorimer Ilsley: I shall give consideration to the answer which should ibe made to the hon. member's question. As usual, he gave no notice of his question.


John George Diefenbaker: Notice is not
required in a matter such as this.


Stanley Howard Knowles: I should like to ask a supplementary question, so that the minister may answer it when he is answering the question of the hon. member for Lake Centre (Mr. Diefenbaker) on Monday. Can, he say by whose authority the questionnaire now being circulated in certain departments was prepared, and will he give some explanation as to the form in which it was drafted? It does seem to me that this question about "his uncles and his cousins whom he numbers by the dozens" is a silly way of dealing with a serious matter.

Supply-Reconstruction and Supply



CRIMINAL CODE


[Stage Direction]
On the orders of the day:
Mr. JOHN T. .HACKETT (Stanstead): Mr. Speaker, will the Minister of Justice be good enough to say whether any special provision has been made for the recodification of the criminal code? I heard what he said the other day when we were discussing the revision of the statutes, but I do not see in the bill any provision for this recodification.
James Lorimer Ilsley: No provision was made in that bill for the recodification of the criminal code. As the hon. member knows, recodification of the criminal law is proceeding rapidly all the time. Extensive amendments are being made every year, but no special provision has been made for a complete recodification of the criminal code.



RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. JULIAN H. FERGUSON (Simcoe North): I should like to ask the Minister of Transport (Mr. Chevrier) to use his best efforts, in conjunction with the Canadian Pacific Railway, to improve the day coach service on the different trains operating to the capital of Canada. At the present time some of the oldest coaches owned by the railway are travelling from Toronto to Ottawa. They are not air-conditioned. I hope that an effort will be made to ensure that railway transport serving this area shall be in keeping with the status of Ottawa as the capital of Canada, which we all hold so dear.
[Stage Direction]
The house in committee of supply, Mr. Golding in the chair.

[Stage Direction]
Demobilization and Reconversion-
1)08. To provide for the liquidation of contracts, including commitments of previous years related to the acquisition of assets operated by the department or an agency of the department; and for miscellaneous and unforeseen expenses, *500,000.
["On a point of order, Mr. Chairman, we have been sitting in this house from eleven o'clock in the morning until eleven o'clock at night, and I do not intend to stay here beyond eleven o'clock.\nItem stands.\nProgress reported."]
Mr. HACKETT:: Has the right hon. gentleman the information which last night he said he would make available?


Clarence Decatur Howe: I expect to be able to give it as soon as my officers arrive.


John Thomas Hackett: Can the minister give us any further information about the four per cent of the claims from cancelled contracts which are still outstanding? Is litigation between the department and the claimants pending at the present time?


Clarence Decatur Howe: Referring to the earlier question, the ten largest claims were as follows:
Canadian Car and Foundry Company (aircraft)	 $18,802,764
Fairchild Aircraft Limited (aircraft)	 6,185,886
Chrysler Corporation (motor
vehicles)	 2,094,388
Ford Motor Company of Canada
(motor vehicles)	 14,591,767
General Motors of Canada Limited
(motor vehicles)	 9,976,479
Montreal Locomotive Works
Limited (tanks)	 4,881,588
R.C.A. Victor Company Limited
(wireless sets)	 10,054,530
Northern Electric Company
Limited (wireless sets)	 3,313,566
Canadian Pacific Railway Company (gun contract)	 2,824,731


John Thomas Hackett: Will the minister outline briefly the method followed in determining the adjustment?


Clarence Decatur Howe: The contract was terminated as of a certain date, an inventory is taken and a complete audit of the books of the contractor made by the treasury audit staff. The surplus inventory is valued and arrangements are made to move it from the contractor's plant for government account. The amount of the balance owing to the contractor is regarded as an appropriate claim.


John Thomas Hackett: Who was the arbiter
who determined what the amount was in each instance?


Clarence Decatur Howe: The department and the
treasury officials.


John Thomas Hackett: Was it a matter of
determination by the department, or was there something in the contract that enabled the minister or the department to determine what was owing, or was it a matter of arbitration or agreement?


Clarence Decatur Howe: The contract was terminated,, the contractor filed a claim for work in process and for materials on hand for the-contract, and the government sent in its-treasury auditors to check the contractor's accounts. Officers of the department who' were familiar with the contract were also* consulted. A claim was adjusted more or less to the satisfaction of the contractor and

Supply-Reconstruction and Supply
the government-certainly to the satisfaction of the government-and after that the claim was paid.


John Thomas Hackett: Was the adjustment made by virtue of some section in the agreement?


Clarence Decatur Howe: Yes; each agreement contained a termination clause setting out the conditions under which the contract could be terminated.


John Thomas Hackett: In that way ninety-six per cent of the claims have been disposed of?


Clarence Decatur Howe: Yes. There are a number of claims outstanding-five or six with one company-but the amount in dispute in connection with all claims is less than $500,000, although payments outstanding are more than that. We have had certain, claims audited, and the [DOT]contractors have challenged the government audits. In some cases a re-audit is being made in the light of the contractor's representations. At the moment there is no claim in litigation. I'Ve settled one yesterday that threatened to be in litigation.


[Stage Direction]
Item agreed to.
J/09. Reconstruction projects, subject to allocation by the treasury board, $1,000,000.
["Yes. There are a number of claims outstanding-five or six with one company-but the amount in dispute in connection with all claims is less than $500,000, although payments outstanding are more than that. We have had certain, claims audited, and the [DOT]contractors have challenged the government audits. In some cases a re-audit is being made in the light of the contractor's representations. At the moment there is no claim in litigation. I'Ve settled one yesterday that threatened to be in litigation."]
Mr. GREEN:: Will the minister explain this item?


Clarence Decatur Howe: Under the government's high employment program a reconstruction fund was set aside to take care of spotty unemployment in certain areas. If a serious unemployment situation developed, funds could be allocated to various departments of the government in .order to proceed with needed public works in the area. As employment has been high, it has been used only to a limited extent.


Howard Charles Green: To what extent?


Clarence Decatur Howe: There was a survey of the St. Lawrence waterway project, $63,000; a survey of the Red Deer river project, $107,000; a survey of the South river project, $120^000; reconditioning and altering .of M.V. Huascaran, now the S.S. Beaverbrae, for the .carriage of immigrants, $300,000. The actual expendFtures last year under this vote were $591,419.21.


Mr. GILLIS:: The minister stated that the purpose of this vote is to develop projects in sections of the country where employment may be spotty, but he went on to say that in view of the high level of employment across the country it has not been necessary to use it, I notice that the surveys that were made were in Ontario and the west.
{Mr. Howe.]
I cannot accept the minister's statement that there is a high level of employment in all parts of the country, because that certainly is not true in the maritimes. It is evident that the maritime provinces have been neglected completely as far as expenditures under this vote are concerned. The committee of reconstruction of this house functioned in 1942 and 1943 and brought in a comprehensive report dealing with projects that it regarded as necessary in the aftermath of the war in order to keep a high level of employment. That committee recommended the carrying out of one project in Nova Scotia having to do with the strait of Canso. That recommendation was accepted, and I am wondering why a survey has not been made.
This matter has been passed on to the Department of Transport, and yet this particular vote is provided to relieve any unemployment situation that might exist. I expect to see very little done by the department which now has the matter under consideration. I submit that if this vote is used for the purpose for which it was intended, this particular matter should receive serious consideration by the department of reconstruction.


Clarence Decatur Howe: A survey of the strait of Canso has been made, and studies have been prepared of three alternative solutions of the transportation problem. However, it seems to be impossible to obtain agreement between the government and the local and provincial authorities as to a solution that will be acceptable to all parties. The project is in good hands as far as this government is concerned. At the moment there is a commission sitting on it made up of three engineers, one appointed by the province and two by the federal government. I dare say this commission will throw' new light on the subject and great things wall result.


Clarence Gillis: I do not think there is any disagreement as far as the provincial and local authorities are concerned. They are unanimous that the job should be done. The difficulty is with the engineering department of the federal government. I think one of the main difficulties which developed in connection with the project was the tying-in of the realignment of the railroad from that point to New Glasgow. That would add terrifically to the cost. I ask the minister, who is an engineer, to give the matter consideration, and to separate the tunnel, causeway or bridge from the railway project; it would then come within the terms of this vote.
I think the reason for the attitude of the Department of Transport is that railway

Supply-Reconstruction and Supply
realignment was tied in with the bridge or causeway or tunnel project across the strait of Canso. I strongly urge upon the minister that he consider the bridge project separately under this vote. He himself has already said that the purpose of the vote is to relieve unemployment in certain areas where it is spotty. Department of Labour statistics show that in the last three years four thousand people have been moved out of Nova Scotia alone to relieve its unemployment situation. Personally I think that bad policy. The people of Nova Scotia today are more or less in the category of displaced persons. Instead of moving the unemployed from Nova Scotia, an endeavour should be made to find employment for them there and to develop this country from coast to coast. It is hard for me to understand the necessity for bringing in a large number of displaced persons from Europe so long as there is unemployment in a large area of Canada. The policy is all to the good from a humanitarian point of view, but it requires re-examination from the point of view of unemployment of our own Canadian people.
I again ask the minister to consider separating the bridge project from the realignment of the railways, because they do not really go together, and see whether the Department of Reconstruction cannot co-operate with the Department of Transport on the bridge project. It would go a long way towards relieving unemployment in that part of the country, and would demonstrate to the people of Nova Scotia that at least one section of the government is thinking in terms of something east of Montreal. In the maritimes the people are acquiring a complex that in the eyes of the government the area east of Montreal is not Canada. Once in a while mention will be made of Halifax and the national harbours board, but there is a stretch of territory three hundred and sixty-five miles long east of Halifax that seems to be ignored by this government. I sometimes wonder when we are discussing national questions in this house whether members know their geography and realize that there are sections of Canada whose people are entitled to consideration from the government other than in the matter of paying taxes.
This is a reconstruction post-war project. I speak of it now because the purpose of this vote is to relieve unemployment. This project was recommended to the house and approved. I do not think much more information can be gained than is now available in the large return that was tabled the other day. It contained report after report by engineers, letter after letter between departments of government, the opinions of coal company engineers and of
government engineers. The feasibility of the project and the necessity for it have never been questioned. The only thing about which there was a difference of opinion was the cost, and I do not think that should be considered at all in a project of this kind. In building such a structure you are creating new work and doing something for coming generations.
If the pioneers of this country who built the Canadian Pacific and Canadian National railways had thought just in terms of money, had allowed money to be the dominant factor, we would still be without railways. We still pour millions of dollars into the C.N.R. because that railway is a national necessity, and this bridge project should be looked upon in the same light. Money is only a medium of exchange to be used to get things done. The government should go ahead in co-operation with the provincial government and spend some of the taxpayers' money in creating new wealth in this country by proceeding with this bridge project, which coming generations could look at and say: The government in office at that time certainly recognized when they built these improved facilities that there were generations still to come. As it is now, we are using the same old equipment that we had seventy-five years ago, and the government is spending another five or six million dollars in perpetuating that antiquated equipment. It is a waste of money.
I think the minister knows that the island of Cape Breton produces one-third of Canada's basic steel, and it has to be shipped across that strait, which proved to be a bottleneck during the war. When the St. Lawrence river was partly closed because of enemy submarines, equipment had to be provided to unload and transport the coal up the St. Lawrence, at a cost very nearly as much as a permanent bridge would cost. That was done because there was an emergency; the war was on. Today I am thinking in terms of linking up that part of the country with the rest of Canada. Even if the bridge or causeway should cost $54,000,000 -which I doubt, and which engineers who have submitted estimates of cost also doubt- we should be building something for ourselves and for future generations. It would create employment and help to develop that part of the country so that people would have an incentive to come there and invest their money.
The one thing that militates against the development of the maritimes is the lack of transportation facilities. This bridge project was recommended unanimously by a committee of this house which was charged with
5492	COMMONS
_____Supply-Reconstruction and Supply
examining post-war projects that were necessary and of national importance. This is one of them.
When the minister has a responsibility I know there is no ducking of the issue with him. One thing I like about him is that he puts the cards on the table face up, and if he undertook this responsibility and gave an opinion on it based on his own knowledge, I would be quite satisfied to accept it. But I am not satisfied with all the quibbling and manoeuvring and manipulating that has gone on with regard to these surveys and borings since 1901. As one member of the house who has given a lot of thought to the subject and read the reports of the engineers pro and con, I am convinced that the project is feasible. It will not cost too much money, and it is the direct responsibility of the government, and of the minister, under this vote, as a post-war project.


Clarence Decatur Howe: Let me say this. The Minister of Transport brought down an engineering report from the officers of his department. That report contained a recommendation for improving transportation between the mainland and Cape Breton island. It is only because of local protests that that work is not under way today. I suppose that people who are not prepared to invest five cents in the enterprise can bring down suggestions for the next fifty years, and nothing will be done. If the project could be reduced to reasonable proportions, it seems to me we could get on with it and give the island of Cape Breton transportation facilities equal to the requirements of the situation.


Clarence Gillis: Would the minister mind telling us where these local protests come from?


Clarence Decatur Howe: I could tell the hon. member the names of the people who have come to me in delegations, and to the government in delegations, but I do not know that it would improve the situation. They have come from the province and from the locality. Nothing that the government proposes is any good. If that situation could be remedied, perhaps we could get on with the project.


Clarence Gillis: The reason that I press the point, Mr. Chairman, is that I hold in my hand documents which have been sent to me representing the whole opinion of the community.


Clarence Decatur Howe: Yes.


Clarence Gillis: They are not insisting on a tunnel, a causeway, or a bridge. They

demand that the project be built in accordance with whatever plans the government may have; that is all. I have read engineering reports in the returns that I have, and the opinions of engineers who are competent. They do not doubt the feasibility of it. I am surprised to think that anybody locally would object to the government going ahead and making a permanent crossing there in accordance with whatever views of it they may have themselves.


Clarence Decatur Howe: At the moment a commission is sitting on the project. Why? Because it was demanded by the province and by the local interests. I presume that the report of the commission may not satisfy everybody, and someone will demand something else. If the people there would cease making this a political football, and try to get some practical result there, I think they would have no complaint about getting on. Certainly, if I were the responsible minister, so long as the controversy raged I would do just what the government is doing-wait for the opinion to crystallize on some particular method.


Clarence Gillis: I resent the remark of the minister that this is being made a political football. I do not think he intended that, because the reverse is true. I know that every shade of political opinion in Nova Scotia today, particularly on the island of Cape Breton, is organized into a permanent organization known as the Canso Crossing Association. There is no political opinion in that body. They are meeting weekly, and they represent the whole section of the country. They write to me. I know who they are politically, but that does not enter into the picture at all. It is one thing on which the people of that section of the country are solidly united.


Clarence Decatur Howe: The hon. member will agree that the local organization demanded another report from a board of engineers which is now sitting. The hon. member will agree with that?


Clarence Gillis: Yes, for this reason-


Clarence Decatur Howe: There is nothing we can do until the last demand is fulfilled and the report is made by the board of engineers.


Clarence Gillis: The reason they demanded that should be well known to the minister. Perhaps he does not know it, because this has not been under his wing. I think it would be further advanced if it were. He would build the bridge.


John Thomas Hackett: He will build it before we adjourn if the hon. member is not careful.

Supply-Reconstruction and Supply


Clarence Gillis: Why did they demand the board of engineers?


Clarence Decatur Howe: Because they did not like the last one, and I am sure that after this report is brought down they will demand another.


Clarence Gillis: First, the board took a whole year to find out how deep the water was, and spent a lot of money on that.


Some hon. MEMBERS:: Oh, oh.


Clarence Gillis: The Minister of Transport made a report to the house. They knew how deep the water was in 1901 because the Waddell Hardessy Company made a survey. After the borings were completed the minister reported to the house. His report was to the effect that it was not considered financially feasible. The cost was too high. That report led the people of Nova Scotia and myself to believe that as far as the government was concerned it was out; that the government was not going to touch it. That was further supported by an appropriation in the estimates of the Minister of Transport's department for improvements to the existing facilities costing
So,000,000, plus all the maintenance costs. When I saw the improvements there, and the new ferry, it led me to believe, as it led the people to believe, that the tunnel project or the bridge or the causeway was finished, that it was not going forward. That did not satisfy the people. It did not satisfy me. That is why they demanded a board of competent engineers. I think it came from the Premier of Nova Scotia.


Clarence Decatur Howe: They have that.


Clarence Gillis: They have the board of engineers now. What I am suggesting to the minister now is that under this vote he should endeavour to separate the realignment of the railways from the project itself, which would take away that frightening cost, and decide on a permanent crossing, based on that project alone, rather than allow the matter to rest completely with the transport department. I suggest that he exercise his influence on this department and try to have the project come under the vote having to do with reconstruction, relief and employment, which is a necessary project in Nova Scotia. I suggest that he use whatever influence he has to separate the costs. In my opinion what has retarded the whole project has been the hooking up of the realignment of the railways. That is where the Minister of Transport became involved.
I am not going to argue any further with the minister. I know he agrees with me a hundred per cent, but he just cannot say it publicly. I ask him to give it consideration.


Mr. QUELCH:: I notice that this item includes the cost of survey and engineering work on the Medicine Hat irrigation project and the diversion of the Red Deer river in Alberta, and the South Saskatchewan. Can the minister tell the committee just what is the status of the Red Deer river diversion project? Is it being held back as a project to provide employment in the future, or, on the other hand, is it the intention of the government to go ahead as rapidly as possible just as soon as men and materials are available for the work?
I know that a small project in connection with the larger one is being carried out this year, but it would be dependent upon surface run-off water for irrigation. Unfortunately in that area in the extremely dry years there is very little run-off, with the result that at the very time when water is most needed for irrigation it is not available. We can never expect irrigation in that area to be a success until we can obtain water from the rivers in the extremely dry years. A tremendous loss of wealth is occurring in that area on account of drought. For the past three years the greater part of that area has been under the prairie farm rehabilitation scheme. Although there was a heavy run-off this spring, complaints are already coming in that crops are drying up. The federal government is having to put out large sums of money in that area for prairie farm rehabilitation, and in certain years feed has to be shipped in. This irrigation project would provide feed lots so that the area could be largely self-supporting. In addition it would provide for an additional population of around 30,000 people.
It is generally agreed that this irrigation project would make the area largely self-supporting, thereby relieving the federal government of a large bill of expenses. Is it the intention to proceed with the project as soon as men and materials are available, or is it being held back as one of the relief projects to provide employment in the future?


Clarence Decatur Howe: The project is in the hands of P.F.R.A. The department merely allocates certain funds from this vote to permit P.F.R.A. to go ahead with the survey. When the time comes to proceed with the project, appropriations will be made from the P.F.R.A. vote in the usual way. Only the Minister of Agriculture can give the information asked for.


Mr. DIEFENB AKER:: The Minister of Agriculture within the last few days did give some information in regard to the South Saskatchewan river project; he said that $110,000 had been spent during the year on survey proceedings. The total amount of

Supply-Reconstruction and Supply
expenditure for the coming year,, according to the estimates, is to be $1,000,000. I should like to find out what projects particularly are in the mind of the government, how that expenditure of $1,000,000 is to be made, and how it is to be distributed.
The South Saskatchewan river project, according to the present views of the Minister of Agriculture, cannot be proceeded with for a period of two years. I think it should be proceeded with now. Extensive exploratory and engineering work has been done, but the government's attitude is that the work shall not go ahead. Is the minister able to say how much of the $1,000,000 will be expended, or is to be expended, this year?
I wish to bring to the minister's attention another project in Saskatchewan which, if properly developed and encouraged, would attract to that province many tourists who today are not coming in. I refer to Watrous lake, some ninety miles east of Saskatoon, a lake which for over two hundred years has been recognized by the Indians living on the plains as possessing peculiar medicinal qualities. In the last few years that lake has gone back because of drought and because the springs that ordinarily feed it have been covered over by an incrustation of chemicals resulting from heat and evaporation. Is that the type of project which the department of reconstruction would consider a proper one on which to expend moneys under this item? I am not asking for the expenditure of money on anything but self-liquidating projects, and I suggest to the minister that this is one that would pay large dividends in increased tourist traffic and in the numbers who would come from various parts of the United States for treatment in this lake.
About three years ago the minister stated that his department had plans ready for public projects and was prepared to go ahead on short notice. He said that particular attention would be given by his department to projects designed to develop basic industries and to press forward vigorously, improvement in transportation and the opening of northern regions. I would ask him what is being done to carry out the views he then expressed.
Today our only hope for the development of the north country is through the instrumentality of private enterprise. In Saskatchewan-and I am not entering into any controversy on the subject-no government can afford to invest risk capital in exploratory work for the development of our natural resources. In fact, as far as gas and oil development is concerned, that has been turned over by the government of Saskatchewan to private interests. We all realize that

governments, however great the potentialities in natural resources, cannot afford to risk the taxpayers' money on projects without knowing for certain that they will actually return dividends.
There is great risk in the development of these resources. Recently I noticed that the total amount of return to private companies in Alberta since the development of the oil resources in that province has been $55,000,000, while the total amount expended in risk capital since oil was first discovered there has been $65,000,000.
I should like to know what the government intends to do during the coming year to open up communications with the north country, so that opportunities will be available to private enterprise to go in and develop. We need in Saskatchewan, as in the other western provinces, the opening of roads and the development of power, which after all, in the northland, must be a matter of government expenditure-as in the Yellowknife district by virtue of legislation introduced the other day and now, I believe, passed by parliament.
What plans has the minister to encourage the development of the eighty-five per cent of our country which is largely undeveloped today? I do not think that any government can enter into that development but I believe that one of the responsibilities of the minister, as head of this department, is the surveying of the country. Indeed, he himself said three years ago that these were his plans, and then, a general survey having been made, funds would be advanced on behalf of the state to the end that opportunities would be made available to private companies prepared to risk their capital in the uncertain development of our resources.
My questions therefore are these: (1) How much will be expended this 3rear on the South Saskatchewan development? (2) Does a project such as I have mentioned, the one at Watrous lake, come within the purview of this estimate? (3) Will the minister give the country the benefit of his experience in the matter of the, expansion and encouragement of development of our natural resources, to the end that in our north country we shall give to private enterprise the opportunity which too often is denied it because of the costly expenditures private enterprise would have to undertake to make these resources accessible?


Clarence Decatur Howe: This $1,000,000 refers to no known project at the moment. If the project were known, it would not be included in this vote but would be in a special item. This vote is to meet unforeseen conditions. The vote

Supply-Reconstruction and Supply
was originally 85,000,000 and was reduced to $1,000,000, because we have learned over the years that in times like these there are not many unforeseen situations that have to be met apart from those provided for through the normal estimates. The drawings on the fund have been small. We have started projects where some unusual situation made it imperative that no time be lost.


John George Diefenbaker: How much was
drawn out of the fund last year?


Clarence Decatur Howe: I gave the figure.


John George Diefenbaker: Yes, but I am asking for it again.


Clarence Decatur Howe: $591,000. Watrous lake is wholly in the province of Saskatchewan. Any development of the type indicated must be sponsored by the province. The same remarks as I made regarding the Red Deer apply to a dam on the South Saskatchewan river. It is a project which is being carried out by the P.F.R.A. Certain expenditures were made for borings last year, and money was appropriated from this account. But this year and in the future, appropriations will be in the estimates of the P.F.R.A.


John George Diefenbaker: No part of the million dollars will be used on the South Saskatchewan project?


Clarence Decatur Howe: Not unless an emergency arises which indicates that it should be so used.


John George Diefenbaker: What does the
minister mean by an emergency?


Clarence Decatur Howe: Some necessary and unforeseen expenditure that the government believes is sufficiently urgent to warrant an appropriation from this vote. The South Saskatchewan is one of the most difficult engineering problems that has ever been tackled in this country. Part of the problem is to build a high earth dam on material that has no known bottom. In building grain elevators in that country we used to drive all the piles we could get, of as great a length as we could get, build on it, load the elevator, say a prayer and watch it settle a few inches. You cannot do that with a dam. You must find something to put a da.m on in order to make .the project feasible. That is involved in the present exploration. It is no easy problem. However, it is being tackled by the best engineering skill that can be made available.


John George Diefenbaker: Do any of the engineers in the minister's department make reports on this matter?


Clarence Decatur Howe: No.


John George Diefenbaker: Or make any
investigation?


Clarence Decatur Howe: No. We do on occasion, but not on this particular project. It is too big a project for casual engineering. It requires a special Staff.
I think that answers the question. Was there another one?


John George Diefenbaker: What about the northern area? What is being done there?


Clarence Decatur Howe: Where the province has shown an interest in an area, we sometimes render assistance in opening it up. A case in point is the road from Alberta into the Yellowknife region. The road has been built, or is under construction, connecting Alberta with the Northwest Territories. That road within the Northwest Territories is being paid for by the federal government, and some assistance has been given to the Alberta section of the road. The federal government is just, completing a power plant in the Yellowknife area. A bill has been before the house at this session to set up a power commission. Ordinarily it is the job of each separate province to develop power within its boundaries. That is a job the provinces are glad to undertake because it is usually a profitable operation. But in the Northwest Territories the federal government is the government, and it is carrying out there the duties that would ordinarily be carried out by a province if that area were included in a province.
With regard to northern Manitoba, some important discoveries were made in the vicinity of Flin Flon. There again the government is giving some assistance to the province in building a road to open up the area. Certain assistance has been given to British Columbia in opening up certain areas.


Howard Charles Green: Which ones?


Clarence Decatur Howe: I cannot say offhand. It would not come from this estimate or this vote. The votes were made in the usual way. I cannot say which ones. The Department of Mines and Resources will be able to tell my hon. friend that.


Mr. POULIOT:: Construction is made more difficult because of the difficulty in getting cement. Some builders have told me that last year the Canada Cement Company closed a manufacturing plant in Ontario, and that at least one million bags of cement would have to be provided from the province of Quebec in order to fill the gap. I wonder if that is true. I would ask the minister, who must know about the matter, for some information with regard to the closing of the

Supply-Reconstruction and Supply
Ontario plant of the Canada Cement Company and the possibility of securing cement by those who intend to build houses. At the present time it is most difficult for those who are building to put in the foundations of any building they are constructing. I would be grateful to the minister if he would give us some explanation about the matter.


Clarence Decatur Howe: The position of cement is vastly better this year than it was last. The addition to the plant of the Canada Cement Company in Montreal has been completed and is in full operation. The addition to the cement plant at Belleville is in full operation. The addition to the Exshaw plant is in full operation, I believe; in fact, I am sure it is by now. I think the capacity has been expanded-I hesitate to give the amount- by something of the order of a million barrels a year as compared with last year.


Jean-François Pouliot: Was one Ontario plant closed last year?


Clarence Decatur Howe: Only for repairs or expansion. All the cement capacity of the country is operating, and I am told by the industry that it is expected that there will be plenty of cement this year.


Mr. LENNARD:: There is a plant at Lake-field which has been closed for some years. Is it to be reopened?


Clarence Decatur Howe: If the plant has been closed for some years, the chances are that it could not be reopened.


Howard Charles Green: Last night the minister
stated that the department of reconstruction would be wound up within six or seven months. As I understand it, one of the principal functions of the department has been to take a look at the country as a whole, from a broad view, and to decide where projects will be undertaken. I think that was a useful job. But what is to happen when the department folds up? Is some other department of the government to take on the function of viewing the picture across the country as a whole and deciding where this help should be given? That of course is important, not only from the point of view of furnishing employment in bad times, but also for the long range development of the country. I think it is important that we should know just which department of the government is to cariy on this useful work once the department of reconstruction folds up.


Clarence Decatur Howe: The department of reconstruction was formed for the purpose of looking after the transition from war to peace. We feel that that work has been accomplished.

However, there are certain continuing functions which we believe should be merged into the permanent plan of operation. Two branches were concerned with the work suggested by my hon. friend. One was the economic research branch, which studies the figures collected by the bureau of statistics, and also collects figures independently and prepares reports from time to time on the state of the country, calling attention to any situation that requires special attention. The other was the public projects branch whose duty it was to encourage self-liquidating or necessary public projects, and to have them available whenever the manpower and materials situation make it possible to carry out such projects. That will be a continuing branch, and both those branches will be merged1 in the Department of Trade and Commerce.


Howard Charles Green: This will not be under the Department of Public Works or the Department of Mines and Resources.


Clarence Decatur Howe: The plan at the present time is that it wall be under the Department of Trade and Commerce. There may be some re-adjustment later. At the moment, consolidation is going on between the Department of Trade and Commerce and the Department of Reconstruction and Supply.


Mr. MILLER:: Has the minister's department done any survey work across Manitoba in connection with a new trans-Canada highway? I know certain work was done, but I believe it was done by the provincial authorities in connection with the re-routing of the highway. Actually I should think the trans-Canada highway would be in the mind of the minister, because it is related to the employment part of his program. If no survey has been made, is it in contemplation; and is it the ultimate intention of the department to build the trans-Canada highway across Manitoba and western Canada?


Clarence Decatur Howe: The policy has always been that the route of the trans-Canada highway is a matter for each province to recommend and the federal government to approve. Highways are the responsibility of the provinces. The federal government has neither the authority nor the machinery to build highways in the provinces. Any surveys having to-do with the trans-Canada highway in Manitoba would be made by that province.


Mr. STEPHENSON:: In connection with the closing out of the Department of Reconstruction and Supply, what would happen to housing projects? Also, will the minister make-a statement about the rumour that any com-

Supply-Reconstruction and Supply
munity wishing to begin a wartime housing project must make application before a certain time?


Clarence Decatur Howe: All the housing functions of the government have been concentrated in the Central Mortgage and Housing Corporation, a crown company. It has been customary every year to draw a deadline at a certain date as the cut-off for the program of that year. Obviously a house started in September, 1948, cannot be considered as part of the 1948 program, because it will not be completed in that year. The government does not desire to begin the building of houses in the autumn so that they will have to be completed in the winter. The process is too expensive. The program for 1948 was cut off, I believe, on June 1. This autumn we shall probably be considering the program for 1949.


Charles Elwood Stephenson: But it is the intention of the government to carry on the housing program under another department in the future?


Clarence Decatur Howe: Central Mortgage and Housing Corporation will continue to be that body. At the present time it reports to the Minister of Renconstruction and Supply. In future it will report either to him or to some other minister, and its functions will be carried on.


Mr. CASE:: The minister has intimated that the provinces are responsible for the designation of the route. Is there any set contribution that the dominion government makes towards that project, or is it a matter of negotiation?


Clarence Decatur Howe: There is no policy which provides for contributions from the federal government toward the building of any highway at the present time-except by special arrangement ; and that is usually confined to the opening up of new areas.


Wilfrid Garfield Case: That is, there never has been any such-*


Clarence Decatur Howe: Oh, there has been a policy, yes-other days, other policies. There was a policy in the thirties, when employment was a key consideration, at which time the cost was divided fifty-fifty. At the present time, however, it is impossible to tackle a big project on account of lack of manpower. When it becomes possible to consider such a project, a new policy will be established.


Calvert Charlton Miller: Is there among the future unemployment relief projects or programs of the government any blueprint for the trans-Canada highway?


Clarence Decatur Howe: If we see any sign of widespread unemployment we will proceed to make
a blueprint. But at the present time we have not a blueprint and we do not think one is necessary.


Stanley Howard Knowles: In connection with the matter raised by the hon. member for Portage la Prairie, may I call the attention of the minister to a recommendation recently forwarded to the government by the Winnipeg chamber of commerce, over the signature of Mr. E. C. Gilliat, the managing secretary.
I understand this recommendation was sent to the Minister of Public Works. It seemed to me at the time, however, that it was a matter which would come under this department, and I am glad the hon. member for Portage la Prairie has brought it up.
I shall not take the time of the committee to read the whole of the letter, or even all the terms of the recommendation, but I would call attention to this concluding paragraph, which sets out the views of the Winnipeg chamber of commerce:
It recommends, therefore, that a dominion-provincial agreement respecting federal support for highway construction under conditions and conforming to specifications as may be set out in the agreement he negotiated forthwith.
Has this been considered by the government? If not I hope the minister will do his part to have this recommendation from the Winnipeg chamber of commerce considered favourably, with special reference to the completing of a dominion-provincial agreement respecting federal support for this desirable project.


Howard Charles Green: The minister has intimated that there is no intention of taking any steps with regard to the trans-Canada highway-


The DEPUTY CHAIRMAN:: I wonder what this item has to do with housing and the trans-Canada highway?


Howard Charles Green: We are not on the housing item.


John Thomas Hackett: We have not reached that one.


William Henry Golding: We are discussing item 409, which deals with reconstruction projects, subject to allocation by the treasury board.


John Thomas Hackett: The minister has said it covers anything and everything that may develop from an emergency.


William Henry Golding: I do not think the item would cover housing and a transcontinental highway.


Howard Charles Green: It would certainly allow us to discuss a trans-Canada highway; I agree it does not cover housing.
549S

Supply-Reconstruction and Supply


William Henry Golding: If we would confine our remarks to the item under discussion we would make greater progress. Let us deal with these specific matters when they are reached.


Howard Charles Green: The construction of a trans-Canada highway would certainly come under reconstruction projects. The minister has intimated that the present policy is to do nothing about the trans-Canada highway until there is a period of comparative unemployment. We all hope that will be many years hence.


Clarence Decatur Howe: I did not say that; I said when manpower would be available. I wish my hon. friend would not put words in my mouth. I did not talk about unemployment; that is the specialty of the opposition.


An hon. MEMBER:: You did talk about it.


Howard Charles Green: My statement-and I think everyone here will agree-was in accordance with what the minister said.


Clarence Decatur Howe: Quite different.


Howard Charles Green: If he wishes to change his policy, it is all right with me.


Clarence Decatur Howe: I want to point out that it is not the responsibility of the federal government to build highways on its own initiative. The provinces initiate plans for highways and then ask for consideration by the federal government. It is not appropriate for me to talk about building highways unless they lie in the Northwest Territories or in areas controlled by the federal government.


John Thomas Hackett: Or over the strait of Canso.


Clarence Decatur Howe: I suppose we could do that.
I can give no commitment about any highway, and I do not intend to answer any questions.


Howard Charles Green: I do submit-


William Henry Golding: I do not believe that this item has anything to do with the trans-Canada highway or housing. Hon. members should confine their remarks to the item under consideration.


Howard Charles Green: I point out with all due respect that I am about the sixth or seventh speaker who has mentioned the transCanada highway. As other members were allowed to make their statements, and as the minister has been allowed to interrupt me before I had time to complete my submission, I submit that I should not be ruled out of order.


William Ross Macdonald: I think the hon. member will admit that the item does not cover either housing or the highway.


Howard Charles Green: The item covers reconstruction projects.


William Henry Golding: Now-


Howard Charles Green: I am entitled to make my submission.
T. he DEPUTY CHAIRMAN: Just a minute. If the committee consents that anything and everything can be discussed under this item, the Chair will agree. I have simply drawn attention to the fact that the item does not cover these things.


Mr. MacINNIS:: On the point of order, if the chairman says that this item does not cover such projects as the trans-Canada highway, then I think it is up to the chairman to say what subjects can be discussed under this item. It seems to me that the item should permit a wide-open discussion of any projects that might be initiated.


Clarence Decatur Howe: Costing not more than


Angus MacInnis: I agree with the minister that he should not set an amount now, because he has stated that the government would consider this at the appropriate time. I submit that the trans-Canada highway can be discussed under this item, and I think, Mr. Chairman, you should rule accordingly.


William Henry Golding: I suggest to hon. members that they should not spend time talking about the chairman's ruling. Apparently it is the wish of the committee that the discussion be wide open.


John Thomas Hackett: It will not take long.


Howard Charles Green: The minister's statement indicates that the government has no intention of proceeding with the trans-Canada highway project until there is a period of unemployment, and that the government also believes that the initiative must come from the provinces. I am afraid that that is not a proper policy. Certainly it is not in line with the wishes of western Canada. We believe that there should be a paved highway from coast to coast, and that it will never be built until the dominion government takes the lead.
At present if anyone from British Columbia wants to drive to the east, or if anyone from British Columbia happens to be in the east- for example, a member of parliament-and wants to drive back to British Columbia with a new car, he does not think for one minute of going through Canada. He gets into the United States by the shortest route, travels across the United States as far as he possibly can, and then comes back into Canada.

Supply-Reconstruction and Supply


Mr. BLACKMORE:: And spends United States dollars in the process.


Howard Charles Green: If he can get them. That has been the position for a long time, and it creates a serious situation. It makes it that much more difficult to build up a strong nation. I think one of the most important policies that could be adopted by any Canadian government would, be the completion of a paved highway from coast to coast.
A person in British Columbia never thinks of driving to Alberta; it just never enters his head. If he goes for a drive he goes to Washington or Oregon or California; he would not think of driving across to Calgary. The same thing applies to most of the people on the prairies. They seldom think of driving through the mountains to British Columbia, because the road is poor. It is a ridiculous situation to have in a nation which we hope will be one of the leading nations of the world. It is not good enough to put off the construction of the trans-Canada highway until-


Mr. KIRK:: Who builds the roads over in the United States?


Howard Charles Green: We tried to get you a bridge a few minutes ago. It is not good enough to put off building a first-class trans-Canada highway until there is a period of unemployment or until we can get the nine provinces to take a lead. The lead in this connection must come from the dominion. I am sorry to learn this morning that the policy of the government is as it has been enunciated by the minister.


Angus MacInnis: I have received from
British Columbia many letters and resolutions indicating a great interest in this matter. I do not concede that the dominion government cannot have any interest or responsibility in connection with a trans-Canada highway. A trans-Canada highway, because of changed transportation conditions, is as much a necessity today as were the railroads before and after confederation.
I do not believe the trans-Canada highway can be built by the provinces. Some of the provincial roads already in existence could be used as part of the trans-Canada highway, but I am satisfied that sooner or later the federal government will have to give some assistance. If it has to give assistance, then I think it should have some say in deciding what the route should be. I do not agree that the federal government should provide funds for projects and then have no control over them.
With the relatively high employment existing at the present time perhaps this would not be a good time for the provinces or the federal government or both to start actual construction on a project of this kind. But a policy should be announced and the necessary surveys made so that when labour and materials are easier than they are now, the provinces and the federal government will be able to go ahead with the project in a properly planned way.
I am not sure whether the minister and the government have such a policy in mind, but ultimately they will have to have one, because the people of Canada will demand it; and they are demanding it now.


Mr. FULTON:: For three years I have been trying to bring this matter separately before the house under a resolution which would deal with this matter alone, but that has not been feasible. I support what has been said here this morning, except that I do not agree with the member for Vancouver East that the time is not ripe to make a start on this construction. Our provinces are building roads now which might form part of a trans-Canada highway system, and they should have now the financial assistance that will eventually be given to them under a trans-Canada highway policy.
I agree that the federal government should not be expected merely to contribute funds, but should have a say in the standards of construction and maintenance, and in the location of the highway. The most logical way to proceed would be along the lines followed in the United States, where a federal highways commission is set up, which, in conjunction with the states, works out the location of the roads and the standards of construction and maintenance. When the states have built the roads in accordance with the agreed specifications, the federal contribution is payable. That would be the logical way to do it in Canada. In the United States if the road is maintained in accordance with the agreed specifications, a yearly contribution is made towards the maintenance of that highway system. The policing of the road, traffic laws, and so forth, are in provincial hands. But the federal government, through the highways commission on which the states have representation, lays down the standards of construction and of maintenance. The federal government's contribution is fifty per cent. I think we should follow that precedent here and make a start now, so that the provinces which have to build and maintain their roads would be entitled to federal assistance in respect of the roads which fall within the trans-Canada highway system.
The commission might well take into consideration also the question whether we should have only one, or two or more trans-Canada roads, and should be making its plans for the location of these roads to encourage the provinces in the road building they are now doing

Supply-Reconstruction and Supply
which will become part of the highway system. The provinces should receive assistance in that work now. Then the provinces, particularly the western provinces, could devote their own resources to their own main problems, which include the building of roads in the new areas to be developed; and the federal funds would help to take care of the main road question.
While I agree with all the principles put forward this morning, I do not agree with the member for Vancouver East that no start can be made on actual construction now. I feel that we could make a start along the lines I have suggested, without making extra demands on labour and building materials.


Mr. CHURCH:: I am not objecting to what the British Columbia members do, who are well represented on both sides of the house. But houses are needed ahead of highways. I point out to the minister that an agreement was made by the city of Toronto with this government and the provincial government under which the federal government was to pay one-third of the cost of some housing projects, and I hope that commitment will be lived up to.


John Horne Blackmore: I do not propose to discuss the trans-Canada highway, except to point out that last year thirteen of us, including members from various parties, supported a program in favour of the southern route for a trans-Canada highway. Therefore I am thoroughly in favour of what has been said this morning in support of a trans-Canada highway.
I wish to say a few words on the Red Deer diversion scheme. There are several aspects of this scheme which are worthy of consideration by the minister of reconstruction. In the first place, the Red Deer diversion scheme is designed to put water on pasture land in what is known as short-grass country. The short-grass country extends in various directions from Medicine Hat, and the same kind of country is to be found in the area to be served by the Red Deer diversion scheme.
Those who are not familiar with western terminology may not know the significance of short grass. Short grass is exceedingly nutritive. Cattle will finish more rapidly on short grass than on any other kind of natural forage that I know. We can therefore see that this area is exceedingly valuable as a source of feed. The soil is very rich. The grass grows rapidly and abundantly as long as there is water on the land. The soil is not inclined to alkalization. We do not have to worry about spoiling that land with too much water because the land is well drained.

May I say for the benefit of those who are interested in irrigation projects in Alberta, Saskatchewan and Manitoba, that there is danger in irrigation schemes of spoiling the land through alkalization if it is not well drained or susceptible of being well drained. The land I speak of is well drained and is not subject to alkalization.
There are 500.000 acres of land involved in the Red Deer diversion scheme, using water only out of the Red Deer. If you add water from the North Saskatchewan, 900,000 acres could be brought under water, all exceedingly productive.
The land is gently rolling, the slopes not precipitous; the water will not run off-a very important factor in any irrigation scheme.
There is one reason why I am particularly interested in the Red Deer diversion. I may seem to be looking too far into the future, but I do not think I am. The Red Deer diversion is naturally a complementary scheme to such a project as the Lethbridge southeast water conservation project which the minister has done so much to help forward, a scheme designed primarily to put water on agricultural land on which it is proposed to raise sugar beets, canning crops and other cultivated crops. The Red Deer diversion scheme is not so valuable for cultivated crops as it is to provide forage for stock. There are, in the area adjacent to the Red Deer diversion scheme, great stretches of land which, being in the Palliser Triangle, do not receive sufficient precipitation to enable the land to support regular settlement. It does receive just enough water to make it pretty good pasture for cattle, so that probably four acres would supply the needs of one animal. A person could not make a living on a small amount of that land. But if it is not used in production of stock it remains idle and of no value to the Canadian economy.
The minister can readily see that such an area could well be used in the Canadian economy for the production of beef which would be fattened down in the areas where the sugar beet factories are. It is thus extremely important, especially if we go forward with an extensive development of the beet sugar industry, as we should, in the area which the minister is now proposing to irrigate under the Lethbridge southeast conservation project, involving, as the minister knows, about 350,000 acres of land.
Considering the fact that we are going forward with the St. Mary river project, the Red Deer diversion scheme ought to be developed as a complementary project.

Supply-Reconstruction and Supply
May I give a few other facts about this project?-and then I shall resume my seat. I am informed that the main dam for the Red Deer diversion project will back up water to a depth of 150 feet on the Red Deer river, which means a great deal of water. From the reservoir produced by the dam it is proposed to carry the water by canal to lake Hamilton. It is thought that the cost of building the dam and carrying the water to lake Hamilton would amount to around $7,000,000, which in days like these is not a great deal of money, especially bearing in mind the tremendous value to the Canadian economy which could result from the expenditure of this money.
There is another important aspect of this particular project. At the present time, as the minister knows, all over the west there is a great deal of run-off. Where the land is covered with short grass, nearly all the water that- Mis in anything like a rapid rain, or in a snowstorm, which melts quickly, runs off and we get no good from it ait all. In this particular area there is -a broad basin from which a vast amount of water yearly runs off. That water could be arrested without too much expenditure in the Red Deer diversion scheme by constructing appropriate dams here and there at the mouth of lake Hamilton and various other small lakes. Thus a great deal of good could be derived by saving that amount of water which now runs away into the Hudson bay to waste.
There is another lake beside lake Hamilton which is also important to this scheme, namely, Buffalo lake. When I tell hon. members that Buffalo lake is fourteen miles long and eight miles wide, they will realize that we are not talking in terms of small matters when we discuss the Red Deer diversion scheme. The cost of the whole project is estimated at about $15,000,000. That is about the amount which is to be spent on the St. Mary river project.
There is one more aspect of the matter. We have had bitter experiences this year in the floods on the Fraser river. In any area in which there occurs occasionally abnormal precipitation, either of snow or of rain, we are apt to have serious floods. We might have serious floods on the prairie rivers. I have seen very serious floods at Lethbridge, Medicine Hat. and Cardston. We did not happen to have them this year, but we could have had them. The Red Deer river is capable of giving us a serious flood problem. The town of Drumheller suffered this year. The construction of this project would help to overcome the danger of floods on the Red Deer river, because it is proposed to draw the water
from the main reservoir into lake Hamilton, and this, as the minister can see, would auitomatioallly distribute the water over a wide area. From the canal which draws the water from the main reservoir into lake Hamilton it is proposed to cut a canal of about a mile into Buffalo lake. There another tremendous amount of water can be stored, which could be used either to replenish the water of the Red Deer in case of low water, or to supply water to lake Hamilton and the land under the project.
The minister can see from what I have given in this rough outline that the project is really in a class by itself and worthy of special consideration.
May I deal with one or two other matters? It is the responsibility of Canada at the present time to supply food. Nearly everybody is worrying about food. The world is actually short of food. I wish to refer to an article which I shall not go into in any detail. It is headed "Want still threatens the world." It appeared in the Ottawa Citizen of May 22, 1948. The subtitle reads as follows: "Sir John Boyd Orr reiterates his grim warning that the nations should be growing food instead of making preparations for war." In the article appeared these words:
But as he showed' in notable reports, most of the people of Britain were not adequately nourished and half the world's population normally suffers disease, disability, and premature death because of not having enough food. Now the world's high birthrate is intensifying the problem.
As the minister very well knows, when people get hungry they are capable of doing a good many extreme things, including going to war. Nations which are abundantly blessed by Providence, such as the United States and Canada, simply must be prepared to assume a greater and greater responsibility in the world's program of producing food for a hungry people. We cannot afford to defer this matter long; the people are hungry now, and they have been ever since the war. The population is rapidly increasing. This is important in connection with this project because of the fact, as I have indicated, that by developing this project we can produce great quantities of beef which can be finished in the sugar beet areas, greatly to the advantage of the whole country. The Red Deer diversion scheme is not necessarily a reconstruction project or part of a reconstruction program for Canada; it is rather a part of the reconstruction scheme for the world. This gives the matter considerable importance.
I trust that hon. members of the committee will pardon me for having detained them

Supply-Reconstruction and Supply
as long as I have, but I did think that this matter was worthy of special attention, at this time.


Mr. McIVOR:: I see bright prospects for the completion of the trans-Canada highway.


Howard Charles Green: You have good eyesight.


Mr. IRVINE:: Where do you see it?


Daniel (Dan) McIvor: During the provincial election the Premier of Ontario, along with his supporters, promised that the Ontario part of the road would be completed. Of course there are a good many people who think that the premier of the province keeps his promises. I think he will keep this promise if he considers it of practical use. Since he has visited the head of the lakes and knows what we have there as an attraction for tourists from the east and from the west, we are sure that he will do his part.
In the past the Minister of Trade and Commerce has shown a willingness to co-operate with anybody and everybody for the good of Canada. When we think of what we have at the bead of the lakes to sell to the rest of Canada, we believe that the province will do its part, and I am sure the dominion will do its part.


Mr. CASTLEDEN:: It is evident that there is a national need and a national demand for a highway system across Canada. The organization of highway associations, resolutions from boards of trade, and meeting of the highway ministers from various provinces have revealed that there is not only a need but a willingness on the part of the provinces to co-operate with the dominion in any such scheme. The debates in this bouse reveal that there is a demand from the Canadian people for a highway system which would be worthy of this country.
It is evident also that the nine provinces cannot build this road by themselves. Some of the provinces have extensive highway programs, which take in practically everything they can possibly do. By means of co-operation between the federal government and the provincial authorities, along lines similar to those followed in the United States, I think it is possible for the dominion to inaugurate a system, and I am surprised that steps have not been taken towards laying the foundation for negotiation between the provinces and the federal government with respect to this important project.
It is evident that in the prairies not only the provincial governments but the people themselves are willing to assist. It is fully realized that the people do not want construction materials to be used in the building of high-

ways if they are necessary for housing, for houses at the present time are more important than highways. At the same time there are vast stretches in the prairies over which highway construction would not be very expensive. They have the tar sands, and they could proceed with highway construction that would be both cheap and easily done, compared with British Columbia. But British Columbia has shown its willingness to act.
I should like to know whether or not any steps have been taken towards negotiation between the federal government and the provincial authorities in order to lay plans for proper co-operation so that this important national project may be undertaken. Has there been any negotiation at all, or any approach from the provinces in the matter?


Mr. FAIR:: Mr. Chairman, I have been
waiting for the past twenty minutes to get the floor in order to add my little piece on the question of a trang-Canada highway, but I have been unable to get the eye of the chairman because I am so far away from him.
I should like to comment briefly on the reply given to the hon. member for Portage la Prairie by the Minister of Reconstruction and Supply. The minister stated that it was the responsibility of the different provinces to plan and construct a trans-Canada highway. In my opinion the federal government should take the initiative. We shall have no continuous highway if we leave it to the individual provinces, for the reason that there are a number of people who feel that the routes which they advocate should be constructed.
In my opinion the government should adopt the suggestion made by an organization set up recently at Saskatoon'-last November 29, I believe-which recommended a trans-Canada highway commission to co-ordinate the efforts of the different provinces in cooperation with the dominion, 'because that would be the proper solution of the project.
The Yellowhead route for the trans-Canada highway has been advocated by many people in the prairie provinces. At my home town of Vermilion, on October 15 last, a meeting was held, attended by 127 delegates representing the district between Edmonton and North Battleford inclusive, and I understand that a report of that meeting has been forwarded to the dominion government, as have been briefs on former occasions dealing with the trans-Canada highway Yellowhead route. In these briefs it was pointed out that the Yellowhead route is shorter, and presents fewer engineering difficulties than

Supply-Reconstruction and Supply
the others that have been proposed. There is much less snow on it in the winter, and therefore it is passable for more months of the year than the other suggested routes. I understand that route was picked out by the engineers of the Canadian Pacific Railway many years ago, but for some reason it was later abandoned.
A survey by engineers would show, I believe, that the proper route to take would be from Winnipeg to Saskatoon, Lloydminster, Vermilion, Vegreville and Edmonton, then on to Vancouver, with another branch to be built to Prince Rupert.
I have said on this vote part of what I intended to say on the estimates of the Department of Public Works, in case I am not here when they come up. I see the Minister of Public Works in his seat, and I hope he will take note of my remarks. Many things can be said in favour of the Yellowhead route, and I believe the time has long gone by when it should have been built.
Like many other members from the west, I have motored across Canada at different times, but I have not taken a chance on motoring all the way through the dominion. I have followed routes to the south where there are good roads. I think it is a disgrace to this dominion that there is not an allweather highway from the Atlantic to the Pacific.


Calvert Charlton Miller: I have been trying to get in my main question on this subject of a trans-Canada highway, and I should like to make a suggestion to the minister.


Clarence Decatur Howe: This has nothing to do with the trans-Canada highway, I know nothing about the trans-Canada highway; I will not answer questions about it, and after that you can go on with your questions.


Calvert Charlton Miller: I will not make a speech, but, I wish to offer a suggestion. I suggest that the minister confer with the Minister of Mines and Resources, the Minister of Public Works, and the Minister of National Defence, and perhaps also, as has been suggested, have someone originate discussions with the provinces, with a view at least to having someone take the lead in this matter and co-ordinate the whole thing so as to have a plan prepared. From the standpoint of bringing in tourists it is important to the Department of Mines and Resources. Public works might also be involved, and certainly national defence. The provinces are interested, and I do not think there is one of them which would present any obstacle to the federal government stepping in
and taking the initiative in the construction of a trans-Canada highway. I think the minister of the department whose estimates we are now considering is the one who can best take the lead in originating discussions among the various departments concerned, and in giving consideration to this project, the necessity for which has been emphasized so much this morning by various members.


Stanley Howard Knowles: May I say, in connection with the recommendation which I read to the committee a few moments ago, that it is contained in a letter from the Winnipeg chamber of commerce to the Minister of Public Works. My suspicion is that when the Minister of Public Works receives it he will say that it does not come under his department, and he will probably refer it to the Minister of Reconstruction and Supply.


Mr. FOURNIER (Hull):: I have not yet seen that resolution, but I can give an answer now. In public works we have no jurisdiction over roads in this country. Furthermore, I will say that even reconstruction does not cover highways. All this debate may be good from the standpoint of the individual provinces, but it is not advancing the progress of the estimates before the committee. It is not relevant to the estimates.


Stanley Howard Knowles: Part of my suggestion, at any rate, as to what the Minister of Public Works would do with the letter when he received it, is correct, in that he says it does not come under his department. It seems to me that when these requests come in, the government, should consider them; and I ask again for consideration of this simple, straightforward recommendation: that a dominion-provincial agreement respecting federal support for a highway construction be negotiated forthwith.


Mr. FERGUSON:: I am sure that when the minister receives the letter to which reference has been made he will pass it on to the proper authorities. Why waste time talking about it?


William Ross Macdonald: This question of a trans-Canada highway does not come within the item. Shall the item carry?


Some hon. MEMBERS:: Carried.


Mr. McLURE:: I wish to speak on this item, Mr. Chairman. I have been trying half a dozen times to get the floor.


William Ross Macdonald: In order that the committee may know which item is to be considered when it reconvenes at three o'clock, I put the question, shall item 409 carry?

Supply-Reconstruction and Supply


Some hon. MEMBERS:: No.


William Ross Macdonald: The hon. member for Queens wishes to discuss the item.
At one o'clock the committee took recess.
The committee resumed at three o'clock.


Winfield Chester Scott McLure: When the hon. member for Cape Breton South was speaking on item 409 he stressed once again the strait of Canso connection-that is, between Cape Breton Island and the mainland of Nova Scotia. I do not wish to deal with this matter any more than to say that I concur in what the hon. member has said; and whether it should be a causeway, bridge or tunnel, I would be prepared to leave to the best judgment of capable engineers. I wish to say that this is not a community matter, nor is it a maritime matter. It is a national necessity for the business that is being done in that part of Nova Scotia. Therefore as a maritimer I am glad to support what the hon. member for Cape Breton South has already said.
I was surprised to learn from the minister of reconstruction that this department is now what might be termed a passing show. A few years ago when this department was organized it was heralded across Canada with trumpets sounding as one of the greatest departments of government for the benefit of Canada and all the provinces that was ever inaugurated at Ottawa. At the same time this department advises the provinces to set up similar offices or organizations by means of which to get in contact with the federal government and bring before them what the provinces desire with regard to the different projects they have in mind in their own interests.
What has this reconstruction department done? We find-and I intend to speak of our own province in particular-that the work of this department has been practically nil. However, it has been of some service to the government. It was an excellent vote-catcher in 1945, and again in 1947, in the provincial election. The projects that have been outlined in my province to the'federal department were projects such as the West Point-Buctouche ferry system, a super-highway from Borden to Charlottetown, and the construction of the ^ Brighton bridge, by means of which, in conjunction with the super-highway from Borden, the distance from Borden to Charlottetown would be shortened by some twenty miles. Both major political parties made definite commitments with reference to those projects that were placed before the
[The Chairman.]
federal government. As I said, they were given prior to an election, but the people had some faith, and believed that the government, if elected, would fulfil those promises. So far, however, we have nothing but the bare promises.
In this connection I might say that we have been advised today by the minister, and also by the chairman on several occasions, that we should not have anything to say about these projects at the present time, that we must simply forget them. In other words, they have told us that we are not supposed to speak about road building as one of the projects. In the course of the discussion I learned from various people who were discussing this matter-


William Henry Golding: Order. I
hardly think the hon. member is stating facts when he says the chairman requested that hon. members should not go into the different departments. I said that on item 407, general administration, the hon. member had the opportunity of discussing anything he wished to discuss.


Winfield Chester Scott McLure: With all due respect, Mr. Chairman-


Clarence Decatur Howe: The hon. member is discussing Prince Edward Island politics.


Winfield Chester Scott McLure: -I am not discussing anything that has not already been discussed under item 409. What I am doing is particularizing the matter with reference to my province. I think that is a fair conclusion to draw. However, I will not develop it quite as far as I had intended; I will simply say that the proposed projects would have been of great benefit to our province.
I shall now mention a matter which was much in the limelight prior to the last two elections-the West Point-Buctouche ferry proposal. The people in Prince Edward Island were not asking for too much. They have already secured at Buctouche a guarantee for a landing pier at no cost whatsoever to the federal government. They have also secured, through the Saint John Dry Dock concern, the use of two suitable boats for this ferry route again at no cost to the federal department. All the people are asking with reference to this project is that a pier be built at West Point for the benefit of the farmers in that community. Besides, of course, they will be looking for a subsidy in connection with the service that is to be rendered. If under these circumstances that project is not to be definitely taken up at this session or during this fall, I believe the people should be definitely so advised so that they may take upon themselves the responsibility of making other

Supply-Reconstruction and Supply
arrangements for transporting their crops instead of having the long haul to which they are now subjected.
I wish also to mention in passing that we were definitely promised, under this reconstruction policy and reconstruction department, that consideration would be given to harbour improvements in the city of Charlottetown. Consideration was to be given to the building of a marine railway slip. I mention these things so that we may not be brushed off too easily with regard to the promises that have been made. I for one do not intend to be brushed off by these promises, which were definitely made by the government; and from time to time as opportunity arises I shall bring the matter to the attention of the ministry.
In compliance with the decision of the chair I shall not go into details, but if the government intends to take any action whatsoever with reference to the highway from Borden to Charlottetown, and the building of the Brighton bridge, then a definite decision should be made. I believe it was the minister who said that the federal government did not take any active part in the building of highways in the provinces. For his information I would say that in 1935 construction of the super-highway from Borden to Charlottetown had been begun, and two or three miles of it were built of solid concrete. We were hoping that after 1935 the work would be completed, but nothing has been done, with the exception of the repeated promise that this super-highway would be built.
Another highway was built by the federal government from Hunter river to Rustico. This highway was built entirely by the federal government, without one cent of cost to the provincial government. These projects have been started, and the federal government should take upon itself the fulfilment of what the Department of Reconstruction and Supply has led people to believe would be implemented.
I hope the minister will give us some assurance that the projects which have been mentioned1 will have some chance of completion witihin the next six months.


[Stage Direction]
Item agreed to.
.'ill. Home conversion plan, $50,900.
Frank Exton Lennard: In what I shall say I am not holding the minister responsible, because he will remember that some few months ago when he took over this branch I told him he rvas asking for trouble. I am interested in some twenty projects in the Hamilton area. These projects were taken over from the owners in 1944, I believe it was, and these owners were all more or less given to understand that the wox'k would be let on a contract
basis. I learn that in every case it was let on a cost-plus basis, and in some cases the cost of conversion was almost double that of the understanding between the owmers and the department.
I have in mind particularly the building at 72 Victoria avenue, south Hamilton. The conversion in 1944 was to cost $7,500. The building permit was issued from the city for the sum of $5,600. On completion the conversion cost 812,600. I bring this to the minister's attention because I feel that the people who had these properties converted should receive some consideration from the government.
I would draw the minister's attention to another matter in which I have some interest, and that is the salvage items in connection with the majority of these projects. A return I received some months ago shows that the average salvage for fourteen of these projects was $5 each. That amount was for water heaters stored in a garage somewhere in Hamilton. This means that there was salvage to a value of $100 on these twenty projects costing several hundreds of thousands of dollars.


Mr. JACKMAN:: Perhaps they deducted the postage.


Frank Exton Lennard: Then I received a later return in which the amount shown was a little over S200. I wrote the minister's department and inquired about the salvage in connection with one project, and I was told that the salvage to the value of $5 was for a jacket water heater; and that was valued at $5.
In connection with this same project the original owner has an itemized list of certain items. I believe in this list he is modest, because it amounts to only $125. Among the items I see five cut-glass doorknobs at $1 each. I doubt if one could buy cut-glass doorknobs today for less than $10 a pair. This later return in connection with the project shows miscellaneous fittings at $14, a used basin at $10, one jacket heater at $5 and one imperial heater at $5, making a total of $34. The amount was increased by $29 in the second return.
I draw this to the attention of the department to show thait while I am not holding the minister responsible, it would appear that contractors walked in and took everything they could lay their hands on. They took walnut staircases, mahogany pieces, lighting fixtures and everything else. Nobody knows where those things went; it is just one of those things that- happened.
I urge upon the minister and the members of his department that every consideration
5506	COMMONS
Supply-Reconstruction and Supply
be given to these people when these projects are being turned back to them.


[Stage Direction]
Item agreed to.
tX2. Emergency shelter-administration, $3,000,000.
Winfield Chester Scott McLure: Both the minister and his parliamentary assistant have given assurance that something will be done with regard to the Maple Hill emergency housing project at Charlottetown, Prince Edward Island. I would ask for a definite statement now, and some assurance to these people that they will not be ejected. I have received word today that the .provincial government has ordered the .Closing of the school at that point on June 30.


Clarence Decatur Howe: I do not know what the situation is in Prince Edward Island, buit I think most schools close on June 30 every year. I would suppose Prince Edward Island is no exception. The situation is that certain buildings owned by the government were converted to emergency shelter under an agreement with the city of Charlottetown. The city withdrew from the agreement, and at that time the project was taken over by the provincial and federal governments 'on the basis of each sharing fifty per cent in the loss. The situation today is that the provincial government has advised the federal government that it does not wish to continue the agreement beyond September 1. An offer has been made by the province for the purchase of the buildings and that offer has been accepted. The result is that the federal government is out of 'the emergency shelter business in that province.


[Stage Direction]
Item agreed to.
its. Wartime Housing Limited, $50,000,000.
Edmund Davie Fulton: When, as the minister indicated, this department closes up in six or seven months, who will be responsible for the supervision of wartime housing projects and other housing projeots under construction?


Clarence Decatur Howe: The present minister is the one designated to be in charge of wartime housing. Until some change is .made, the present arrangement will continue.


Edmund Davie Fulton: I should like to bring to the attention of the minister a question having to do with the request made by certain municipalities in British Columbia for increased returns from the lots now occupied by wartime houses. I know this is the case with Kamloops and I am informed the same

condition applies to other municipalities. The municipality finds that it can no longer service these lots at the figure agreed upon with the government when the houses were first built, which was from $24 to $30 per lot per year. I understand that the government has entered into an arrangement whereby the city will receive in the neighbourhood of $80 per year, but the tenants now find that there will be an increase in their rental.


Clarence Decatur Howe: No.


Edmund Davie Fulton: How is it to be done?


Clarence Decatur Howe: The rent is just the same.


Edmund Davie Fulton: I have received a petition from practically every tenant of the wartime houses built in Kamloops protesting against being charged increased rentals.


Clarence Decatur Howe: The rental is just the same. The city of Kamloops in its judgment has made a certain assessment against the tenants for taxes, and the government has agreed to collect the additional amount and remit it to the city.


Edmund Davie Fulton: Although it is not rent that the government is collecting, it is-


Clarence Decatur Howe: It will be collected by the government and paid over to the city which made the assessment.


Edmund Davie Fulton: These projects were intended to provide low-rental houses, and as far as I can make out from the correspondence I have had with the department, so far it is not denied that the city requires a greater amount in respect to these lots than it is now getting. If they continue at the present rate they will have to impose an unfair tax burden on the ordinary property holder in the city.
An agreement, which the minister has just mentioned, has been arrived at between the city and the Central Mortgage and Housing Corporation. If that agreement is carried out, it means that the Central Mortgage and Housing Corporation, which is in effect the federal government, will not bear any portion of the increased administration costs with which the city is faced. The result is that these houses are no longer the low-rental houses they were originally intended to be.
Although it is not rent that the government is charging, to the tenant it amounts to an increased rental. If it is the purpose of these projects to provide low-rental housing to those in the low income brackets, particularly returned veterans, I think it would be proper for the federal government to pay a portion of the increased costs of the municipality. The government should assume at least half' and let the tenant pay the other half.

__________Supply-Reconstruction and Supply
As I say, I am in correspondence with the department about the matter, and I have not as yet received a definite reply. They suggest that they do not understand the purport of my representations. I hope they understand it now. I think the federal government should pay at least half of the increased costs, with the tenant making up the other half.


Clarence Decatur Howe: The position of the crown is quite clear. The houses were built under a tax agreement with the city. The rentals provide for a reasonable return on the capital investment and also for agreed taxes. The city agreed that the charge per house would be $25 a year, or thereabouts. However, the city has since changed its mind about the taxes that it requires from these houses. The crown has not changed its position one iota. It requires so much as a return on the investment ; an amount which has not changed. The federal government has not imposed any greater burden on anyone. The city has increased its requirements from $24 to $70 or $80. As a convenience the crown agreed to collect that for the city, although it is under no obligation to do so. It could easily have said, "Make your own collections," but it did not. It is co-operating with the city to the extent that it is collecting the city's levy along with its own rentals. The rentals have not changed.


Edmund Davie Fulton: In other words, the crown will not assist the city by assuming some portion of the increased burden? Is it not admitted that the city erred on the side of generosity when it fixed its charges at from $24 to $30 per lot per year? Surely it cannot be denied that that is too little to charge for servicing a lot?


Clarence Decatur Howe: All I can say is that the amount was agreed upon with the city. They signed an agreement voluntarily, and we assumed that there were intelligent people in Kamloops. We have to assume that. If my hon. friend owns a house and the city requires more taxes, I am sure he will pay them.


Edmund Davie Fulton: But the city entered into that agreement only because it was under compulsion to do so. It is not quite correct for the minister to say that they were not under any compulsion. They were under compulsion because they regarded it as their moral duty to try to supply low-rental accommodation for their citizens. All costs have gone up since then. The return to the city was low enough at that time, but the city was willing to accept it because of the compulsion I have spoken of. Costs having gone up, the federal government should assume at
least a portion of them. The city would still be getting less than it receives from private taxpayers, and therefore the other taxpayers would still be helping to provide this low rental accommodation. My suggestion is that the whole burden should not be placed on the city.


Clarence Decatur Howe: I am not placing any burden on the city; the city is placing a burden on the tenants.


Edmund Davie Fulton: Do not permit the city to assume the whole burden of increased costs; the federal government should help.
Mr. HOI\E: The city is not assuming any burden.


Edmund Davie Fulton: The minister has said that the crown requires a certain return as interest on its investment. The investment of the crown is to be returned by the payments made each month. Why should not the city get back its investment? Why should the city assume the burden of servicing these properties at less than cost?


Clarence Decatur Howe: We do not ask them to.


Edmund Davie Fulton: No, but you say that if they do not do that, they have to pass on the whole cost to the taxpayers. In other words it is no longer a low-rental housing project. The whole investment is to be returned with interest, and the tenants will have to pay full taxes or the city will have to service these properties at a loss. These projects are certainly not fulfilling the purpose which the city understood they would when it entered into the agreement, that of providing low rental housing with an element of subsidization.


Clarence Decatur Howe: The city knew exactly what the houses would be like; they knew that they involved a rental of some $19 or $20 a month to the government, plus taxes of about $24 per year to the city. That was well known to all. The government has not changed its position. Its amortization and interest charges are exactly what they were then. My hon. friend is trying to say that the government has changed something, but the government has changed nothing at all. Will he explain wherein the government has done any great injustice to the city?


Edmund Davie Fulton: I will try to do it again. All costs have gone up. That is not the fault of the city, nor is it the fault of the taxpayer.


Clarence Decatur Howe: Nor of the government.

Supply-Reconstruction and Supply


Edmund Davie Fulton: I will not enter into a debate as to whether it is the fault of the government, but these costs have gone up, and what I am asking the government to do is to change their present position. Let them enter into a further arrangement with the city to share the burden of the increased cost, fifty per cent each, and do not ask the property owners, the taxpayers, to pay any share of that increased cost. This will be doing what we have in effect frequently urged the government to do-provide low-rental housing with an element of subsidization.


Wilfrid Garfield Case: I would like someone to take care of me in regard to my property.


Clarence Decatur Howe: This discussion is getting back to subsidized housing. The position is this. The city is not sacrificing anything. It is getting taxes from these houses just as from any privately owned houses. That is the business of the city. We cannot interfere between the city and the taxpayers, and we are not inclined to; we are co-operative.


Edmund Davie Fulton: The city would be glad if you were to share the increased cost.


Clarence Decatur Howe: I know that. My hon. friend may think that is the logical thing to do with the public purse, but I differ. The increase in the old rental is trivial in comparison with the increased costs. It is still the lowest rental housing in Kamloops or anywhere else.


Howard Charles Green: Will the minister explain why the government undertook to collect these taxes for the city? Apparently the position in Vancouver is that originally an agreement was made between the city and the corporation and the houses were rented at an agreed figure. Then the city threatened to levy a tax on the tenants as distinct from a tax on the land. The government negotiated a contract with the city, without consulting the tenants at all, and apparently agreed to collect the assessment that had been levied on the tenants.
The next thing that happened, according to a brief I have here from the Wartime Housing Tenants Association of Vancouver, dated early in May or about the end of April, a copy of which has been submitted to the minister, was that Central Mortgage and Housing then sent to these tenants what it is referred to in the brief as "a notice to quit," but it seems to me a notice of increased rental. It reads:
Under the terms of a resolution passed by the city of Vancouver, dated February 24, 1948, this corporation (Central Mortgage and Housing Corporation) has been requested to provide increased payments in lieu of taxes to the city of Vancouver. In order to provide these re-

quested increased payments in lieu of taxes, your rent will have to be increased by a similar amount.
That was the notice sent by Central Mortgage and Housing Corporation to these tenants, who apparently knew nothing about the deal made between the city and Central Mortgage and Housing for an increased rental. Apparently it was done in the face of an understanding between the city and the tenants association that no change would be made without the tenants being permitted to make representations. I admit that the government is not responsible for any agreement of the kind made by the city, but the agreement makes it just that much more unfair from the point of view of the tenants. I should like to know why the government agreed with the city to collect these taxes, which were being levied, not on the government but on the tenants, without the tenants being given an opportunity to make representations.
A further question is this. This brief says that throughout there has been a suggestion that the tenants would be able to purchase the houses, but no sale terms have ever been announced. Central Mortgage and Housing Corporation has not yet told the tenants on what terms they may buy these properties. Many of the tenants might like to purchase the properties; if they did so, they would become the assessed owners and would pay the ordinary taxes on the properties, which, it is suggested in this brief, would be lower than what they are now required to pay.
I think that the final request which the tenants make in their brief to the minister is a very reasonable one. It is this:
On behalf of the Wartime Housing Tenants Association we respectfully urge, Mr. Minister, that you negotiate and conclude an agreement with the city council of Vancouver to have the increased taxation held in abeyance until such time as the Central Mortgage and Housing Corporation are prepared to have these houses properly appraised and1 a purchase plan submitted to the tenants.
I would ask the minister to answer my two questions: first, why did Central Mortgage and Housing Corporation step in and make a deal with the city over the heads of the tenants; second, what is the reaction of the minister to this request made by the tenants for a proper appraisal and a purchase plan so that they will at least have the option of buying the houses and becoming taxpayers in the ordinary way?


Clarence Decatur Howe: I am surprised at the notice sent out by Central Mortgage, which does not represent the true situation. The houses in Vancouver were built under an agreement with the city in the ordinary way. The land

Supply-Reconstruction and Supply
was transferred by the city to the crown, the federal government, and the houses were built. The initial rentals were worked out on the basis of an agreement with the city which provided the usual terms, that we should pay from $22 to $26 a year in taxes to the city, and that the rental would be based on the cost of the project, plus taxes provided for in the agreement. However, the city, as my hon. friend knows, has the right to tax tenants of rented property. It exercises that right quite freely in British Columbia. What actually happened was that the city exercised that right by agreement with the department of municipal affairs of the province. We said that we would collect the tax which the city assessed, provided that we consider the tax reasonable in amount. We thought the tax imposed by the city was reasonable, and we agreed to collect the taxes. It was simply a matter of co-operation. We did not agree to the taxes being imposed. The only part this government had in it was that we said we would collect the taxes for the city if in our opinion the tax was reasonable.


Howard Charles Green: Was any order obtained from the respective tenants authorizing the dominion government to take out that amount?


Clarence Decatur Howe: No; the city imposed the tax.


Howard Charles Green: Was any authority given by the tenants to the government to pay that amount?


Clarence Decatur Howe: No; we are simply acting as tax collectors for the city in that regard.


John Thomas Hackett: If the tenant did not pay, the city would have to sue.


Clarence Decatur Howe: Yes.


Howard Charles Green: It might have been much better to let the city collect the tax from the tenants. Then the matter would have been brought to a head, and I doubt very much whether the city would have tried to collect.


Clarence Decatur Howe: That may be so. The city had the legal right to impose the tax. The tax was legally imposed, and if we choose to collect it, we do so simply as a matter of co-operation. We try to co-operate with the cities in which we have houses. We did that in this case. We are doing it in every similar case across Canada. If the tax is legally imposed, and we think it not unreasonable, we co-operate with the city by collecting it from the tenants. If the tenant refuses to pay the tax, but is willing to pay the rent, it then becomes a matter between the city and the tenant.
With regard to the second part of the question, about selling the houses, we sell houses wherever the city permits us to do so. The houses were built under an agreement with the city which did not provide for the sale. Many municipalities and cities have released us from that agreement. For instance, the town of North Vancouver released us from the agreement, and we are selling the houses there to veterans. I think we have sold eighty per cent of all the houses we owned in North Vancouver. The former tenant is now the owner, and the city collects the taxes in the ordinary way. The difficulty in Vancouver has been that we have not yet been able to work out a price for land at a level which we believe should be included in the sale price. My hon. friend will understand that. While the city transferred the property to the crown for a dollar a year, there was an agreement that if the property was sold, the city would recover a reasonable price for the land.


Howard Charles Green: Many houses are involved in that transaction. Is it not possible to reach finality on the purchase price and the terms of sale?


Clarence Decatur Howe: It has not been so far. We think we are pretty close to it in Vancouver.


Howard Charles Green: How long have negotiations been going on concerning these prices?


Clarence Decatur Howe: About eighteen months.


John Thomas Hackett: What proportion of the $50,000,000 is allocated to the construction of wartime housing in rural areas as distinct from towns and cities?


Clarence Decatur Howe: Wartime housing is not built in rural areas under the usual terms, for reasons that I think my hon. friend will understand. The farm section of the Central Mortgage and Housing Corporation Act has been applied to farming areas. In other words, people in the rural areas can borrow money under the National Housing Act to build houses, but houses are not built for rent in rural areas.


John Thomas Hackett: What proportion of the total amount invested by government in housing has been spent in urban areas as distinct from rural areas?


Clarence Decatur Howe: The direct investments in housing have all been made in urban areas. Government ownership of houses for rent is confined to urban areas, for reasons that I think my hon. friend will understand. The government has built houses in mining and logging areas by arrangement with the mine owners and others, where the industry has guaranteed

Supply-Reconstruction and Supply
the rentals for a period. Ordinarily the government does not build houses for rent in rural areas.


John Thomas Hackett: I took this matter up once with the minister, but we came to the end of the session and I did not get the answers. I understand that a large percentage of amounts invested by government in shelter for the people has gone into urban dwellings, and in consequence into shelter for the industrial population. I was endeavouring to find out from the minister what proportion of our total production is sold abroad, and how much greater it is than before the war. I understood that before the war it was somewhere around 35 per cent, and that it would have to be much greater than that now.


Clarence Decatur Howe: The proportion of our total production is about 35 per cent.


John Thomas Hackett: In the United States it is six per cent or seven per cent.


Clarence Decatur Howe: Something less than ten per cent. My hon. friend will realize that the bulk of our exports is in the form of wheat and wheat products, newsprint, forest products and metals. In other words, the vast bulk of our exports is in raw materials. I doubt whether the bulk of our manufactured goods exported is larger in proportion than similar goods from the United States.


Edmund Davie Fulton: It appears that any further houses which are to be built under the wartime housing project, now administered by the Central Mortgage and Housing Corporation, are to cost the tenants a great deal more in rents than some of the houses built previously. In the city from which I come, a two-bedroom house, without basement, now rents for $22. Under the arrangement which we have just been discussing, they will cost the tenant approximately $25. In the negotiations recently carried on with the Central Mortgage and Housing Corporation, the city has been informed that in the future it will only be possible to construct two-bedroom houses, without basements, owing to the greatly increased costs. In other words a two-bedroom house with basement, or a three-bedroom house, is right out of the picture. Even the two-bedroom house, without basement, on account of the increased cost, will result in a rental of $37.50 a month to Central Mortgage and Housing Corporation. On top of that, the city has to impose an amount for taxes which, let us say, will be another $3 or $4 a month-or does the rental include that?


Clarence Decatur Howe: Yes.


Edmund Davie Fulton: The minister says that the rental includes the city's taxation for services. We shall then have houses already built and occupied, with rent and taxes charged, renting at $25 a month, with new houses of exactly the same type at $37.50 a month. It seems to me that this will be regarded by tenants, and with some justification, as unfair. Would it not be possible for the dominion government, under these extraordinary circumstances, to absorb some of the cost of construction, or amortize the collection over a longer period, so that the tenants of the two houses virtually side by side W'ould be paying the same rent, instead of a rent of $12.50 more in one case than in the other for exactly the same house? Could not something be done there?


Clarence Decatur Howe: If my hon. friend had built a house in 1942. the cost would have been a certain figure. If he had built it in 1948, the cost would have been eighty or ninety per cent more. The government is in exactly the same position. The government cannot perform miracles. A reasonable rental for a house built in 1942 would not represent a reasonable rental for a house built in 1948.


Edmund Davie Fulton: Could the minister not amortize it over a longer period?


Clarence Decatur Howe: WTe are doing that. We are doing everything we ean to hold the line. It will be noticed that whereas the cost has gone up eighty or ninety per cent, rents have gone up about only fifty per cent.


Edmund Davie Fulton: Yes.


Clarence Decatur Howe: Which is not too bad. To do that we have had to lengthen the time of amortization, lower the cost of the money, and make several moves which are getting us closer to subsidization than-


Edmund Davie Fulton: Why not go the whole way?


Clarence Decatur Howe: There is a limit to where we want to go. We are holding the costs as best we can. We put a ceiling on the rentals at $37.50, and if we cannot build in a town, cannot build houses which can rent on the new formula-and that includes $70 to $80 a year in taxes to the municipality, which were not included, I may say, in the early houses-if we cannot build houses to rent at that maximum, then we do not build them. We think we must draw the line on what constitutes low-rental housing, and we believe that today $37.50 does represent low-rental housing in most of the cities of Canada.


Edmund Davie Fulton: In view of the fact that this whole matter w'as discussed when the

Supply-Reconstruction and Supply
minister's bill was before the house, although I am not satisfied with the policy he has indicated I will not deal with it any further. However, I wish to ask about another matter in connection with wartime housing, I refer to those projects where arrangements have been made to sell properties to tenants. I have had complaints which I have raised in the house earlier, one being in connection with one of the projects in Montreal. The complaint was that the tenants were virtually being forced to buy alternative accommodation. I had a similar complaint from Fort William. The answer given by the minister was that nobody was being forced to vacate. While that is technically true, the answer is that the tenant is told, "If you are not prepared to buy this house you are now in, you will have to move into a similar house". Is that the policy?


Clarence Decatur Howe: Yes.


An hon. MEMBER:: Move only once.


Edmund Davie Fulton: An hon. gentleman says, "Move only once". There was no assurance of that. Some of the officials, I am told, told the wives-not the husbands-and said, "You might as well buy your house now, because if you don't, you will have to move, and if you are not willing to buy that one you will have to move again. Why not settle the thing and buy now?" I have information with reference to the project in Fort William. I understand that one of the tenants there said -and this was in March or April: "No. My lease says I can rent this house, and I stand on my rights and will continue to rent. I will not buy this one nor will I move to another". He was told, "In that event we terminate your lease and you will be considered as an overholding and illegal tenant." Is the minister aware of that situation?


Clarence Decatur Howe: Oh, yes.


Edmund Davie Fulton: That is the case of a man who is to be evicted. How can you say there will be no evictions under this program to sell houses? The two are not consistent.


Clarence Decatur Howe: The tenants have been enjoying low rent for a number of years.


Edmund Davie Fulton: Under a lease entered into with you.


Clarence Decatur Howe: But not a long-term lease; a lease from month to month. The tenant has no leasehold right whatever, being a month-to-month tenant. In disposing of these properties, it is quite in order to sell the more desirable houses first. The worst that has happened to any tenant is that he has 5849-350J
been asked to move into a similar house in a different location. Not only that; the cost of moving is compensated to the tenant to the extent of $15. There is no hardship involved, and there is little complaint from the tenants. My hon. friend is going a long way from home when he takes over the work of the hon. member for Fort William, who has been cooperative in working out this situation.


Edmund Davie Fulton: That is an interesting
observation on the part of the minister. At Kamloops, I may say, these houses are not yet being sold. I am glad the minister appreciates the co-operation of the member for Fort William, but I can tell him that when I was in Fort William I was sought out by a group of tenants who brought their complaints to me, and also showed me a little pamphlet put out by Central Mortgage and Housing Corporation last July. The pamphlet contained a series of questions and answers. The first question reads:
If the present tenant does not wish to purchase the house in which he is living, will he be asked to vacate?
The answer is:
It is not the intention of Wartime Housing Limited to disturb any tenant at the time houses are offered for sale. However, a tenant is expected to live up to requirements of his rental lease, making payments on or before due date and taking proper care of the property.
That is the only requirement that is laid down. It States that it is not the intention of Wartime Housing Limited to disturb any tenant at the time houses are offered for sale. This means: So long as you continue to make your payments regularly, and to maintain the property, you will not be turned out.


Clarence Decatur Howe: It does not say that at all.


Edmund Davie Fulton: It is not the intention to disturb any tenant at the time of making sale.


Clarence Decatur Howe: It does not say, "at the time of making sale".


Edmund Davie Fulton: At the- time houses are offered for sale.


Clarence Decatur Howe: Yes.


Edmund Davie Fulton: That is what is going on.


Clarence Decatur Howe: Sales have been actually -made.


Edmund Davie Fulton: Yes, and the tenant, when his house is offered- for sale, is required to buy or to move to another one. That involves a great deal of disturbance.


Clarence Decatur Howe: Don't read into it something that it does not say.

Supply-Reconstruction and Supply


Edmund Davie Fulton: I did no such thing. I said that the only meaning that could be taken from these words is exactly what they say: thait when these houses are offered for sale it is not intended to disturb any tenant, and the orily way of avoiding 'disturbance of the tenant is not to move him. But you are moving him.


Clarence Decatur Howe: I do not think my hon. friend knows very much about the situation.


Edmund Davie Fulton: Of course I dio not hold myself up as an expert, but I think I can understand the plain meaning of words, and the meaning I have ascribed to these words is the meaning they bear.


Clarence Decatur Howe: Let me ask my hon. friend this question. What does it mean when it says the tenant will not be disturbed- when the house is offered for sale-that is, when it is advertised for sale?


Edmund Davie Fulton: It means that the tenant will not be required to move.


Clarence Decatur Howe: It is one thing to offer the houses for sale -and another thing to close the sale.


Edmund Davie Fulton: Is this intended to fool the tenant?


John George Diefenbaker: A play on words to fool him.


Edmund Davie Fulton: Whait is the meaning of the other words, that a tenant is expected to live up to requirements of his rental lease? What is the meaning of those two sentences placed side by side?


Clarence Decatur Howe: Read the other nine clauses and you will get to the one that is pertinent.


Edmund Davie Fulton: I have already read all -the other clauses. The second question is: "Who has first opportunity to purchase a house?" and the answer to that question is: "Tenant now occupying the house." Read that in conjunction with No. 1 and you will see that the obvious intention is: If you don't wish to purchase, you will not be disturbed.
Mr. HO-WE: You are reading there something that I do not find in print.


Edmund Davie Fulton: It states that it is not intended to disturb any tenant "at the time houses are -offered for sale". It does not say at the time his house is being offered for sale, but at the time houses are being offered for sale. But tenants are being disturbed, and the obvious intention is not being carried out. There is a change in policy. Here is a letter from the minister addressed to a tenant of

the Montreal project on March 2 in which he himself admits that hardship will be imposed on tenants. He says in part:
. . . we intend to proceed as planned.
That is, with this sale and the moving of tenants.
We realize that circumstances will arise where even alternate accommodation within the same project wall impose hardship upon the tenant being asked to move.
It certainly cannot be maintained that the first position held ou-t in this pamphlet is being followed, and that hardship is not being imposed on tenants who are asked to move. I would ask that Central Mortgage and Housing Corporation revert to their plan as put out in this pamphlet, and that the tenant who is unable to buy the house when offered for sale be not required to move.
I conclude by drawing the minister's attention to this. These tenants in many cases have put in special work on their houses. They have made gardens and have had fixtures installed and they do not wish to move to some other place that has not a garden.


Mr. SINCLAIR:: Why don't they buy them?


Edmund Davie Fulton: Because they cannot afford to, as the hon. member for Vancouver North knows. Many of these tenants cannot afford to buy at the time houses are offered for sale.
Mr. H-OWE:	The man is a munitions
worker. He moved into one of these houses in 1942 or 1943 because the rent was favourable and we were anxious to get him there. We needed his work in a particular plant. Does he think that the fact that he moved there in 1942 should guarantee him occupancy of the house for life? Is that the- thought of my hon. friend? What divine right has he to have greatly preferred rentals for life just because he happened to move into a house in ,1942? Why should he not buy?


Edmund Davie Fulton: The minister asks what divine right a tenant has to stay in a house into which 'he moved during the war. I do not intend to answer that question in the way in which it should be answered, but I will say this without going into a theological argument. The tenants in many cases, as they have themselves told -me, were asked to go there. The minister himself has admitted that they were anxious to get these men to go to work in the munitions factories, in the tank building or gun- building factories and so on. So they said to them, "If you will come and work in our factories, we will give you low-rental houses". They went in there on those undertakings and they are continuing to work in the same plant.

Supply-Reconstruction and Supply


Clarence Decatur Howe: Very few of them.


Edmund Davie Fulton: The ones I have spoken to. It is peculiar that the minister and I do not seem to see the same people or the same set of circumstances, especially when it comes so close to his own home. But the ones I have spoken to are continuing to work there. They tell me that they have moved there, in some cases from great distances, admittedly partly because an attractive job was offered to them, but also because the government said, "We need you here and we will provide you with accommodation". So, having assessed the need, they perhaps changed markedly their whole course of life. They moved from the prairies to Fort William or to Montreal or from Vancouver to the prairies, or vice versa, with their families. Having sized up the situation they said, "We are going to make this move and stay here". Certainly nothing was told them at the time to indicate that some months or some years later they would be required to buy or to leave the houses in which they were settled. I do not think even the minister, with all the power he has, can confer a divine right on himself or any tenant. But I certainly think the tenants were given the understanding that they would be permitted to enjoy possession of the property so long as they continued to pay their rent promptly.


John Ewen Sinclair: I should like to say a few words following what the hon. member for Kamloops has just said. I will speak only about my own riding of Vancouver North in which we had one of the first and largest wartime housing projects in order to provide, as the minister has pointed out, cheap available rental accommodation for the men who worked in the shipyards.
Instead of criticizing the ministry at this time-and I think I do my share of that-I wish heartily to commend Wartime Housing for the job they did during the war and for the job they have done since. In my own riding the great bulk of the people were anxious to buy these houses. We had two years of difficulty with a city administration; and in the end it was necessary to change the city administration over this one issue. But, although sales have been going on for only three months, the contractors say the people of North Vancouver have gladly picked up these wartime houses. They want to buy the houses.
I wish to tell the hon. member for Kamloops that it is precisely those people who have done something to their houses-who have built fences, put in nice gardens and electric fixtures-who are the ones who are so anxious to buy. When you see the wartime
housing development, you see a fairly good cross-section of human nature. Every house on the North Vancouver property started out the same, and the people moved in. Some took the finest care of their homes and made those little wartime houses as attractive as any in North Vancouver. Other people drawing the same wages on the same job, moved into these houses just as the builders left them; and now five years later the houses are still the same way. Those are the people who-


Edmund Davie Fulton: Those are the people who have an opportunity to buy a better house.


John Ewen Sinclair: No.


Edmund Davie Fulton: Yes.


John Ewen Sinclair: The people who are able to buy better houses are already buying houses. The hon. member for Kamloops was talking about divine right. These people think it is their divine right because they worked in the shipyards during the war.


Edmund Davie Fulton: I was not talking about divine right. The minister was.


John Ewen Sinclair: My hon. friend was
talking about a theological argument.


William Ross Macdonald: Order.


John Ewen Sinclair: I suppose my hon. friend does not know the meaning of the words he is using. He was saying he did not want to get involved in a theological argument. However, these people are the very ones who think that now they should be allowed to continue to get these houses for $25 a month, despite the fact that there are over three hundred married veterans in North Vancouver, men who fought overseas, who are most anxious to get into these houses. I do not know about Fort William or Montreal. I just know about my own riding, and I had a considerable amount to do with the negotiations. The people of North Vancouver as a whole are glad to see that these houses at last are paying their proper share of the tax burden; and the people in the houses are now glad to be, as they themselves describe it, not second-class citizens getting a free ride at the expense of the people of North Vancouver through just paying $25 taxes instead of $100. The same situation applies in the city of Vancouver, as the hon. member for Vancouver South knows. The only criticism I have heard-


Howard Charles Green: They are nearly all veterans there.


John Ewen Sinclair: That is quite right.
North Vancouver was not a veterans project.

Supply-Reconstruction and Supply
But a veteran has been put in every house that has become vacant. Today there are over three hundred overseas veterans with two or more children, who were resident on the north shore before enlistment and who are anxious to get in to buy these houses, and I say they should have that right.
In North Vancouver the only criticism with regard to this plan was that it was not consummated two years ago. Even many of the shipyard workers have complained to me that they have been paying rentals which should have been going toward capital payment for the last two years, because of the failure not of Wartime Housing but of civic administration-the mayor at that time-to consummate the deal. I should like to commend the minister in this matter, and I think they could well afford to build even more of this type of housing for the veterans in the Vancouver area.


Daniel (Dan) McIvor: I think I know something
about wartime housing in Fort William. The first criticism was that the government was extravagant in building these houses in the first place, that in the first year after the war they would be pulled to pieces, and that this would be the fault of the government. Now these, houses are worth more than they were then.


Angus MacInnis: Prices have gone up.


Daniel (Dan) McIvor: I saw a number of people who came to me wanting an opportunity of buying these houses because of their associations. Some of them made some improvements. But when a young veteran and a young mother live in a home, and a little happy coal oil stove comes into it to light it up. you can see that there is an association in that home that is fine. It was my urgent plea to the minister and Wartime Housing to give to those people who wanted it an opportunity to buy those houses. In Fort William we have people who own houses thej' moved into as war workers and who never owned a home before; and I have commended several of them for it.
I know some people were not satisfied. They said, when the agent called on them during the daytime, he should not have called then but should have called at night. It was impossible for agents to make all these calls in the evening. I placed all the different arguments and discontents before the minister; and if hon. members want to see a fine bit of literature, with arguments thoroughly answered to the satisfaction of a great many people in Fort William, with the exception perhaps of one or two, I say they

should get from the minister's office a copy of that brief. I commend the minister for his generosity and for his outstanding patience with regard to this matter of wartime housing.


Edmund Davie Fulton: I want to answer some of the comments that have been made by the hon. member for Vancouver North, because I am not speaking against the tenant who wishes to buy his home being allowed to do so. I agree that he should be not only permitted but encouraged to buy his own home if he is in a position to do so. My point is that the tenant who is not in a position to buy at the moment or who does not wish to buy the house should not be forced to move because somebody else from some other house in the project wishes to buy the particular house which this tenant is in.
The hon. member for Vancouver North spoke as though all tenants were in a position to buy the houses they are living in and there would be no hardship done. I want to read him an extract from a letter I have received from the tenant of a house in one of these projects which were thrown open for sale; this is from the wife of the tenant. They did not wish to buy, and the agent of the Central Mortgage and Housing Corporation came around to call on them and said they had from somebody else an offer to purchase the house these tenants were in. She went on to say:
He then went on bo tell us that seeing as we are on a corner lot, and have cupboard doors on our cupboards in the kitchen-


Alphonse Fournier: I rise to a point of order, Mr. Chairman. I should like to know if the hon. gentleman is ready to read the whole letter and give the name. That is the rule. Extracts from letters should not be read without the names being given.


John George Diefenbaker: That is not so.


Edmund Davie Fulton: That is not the usual custom.


Alphonse Fournier: It is.


Clarence Decatur Howe: You cannot read from a document you are not prepared to table.


Edmund Davie Fulton: It is the custom in this house to read-


Alphonse Fournier: Not letters from a private individual; you cannot read extracts from letters.


Edmund Davie Fulton: I am prepared to give the name of the tenant. I am not prepared to read the whole letter.


Alphonse Fournier: Why not?


An hon. MEMBER:: Put it on the record.

Supply-Reconstruction and Supply


Edmund Davie Fulton: I will give the name, if the minister wants it.


Clarence Decatur Howe: You must table the letter.
Mr. MaeINNIS: No; a private letter need not be tabled.


Clarence Decatur Howe: A private letter should not be read in the house.
Mr. MaeINNIS: Yes. Let the hon. member proceed.


Clarence Decatur Howe: I will ask that a ruling be given.


Edmund Davie Fulton: I certainly never heard of that suggestion.


Stanley Howard Knowles: On a point of order, may I call the attention of the committee to citation 316 in Beauchesne; second edition?


John Ewen Sinclair: Is that 316?


Stanley Howard Knowles: Yes, 316, in Beauchesne, second edition. You have the third edition there.


John Ewen Sinclair: You know it all. I am more modern than he is; I am up to date.


Stanley Howard Knowles: It states:
It has been admitted that a document which has been cited ought to be laid upon the table of the house, if it can he done without injury to the public interest. The same rule, however, cannot be held to apply to private letters or memoranda. On the 18th May, 1865
Comparatively recent.
-the attorney general, on being asked by Mr. Ferrard if he would lay upon the table a written statement and a letter to which he had referred on a previous day, in assuming a question relative to the Leeds bankruptcy court, replied that he had made a statement to the house upon his own responsibility, and that the documents he had referred to being private, he could not lay them upon the table. Lord Robert Cecil contended that the papers, having been cited, should be produced; but the Speaker declared that this rule applied to public documents only.


William Irvine: Hear, hear.


Edmund Davie Fulton: The portion of the letter continues:
He then went on to tell us-


Alphonse Fournier: Does the hon. member undertake to give the name of the party?


Edmund Davie Fulton: I will do that. It continues:
He then w'ent on to tell us that seeing as we are on a corner lot, and have cupboard doors on our cupboards in the kitchen, and have just put in wiring for an electric stove, that there are lots of people who would be glad to buy our bouse. He said he would give us ten days to think it over.
It is this letter which contains the statement that if the tenant did not buy at this time, they were likely to be moved until they did buy. Then, the name of the correspondent, if the Minister of Public Works is still interested- and perhaps he is not interested; perhaps he merely made the request as a formality-


Colin William George Gibson: You are being silly now.


Howard Charles Green: He has forgotten all about it.
Mr. MaeINNIS: Proceed.


Clarence Decatur Howe: Give us the name of the tenant.


Edmund Davie Fulton: The Minister of Reconstruction and Supply would like to have it. It is Mrs. Jacqueline C. Hayne of Fort William. The point I make is that the tenant, who is not in a position to buy, and does not wish to buy, is being put in an unfair position by being required either to buy or to move. I most certainly think that the policy should be changed, and that a tenant who is not prepared to buy should not be required to buy or to move.


Clarence Decatur Howe: I will say that the tenant is the most fortunate person in the world, from my hon. friend's statement of the facts. He has the absolute security of a house for life. He can leave it any day, without any obligation whatever. He is on top of the world. Who would buy a house if he could get that kind of terms? He has security forever to live in a house as long as he likes, and pay the same rent. Yet he can walk out of it any day he likes. He came there because of a government requirement to work in a munitions plant. But because of that he has that wonderful privilege for the rest of his life. Does the hon. member really believe that?


Edmund Davie Fulton: The minister is overlooking something. He overlooks the fact that many tenants took possession of their houses before mention was made of the fact that they would later be required to purchase. These are the ones I am speaking of, and they should be allowed to rent them as long as they continue to pay rent promptly. If the minister wishes to give notice that from now on tenants will only be admitted into these houses subject to a condition that they must buy or vacate on receiving a notice requiring it, that is a different matter. But these tenants took the house before any such policy was in effect. I believe it is an injustice to change the policy and require them to buy.


Clarence Decatur Howe: Does the hon. member realize that when these people moved they were informed that they were moving into houses

Supply-Reconstruction and Supply
which were required' to be dismantled and removed within one year, I believe it was, after the end of the war.


John Ewen Sinclair: Six months.


Clarence Decatur Howe: Six months. That was the term under which they moved into the houses.


Howard Charles Green: The minister has overlooked one point. Does he think it is fair that the tenant of another wartime house should be allowed to come along and push out a person who does not wish to purchase? Apparently that is the complaint, that this particular tenant was in the house and some other tenant was permitted to come along and' push out the tenant who did not wish to buy. Does the minister think that was fair?


Clarence Decatur Howe: The first man has already had an opportunity to buy. The second man does not come as a tenant; he comes as a purchaser. He lived in the project, and he is anxious to buy a house. The other man does not wish to buy a house. He does not want to tie any strings to the property at all. He came there on a temporary basis, a month-to-month basis. He came there, believing the houses would be removed from the property and dismantled six months after the war ended. Nevertheless my hon. friend says that three or four years after the war ends he is entitled to security against all comers. Because another tenant wishes to buy the house, my hon. friend says he should be permitted to stay there. It seems to me that is absolutely absurd. You are setting up a class of tenant which does not exist in any other part of Canada. The tenant owns nothing beyond his lease.


Howard Charles Green: I suggest that it would be fairer to have the person who is going to buy a home buy one in which he lives and not be permitted to walk down the street, pick out the finest home in the block, and then force out the person who was in it, simply because the second person does not wish to buy. I think that is the unfair feature of it.


Clarence Decatur Howe: That is the great gift the man has. He is tenant in the home; he does not want to buy. But he has some inherent right to stay in the house under any condition-what is the situation there? How does that work?


Edmund Davie Fulton: At the present time no other proprietor can give notice to quit, except the government. That is one example-not as long as he pays rent regularly.


Clarence Decatur Howe: Yes, but like any other house built after 1940, no rental restrictions apply at present.


Angus MacInnis: I do not wish to prolong this discussion. I have had some considerable correspondence in regard to these houses, some of which are in North Vancouver, and I know something about what was discussed earlier in the house, where rents have been increased.


Clarence Decatur Howe: May I correct the hon. member. No rent has been increased.


Angus MacInnis: I understand; that was a technical term. But it is increased so far as the tenant is concerned. He is paying more than he was paying before.


John Ewen Sinclair: He is paying his taxes mow.


Angus MacInnis: Yes, and I think if the increased) price he is asked to pay is not more than the ordinary taxes, it is justified. I do not see why some taxpayers should support other taxpayers by low taxation. But what I was going to say was that the question is somewhat confused. I was never satisfied that Wartime Housing, which has the administration of these projects, was not dealing justly. At least I do not feel constrained to criticize. Before I do that, I should like to understand the situation better, because with so many other things to attend to I have not had time to get around to this.
I do not think there is much point in what has been said that a person should not be compelled to vacate if a buyer of the property is available. If the government are to be in the housing business, and I agree that they should be in that business under present circumstances, then they should be in it on a proper business basis and on no other. I asked some questions with regard to wartime housing in North Vancouver which were answered on May 10. I should like to read the last question as well as the answer which was given by the parliamentary assistant. The question reads:
If the present tenants do not purchase, will they 'be compelled to vacate?
And the answer was as follows:
Tenants who do not wish to purchase may be asked to move to suitable alternative accommodation. If a tenant is moved to a smaller house than he now occupies, it must be suitable to house his family without overcrowding. A tenant will not be required to move more than once and a veteran will not be moved to accommodate a non-veteran. Furthermore, tenants who are required to move will be compensated for moving expenses by a grant up to but not in excess of $15.
It seems to me that that is not too bad. Perhaps ordinary business people, particularly when the controls are removed as my hon. friends want to have them removed, would

_____________Supply-Reconstruction and Supply
not deal as fairly as that with tenants. I am not speaking now to protect or in support of Wartime Housing, but I want to say I cannot find anything to get particularly heated about.


Julian Harcourt Ferguson: I do not know whether the government run wartime housing any differently in one part of Canada from what they do in another, but I do know how they run it in my own community. At my request the government erected 100 houses and we were delighted to get them. The city council, which at that time was typical of most city councils, said that fifty houses would be plenty. When 1 asked why they had written that letter they did not know. The government built another fifty and they are now building another seventy. I wish they would come back tomorrow and build another 100.
We have eighty applications for wartime houses. Let us be reasonable about this. They can be purchased on terms that the average workman can afford. They are asked to pay ten per cent down, and I am all for any man in Collingwood who wants to buy a home. If he is too lazy to buy one, he should be thrown out. This is just nonsense. There are some tenants who have deteriorated their houses, but, thank goodness, the majority of the people have improved the houses for their own benefit.
If a man does not want to buy the house; if he does not want to pay fair taxes along with other citizens, he should be put out. We want people to buy their homes in our section of Canada. I hope that these men will buy all these houses, and I hope that the government will put up another 100, so that they can be purchased at the reasonable figure at which they are available today.


Mr. GIBSON (Comox-Alberni):: How many houses have been built by lumbering, mining and fishing companies under the amendment
passed last year?


Clarence Decatur Howe: I think I can get that
information a little later.


John Lambert Gibson: Have the minister and his officials given any consideration to altering the specifications for these houses? Wartime houses must be built to certain definite specifications which are not always suited for houses built out of town. I know one concern that took up with the minister's department the borrowing of $175,000; but, after considering all the features and factors involved, such as having to meet the specifications, they decided it would be infinitely cheaper not to borrow the money from the government.
One company has found that for about $1,000 it can get a roof over a family's head. Working as they do only forty hours in the week, these men are left with a good deal of time during which to improve their houses. Apparently there is at the present time no provision in the legislation to permit people to fix up homes in that way for themselves. Actually Central Mortgage will not approve anything that costs less than about $4,000, whereas many homes out of town could be built for something around $2,000 if the specifications were not so rigid.
The minister and his officials should give serious consideration to permitting more flexibility in this connection. After all, the only security the government has for its money in a case of that kind is the integrity and business ability of the concern building the houses. I think the business concern would be the best judge as to what would be adequate housing for its employees. You will find that progressive employers in this country do not want sub-standard homes for their employees. The present specifications almost double the cost of these houses.


Jean-François Pouliot: I subscribe fully to what the hon. member for Comox-Alberni has said. I should like to ask a favour of the minister. Will he send the hon. member for Simcoe-North over to England and have him make the same speech he just made to the British social government and the coal miners who are producing only a limited amount of coal?


Howard Charles Green: Can the minister say when an agreement will be reached concerning the houses in Vancouver, so that the tenants can enter into purchase agreements?


Clarence Decatur Howe: I am told by the vice-president of Central Mortgage and Housing Corporation that agreement was reached within the last few days. I may say to the hon. member for Comox-Alberni that the government feels that it must maintain certain minimum standards It is all very well to build houses which may be satisfactory to the people living in them, but government housing must be kept up to a minimum standard. I quite agree that lumber companies can do better by borrowing money in other ways, but I do not think that is any reason for making a change.


Jean-François Pouliot: What about the $475 house of the hon. member for Renfrew North?


[Stage Direction]
Item agreed to.
JiH. Cost of moving houses from one locality to another to meet emergency shelter requirements, $500,000.
5518
[Stage Direction]
Supply-Reconstruction and Supply
John Thomas Hackett: What type of emergency could arise to make necessary the moving of houses from one locality to another? I thought that was incidental only to the necessities of war when production simply had to go on and houses were moved to replace tents. With all good will, I suggest that this is a type of item which might with benefit disappear.


Clarence Decatur Howe: In some places we have overbuilt. A case in point is the town of Pictou, where we had a large shipyard during the war. The shipyard has gone, and we have vacant houses there. On the other hand, there is a shortage of houses in the nearby town of Stellarton. This item would cover the cost of moving the vacant houses in Pictou to Stellar-ton, where they will be occupied.


John Thomas Hackett: I can see that, but this item rests upon emergency, and the minister knows that the pretext of emergency does not arouse a great deal of enthusiasm in me. I can understand the transfer but I do not like it being made dependent upon an emergency.


Clarence Decatur Howe: My explanation was not very good. The emergency refers to removing air force or similar buildings from their present location into the town for emergency shelter purposes.


[Stage Direction]
Item agreed to.
bl5. Incentive bonus to industry to expedite the production of strategic building materials, $370,000.
John Thomas Hackett: What is the incentive bonus to industry, and just w'hat does it all amount to?


Clarence Decatur Howe: There are only two cases covered by this item. We were very short of plumbing fixtures, and we made an agreement with the Port Hope Sanitary Manufacturing Company Limited for an incentive bonus payable on increased production of enameled sanitary ware. The contract runs to December 31, 1948, during which period it is anticipated that increased production will amount to
8,100,000	pounds at two cents a pound, which means a subsidy of $162,000. That was to induce Crane Limited to build an addition to their plant.


John Thomas Hackett: Were they given any write-off in connection with that plant?


Clarence Decatur Howe: No, a straight subsidy. We were also short of cast iron soil pipe. We entered into an arrangement with Anthes-Imperial Limited for an incentive bonus payable on increased production of cast iron soil pipe. The contract runs to December 31, 1948, during which period it is anticipated that

increased production will amount to 9,900,000 pounds at two cents a pound, or a subsidy of $198,000; and ten per cent was added in this appropriation for contingencies to cover overproduction. That accounts for the total vote of $370,000.


John Lambert Gibson: Are these plants working twenty-four hours a day?


Clarence Decatur Howe: I would imagine so, but I am not sure.


William Irvine: I was of the opinion that private enterprise had sufficient initiative in itself without the government's having to bonus it, but apparently private enterprise has not enough initiative, since this industry finds it necessary to receive something from the federal treasury in order to carry on. I suggest that the prices for these commodities are already high enough to stimulate the initiative of any industry, and it would be much more to the point if subsidies were paid to the consumer rather than to the producer, if subsidies are to be paid at all.


Robert Fair: Is any subsidy being paid on the production of nails?


Clarence Decatur Howe: No.


Robert Fair: Is there any ceiling now on the price of nails?


Clarence Decatur Howe: No.


Robert Fair: I have information that in western Canada quite high prices are being quoted by manufacturers of nails in Ontario. My information is that the wholesale price of two-and-a-half inch common nails in Calgary is $8.30 per 100 pounds, which includes the tax, and I have here a rush telegram from a Toronto firm quoting two-and-a-half to four inch common nails at $12.25 per 100 pounds.


Clarence Decatur Howe: Will my hon. friend give me the name of the company?


Robert Fair: Interstate Sales.


Clarence Decatur Howe: That is an outfit which was importing nails from the United States and offering them in western Canada.


Robert Fair: Cannot you stop these high prices?


Clarence Decatur Howe: If people want to import nails from the United States, where the cost of nails is very much higher than in Canada, if people are so desperate for nails that they are willing to pay these prices, I do not know that there is anything we should do about it.


Robert Fair: What about the dollar shortage? Do these imported nails not have to be paid for in United States dollars?

Supply-Reconstruction and Supply


Clarence Decatur Howe: Certainly.


[Stage Direction]
Item agreed to.
>ilC>. To provide for production and transportation subsidies on steel and iron under such terms and conditions as may be approved by the governor in council, $5,000,000.
Clarence Gillis: Last evening I discussed at some length the increase in the price of steel, and the minister advised1 me that he did not have the officials concerned1 before him. I wanted to know the reason for the recent increase in the price of steel. I said I thought it could not be justified. I should like to hear an explanation from the minister. I do not like to get the information through the press all the time; I think we should get it here.


Clarence Decatur Howe: For something like two years we held steel at the former price. In the meantime there were two increases in wages for all steel employees, amounting roughly to twenty-five cents an hour.


Clarence Gillis: The two increases were six and Hi cents, or 17i cents altogether.


Clarence Decatur Howe: That probably is right. Then there was a freight increase of 21 per cent. Transportation costs have been rising steadily. The cost of coal went up about $2 a ton. Scrap iron went up considerably; and it became necessary for the mills to rely on foreign, scrap, costing around twice the price of domestic scrap. It was a combination of all these increases that had to be met. We met it for a while through subsidies, but the pressure got so heavy we could not carry on. Therefore, after studying the entire industry, we decided that price increases were necessary. We believe that the profits for 1948 will certainly be no higher, and probably lower, than for 1917 and earlier years. To keep the steel industry operating, we were convinced that price increases were necessary.


Clarence Gillis: I am not going to argue the matter with the minister; it has already been done. But I did say last night I thought it was short-sighted, and I put the figures on the record. If the minister will check them he will see that they show, based on the production of steel last year and the profits made in 1946 and 1947, that the increase which has been permitted at this time will just about double the profits of the companies. In the light of present price conditions in Canada, that increase in one of our basic commodities was not warranted because of the companies' positions. It was something that should not have been permitted at this time. However, it has been done, and I am afraid that when the increase
5849-351J
begins to hit farm machinery and all the things it will affect in our whole economy, we shall find that we have done something we shall not be able to control very easily. Another thing, it has created a feeling in the minds of those who actually work in the steel plants that they were ignored. Hon. members will remember the difficulties we had in 1946 in getting them straightened out on a wage agreement. It will be remembered that in 1948 the workers took a very slight increase. I know that all throughout the steel workers union, from top to bottom, the objective was to stabilize the industry. There has been quite an increase in the production of steel. Last night I referred to an article in the Financial Post.


Clarence Decatur Howe: The production of steel is not as high as it was in wartime.


Clarence Gillis: Maybe not.


Clarence Decatur Howe: Two furnaces had been down for a while. They are producing more steel at the moment than they were when the two furnaces were down.


Clarence Gillis: That is right. This is a short sketch which appears on the front page of the last issue of the Financial Post. It reads as follows:
Dosco breaks eleven output records
Open hearth operations at the steel plants of Dominion Steel and Coal Corporation at Sydney, N.S. showed a monthly ingot production mark of 53,774 tons in May. The previous high was 51,802 in May, 1940.
That is higher than the war years. I continue:
Three blast furnaces shattered a six-year record by producing 40,379 tons, edging the previous mark of 39.866. Eleven production records were broken during May, P. J. Power, industrial relations superintendent announces.


Clarence Decatur Howe: The press agent has, of course, his own way of figuring these things. If my hon. friend will get the production records of that plant for 1944 he will, find that they are not breaking any records in that plant. They were manufacturing much more steel in 1944 than they are today.


Clarence Gillis: I do not know. This gentleman says that the high was in 1940, and the record for May, 1948, was higher than it was in 1940. If that is so, if production is on the up-grade, it, in effect, would to a large extent offset even the wage increases that were granted.


Clarence Decatur Howe: The year 1940 was the first year of the war. The plant was then on a peacetime basis.
5520	COMMONS
Supply-Reconstruction and Supply


Clarence Gillis: That is right. I wanted to put that article on the record for the benefit of the hon. member for Calgary West, and to tell the minister that I am completely unsatisfied with his answer. Perhaps it is the best answer he can give at the present time. On sober reflection and further checking, perhaps he may find out the answer and go back to his subsidy arrangement, because the saving of $2,500,000 in subsidy and then dumping the load on the back of the consumers of this country will add about $9,000,000 more to the cost of the goods that the consumers have to purchase. That is the wrong way of facing up to the present situation.


Clarence Decatur Howe: It does take $2,500,000 off the backs of the taxpayers.


Clarence Gillis: But in the final analysis $7,000,000 is being added to the price of the goods the consumers have to purchase. In the light of the vast budget surplus, there is no justification for having taken off the subsidy. It has created an upward trend in prices, and it has a great influence on increased prices.
I want to say this for the benefit of the hon. member for Calgary West, who last evening suggested that wage increases inevitably increased costs. That is not so. That has been proven in this house. We put the actual figures of the steel plant at Sault Ste. Marie on the record. These figures showed that, despite the fact that wages were increased by 25 per cent, because of increased production during the same period the increased wage cost was completely offset. As a matter of fact, despite the wage increase, costs were actually lowered.
Last evening the hon. member for Calgary West made the observation that in my own union, the miners' union of Nova Scotia, the answer was increased production to offset the increased wage cost. I told him at that time that it was absolutely incorrect. He said production had increased. It has slightly increased, but not for the reasons he gave. The wage increases that were granted in the mines of Nova Scotia during the war-I think it applies also to the steel plants-did not come out of the pockets of the corporation. It was handed back in the price increase to the consumers of coal. The man on the street paid the bill. If hon. members will check up they will find that every time a wage increase was granted to the coal miners the companies improved their own financial position. They really made money out of it.
Production was down during the war years. Why was it down? I do not think anyone knows the reason better than the minister

does. The government was Santa Claus during the war. Under the circumstances they had to be. Huge sums of money were poured in. In fact, these mines were operating on a cost-plus basis. The greater the loss, the more money the companies made. That is quite true. Their losses were made up, plus a certain percentage of profit. The higher the losses the higher the profit.


Julian Harcourt Ferguson: May I	ask	one
question?


Clarence Gillis: No. Wait until I am through and I shall answer all the questions the hon. member wishes to ask. The minister knows that what I am saying is correct. In the coal mines there grew up the system of an overloading of datal men. The result was that the younger men, who should have been mining coal, had gone to the war. We had to bring some of them back. A large percentage of the older men and the younger men who did not understand mining were ini the coal pits. A bad situation developed from the standpoint of management. When the war finished, production per man-day was down. There was no doubt about that. How did they increase it? They are not producing much more coal; but they can show a man-day production increase, because in 1946 when the strike took place 1,500 of the older men were laid off the datal force. They were taken out of the industry, which affected the man-day production. Younger men were put on the face. The datal force was cut drastically. It did not take very many more tons of coal to increase the man-day production. That is what happened in stepping up the production per man-day in the mines of Nova Scotia. The older men were relegated to the streets.
I shall have something to say on that when the estimates of the coal	board are	up	fordiscussion. I am wasting	time	now,	but Idid think I had to say that for the benefit of the hon. member for Calgary West, who last evening attempted to say that wages are the reason for the inflated prices today. If he will check the balance sheets of the corporations of this countiy today as against 1945 he will find that	huge	profits	areresponsible for the inflationary spiral which we have today, and the	wage	cost	in	the
picture is so slight that it is hardy noticeable


Julian Harcourt Ferguson: My hon. friend is
apparently trying to imply that an increase in wages does not increase costs in any way, shape or form. The hon. member for Calgary West made a statement which was quite correct and I may say I am repeating his exact words.

Supply-Reconstruction and Supply


Clarence Gillis: Is the hon. member asking a question or making a speech? He said a moment ago that he wanted to ask a question.


Julian Harcourt Ferguson: The hon member will recognize it when I am through, I hope.


William Irvine: No, he will not.


Julian Harcourt Ferguson: The hon. member for Calgary West made the positive statement that one ingredient in any commodity, namely wages, will increase the cost, but I am sure he did not say that this was the entire reason for the increase in the final price of the commodity. Undoubtedly wages are as much a factor in the cost of the commodity which is produced as the materials that enter into it. There is no doubt about that.
The question I wish to ask is this. Was the hon. member for Cape Breton South trying to imply that for one moment any corporation in Canada during the war would deliberately curtail production in order to make more money through such curtailment on a cost-plus basis? Would he say that any corporation was guilty of that? If so, would he care to prove it.


Clarence Gillis: As regards the first part of the question, what I said to the hon. member for Calgary West last night, and if it went over my hon. friend's head that is not my responsibility-


Julian Harcourt Ferguson: Some things go over my head, but that certainly did not.


Clarence Gillis: I said a wage increase did not necessarily mean a cost increase, because it could be offset by an increase in production. That is No. 1.


Julian Harcourt Ferguson: It still creates a cost increase. The cost is still increased by the wage increase.


Clarence Gillis: There is no need to argue that further with the hon. member, because I do not expect agreement.


Julian Harcourt Ferguson: I am glad you agree with me.


Clarence Gillis: I do not agree with the hon. member, but I am wasting my time by arguing with someone who does not understand the question at issue.
As to the second part of the question, and I am glad I am taking the heat off the minister for a while, I understand it to be this. Did I think there was any corporation in this country who would deliberately slow up production because they had cost-plus contracts during the war years? I will say, I think the minister and the officials of his department who had to do with pay and subsidies, and
checking them, will agree with me when I say that perhaps 80 per cent of the cost-plus contracts let during the war operated on that basis. Let me go further.


Julian Harcourt Ferguson: I cannot listen to any more of that stuff.


Edmund Davie Fulton: Is there any estimate of the amount of increased costs to the construction industry which the increase in the price of steel will cause in, say, one year?


Clarence Decatur Howe: What industry?


Edmund Davie Fulton: Is there any estimate of the amount of the increase in cost which this increase in the price of steel will give rise to in one year? On the average consumption of steel in Canada, what will be the annual amount of the increased price?


Clarence Decatur Howe: It is an average of about $7 a ton on steel. Anyone using steel will find the cost increased by about 87 a ton on the quantity he uses.


Edmund Davie Fulton: What is the average consumption of steel in Canada?


Clarence Decatur Howe: The consumption is about
4,000,000 tons but Canadian production is about 3,000,000 tons.


Edmund Davie Fulton: Approximately $20,000,000 would be a reasonable estimate?


Clarence Decatur Howe: I was talking about ingot tons, and the hon. member is interested in finished tons. It would be about 2,500,000 tons, or about $17,500,000.


Mr. MACDONNELL (Muskoka-Ontario):: While it was not my question, I think we had better get an answer to the question which the hon. member for Cape Breton South was answering when he stopped in the middle-


Clarence Gillis: My questioner left.


James MacKerras Macdonnell: -because he left an impression which I hope he did not intend to leave. The question asked him was whether he was suggesting that, during the war, corporations actually slowed down production, there being an innuendo that they might thereby, on the cost-plus basis, get more profits. I should like to have that answered.


Clarence Gillis: Does the hon. member wish to have me answer it?


James MacKerras Macdonnell: Yes.


Clarence Gillis: I have already answered it.


John George Diefenbaker: I think the minister of reconstruction had better answer that question because, if that is true, it is one of
a522

Supply-Reconstruction and Supply
the most serious imputations that can be made against the activities of industry in Canada during the days of the war. The statement suggests that-


Clarence Decatur Howe: If my hon. friend wants to know whether cost-plus work is as efficient as lump-sum work, it is not. You get cases- my hon. friend knows of one and I know of some-where management practically abdicates and permits inefficiency to take charge. He speaks of the disproportion of datal workers to face workers. That would not have happened had it not been for subsidies. You get cases like that, but when he says that 80 per cent of industry followed that practice I would say that perhaps five per cent did and ninety-five per cent did the best they could.


Clarence Gillis: I said cost-plus contracts; I did not say industry.


John George Diefenbaker: It is such statements that, unchallenged, do more harm to the profit system in this country than anything else, and I think the time has come to answer suggestions such as that. I have a high regard for my hon. friend, but I do not believe that industry in this country in the days of the war-I am not going to deal at the moment with the days of peace-to the extent of eighty per cent, ever tried to take advantage of the state in the midst of war. If that statement remains unchallenged it casts on Canadian businessmen a reflection which I think is entirely unwarranted, having regard to the contribution that private enterprise countries made in their respective war efforts.


Clarence Decatur Howe: It shows the danger of generalizations. The ordinary citizen has intentions that are probably ninety-five per cent good, five per cent being not so good, and I suppose it is the same with business. It is a challenge to industry in the case where there is no subsidy. Production/ is then stimulated by competition. Industry must be efficient to survive. The moment you introduce subsidies into the picture, or cost plus, you introduce a factor that tends to take away the incentive. Ninety-five per cent of business does the best it can under the circumstances andi five per cent is inclined to coast. That is my estimate of the situation. It is unwise for the hon. member for Cape Breton South to generalize on the basis of one industrial unit he knows about, and it is just as dangerous for the hon. member for Lake Centre, who knows a great many firms who are doing a good job, to generalize on the strength of that knowledge.


Clarence Gillis: In answer to the indignant statement of the hon. member for Lake Centre-


John George Diefenbaker: I do not think we are all dishonest, as my hon. friends to the left suggest.


Clarence Gillis: I will not generalize, but my hon. friend the member for Lake Centre will remember this. A statute was passed early in 1939 limiting profits to five per cent on all war contracts and when this house met in September, 1939, the present minister was questioned as to why that profit limitation in war contracts was removed by order in council. His answer at that time, as I remember it, and I am speaking from memory, was to this effect, that for months he had tried to let war contracts for industry but he could find no one to accept a war contract until such time as that profit limitation was removed. That is when/ Britain had her back to the wall, and that does not suggest that patriotism took precedence over profits even in the dark days of 1940.
I said a moment ago I was speaking from memory. The statement will be found in Hansard of September 12, 1939, at page 179:
The provision of 5 per cent was put in the last act . after a good deal of consideration as a minimum return for the service rendered, but it was one which men of considerable experience believed to be unworkable. I can say to my hon. friend that from that day to this the defence purchasing board has done its very best to place contracts on that basis and has used every pressure that could be brought to bear in the form of patriotism and so on, but to date it has not succeeded in placing a single contract on that basis.


John Thomas Hackett: What is the date of that?


Clarence Gillis: September 12, 1939.


Clarence Decatur Howe: My hon. friend describes that as though the limitation-


John Thomas Hackett: Three days after the war began.


Clarence Decatur Howe: -were five per cent on cost. It was not five per cent on cost. It was five per cent on the money invested in the productive equipment. It was worded-


John Thomas Hackett: September 12, 1939, was three or four days after the war began. Therefore no contracts had been let as yet.


Clarence Decatur Howe: I know. But it described events in the period of some seven or eight months between the passage of the legislation and the date when I was speaking. The actual profits in the munitions works were nearer two per cent. I think the average

Supply-Reconstruction and Supply
profits throughout the war averaged about two per cent. But that two per cent profit is two per cent on the value of the product. The five per cent that my hon. friend was talking about had nothing to do with the value of the product. It had to do with the capital invested, which is quite different and quite unworkable. It was devised by our friends in the east block without a great deal of knowledge of the productive problems.


John George Diefenbaker: That is a good admission.


John Thomas Hackett: I should just like to get this fact on the record. The hon. member for Cape Breton South stated, if I understood him correctly, that eighty per cent of the cost-plus contracts during the war were dealt with dishonestly.


Mr. GILL IS:: No. I refuse, Mr. Chairman, to allow the hon. member to put words into my mouth. I said that if the hon. member who was questioning me at that time would question the minister and his officials, they would likely inform him that eighty per cent of the contracts operated on a cost-plus basis during the war militated against the best interests of this country from the standpoint of spending money. I did not say anything about dishonesty, and I do not intend to let the hon. member put words into my mouth. My hon. friends over here to my right can become as indignant as they like. That statement of mine still stands. If any of them have any evidence to the contrary, let them put it on the record here.


Frank Exton Lennard: Have you any evidence to that effect?


Clarence Gillis: I am reasonably sure. I tell my hon. friends to talk with their own members on the war expenditures committee. I say to them to go and talk to some of those who were probing those cost-plus contracts. I have had members of their group show me evidence which they wanted me to use, but which I thought was too rotten to use. I am quite willing to face facts and be honest about these things. But when the hon. member for Stanstead gets up in this house and tries to put words into my mouth, that is something I will not stand for. My statement is on the record that these contracts militated against the best interests of this country from the financial standpoint; and all the evidence given to the war expenditures committee will bear that out. Profits were placed above patriotism when this world was in a bad state, on the removal of that five per cent profit limitation. That is my interpretation of it.


John Thomas Hackett: I was interrupted by the hon. member for Cape Breton South. We will take his restatement.


Clarence Gillis: It is not a restatement at all. That is the first statement.


William Ross Macdonald: Order.


John Thomas Hackett: We will take the last statement of the hon. member for Cape Breton South as being the statement by which he wishes to stand. The allegation is that eighty per cent of the cost-plus contracts were carried out in a way that was prejudicial to the interests of Canada. Then, in support of his charge he reads a statement that was made to the house on some day early in September.


Clarence Gillis: September 12, 1939.


John Thomas Hackett: Yes. War was declared on September 10, 1939. The hon. member for Cape Breton South is relying upon a statement that was made in the house two days after war was declared as proof that eighty per cent of the cost-plus contracts were carried out in a way that was prejudicial to the interests of Canada.


Clarence Gillis: That is plain nonsense.


John Thomas Hackett: Those are the facts.


Clarence Gillis: No.


John Thomas Hackett: I merely wish that they appear in sequence in the record.


Clarence Gillis: That is just plain nonsense.


William Irvine: I think the facts are that there were not in Canada any big interests or any capitalists in 1939 who were more than five per cent patriotic; that is to say, they said they could make five per cent on their capital, but that was not enough for them. They were not patriotic enough to accept that.


Some hon. MEMBERS:: Oh, oh.


William Irvine: That is the story the minister himself has acknowledged.


Clarence Decatur Howe: There is no occasion for my hon. friend to make twisting speeches. I said nothing of the kind.


William Irvine: What did you say?


Clarence Decatur Howe: I said that the basis or the provision of the act was not workable. The provision was for a maximum return of five per cent on the capital involved in the particular operation. In the first place, it was exceedingly difficult to allocate the capital involved in the particular operation. In the second place, no one dared to take a contract because the terms were so vague as to the limitation.

Supply-Reconstruction and Supply


William Irvine: I do not think I have twisted it.


Clarence Decatur Howe: People use the five per cent limitation quite loosely. It needs to be carefully defined.


William Irvine: While I am on my feet, I also wish to say that I should like the minister to be a little bit more consistent. With respect to subsidies he has just said that as soon as you introduce a subsidy you discourage incentive. I assume that is true. But in the very item before this he has given $370,000 as an incentive bonus to industry. If subsidies are to be taken as destroying incentive, why should the people of Canada pay taxes to destroy incentive, as evidently it would do?


Julian Harcourt Ferguson: Here, Mr. Chairman, is a member of a party which, long after the war had started, advocated not sending any troops to help dear old Britain with her back to the wall; they said to keep the men in Canada to defend the worlds-keep them right here; make Canada the battlefield. That is what they advocated during the war. Now they are trying to create class hatred more than ever by saying of a man who allowed his factory to be used on a common-sense, reasonable basis for the purpose of making munitions of war that he gouged the public, and that, unless he was paid blood money, he would not have put forth any effort on behalf of the war.


Clarence Gillis: That is correct.


Julian Harcourt Ferguson: That is what is being expounded here today by the group which, on the whole, advocated keeping their sons right in this country and not fighting for the British empire. I say, shame on you.


Jean-François Pouliot: May I ask the hon. member for Simcoe North if his speech was prepared by the hon. member for Vancouver East?


Julian Harcourt Ferguson: I have never been fortunate enough to have anyone prepare my speeches for me.


Angus MacInnis: I think we might leave it at this, that if Canada got good value for the money spent during the war, in connection with war production, we got it because we had good inspection. I have had something to do with contracts, in a small way, in the city of Vancouver, and I was told that the value we got from the contractors in any contract work that was let was just as good as the inspection, and no better. If the inspection was poor, the value received was poor. If the inspection

was good, the value received was good. And if we will throw our minds back to the first world war we will remember that paper-soled shoes were sold to the troops; we will remember that bacon was filled with brine and fed to the troops; we will remember that beef was embalmed and fed to the troops. I do not suppose we have improved morally veiy much from 1914-18 to 1939-45.


John Lambert Gibson: I think it is very unfortunate that if, as has been suggested here, there are five per cent of business concerns whose morals are not 100 per cent perfect, their lapses of moral turpitude should always be quoted by the C.C.F. That does not prove anything so far as the free enterprise system is concerned. I am confident if I had to depend upon hon. members opposite to produce very much, either in war or in peace, we would not have much wealth in this country at any time.


James MacKerras Macdonnell: I just wish to add a word. There are times in this house when I am impressed by the sincerity, and sometimes even by the logic, of those to my left. But when they get down to smearing-


Clarence Gillis: Who started it?


James MacKerras Macdonnell: You did. When they get down to this smearing of business, and trying to create the impression that except in the rarest of cases, which we all despise, there is any concerted attempt on the part of business to deal unfairly, I resent it. The hon. member for Vancouver East, under the guise of dealing fairly with the matter, said the goods received were only as good as the inspection.


Angus MacInnis: I do not care whether you resent it or not; it is the truth.


James MacKerras Macdonnell: I think it is unfair, and I think that kind of smear campaign will get them nowhere.


Mr. McCULLOUGH (Assiniboia):: The
reason the minister indicated for the increased cost of steel and iron products was the increase in the cost of scrap metal. Can the minister tell the committee what amount, if any, has been exported to other countries in the last five years, and to what countries such exports were made?


Clarence Decatur Howe: There has been a prohibition against the export of steel scrap, except for an occasional swap. I think a little steel was exchanged on the Pacific coast. Canadian scrap delivered to Seattle against Buffalo scrap moving to Hamilton, the reason being to save

Supply-Reconstruction and Supply
freight charges. But, other than that, on balance Canada has been an importer of scrap and has not permitted exports.


[Stage Direction]
Item agreed to.
hi7. Administration, reconversion and operation of Canadian Arsenals Limited, $2,900,000.
Howard Charles Green: How much did we spend under this item in 1947-48?


Clarence Decatur Howe: This represents the difference between the cost of administering all government arsenals, which is $4,400,000, and the estimated earnings of about $1,500,000.


Frank Exton Lennard: What would be the
amount allocated' to reconversion?


Clarence Decatur Howe: I think the reconversion work at the arsenals is pretty well finished.


Frank Exton Lennard: My point is that there would always be more or less of an amount for conversion. It would always be changing to a certain extent.


Clarence Decatur Howe: Yes.


Frank Exton Lennard: I was wondering why this was put in. I should think it would be more accurate to say that this amount was for administration and operation. Would there not always be conversion going on in connection with the making of munitions?


Clarence Decatur Howe: Perhaps so. The hon. member will understand that when the war ended we allocated certain war plants as arsenals. I believe we have seven or eight arsenal plants. We moved into those plants machinery from others sufficient to make it possible for the arsenals to make anything made during the war. There was a good deal of expense attached to that operation. Some of (his money may be used for that purpose. In any event, it is the total expenditure estimated to maintain the arsenals, less earnings.


Howard Charles Green: Is the production entirely for government use, or are sales made to the public?


Clarence Decatur Howe: We make sales as we can. The countries to whom we can make sales are rather limited. However, we have made sales occasionally from the aresnals.


Howard Charles Green: What amounts are required to maintain the other crown companies? I have in mind the Eldorado Mining and Refining Company and the Polymer Corporation.


Clarence Decatur Howe: Eldorado Mining and Refining is healthy. Operating profits for the twelve months ended March 31, 1948, amounted to $1,087,318.97.


Howard Charles Green: What about Polymer?


Clarence Decatur Howe: Polymer made its depreciation, plus about $25,000.


John Thomas Hackett: How many crown companies have been brought into existence since the war? The minister told us last night that all but five had ceased to do business; but there have been some new ones since.


Clarence Decatur Howe: The Canadian Commercial
Corporation was brought into being to take over the purchasing functions of the Department of Munitions and Supply. The Export Credits Insurance Corporation, which was incorporated by act of parliament a year or two ago, is another one. They are the only two I can remember.


John Thomas Hackett: Were there any others?


Mr. CRUICKSHANK:: Would the minister inform me-


John Thomas Hackett: I was in the middle of a question.


George Alexander Cruickshank: Would the minister inform me under whose advice the arsenal was constructed at Kamloops, where it is subject to flooding?


Edmund Davie Fulton: What arsenal are you talking about?


George Alexander Cruickshank: Munitions stored in that area.


Edmund Davie Fulton: That is different from an arsenal.


George Alexander Cruickshank: All right; munitions storage depot. On whose advice was it constructed and who is in charge? What military command advised the construction at that spot?


Clarence Decatur Howe: Obviously the hon. member must ask that question of the Minister of National Defence. I am not aware of the details. All I know is that the Department of National Defence chose the location and ordered the construction there.


George Alexander Cruickshank: That answer partly satisfies me.


Clarence Decatur Howe: It is not an arsenal. It is a storage dump belonging to the armed forces.


George Alexander Cruickshank: Yes, but obviously it was constructed on somebody's advice. I should like to know, through you, who advised its construction in its present location.


Clarence Decatur Howe: The Minister of National Defence will be in the house next week and

Supply-Reconstruction and Supply
will be prepared to answer all questions. I suggest that the hon. member ask him that question.


John Thomas Hackett: Are there any other crown corporations apart from the two which are under the administration of the minister?


Clarence Decatur Howe: There are statutory crown companies; I suppose you could call the Canadian National Railways a crown company. We had some thirty crown companies during the war, but today only four are left. By crown company I mean a company operating under the Companies Act. There are other crown companies set up by statute, which are in a different category. I have mentioned two connected with the department with which I am associated, but there may be others of that type. I think we now have only four which had been set up under the Companies Act.


John Thomas Hackett: Does the minister know of any other companies, apart from the two under his administration, which have been set up since the war?


Clarence Decatur Howe: No.


John George Diefenbaker: What was the total production of Polymer during the year ended March 31? How much was deducted by way of depreciation, or at what amount was depreciation computed?


Clarence Decatur Howe: The net profit for the year's operation was $25,623, after provision was made for $2,192,967 for depreciation of plant and equipment.


John George Diefenbaker: What is the value of the plant and equipment today?


Clarence Decatur Howe: I think it stands on the books at about $38,000,000; that is the net total cost of the plant, less repayment of capital from operating profits. The value of the production was $17,000,000.


John George Diefenbaker: I read in the press that the manager had been abroad in an effort to get markets in Europe for the production of Polymer. To what extent did he succeed, and what were the values of the exports during the year ending March 31?


Clarence Decatur Howe: The trip was successful. For instance, he sold the entire requirements of the Michelin company of France for butyl rubber to be used for inner tubes. The Michelin company ship crude rubber of an equivalent value to New York. It is sold for United States funds which are applied against the purchase of butyl rubber at Sarnia. The exports of G.R.S. rubber were 11,784,000 pounds to the Reconstruction Finance Cor-

poration and 21,392,000 pounds to other importers. Exports of butyl rubber were 95,000 pounds to the Reconstruction Finance Corporation, and 2,379,000 pounds to other export buyers.


John Thomas Hackett: Can Polymer compete with natural rubber?


Clarence Decatur Howe: I think Polymer has had its worst year last year. The price of natural rubber dropped to below fourteen cents and, in order to hold its customers, Polymer had to drop its price to fifteen cents a pound, which is very close to production cost. Later, the price of natural rubber moved back to around twenty to twenty-five cents a pound, and Polymer advanced its price to eighteen and nineteen cents a pound. During the period the price was at fifteen cents, the corporation was operating very close to the red ink.


John Thomas Hackett: What salary is paid the chief executive?


Clarence Decatur Howe: Twenty-five thousand dollars a year.


[Stage Direction]
Item agreed to.
418. To provide for research and development of jet engines and aircraft, $2,000,000.
John George Diefenbaker: Recently two tragic accidents have occurred in which the lives of gallant airmen were lost. Were those aircraft produced in Canada, and have investigations taken place in regard to those fatalities?


Clarence Decatur Howe: Here, again the hon. member is asking the wrong minister. Those accidents did not occur during the testing of jet planes; they occurred during operations by the Royal Canadian Air Force.


John George Diefenbaker: Those planes were not produced in Canada?


Clarence Decatur Howe: No.


John George Diefenbaker: Are any being produced in Canada?


Clarence Decatur Howe: Canadian-built jet engines
have been tested on the test block, but they have not been put into service. Jet planes are in the development stage, but no Canadian-built jet plane has flown.


John George Diefenbaker: Where are these developments taking place?


Clarence Decatur Howe: At Malton.


[Stage Direction]
Item agreed to.
National research council-
398. Salaries and other expenses of the national research council, $6,820,000.
Howard Charles Green: Have any crown companies been set up under the national research council?

____________Supply-Reconstruction and Supply


Clarence Decatur Howe: Yes, one small company to handle patents. There was no machinery for the marketing of patents which had been taken out by employees in the national research council or workers in the universities in the name of the government. Most other countries have patent corporations. The advantage of having a patent corporation is that it provides not only marketing facilities for Canadian patents but permits agency arrangements in connection with patents originating in the United States or the United Kingdom which can be offered to the market in Canada. All patents owned by the government have been transferred to this corporation, and it has made some marketing arrangements of considerable advantage.


Howard Charles Green: How does the national
research council come into the picture?


Clarence Decatur Howe: By arrangement between the governments, patents held by a similar corporation in the United States are made available to Canadian users through the Canadian Patent Corporation. In other words, they can apply through the corporation for Canadian rights to United States patents.


Howard Charles Green: Private firms?


Clarence Decatur Howe: That is right. The purpose of the corporation is to sell public patents to private firms.


John Thomas Hackett: In Canada and abroad?


Clarence Decatur Howe: This corporation works with corresponding corporations in other countries. For instance, our Canadian patents will be listed with the United States and the British government corporations. If there is no appropriate corporation to handle patents abroad they can be sold from Canada, but it is believed that in handling publicly owned patents it is better to work through government corporations.


John Thomas Hackett: Are these patents that recently originated in Canada, or are they patents that have become public property by reason of the activities of the custodian of alien enemy property? There were a great many German patents registered here, and I assume that the custodian had a vested right in them for a time.


Clarence Decatur Howe: The purpose of the corporation is to market patents taken out by government employees in the name of the crown. I cannot say whether the corporation has taken over the German patents that were lodged with the custodian. There was some talk of their doing so, but whether it was actually done or not I
cannot say. That will be between the national research council and the patent office.


John George Diefenbaker: You passed over items 396 and 397, Mr. Chairman, with a rapidity which is ordinarily appreciated, but may we be given the opportunity to revert to these items because they went through so fast we could not follow them?


Howard Charles Green: There is an increase in item 398 of $776,000 over the previous year. Would the minister explain the increase? We are all in favour of helping the research council, but why this increase?


Clarence Decatur Howe: We are trying to stabilize the expenditure of the research council around $7,000,000, which is only a little higher than the present level.


Howard Charles Green: Has the research council been engaged in commercial business at all? The minister will remember two years ago, when the National Research Council Act was amended, the debate as to the extent to which they would go into business. What is the picture?


Clarence Decatur Howe: The council can be and often is retained by private industry to work out a certain problem, but if my hon. friend means, do they buy and sell


Howard Charles Green: That is what I meant.


Clarence Decatur Howe: No. A firm may wish to develop an item of radar, and they will come to the national research council to have one unit made which can be used as a model for production. The council does that sort of work. It will make a prototype, but it does not manufacture in volume.


Mr. MacNICOL:: Have we made progress in the production of oil from coal through hydrogenation? Have we been able to obtain any German patents? Have we anything along that line by which we can produce oil from coal?


Clarence Decatur Howe: I am not sure. That particular activity comes under Mines and Resources.


[Stage Direction]
Item agreed to.
399. Expanded research on the utilization of farm crops, $260,000.
Mr. CHARLTON:: This item is for expanded research; yet there is a decrease in the vote. One ordinarily associates expansion with increased expenditure. Would the minister explain what results have been obtained and the reasons for the reduction in what I consider an important and necessary item?


Clarence Decatur Howe: This is to cover the construction of the laboratory at Saskatoon. The

Supply-Reconstruction and Supply
amount voted in 1947-48 was $401,400, and the amount expended, $141,400. We are revoting $260,000 to complete the building. I understand that the building is now practically completed.


John Alpheus Charlton: Is there any idea of doing further development work along this line?


Clarence Decatur Howe: This item is to cover the cost of building the laboratory at Saskatoon. The operation of the laboratory comes under the over-all vote in the previous item.


[Stage Direction]
Item agreed to.
J/03. Maritime regional laboratory, $150,000.
Clarence Gillis: I am sorry I was out of the chamber for about a second when the dominion fuel board item went through. The item now before us has to do with experiments in regard to the utilization of Nova Scotia coal, which all comes within the work of the dominion fuel board.


Clarence Decatur Howe: On a point of order, Mr. Chairman, this is a building item.


Clarence Gillis: What are you building it for?


Clarence Decatur Howe: We shall decide that later when we look the building over.


Clarence Gillis: There has been a great deal of political propaganda that the government was going to set up experimental stations in the maritimes. Since this is the first time that the minister has brought before the house the vote for the dominion fuel board-


William Henry Golding: Order. We had better deal with this item. We do not want to go back to items we have passed.


John George Diefenbaker: After all, Mr. Chairman, one does not very often ask for reconsideration of an item, but we cannot keep up on all occasions with the speed with which you are presenting these items. A number of us wish to say something on items 396 and 397 and my submission is that the opportunity should be made available to us. We have sat here all day waiting for these items. As soon as the committee disposed of one you, sir, very properly and with meritorious speed passed on to the next, but we have not had an opportunity to deal with some of these items and I suggest that the opportunity to revert be granted.


William Henry Golding: I try to get the estimates through, of course, and my hon. friends had every opportunity to speak on them as they were called from the chair. I would remind hon. members that we have had a long discussion on coal.


John George Diefenbaker: It should not interest you, sir, how long a discussion we have had.


William Henry Golding: My hon.
friend knows that the rules are that the committee deals with the item before it, but if he wishes to ask for the consent of the committee to go back to a certain item-


Clarence Decatur Howe: We do not want to be unfair to anyone, and I suggest, Mr. Chairman, that we continue with the items and, when we have finished with them, revert to the coal item.


[Stage Direction]
Item agreed to.
JiO'i. Administration expenses of the atomic energy control board, $77,272.
Howard Charles Green: This and the next two items have to do with the atomic energy control board, and I think it would be appropriate if the minister would make a statement concerning the activities of that board. As he knows the house has had very little opportunity to find out just what is being done by the board, and this is the occasion when we should have an explanation.
There is one other point in connection with the board. When the bill was passed in 1946 there was agreement, I think on all sides of the house, that theTe should be a watchdog committee, similar to the committee in the United States where they have nine members of the senate and nine members of the house of representatives constituting a committee on atomic energy. At that time, in 1946, the present minister took this position, which will be found at page 2401 of Hansard of that year:
Then my hon. friend mentioned watchdog committees.
In opening the debate, I had suggested that there should be watchdog committees, one of which would be composed of members of the Senate and members of the House of Commons. As I have explained, that was supported by several members from each of the parties. I continue:
I dare say that, as developments proceed, it may be desirable to have committees, and perhaps a standing committee of this house on problems of atomic energy may be warranted; I do not think that is so at the moment. We should obtain more experience in the work of atomic energy before a standing committee is established. But that may very well be a logical development of the future if and when atomic energy takes a more important place in the Canadian economy. There is nothing in the bill that wrould prevent the establishing of advisory committees or the setting up of a parliamentary committee, should the future indicate that that is desirable.
Two years have gone by. Last year the minister explained to the house that the work

Supply-Reconstruction and Supply
being done in Canada on atomic energy had to do with the use for civilian purposes, and not for war purposes, which I suggest removes some of the need for secrecy; that was the main basis on which this house was refused any hand whatsoever in the development of atomic energy back in 1946. I suggest to hon. members that atomic energy may be of the utmost importance in the economic life of Canada in the years that lie ahead. We all hope that it will be.
It is an unsound position that on this question this house should be working entirely in the dark. We know absolutely nothing of what the possibilities are, or what progress has been made. I do not think that condition exists with regard to any other activity of government. Here we have a board operating without any real control by parliament, and without parliament having any knowledge of what is being done. The board is not even a fulltime board; it is more or less of an honorary board; the chairman has other duties which take up most of his time. I suggest that the time has now come when there should be set up some sort of parliamentary committee on atomic energy. If that cannot be done, then parliament should be given some more direct control over the activities of the atomic energy control board.


Clarence Decatur Howe: I had expected that this subject would come up earlier in the session, and I had gone to the trouble of preparing a brief but eloquent speech, telling about everything that Canada is doing on atomic energy. Perhaps I can dig out of the speech about as much as I can read from now until six o'clock, and give an idea of what we are doing, and after that we can discuss the other problem.


John Horne Blackmore: I should like to hear the minister give us the whole story.


Clarence Decatur Howe: I would love to, but time
moves on.


Edward George McCullough: Put it on the record.


Stanley Howard Knowles: No.


Howard Charles Green: It is of great importance.


Clarence Decatur Howe: An undelivered speech is a great asset. Perhaps if the committee does not want it I might deliver it at some other forum.


John Horne Blackmore: I should like to hear it all.


Clarence Decatur Howe: I shall start from the point that tells what we are doing at the moment at Chalk River; that is, the peacetime use. I could hold in my hand a small cylinder of
natural metallic uranium. The cylinder I had prepared for this demonstration was about the size of the little jack-knife I now hold in my hand. We now know that if every bit of this very heavy metal could be turned into energy -which theoretically it can be-we would get the same quantity of power that could be developed by about 500,000 tons of coal, or about the power we now get out of the large Shipshaw plant in one year. There is little doubt that some day we shall be able to fly to remote areas, in one small aeroplane, more potential power in the form of nuclear fuel than can be hauled today in a hundred railway coal cars. One does not require an extraordinary imagination to envisage what that may mean to future developments. But as I have said, there are many problems to be solved before commercial atomic power is an economic reality. Our Chalk River plant is working vigorously on the fundamental problems involved, and we are keeping in as close touch as possible with what is going on in other countries.
While commercial atomic power is definitely not "just around the corner", there are immediate dividends in connection with radioactive isotopes and their use in medicine, biological research, and industrial applications, which I shall mention in a few moments and which some people feel may ultimately yield greater and more significant returns than all the conceivable applications of ordinary power.
Now, as to what we are doing at the moment at Chalk River. The pile is running satisfactorily; plutonium is being made in the rods; but, since it takes some time to build up that material in the rods, the chemical extraction plant is not yet functioning, although extraction on a laboratory scale is being carried on. We are producing, using, and distributing, a series of radio-isotopes, and the research and engineering staffs are extremely busy on an extensive series of investigations on the chemical, biological, medical and industrial uses of isotopes. Also fundamental nuclear investigations on the effect of radiation on structural material are being carried on, which are necessary before commercial atomic energy plants can become a practical economic reality.
It might seem that, since we are now running a pile or nuclear furnace which gives off heat, it should be easy to develop power on a commercial basis. It is true that the Chalk River plant is now discharging into the river hot water which might be used to heat buildings. This could be done, of course, but the temperatures are so low that it would cost more than it does by the use of conventional steam heating. This is not because higher temperatures cannot be produced; but because,

Supply-Reconstruction and Supply
at the moment, the structural materials available that will stand high temperatures are unsatisfactory from the standpoint of absorption of neutrons. This means that much research must be done to develop new materials, because unfortunately materials of the engineering standard textbooks are not satisfactory.
We also know little about the effects of intense radiation on structural materials. Here again we have a revolutionary new force that engineers in the past never had to take into account in structural design, and we must accumulate the necessary fundamental facts before we can design high-temperature power reactors with confidence.
In the field of radioactive isotopes, the situation has more immediate promise, and we are now making dozens of different kinds and are regularly distributing to workers in ten universities quantities of thirteen of the most important radio-isotopes such as radioactive phosphorus, sodium, carbon, calcium, iodine, et cetera. In addition, of course, even larger quantities are being used in the national research laboratories at Chalk River and elsewhere.
I think most hon. members realize that radioactive isotopes have three main uses. They are useful as tracers in research and analytical procedures. They hold great promise in the field of medicine for clinical use as a radioactive source, and they have almost limitless possibilities in the broad field of industry for control and other purposes. Perhaps a few examples will be helpful. For instance, iodine is known to concentrate in the thyroid gland; hence, if a compound containing radioactive iodine is given a patient, the course of its path through the body may be traced and the rate of accumulation in the thyroid can be determined by instruments outside the human body which record intensities of radiation. It can be easily seen that in a similar way, where treatment by radiation has proved helpful, it may be possible, in the future, to carry that radiation to the proper tissues by radio-isotopes.
There is siurely an immense field for the use of tracers in research work in chemistry, in biology, and in medicine. In determining just what happens in biological processes, the tracer techniques provide a new wool as potentially novel and useful as was the microscope when first introduced. In the treatment of disease, there is a future so hopeful that many believe the benefits from medical research alone will some day repay manyfold all our considerable expenditures.
I could go on giving scores of examples of the use that is now being made of radio-

isotopes by Canadian scientists, but time will not permit. I do want, however, to say that in the field of agriculture also the experiments being carried out in western Canada have already given most important information about the way in which plants take up elements from fertilizers, where the various nutritional elements in feeds go, and how they are assimilated. It is predicted that the use of tracers will have a profound effect on agricultural science and production.
But perhaps the greatest quantitative use of tracers will be in industry. Even today, isotopes and radiation are being used in scores of industries, in chemical plants, in metallurgy, in textiles, in the oil industry, and in thousands of plants, particularly in the United States, where intensive studies are being made everywhere to see if industrial processes cannot be improved and costs cut down by the use of this new technique. For instance, in mixing chemicals, tracers can indicate accurately how much of each type is in the final product. Again, where raw materials from different parts of the world go into one product and where quality is effected by blending, tracer techniques can provide easily the definite answer wanted as to just how much of each ingredient is in the final product. In metallurgy the uses are obvious and many. In studies of the wear of bearings it has been possible to detect the migration of atoms of metals from one piece to another; information that was heretofore impossible. Also the phenomena of annealing, grain growth, and transformation of one type of iron into another can be closely studied.
Again in control operations, in industries where it is desirable to know the composition of wastes; in dye industries, where it is essential to follow the strength of solutions; in the oil industry, where control is essential; in these and hundreds of other cases, the use of tracers for analytical purposes is proving most useful. In addition, other unsuspected uses for radiation are being worked out, such as the instrument which will follow and chart the internal corrosion of a metal retort or vessel from an external location, the gauge which will record levels of liquids in tanks, and the device which measures and controls the density of solutions in large tanks. There is also a useful device for removing the static from paper and textile machines which has shown real economies. That device is being sold commercially by the government. In fact, so attractive are the potential uses in industry that one might almost say that within two or three years the real initiative and enter-

Supply-Reconstruction and Supply
prise of a country's industries will be measured by the use they are making of isotopes and radiation techniques.
From what I have said I hope the committee will appreciate that our enterprise at Chalk River is not an ordinary industrial undertaking which can be judged by the immediate output of plutonium. It is really an exploration expedition into a land of great promise. We have a staff of about 250 scientists and technicians, with an additional 750 employees and, beside the output of isotopes and plutonium, there are now being turned out hundreds of original scientific papers which are rapidly establishing the scientific quality and reputation of this Canadian scientific centre, which even now is a place to which the great scientists of the world come for discussions and information.
While the tangible and immediate results in production, in research, and in development, are impressive and worthwhile, I should like to remind hon. members that the ultimate results of the best research can seldom be immediately discerned. We know by experience that where we have first-rate research in any field, there is almost sure to be an overflow into adjacent fields, and the unexpected harvests are often the most valuable.
In closing, I suggest that this rather large enterprise which we undertook at Chalk River in a time of war is turning out to be an absolutely first-rate effort that will continue in the years to come to be a credit to Canada in every sense.


Howard Charles Green: The minister did not deal with the suggestion that we have a committee of the senate and this house.


Clarence Decatur Howe: I doubt whether a committee is necessary. Since the work done is chiefly confined to peacetime uses, control is more or less obvious. The work is being laid out by the national research council; the council has its medical committee and men interested in plant research, and other research of various types, and these committees are directing the experimental work that is being carried out.
If a committee of the house wishes to go there and see the work at Chalk River that will be possible. The atomic energy commission has no great decisions to make. We have freed control of material in the ground. Its duties are confined to purchasing fissionable materials after they are mined, and controlling their refining and sale. That today is concerned only with the Eldorado operations. There is no private operation either present or contemplated, which we know of,
although there are rumours of the finding of new deposits of ore. I can think of no reason why any formal board should be set up, but if the house at the next session wished to appoint a committee on atomic energy and bring experts before that committee to discuss these matters it might be appropriate to do so.


Howard Charles Green: Would the minister consider making a move of that kind at the next session? I know that nothing can be done during the present session; but in the intervening months, between now and the session of 1949, perhaps the government could give some thought to the advisability of setting up a committee of the house or a joint committee of the senate and the house.
'Mr, HOWE: I would certainly have no objection to doing that. I would be glad to consider it.


Jean-François Pouliot: If the hon. member for Vancouver South belonged to such a committee he would turn into a statue of salt.


William Irvine: Is there any oo-operation between the research going on in Canada and that which is taking place in the United States and Britain with respect to atomic energy?


Clarence Decatur Howe: Yes. There is close co-operation.


Edward George McCullough: The minister said that knowledge of atomic energy would be used more particularly in the United States. By that, does he mean that United States industry is using to a greater extent than Canadian industry the knowledge that we also have of atomic energy?


Clarence Decatur Howe: Industry in the United States is about ten or fifteen times the size of industry in Canada, and therefore more people are interested in research, and in the application of atomic energy to industry. Our industry is also active, but there is a larger use in the United States.


Edward George McCullough: Because it is larger, it does not follow that it is more progressive or up to date, or should be, in the use of the technological knowledge which we have. I think attention should be paid to that phase of the matter to see that our Canadian industries utilize the atomic energy knowledge that we have.


Wilfrid Garfield Case: Is Canada the principal source of fissionable material for the United States?


Clarence Decatur Howe: No, not the principal source.


Edward George McCullough: I have seen metals-I believe it is uranium-coming from the Flin Flon deposits. Is there any danger of such metals or ores finding their way

Supply-Reconstruction and Supply
into the hands of people who should not have them, in view of the fact that the government has removed the controls in that regard?


Clarence Decatur Howe: My hon. friend has never seen uranium metal.


Edward George McCullough: I do not know. It is an ore.


Clarence Decatur Howe: He could have seen low-grade ore. But there is no great danger with low-grade ore. The refinement process is a complicated one. The ore is no more dangerous than any other kind of ore. The ore is not fissionable, but it can be made into fissionable material.


[Stage Direction]
Item agreed to.
Some hon. MEMBERS:: Six o'clock.


John Horne Blackmore: Will you, Mr. Chairman, tell us exactly what our position is? Are we going on at eight o'clock? Are we to go on from eight o'clock until eleven o'clock tonight?	[DOT]


William Ross Macdonald: It being six o'clock, I llo now leave the chair.


John Horne Blackmore: Are we to come back to item 396 as though it had not been passed?


Clarence Decatur Howe: It was my understanding, and I hope that the chairman will agree, that at eight o'clock we will take item 396. on the coal board, and rather hurriedly examine it.


Stanley Howard Knowles: We hope.


Clarence Decatur Howe: If anyone has a forty-minute speech, perhaps he can cut it to twenty minutes and let us get on fairly quickly, as a sort of compromise with the situation.


Howard Charles Green: What department will be called after that?


Alphonse Fournier: External affairs.


Stanley Howard Knowles: And then what after that.


Alphonse Fournier: Labour.


Stanley Howard Knowles: And after that?


Alphonse Fournier: Sunday morning.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


William Henry Golding: Although
items 396 and 397 for the dominion coal board were carried, I believe it was agreed that there would be some further discussion.
rMr. McCullough (Assiniboia).]


Clarence Gillis: I know, Mr. Chairman, that the minister hates to see me get up just as much as I hate to get up.


Clarence Decatur Howe: I would not say that.


Mr. HARRIS (Grey-Bruce):: No. We are glad to see you get up.


Clarence Gillis: I do not intend to take long on the subject. I was anxious that the minister should make some statement on this item, the dominion coal board, because it is a new piece of machinery established nationally to try to do something about developing the Canadian coal industry, and also about developing a national fuel policy in the field of marketing. The coal board itself was appointed as a result of a recommendation of the royal commission, and it has functioned for a year. I thought the minister might have something to say as to how it has worked, what new fields it has opened up or it has in mind with respect to a national fuel policy. That is mainly the reason why I rise at this time.
I shall not talk about what the fuel policy should be, or to any extent about the development of the resources of Canada. I have done that so often in the house that I hate to see myself doing it all over again.


Mr. GRANT:: You must be getting fed up with it.


Clarence Gillis: No, not exactly. I think the setting up of the board itself and giving to it the function it has to perform is a step in the right direction. I said that when the board was set up. According to the Financial Post, the board has a scheme under way now for the further mechanization of the coal mines of Nova Scotia.


Clarence Decatur Howe: Does that paper in the hon. member's party now correspond with the Toronto Globe and Mail in the Progressive Conservative party?


Clarence Gillis: It is rather unfortunate that one picks up in that paper a considerable number of things that we do not get in the house. This issue of it had about eight pages on maritime industry, as to the things that were to be done and the things that the government were doing. Among the items was a fairly comprehensive statement as to the negotiations being carried on between the dominion government and the corporation; and I presume that is the dominion coal board.
Last night the argument with regard to the development of the hard-coal areas in Alberta reminded me of the arguments we were mak-

Supply-Reconstruction and Supply
ing twenty years ago along the same lines. The factor that has always prevented the development of the Canadian industry has, in my opinion, been the question of markets. The coal is east and west and our main market is in the centre of Canada. In that respect you were bucking geography. I always contended that the only way to overcome it was to zone the markets in Canada that were as economic as possible. Then, your subvention arrangement would enable our coal from the east and1 west to go into the markets as far to the centre of Canada as possible and compete, with government assistance. Under the present scheme of things, under free enterprise, I do not think there is any other way to work it.
One thing, however, of which I am convinced is that as far as Canada, the government and-as far as I know-the coal board are concerned, there does not seem to be any initiative being taken by any body of government with respect to the development of our own resources. In my own end of the country the resources are there. The coal industry has a reallocation of colliery policy going back to 1926 under the old Duncan commission report, when they were shrinking the thing, centralizing the operation as far as possible, and catering to the maritime market only. That is our position today. I do not see any program for expanding the industry.
There is a program of further mechanization, with loading machines at the face, to try to increase production in the collieries that are now operating. But that is not expanding the industry, and it will not free us from almost complete dependence on the United States for our supply of coal. I was wondering if the board had anything in mind with regard to new openings in order to expand our own industry. It would not happen overnight, of course. Some planning would have to be done, keeping markets in mind. But I think it is about time that we at least began to take a long-range view with regard to developing our own resources.
I wish to read, for the minister's benefit, a passage from a letter I have here. I was surprised when I obtained this letter, and I have authority to use it. It is a letter from Mr. R. C. Vaughan, president of the Canadian National Railways, in reply to a letter from Mervyn Brown, president of Alberta Hard Coals Limited. He was writing to the president of the Canadian National Railways -and I will not read all of the letter-probing the possibilities of this resource about which we were talking last night. The pertinent part of the letter reads as follows:
In normal times the problem has been to find a market for the coal produced not only in western Canada but also coal produced in eastern Canada and the government of Canada has expended large sums of money by means of subventions to enable that to be done.


John George Diefenbaker: Who wrote that?


Clarence Gillis: Mr. R. C. Vaughan, president of the Canadian National Railways. The letter continues:
It is quite likely that in three or four years, or sooner, that condition will again exist.
That is all of the letter that I need to quote. But it shocks me that a man in that position would make the statement that the condition which existed prior to the war with regard to the marketing of our own coal in Canada would likely be the condition with which we shall be faced within the next three or four years or sooner.
I might say, Mr. Chairman, that all the talking I have done in this house about coal during the past three or four years was based on that assumption. I myself could see a drift back to what we went through after the last war when we lost the Quebec markets, and the struggle we had to get back into those markets. In the many conferences and discussions we had with the operators and with government officials in the years when our collieries were working only two or three days a week, that was always the story. They said, "You find the markets for us and we will make new openings", or "We will produce more coal", or "These collieries will operate on a five-day week basis". But it was always the question of markets. I am wondering if that kind of thought, coming from a high official of the Canadian National Railways who knows something about the field of fuel- and he must know something about it; the Canadian National Railways consume a great deal of it and haul a great deal of it across the country-is at the back of the minds of the coal board, for example, the minister himself or government officials. We are sitting back, fearful of developing our own resources in Canada, because we think that three or four years from now there may not be the markets which would permit the operation in this country. Has the board considered attempting to get away from dependence upon the United States, to the extent we are now depending upon them, by developing and extending our own resources, and trying to develop some zoning of markets in this country so as to develop the industry here?
My own opinion is, of course, as I have stated on many occasions in the house, that

Supply-Reconstruction and Supply
under the system of so-called free enterprise I do not believe the coal resources of Canada will ever be developed. I do not think we shall find risk capital in this country from coast to coast, or in the central provinces, which will put money into that kind of business. I believe this resource, which is basic to our whole economic set-up, is something which will have to be managed and taken over by the government because, in my view, the government is the only organization with the necessary funds for development as it should be carried out.
I shall not discuss the matter further. My main purpose in rising was to inquire from the minister if there is any substance in the thought expressed in this letter by Mr. Vaughan, that there is a chance of our swinging back to a no-coal situation in Canada, and returning to the operation of collieries for two or three days in the week. Or has the board a program of extending and developing our own resources from a long-range standpoint, in order to get away from our dependency upon the United States to the extent which is now necessary?


Edward George McCullough: I should like to follow what has been said by the hon. member for Cape Breton South. I do so because I am deeply interested in coal, coming from a province where we have about 24 per cent of the known lignite deposits in Canada, and most of which lies in my own constituency.
I support the hon. member when he says we have to have a policy with a social consciousness at the root of it. We cannot discuss the fuel policy intelligently unless we discuss it on the basis of development across the country, not only as it applies to coal, but as it applies to oil and other fuel deposits.
I would bring to the attention of the minister the fact that it was only last year that we had a tremendous shortage of fuel in eastern Canada. During the war, too, we were dependent upon the United States for supplies of coal for our industry. I am sure that with the proper type of development in this country, and with our known deposits, we can safeguard ourselves by developing those deposits. At the present time we are imposing upon our people rigid restrictions in an attempt to save United States dollars. We must remember that we import about $150 million worth of United States coal, and pay out about $75,000,000 in freight charges to bring it to Canada, making a total of $225 million, or a quarter of our national deficit in United States dollars. This fact should bring before the government the necessity of developing our own coal fields.
In my own constituency some weeks ago one mine was shut down, and the workers in

the mine were given notice by the company that their services were no longer required because the mine was shut down indefinitely. I believe the government should take some responsibility in this regard. I am glad that the coal board has been set up, but I believe it should undertake the development of coal throughout the country, so that our nation will be safeguarded both in peace and war against any restrictions which might be placed against the importation of fuel from other countries, and so that our industries will be able to operate with the help of our own resources.


Clarence Decatur Howe: The purpose of the dominion fuel board is to keep informed on all problems of Canada related to fuel, and to see that no difficulties arise which may be avoided. It is the duty of the board to see that the industry functions as efficiently as possible.
There are many problems connected with fuel in Canada, the first of which is the problem of production and distribution. I can say that this problem has been handled better during the past twelve months than ever before in our history. Every mine has been kept operating at capacity, and the fuel has been sold either domestically in Canada, or in export markets. That is something which I believe was not done as well even in war years, because there were interruptions in those years which have been avoided during the past year.
Then there is the problem of supply in the central provinces. It is necessary to have sufficient coal in the country, so that no hardship results either to industry or to private citizens through a shortage of coal.
There is the further problem of fuel oil. Canada has been dependent upon outside sources for about 90 per cent of that product. I am happy to say, however, that the ratio is going to change rather rapidly, as we hope to develop in western Canada a source of supply which to a considerable extent will offset the quantities being imported at the present time.
Then there is the problem of natural gas. This is a provincial matter, because gas is not distributed outside the province in which it is produced. Nevertheless the government and the coal board have been able to give some help in western Ontario, where an effort is being made to bring in gas from Texas.
All these fuel problems require constant study. If any serious failure occurs in any of these problems, the result may be calamitous. In a country with the climate of Canada, nothing could be more serious than to be without fuel in the midst of a Canadian winter.

Supply-Reconstruction and Supply
Mr. MeCULLOUGH (Assiniboia): In that *connection, does not the minister think it *would be better to have a board set up which Mould take into consideration the development of all types of fuel?


Clarence Decatur Howe: This board is charged with that responsibility. It has no mandatory powers over fuel oil, but it can be given those mandatory powers under the act, simply by the passage of an order in council.
People speak a good deal about development, and suggest that we should open new mines. The hon. member for Cape Breton South, who probably knows the problem better than I do, will agree with me that the limitation is one of manpower, the supply of qualified miners. If we had more qualified miners in western Canada we could produce more coal. If we had more workers on the face in Cape Breton we would produce more coal. The simple method of opening up new mines will not produce new miners.


Clarence Gillis: Why was the apprenticeship scheme, which was established during the war in connection with the coal mines, abandoned? Miners were being developed rapidly, but that scheme was abandoned. That is why you are not getting men at the face today.


Clarence Decatur Howe: Because in wartime we had control of labour which we have lost in peacetime. My hon. friend knows how that happened.


Clarence Gillis: Could this board be given that authority now?


Clarence Decatur Howe: I am afraid not. It is impossible to order men to do anything these days. If men come forward and volunteer for apprenticeship, I am sure it could be arranged. The other matter, about which the hon. member speaks, was more or less a mandatory affair.


Clarence Gillis: I am sure you would get hundreds of apprentices if you re-established the scheme.


Clarence Decatur Howe: I shall be glad to confer with my colleague the Minister of Labour and suggest that he re-establish his school. But it Mould be a different kind of school from the one which operated during the war, as my hon. friend will appreciate.
Then, reference has been made to the lignite deposits in Saskatchewan. The hon. member knows as well as I do that lignite cannot be stored in any quantity. As the hon. member knows, the mines in Saskatche-M'an have always closed down in June, July and August since he was a small boy and probably they will in future, because the coal
must be moved from the mine into use immediately, or otherwise it will not be coal; it will be just a pile of dust. I do not know that the coal board with all its magic can do anything about that situation. An attempt has been made to briquette the coal, I think perhaps with some success. I am not sure how that briquetting process is working out.
Mr. MeCULLOUGH (Assiniboia): I do not pose as being a coal expert, but I know they are briquetting coal there and have been doing so for years. They have developed a good binder, and the briquetted coal can be shipped any place in Canada. I think the minister will admit that it is high-grade fuel in that condition.. I submit that the capacity of the briquetting plant should be increased, either by private enterprise or by the government. It would then be possible to ship the larger quantities to those parts of Canada where fuel is needed, and to sell the byproducts.


Clarence Decatur Howe: I am not familiar with the briquetting plant, but I should imagine that the mines at Estevan can produce in one day sufficient coal to keep the briquetting plant in operation for a year.
Mr. MeCULLOUGH (Assiniboia): That is true.


Clarence Gillis: Then why not expand the plant?


Clarence Decatur Howe: Expand it 365 times? We must be practical about these things.


Clarence Gillis: Put in a few more retorts.


Clarence Decatur Howe: The only reason the plant is operating today is that its capital cost was written off. It was sold to the present owner for one dollar. There is no great encouragement, either for the government or for anyone else, to make the capital investment required to briquette Estevan coal and expect to do the country any great good.


Clarence Gillis: I was out there and had a look at that plant. The plant was set up in the first place by the Saskatchewan government, which was Liberal at that time, at a cost of $1,000,000, but it was never used. It is a low-temperature carbonization process, the process upon which Germany built her M'hole industrial set-up. There are only two of these plants in North America. This was simply a small pilot plant, and it was sold later by the government for a dollar. It is just a small affair that is struggling along.
If the coal- board took hold of it and, as suggested by the hon. member for Assiniboia, put in a few more retorts, the fuel could

Supply-Reconstruction and Supply
be sent to any part of the world, once it was briquetted, and the by-products could be utilized. I suggest that there is a possibility to do something with Saskatchewan coal. The board should have a look at that plant and see what can be done about expanding it.


Clarence Decatur Howe: The purpose of the coal board is to see that coal is produced as efficiently as possible in all parts of Canada; that it is distributed as efficiently as possible; that sufficient coal is brought into the deficient areas to meet their requirements; that the distribution of oil is in the best interests of Canada, and to promote the efficient production and use of fuels across the dominion. I think the board has got away to a good start.


William Irvine: Could the minister give us the names of the personnel of the coal board and also tell the committee if some of the members have been or are still closely connected with United States coal companies which are shipping coal into this country?


Clarence Decatur Howe: The chairman of the board is Mr. Uren, who had charge of the distribution of materials throughout the war years. Mr. D. W. Morrison was the mayor of Glace Bay. He is an old coal miner and was the unanimous choice of the miners in that area. Mr. P. Streeter is a coal operator in New Brunswick. Mr. MacLaren was associate coal controller for the dominion during the war years. He has a distributing business in Toronto and is familiar with the problems of Ontario. Mr. A. Vissac is a consulting engineer who has been operating in the western provinces for many years past. Mr. W. Whittaker is secretary of the coal association of western Canada, and Major-General Renaud is a gentleman who is familiar with the distribution problems in Quebec. He was not previously associated with the Industry.


John George Diefenbaker: Last evening there vas a discussion with regard to the Highwood oroperty in Alberta, and reference was made to the findings of the royal commission on coal. Has any investigation of the Highwood property been made at any time by the fuel board?


Clarence Decatur Howe: The fuel board have received samples of the coal and have had it analysed in the dominion laboratories. There has been no opportunity to visit the property, which is not a coal operation; rather it is a coal lease. There are really two leases. My hon. friend has referred to the Highwood property. The property our friend Brown is interested in is the Burns leases, on the other side of the river.


John George Diefenbaker: Reference was made by the hon. member for Cape Breton South to Mr. Vaughan, president of the Canadian National Railways. When Mr. Brown, to whom reference has just been made by the minister, communicated with Mr. Vaughan in regard to the building of a branch line of some fifty miles to the Highwood property, Mr. Vaughan, among other things, said this on May 18:
The royal commission on coal, appointed by the government, in their report of December, 1946, dealt with the Highwood area (pages 37 and 38). I understand the fuel board at Ottawa has also made some investigations into those areas in relation to the general coal supply of Canada.
As the minister has just said, apparently the fuel board did not make any investigation of this area, apart from an investigation with regard to the quality of coal to be found there. I have read over the statements made last evening with regard to this matter, and it seems to me that it is rather unfair to the application which is being made to rely on the findings of the royal commission on coal. The reason for this was set out last evening by the hon. member for Calgary West when he referred to the fact that the evidence of Mr. Brown and the representations of Mr. Charles McTague, council for Mr. Brown and his associates, were not completed. Indeed, their representations were withdrawn and they themselves withdrew from the commission. That being so, I do not think the findings of the royal commission should be accepted in any way in connection with deciding upon the value of this property and the need of a spur being built.
To keep the record clear, I have in my hand a copy of a letter written by Mr. McTague. Incidentally, Mr. McTague was for some years a judge of the court of appeal of Ontario. He resigned some years ago. He is a man who would be most careful in any representations he would make, and on October 1, 1945, he wrote the following letter to Mr. J. H. Frawley.
Dear Mr. Frawley:
Re Allied Industrials Limited
With reference to your letter of September 25, and subsequent telephone conversation I have to advise that my clients wish to withdraw their applications from the commission and consequently it is not deemed necessary to file the material to which you have reference.
My clients are of the opinion after their experience at the hearing in Toronto that no good purpose will be served . . .
The reasons for that statement are set out, but I do not need to place them on the record. The letter then goes on:
Therefore, I should appreciate it if you would place on the records of the commission this letter of withdrawal.

Supply-Reconstruction and Supply
So far as this property is concerned, I feel that those who advocate the opening of this area do not deserve, in the interests of the country as a whole, to be met by the argument that a royal commission had met and come to a determination finally or indeed partly conclusive, because representations were not made for the reasons set out in that letter.
My hon. friend mentioned Mr. Brown, and last night certain references were made to him. I am not going to place his views before the committee, but if there was any intention on the part of the right hon. gentleman in referring to Mr. Brown as a promoter, as he did, to convey any innuendo-


Clarence Decatur Howe: Promotion is an honourable profession, is it not?


John George Diefenbaker: I am glad to hear my right hon. friend say that, because it removes any suggestion that might be conveyed by the use of the words in the manner in which they were used.
Reference was made to the personnel of the coal board. I do not know anything about the members of the coal board, but it is the contention of Mr. Brown that their attitude has been far from co-operative. He points out that one of its officials was a member of the western coal association, which is unfavourable to the opening of this area. He further states that another member of the board has been the president of the Rochester and Pittsburgh Coal Company, a United States coal company, which has been exporting millions of tons of coal into Canada. He also points out that Mr. Vissac, to whom my right hon. friend referred, and who was the consulting engineer for Mr. Brown in 1944, approved the opening of the Highwood coal area. These are the representations that Mr. Brown makes, and these representations, as I see it, deserve to be answered by the minister, to the end that any sense of unfairness that is felt by Mr. Brown will be removed, if not dissipated.
My right hon. friend said in answer to the hon. member for Cape Breton South that, regardless of the properties which could be developed, lack of available miners would prevent any development. He stated that the proposal of this group with whom Mr. Brown was associated was to mine millions of tons of hard coal by strip-mining methods, thus avoiding the necessity of having underground miners. I do not know anything about this proposition from personal knowledge, but if what the Minister of Agriculture said at a dinner that I attended along with other members of this house is to be seriously regarded,
I again bring this matter to the minister's attention, to the end that further consideration be given to this application.
The minister said last night that other coal companies had built their own spur lines, but my information is that none of these spur lines has been longer than five miles or so, and in no case is there one approaching fifty miles in length. The hon. member for Davenport, who has given his usual close study to this matter says there is no spur line at all to a hard-coal mine which has been built by the operator.
One of our major responsibilities as members of this house is to see that fairness is done to all. and if the allegations and contentions of Mr. Brown be correct, then I think the whole question deserves to be reconsidered. Certainly Mr. Brown and those associated with him should not be faced with the findings of a royal commission report that was not based upon full evidence and, indeed, is based upon evidence, the representations covering which were withdrawn prior to the conclusions of the royal commission.


Clarence Decatur Howe: I cannot understand what this is all about. I have read full-page advertisements attacking myself personally for something I failed to do in connection with this venture, and I have seen this group issue full-page advertisements in the press. So far as I know, Mr. Brown has never made any proposition to the government at all.
There is in the neighbourhood a mine operated by John Boyd, which is trucking its coal to the nearest railroad and getting along all right. I cannot imagine what magic there is about this particular property that requires us to build a railroad. Sixty miles is not an uneconomical trucking distance. There has been tremendous excitement and tremendous pressure about this property, but absolutely nothing done in the way of development.
Mr. Brown asked for permission to appear before the royal commission on coal, which was made up of men who had no prejudices in the matter that I know of. They heard him for a time, and then he withdrew on the advice of counsel. I would judge from that, that he did not have very much to present or that it did not carry very much weight. He applied to the Canadian National Railways. I must say that I disagree absolutely with Mr. Vaughan as to the future of the coal industry in this country; nevertheless I cannot imagine Mr. Vaughan building sixty miles of railroad into this particular property when he could build fewer miles of railroad and get an equally good product. There is no magic in this particular property. I have known about the Burns' leases since I first went to western

Supply-Reconstruction and Supply
Canada thirty years ago. I have actually visited them. Probably I am the only man in the house who has evei; seen this property. What is all the shooting about? Who wants to do what? I have never been able to discover it.


Julian Harcourt Ferguson: I saw this man's advertisement in the paper. Naturally, as a Canadian, I was interested. I went to the Royal York hotel. I heard him contend tnany things. I said, "If you wish I will meet you in Ottawa." I made arrangements to meet him here. He never met me. I got a wire at the last moment. I told him I was willing to meet him at eleven a.m. I think the man does not know where he is heading. Why waste any more time in this House of Commons and expend many more dollars of the people's money on a man like that? The man is all talk.


Thomas Langton Church: I wish to refer to this matter. As a pioneer in this national fuel policy, twenty-five years ago on the 13th day of March, 1923, I introduced a resolution calling for a national fuel supply. I asked for the adoption of a policy to that end. I am too modest to call myself a Progressive; I am a Conservative. I asked for the adoption of a national policy of bonuses, subventions and subsidies, so that all the coal we use in Canada could be mined and coked under the British flag. I referred to Wales, Alberta and the maritimes. I find that the minister has made some progress. There is no doubt about it at all. We had the same difficulty when I raised this problem, on March 13, 1923. At that time we had not enough miners, no help from the national railways, no merchant marine, and all that kind of thing which we needed for the policy.
Ten years before that, we had an experiment made. In 1912 a ship left Swansea, Wales, with several thousand tons of Welsh coal and landed at the harbour improvement in my constituency, in Ashbridge's bay. One hundred and four members of parliament were down the ship channel the other day. They saw the large piles of coal, about 800,000 tons, brought in. instead of by all-rail, by water through the Welland canal from lake Erie ports; Buffalo; Erie, Pennsylvania; Ashtabula; Cleveland; and many other coal centres in Pennsylvania. We have had experiments made.
We have the same problem today. It is not a new problem at all. We knew of this problem when we started the harbour improvements. I believe the time is coming when the government should try to get more miners into the country. There are many displaced persons from Europe today who could go into the coal industry in this country. If we could get 1,000, 2,000 or 3,000 of them it would help.

Many of them have been deported from some of the mines in eastern Europe, and are now slaves working for the Russian government. If our friends at the UNO would only make some representations I believe we could get some miners into these three parts of the country.
I proposed an embargo on coal in 1923. The debate lasted three days. It is not a new problem; it has been going on since I have been in the house. It is 95 per cent a transportation problem plus a labour problem. The very same state of affairs prevails today. The same situation exists with regard to Alberta coal moving westward. We had hoped to bring in a whole lot of it. One of the western papers said they had to bring United States coal as far west as Saskatoon and other places farther up from the border, on account of Alberta coal going west. I predicted this in 1923. Hon. members will see that if they look up Hansard of March 13, 1923. It was said that the government of the day could do nothing. Five or six years before that, it was suggested that maritime coal be given bonuses, subventions and subsidies. The minister made some progress last year. I give the minister some credit for having made some progress. He should consider further the question of giving subventions to miners and mines that produce large amounts of coal.
The minister knows more about this matter than I do. I am speaking from memory. I referred to the Burns matter near Calgary at that time. They had some mines in Alberta when I brought this matter up before. I believe the government should consider the policy now along the same lines, because it is all a protectionist measure to use Canadian coal to try to save dollars. Look at what we would have saved in dollars since 1923. In 1923 we were sending out $52,000,000. We were sending that out in wages to Pennsylvania coal barons. Sir Henry Thornton was head of the Canadian National Railways at the time. He did not think very much of my policy. It would be far better for us to consider that policy and do something to develop our mines and bring them forward. Although I do not pose as a Progressive, I predicted in 1923 that the prairie provinces, which were then largely agricultural, would become, in the not too distant future, great manufacturing and mining districts. To the great credit of the Dominion of Canada, that has been proven true in the west, as the minister knows. Mining discoveries have been made. About eight or ten different types of mineral wealth have been discovered, and that is a great credit to the western natural resources of this country.

Supply-Reconstruction and Supply
I believe a policy of some system of reasonable subventions or bonuses should be adopted to develop the mines. That policy has been adopted in some of the departments at the present time. The principle is a principle whether it is applied to coal or some other class of mineral. The provinces have applied that principle. Some of the mining areas of new Ontario have been subsidized.
Some progress has been made. I was told in 1923 that I was talking nonsense when I proposed a national hydro-electric policy for the Northwest Territories and for all Canada then. The day is not far distant when this question will be solved. It is true that in Toronto there is not as much Alberta coal as we should like to get. At the present time I believe they are down to a few hundred1 thousand tons. We have the docks at Ash-bridge's bay piled up with coal as high as the galleries. In Alberta coal they are down to two or three hundred thousand tons. We could use 500,000 tons or vastly more. That has taken place since I was the head of the harbour board. A solution of the problem is transportation, plus mining, plus deposed person's extra labour. In Alberta and the maritimes, they have the sites; they have the mines. The only trouble is transportation. The merchant marine is not doing as much as it could do in the maritimes. If we had additional miners in the country to open up the mines we could produce in Alberta and the maritimes a large part of the coal we require.
The school board is willing to take Alberta, Welsh and maritime coal. We should like to get it for our public schools. The boards of education would like to get it. Many of the businessmen would like to get it. I know that the Toronto board of trade which hon. members met the other day would like to get it. They were very glad to see my hon. friends. We hope it will be an annual visit. I see my young friend the hon. member for Fraser Valley here tonight. He is one of those who believe in the policy that I have been pressing here. We hope we shall have hon. members all back next year. If not there, at the trade fair.
I am not going to detain the committee longer tonight. We had a long day today and a long day yesterday. I want to commend the minister for the policy he has inaugurated. I hope it will be extended, so that if an ordinary citizen comes forward and gives security, either through the bank or in the way of a guarantee, the government will not lose any money.
I believe the same principle should be applied to the development of coal as the government has used in connection with housing. Money has been lent through the banks and the banks have been guaranteed. We have spent $89,000,000 in this work and the loss has amounted to only one-fifth of one per cent. We should have some such policy in connection with coal development, because next winter will be a disastrous one for the Canadian people. This has a direct bearing upon public health in Canada. I do not know what our situation will be next winter if we cannot obtain some substitutes for coal to eke out our fuel supply.
I have visited homes of soldiers, and of other people as well, in the riding I represent, and I know what conditions they are living under at the present time. In the lower part of my riding there are a great many soldiers. There are many poor families in that working men's district who are suffering severely. As a matter of fact, it might be called a soldier district. I was indeed surprised to witness the state of affairs in some of the homes I visited. There are people who are living in cellars without any fuel at all. This is a serious state of affairs. It directly affects the public health and is something that is closely related to the housing problem.
The minister is a progressive man and, during the war, he did good work. I would ask him to apply the same policy as in homes to the development of our coal mines. There is no reason why we could not make use of more displaced persons in the coal industry, and at the same time make every effort to solve the transportation problem. We should have proper cars for removing the coal. I have seen Alberta coal in transit once or twice and it was being moved in dilapidated wooden box cars. Some of the coal was falling out. It was being moved in the type of cars used before the war. There was a large vote for our national railways, and I suggest that we should have proper cars for the transportation of our coal and at the same time make use of displaced persons, where possible, as miners to aid, bringing them in for the development of the coal mining industry. If the government would introduce a proper coal policy I am sure it would receive the support of everyone. As it is, I think they have made some progress since the last session.


Wilfrid Garfield Case: I have listened to the presentation by the hon. member for Calgary West and the hon. member for Davenport. I have known Mr. Brown for some time and he has always been associated with fuel enterprises. I am thinking now of the promotion of natural gas, artificial gas, peat bogs and western coal. That seems to be the latest venture.

Supply-Reconstruction and Supply
I have followed advertisements in the press and have listened to much of his propaganda with respect to this tremendous field.
I recognize that Canada is vulnerable so far as fuel is concerned, and I am inclined to think the minister is interested in finding a solution for our fuel problem. He is as much interested as any other good Canadian would be. He has no ulterior motives and he is anxious to see our resources developed. I should like to have his assurance that geologists connected with the department are acquainted with the quality and the character of the coal.
I have made inquiries, because I had something to do with the handling of Drumheller coal in western Canada. Some would slack easily and would not store over a great period of time, but if this is a rugged type of coal that could stand handling I think some method could be evolved to solve the transportation problem. This coal could be delivered to the head of the lakes, dumped in huge mounds from which it could be transshipped by water so as to get the full benefit of the water rates, which are cheaper than the rail haul.
This may have been all considered and carefully studied; but that is the thought I have in mind, because, after all, it is a transportation problem. When Alberta coal is advertised in my own city of Owen Sound and in the adjacent municipalities, people are glad to have the opportunity of using it. But, as the minister said on a previous occasion, they have not so far delivered more than 500,000 tons to the province of Ontario. Be that as it may, I still feel that if we are to consider, as we are doing at the present time, our disadvantages and disabilities in the matter of United States exchange, we can well afford to consider the advantages of subventions or otherwise in encouraging the use of our native fuel.
I do not think I have much more to say on this question. I believe that the transportation problem could be solved and that the necessary carriage facilities, the railway care, could be provided so that a great deal more coal could be delivered in Ontario. After listening to the discussion that has taken place in the committee, I do not think this is any new discovery. There is ample coal available in Alberta. They are calling it canthracite, associating it with anthracite, but it is either a lignite or a bituminous coal, as I understand. Having served on the public utilities commission in my city, I may say we bought thousands of tons of coal, and I agree with the minister that we bought our

coal without seeing the product at all. We bought it on the strength of its analysis, the B.T.U.'s and ash content. It is a free market as far as we are concerned; if Alberta coal had been available at anything like competitive prices our sympathies would have been with the Canadian product and we would have used it.
We happen to be a lake port, and my suggestion. is compatible with our own best interests. If the coal could be hauled to Fort William or Port Arthur, when grain haulage does not make a great demand upon the use of our boxcars, there is no reason why it could not be brought in. I received a good- many carloads of coal in my day, delivered in boxcars; not open dump cars. The coal could be rolled down there and piled up for water carriage, and as soon as transportation opened in the spring we could take advantage of the water.
Mr. Brown should be encouraged in his endeavours to interest capital in this venture, and our Canadian railways, both the Canadian Pacific and the Canadian National, should have a sympathetic understanding of the situation. It is only a sixty-mile spur that is involved. I hope their purpose will not be defeated on this account. I have no quarrel with the ministry. I think they are as much concerned about this matter as we are. In the trying days of the war we valued the efforts that were made, and perhaps I should be more complimentary than critical.


Clarence Decatur Howe: This item was passed this afternoon and we have had an hour's discussion. It is obvious that we have reached the stage where every speech is a repetition of what has been said before. Can we not pass the item and allow the Minister of External Affairs to get on with his estimates?


Winfield Chester Scott McLure: What I am about to say will not consist of repetition.


Clarence Decatur Howe: There is no coal in Prince Edward Island.


Winfield Chester Scott McLure: I wish to make one statement. It seems that we have got down to personal matters and the personnel of the company. I think the hon. member for Simcoe North made a mistake in his reference to Mr. Brown.


Clarence Decatur Howe: Under what item does Mr. Brown come?


Winfield Chester Scott McLure: Under the same item under which this discussion has been taking place.


William Henry Golding: There is
nothing in the item to justify the hon. member.

Supply-External Affairs


Winfield Chester Scott McLure: Then, as a matter of privilege may I say this? I have known Mr. Brown for years. He was one of the best citizens of our province, and he left that part of Canada as a young man. His background of parentage and training at home cannot be duplicated by any man sitting in this house. As one who listened to the hon. member for Brandon introducing him the other night, as ke knew him in the west, I can say that no one can have anything against Mr. Brown as an excellent citizen of Canada.


Julian Harcourt Ferguson: Let us be brief about this matter. Let us get down to business and stop wasting time. Personally I have nothing against Mr. Brown. I believe everything that has been said about Mr. Brown is quite correct. I believe no one else in Canada can equal him. But let Mr. Brown, in a businesslike manner approach the minister of reconstruction and, in a businesslike manner-with a stenographer taking down everything he says-for co-operation purposes-lay his case on the table before the proper authorities in this government. If he has anything worthwhile, he will not need to put it in the newspaper as he did and call my attention to it. I have wasted time over Mr. Brown. I waited for Mr. Brown to come to the city of Ottawa on a certain day at eleven o'clock, on the assurance that I as an independent man would lay his case before the house of parliament, and he said he was too busy to keep the appointment. I have never heard any more from the gentleman.
There is a proper channel through which to operate. This is the most important business in Canada to be discussed. Let Mr. Brown lay his case before the government of Canada. If he does not get proper attention, let Canada know the facts, and I will be one of the first to take up his brief. Otherwise, let us dispense with it tonight.


Jean-François Pouliot: What about Mr. Jones, Mr. Smith and John Doe?


William Irvine: I have one question that is not about Mr. Brown. It is well known that we must import a large quantity of coal each year from the United States. It is also well known that we have a great deal of coal in Canada. We have appointed a coal board. Before this item is passed, I should like the minister to say in what way this coal board is expected to increase the production of coal in Canada next year. Exactly what is its function?


Clarence Decatur Howe: The whole purpose of the board is to see that every coal miner in Canada is enabled to work as many days as he can work, to produce all the coal he can, 5849-352
and to see that the coal is marketed appropriately inside or outside Canada.


Jean-François Pouliot: The policy the minister has outlined is a good one. With regard to what the hon. member for Beauce said not long ago, it is unfortunate that the same thing is not done in England, that the coal miners there do not work as much as they should, and that the British government does not see to it that they do. If they did that, England would be able to export coal to the value of a billion dollars more each year. Then they would need no help from any other country and there would be no dollar problem. It is socialism that is the cause of all the trouble.


Some hon. MEMBERS:: Carried.



[Stage Direction]
52. Departmental administration, $1,915,860.
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): Some six weeks ago we had a full discussion in the house on the general policies of the Department of External Affairs. With respect to the operations of the department, they are reflected principally in items 52, 53 and 54, which provide the funds required for departmental administration, passport office administration, and representation abroad. The increase in the field of activities of the department is reflected in an increase of $286,000 in the amount asked for in the main estimates for departmental administration, and $1,074,974 in the amount asked for in representation abroad.
In the course of the calendar year 1947, ten new missions were opened and two have been opened since January 1, 1948. It is planned to open a consulate general in San Francisco on July 1, and a consulate in Boston on October 1. None of these missions was operating on a full basis during the past fiscal year, and their operation during the current year accounts for substantial increases in the expenses provided for in these estimates. The increased number of missions has resulted in larger staffs both in Ottawa and abroad. A year ago the total staff of the department was 866. It is now 1,095. This increase in numbers, together with an increase in civil service salaries, has resulted in the greater payroll requirements in the department, which accounts for most of the increase in the estimates.
The other major change compared with last year's estimates is in the contribution toward the expenses of international organizations. The percentages have not been changed but, the budgets of these international organiza-
Supply-External Affairs
[Stage Direction]
tions having been increased, our proportion has increased. These estimates were considered in detail by the standing committee on external affairs and were reported the other day as approved by that committee. I have no doubt hon. members will have some additional questions to ask about some points which may not have been brought out in examination in the committee. So far as I am able to do so, I shall be glad to attempt to answer those questions; but I do not think hon. members would wish me to make any more detailed comment at this time.
John Thomas Hackett: It is true that the minister made a lengthy and complete statement on external affairs about six weeks ago. Nevertheless, in the interval there has been a great deal of tension and anxiety; and while, as the minister says, an opportunity was afforded in the external affairs committee to discuss external affairs, there remain a few matters concerning which I am sure the committee would be glad to have a little additional information.
I am not aware that any other department has sent its estimates to a committee. I am not prepared to pass final judgment upon the practice, but I think I am stating a prevailing view among members of the committee when I say there are some advantages in the practice when applied to this particular department. We had the benefit of meeting a number of departmental officials. Mr. Pearson, Mr. Chance, Mr. Matthews, Mr. MacDermot, Mr. Riddell, Miss Burwash, Mr. Moran, Mr. Rae and possibly others were before the committee. On several occasions when questions were asked of these witnesses, the ever-vigilant and. paternal parliamentary assistant indicated to the committee that it might not be fair to persist in certain questions to a departmental official; and I think he was right.
We had hoped1-and I am sure the minister had hoped-that he would be able to come to the committee. I am sure he could have answered questions by various members of the committee concerning aspects of policy which departmental officials did not consider that they Should discuss.
The great preoccupation of the government in the sphere of external affairs, and the principal preoccupation, I believe, of the department, is the maintenance of peace and the entering upon those negotiations which are necessary to give effect to policies which will lead to agreements and understandings that will make peace enduring.
I am going to ask the minister to state what events of importance have taken place in the international field since he made his general

review of the international situation some six weeks ago. I ask him to state what negotiations are under way iwith regard to the partition of Palestine, with regard to the establishment of a government in that portion of Germany which is not under Russian rule, how much longer he expects the Canadian representative on the court in Japan to continue at that post, what are Canada's relations with China at the present time, what further steps if any Canada is taking with regard to the inclusion of Newfoundland in the federation, where there has been any modification in the relationship with the United States concerning seaways, whether anything further has been done in considering the royal style and titles of the king, whether any change in the relations between this country and South Africa has followed in the wake of the recent election in that country and, generally, what has been done toward completing any relationship between Canada and the countries of western Europe, and, in particular, with the other members of the commonwealth, with regard to resisting any .possible breach of the peace from any quarter whatsoever.
These are headings concerning which I suggest the minister may feel inclined to make a few comments that would be of interest to the committee.
Mr. ST. LAURENT: Mr. Chairman, I should not like to attempt to make an allinclusive statement of events which may be of consequence to Canada and which have taken place in the last six weeks. I think we must recognize that practically all happenings of international consequence in the whole world are of pretty direct and immediate interest to us. I would not wish it to be concluded from anything I may say or avoid saying tonight that I regard as matters of consequence only those I mention.
The hon. member has listed quite a number of topics to which I may refer; but I should not like to give the impression that there may not be other matters of importance which have happened in the international field within the last, six weeks.
With respect to Palestine, 1 think the most important and satisfactory event has been the acceptance by both parties of a truce, and their apparent acceptance of the offices of Count Bernadette as mediator to. try to arrange that strife will not again break out in the Holy Land. Canada has been extremely careful to avoid doing or saying anything which might prejudice the peaceful situation which momentarily exists. We have felt that we should be very careful to avoid doing any-

Supply-External Affairs
thing that, rightly or wrongly, either party might regard as making any change prejudicial to it, while the truce is in operation.


John Thomas Hackett: Has Canada sent any personnel to Palestine and, if so, under what conditions?
Mr. ST. LAURENT: No, Canada has sent no personnel to Palestine. So far as I am informed, a very small guard of fifty is being recruited voluntarily from the ordinary staff of the secretariat of the united nations, and I believe that that guard was being flown from New York today. It consists of fifty of the regular personnel of the secretariat of the united nations, who volunteered to act as a token guard to assist the mediator in his undertaking to bring about a settlement there.


John Thomas Hackett: Have any Canadians
joined that unit?
Mr. ST. LAURENT: No Canadians have joined that unit. My information is that all but five are United States citizens. Two are French citizens who were in the employ of the united nations at Lake Success; one is of Swedish origin, and another is of Danish origin.


James MacKerras Macdonnell: Do they go as civilians?
Mr. ST. LAURENT: They go as civilians employed by the united nations in a custodial capacity. They were guards of the premises at Flushing Meadows and Lake Success, and they probably went in the uniforms they wore as members of the custodial staff of the secretariat, but about that I am not sure.


Mr. JAQUES:: Will those fifty people who are going to Palestine be the nucleus of an international police force?
Mr. ST. LAURENT: I do not know that there is any international police force other than the custodial force the united nations have at Flushing Meadows and Lake Success. They go as bodyguards for the mediator and to assist him in the organization of his office on the island of Rhodes. I think it is for the purpose of bringing together the parties to this dispute and trying to get them to recognize that certain solutions are inevitable and should be accepted without bloodshed.
With respect to the constitution or semipermanent constitution for the three zones occupied by the forces of the United Kingdom, the United States and France, as I stated some time ago in the house we did not ask to be invited to attend the discussions which took place in London, although we were kept informed of everything that was going on.
5849-352J
The reason we did not insist upon being brought in at that time was our recognition of the fact that if we had been brought in, a great many others would also have been brought in and it might have hampered the negotiations which were taking place for this semi-permanent solution. However, we reserved our position that when the peace treaty was being considered we wished to have a role commensurate with the role we had in carrying on wartime operations.


John Thomas Hackett: I understood that Canada has submitted a memorandum suggesting a form of government based on the principle of federalism which might be applicable in Trizonia. The suggested form of government differed slightly from that of our own system, in that the component states were to be the residuary legatees of all power, whereas here the dominion is. If my information is accurate, I should like to know whether we submitted that memorandum on our own initiative or upon invitation.
Mr. ST. LAURENT: It was submitted to the officials of six governments participating in the London talks, as a comment upon the information that was being communicated to us. We have not published the memorandum we submitted, because we thought that, by doing so, it might further complicate the negotiations which were being held. We had nothing of a serious consequence to comment upon in the drafts that we were receiving as being then under discussion in that meeting.
The hon. member asked when we might expect the Canadian representative on the war criminal court in Japan to return to Canada. I am not able to give the exact date, but I may say I had the privilege of having a long conversation some days ago with Brigadier Nolan, who had acted as Canadian prosecutor in these trials. He informed me that the trials had been completed and the cases taken under advisement. He told me that the members of the tribunal would be there only as long as may be required for them to prepare-their judgment and reasons for their judgment. I hope that within weeks Mr. Justice McDougall will be back in Canada. At that time I am sure he will be glad to take up his ordinary duties as a member of the court of appeals of the province of Quebec.
The hon. member asked about Canada's relations with China at the present time. There have been no recent developments in that regard.
Then he asked as to what steps, if any, were being taken with regard to the entry of'Newfoundland into confederation. As hon. members know, the first vote was not decisive and

Supply-External Affairs
the second vote, which will be held on July 22, is to be on two questions only, responsible government and confederation. We have maintained and are maintaining the attitude that, after having made what we consider is a fair offer, it is exclusively the right of the people of Newfoundland to express their acceptance or rejection of that offer. We have been most careful to avoid doing anything that either party might regard as an attempt to influence the votes of the inhabitants of Newfoundland.


John George Diefenbaker: During the past couple of days I have received a number of representations from Newfoundland in regard to the question to which the minister has just referred. I should like to refer to these and then ask a question. The first representation is in the form of a telegram which was sent to the Hon. the Secretary of State for Commercial Relations in London, and reads:
The undersigned members of the bar of Newfoundland are of the considered opinion and firmly maintain that the address to His Majesty by the Newfoundland legislature and the Newfoundland Act of 1933 enacted by the British parliament provided specifically that Newfoundland's constitution would be merely suspended and would be restored to the people at their request when the country again became selfsupporting. As the national convention has decided that Newfoundland is self-supporting, therefore only two forms of government can be considered and submitted to the people in the referendum, namely, responsible government and *commission government.
'That was signed by what I am informed is a majority of the members of the bar there. Today I received a telegram which I should like to bring to the attention of the minister. This reads:
Forwarding information King stated Newfoundland should "indicate clearly and beyond all possibility of misunderstanding their will to become a province."
This telegram then asks if 50 per cent of total electorate or 70 per cent of vote cast would be considered sufficient on the part of the government of Canada to warrant their accepting Newfoundland's application to join the Dominion of Canada. At what point will the government consider that the Newfoundland authorities and the people as a whole desire to be included within the Canadian confederation?
Mr. ST. LAURENT: Mr. Chairman, I cannot say anything that would be binding in that regard. I do not think the government of Canada will attempt to examine the various representations that may be made to the commonwealth relations office or that may be made to others.

There was received from the Governor of Newfoundland a communication asking us to receive a delegation from the national convention and then submit such conditions as we would consider fair for the entry of Newfoundland into Canada. Those conditions were submitted. If the authorities recognized as speaking for Newfoundland report that the people of Newfoundland wish to join Canada on the conditions expressed in the proposals that were submitted, it will then, I think, be the responsibility of the government to bring to parliament a recommendation that those conditions be made available to Newfoundland, and it will be for the commission of government or the parliament of the United Kingdom under which that commission of government functions to complete the arrangements, which will in my view no doubt require legislation by the parliament of the United Kingdom and possibly also by the Canadian parliament.


John George Diefenbaker: It would require legislation by the Canadian parliament to be consummated?
Mr. ST. LAURENT: It would require action by the Canadian parliament. I do not think this government or any other government would venture to consummate a thing of such magnitude without having it decided by the parliament of Canada. It will be the responsibility of the government to make a recommendation to parliament, and the government, of course, will have to accept responsibility for the acceptance or the rejection by parliament of its recommendation. But the government will not attempt to say that it could complete the union without the approbation of parliament.


John George Diefenbaker: Would the minister not say it would require an almost overwhelming vote of the people of Newfoundland in order to justify Newfoundland being joined to Canada?
Mr. ST. LAURENT: The degree to which the consent of the population of Newfoundland would require to be expressed would have to be appraised by those who are responsible at the present time for Newfoundland affairs. If the government of Newfoundland, having consulted the population, represented to us that the population wished confederation to be consummated I think we would not go behind that declaration to examine to what extent they were justified in making such a representation.
At the present time the constitution of Newfoundland is still suspended, and it is the parliament of the United Kingdom that has legislative jurisdiction over Newfoundland. It

Supply-External Affairs
exercises that through a commission of government, but it is under the legislative jurisdiction of the parliament at Westminster and I do not think the British government or the British parliament would act in a manner that it did not feel was proper in the interests of the inhabitants of Newfoundland, after consulting them in these two plebiscites.


John Thomas Hackett: I understand that the government might wish that a statute express the will of parliament on granting to Newfoundland access to the dominion. Does that mean that the minister considers that the provision in the British North America Act concerning the admission of Newfoundland into confederation is but a power to be exercised in the ordinary way, that is, by legislation enacted by parliament. I do not recall the exact words of the British North America Act, but it contains a provision which anticipates the possibility of Newfoundland becoming a province of Canada, and my query is: Does the minister consider that enactment merely as a power which parliament may exercise, or is it something more than that which would only require executive action to carry the admission into effect?


Jean-François Pouliot: What difference does it make?
Mr. ST. LAURENT: It makes a difference as to the proper procedure to bring it about. The British North America Act contemplated that there might be union between Canada and Newfoundland on a joint address of the houses of parliament of Canada and the legislature of Newfoundland. That principle could be resorted to; but it would require, in order to be resorted to, the restoration of selfgovernment in Newfoundland, and then joint addresses under the terms of section 146 of the British North America Act. On those joint addresses, union could be consummated by order of His Majesty in council without legislation in the parliament at Westminster or legislation in the parliament of Canada. But if that method is not resorted to, the matter is not expressly provided for and would have to be accomplished by new legislation that could, I suppose, be adopted only by the parliament at Westminster if there were joint addresses from the houses of the Canadian parliament asking that it be done. The parliament at Westminster amends the British North America Act and makes provision with respect to Canada, but only on the request of the houses of the Canadian parliament; and that could probably be the method adopted. The one provided for in the British North America Act would require, as a condition precedent, that self-government
be restored to Newfoundland, that a legislature be elected in Newfoundland and that there be an address from that legislature as well as from the Canadian parliament for an order in council.


John Thomas Hackett: I had a little difficulty in following the minister when he seemed to consider the disability of Newfoundland as creating a disability in Canada. I readily understand that the government might wish to pass a statute. I understand that, but I was not certain whether or not it would be necessary in order effectively to carry out the union to do more than pass addresses in Canada; it, of course, being necessary that Newfoundland, in view of the suspension of parliamentary life there, go to Westminster for the authorization which results-I do not say this in any disrespectful way-from its temporary tutelage.
Mr. ST. LAURENT: I think the hon. member is technically right that it would be sufficient to justify legislation by the parliament at Westminster placing Newfoundland within Canada to have addresses from the houses of parliament in Canada, and the agreement of Newfoundland to the legislation would be a matter that would be the responsibility of the parliament at Westminster.


John George Diefenbaker: One question arises from that. Has the minister given consideration to the Newfoundland Act of 1934? A perusal of that act would indicate that the United Kingdom pledged itself to restore selfgovernment there at any time that Newfoundland became self-supporting. In view of the section of the British North America Act which the minister has just read, and having regard to the Newfoundland Act of 1934 that self-government is to be restored in Newfoundland, would it not be a condition precedent before confederation between the nine provinces of Canada and Newfoundland could be consummated?
Mr. ST. LAURENT: No, I do not think so. I think all we have to do is to look after our responsibility, and leave it to those who have-constitutional responsibility for the fate of Newfoundland to ascertain whether they are fulfilling their obligations, whether the obligations arise out of the Newfoundland Act or otherwise. I think we can in perfec't confidence leave it to the Newfoundland and British authorities to clear everything required on their side to enable a proper union to be consummated.


John George Diefenbaker: Has the minister received any representations from Newfoundland, or the people of Newfoundland or any group in that country, against any action on the part of Canada?
Supply

External Affairs

Mr. ST. LAURENT:	The department
would, of course, receive courteously and file anything that would come from any group in Newfoundland, but the department would not act on anything that does not come from those who have the constitutional responsibility for the government of Newfoundland at the present time.


Angus MacInnis: With noted lawyers on my right, I was wondering, since the position is now that a referendum is to be ta'ken on two questions-union with Canada or responsible government-if the vote decides for union with Canada it decides against responsible government. Surely the United Kingdom would not then insist that Newfoundland should have responsible government before it could have union with Canada. It seems to me that the question we are discussing is purely academic.


John George Diefenbaker: It is not academic so far as the people there are concerned.


Angus MacInnis: But the people there are going to decide. If they decide by whatever majority they do decide I do not think Canada can say to the authorities in Newfoundland or to the authorities in the United Kingdom, if they should be acting for Newfoundland, that we cannot accept Newfoundland as a province because the decision of the people has not been decisive enough. I claim that this discussion is purely academic until such time as the referendum is taken and we begin to work it out. Certainly we cannot do anything about it tonight.


Thomas Langton Church: I wish to say something on the administration item.


William Ross Macdonald: Order. The discussion is on Newfoundland. We should try to complete that discussion before discussing other subjects. If the hon. member is to speak on Newfoundland it will be proper for him to speak now. If not, would he mind waiting until we have exhausted the discussion on this subject?


Thomas Langton Church: I do not wish to be here all evening waiting for others to speak. I have made a study of this question since I came here in 1921, and am not like some of the amateur diplomats wrho are now appearing on the scene. I have been following this situation for many years past. I want to find out from the Secretary of State for External Affairs what is or what is not the policy of the government at the present time regarding foreign affairs. We may have an invasion just like a thief in the night, the way it came at Pearl Harbor. What are you going to do about it? There is no use in our pretending that we are a first-class power
IMr. Diefenbaker.]
when we are not. I have never been at one of those UNO conventions because I do not believe in them.
In his opening address this session, the minister said that the foreign policy of Canada was wrapped up exclusively with the UNO. That is the present policy of the government. There is no use in our pretending that we can rely on such agencies any longer. That 'was shown by the action of Gottwald regarding Czechoslovakia in the deposing of the late president. It shocked the whole human world, and show's us the grave danger we are in. What is this famous UNO in which the minister has confidence? We used to have an empire parliamentary association. They safeguarded our interests so far as foreign affairs were concerned. They forgot all about the empire and became pan-American. We are not a first-class power. We have had two wars to teach us that lesson. You have had this second UNO league of nations. We had the first league of nations on which this country expended nearly
85.000,000 in sending deputations over to Geneva. They built buildings costing fabulous sums of money, millions of dollars in Switzerland and Geneva, and, after that was done, it w'as found that it was a hollow' mockery, a sham and a humbug, and drove us into a second war.
There was not a newspaper in the country except one or two which had three or four lines about the collapse of Geneva, and the buildings there are wasted. We sent these deputations over there, which wyas supposed to be a consolation prize for those members of the government and others to have a little side trip after the session was over. My hon. friends to the left believed in it. My hon. friends to the left, away back in 1938, six months after Munich, right up to the opening of the war years, asked what was the use of depending on Glasgow and London for defence, when we would get all the defence we wanted in Washington; but we had a rude awakening in 1939.
The second war was caused by whom? It was caused by the very people in England, in Canada and in the other dominions who were members of what they called this league of nations society, which we are now recommending for a 85,000 grant, consisting of wellmeaning highbrows, parlour pinks, professors, and others. Britain will come to life again in Canada. There is no use in our depending on any such agencies as UNO and similar societies. It was the proposal of the late great president of the United States to bring Geneva to San Francisco, and New York to Lake Success. Now the congress at Washington wishes to get rid of the UNO. Congress wants

Supply-External Affairs
to get it out of the country. Next week a Republican convention is to be held in Philadelphia for the purpose of selecting a candidate for the presidency. Opinions were expressed in congress in favour of getting the UNO out of the country. The second world war had hardly ended when people started their efforts once more to establish a second league of nations, now known as UNO. There was, as everyone knows, a great gathering at San Francisco, and we had our own ambassadors there, ambassadors from our own party and others. They were there trying to learn diplomacy in a day, just like this magnificent institution that the minister has at the present time at Lake Success.
The government has been spending vast sums of money on this UNO institution. It has gone up to nearly $10,000,000, there being an increase this year of $1,074,974 for salaries alone, or a salary total of $5,083,082. Just imagine that! And what did they do at San Francisco? They divided the nations into powers, large and small, and our own representatives were there and agreed to give the Big Five a veto power. Foreign affairs will always be a political issue in this country. It always has been and it is a blessing that it has, instead of a non-party one, by giving a few a trip to such farces as Lake Success. Canada's policy in foreign affairs is the UNO, and "Let us pretend".
In the first war we were not prepared, and yet a million men went from the dominions to participate in the first war. They went under the individual sovereignty status and autonomy of every dominion, and of those men 130,000 fell on the field of battle. Those men enlisted and died of their own volition, and the men of the dominions repeated it in the second war in five times the number. But in the period between the two wars another organization was started up. Efforts of this kind in league of nations societies or peace societies have been a failure for 100 years or more. We remember the concert of Europe from 1815 to 1823, when Russia, Prussia, and Austria formed what was known as the Holy Alliance. They were going to survey conditions in Europe every five years and when war seemed imminent they would endeavour to bring about peace. It was such a humbug that a great prime minister, George Canning, proposed] that Britain get out of Europe altogether. It simply led to the Monroe doctrine. The Holy Alliance lasted from 1815 to 1823 and culminated in what has come to be known as the Monroe doctrine. What was that doctrine? In a word, Mr. Chairman, it was nothing more than the supremacy of Britain on the seas. And that is what has
maintained the peace of the world for 100 years from 1815 to the great war of 1914- British supremacy on the seas.
There has been talk, since the end of the second war, about a new UNO, and they have opened up in New York, at Lake Success after San Francisco. They have opened up another agency there, and two of the principal supporters and boosters of UNO, the London Economist and the London Times, have been compelled to say recently it has been a disappointment and a failure, and to demand an end of it.
The fact is that there is no use in our depending on that organization any longer. Are we going to spend another $10,000,000 this year on that organization? What is the use of deceiving ourselves? Why cherish the delusion that UNO can keep the peace? We are as close to war as Churchill has said, as Tinman has said, as General Bradley, before the congress committee at Washington, has said, and as the admiral of the fleet at Washington said not so long ago. We are as close to war today as we were in August 1939. We are back where we were then. Conditions have not changed a particle. There is no use in pretending that we can depend for peace on any such agency as the united nations organization at Lake Success. I call it a Lake Failure.
I have been trying to find out what the foreign policy of this country is and I am bound to say that I have failed in the attempt. We have no foreign policy and we never did have one. The foreign policy the minister announced earlier in the session was simply dependence upon the united nations organization. That was the cornerstone of our policy, and if it is the cornerstone of that policy, then I regret to say that I fear invasion. We did nothing to encourage parliamentary association within the empire. We tried to bring on a debate in the spring of 1947 regarding the scuttling of the empire. The empire has been cut to pieces. We have seen what happened in Egypt. We lost our lifeline in the Mediterranean; we lost the Suez canal. And there is Palestine. I will say nothing about that tonight, because we all know what the situation there is.
I repeat, Mr. Chairman, this government has no foreign policy and never did have one; neither did our delegates to the UNO in New York have a policy. Not a soldier was to be sent by Canada or the United States to fight in Palestine. What is the use of Trygve Lie and all his works at the U'NO? This second league of nations has tried many agencies, and what does Trygve Lie say about it all?
Supply-External Affairs

In my opinion we are simply wasting the people's money at Lake Success. We are throwing 810,000,000 into the sink-hole.
The situation in the Atlantic today is dangerous. The British government, Canada consenting, gave up all its bases from Newfoundland to British Guiana to the United States for ninety-nine years. I pointed out at the time what the result of that would be. I pointed out the effect it would have upon Newfoundland's joining confederation, and my predictions have been justified. What was that lease for? It was a 99-year lease, practically a freehold lease, entered into for a consideration that proved of very little practical value. The lease should have been cancelled long ago and charged up to lend-lease. It was entered into in the darkest days of the battle of the Atlantic, and in return for that lease Britain was given some fifty old, out-of-date ships. Many of them had to go into dry dock, being of no use. Others had no coal. Then Pearl Harbor broke and we got a lesson, and Canada was nearly invaded.
I have been talking about a foreign policy. The United States has never had a foreign policy any more than we have had. For 100 years it has been without such a policy. Its foreign policy was that of Andrew Jackson, George Washington and Madison. And what was the essence of that policy? Simply this: no foreign entanglement unless the shores of America are invaded. When the United States fought the Spanish-American war in 1898 that was the ground they took. Afterwards they wanted to abandon Manila. Our foreign policy now is to depend upon the league of nations at UNO and that we have no commitments; we simply yet take the attitude that "Parliament will decide" if war comes. That attitude, as I have pointed out before, has led to the scuttling of the British empire during the past two years. Britain, together with the dominions, stood alone for two and a half, nearly three years, from 1939 to 1942, against the mighty forces of the enemy, and if the war was to have been lost, then surely it would have been lost in those three years, before aid came. But Britain weathered the storm. If Britain and the dominions do not hang together there is little hope for peace so far as the British empire is concerned.
But not only have bases been given up in the Atlantic; we have given up bases in our own country, Canada, to the United States. Why, I do not know. Surely the United States lave enough to do to look after their own country. We have a great ally in the country to the south of us. The Anglo-Saxon race, the British peoples and those of the United States, are the hope of the world for peace in the

future; but they must be up and doing, because we are living in an armed world in which there has been no peace and in which there is no real peace now. This will prove to have been a forty-year war before it is all over, from 1914 to 1954. Let us not talk about peace when there is no peace. Look at the situation in India where millions of people are left to be massacred. Look at the situation in Palestine. Look at the Suez. And we know what the consequences were from the invasion of Czechoslovakia. Thousands of men in the Russian satellite countries in the Balkans and eastern Europe are being put to work on dry docks and more are sent to the Arctic circle as slaves from Russia's satellite states. It is impossible to find out from the united nations organization how many people are so treated. No one can find out anything about them, so what use is the UNO? Roumania is gone; the Balkans are gone and all that kind of thing. I am far from satisfied with what has been done in the British corridor over in Germany. Canada has no say over there. We are just a minor power. We consented to be a minor power at San Francisco when the Big Five insisted on and obtained the veto power and all that kind of thing. You will have nothing to say about the peace plans whereas, if you had hung together with the mother country, you would have something to say about them. The situation in South Africa is hopeless. There are those in this house-and I have never been one of them-who speak in eulogy of the late prime minister, Lieutenant General Smuts, of South Africa. He is a republican. He has all along wanted to set up a republic in South Africa. He has always been against having a British governor general, and would not give the ballot to the black troops who marched across the desert with Alexander and Montgomery. He was one of the cabinet of the pro-Germans there before world war II. He also signed the charter of the league of nations. Yet he says now the UNO have no power and no jurisdiction over the colonies.
No country in the world is going to give up its control of its own affairs or sovereignty to any foreign power or any foreign body like the UNO, unless the country is so small or has such poor defences that it could be captured in any event. Who is going to give up his sovereignty? Are we in Canada to do that? One of the minister's deputies went away down to Lake Success and Washington. He has been making some speeches and he is in favour of giving up sovereignty over our bases in Canada to the UNO. Where would we have been in the first war if Britain had given up these bases at the Cape, at Gibraltar, at Suez, or at Hong Kong to a foreign country

Supply-External Affairs
or a league of nations? We would have had to remain neutral also in the first and second wars and we would have lost both wars. That is what giving up bases would have meant. Yet we have mischievous representatives away down at the UNO at Lake Success telling us to give up our sovereignty and to let foreign powers establish bases here in Canada and to let them keep the bases they have.
I think that is about all I have to say about that, but there is another point I wish to mention. The minister has referred to the situation in the Suez, in Palestine, in Germany, in China and in India. It is a tragedy. Wait till history is written about the situation in India and all these places. Britain maintained peace, justice and freedom in India for over one hundred years. She did the same thing in Palestine. She took a mandate there. As I said the other evening in the house, there are about eighteen powers claiming a say in the Palestine situation. The Arabs have been there for hundreds of years. Turkey had it. When the first war broke out, Turkey was opposed to us. The Arabs had it. Egypt had it. Rome had it. Persia had it. Greece had it. Syria had it. All these nations have ruled Palestine.
A great mistake was made in what was done at the close of the last war, after General Allenby marched into Palestine. I was on the same platform when he spoke at the exhibition a few years ago and explained the situation. If you are depending on the UNO, you are depending on something that does not exist. It has no defence force. Who is going to be in a defence force to go to Palestine in a situation like that? If you read the articles in the papers and know the truth about it, you will realize the situation.
1 Wait till the truth is known about the scuttling of the empire in India and the Suez, giving up the whole lifeline through the Mediterranean to a foreign power and the UNO, so that we have no control at all over the Mediterranean. If war came, the enemy could come down through the Red sea and right across into Canada in about half a day. I can tell you this: We are just pretending. What is being done in Germany? Nothing. In Japan the situation is the same. China is on the verge of civil war.
What are we going to do about the title of the king? It is not divisible, in my opinion. We have had legal authority for that. The king is now king of Canada, but no longer is he emperor of India. The scuttling and the dissolution of the British empire have gone on. A large body of public opinion in this country thinks the same way as I do about the state of affairs.
Canada, which was first in the diamond jubilee procession, is today nowhere. We have no foreign policy except that of the UNO, a sham organization, with the extravagance of the external affairs department that goes on down there, 89,000,000 or 810,000,000 being spent in this work, and no security at all. If you look over the estimates you find that thousands and tens of thousands of dollars are just wasted in administrative offices.
Just recently in the city of Toronto we had a trade exhibition to which came people from the seven seas. It was magnificent to see what these trade agents had done the world over, long before we ever had this magnificent organization of ambassadors and consuls general. Wait till the return is brought down for the travelling expenses. Here is a new group of seven or eight of the health department now on the ship bound for Geneva. Several hundred thousand dollars are being spent in one department on travelling expenses. When it is all added up it amounts to 81,000,000, $2,000,000 or 83,000,000 for Canada's travelling expenses. Canada, a small nation with ten or eleven million people, cannot stand that any longer.
There should have been a conference of Britain and the dominions long ago. Mr. Curtin and Mr. Fraser from New Zealand and Australia, from where the Deputy Speaker is now sitting, addressed this house. They wanted to have an empire conference like the ones we used to have every ten years, to take up questions of trade, defence and migration. Sir Wilfrid Laurier had one while he was in power. He proposed a policy for this country that when Britain was at war, Canada was at war also. That was the policy we had in two wars. I have referred to the first war when a million men went voluntarily, under their own status and autonomy, and 130,000 fell. In the second war the situation was the same, except that ten times the number went. That was the policy: when Britain is at war, Canada is at war. If we go into a third war I venture to say the policy will be the same.
Are we to wait until the enemy sails up the St. Lawrence? They were pretty close to it the last time, in 1943, 1944 and 1945. They were up to the St. Lawrence when a secret meeting was held in this chamber in the second war, and they came up fairly far. Thousands of us, if not the whole House of Commons, might have been carted away overseas. They got a long distance up the St. Lawrence. Are we to wait until that happens again? I say no. The way to avoid it is to pretend no longer. There is no use in spending any dollars on the UNO at Lake Success. As I have said before, if they would only close up for about a year, and Canada
5550
Supply-External Affairs

get out of it altogether, we would be better off and have a chance of peace and security. ERP or the Marshall plan is just a blueprint. As the Archbishop of Canterbury said the other day in England, he was greatly disappointed in Lake Success and the way the empire had been dissolved. I quoted his remarks in the house the other night and I will not do so again.
I am absolutely opposed to the policy of this government on foreign affairs. I believe that this item should be reduced to reasonable proportions, to about 11,000,000 a year. That would be plenty to spend on such agencies as are now proposed, because you have no foreign policy except the UNO. That is the cornerstone of it. What has the UNO done? It has just dissolved the whole British empire. They want us to give up our bases on the seven seas. If we do so, you know what will happen. We shall have the enemy out here. Owing to this league of nations, wTe lost two of our great allies in the first war. In the second war you have lost one of them already. I can tell you this, that if you just keep on pretending for another year we shall be just as close to war as we were in 1939, when the second war broke out.
Mr. ST. LAURENT: I believe I had the floor, but I took my seat to alow the hon. member to ask a question'-and with the result the committee has seen. However I am quite willing to sit down again if the hon. member for Muskoka-Ontario wishes to ask a question-because I hope it will be a question.


James MacKerras Macdonnell: It will be a question, and one in regard to Newfoundland-which I take it we can now return to. I wish to ask this question on the point made by the minister as to the constitutional position. I understand that position clearly, and I would ask another question, which, it seems to me, is relevant.
Supposing in fact that the constitutional requirements the minister has outlined are complied with, but that nevertheless we know there is a strong minority-perhaps almost half the people in Newfoundland- who are opposed to any union with us; in the minister's opinion would that be a matter of indifference to us?
Mr. ST. LAURENT: No, I do not think it would be a matter of indifference to us. But we have made an offer to the constituted authorities of Newfoundland, and I do not think we could1 back away from that offer if the constituted authorities came to us and said, "The majority in Newfoundland want confederation." Of course this parliament might be disposed to say there is not

such a decisive majority, in spite of the statement made by the constituted authorities, as would require or justify the carrying out of the offer we made.
My own personal view with respect to these negotiations has been that it would be a serious responsibility to do or say anything which would prevent the entry of Newfoundland into Canada. I may be an optimist, but I do believe that the Canadian nation is destined to occupy an important place in world affairs. I do believe, further, that that place in world affairs would be better preserved by a territory which extended right out to the broad ocean and if access thereto was not closed to Canada by another sovereignty over the territories of Newfoundland and Labrador.
Because of that attitude, we made offers which would involve quite costly requirements from the Canadian people at the present time. But I think we would have been remise in our duty to future generations of Canadians not to have done so. That offer having been made, if there is a desire on the part of the people of Newfoundland to accept it, I think the government will be disposed to recommend to parliament that it be implemented.
It might be that there would come about in Newfoundland a division of opinion that would show that the time was not ripe for union to take place, and that it would not be easy to have it work satisfactorily in what would then be a new province. That is something which I hope we shall not have to face, and about which I would prefer not to have to express any views, unless we do have to face it. I hope there will be a clear-cut decision in this second vote. I hope it will not be so close as to leave us in the embarrassing position of having to take in a large group of recalcitrants, or having to renounce the opportunity of completing what the fathers of confederation originally intended.


James MacKerras Macdonnell: One further supplementary question, if I may. I did not understand the minister to say- at least I hope I did not-that by our action we have put it beyond our power to go back if, in fact, there is now a legal acceptance, legally given to Newfoundland, but with a strong and large dissenting minority.
Mr. ST. LAURENT: That matter would be one which would have to be faced in a statesmanlike manner by the authorities in the United Kingdom and those in Canada. They are the ones who have legal jurisdiction. I am reminded of the view I expressed about demo-

Supply-External Affairs
cracy. In a democracy the will of the majority must prevail; but a majority should not impose a decision that is not in the real interests of the community, or without giving careful consideration to the views of the minority and the reasons for those views. And I think that when the time comes for a decision as to whether this will be proceeded with or not, the Canadian government and the United Kingdom government will have to take info consideration the facts as they will have appeared from the vote of the people of Newfoundland.
Then the hon. member for Stanstead asked me to deal with two or three other questions, one of which had to do with the St. Lawrence seaway. Members of the committee will recall that the basic agreement was signed in March, 1941, was referred to the senate committee on foreign affairs in the United States, and favourably reported upon this year. But it was recommitted to the committee on foreign affairs by a vote in the senate of the United States on February 27, 1948. That was a vote of fifty-seven to thirty. It is therefore not being proceeded with expeditiously by the United States senate.
There have been reports in the newspapers as to the desire of Ontario and the state of New York to proceed with certain power developments; but there have been no official communications to the government of Canada in that regard and, so far as I know, no application to the international joint commission with respect thereto. There is nothing I can communicate to the committee beyond the information I have obtained from the reading of reports in the newspapers.
Then the hon. member asked me about the royal style and titles. As hon. members will recall, an act of this parliament was passed last year expressing the acquiescence of Canada in the dropping from the royal style and titles of the words, "Emperor of India". AVe are informed that a proclamation will be issued by His Majesty fixing June 22 as the date from which those words will be dropped from the royal style and titles in the United Kingdom, and the governor in council has adopted a minute of council to have a notice to that effect published in the official gazette, when we get confirmation that that is the date to be acted upon in the United Kingdom.
The hon. member asked if there had been any changes in our relations with the South African government since the election. There have been no changes.
Then he asked what has been done toward building up our relations with western Europe and other members of the commonwealth. There has been nothing accomplished, but what we have been doing was recently reported in
5849-353J
the Ottawa Jmirnal as a crusade by Canada for the completion of a western union or north Atlantic regional pact. I think that title, of course, perhaps justly describes the attitude we have adopted. We feel that, should war break out that affected the United Kingdom and the United States, we would inevitably be involved and that there might be great value in having consummated a regional pact whereby these western European countries, the United Kingdom and the United States and ourselves, would guarantee each other's security.
AYe had hoped that the united nations would guarantee the security of all of us, but that has not been accomplished, and we think there would be value in a regional pact whereby these western European democracies, the United Kingdom, the United States and ourselves agreed to stand together, to pool for defence purposes our respective potentials and coordinate right away our forces, so that it would appear to any possible aggressor that he would have to be prepared to overcome us all if he attempted any aggression.
AA'e do not think a pact that did not include those major powers would be sufficiently impressive to require us to be a party to it. We think this western union is a good thing, but our adhesion to it without the United States would add very little to it. We are hopeful that it will develop into something which will comprise the United States along with those who are already members, and in that event we think the people of Canada would wish that we also be associated with it, not because we want to assert domination over anyone, but because we realize that if the group in this regional pact became involved in war we would necessarily be involved with them.
That is something that the people of Canada might prefer to avoid, but it is something which they could not avoid even if they wished to. That being so, if there is any value in preparedness we think the people of Canada would be glad to see us making that preparation in a co-ordinated fashion with others whose way of life is the same as ours and whose security is part of our own security. That has not proceeded very far, although there has been the adoption by an overwhelming majority in the United States senate of Senator Vandenberg's resolution recommending the setting up of such a security group.
The hon. member asked what our relations were with the members of the commonwealth. Our relations with the members of the commonwealth revolve around the United Kingdom as being the pivot of the commonwealth. AYe do not think anything that the United
Supply-External Affairs

Kingdom and these western European democracies and the United States would be in is something that we could avoid being in.


John George Diefenbaker: Have we had any consultations or agreement with the other dominions within the commonwealth that if one is attacked we stand together?
Mr. ST. LAURENT: There have never been any commitments among the members of the commonwealth. They are all subjects of the same crown, which is the living link between them. That has always proved sufficient to have the members of the commonwealth recognize their joint and mutual interests. Of course, during the last war one member of the commonwealth remained neutral, which was its right to do, because there was no commitment. We did not take the same course in Canada. I think there has been a mutual reliance on each other; that the security of all is essential to each. I believe it is a matter of general feeling, but in fact it has never been set out in any signed commitment.


Norman Jaques: The minister said, very truly, that some weeks ago we had had a fairly full discussion on external affairs. I understood him to say that we should be careful at the present time not to do anything which might worsen the international situation. But there have been changes in that situation since we last had an opportunity to discuss international affairs.
I wish to make a few remarks on a subject about which I have spoken several times in the past, and I do this for three reasons at least. First, those who are opposed to political Zionism find that, because of Zionist control of the press and radio, they have no opportunity to obtain publicity for what they themselves stand for.


George Hugh Castleden: Does the hon. member mean control in this country or where?


Norman Jaques: Everywhere.


George Hugh Castleden: In every country?


Norman Jaques: Yes.
Second, the Zionists are busy holding public meetings. I see one was advertised in yesterday's and today's papers for Ottawa.
Third, those of us who have opposed the -designs of political Zionism in the past have been smeared with anti-Semitism, and it is about time that people realized that those who have supported political Zionism are, as a consequence, now shown to be anti-British and pro-Soviet, as I shall prove before I have finished.
First of all, I should like to congratulate the government, if I may, upon resisting the

pressure which has been put upon them, particularly by the leader of the C.C.F. party and others outside the house to support violent means of settling partition in Palestine. I say that because, owing to the general ignorance of the public, which has no opportunity of being informed, the government may need some support in their present stand in resisting Zionists and Red and Pink pressure. I think I have the satisfaction of being perhaps the only member on the opposition side of this house who can say that a policy which he has advocated from time to time in this house for several years has now been adopted by the government. I am not suggesting for a moment that this has been due to my influence, but just the same it is a fact and I am glad of this opportunity to congratulate the government on their stand.
Since I asked the minister a few minutes ago whether the UNO force which is being dispatched to Palestine would form the nucleus of an international police force, I have been handed a copy of yesterday's P.M., which, on page 9, under the heading "UN's 1st 'Army' of 50 Will Aid Bernadotte," says:
Clad in blue-gray uniforms, and equipped with standard New York city police department weapons, the half hundred young men of "Lie's Legion" will become the world's first "international police force," responsible exclusively to an international authority.
There are two columns of the article, and toward the end it says:
The UN secretariat looks upon the newly-born 50-man force as the "core" of a legion which may grow in the near future.
Sooner or later, Lie is expected to request the general assembly for a permanent budget for such a force, thus by-passing, in some small measure, the big power deadlock which has so far prevented the creation of the international army originally contemplated by the charter.
The present situation with regard to Palestine is one of the utmost danger. I am, of course, not making these remarks with the idea of informing the government or even anybody in this house. I am speaking solely for the benefit of those people outside the house who, thanks to the boycott of the press of any other than zionist views, have had little or no opportunity of judging the situation for themselves. It all comes back to the original Balfour declaration, and I shall read it because it is quite evident, when you read the zionist statements, that they misquote the declaration for the purpose of misleading the public. The Balfour declaration stated:
His Majesty's government views with favour the establishment in Palestine of a national home for Jewish people and will use their best endeavours to facilitate the achievement of this object, it being clearly understood that nothing

Supply-External Affairs
shall be done which may prejudice the civil and religious rights of existing non-Jewish communities in Palestine, or the rights and political status enjoyed by Jews in any other country.
The violence in Palestine since the partition plan was approved by UNO surely is the answer to this statement in the Balfour declaration:
. . . it being clear that nothing shall be done which may prejudice the civil and religious rights of existing non-Jewish communities in Palestine.
The fact that the various Arab states are now united and are determined to defend with their lives what they conceive to be their rights is proof enough of that. Yet the whole world is being deluged with a propaganda that nobody has any rights in Palestine except the Zionists and that we must all join with them and implement partition by force of arms. Already some two thousand people have, I believe, lost their lives in the fighting, and who can say how many more will not be killed if this policy is pursued?
I have collected a few statements by men whose knowledge of this question and whose standing cannot be questioned. The first I shall quote is Mr. George Hall, now in the House of Lords, but who in 1943 was colonial secretary in the British government. Mr. Hall said:
I must say the attitude adopted by the members of the deputation-
That is the zionist deputation.
-was different from anything which I have ever experienced. It was not a request for the consideration by His Majesty's government of the zionist decisions, but a demand: that His Majesty's government should carry out these decisions.
That was George Hall, colonial secretary, 1943.
Then we have Mr. R. H. Crossman, who is a well known member of the British Labour party and a member of the present House of Commons in Great Britain. He was also a member of the Palestine commission which went to Palestine to study the question. He said, speaking of the situation as he found it in the United States when he was a member of the Palestine committee in the United States:
The public and the .press-[DOT]
That is in the United States.
-are almost entirely pro-zionist and antiBritish. So we have lots to listen to. Rather we are submitting ourselves to the process of total immersion in the zionist flood. By shouting for a Jewish state, Americans satisfy many motives. They are attacking the British empire; they are espousing a moral cause for which they have no responsibility. The Zionists are terrific. They are passionately anti-British
and have obviously organized nearly all the American Jews and all the press. The case for the Arabs and the problems of putting a million Jews into Palestine, simply goes by default here.
That is a quotation from the diary of Mr. R. H. Crossman, January 19, 1946. Then, as a possible reason underlying this zionist policy, we have the opinion of George Antonious, one of the great authorities on Palestine.


Jean-François Pouliot: Who was he?


Norman Jaques: He is a man who has a wide knowledge of Palestine and has written a number of books on the subject which are standard works. He says:
Long ago I came to the conclusion that financial Jewry, both zionist and non-zionist, was furthering the aspirations of fanatical Zionism for its own ends, namely, in order to gain possession of the colossal mineral resources of Palestine and greater Palestine, and that they would be kept fallow until such time as they can be developed for the benefit of financial Jewry, preferably under the aegis of a Jewish state.
That is taken from the book, "The Arab Awakening", by George Antonious, at page 387.
Then we have the opinion of Mr. R. R. Stokes, who is also a Labour member of the present House of Commons in Great Britain.


Jean-François Pouliot: Who was he?


Norman Jaques: Mr. Richard Stokes, member for Ipswich. When I was back in England four years ago I had the pleasure and privilege of discussing various questions with him. He says this:
The UNO committed political suicide when it came to this decision. The Jews have been warned to get rid of these evil zionist advisers. The Americans have an anti-communist policy in Europe; but what is happening now? 'Communist powers are being brought into the middle east. That is a fact.
I know that Mr. Stokes has visited Palestine and has studied the question on the spot.
Then we have Mr. Zuckermann, who has written a book, "The Jew in Revolt". He says:
The basic tenet of our foreign policy must be friendship with Russia, whose stand in the UN will never be forgotten.
That supplies a very good reason, for the fact that the communists are so strongly in support of the C.C.F. at the present time. There is no doubt about it. Mr. Zuckermann continues:
A Jew can, do nothing but follow the road shown by the Soviet Union. There is no other way for him. He must fight for social revolution or perish.
These are quotations from men who certainly cannot be accused of any anti-semitic
Supply-External Affairs

tendencies. Several of them are socialists and have been to Palestine. They have studied the question on the spot.


Jean-François Pouliot: My hon. friend knows that some other socialists are on the side of the Arabs.


Norman Jaques: There are always exceptions, of course; but, generally speaking, I should say that the vast majority of what I call the Reds and the Pinks are strong supporters of political Zionism.


Jean-François Pouliot: The hon. member means that the Reds and the Pinks shake hands under the table.


Norman Jaques: I do not know. Perhaps the hon. member can tell me where the red leaves off and the pink begins. It is something that I have never been able to decide for myself.


Jean-François Pouliot: Tell me who are the Pinks and who are the Reds?


Angus MacInnis: Will the hon. member .explain? If the socialists are on the side of zionism, why are there all the difficulties between the Jews in Palestine and the British socialist government?


Norman Jaques: Is it a socialist government? I thought it was a Labour government.


Angus MacInnis: Find out what they say about it. They will tell you that it is a socialist government. There is no doubt about that. Ask my hon. friends to the right. They say it is a socialist government.


Norman Jaques: It calls itself a Labour government.


Angus MacInnis: It calls itself a socialist government.


Mr. WYLIE:: Why argue about it?


Norman Jaques: I do not see the point.


Stanley Howard Knowles: It is just as sensible as what we are getting.


Norman Jaques: That is all right. Three times in this session your leader has risen in his place and demanded of the government that they force the partition of Palestine, and each time-


Angus MacInnis: That is a misstatement of fact. The leader of this group has never demanded any such thing of the government. I am quite satisfied that the government will not say that he has.


Norman Jaques: I do not know what else you would call it.


Angus MacInnis: I know what you would .call it. I also know what I would call it.


Norman Jaques: He certainly has opposed me in my stand-and not only that-


Angus MacInnis: That would be sensible, in any event.


Norman Jaques: When I sit down you can rise, and I shall be interested to hear a member of the C.C.F. party defend their policy of pro-zionism and pro-sovietism in the house at the present time. That is the policy which they have followed consistently in the past.


Angus MacInnis: Mr. Chairman, that is
another misstatement. This party is neither pro-zionism nor pro-soviet. I insist that the hon. member withdraw it.


Norman Jaques: I am not going to withdraw it.


Angus MacInnis: I will tell you what it is. It is a lie. You can do with that whatever you like.


Norman Jaques: The C.C.F. are certainly judges of lies; they are experts.


Angus MacInnis: We have been listening to lies for a long time.


Norman Jaques: Point out one that I have told and I shall be obliged to you.


Angus MacInnis: I will tell you one right now.


William Henry Golding: Order. The hon. member must not interrupt.


Norman Jaques: Of course you C.C.F. do not like being reminded of it. You cannot defend the line you have been adopting in the past. You have been pro-zionist, and today, for all the world knows-it is known today-


William Henry Golding: Order. I must ask the hon. member not to refer to other members. Let him make his speech without bringing in other members.


Angus MacInnis: The hon. gentleman is trying to defend his anti-semitism by labelling us as pro-zionist. The thing will not work.


Norman Jaques: I beg your pardon, Mr. Chairman, for not addressing the Chair. I have been trying to state that the foreign policy of the C.C.F. in the past has been consistently pno-zionist, and it is now plain for all the world to see that the Zionists are, by their own statements, blatantly anti-British and proSoviet Russia.


Angus MacInnis: The hon. gentleman is going too far, Mr. Chairman, and. I insist that he withdraw the statement that we are pro-zionists.


Norman Jaques: I was going to say a word-

Supply-External Affairs


Angus MacInnis: Mr. Chairman, are you going t.o ask the hon. gentleman to withdraw the statement, which he has repeated several times? I make a point of it, that he withdraw the statement that this party is pro-zionist. There is nothing on the record here that justifies that statement.


Norman Jaques: I think-


William Henry Golding: The hon. member is expressing his own opinions. I have no right to stop him from expressing his own opinion, but I would ask him to deal with the estimates of external affairs without bringing in other members of the house.


Norman Jaques: I will do that, Mr. Chairman. Thank you. I was going to remark that Sir Ellsworth Flavelle, whose advertisement on behalf of zionism is in today's local papers, has as much right to espouse political zionism as I have to oppose it. I am not quarrelling with that. But I would remind the house that Sir Ellsworth was formerly chairman or president of the Canadian Soviet friendship council.


Jean-François Pouliot: Who was that, please?


Norman Jaques: Sir Ellsworth Flavelle. He is president of the Canadian Zionist league and is advertising in the local papers on behalf of political zionism, calling upon Canadians to implement partition. I merely quote it to remind the committee that formerly he was president of the Canadian Soviet friendship council, which may or may not have any significance.
I should like to quote the New York Times to show what the situation is in the United States. I have here the New York Times of Monday, June 7, in which there is a column headed "Stand by Israel". The article is a long one, and I will read only one paragraph:
Meanwhile, the Bronx, Brooklyn and Long Island regions of the Zionist organizations also held conferences. The meeting at the Riverside Plaza hotel heard Daniel Frisch, vice-president of the Zionist Organization of America. He asserted that "whether a boycott is officially *called for or not, I cannot visualize any American worthy of the name, be he Jew or non-Jew, who will in the light of current events purchase any British-made goods, utilize any British services, or associate with the British, because to me they are the untouchables of this generation."
So now these people who have been so busy supporting the zionist cause and who have smeared those of us who ventured to disagree with them, because we knew the danger that was bound to come as a result of zionism, are in this position. They are on the side of those who consider the British-certainly we are British; I am anyway- -to be untouchables, and
they call for a boycott of all British goods and services. I am thankful I do not have to reverse my policy of the past in respect of zionism.
Of course, the dilemma of Americans is this, that in Europe they are anti-soviet, but they are pro-zionist in Palestine; therefore they are pro-communist in Palestine and, as a consequence, largely pro-communist in the United States. And the Canadian pro-zionist dilemma is this, that if they are pro-zionist they are anti-British and pro-soviet. Speaking of boycotts-


Angus MacInnis: Eleven o'clock.


Norman Jaques: I realize that this is painful for you, but we have agreed to go on until we finish the estimates.


Angus MacInnis: Who agreed?


Norman Jaques: I think we all did.


Angus MacInnis: I did not. Eleven o'clock.


Norman Jaques: Anyway, I was about to mention-


Angus MacInnis: Eleven o'clock, Mr. Chairman.


Norman Jaques: -an incident in regard to the boycott which the Zionists have declared in the United States. That is all right; it is their privilege. But when an insignificant little man in Vancouver ventured the same idea with regard to the zionist Jews the whole force of the law descended upon him.


Jean-François Pouliot: Who is that insignificant little man in Vancouver?


Norman Jaques: I do not know that I can remember his name.


Jean-François Pouliot: Is it the former minister of veterans affairs?


Norman Jaques: I believe his name is Graham. It is a case that was decided in Vancouver some time this spring. I have not seen what he wrote, but I understand that he was advocating the boycott of zionist Jews until they learned to behave themselves.


Jean-François Pouliot: He was not the former minister of veterans affairs.


Norman Jaques: No. He is quite insignificant, but in this case the whole weight of the law descended upon him and he was sentenced to three or four months' imprisonment and ordered deported. Are we to learn from this that in Canada we may not criticize another sovereign state, which the Zionists claim to be today? They claim that the state of Israel is a sovereign state. Is it to be a criminal offence
Supply-External Affairs

to criticize the policies of that country; because, if it is, it is just as well to know it? In my opinion, that was a shocking miscarriage of justice, though I am not a lawyer.
In conclusion, may I say that those who think communism is an economic threat, that the Tim Bucks are the threat to the country, and that we can prevent communism by socialistic reform, are either very stupid or very misleading, because communism is not mainly an economic policy. When you come right down to the bottom of it, you will find that it is based on a religion and that the drive of world communism is nothing but the drive to enforce an alien, anti-Christian culture on the world.


Jean-François Pouliot: Therefore your address is more of a sermon than a speech.


Norman Jaques: You can call it what you like, but I think I can say this. I am possibly the only one in this house, as far as I know, who so far has had the courage to tell the truth about this Zionist question as I see it. Perhaps others do not see it. What I have said, I believe. As I said before, I have at least the satisfaction of knowing that the government has veered against the demand of political Zionism to enforce partition; and I can only say in conclusion that I congratulate them upon that.


Jean-François Pouliot: Mr. Chairman-


Angus MacInnis: Eleven o'clock.


Jean-François Pouliot: If it is eleven o'clock, I will sit down.


Angus MacInnis: It is after eleven o'clock.


Jean-François Pouliot: If the sitting goes on, I have questions to ask.


An hon. MEMBER:: Ask the question.


An hon. MEMBER:: Eleven o'clock.


William Henry Golding: Will the hon. member ask his question?


Jean-François Pouliot: I should like to know if the Palestinian problem is racial, religious or economic.


John Ritchie MacNicol: That is a poser.


Stanley Howard Knowles: A little of all three.
Mr. ST. LAURENT: The Palestine question is an unfortunate fact that must be recognized. I think it arises out of grounds that are at the same time religious, racial and economic. It would be difficult for anyone to assess exactly the proportionate influence of religious feeling, racial antagonism and economic interests in the difficulties that create that problem.


William Henry Golding: Shall the item carry?


Some hon. MEMBERS:: Carried.


Jean-François Pouliot: No. I thank the minister for what he has said, and I appreciate the fact that he has answered the question that was put to him. But I have in my hand here whait was said about the new; streamlined Conservative party-


John Ritchie MacNicol: What is that?


Jean-François Pouliot: It is from the Journal. It is a dispatch of June 11 in the Journal. Today I listened to the excellent speech made by the hon. member for Broadview and to the satisfactory explanation given by the minister. But I find that the debate on external affairs has not been serious. When I consider the ability, experience, geniality and knowledge of the hon. member for Stanstead and the questions he has put, I do not think they are questions that a man of his experience and gifts should have put on such an important matter, a matter that would be one of life and death for so many citizens if we were to be at war. I read what has been said about the Progressive Conservative party in Canada:
The Progressive Conservative party in Canada has reached a point wheTe "we must have our efforts bent in a common direction," Ivan Sabourin, Quebec provincial party leader, today told the closing session of the Progressive Conservative Association of Manitoba convention.
Then he made some remarks about the Liberals, and the article continues:
He advocated a "firm, decided direction" and said that "under the efforts of our leader the ship is being righted while the Liberal ship will continue to sink."
Where was the leader of the Progressive Conservative party when this most important discussion on this matter took place? He became a backbencher.


Angus MacInnis: On a point of order, Mr. Chairman, we have been sitting in this house from eleven o'clock in the morning until eleven o'clock at night, and I do not intend to stay here beyond eleven o'clock.
Item stands.
Progress reported.



BUSINESS OF THE HOUSE

Stanley Howard Knowles: What is the business for Monday?


Alphonse Fournier: On Monday we shall consider a resolution in the name of the Minister of Trade and Commerce to approve the international wheat agreement. Then we

Supply-Reconstruction and Supply
should like to move forward a step the resolution in the name of the Minister of Agriculture to continue the Agricultural Prices Support Act, 1944, for a further period. Then there is to be dealt with a resolution in the name of the Minister of Veterans Affairs to remove the time limit in which an application for pension in respect of death may be made under the Civilian War Pensions and Allowances Act; then Bill No. 362, to amend the Yukon Placer Mining Act; Bill No. 363, to amend the Yukon Quartz Mining Act, and Bill No. 364, to amend the Saskatchewan Natural Resources Act. If we conclude those different items we shall move to go into supply and take up the estimates of the departments of external affairs, agriculture, mines and resources and public works.


John Ritchie MacNicol: May I ask the minister if he is able to tell the house how many items of supply are yet to be called?


Angus MacInnis: How many departments?


Alphonse Fournier: All the departments are in, but we undertook to make, during the first three days of each week, a formal motion to go into supply.


Stanley Howard Knowles: About half the items have been passed.


Alphonse Fournier: Yes. I think more than half have been passed.


John Ritchie MacNicol: I heard someone say today that there were three hundred or four hundred items yet to be called, but the minister is not able to tell us just how many?


Alphonse Fournier: I can give the departments that are not completed. There are about ten or twelve items left in the Department of Agriculture; one item in the auditor general's department, and fifteen or sixteen items in external affairs. Then there is finance, fisheries, legislation, labour, mines and resources, national defence, national revenue, the Prime Minister's office, with regard to which there are few items, and public works.


John Thomas Hackett: Is the minister able to say if Bill No. 351, to amend the Quebec Savings Bank Act, which stands in the name of the Minister of Finance, is apt to come up on Monday?


Alphonse Fournier: No. I believe those two bills in the name of the Minister of Finance will be called on Tuesday, unless there is some change. But they will not come up on Monday.
It being ten minutes after eleven o'clock, the house adjourned, without question put, pursuant to standing order.
[The following items were passed in committee of supply]:



DEPARTMENT OF RECONSTRUCTION AND SUPPLY

[Stage Direction]
408.	To provide for the liquidation of contracts, including commitments of previous years related to the acquisition of assets operated by the department or an agency of the department; and for miscellaneous and unforeseen expenses, $500,090.
409.	Reconstruction projects, subject to allocation by the treasury board, $1,000,000.
Housing development, including commitments of previous years-
410.	To provide for payments of amounts owing under guarantees pursuant to item 571 of schedule A to the Appropriation Act No. 5, 1947 (and pursuant to corresponding items in previous appropriation acts) to approved lending institutions in respect of loans made for the purpose of financing the conversion of existing houses into multiple family houses, such payments to be made out of unappropriated moneys in the consolidated revenue fund, $1.
411.	Home conversion plan, $50,099.
412.	Emergency shelter

administration, $3,009.099.
413.	Wartime Housing Limited, $50,000,000.
414.	Cost of moving houses from one locality to another to meet emergency shelter requirements, $500,090.
415.	Incentive bonus to industry to expedite the production of strategic building materials, $370,009.
416.	To provide for production and transportation subsidies on steel and iron under such terms and conditions as may be approved by the governor in council, $5,090,099.
417.	Administration, reconversion and operation of Canadian Arsenals Limited, $2,999,090.
418.	To provide for research and development of jet engines and aircraft, $2,090,909.
396.	Administration and investigations of the dominion fuel board, $82,608.
397.	Payments in connection with the movements of coal under conditions prescribed by the governor in council, $4,590,000.
National research council
[Stage Direction]
398.	Salaries and other expenses of the national research council, $6,820,009.
399.	Expanded research on the utilization of farm crops, $260,009.
490. Industrial chemistry building (formerly included housing research), $65,000.
401.	Grant to the Royal Society of Canada, $8,099.
402.	New waterline-Montreal road laboratories, $125,009.
493.	Maritime regional laboratory, $150,000.
Atomic energy control board-
494.	Administration expenses of the atomic energy control board, $77,272.
405.	Researches and investigations with respect to atomic energy, $142,500.
406.	Chalk River project-capital and operating expenses, $5,796,000.
[Stage Direction]
Monday, June 21, 1948