1948-05-05

LIBRARY OF PARLIAMENT


Mr. SPEAKER:: I have the honour to lay on the table of the house a report from the civil service commission recommending changes in compensation of the staff of the library of parliament.



PRICES COMMITTEE


[Stage Direction]
Right Hon. L. S. ST. LAURENT (for the Minister of Transport) moved:
That the name of Mr. McGregor be substituted for that of Mr. Homuth on the special committee on prices.
Motion agreed to.

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

Mr. ASHBY:: 1.	What are the names of all individuals who assisted in any way in the wording or drawing up of the prairie farmers income tax guide?
2.	Have any of these individuals at any time changed their names?
3.	If so, what were their original names?
4.	What positions are held by all the individuals in question (1)?
5.	Have any of these individuals received training at the London (England) School of Economics?
6.	Have any of these individuals ever successfully operated a farm?
7.	Have any of these individuals ever successfully operated any private business?
8.	If so, what was that business?


Mr. McCANN:: The Prairie Farmers Income Tax Guide and Farm Account Book was compiled with the assistance of many officials of the taxation division who were fully conversant with the income tax problems of farmers in western Canada, also as a result of consultations with and comments received from senior officials of the Canadian Federation of Agriculture, the federal Department of Agriculture and other representative farm organizations.
It may also be stated that the Account Book section of the above-mentioned instructional publication was assembled after officials of the taxation division had conducted a thorough examination of various farm account books published by other departments of the government and by many private businesses, and had ascertained that such account books were inadequate in relation to the many problems arising out of income tax which affect western farmers.


NATIONAL HOUSING ACT-LOANS APPROVED
Mr. McKAY:: How many loans have been approved for home owners and builders for sale under the national housing acts up to March 31, 1948 in (a) Canada; (b) Saskatchewan?


Mr. McILRAITH:: 
NORTHWEST TERRITORIES-LIQUOR REGULATIONS
Mr. NICHOLSON:: 1.	Who is responsible for the administration of liquor laws in the Northwest Territories and how is such official or officials appointed?
2.	Through what agency or agencies is liquor obtained for sale in the Northwest Territories?
3.	How many outlets of various kinds for liquor sale are there in the territories and where are they situated?
4.	What hours for the sale of liquor have been established?
5.	What amount of profit has accrued from the sale of liquor in the Northwest Territories in each of the last two years of official record and what disposal was made of the funds so obtained?


Mr. MacKINNON:: 1.	The council of the Northwest Territories which is appointed by the governor in council under the provisions of the Northwest Territories Act, chapter 142, R.S.C. 1927.
2.	Through the Saskatchewan liquor board under the direction of the Northwest Territories council.
3.	(a) There are two government liquor stores, one at Yellowknife and the other at Forth Smith.
(b) Licensed premises in the Yellowknife administrative district are: Yellowknife hotel; Ingraham hotel; Canadian Legion premises.
4.	(a) Stores: The territorial liquor agent, subject to the approval of the commissioner of the Northwest Territories, may prescribe the days and hours at which the liquor stores shall be kept open for the sale of liquor. The present hours of sale are as follows: Yellowknife, 1 p.m. to 7 p.m. daily except Sunday; Fort Smith, 10 a.m. to 5 p.m. daily except Sunday.
(b)	Licensed hotel beer premises, Yellowknife: Yellowknife hotel authorized recently to operate beer parlour 24 hours per day except over week end. This was allowed in order to accommodate employees on shift duty at the mines. Ordinarily the beer parlours would be open from 8 a.m. to midnight.
(c)	Cocktail lounge, Yellowknife: Open 12 noon to 12 midnight Monday to Friday inclusive; Saturday noon to 11.30 p.m.
In the case of beer parlours and the cocktail lounge, the local trustee board of the Yellowknife administrative district fixes the hours of sale subject to approval by the commissioner.
5.	(a) The moneys acquired in the administration of the territorial liquor ordinance are credited to a special account in the consolidated revenue fund to be applied to territorial purposes.
(b)	Net operating revenue from liquor stores:
Fiscal year 1946-47	 $206,227.77
Fiscal year 1947-48	 196,370.57
(c)	Proceeds of fines, fees and
sundry 1946-48	 10,273.24
Total	 $412,871,58
(d)	Expenditure from liquor fund:
Fiscal year 1946-47	 $ 40,851.80
Fiscal year 1947-48	 334,385.64
(this item subject to adjustment when final returns available)
Total	$375,237.44
(e)	The expenditure referred to above covers disbursements for numerous administrative purposes including substantial grants for schools and hospitals ($297,630), construction of buildings, roads, bridges ($48,637), and payments for special services and supplies ($28,970).


FLOOD CONDITIONS-TORONTO AREA
Mr. CHURCH:: 1.	Has the attention of the government been called to the new floods at Ward's Island caused from the high east wind on Tuesday, April 27, by which 50 cottages were badly damaged and flooded as water crashed over the federal government breakwater past them into the lagoon ?
2.	What action will be taken in the matter?
3.	Is this a government breakwater or not similar to the one at the Eastern Gap and running from Ward's to Centre Island on the lake front?
4.	Who paid the cost of erecting several groynes into Lake Ontario from this breakwater ?
5.	What action will be taken to meet the situation?


Mr. CHURCH:: Mr. Speaker, as a return has been brought down, and it is satisfactory, I would ask that this question be dropped.


James Horace King: Dropped.


ARMED FORCES-MARRIED QUARTERS
Mr. DICKEY:: 1.	How many married quarters of various types did the armed forces have on January 1, 1947?
Questions

2.	How many quarters were completed in 1947?
3.	How many were under construction at December 31, 1947?
4.	How many were under construction or under contract at March 31, 1948?
5.	What rentals are charged?
6.	How are quarters allocated?


Mr. LAPOINTE:: 1.
Permanent	 268
Temporary	 50
Emergency	   923
Total	 1,241
2.
Permanent	 66
Temporary	 406
Emergency	 2,115
Total	 2,587
3.
* Permanent	 463
Temporary	 733
Emergency	 210
Total	 1,406
4.
Permanent	 1,179
Temporary	 628
Emergency	 57
Total	 1,864
5.	Permanent married quarters-No rental as such is charged, but deductions are made from appropriate allowances ranging from $44.00 to $92.00 a month according to rank.
Temporary married quarters-No rental as such is charged, but deductions are made from appropriate allowances in amounts $7.50 less than for permanent married quarters.
Emergency married quarters-Rental is charged at a rate ranging from $17.10 to $20.00 a month depending upon utilities, fixtures, and services provided.
6.	The commanding officer of the unit or establishment concerned makes the allocation, taking into consideration the need for accommodation and the size of family.


EDUCATION OF CHILDREN OF SERVICE PERSONNEL
Mr. GOLDING:: 1.	Have any schools been opened by the Department of National Defence for the education of children of service personnel who are stationed at places where normal educational facilities are not available?
2.	If so, where are these schools located?
3.	What numbers of children are enrolled at each school?
4.	What arrangements have been made with provincial authorities?
[Mr. Dickey.J


Mr. LAPOINTE:: 1.	Yes.
2 and 3. Location of school-Attendance
Camp Borden, Ontario, 309; Barriefield Military Camp, Ontario, 172; Shilo Camp, Manitoba, 102; Fort Churchill, Manitoba, 20; Rivers, Manitoba, 43; Currie Barracks, Calgary, Alberta, 138; Fort Nelson, B.C., 15; Goose Bay, Labrador, 41.
4. The Department of Education of Ontario pays 50 per cent of the approved operating costs, assists in procurement of teachers and provides inspection services for Camp Borden and Barriefield schools. It also assists in selection of teachers for the Goose Bay school.
The Department of Education of Manitoba assists in the procurement of teachers and provides inspection services.
The Department of Education of Alberta assists in the procurement of teachers and provides a grant of $275 per room per annum.
The Department of Education of British Columbia provides a grant of $1,100 towards the teacher's salary.


SASKATCHEWAN FEDERATED CO-OPERATIVES-STEEL WIRE FOR THE MANUFACTURE OF NAILS
Mr. THATCHER:: 1.	Have the Saskatchewan Federated Cooperatives applied to the steel controller for a quota of steel wire for the manufacture of nails?
2.	Has the company indicated that it is prepared to commence manufacturing nails?
3.	Has it asked for an assurance that it can obtain import permits for the necessary machinery in order to go into production?
4.	With what reply has the request been met?


Mr. McILRAITH:: 1.	Yes.
2.	Yes.
3.	Yes.
4.	The co-operative has been advised that application for the import of machinery will be considered by the department and approval granted where it can be shown that the production of items from these machines will be of assistance to Canada's economy.
No assurances have been given in the matter of steel; this for the reason that there is only a limited quantity of steel rod available for nail production and this is being channelled to operating nail manufacturers. The quota of nail rod could only be increased at the expense of wire manufacturers for the agricultural trade, and this would not appear to be a solution. Further tonnages of nail rod for Saskatchewan Federated Co-operatives could only come from tonnages allotted to manufacturers at present producing nails. To grant

Questions
this request would only result in a dislocation of nails in the normal distribution channels, and this would undoubtedly react unfavourably on certain localities and would not increase the total output. As nail manufacturers are endeavouring to supply all markets with such stocks as they produce, there would appear to be no useful purpose served in disturbing the present pattern.


FILM BOARD-COLOUR PRINTING AND RECORDING
Mr. FRASER:: 1.	Did the national film board have any or all their kodachrome (colour) printing .and recording done in the United States during the year 1947 and the first four months of 1948?
2.	If so, what was the total cost of this printing, recording, etc., in United States dollars, during 1947 and the first four months of 1948?


Mr. McCANN:: 1.	Yes. Until December 1947, no commercial laboratory in Canada would quote on production runs of kodachrome printing. The national film board had conducted experiments in kodachrome release printing during the year. In December, following the Canadian government's dollar conservation program, printing materials were shipped from the United States to Ottawa and by January 1948 the greater part of kodachrome printing was being done at the national film board, Ottawa,
It has been possible to make a very large reduction in kodachrome printing orders placed in the United States. However, it has been necessary to continue to have a limited amount of printing done in the U.S. Where certain kodachrome films are being distributed in the U.S., it has been found cheaper to have additional prints made in that country rather than do .the printing in Canada and pay customs charges, express charges, etc., which would be levied if the prints were made in Canada and then shipped to the United States.
2.	1947 Jan.-Apr. Total
Printing ... S60.119.05 $5,951.09 $66,070.14 Recording ..	7,694.83	.. ..	7,694.8367,813.88	5.951.09	73,764.97


WAR VETERANS ALLOWANCES
Mr. WINKLER:: 1.	Howr many veterans of world war II (not veterans of -world war I) are now in receipt of war veterans allowance?
2.	What age groups do they cover?
3.	How many are married?


Mr. GREGG:: 1.	Recipients in respect of service in world war II: 490.
2 . 20-24 years, 8; 25-29 years, 42; 30-34 years, 47; 35-39 years, 30; 40-49 years, 97; 50-59 years, 141; 60 and over, 125.
3.	358.


VALUE OF CANADIAN FISH EXPORTS
Mr. ISNOR:: What was the dollars and cents value of Canadian fish (and fishery products) exported in the years 1938 and 1947?


George James McIlraith: Calendar year 1938,
$26,530,513; calendar year 1947, $82,359,203.


BOARD OF PENSION COMMISSIONERS AND WAR
Mr. WINKLER:: 1.	What was the salary paid to (a) chairmen (b) board members from 1936 to 1945 of (1) board of pension commissioners; (2) war veterans allowance board?
2.	To what sum were these salaries increased in 1945 in the case of (1) board of pension commissioners; (2) war veterans allowance board?
3.	To what sum were these salaries increased in 1948 in the case of (1) board of pension commissioners; (2) war veterans allowance board?


Mr. GREGG:: Return at May 5, 1948, showing annual
salaries:
1.	Canadian Pension Commission (formerly Board of Pension Commissioners for Canada):
(1) (a) $7,000; (b) $6,000.
(2) (a) $9,000; (b) $7,000.
A commissioner was appointed deputy chairman at a salary of $7,500 effective September 1,
1946.
Chairman's salary increased to $10,000 effective January 1, 1947; deputy chairman's salary increased to $8,000 effective January 1, 1947.
(3)	(a) and (b). No increase.
2.	War veterans allowance board:
(1)	(a) $7,000; (b) $6,000.
(2)	(a) No increase; (b) no increase.
Chairman's salary increased to $8,000 effective August 1, 1946; members' salaries increased to $6,500 effective August 1, 1946.
3.	(a) and (b). No increase.


MOTIONS FOR PAPERS
Mr. KNOWLES:: For a copy of all correspondence exchanged between the federal government, including any minister, department, branch, commission or corporation thereof, and the city of Toronto and/or
Inquiries oj the Ministry

the Toronto city planning board, dated since January 1, 1943, with reference to the proposed Regent Park housing project.


FLOOD CONDITIONS-TORONTO AREA
Thomas Langton Church: For a copy of the report of the federal engineer of public works at Toronto harbour regarding the damage done to the federal government breakwater from Ward's to Centre Island and damages by storms to the groynes erected by the federal government, from Ward's to Centre Island, and a copy of all correspondence regarding damage done by floods and storms at Toronto island during 1946, 1947 and 1948, and a copy of any letter or letters between the government or any officers thereof, and any other person or persons on these matters.


Thomas Langton Church: I ask, Mr. Speaker, that this motion be dropped. The minister has handed me a copy of the report of his district engineer for Toronto harbour on the storm and the damage to Toronto island, which is satisfactory.


James Horace King: Dropped.


POSTAL SERVICE
[Stage Direction]
On the orders of the day:
Mr. E. D. FULTON (Kamloops):: Mr. Speaker, may I direct a question to the Postmaster General? Are any discussions going on in the Post Office Department with a view to reducing the postage on food parcels sent overseas from Canada? If not, will the department or the government give consideration to reducing the postage on such food parcels by subsidizing the shipment of parcels to distressed areas abroad?


Hon. ERNEST BERTRAND (Postmaster General):: There are no discussions of that question going on now. We have considered it many times but we cannot reduce the rate.


COST OF LIVING
[Stage Direction]
On the orders of the day:
Mr. G. H. CASTLEDEN (Yorkton):: I would like to direct a question to the Minister of Finance or the cabinet minister acting in his absence. In view of the further increase in the cost of living as reported by the bureau of statistics, what action does the government intend to take to prevent further increases in the cost of at least staple food products, such as milk, meat, butter and bread?


Mr. R. W. MAYHEW (Parliamentary Assistant to the Minister of Finance):: I shall see that the question is brought to the attention of the Minister of Finance.



PRIVILEGE


[Stage Direction]
On the orders of the day:
Mr. JEAN FRANCOIS POULIOT (Temis-couata):: Mr. Speaker, I rise on a matter of personal explanation. The Peterborough Examiner of April 21-


Mr. FRASER:: A good paper. .


Jean-François Pouliot: Yes. It referred to certain remarks made in the House of Commons by several members about the "Red Dean," who was swimming in the Black sea with young communists. I mentioned the Very Reverend Doctor Fisher, but at the same time I referred to the former Archbishop of Canterbury, who was the Very Reverend Hewlett Johnson.


Mr. COLD  WELL@: The hon. gentleman is wrong. The former Archbishop of Canterbury was Doctor William Temple.


Jean-François Pouliot: No, not the one the hon. member mentioned. He is dead. I mentioned the one who is alive, and who went to the Black sea and had his picture in Life.


Mr. COLD  WELL@: You mean the Dean of Canterbury?


Jean-François Pouliot: Maybe the Dean of
Canterbury. But his name is not Fisher, and I apologize. My excuse is that I am not a doctor of divinity and I do not pose as such.



TREATIES OF PEACE


[Stage Direction]
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs) moved that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to provide that the governor in council may do such things as to him appear to be necessary for carrying into effect the treaties of peace between Canada and Italy, Roumania, Hungary and Finland, respectively; and for that purpose the governor in council may make appointments, establish offices and make orders or regulations; and to provide further that any expense incurred in carrying out the treaties shall be defrayed out of moneys voted by parliament.
Motion agreed to and the house went into committee, Mr. Macdonald (Brantford City) in the chair.
Mr. ST. LAURENT: Mr. Chairman, this resolution is for leave to introduce a bill consequent upon the action taken in the house

Treaties oj Peace
during the last session with respect to the treaties between Canada and Italy, Roumania, Hungary and Finland. Hon. members will recall that these treaties were approved by resolutions of both houses of parliament. Subsequent to the approval, ratifications by His Majesty on the advice of the Canadian government were deposited in the manner required by the treaties to bring them into operation. It is now felt desirable to have legislation passed which will enable , the governor in council to take from time to time whatever action may be required to give effect to the provisions of the treaties.
The bill to be introduced following upon this resolution will be in substance similar to the bills that were passed after the last war, one of them being chapter 30 of the statutes of 1919, another chapter 4 of the statutes of 1920, and the third chapter 49 of the statutes of 1922. It is also in substance similar to the bill which was passed almost a year ago, I think, by the parliament of the United Kingdom. I understand a similar bill is now before the parliament of the commonwealth of New Zealand.
The terms of the bill are in substance exactly the same as those of the bills which were thus adopted to empower the governor in council to do whatever might be required to carry out the provisions of the treaty. Hon. members will recall that the British system is not the same as the United States system, where a treaty automatically, upon approval, becomes the law of the land.
Last year parliament' was asked to approve these treaties. That makes them binding obligations between this country and the other party to the treaty, but it does not constitute legislation effective upon Canadian citizens; and this procedure is the one that it is usual to adopt in connection with the implementation of treaties, after they have become binding between this country and the other party thereto.
Mr. HACKETT:: Will the minister say if the implementation of the treaty raises the vexed question of jurisdiction between the dominion and the provinces?
Mr. ST. LAURENT: That question might arise if the governor in council did adopt orders in council to implement the treaties which in their effect trenched upon property and civil rights in the provinces. But, of course, no action taken here, or no action taken by the government, could be effective if it was not within the constitutional powers of the authority taking the action. For instance, there is a provision in these treaties that the period of the war is not to operate
for the purpose of the application of the statute of limitations. That may very well be something that is within provincial jurisdiction, and the question might arise whether any order in council passed by federal authority under the statute that it is proposed to ask parliament to adopt was valid or not. In our own jurisdiction, Quebec, I think that the interruption of prescription would be automatic, because of the impossibility of a creditor, affected by the state of war, pursuing his recourse. Our code provides that whenever the creditor is prevented from exercising his right, the period of limitation against him does not run. That is the general principle which is embodied in the treaties here. There were similar provisions in the treaties made after the first world war. There was an order in council which purported to make them effective, and I do not think any litigation arose over them.


John Thomas Hackett: The minister will recall that a number of statutes which were enacted by the government led by Mr. Bennett, as he then was, were attacked because their jurisdiction rested upon that clause in the British North America Act which purported to empower this parliament to enact legislation giving effect to treaties. We know what answer the courts gave in those cases. I want to know whether the present government would be relying upon an emergency, for instance, to enact legislation which it could not enact under the section of the British North America Act as interpreted by the courts when, they disallowed the Bennett legislation.
Mr. ST. LAURENT: Oh, no. There is no assertion of a constitutional principle here. This is merely empowering legislation to authorize the governor in council to do what parliament might do by specific legislation in each instance.
As a matter of fact I inquired if there had been very much that had to be done after the first world war to implement the treaties. I found that in fact there was very little, but there was something done, and there will have to be something done at this time, to deal with property which during the war was vested in the hands of the custodian of enemy property. There are matters of that kind which do arise and with which it is necessary to deal. But there is a special provision here, because I wanted to anticipate any objection that might arise in that connection, that any order in council will have to be tabled in parliament within a fortnight if parliament is in session, and if not, within the first fifteen days of the next ensuing session.
Treaties of Peace


Thomas Langton Church: I wish to call the attention of the minister to the fact that Canada has been at peace with these countries since the close of the German war. In the first place since the end of the war these countries, or three of them, have become Soviet satellite countries. I refer to Roumania, Hungary and Finland. What is the policy of the government with regard to some of these changes that will have to be made in the treaty as a result of Soviet action?
In the second place, I was opposed to the doctrine that Canada could sign these treaties separately from the mother country. Canada secured that right back in the early twenties. At that time we got the power to sign treaties as Canada, separately from Britain. We have been at peace with these countries for years, but they have now become Soviet satellite countries. Finland is a Soviet satellite. Russia has secured a port at Petsamo in Finland. What they want it for I do not know. Roumania has become a Soviet satellite nation, and so has Hungary.
I am opposed to the policy of our dealing with a matter such as this at this time. At Lake Success, where these matters are supposed to be discussed, a stand should have been taken regarding these nations. All the scare and all the clamour raised by Russia at Lake Success was for home consumption in Russia, where, if they had been left alone by the UNO, the people had enough trouble of their own to occupy their attention.
The government should give us further information in this matter if we are to establish offices in these different places, though I do not see why they want to do so. Who wants to go to any Russian satellite country such as Roumania or Hungary at a time like this? These countries are Soviet police states; that is all they are. They are absolutely under the control of this dictator country.
Clemenceau said that Britain was the most difficult country in the world to make treaties with because it always speaks with so many voices. We have no navy, army, or air force; we have no means by which to protect our interests with these people at the present time. As I said last night, if Lake Success were to be closed for a year or even six months we might begin to talk about redeeming some of these countries, which are simply police states under Russia. If we were going to sign treaties with these nations why have we waited for two or three years to execute them? As far as Canada is concerned, this is a separate nation under the act that was passed away back in 1921 or 1922. I do not know why

we have waited for three or four years to sign treaties which were ready two or three years ago. Why bring it up now? As for establishing offices in these countries, you are simply going to get into trouble. I was glad to see my hon. friend the member for Winnipeg North Centre (Mr. Knowles) go over to Moscow as a delegate from the dominion, but at the time, on one occasion when he was speaking to a former minister of health, I suggested that the government had better send over a bodyguard with him because I was afraid they might kidnap him while he was in Moscow.


Jean-François Pouliot: I remember that in August 1940 there was quite a fight for the prorogation of parliament, but instead of that, parliament was adjourned so that the members could be called together at any time to decide important matters during the war. There was a special session in November of that year and it was adjourned, and during the adjournment Canada declared war on five countries. I have never understood why a declaration of war on any country was not a grave enough matter to call the members of parliament together at any time of the year, but during that brief period of time, shortly after the adjournment, Canada declared war on five countries. And still we call ourselves a peace-loving nation.
Not only that, but what business did we have to declare war on Roumania, Hungary and Finland? We did not send a man to fight them. We did not send a plane. We were at war with these nations because the United Kingdom had declared war. This is something I have not understood on the part of a peace-loving nation. The declaration of war on Italy had a certain sense, and our boys went there to fight on the soil of Italy.
One day I telephoned the Department of External Affairs and asked one of the higher-ups to tell me with what countries we were at war. He replied, "Wait a minute; I am not sure about that. You had better ask somebody else". I had to telephone two or three of the higher-ups to find out with what countries I as a Canadian citizen was at war. I did not know with whom I was at war and I could not be told by the experts.
If the name of Bulgaria does not appear here, with Italy, Hungary and Finland, it is because Bulgaria was forgotten by the experts in the Department of External Affairs when Canada ceased for a moment to be a peace-loving nation. But we continue to consider these men as experts. I have the highest regard for my chief, the Prime Minister; I have the highest regard for the present Secre-

Treaties of Peace
tary of State for External Affairs, but I ask them to get rid of the nonentities in the Department of External Affairs, who take themselves so seriously.
Imagine! The more countries we are at war with the greater country is Canada. I afterwards asked how many men we had sent there and what we had done to fight them. Nothing at all. But we were at war. This is idle talk, and I wonder what the influence of Canada is in the drafting of these treaties. Did Canada dot an "i" or cross a "t" in the manufacture of those treaties? Canada had nothing to do. We have the role of suiveux, blind followers, in all these treaties. If Canada had had something to do with the discussion of these treaties, with the ratification of them, we could consider the thing seriously; but I remember reading not long ago that my right hon. friend the Secretary of State for External Affairs had complained about the fact that Canada was not consulted at all concerning the manufacture of treaties-the fabrication of treaties. It was left to the big powers. That is why I find the set-up of the united nations is all wrong. It is because the basis of the united nations is not the basis of right, it is not the basis of justice. It is the basis of might, the same that prevailed in Germany at the time of the kaiser. Might is right. These big ones do everything.
Have we heard that any country besides the big ones had anything to do with it? Moreover, an important senator was silly enough to say that the Prime Minister would lead the small nations at San Francisco. This made me so indignant, to think that Canada was a small nation. That such a thing was said by a cabinet minister who has a seat in the senate was an insult to all of us, because Canada is not a small country. Canada is a great country. If Canada is merely a small country it was not led by the Prime Minister at San Francisco, although I suggested in the spring of 1945 that the Prime Minister should be made president of the conference at San Francisco. At the time he was not interested in having that presidency, but it would have been worthy of him, a man of his experience, who has occupied the post of Prime Minister longer than any man within the British empire has held such an office.
Therefore, sir, I find all the discussion concerning international affairs childish. It is not serious. This was-with Hungary, with Rou-mania, with Finland-a theoretical war, a war on paper. How is it that a peace-loving nation decides to declare war and do nothing afterwards? It is shadow-boxing in order to give the illusion that we are prizefighters. That is all it is. Roumania owes Canada $20,000,000 plus compound interest over the period since
the first war. I wonder if Russia is ready to endorse Roumania's note to Canada for that amount? Twenty million dollars is a large sum of money. It represents the amount of money that Canada has voted for the children of Europe. Why do we not get something from Roumania? If Roumanian people have property here, why do we not confiscate it in payment of the amount which has been due to us for such a long time? There was gold here which was deposited in Canada by debtor countries. Why do we not hold what we can get to compensate us for the sacrifices we have made and the loans that we have made to all the nations of the wrnrld?
I shall not say any more about the matter, as I do not want to carry the discussion too far. But if all these things are to be adopted, they should be adopted as a matter of course or as a matter of routine, because we had nothing to do with the making of the treaties and nothing to do with the actual war with those countries. It is a great mistake to follow blindly the external policy of the United Kingdom. Why? Because the independent nations will consider Canada as a satellite of England just as the Ukraine, Roumania, Hungary and Finland-although Finland not so much-are supposed to be satellites of Russia. If we act with regard to Great Britain in the same way as the satellite countries act with regard to Russia, we shall be considered by the rest of the world as a satellite of England and we shall deserve their contempt. It would be much better for Great Britain if there were more vigour and independence in the external policy of the dominions of the British commonwealth. Australia set a great example during the post-war period. Australia was respected by the whole world, even by those who did not agree with her policy.
I believe that each one of us should have pride in his country, that he should be a Canadian first and should be ashamed to follow blindly the long and winding policy made by the long-beards of the foreign office. They have been instrumental in the disruption that is taking place now throughout the world. Their policies were responsible for the massacre of Turkey a- long time ago, of India, of Palestine, and for the division and disruption of the British empire.
We are a young nation. Let us show that we can lead the world in the path of honesty and order. We shall never do so if we follow blindly the policies, full of intrigue, of other countries.


Mr. COLDWELL:: This is a resolution, Mr. Chairman, which indicates that a bill will be brought before the house. I do not propose to

Treaties oj Peace
say much at this stage except to make a suggestion. When the bill comes before the house no doubt copies of the treaties will be attached to it, or in any event they will be supplied to members of the house.
Mr. ST. LAURENT: They were distributed to members during the last session.


Major James William Coldwell: Yes, that is right. They are in our files.
Mr. ST. LAURENT: Hon. members have them on their individual files.


Major James William Coldwell: In order to have a more intelligent discussion of these treaties-because this resolution gives the governor in council power to do all things that may be necessary to carry into effect the treaties that have been made-I suggest that the matter be referred to the external affairs committee, where the minister and the officials can be in attendance, and we can discuss the matter more informally and perhaps get more out of it than we could in any other way.
Mr. ST. LAURENT: There will be no objection on the part of the government to the bill being referred to the committee on external affairs. But a reference to the records of the meetings of that committee of last year-and I think the members of the committee are the same as they were last year-will indicate that they did a good deal of work on the treaties.


Major James William Coldwell: Yes, that is right.
Mr. ST. LAURENT: Hon. members will probably find that they will not be required to do much more in order to bring themselves quite up to date in respect of them.


Edmund Davie Fulton: I wanted to ask the minister a question on a matter which was touched on by the hon. member for Temiscouata (Mr. Pouliot). Will the minister be kind enough to refresh our minds by a brief statement on the part which Canada played in the drafting of these respective treaties? I recall that with respect to Germany we were denied any part whatsoever; but with respect to some of these minor countries, and particularly Italy, it was my impression that we were at least given the opportunity of expressing our views. If that is so, I should like to know whether in the minister's opinion our views were helpful, and whether any of our views were adopted; because we certainly played no small part in the war in Italy, both before she withdrew and afterwards, and in liberating that country.
Then if the minister would be kind enough to deal with another matter which is related,

I think it would be of great interest. It appears now that treaties of peace with Germany may be concluded separately by Russia and the western nations. If that is so, it gives us a fresh opportunity to renew our rightful request that we should have a voice in the preparation of whatever treaty of peace is finally concluded with Germany. Would the minister care to touch on that matter also?
Mr. ST. LAURENT: I will say just a word on the last matter referred to by the hon. member. Then perhaps he would like to hear the Minister of National Defence (Mr. Clax-ton) who attended the conference for the preparation of these treaties, answer briefly the other part of his question.
With respect to the German treaty, the government of Canada has taken the position that in the preparation of the final treaty it should have a part commensurate with the part we took in the war. That is still the attitude that is being maintained. At the present time, however, negotiations are going on between the powers occupying the western zone-the United States, the United Kingdom and France-for not a permanent but rather a semi-permanent solution for the western zone, pending the time when a general treaty, or the possibility of making a general treaty, can be envisaged. In the preparation of these semi-permanent solutions, these powers have seen fit to accept the intervention of the Benelux countries, which border upon western Germany. We have been kept informed of what has been going on, and we have not insisted on being present at that stage because if we did it would be a reason for bringing in a great many other countries, which might hamper or retard the progress being made in trying to bring some semblance of order and reorganization into this zone-a very important zone not only to the Germans who inhabit it, but to the whole of western Europe. Its restoration, not to the extent of becoming again a menace to its neighbours but to the extent of taking its part in the integrated economies of western Europe, is important to the whole of western Europe; and because it is important to the whole of western Europe it is of direct interest to us.
For that reason we have not wished to appear to be attempting to put forward technical claims which might require the occupying powers, in order to give offence to no one, to invite all those who had declared war against Germany; this in our opinion would have had a delaying effect on the measures the occupying powers are trying to take to bring about some semi-permanent solution of the problem. But we are still insisting that when it comes

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to the making of the final peace with Germany the powers who took a substantial part in the winning of the war shall be given a role proportionate to their importance in the conflict.


Edmund Davie Fulton: Then from what the minister says I take it we would be justified in concluding that if it should become necessary to write separate treaties of peace; if things should reach the point that the difference between the east and the west could not be resolved, the three western powers who are now the occupying powers would accede to our request?
Mr. ST. LAURENT: The three occupying powers have supported our contention that we should take a part in the preparation of the general treaty, so from that I take it that if they were going to do something separately, with respect to their own zones, they would take toward our claim the same attitude they adopted when it was put forward at the meeting of the big four.


Jean-François Pouliot: The minister was very generous in answering so fully questions that were completely out of order. This has nothing to do with a peace treaty with Germany. It mentions treaties with four countries: Italy, Roumania, Hungary and Finland. I would ask the minister what Canada had to do, if anything, in the preparation of the treaties with those four countries.
Mr. ST. LAURENT: That was the first part of the question by the hon. member for Kamloops, and I asked if that might be answered by the Minister of National Defence, who represented Canada at the conference *where these treaties were drafted. If it will satisfy the hon. member for Temiscouata I think he will get the information he wants from the statement of the Minister of National Defence.


Mr. CLANTON:: Mr. Chairman, the questions which have been directed to the ministry with regard to these treaties relate to what grew out of the meeting of the council of foreign ministers at Potsdam in 1945 and the conference held in Paris in 1946. At that conference, as hon. members know, the Canadian delegation was headed by the Prime Minister until his departure for Canada, when it became my honour and privilege to succeed him.
This matter has been before the house on several occasions already. In an appendix to Votes and Proceedings for February 10, 1947, will be found a report from myself to the Secretary of State for External Affairs on
the work done at the conference. On March 3, 1947, as reported at page 952 of Hansard, I made some remarks in the 'house on the work of the conference and what was done by the Canadian delegation there. If my recollection serves me aright, though I would have to check this again, there was some further discussion on June 30, 1947.
With regard first to the nature of the conference, in those statements there will be found a thorough-going criticism of the adequacy of the conference and of that kind of treatymaking. What is more, that criticism was voiced not in Canada alone but also at the conference itself, by the Prime Minister while he was there and by myself. The views that were then advanced received support not only from representatives of the middle and smaller powers there, but also from some of the greater powers.
I am sure it is not the wish of hon. members that I should delay these proceedings except to refresh their memories by these references. But when we come to consider Canada's interests with regard to these treaties I think once more we must recall the fact that the first Canadian corps constituted the third largest force which fought the whole long way from Sicily almost to the banks of the Po in Italy, and that the graves of more than five thousand Canadians who gave their lives in that fight remain in Italian soil. If anyone should question our interest in this, apart from the fact that Canada made a major contribution to victory on the Mediterranean front, then I would reply that this interest was not questioned at Paris. It was interesting to note how day after day we would be carrying on our deliberations at the Luxembourg, and in between those deliberations the nations interested in the outcome of these treaties would be sending in their recommendations and sending around their delegations in order that they might have our understanding, our sympathy and if possible our support for the points of view they were putting forward.
With regard to our interest in declaring war on Roumania, which was the question raised by the hon. member for Temiscouata-and a very natural and proper question-at the moment I do not know how many members of the Royal Canadian Air Force flew over Roumania or Hungary or some of these other countries during the war. There were quite enough of them, however, to make it important for them and for us to see that in case of a forced landing in those countries they should have the rights accorded to belligerents. Without these declarations of war our men
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flying those planes, on missions which undoubtedly were of the utmost importance in the allied cause, when forced to land might have been treated quite differently from the treatment they received as belligerents. When you get men of this type undertaking missions of that kind, men with the kind of courage required to fly off into night and space, even beyond the range of the normal flight of their planes, it is up to us to give them protection. They were belligerents fighting for us, declared to be such and recognized as such. I am sure that the hon. member for Temis-couata will recognize that from the national and patriotic and humanitarian point of view that is a sufficient answer. It is certainly the answer which, as Minister of National Defence, I would wish to give.
With regard to our exploits in these fields I would draw the attention of hon. members to the fact that there has been delivered to them a book entitled, "The Canadian Army, Official War Summary". This was issued just today, almost three years from the termination of hostilities in Europe. I think hon. members will find in this book a true and fine objective account of the exploits of our soldiers in the fields of action to which these treaties relate. The navy and air force stories will come later.
All three branches did their part in bringing about a cessation of hostilities so that we might have formal peace with these countries, in the hope that from that peace we might build a foundation for a better future, not only for the countries themselves but for our own country. Our interest demands that there should be peace in these countries as well as here, and that just as soon as possible trade should be established on a sound basis with those countries as well as with all other countries.
In the prosecution of that end, your delegation, first under the Prime Minister and then under my direction, worked steadfastly at Paris. I believe we made a contribution similar to that made by the seventeen powers who were not great powers. I believe we earned the respect of the countries with whom we were working. I believe that if you compare the draft treaties and the discussion with the final treaties as signed you will see that there was some improvement. There was not nearly as much improvement as we would have liked, nor was it the kind of conference which we would have liked or which we hope will be set up with respect to the treaties of peace with Germany and Japan. But in consequence of the discussions at Paris the treaties were better than they would have been had the representatives of the seventeen smaller powers not been there.

Had we not been represented and taken as effective a part as we could in the discussions at Paris the people of Canada would have been the first to say that we were remiss in our duty. We did the utmost we could within the terms of reference, working in close co-operation with the other countries that were there. We achieved something, but not nearly as much as we would have liked. Our hope is that the views expressed by Canada at Paris, and since, will have some influence in persuading the three or four great powers that we should have a more effective voice in future treaty making, and that the part we played in the war must be fully and adequately represented in the part we can play in building the foundations of peace.


Jean-François Pouliot: Mr. Chairman, unquestionably you and I have been deeply moved by the pathos of the Minister of National Defence, but he has not answered my question. He said that in the future he hoped that something better would be done concerning treaties. I have not his exact words, as I did not have my pencil in hand; but he gave us the impression that in the future Canada would be better represented than in the past. That is my impression of what he said, and that is quite creditable.
He spoke of the conference in Paris which he attended. I want to know if the four treaties mentioned in the resolution were prepared at that conference. I want to know if the drafts were made there. What part was played by Canada in the making of those drafts? What suggestions were made by Canada? Were any suggestions made by Canada not accepted by the big powers? I have in mind what was said in Paris by the Prime Minister in 1946 or 1947 that we expected nothing out of the war. Therefore I want to know clearly and precisely what suggestions were made by the Minister of National Defence at the Paris conference. I want him to tell us if the original drafts of these treaties were prepared at the Paris conference. I want to know what changes were made, and what changes suggested by Canada were refused by the big powers.
We have been told the story of our airmen who flew over Hungary. At that time we were allied with Russia, and Russia is still one of our bosses, being one of the big powers. I would remind the Minister of National Defence that I was told by the government that no man had been sent by Canada to any of these countries except Italy. I asked that question in respect to Italy, in respect to Bulgaria, in respect to Hungary, and in respect to Austria. The only men who went to

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Austria were prisoners of war who had been captured at Dieppe. They were in the Tyrol, but they were there as prisoners of war, not as belligerents.
Who told me the truth? Was it the cabinet minister-I do not remember just which one, but I have only to look at Hansard to find out -who answered and told me that not a single Canadian had been sent to those countries; or was it the Minister of National Defence, who has just said that our airmen flew over those countries? There may have been some airmen in the R.A.F.; I do not know how many R.C.A.F. men were sent there, how many R.C.A.F. units. If that was so, why was I told that no Canadian had been sent to those countries?
I want the minister to be more definite and precise and less sentimental about these matters so that the house may be really informed. He was at Paris as the representative of this country, and it is time that he gave an accurate account of his mandate and told us what was done there. He should tell us what he did as representative of Canada and what part he played in the drafting of these treaties that are now before us in the form of this resolution.
The minister has travelled the world over. At times he has boasted that he was travelling more than anyone else by air and by all means. His travels must have been useful, and this is the time for him to render an account. I want him to tell us what useful thing he has done, or if he just made speeches over there which amounted to nothing like the one he has just made here.
Mr. ST. LAURENT: Perhaps the hon. member wants a lot, but what he is wanting and asking for today he should have wanted and asked for last year when the matter of approving these treaties was before the house, and when, before the resolution was adopted, it was referred to the committee on external affairs so that all the information that any member wanted could have been made available. The resolution that is before us today is merely consequential upon the decision which was made last year and which is binding upon the hon. member as it is upon every member of the house. The question now is whether or not this house will authorize the government to carry out obligations which this house authorized the government to contract. That is all that is involved at the present time, and for that purpose I submit that more relevant discussion could be had upon the terms of the bill if I am given leave to introduce one.


Jean-François Pouliot: I gave the minister enough time to prepare himself to answer today. I will tell my right hon. friend the Secretary of State for External Affairs, that I have the highest regard for him. He was not over there, but his colleague the Minister of National Defence, then acting in another capacity, as minister of national health and welfare or something like that, was there, and now I am asking him for some information. What rule of the house prevents the Minister of National Defence from answering my question if he can? If he can confound me, so much the better. But I would like to hear more than mere words from him.
The Secretary of State for External Affairs told me that the Minister of National Defence would give an explanation. He rose, he opened his mouth and said nothing; and now, because he said nothing, I am precluded from asking him for more information at the very same sitting-just twenty minutes later. When the Secretary of State for External Affairs told me that the Minister of National Defence would answer, I sat down and listened closely to him, and learned nothing. It was just beautiful pathos, and now because the Minister of National Defence has been unable to give complete information to the member for Temiscouata, is the member for Temiscouata to be precluded from asking for particular data? Whoever heard of such a thing? Therefore I insist, sir, that the Minister of National Defence should give all the information that I have asked for, and if he does not give it now, I shall conclude that he is unable to supply it to the committee.


Edmund Davie Fulton: Without his force I do agree with some of the things that have been said by the member for Temiscouata. Particularly I would ask the Minister of National Defence who has indicated that he did make certain suggestions, if he would be kind enough, without unduly prolonging the discussion, to refer to some specific suggestions which he as Canada's representative made, and which were accepted, if any were, by the treaty-making parties; and perhaps he would indicate the effect of his suggestions on the treaty as it finally emerged.


Brooke Claxton: There may be confusion between two kinds of suggestions. When I said that I had made suggestions, I was replying to some criticism offered, I believe, by the hon. members for Rosetown-Biggar and Peel and other hon. members of the procedure when the matter came before the house last year. At that time we made some suggestions as to the kind of procedure that should be followed in making treaties of this type.
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With regard to suggestions on the five draft treaties that were before the conference, the draft treaties were under discussion for some three months. They had been prepared by the council of foreign ministers, representing the United Kingdom, the United States, the Soviet Union, and France. Those drafts were put before the conference, to which were summoned seventeen other powers, including Canada. The countries there represented had an opportunity of putting forward their views.
The conference was divided into some nine commissions, and views were put forward with respect to many of the provisions of all of the treaties. The discussions went on in the commissions, and I think it would be a fair estimate to say that altogether there were something over one thousand votes taken on the recommendations that might be made by the conference with regard to the text of the treaties. Those votes were cast by the Canadian delegation, as by the other countries represented, according to their instructions and in the light of the best information they had.
The countries there assembled included the United States of America, Australia, Belgium, Brazil, Canada, China, Ethiopia, France, Great Britain, Greece, India, Norway, New Zealand, the Netherlands, Poland, Czechoslovakia, the Ukraine, Union of South Africa, the Soviet Union and Yugoslavia.
It would be easy, if it were desirable, to go back over the records, which- are very full, to indicate how the Canadian delegation voted on each one of the issues put forward in each of these nine commissions each day of the conference. The member for Temiscouata did not ask me to do that in his first speech, and hon. members will agree that I answered the questions he put in his first speech just as adequately as they could be answered. But if for any reason he is interested in learning how the Canadian delegation voted on each one of the points put forward with regard to each separate section of each of the five treaties, the records will show that; and if he so desires we shall be prepared to defend each one of those votes as we go along, just as we did in consultation with the other nations represented at Paris. We played the same part that any nation would, faced with that situation at Paris. We heard the discussions, we received our instructions, we considered the situation, and we voted on each point as it came up.
In the final session, in the last three days I believe, hon. members might be surprised to learn that there were something like 250 or 300 votes on different points that had been raised in the different commissions.
We have a record of this as well. If anyone likes to see it he can do so, but he will

not be able to do very much about the terms of these treaties. We have passed the resolution through the house. The treaties have been signed, and now we are face to face with one thing only, namely, whether or not a bill will be passed, after its introduction, to carry into effect those treaties in so far as they are necessary to be carried into effect in Canada.
The hon. member for Temiscouata might have made these points in March or June of last year. If he has any desire for information I have the records to give to him, but I do not see that I need detain the committee with that exercise at this time.


Jean-François Pouliot: So long as the minister has answered I am satisfied.


Mr. BRACKEN:: This resolution has to do with Canada's part in administering certain treaties of peace with Roumania, Hungary, Finland and Italy. There are three sections to the resolution. I should like to ask the minister one question with respect to each of them. These questions have to do more with procedure and administration than with the terms of the treaties themselves.
The first section of the resolution reads as follows:
That it is expedient to introduce a measure to provide that the governor in council may do such things as to him may appear to be necessary . . .
My first question is a very simple one. Why is it necessary that there be a resolution at this time? Why not the bill itself? I can understand that under our procedure a money bill has to be preceded by a resolution. I am asking only for information. No doubt the minister can give it without much difficulty.
My second question has to do with the suggestion in the latter part of the first third of the resolution, and with respect to the second part of the resolution which reads as follows:
... do such things as to him appear to be necessary for carrying into effect the treaties of peace between Canada and Italy, Roumania, Hungary and Finland, respectively; and for that purpose the governor in council may make appointments, establish offices and make orders or regulations.
My question is, what is the nature of the work to be done? Perhaps the minister can briefly give the committee in simple language some idea of the work that is contemplated under the bill which will be introduced.
The third part of the resolution has to do with the matter of expenditures and reads as follows:
And to provide further that any expense incurred in carrying out the treaties shall be defrayed out of moneys voted by parliament.

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Will the minister indicate whether these expenditures are likely to be large or small sums, whether they are to deal only with the personnel of the department for carrying out certain instructions, or are any large sums likely to be involved?
Mr. ST. LAURENT: May I deal with the questions in the reverse order from that in which they were put? The first has to do with what is contemplated as expenditures. I would imagine that there would be very little, possibly none at all, but the law officers of the house are very careful that there should be a resolution wherever there is any chance that the legislation to be brought down may involve the expenditure of money, because of the requirements of the British North America Act that such legislation be preceded by a resolution. They take no chances because, they say, if it did happen that money was involved, the legislation would be invalid if it had not been preceded by a resolution. There is apt to be very little, if any, and that is why the bill is drawn in the way that if there is any it will have to be by appropriation of parliament.
We do not intend this to be a bill authorizing the expenditure of money. There may be some of the time of employees taken in dealing with various aspects of the liquidation of enemy property, and things of that kind; but if anything required money that was not in the ordinary administrative vote of the department there would have to be a special appropriation by parliament, and it would have to be by a special item in the estimate.


John Bracken: The minister does not contemplate anything more than a minor increase in expenditure?
Mr. ST. LAURENT: A very minor increase in expenditure. The nature of the things that may have to be done cannot be determined in an all-inclusive way. The treaties in question provide that enemy property now vested in the custodian may be confiscated and the proceeds retained by us and applied to settle any debt owing to a Canadian for some damage suffered by him as a consequence of the war. There are certain assets which are in the control of the custodian. It will probably be necessary, as it was after the other war, to have someone designated to advertise for claims, to receive the claims, to determine how they will be dealt with for the purpose of ascertaining their validity or not, and then to determine whether there is enough to satisfy them all, or whether there will be only a pro rata payment to each, if the amounts claimed are larger than the amounts available for distribution, and things of that kind.
Then there are provisions in the treaty relating to patents that may have been in existence, valid in this country, in favour of persons who became enemy aliens. Some of those have been taken as enemy property and disposed of. There are matters of that kind. These provisions are reciprocal. There may be Canadians who have rights in enemy countries. Those rights are restored by the treaty, but on a reciprocal basis. Therefore, in order to get for Canadian citizens, for instance, the benefit of a patent a Canadian citizen may have operative in Italy, we have to do something reciprocal for an Italian who may have had a patent operative in Canada. It is matters of that kind which do not affect the relations of governments with each other as such, but which affect the interests of the subjects of the countries which were at war and which are now at peace as a consequence of the treaties and the ratification thereof last September after the house had authorized the ratification.


John Bracken: The minister did not answer the first question.
Mr. ST. LAURENT: The resolution was introduced because the law officers were not convinced that there might not be some money involved as a consequence of the bill.


John Bracken: It was just because there might be a money aspect to the bill?
Mr. ST. LAURENT: Yes; that was the only reason for the resolution. The reason is that our law officers say that we cannot afford to make a mistake. If we did make a mistake and legislation was passed which should have had a resolution it would be invalid because of the terms of the British North America Act. They say, we would rather have you pass a resolution which may not be necessary than take any risk of passing a bill without one and have it decided afterwards that it required a resolution.


John Bracken: I was trying to save the time of two debates.


Mr. MERRITT:: The minister made reference to the fact that this treaty would enable reparations to be paid to individuals who have claims arising out of enemy action during the war. I have had a case drawn to my attention which, in fact, deals with a claim for reparation against the crown by an individual which, of course, is not covered by this treaty, as I am well aware. But I want to take this opportunity of saying to the minister that the person who applied to me has fallen into difficult financial straits by reason of
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having lost his property as a result of Japanese action in Malaya. He is finding it difficult to get along at the present time, and has had to reduce his standard of living severely. I have been told by the minister's department that, pending a treaty with Japan, no reparation can be paid.
Since unquestionably a peace settlement with Japan is held up by international complications and problems, and since it looks as if it will be considerably delayed, I wish to suggest to the minister that he give serious consideration to his power to authorize the custodian, who now has enemy assets in his hands, to make advances to individuals who are deprived of their settlement through no fault of their own and who are in necessitous circumstances. Will the minister take that into consideration?
Mr. ST. LAURENT: I think the matter has already been looked into. The department and the governor in council can only do the things that parliament has authorized them to do, and that is why we are coming here for authority to implement these treaties. With respect to the making of advances by the custodian to those who have claims, I have no doubt it would be helpful to those who have already submitted claims, but we are not yet in a position to advertise for those claims. We are not in a position to know what reparations we are apt to have available, and it would be extremely difficult for us to come to parliament and say, "Here, authorize us to do such and so", without being in a position to satisfy parliament that it could not ultimately prove to be prejudicial to somebody. I should not like to ask parliament for any wide authority of that kind, and without the authority of parliament it cannot be done.


Charles Cecil Ingersoll Merritt: Mr. Chairman-


The CHAIRMAN:: I do not wish to restrict discussion at this time, but I do not think the discussion on the general powers of the custodian with respect to claims is within the scope of the resolution. I bring that to the attention of the committee.


Mr. MACDONNELL (Muskoka-Ontario):: I was struck with the fact that the minister, while indicating that he would have proper regard to the rights of Canada in respect of the making of future treaties, also made it clear that he would not be actuated by a fussy desire to be constantly putting forward every claim that might conceivably be made by reason of our efforts and sacrifices during the war.

It may be said that there are really three considerations which enter into the part a nation should play in peace making. First of all, there are the efforts and sacrifices made during the war. But after all, when we go to the peace table now it is not primarily with the idea of getting something for ourselves, although I realize that, where Canadian nationals are concerned, that does enter in.
But there are two other important considerations which arise. In the first place, there is the contribution that we can make by reason of our knowledge and the association we have had in the affairs of the country since the war, and, thirdly,-this is equally important-there is the question of what we are prepared to do with regard to the follow-through. I take it from what the minister has said that something like that he would agree with, and therefore I welcome what he has said.
Resolution reported, read the second time and concurred in. Mr. St. Laurent thereupon moved for leave to introduce Bill No. 248, to provide for carrying into effect the treaties of peace between Canada and Italy, Rou-mania, Hungary and Finland.
Motion agreed to and bill read the first time.



NATIONAL HOUSING ACT


[Stage Direction]
Right Hon. C. D. HOWE (Minister of Reconstruction and Supply) moved that the house go into committee to consider the following resolution:
That it is expedient to present a measure to amend the National Housing Act, 1944, and in particular to authorize approved lending institutions to purchase from Central Mortgage and Housing Corporation mortgages held by the said corporation and to make loans to owners of rental housing projects not exceeding in amount 85 per cent of the estimated cost thereof; to authorize Central Mortgage and Housing Corporation to guarantee an annual return of an amount to be determined by the corporation of rentals from rental housing projects for a period not exceeding thirty years, to make loans to owners of rental housing projects if such loans are not being made available by approved lending institutions; to authorize the governor in council to transfer lands vested in His Majesty to the corporation; and to make provision for the winding-up and dissolution of Wartime Housing Limited and to vest in Central Mortgage and Housing Corporation power to provide rental housing out of moneys which may be appropriated by parliament for the purpose.
Charles Cecil Ingersoll Merritt: Does the minister intend to make a statement?


Mr. HOWE:: Yes.

National Housing Act
Before dealing with the legislation proposed in this resolution I would like to comment briefly upon the general housing situation.
Continuing high levels of employment and income, and the high marriage rate, are currently, as in the last few years, placing great pressures on the housing supply. There is still congestion in many parts of the country, and in spite of a large number of new units in 1947 there is much doubling up and over-crowding.
However, in 1947 considerable progress was made. Hon. members will recall that I expressed the hope that the completion of
80.000	units would take place in 1947. Figures recently released by the dominion bureau of statistics indicate completions of 77,000 units. There were about 79,000 starts during the calendar year. The carry-over, or incomplete construction, of 42,000 units was slightly increased over the 40,000 at the end of last year. For the first time since war began, new housing units exceeded net family formation. The margin was about 13,000 units.
Although the objective or target of 80,000 units was substantially accomplished, it by no means solved the over-crowded housing situation. Furthermore, during the last year the cost of construction has risen sharply. Our costs of rental units are about 15 per cent higher than a year ago. In spite of the resulting higher sale prices, the effective demand for home ownership continues. The number of completed but unsold houses is relatively small. For instance, in the city of Vancouver, where proportionately there is more new housing than in any other place in the dominion, completed but unsold houses amount to less than one week's supply of new houses. The same situation pertains generally throughout the country.
I would point out, however, that the greatest demand and need is for rental housing. Many people buying houses are only doing so because they cannot secure rented accommodation. Although the 77.000 completions were large in number, only 22,000 of these units were for rental. The balance were built by or for home owners. Of the 22,000 rental units, some 13,000 were built under government sponsorship. This includes wartime housing units, units constructed by housing enterprises, and our emergency shelter activities. For reasons which I will discuss later there was relatively little activity by the entrepreneur in the rental field. I will be suggesting steps which may be taken to help remedy this deficiency.
Housing completions in 1947 were the largest on record in any one year. This was achieved at a time when capital investment 5849-231
of other forms was at unprecedented levels. By various means the dominion government provided assistance for about one-third of the 1947 housing program. The large number of completions was only possible because the government took very positive steps to facilitate the flow of materials. These steps were of great assistance to private enterprise which saw to the major portion of the 1947 program. Some of these steps included the encouragement of additional production of our shortest items such as soil pipe and plumbing fixtures. As a result of arrangements with the steel companies, the supply of nails was maintained at a very high level. Our policy in respect to timber exports resulted in a sufficient supply of lumber to meet the largest capital investment program we have ever experienced.
As evidence of the beneficial effects of these steps, the average time of construction for a residential unit was substantially reduced. One sample indicates the average time of construction reduced from eleven months in 1946 to eight months in 1947. This reduced time represents a saving in construction cost. This reduction in time of construction has offset, in part, increases in price of building materials and wage costs of about 18 per cent in 1947. I am glad to report that the efforts of my department to secure a greater and more regular flow of building materials have had beneficial effects.
I would now like to deal with the highlights of some of the direct operations by government in the housing field. In 1946 we took vigorous steps to provide emergency shelter units in those communities where there was heavy congestion. These steps were continued in 1947, during which time some 3,800 units were brought into occupancy. In all, through the assistance rendered under the emergency shelter regulations, some 10,000 units have been provided to relieve the most overcrowded conditions. In this work we have had a very full measure of co-operation from municipalities. The present situation is that we have used up practically all surplus buildings suitable for the purpose. But there are indications that the greatest need for emergency shelter is past.
In our rental housing program in 1947, 5,421 units were completed, and we had a carryover of 5,354 units, most of which will be completed during the first half of 1948.
On October 10, 1947, I announced the terms of the 1948 rental program. The arrangement is more favourable to the municipalities than previous operations by Wartime Housing Limited. The type of unit conforms more
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closely to current residential development. Arrangements are made with the municipality so that these houses may be sold. Agreements have now been signed for 3,575 units, and negotiations are under way for 5,179 units. By regions the number of units under signed agreements or negotiations, as at April 23, are:
Maritimes, 1,319; Quebec, 415; Ontario, 3,375; Prairies, 2,530; British Columbia, 1,115.
Because we do not wish to enter into winter construction involving extra costs, we will be following the custom of the last two years in accepting applications from municipalities up to June 1, 194S. Whether the dominion will continue in the direct rental field in 1949 is a matter for further consideration. But we will not enter into construction in 1948 unless municipalities make arrangements for rental housing before June 1, 1948.
At the time I announced the 1948 rental program, I expressed the hope that we might complete arrangements for 12,000 units. From the figures which I have already given you, you will notice that a small proportion of the units are in the province of Quebec. Little success has attended our efforts to arrange agreements with municipalities in that province.
Under legislation brought down by the Ontario legislature at its recent session, provision was made for the province to meet half the costs of the municipalities' participation in the 1948 rental program. This legislation is very helpful, and should assist in arranging a larger number of units in the province of Ontario than otherwise would have been the case.
In 1947 it became evident that Housing Enterprises could not produce housing at satisfactory cost levels. Housing Enterprises decided to abandon new projects in 1947 and limit their activities to the completion of the 3,313 units under construction. In August, 1947, the life insurance companies which owned Housing Enterprises, approached us to request that the Central Mortgage and Housing Corporation take over their operations. In light of all circumstances the government accepted this proposal. The corporation has taken over Housing Enterprises Limited and has completed and rented the 3,313 units in the 32 projects.


Mr. MacNICOL:: Can the minister give the average rent?


Clarence Decatur Howe: I could not do that at the moment. I will be glad to do it when we are in committee.
Tba other major form of assistance by the government towards housing construction has been loans under the National Housing Act. It was the largest year in the history of the

act, with 10,933 units being approved. The total figures for the year 1946 appear somewhat larger, but they included the loans made to Housing Enterprises Limited. During the first three months of 1948 activities under the National Housing Act are at new high levels. Loans involving 2,371 units have been approved as compared with 888 units for the first three months of 1947. Although the weather is much further advanced than it was last year, these figures show a great use of the facilities of the act..
Because they do not fall within my department, I will not deal with the other governmental activities in the housing field which include a program of housing for married personnel by the Department of National Defence, small holdings under the Veterans Land Act, and loans for housing purposes under the Farm Improvement Loans Act and the Canadian Farm Loan Act.
The government is taking vigorous steps in the housing field. I think it should be emphasized that the limitations are physical rather than financial. Effective demand remains very high for home ownership even at present prices. In view of the high rate of family formation, there is an effective demand for rental housing at almost any rental levels. It is difficult to make an estimate of likely accomplishment in 1948. With the large carryover from 1947, I think it is likely that we will equal 1947 completions. Just how far we can exceed this figure is uncertain. On the favourable side there is a better supply of materials, some improvement in the supply of labour, and an undiminished demand for housing. On the unfavourable side there is the increasing lack of serviced land, and a short supply situation in some items such as steel of all kinds. But in my opinion the most unfavourable factor is the continued buoyancy in the cost of construction.
From time to time we receive requests that the corporation increase its level of lending values. We agree that the lending values upon which National Housing Act loans are based are somewhat less than the present average cost of construction. Nevertheless, we do not feel that we would be justified in capitalizing into long term mortgage debt many of the elements of cost which now exist. A further increase in National Housing Act loans would be an inflationary step and would in itself contribute to higher costs. We realize that with the prices of houses rising and no corresponding increase in National Housing Act loans, equity requirements of the home owner are increasing. Nevertheless, after taking all factors into

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consideration, we have decided it would be unwise to contribute further to the general inflationary tendencies, and it is our intention to maintain during 1948 the present level of lending values.
The same problem of high and increasing costs may limit our rental program. Our present policy is that we will not enter into construction of rental units if total costs of all kinds are estimated to exceed $6,800 per unit, which under the rental formula, involves a rental of $37.50 for a five room house. Acceptance of these high costs by us has the effect of confirming the upward trend of prices. We realize that rental housing is needed, but the point has been reached where we must weigh the need for rental housing not only against the very high cost, but also against its contribution to the inflationary trend. Already this difficulty has occurred in municipalities where agreements have already been signed. Our present attitude is that unless arrangements can be made so that a maximum rental level of $37.50 can be maintained, construction will not proceeds
I turn now to the resolution. The proposed amendments to the National Housing Act follow our previous practice of making changes to meet changing situations. The most important of the amendments is the introduction of rental insurance. I have already mentioned that the greatest need in the housing field is for rental housing. The majority of 1947 rental unit completions were by the dominion government. I think that all hon. members will agree that it would be very desirable that there be an increasing supply of rental housing by private enterprise.
The dominion government is in the direct rental housing field because neither private enterprise nor other levels of government is providing greatly needed rental housing accommodation. I look forward to the day when the dominion may withdraw from the field of direct house building. Therefore we are anxious to do everything we can to encourage more private house building. The proposal before the house is designed to make rental housing more attractive to professional landlords and investors.
We have made a careful examination to ascertain the main reason for lack of rental housing by the entrepreneur. A number of builders engaged in the rental field have been interviewed and the whole situation has been thoroughly canvassed. It will be remembered that rentals upon new units are no longer under rental control. Economic rentals in relation to today's costs are readily available. It is our belief that the main deterrent to new 5849-231i
rental construction is the fear that although economic rentals will support present capital costs, the day will come when comparable rental units can be built at a lesser figure, with correspondingly lesser rentals. The builder and the landlord know that economic rentals at today's level will see them through. However, they doubt whether present rentals will be maintained.
We believe that the steps to be taken should have the following characteristics:
1.	Protection to the builder and subsequent owner against an anticipated decline from the economic rentals determined on the basis of present construction -costs.
2.	Provide the builder or owner with some incentive for equity investment.
3.	The arrangement should retain all the traditional debtor-creditor relationship.
4.	The plan should avoid the payment of a subsidy or insurance payments before assistance is needed to protect the position of the owner.
5.	It should be a plan which does not interfere with other forms of credit, particularly in the real estate field.
We therefore intend to introduce a plan of rental insurance. Generally it will guarantee that the owner, whether the builder or a subsequent purchaser, shall be assured of sufficient rental income to look after:
(a)	Taxes.
(b)	Debt service.
(c)	Operating expenses.
(d)	Repairs, renewals and replacements.
(e)	A reasonable return on his equity investment.
Rental insurance will be limited to the class of housing in which we are most interested, family units, renting at not more than $80 per month on a fully serviced basis. Unserviced units would carry lower rental maxi-mums. We will not offer rental insurance in projects which average less than one and a half bedrooms per unit. There will be a requirement that the project consist of eight or more family housing units.
The terms of the contract with the builder will provide that the rents which he' may charge for the first three years shall not exceed the limits which I have already indicated. The contract with the builder will guarantee him annual rentals sufficient to meet charges and to provide a 2 per cent return on the equity investment. I would point out that this is a minimum return to the owner when claims are being made under rental insurance. If the rentals received are above the guaranteed
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rental level, then the owner's return is considerably in excess of 2 per cent. This guaranteed rental will be about 85 per cent of the economic rental which the owner may charge his tenants during the first three years. The owner will pay a premium for his rental insurance at a rate to be set by the governor in council. Provision is made for a lending institution to make loans up to 85 per cent of the estimated cost of the rental housing project. These are to be direct loans with all the funds to be advanced by the lending institution, rather than the usual joint loans under the National Housing Act. It is felt that these high ratio loans are appropriate as investment by lending institutions because, by virtue of the guaranteed rentals, little risk is involved. There should always be sufficient moneys available to service the mortgage debt and pay taxes. Provision is also made that in the event of a loan not being available, then the corporation may make this type of loan. The maximum rate of interest which may be charged on mortgage loans secured by rental insurance will be set by the governor in council. Provision is made for principal repayments of 2i per cent per annum. The loan will be for a period of twenty years.
If the resolution is adopted, more detailed examination of the proposal can be made at the time we are in committee of the whole.
Rental insurance is to meet the fundamental deterrent to a satisfactory volume of new rental housing by private enterprise. It will be recalled that under present National Housing Act loans, guarantees by the government are afforded to the lending institution. This new proposal gives the benefit of such guarantees to the builder or the owner so that he will be willing to enter into rental housing which to his mind is hazardous at this time. On the other hand, the lending institutions will be benefited by the government guarantee because they will be assured that the rental incomes will always be sufficient to meet mortgage payments and taxes.
We are not sure of the amount of new rental housing which will result from this proposal. We hope it will be substantial, and every effort will be made to encourage builders to operate under its provisions. It is likely, however, that most of the new housing will be in the moderate rental field because that is the type of housing in which landlords and builders are interested.
Although the rental insurance provisions will be applicable to rental housing of all types, I do not believe that low rental housing-that is beyond rentals of less than $35 a month- can, be built at this time without substantial capital subsidies or contributions to rent

reduction funds. Because of very high construction costs and because the building industry is now working at capacity, I do not think that the present is an opportune time to attempt initial steps into the low rental housing field. Certainly at this time I am not prepared to recommend capital subsidies or contributions to a rent reduction fund by the dominion.
However, the dominion does not take a dogmatic stand in this matter, and we are willing to discuss with the provinces and municipalities a course of action which would lay a sound foundation for a long term national housing program. The Canadian federation of mayors has already sent us a brief concerning low-rental housing. Their proposals have merit but are not acceptable in their present form chiefly because they contemplate full financing by the dominion government both in respect to capital costs and operating deficits. Whether suitable arrangements for adoption at a more opportune time can be found, I do not know. However, I am quite certain that no suitable arrangements can be found without participation by all three levels of government.
The other main provision in the bill is the winding up of Wartime Housing Limited and the transfer of its assets and liabilities to the Central Mortgage and Housing Corporation. The proposal gives the corporation the power to carry out the functions previously performed by Wartime, Housing Limited. It also authorizes the transfer to the corporation of His Majesty's leasehold interest in houses converted under the home conversion plan.
As from January 1, 1947, the corporation has been supplying the management, both for the operation of existing wartime housing units, and the construction of new units. The construction function has been carried on in the name of Wartime Housing Limited. The corporation has been paid a fee for the management of the .wartime housing units. Under the new arrangement, the net revenues from the properties would be payable to the corporation, and would be accounted for pursuant to the Central Mortgage and Housing Corporation Act. Hon. members will recall that pursuant to the corporation act, when its reserve fund reaches $5,000,000, all net revenues of the corporation, are payable to the receiver general. We believe that it is desirable to have this new function of the corporation conform to its financial pattern set up by statute. Thus, in place of acting as an agent, it will in the future act as a principal with reference to wartime housing operations, and be subject to account for such

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operations in the same manner as it must account for its lending operations under the other portions of the National Housing Act.
Other powers given to the corporation under this amendment include authority to make title to crown lands. The corporation is at present engaged upon a sale program of certain wartime housing units and it is desirable that they be in a position to convey title rather than relying upon letters patent. Authority is given to the corporation to make payments to municipalities in lieu of taxes.
The other provision is that moneys appropriated by parliament for new construction shall be a liability of the corporation on such terms and conditions as are approved by the Minister of Finance.
The resolution proposes two other measures of somewhat lesser importance. It authorizes lending companies to purchase mortgages or an interest therein from the corporation. These mortgages may result from sale of wartime housing units or from direct loans under section 31A made by the corporation. The purpose of this amendment is to ensure that lending institutions may acquire mortgages from the corporation.
The other change concerns the limited dividend section of the act. Hon. members will recall that little success has attended our efforts in the formation of limited dividend companies to erect rental housing. It has been suggested that if at the end of the amortization period, say forty or fifty years, the owners might have title to the residual value of the property, then this type of limited dividend company might be more attractive to investors. The important feature of the limited dividend section is to provide low rentals for forty or fifty years with a nominal return to owners. If indeed the reversion of the residual value to the shareholders of the limited dividend company will lend encouragement to the development of such companies, I am sure that there will be general agreement that such a change should be made.
We are ' continuing to encourage and assist a large volume of residential construction. It is desirable that private enterprise look after as much of our housing needs as possible. However, to the extent that the housing need is not being met in this way, we are continuing to supplement the over-all program with direct construction. Every effort is being made to see that the improvement in the supply of building materials and building labour is maintained. The provisions of the National Housing Act, including the amendments which are proposed in this resolution, will be vigorously promoted. Our attention is directed particularly to ways and means of increasing the supply of new rental housing units.
Our primary concern is to deal with immediate needs. The long term housing problem, including slum clearance, is one which will require working arrangements with the provinces and the municipalities. It is the earnest desire of the dominion government to do all it can within its constitutional limitations to improve housing conditions. Until some longterm basis can be established with the provinces and municipalities, the dominion is doing what it can within these limitations to alleviate the immediate problem and in particular to discharge its responsibilities for that part of the program that is the direct result of war.


Charles Cecil Ingersoll Merritt: Mr. Speaker, this is the first opportunity we have had this year to debate a problem which is still one of grave concern to the Canadian people, no matter what may be going on throughout the world. The minister has given us an interesting resume of housing activities in Canada. Quite apart, however, from what happened last year, I wish to take this opportunity to indicate a concern which has been in my mind ever since the minister made a speech in Vancouver on October 10,
1947.
I am concerned, and nothing the minister has said today leads me to change my mind, that the minister and the government are quitting their leadership in the housing field. I should like to refer to what the minister said two years ago shortly after he was appointed by the Prime Minister (Mr. Mackenzie King) as the housing expediter for Canada. I well remember the comprehensive and vigorous speech he made on that occasion, and I remember my own feeling which I expressed at the time that he was really going to go after this problem and solve it. I think he thought that himself. He threw himself into the task, if one can judge from his speeches, with a great deal of energy. I should like to read from page 3690 of Hansard of July 22, 1946, where the minister is reported as follows:
The legislative and administrative steps which I have outlined today give clear indication of a positive and integrated housing policy. This policy is designed primarily to see to the immediate shelter problem, but it does not neglect the long-term implications of the need of raising the standard of housing for people in this country. In conclusion, I would like to sum up the main principles underlying our aims and objects.
(1) High priority. Adequate housing for the Canadian people is one of the major tasks before us. The utmost effort will be directed towards meeting this need, and the resources of the country will be used to this end.
Later on that summer, in a press release in August, the minister talked about the need for
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a definite plan, an organization to implement it and constructive help of all interested in housing needs as the way to meet his objectives. We went on in 1946 and 1947, and the minister set targets of 60,000 and then 80,000, which were met if you take the over-plus from 1946 to make up the deficit in meeting last year's target.
In the meantime a new difficulty added itself to the original problem, which was a shortage of houses and of building materials. The new problem was one of high construction costs and, therefore, one of high rents. A year ago, in February, the minister warned us that the need for rental housing was our chief problem and he put into effect a double depreciation scheme and offered priorities for the building of rental housing. That appears to have failed because, from the minister's own figures, there were only 370 units in respect of which application was made for double depreciation; that is 370 units out of a target of 80,000 and more. It appears, too, from the minister's statement that we have not had much rental housing constructed in the past year. You could see the minister's concern in the speech he made this afternoon that rental housing cannot be provided at rents which the low-income groups most in need of that type of housing can afford to pay. Consequently, when the minister announced in Vancouver his new rental housing policy to take the place of Wartime Housing he rather receded from his enthusiasm of 1946, when he was going to put the whole resources of the country behind a housing drive. He had this to say:
As far as long-term housing program for Canada is concerned, dominion participation must necessarily be indirect, because of the limitations that I have mentioned. The authority lies with the provinces and the dominion can participate directly only when it is invited so to do.
Then he goes on to say:
The principal shortcoming of Canada's housing program to date has been the failure to provide sufficient low-rental housing. To meet this shortage, the active co-operation of dominion, provincial and municipal governments is necessary, since the problem is of such magnitude that no one level of government can see it through alone.
We will all agree with that statement, but not. with this next one:
The responsibility for initiating such a program lies with the provinces.
So we find that in the short space of two years his enthusiastic approach to have this housing problem solved has vanished, and the minister and the government are now crawling under the constitution to get out from the responsibility which the minister assumed

pretty wholeheartedly in 1946. In my view the government is no longer heading the drive for housing but has abdicated its function and is going to do just as little as it must in this field in the future.
I believe that the basic reason for the change in the government's attitude is that it has refused to enter the field of subsidized low-rent housing for those in the low-income group. The minister knows it is not possible to provide rental housing at rents which those in the low-income group can afford to pay, unless this type of housing is subsidized. This is particularly true of veterans, upon whom the present situation bears most heavily, as some figures I shall cite will show. It is not possible to provide housing, unless it is subsidized, at rents which these veterans can pay.
In the face of the rising costs which the minister has mentioned, a rent reduction scheme and a rent reduction fund to be participated in by the three levels of government constitute, in my opinion at least, the only hope for veterans obtaining housing at reasonable rentals.
It was all very well for the minister to say this afternoon that this is not the time, and that the government is not taking a dogmatic stand on this point. I say to him that this is the time to face up to the problem of subsidized low-rent housing. I say that the attitude taken by the government is very dogmatic indeed. I want to call the attention of the house to a statement made recently by the Secretary of State for External Affairs (Mr. St. Laurent) in a public speech. He said:
No government of which I form a part will ever pass legislation for subsidized housing.


An hon. MEMBER:: Shamel


Charles Cecil Ingersoll Merritt: That was a dogmatic and definite statement, and I think it is the mainspring behind the minister's recession from his enthusiasm in approaching this problem two years ago. That statement indicates a fatal refusal to face realities in this field.
There is nothing necessarily socialistic about subsidizing housing for the low-income groups. The Secretary of State for External Affairs and no other minister need ever worry about that. Subsidized housing for those with low incomes was introduced in Great Britain in 1920 by a Conservative government, and it has been in operation, and in useful operation, in the United States of America since 1938 or thereabouts.


Clarence Decatur Howe: Is it in operation in either country today? I can tell my hon. friend, if he does not know, that it is not operating now at any rate.

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Charles Cecil Ingersoll Merritt: No one will suggest that either of those countries at the times I spoke of were in any way socialistic. I am not aware of my own knowledge of the answer to the minister's question, but I should be most surprised if Great Britain is not now subsidizing low-rent housing. I know that the Conservative government in Northern Ireland is doing so today. I am perfectly certain that the act in the United States is still on their statute book, and if it is not in operation it is there to be used whenever there is a need for it.


Clarence Decatur Howe: Whenever the costs come down so that it can be made operative.


Charles Cecil Ingersoll Merritt: The minister says, "Whenever the costs come down so that it can be made operative." I remember making a speech in this house on housing within the last two years in which I complimented the minister on the provisions he had brought in. I made the criticism that they were all good provisions but were one year late. That has been the record of this government on housing since 1945. In the fall of 1945 we on this side of the house, not only in this party but my hon. friends to my left, all urged the government- the minister was not responsible for housing then-to appoint a housing expediter, to put the whole problem in his hands and to get after it. That was done months after it had been urged from this side of the house. We also urged that special steps be taken to expedite the production of building materials. The minister took those steps one year afterwards.
It is not good enough for the minister to say that this is the wrong time to start building this type of housing. This is the time to concert a plan between the three levels of government concerned and to put it on the statute book and to set up your local building and administration organizations. In my view this is the time to put it into effect as well. Even if the minister is correct today that it would not be the proper time to put the scheme into effect, if we wait until it is right to build before we start negotiations, it will take a whole year even to scratch the surface of all the work that must be done before agreement is reached and houses are actually built.
I want to say a word about the specific measures referred to in the resolution. I say that when the minister has recognized that rental housing is the need, when he recognized it a year ago, and when he recognizes it today, the measures he has brought in now are just puny and entirely inadequate to meet the problem that faces so many people across Canada. I was going to refer to these figures
later, Mr. Speaker, but I wish to draw your attention to the fact that in Vancouver today there are about 4,500 veterans who have active applications for wartime housing on the list. Of these 4,500, 2,000 are married, have families and served overseas. They want wartime housing only because they are not financially able to buy houses, and they cannot rent at S80 a month or something of that kind. Their only hope is through the wartime housing scheme or the minister's new scheme, which, incidentally carries a concealed subsidy in itself, and forces the municipality taking on the scheme to put up some money as well.
The suggestion of the minister that you can solve the rental housing problem for those veterans in particular, who are most in need, by guaranteeing rents and getting rental units built at rents of S80 a month is quite ridiculous. What is needed is an expansion of the scheme that he undertook in Vancouver in October, by which rents up to $37 a month would be charged. Even that amount is high enough for the income group in most difficulty because of the housing shortage. It will not do any good to produce a house at a rental of $80 a month or something like that. There is a sufficient demand for housing by people in that group to take up the lot of it without any filtering down and making houses available to those in lower income groups. I do not believe that in the scheme the minister is proposing today he has added one unit of rental housing for the low-income group person who wants to rent a house.
In his speech the minister said that the limitation on housing is a physical and not a financial one. ll do not think that is true at all. I think there is a definite financial limitation on home ownership today as well as on rental housing, as I have already indicated. The province of Ontario has recognized that fact-the minister commended it a moment ago-and has provided guarantees to lending institutions of part of the prospective home owner's down payment. I believe the guarantee is up to $1,250 a unit. At the same time, in the Ontario Act provision is being made for grants in aid to low-rent housing as well. It may be that all sorts of mortgage money is available in lending institutions, but there certainly is a financial limit on what those seeking new housing can put down as a down payment.
The minister mentioned that the cost of housing had risen; I think he said 15 per cent. The figure I obtained from the report of the Central Mortgage and Housing Corporation was 18 per cent over 1946.
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Clarence Decatur Howe: That is the cost of materials and labour, the cost of actual housing 15 per cent.


Charles Cecil Ingersoll Merritt: Very well. My figures refer to materials and labour, and they have gone up since 1939 a total of 84 per cent to 94 per cent. The minister talks of the average time for completion having been reduced from eleven months to eight months. That is very good indeed; but we must not forget that in 1939 it took only five months to complete a house of a size comparable with the figures given by the minister.
The only new suggestion coming forward from the minister is the idea of stimulating private building of rental housing by means of a guarantee of income. With that in mind, I want to refer for a moment to the situation in my particular city, which I imagine is pretty well typical of any big city in Canada. Earlier I gave the figure of the number of veterans who want wartime housing. I may say that they want wartime housing because they believe it is the only way to get rental housing at a rate that they can afford to pay. That figure is 4,952. At the same time there are 1,500 applications for home conversion units or for emergency shelter units. Therefore, in the city of Vancouver today there are more than 6,000 veterans in the lower income groups who are looking for housing accommodation. When you contrast that with the all-Canada total of 12,000 units, as I understand it, which are contemplated by the minister's new scheme to take the place of wartime housing, you will see that the new plan is just as inadequate as the plan which has been going on for the past two or three years.
I may say that I was quite horrified this afternoon to hear the minister suggest that some of the houses which are proposed to be built under the scheme he announced in Vancouver in October might not be started if building costs continue to rise. We can handle half of them in the city of Vancouver alone. From his figures there are only 1,115 under negotiation in Vancouver, and I should hope that the minister was not talking seriously when he said there was a possibility of a reduction in that number. I should hope the number would be sharply increased if it is possible to get the materials to do so.
The situation in Vancouver with regard to housing is well summed up in a publication of the Vancouver Housing Association entitled "The Housing Situation in Vancouver, Janu-

ary 1948". Under the heading "Over-all Picture", that association says:
Regarded as a whole, the housing situation, in spite of the apparent building activity, has steadily deteriorated during the past year.
It goes on to say:
The city's social service administrator, in his annual report for 1947, states:	"The situation
has greatly deteriorated during the past year. Low-rental housing is not available and social allowances and pensions are so far below the level of economic rentals that it is useless to hope that private landlords will rent quarters at the rates our clients are able to pay."
Later on it points out that, although some 14,800 persons came into the city during the year, the new dwellings completed total only 2,669, and it would take 4,600 houses to handle the newcomers alone.


Clarence Decatur Howe: May I ask what year you are referring to?


Charles Cecil Ingersoll Merritt: The summer of 1946 to the summer of 1947 is the precise period.


Clarence Decatur Howe: His figures are off.


Charles Cecil Ingersoll Merritt: The suggestion here in any event is that the situation has got worse in Vancouver by 2,000 houses during 1947. It points out that building permits issued in Vancouver in 1947 were 36 per cent down and, in greater Vancouver, 20 per cent down on the previous year. The drop was partly due to cessation of wartime housing construction, but the basic cause is undoubtedly the rapid rise in construction costs.
That, I suggest, is a situation which is probably typical of every city across Canada, and I see nothing whatever in what the minister has said today that even begins to meet the problem.
I see too, in the figures for the new scheme, another cause for alarm, and it is this. The whole history of negotiations between Wartime Housing Limited and the municipalities has been a history of irritation and long delay because of the inability of the dominion and the municipality to get together on terms.
In Vancouver, which again is the situation I know best, I think the first move toward the construction of new wartime houses in 1947 took place in January or February of the year, and it was not until October, and the minister's speech in Vancouver, that anything was accomplished in respect of wartime housing or its substitute in that city. That has probably been so ever since the end of the war in every municipality, and many additional houses would have been built if it had been possible

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for the dominion and the municipality to agree at once on terms and get after the actual construction of houses.
We find that on October 10 the minister announced a new scheme. In the annual report of the Central Mortgage and Housing Corporation it is stated that some 8,000 houses are being negotiated for, but it does not suggest that any have been finally agreed upon and put in hand. The minister has today given some figures which, if I heard them rightly, are to the effect that about 3,500 houses are actually contracted for and some 5,200 are still in process of negotiation.
Here we are, Mr. Speaker, six months after the announcement of that scheme, with a suggested ceiling then of 12,000 houses, and in six months we have only 3,500 agreed upon. I do not know how many of these have been started, probably very few. And that is all we have to show for this new scheme.
I know the minister has blamed my city often for haggling over the terms of these deals; but the minister must know, and undoubtedly does know, that municipal finances are limited, that they have limited sources from which to get funds. All the haggling has been because the municipality was being required to enter into an agreement to subsidize housing without having any certainty that, after they had committed themselves to subsidies, they would in future years be supported by their provincial government or by the dominion government.
I am sure that the reason for all these delays in starting on this problem is that the dominion government has refused to undertake its responsibility of giving a lead in working out with the municipalities and the provinces a definite allocation of responsibility in the housing field, including a definite division of responsibility for the putting up of a rent-reduction fund.
I am perfectly certain that if that were done and if there were an over-all agreement on the part of the three levels of government, and the necessary legislation on all levels to make that agreement workable, with a definite allocation of responsibility for construction and for the financing of projects of this kind, we would not have found in the last two or three years, as we shall find in the future, one dominion government agency trying to fill this essential field and having trouble in negotiating each one of the agreements. We would have found in every big city in Canada a local housing authority making plans because of local needs, knowing exactly what assistance they would get from the municipality, the
province and the dominion. Instead of having one agency producing these houses, with friction, we would have across Canada a dozen or more agencies working smoothly and producing a much greater volume of housing. And in that there would be no socialism either. That would be a perfectly proper activity for any government which supports private enterprise. All the work would be done by private contractors in various cities, and the whole community would be behind a plan of that kind.
Every political party in Canada other than this government, the federation of mayors, the Canadian Legion, every social service organization in the country, and the Curtis report on housing, which was produced, I believe, in 1943, have all committed themselves to this principle. This is the one government which has not been willing to move in the direction of subsidizing low-rent housing. It is to a large extent because of that unwillingness that so many people find themselves in difficulty in this rental housing field today.
There are, of course, many other matters concerning housing upon which any one could make extended remarks in the first debate this house has had on the subject this year. But because of the importance I attach to the obtaining of a definite plan on all levels of government as to how low rental housing is to be handled in Canada in the future, I shall limit my remarks on this occasion to that subject only.


Mr. J. O. PROBE (Regina City):: I have been a member of this House of Commons, Mr. Speaker, for nearly three years now. In that time I have come to know a little bit about the present Minister of Trade and Commerce (Mr. Howe), the right hon. gentleman who is at present in charge of the federal housing program. When he said this afternoon on several occasions that the government was taking vigorous steps with respect to such things as emergency shelter, whereby 3,700 units were produced last year, and that vigorous steps were being taken to increase the production of this and of that-everything except houses-I do not suppose it would be particularly flattering if I were to say to him it seems to me that those vigorous steps always bring him back exactly to the point from which he started. For three years now we have listened to the same story, and that is that next year is to be the big housing year.
3648
National Housing Act


Mr. JOHNSTON:: He must have lived on the prairies.


John Oliver Probe: Sometimes those on the prairies believe in next year. Of course they must, by virtue of the weather. They are trying to do something about it this year.


Charles Edward Johnston: It is not so windy out there.


John Oliver Probe: I am afraid the minister of housing, elections, trade and commerce and so on, is back with his annual excuses. This debate should give the members of the house an opportunity to offer their ideas on what is wrong with the policy of the government, and to offer their humble suggestions as to how some improvement might be made.
In the first place, in my view what is wrong with the minister's housing program, is that the Central Mortgage and Housing Corporation is being run by officials who are trained in terms of insurance company practice or mortgage company technique. They have no other viewpoint. I want to give them credit for full sincerity. I respect the president of the Central Housing and Mortgage Corporation as a courteous and painstaking officer of that company. But the legislation that is offered for the approval of this house is always legislation which tends, in terms of housing, to make reasonably secure the dividend position of the corporations who have moneys to invest or, in certain cases-one of which I shall outline in a moment-to make certain that the contractor himself is protected against financial loss in the construction work he is doing; but the end user, the family man, neither gets a house he can afford to buy, nor is he protected in any way against the policies of the government.


Charles Edward Johnston: That is the government's fault.


John Oliver Probe: Undoubtedly it is the government's fault. I certainly corroborate that opinion. I do not think there is any other point of view which could be taken.


Charles Edward Johnston: It is not the contractor's fault.


John Oliver Probe: I shall have a little bit to say about that. I think the contractor is trying, naturally in his own way, to do the job he is supposed to do. But government policy makes it possible for everyone to get satisfaction out of the housing legislation except the people who require it most. The government has gone out of the subsidy and guarantee business, except to the builder, the investment company, and the supplier of equipment.

For example, in the case of plumbing, a year or so ago a big guarantee was given to Crane Limited in order to provide extra facilities for the production of plumbing equipment. But no guarantee was given that the end user would get that equipment at a price he could pay. We in this corner of the house have for many years pleaded that housing be made available on proper terms to municipal, co-operative or provincial ventures into the housing field. The minister said that, from a long term point of view, he was prepared to co-operate. I have not his exact language, but I think he said that ultimately there must be some working arrangements with the provinces and the municipalities. We have had three years now since the war ended to get these working agreements well under way, and he is still talking of them as something for the future.
I have here a letter from the Canadian federation of mayors and municipalities relative to this particular point. On the subject of housing it states as follows:
At a meeting of the executive committee and advisory board of the Canadian federation of mayors and municipalities, held in Montreal on February 14 last, the following resolutions on housing were unanimously adopted.
The resolutions are then set out, and the letter continues:
These requests have been communicated to the dominion government, but no response has as yet been received.
The letter was written to the members of the House of Commons on March 6, 1948. The federation of mayors and municipalities made a commendable set of recommendations with respect to housing for the consideration of the government. Here are some of their recommendations. With respect to capital costs, first of all, they recommend, in two fields:
(a)	For privately sponsored limited dividend projects:
The federal government to loan 96 per cent of the full construction costs.
They do not wish to restrict the activities to the privately sponsored projects as is now the case, because they include a second field under capital costs.
(b)	For municipal, provincial or federal sponsored projects: the federal government to finance full construction costs.
They give valid reasons for their suggestion. Then, with respect to interest and repayment charges they recommend that, in view of the social nature of low-rent housing, it should be possible for projects falling within this category to be financed at no more than 2f per cent, plus an additional 4 per cent to cover

National Housing Act
administrative costs, or a total of less than three per cent, with an amortization period of up to thirty-five years.
Then, under the heading, "Housing loans to whom?" they suggest that to facilitate the construction of low-rent housing projects in Canada the federal government should provide loans on the basis and in the manner suggested to three broad groups of agencies: limited dividend housing corporations; local housing authorities, which means a municipality or public body created by a municipality having authority to construct, hold and manage houses built as a low-rental housing project; and provincial housing authorities. With regard to these three, I say this is where the insurance company or mortgage company complex of the department is so evident, for apparently they can do business with none but the limited dividend housing corporations, and find constitutional reasons for having nothing to do with local housing authorities, provincial housing authorities, or authorities of the co-operative type.
Then the federation recommend an annual rental subsidy. They say:
In order to maintain the character and purpose of low-rent housing projects it will be essential to provide a rental subsidy (based on the family income and size of family) for most tenant householders occupying the property.
And they make this further recommendation:
This subsidy should be wholly provided by the federal government, for which purpose the federal government should forthwith establish a national rent reduction fund.
Just in connection with the interjection made by the minister a few moments ago, when the hon. member for Vancouver-Burrard (Mr. Merritt) was speaking, it is the contention of this federation that in one form or another there is an annual rental subsidy which has come to be almost universally recognized as the best and most practical technique for overcoming the problem. The basic principle was incorporated before the war in the low-rent housing legislation of the United Kingdom, the United States, Australia, New Zealand and South Africa, and, I believe, in Denmark as well.
Then the federation goes on to make a recommendation in connection with local taxation. Quoting from page 196 of the Curtis report, they say:
One of the most critical points which past experience has shown will determine the response of cities and towns to low-rent housing legislation is the basis on which the project will be related to the municipal tax structure.
They go on to propose the following formula with respect to municipal taxation:
For purposes of local taxation of low-rent housing projects the amount of such taxation to be computed by capitalizing at five per cent the maximum rent which the aggregate of tenant families occupying any project would normally pay for non-subsidized1 housing accommodation;
Or, in lieu of the foregoing, that the municipalities' contribution to the financial costs of local low-rent housing be in the form of a direct contribution to the proposed national rent reduction fund in some equivalent ratio to what would have been the tax concession in terms of the foregoing formula;
Or, in those instances where a municipality is permitted under provincial statute to grant tax concessions of one form or another, that the federal government accept such concessions as the basis of the local financial contribution and that they be proportionately equivalent to *what would have been the concession under the formula above referred to.
They go on to make recommendations with respect to technological economies. There is no need to repeat the arguments which have been advanced on many occasions in this house to show that we are using antiquated methods of housing construction, which multiply the cost to the family occupying the accommodation.
Finally they deal with housing loans to families of limited means and say:
In addition to the foregoing we strongly recommend that the existing National Housing Act be amended in. order to provide more liberal lending facilities with a view to encouraging credit-worthy families of limited means to own their own homes.
To that end they suggest that the percentage of housing loans guaranteed to lending institutions by the Central Mortgage and Housing Corporation be established on the following basis: 100 per cent for a dwelling not exceeding $5,000 ; 90 per cent of any additional amount up to $2,000, and 70 per cent of any amount in excess of $7,000, with interest rates at 34 per cent and the loans to be amortized over a period of up to twenty-five years.
I now want to take up one or two typical cases of individuals who have had dealings with the Central Mortgage and Housing Corporation.


Some hon. MEMBERS:: Six o'clock.
On motion of Mr. Probe the debate was adjourned.



BUSINESS OF THE HOUSE

[Stage Direction]
Mr. MaoNICOL: What is the business for tomorrow?
Clarence Decatur Howe: We will continue with this debate, and follow the program that was announced for today.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, May 6, 1948