1949-11-14

RAILWAYS, CANALS AND TELEGRAPH LINES

[Stage Direction]
Third report of standing committee on railways, canals and telegraph lines.-Mr. Breithaupt.


Mr. Speaker:: I have the honour to inform the house that I have received from the chief electoral officer a copy of the report of Hon. James T. Brown, Chief Justice of the Court of King's Bench for Saskatchewan, a commissioner appointed by the chief electoral officer under the provisions of the Dominion Elections Act, 1938, to inquire into certain alleged irregularities in connection with the election in the federal district of Regina City, in the province of Saskatchewan, in the dominion election of June 27, 1949; and covering letter from the chief electoral officer in connection therewith.



CROWN PROPERTIES


Hon. Douglas Abbott (Minister of Finance):: Mr. Speaker, I should like to make a statement with respect to certain proposals the government has concerning grants to municipalities in lieu of taxes. I must ask the indulgence of hon. members for the length of the statement, but the questions involved are important, and I think it is as well that hon. members should have a full statement of the reasons which prompted the government to make the proposals which it intends to make. Of course full opportunity will be afforded for discussing them when I ask for appropriate financial provisions to carry them into effect.
For some considerable time the government has had under review its policy in respect of the tax-exempt status of its real property in various municipalities throughout Canada. The present situation, which reflects the exemption from municipal taxation granted to crown property under the British
North America Act, has given rise to increasing complaints as the number and variety of federal properties have multiplied during the past few years. These complaints have been embodied in representations from such bodies as the Canadian federation of mayors and the Ontario association of mayors and reeves, as well as from individual municipalities.
The government, aware of the problems faced by at least some municipalities in financing continuing growth and expanding services, has studied these complaints with sympathy and with the utmost care. Every effort has been made to gather together the relevant data and to examine these data in the light of conditions and needs in our own country and the experience of other countries.
One of the first steps in this study was to make a preliminary survey of all federal government property in Canada. This survey took a good deal of time to complete, but it was absolutely necessary to arrive at an appreciation of the nature and magnitude of the problem.
Another phase of the study was a review of the experience and practice, in this field, of other countries of the world, particularly the United Kingdom, the United States, Australia, New Zealand, and the Scandinavian countries. This review was most illuminating. It revealed, in practically all countries, conditions and a course of development very much like our own. In practically every country, as a result of either legislation or custom, the practice is, or at least has been at some time, to exempt from local taxation the real property of the central government. However, there has been increasing recognition that this tax exemption gives rise to a problem for the municipalities, and a number of countries have found it advisable to have their central governments assume a measure of responsibility. Nevertheless, no consistent or uniform pattern has been evolved. The problem is still under consideration in most countries, and quite a few are looking with interest to any solution which may be proposed by Canada.
While this review of the practices followed elsewhere was most helpful, none of the various solutions adopted abroad was found to be wholly applicable to Canada. A solution suitable to a closely-knit unitary state, such as the United Kingdom, cannot be applied to a federal state, such as Canada,

Crown Properties
where governmental powers are divided and where the municipality is a creature of a provincial rather than the central government. The only two countries where the central government was found to pay full rates on all its properties were the United Kingdom and Eire, both unitary states where the local governments are subordinate to and integrated with the. central government and where financial and administrative relationships are more a question of financial accounting then separate fiscal responsibility. It is significant that even in these two countries the central government has felt it necessary to maintain the right to assess its own property and thereby determine the total amount of taxes payable to municipalities. Unfortunately it was found that in the United States and the other federal states which were examined, where despite differences of size and historical development the basic ingredients of the problem are the same as in our case, no satisfactory solution has as yet been worked out.
Having obtained information on the nature and scope of the problem in Canada, and after studying the methods followed in other countries in dealing with a similar situation, the government came to the conclusion that if an acceptable solution were to be found it would have to be one that was based on consistent general principles, one that recognized the absence in Canada of any administrative connection between the central government and municipal governments, and one that would in its application be equitable to all municipalities as well as to the Canadian taxpayer.
As a first principle it was decided that the constitutional exemption of federal property from municipal taxation must be maintained. Consequently the federal grants in lieu of municipal taxes, which we propose to seek parliament's authority to make, are to be made solely as a matter of grace and are to be subject to discretionary determination by an agency of the federal government. It is proposed to set up under the treasury board a unit which will be staffed with competent men, preferably men who have had some experience in the field of municipal tax assessment or valuation of properties for tax and other purposes; and it will be the job of these officials to consult with municipal authorities and to apply as fairly as possible to the assessment of government property the same principles and practices as are being applied in the assessment of similar private properties.
I think hon. members will readily agree that we are under an obligation, in adopting a program of this sort, to avoid creating a situation whereby a few municipalities, by means of discriminatory assessment practices,

could benefit at the expense of other municipalities and the taxpayer in general. I may add that our survey of the experience of other countries revealed a universal acceptance of this general principle.
In the second place, it was decided that, to be fair to all municipalities, any federal program of this sort should recognize that the presence of federal property within a municipality normally brings certain definite benefits to the municipality. These benefits include not only the increase in local incomes and business activity resulting from the presence of federal employees who work and live within the municipality, but also the greater degree of stability given to municipal revenues by the fact that a good proportion of municipal taxpayers are in the employ of the federal government. It is not difficult to demonstrate that these benefits do accrue to municipalities which have federal property within their boundaries. Such benefits are constantly reflected in the competition which, as all hon. members know, exists amongst municipalities for new federal buildings or new federal enterprises of one sort or another. I need only refer to a recent controversy highly publicized in this community, the controversy resulting from the decision to remove the government printing bureau from Ottawa to Hull.
It has indeed been argued by some that the benefits resulting to a municipality from the presence of federal real property within the municipality are more than sufficient to compensate for any added cost of municipal services which might be occasioned by the presence of this added property. I think this contention carries the benefit theory too far, if not in all cases, at least under certain circumstances to which I shall refer more fully in a moment. However, there is sufficient in the theory, I believe, to demonstrate that in any program of federal grants in lieu of municipal taxes, it would be unfair to municipalities generally to base the grants on acceptance by the central government of responsibility for a full equivalent of ordinary taxes.
The third general principle relates to the special circumstances I referred to a moment ago, the special cases where it clearly cannot be said that the benefits derived by a municipality from the presence of federal property within its limits are more than sufficient to compensate for the added costs resulting therefrom. This special type of case is where there is an abnormally large concentration of federal property within a municipality. The studies which have been made have convinced the government that where federal property is heavily concentrated, a problem is created for the municipality because our

present municipal tax systems are not designed in such a way that they obtain for the municipal corporation as such all the benefits which accrue to the municipality at large from the presence of federal property. As everyone knows, municipal revenues are based primarily on real estate taxation and therefore may not fully reflect a substantial increase in personal incomes and business activity within the municipality which may flow from a heavy concentration of federal properties. We have therefore reached the conclusion that the key to any solution to the problem before us is the degree of concentration of federal property in a municipality; and the solution which I am about to propose is based primarily on this premise.
To be able to apply this solution, it is first of all necessary to establish a clear test of what constitutes abnormal concentration of federal property. The test which we are proposing is that anything in excess of the national average of all federal property to total municipal assessments in all municipalities in Canada shall be considered abnormal concentration. The preliminary figures we have obtained as a result of the survey of federal property I referred to at the outset of my remarks indicate that this national average is somewhere between four per cent and five per cent. For the purposes of the solution we are proposing, it has been decided to use the lower figure of four per cent, at least in the initial period. This, of course, is more favourable to the municipalities than adopting the higher figure. Later, when we have completed the work of applying the ordinary principles and practices of municipal assessment to all our federal property, we may have to revise that figure to some extent.
I am therefore glad to be able to announce that the government is prepared to seek the authority of parliament to pay annually to any municipality, as a matter of grace, a grant determined according to the following formula, namely, a grant equal to 75 per cent of the sum determined by taking that percentage of the general tax levy for municipal and school purposes-but excluding business taxes-which is equal to the percentage which total federal property assessments bear to total taxable assessments in the municipality, less four per cent.
The grant is to be equal to 75 per cent, rather than 100 per cent, of the sum determined by the above formula, for two reasons:
(a)	to reflect in some degree the fact mentioned above that benefits do accrue to the municipality from the presence of federal property within its limits; and
(b)	to take into account the further fact that there is always in any municipality a
45781-108$
Crown Properties
proportion of other than federal property which is granted exemption from municipal tax.
In this formula the term "federal property" is taken to mean all federal properties, except such types as parks, harbours and more or less self-contained defence establishments and property owned by crown corporations or agencies. I am presenting a detailed schedule of the excluded categories which, with the permission of the house, I would like to have tabled and printed as an appendix to this statement. Certain of these excluded categories may, however, be included in the calculations for any particular municipality if such municipality can demonstrate that special conditions exist which warrant such inclusion.	,
It will be noted that while school taxes are taken into account in determining the amount of a grant, the total amount will be paid to the municipal corporation, which will have the responsibility of applying the amount of such grant in the best interests of all taxpayers in the municipality. It is clear, of course, that any contribution to the cost of any local service eases the burden on taxpayers generally for the total cost of their local services.
Perhaps I might now be permitted to give an illustration of how the formula would work out in the case of a hypothetical municipality. Take a municipality which has total tax assessments of $100 million. Using the same assessment practice, the total assessment of federal properties would amount to $10 million, or 10 per cent of the total. The municipal tax levy for ordinary and school purposes is $4 million. Our first step is to deduct the national average of federal property assessments to total municipal assessments, assumed at 4 per cent, from the figure of 10 per cent, which represents the corresponding figure for the municipality in question, leaving a net of six per cent. Applying this percentage, six per cent, to the total tax levy of $4 million, we arrive at the figure of $240,000. The grant payable in the case of this municipality would therefore be 75 per cent of this sum, namely, $180,000.
It will thus be seen that under the program which we are now prepared to recommend, the federal government intends to assume a proportionate share of the cost of maintaining ordinary municipal services in any municipality where the concentration of federal property is in excess of the national average. In return, the federal government will seek treatment in the matter of municipal services not less favourable than that accorded to ordinary taxpayers.

Crown Properties
It is proposed, in addition, to pay in future to any municipality in receipt of this type of grant a further temporary adjustment grant whenever the crown acquires a new piece of property in that municipality. This grant will ensure that the municipality will receive full taxes for the year in which the property is acquired, either from the vendor or from the government, depending on the sales agreement, plus full taxes in the succeeding year, and one half of taxes in the next following year. At the end of this period the assessed value of such property will be included in the total of federal assessment of the municipality-with a commensurate effect on the regular grant.
For any municipality where no regular grant is made because total federal property in that municipality is below the national average, the government proposes in future to pay, in respect of any piece of property acquired by the crown, full taxes for the year of acquisition in the same way as above, plus full taxes for the succeeding year and in each of the next three years grants of respectively 75 per cent, 50 per cent and 25 per cent of the full taxes. At the end of this five-year period no further grants will be paid. These temporary grants are intended to permit the municipalities to adjust themselves to the loss of specific tax revenue upon the acquisition of property by the crown.
We will also propose the payment as soon as possible of all proper arrears and charges for local improvements against federal real property in any municipality, and the payment of all local improvement charges as they occur in the future.
In addition it is the intention of the government to pay for all charges for water received at government buildings on a meter basis.
Finally, I wish to say a word about the position of property held by crown corporations. With respect to such property the situation is complicated, but in general the policy of the government will be to authorize its crown corporations to work out fair and equitable agreements with the municipalities in which their properties are situated.
In the case of residential housing property owned or managed by the Central Mortgage and Housing Corporation, there are already agreements with municipalities providing for payments in lieu of taxes. Because agreements between Wartime Housing Limited and the municipalities in relation to war workers' houses provided for payments in lieu of taxes which were considered insufficient, the Minister of Reconstruction and Supply on July 22, 1946, indicated that these agreements could

be renegotiated with the corporation, with corresponding increases in rents to be paid by individuals to meet the adjusted payments in lieu of taxes. Most agreements of this kind have now been renegotiated, and the balance can be renegotiated if the municipalities so desire. In regard to housing properties completed since 1947 and under current programs, payments in lieu of taxes are being made in accordance with agreements negotiated with the municipalities which are believed to be equitable and will not be renegotiated.
In the case of the government-owned railways operated by the Canadian National Railways, agreements have been entered into with the cities of Halifax and Saint John for the payment of reasonable amounts in lieu of taxes. I understand that the Canadian National Railways will endeavour to work out similar arrangements with other municipalities through which the government-owned railway runs.
In general, as I have indicated, the policy will be to have crown corporations work out arrangements with municipalities which are fair and equitable under all circumstances.
It should be clear from what I have said that the government intends to pursue policies in respect to its federal real property which will assure fair and equitable compensation to those municipalities which have a genuine burden as the result of the presence of federal property within their boundaries, and will assure the payment of legitimate costs as they occur in connection with its properties.
The government proposes to make immediate arrangements to have its property assessed by its agents for the purpose of determining the grants to be paid. Preliminary information indicates that, in a number of cases at least, local assessments of federal property are considerably inflated. It should be borne in mind that such assessments have been made without contest or rebuttal by the federal government, because hitherto the assessment of federal property has been a matter of academic interest only.
While the procedure of assessment will probably require a couple of years to complete, it is proposed to institute the program I have outlined as of the 1st of January, 1950. Actual payments in some cases may be delayed, but they will be made retroactive. For obvious reasons it will not be possible to institute the system of grants for those municipalities having within their limits federal properties to an extent near the assumed national average of four per cent until the actual certification of the figures has been

completed. However, for those municipalities which, according to our rough preliminary figures, would seem to be clearly within the ambit of the new scheme, we propose, if our recommendations are accepted by parliament, to commence payments as soon after January 1, 1950, as possible, withholding 25 per cent until the final determination of figures has been completed. Adjustments will be made retroactively.
Figures now available would indicate that there are something over one hundred municipalities where there is a concentration of federal property in excess of the national average. I hesitate at this time to make any estimate of what the total annual cost of the entire program will probably amount to but I believe it is likely to be in the vicinity of $5 million.
This new program will supersede any existing arrangements with certain municipalities, such as those which formerly existed with the city of Ottawa. This city, the capital of the dominion, is not only the most outstanding case amongst the municipalities affected by a substantial concentration of federal property, but the situation is rather more complicated here, because of the proposed development of the national capital plan. This has, I am afraid, led to some confusion, and we think it important to a clear understanding of the proposals we are making, and to a satisfactory solution of our relationships with the city, that it be clearly recognized that in the case of the city of Ottawa there are two distinct and separate problems: first, the problem arising from the presence of a large amount of tax-exempt federal property within the city limits; and second, the financial problem which may be faced by the city in fulfilling its part in its own development as the national capital of Canada, as envisaged in the Greber report.
We fear that confusion in regard to these two problems has made them seem a lot more difficult and complicated than they really are. The discussion of relative participations in some new capital planning project has been complicated by arguments based on inadequate compensation for abnormal concentration of federal property, and vice versa. At times also statements have been made which appear to overemphasize the burdens placed upon the city by the presence of federal property or fail to take into account the contribution which the federal government is already making. Perhaps it is well that all hon. members should first be clear about this latter point. At the present time the federal government does its own policing, paves and maintains a good part of Wellington street, the federal district highways, Clemow avenue and two bridges over the Ottawa river, with
Crown Properties
the approaches thereto; maintains the federal district parks system, including a few of the city's own parks; collects and disposes of garbage from its own buildings; pays for all the water it uses at the fair rate of 20-82 cents per thousand gallons, and pays to the city an annual grant of $300,000 in lieu of taxes. On the other hand, the city supplies light and water for the parks and parkways within the city limits to which I have referred.
I wish now to outline the new arrangements which we are proposing. In regard to Ottawa's first problem arising from concentration of federal property, the government believes that the city should be treated in this respect in exactly the same way as a great many other municipalities which are confronted with the same problem in greater or less degree. In other words, if parliament approves the general program of grants I have outlined, the city of Ottawa will receive as from January 1 next a grant in lieu of taxes determined on the basis of the same formula as that applicable to all other municipalities. However, the arrangement which has been in effect in the past lapsed on June 30 last, and it is therefore necessary to decide on a grant to the city for the rest of the current year. I am happy now to announce that the government has decided to recommend payment to Ottawa of an interim grant of $250,000 to cover this six-months period. For the present it is not proposed to disturb the existing arrangement whereby the government now provides certain services for itself in Ottawa, as I have indicated. However, in accordance with our intention of seeking equal treatment in future in the matter of municipal services, these arrangements will be reviewed with the municipality when the new plan of regular grants in lieu of municipal taxes comes into effect.
Having disposed of this first problem in the way suggested, we hope it will now be possible to deal with the second problem separately and on its own merits. This second problem arises, as I have already indicated, from the necessity of financing the development of the national capital. For some years past, as the house is aware, members of the federal district commission and others who are members of the national capital planning committee, including a number of experts, have been working on a plan for the development of the capital. A master plan is being prepared setting out on broad lines the developments which should be followed from year to year by the different authorities and organizations having to do with the development of the capital.
From the very outset it has been recognized that the implementation of any master plan

Crown Properties
befitting the requirements of a national capital would involve developments of a character beyond the municipal improvements ordinarily required in other cities. This was foreshadowed in the report, dated August 1, 1944, of the joint committee of the Senate and the House of Commons appointed to review the special problems arising out of the location of the seat of government in the city of Ottawa. The resolution which was passed by this house in June, 1948, explicitly recognized that fact and its corollary that "the development of a national capital is at least in part a national responsibility." For that reason the resolution went on to recommend the creation of a special account in the consolidated revenue fund, to be known as the national capital fund, to which appropriations would be made annually by parliament over a period of years of the amounts required from time to time to meet the costs of such projects as might be recommended by the federal district commission and approved by the governor in council for the development of the national capital and the surrounding area in accordance with the developing master plan. As hon. members are aware, the sum of $2J million was voted to be set aside in that national capital fund last year, and a similar item is included in the estimates for the current fiscal year.
On behalf of the government, therefore, I now wish to make it clear that we are prepared to see appropriate assistance given on the recommendation of the commission in the case of those individual projects which are considered essential in the development of the national capital plan, and yet would not be undertaken, at least not in the same form or to the same extent or at as early a date, if Ottawa were not the capital of our country and it were not necessary to have regard to the future development of the country as well as of the municipality. This would include, for example, part of the extra cost that might be necessary to make a new city hall comply with the architectural requirements of the national capital plan if the city should eventually decide to place it in a location where such additional standards would be required. Another example would include certain features of the Gore and Storrie report on sewage and water supply, and new Sussex street bridges over the Rideau river to complete the gap in the eastern end of the driveway system.
The federal district commission has power to discuss with the city participation in any one of these individual projects or developments. Any project will be considered on its own merits and on the degree of its

relationship to the city as an ordinary municipality or to the national capital, as the case may be.
Furthermore, the government proposes, in addition to the regular grant to the city, to make additional funds available to the federal district commission to cover additional expense which it may be necessary for the city to incur in co-operation and agreement with the commission in carrying out its obligations under provincial planning statutes, such as zoning and laying out on the ground by surveys the necessary features of the national capital plan. The amount of funds so made available will not be a fixed grant, but it is likely to vary to some extent from time to time, depending on the projects likely to be undertaken during the period in question.
It is the hope of the government that by keeping our consideration of this national capital development problem separate and distinct from the other general problem to which I referred in the early part of my remarks, we shall be able to remove the confusions and misunderstandings that may have existed in the past and secure the effective co-operation of the city authorities in promoting the growth and development of this beautiful city in its role of the national capital.
In conclusion, may I say that we would propose to ask for parliamentary approval of the interim grant to Ottawa and the initiation of the program for the whole of Canada by a special estimates item to be introduced at this session of parliament. I believe only a modest appropriation of funds at this session, over and above the amount of the interim grant to Ottawa, will be necessary to make possible the setting up of the necessary establishment in the Department of Finance, work out details of procedure, begin the job of assessments of federal property and provide for such initial grants as may have to be made before the close of the present fiscal year. At the next session it would be our intention to introduce a bill to provide permanent statutory authorization of the program as a whole. (Schedule of excluded categories follows:)
appendrx
Detailed Schedule of Categories Excluded From the Definition of Federal Property
Total federal property shall mean all federal property within municipal boundaries in organized territory, except:
(1)	All military, naval and air force establishments which are self-contained or substantially so.
(2)	AH harbours, canals and other lands held in connection with the federal government's responsibility for navigable waters.
(3)	All lands held in connection with land conservation, irrigation, rehabilitation and forestation.

<4) All penitentiaries and D.V.A. hospitals where they are outside of urban municipal boundaries and/or self-contained or substantially so.
(5)	All parks and parklands and historical sites and other improvements of a like nature.
(6)	All property held by crown corporations or agencies.
(7)	Canadian government-owned railways.
(8)	Property of Central Mortgage and Housing Corporation.
Any of the above types of property in classifications 1 to 4 inclusive may be included in whole or in part for the purpose of determining the principal grant if in the opinion of the minister a municipality has demonstrated a good case for its inclusion.


Mr. Green:: Will the minister file a list of the municipalities which it is expected will become eligible for assistance?


Douglas Charles Abbott: No, I am afraid that is not possible, because, as I indicated in the course of my statement, our survey of values of federal properties is still pretty rough. We know some, of course, that are clearly within the purview of the statement. Cities such as Ottawa, Halifax and Esquimalt are obviously within that sphere, but other than indicating one or two obvious cases, I would prefer at this stage not to attempt to give any list.


Mr. Church:: Are there other cities in which bodies such as the Toronto transportation commission and the Toronto hydro pay full federal, provincial and municipal taxes, as private corporations do?


Douglas Charles Abbott: In no municipality does any agency of government, so far as I know, pay full federal taxes, unless it be under the equitable tax agreements negotiated by certain crown corporations, such as the Central Mortgage and Housing Corporation.


Thomas Langton Church: Sir James Whitney went as far as that thirty-four years ago.


Mr. Graydon:: Will there be any appeal from the assessment figure that is finally decided upon by the government?


Douglas Charles Abbott: No.


Mr. Drew:: There is one point I should like to have clarified. As I understand the minister's statement, the plan now put forward provides for a system of compensation for taxation, other than business taxes, only in those municipalities which are above the national average of concentration of dominion government property, and as to any other case the plan will not apply, other than to provide for certain adjustments of taxes in the first year after purchase.


Douglas Charles Abbott: That is correct. It will be only in those municipalities where there is an abnormal concentration of federal real property.


Gordon Graydon: That is the government's escape clause.
Questions PRIVATE BILLS



FIRST READINGS


[Stage Direction]
Bill No. 177, for the relief of Shirley Patricia Susan Oakes Rowlands.-Mr. Winkler.
Bill No. 178, for the relief of Margaret Adeline Bodley Cabana.-Mr. Winkler.
Bill No. 179, for the relief of Mary Letinetsky Nemeroff.

Mr. Winkler.
Bill No. 180, for the relief of Norah Helen Jarrett McCaffrey.-Mr. Weir.
Bill No. 181, for the relief of Elizabeth Karaszi Bergeron.-Mr. Winkler.

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

Mr. Black (Cumberland):: 1.	What were the total sales of 2j per cent Canada savings bonds in each of the years 1946, 1947 and 1948?
2.	What have been the cancellations or redemptions of each issue to date?
3.	What was the cost of marketing each issue?


Douglas Charles Abbott: 1,	2 and 3.
Series 1-October 15, 1946 to September 30, 1947, total sales, $535,285,550.00; redemptions to October 31, 1949, $235,287,150.00; costs of flotation, $4,457,649.87.
Series 2-October 15, 1947 to September 30, 1948, total sales, $287,733,100.00; redemptions to October 31, 1949, $121,681,200.00; costs of flotation, $2,094,146.07.
Series 3-October 15, 1948 to September 30, 1949, total sales, $260,476,100.00; redemptions to October 31, 1949, $53,339,450.00; costs of flotation, $2,120,605.59.


WAR VETERANS ALLOWANCES
Mr. Green:: 1.	How many veterans were in receipt of war veterans allowance as of October 31, 1949?
2.	How many of such recipients have made application for assistance from the special assistance fund?
3.	How many have been granted) such assistance?


Mr. Mulch:: 1.	25,918.
2.	3,174.
3.	2,444.


INTERNATIONAL SUGAR COUNCIL
Mr. Blackmore:: 1.	Was Canada represented at the international sugar council of representatives of seventeen governments, reported to have been held in London within the last two months?
2.	If not, why was Canada not represented?
3.	If so, who was the Canadian representative?
4.	Did the Canadian representative request that before the international sugar council should consider any measures for limiting the sugar production in any country the council should make sure

Questions
that adequate provision is made for production of enough sugar to supply the needs of the total population of the earth?
5.	Does Canada aim to be represented at the next international sugar council, tentatively planned to be held not later than next July?


Mr. Mcllraiih:: 1.	A Canadian representative attends meetings of the international sugar council in the capacity of an observer only.
2.	Answered by No. 1.
3.	The Canadian commercial counsellor in the United Kingdom, Mr. A. E. Bryan.
4.	Answered by No. 1.
5.	The nature of the Canadian representation will be determined in due course.


CANADIAN NATIONAL RAILWAYS
Mr. Sirmoii:: 1.	Have any negotiations been carried on during the last year to dispose of Canadian National Railways property at Grand Beach, Manitoba? If so, with what result?
2.	What arrangements have been made to carry on concessions at Grand Beach, Manitoba?
3.	Has there been an offer made by an American firm to buy outright the property owned by the Canadian National Railways at Grand Beach, Manitoba?
4.	If so, for how much and who was the party submitting the offer?


Mr. Chevrier:: The Canadian National Railways advise as follows:
1.	No.
2.	None.
3.	No.
4.	See answer to No. 3.


PAYMENTS FOR STORAGE
Mr. Diefenbaker:: What is the total amount paid by the wheat board for storage of wheat between the first day of August, 1948, and the first day of October, 1949, with particulars as to the companies to whom payment was made, and the amount paid to each?
By arrangement with the Minister of Trade and Commerce, this question will be dropped in order that it may be reworded.


Mr. Speaker:: Question dropped.


INTERNATIONAL FEDERATION OF AGRICULTURAL PRODUCERS-GUELPH CONFERENCE
Mr. Calherwood:: What action has been taken by the government with respect to the recommendations passed at the conference of the international federation of agricultural producers, held in Guelph in June of this year and subsequently approved by the food and agriculture organization of the united nations and presented to the governments of the fifty-eight countries, including Canada, for consideration?


Mr. McCubbin:: The recommendations
passed at the conference of the international

federation of agricultural producers were referred to the council of FAO at its meeting in Paris last June. The council instructed the director-general of FAO to appoint a committee of experts to study them and to consider other proposals for facilitating the distribution of surplus commodities. The committee prepared a report which was forwarded to member governments of FAO for their consideration before the annual conference of FAO, at which the report will be dealt with by the representatives of member governments.


NICKEL AND NICKEL MATTE
Mr. Herridge:: 1.	What amount of nickel or nickel matte has been shipped to European countries during the years 1946, 1947, 1948 and to date in 1949?
2.	What amount was shipped to each country during each of these years?


Mr.   McHrailh@: 1 and 2.
Nickel contained in matte
Jan. 1 to Sept. 30
1946	1947	1948	1949United	Cwt.	Cwt.	Cwt.	Cwt.Kingdom .	198,738	390,532	456,708	410,002Norway ....	184,958	208,038	179,363	185,709Totals 	
383,696 Nickel contained in United	598,570 oxide	636,071	595,711Kingdom . Nickel, fine United	4,772	6,726	5,645	7,683Kingdom .	74,240	139,646	48,753	6,240Austria	-	4,473	-	-Belgium 	9,455	5,323	4,898	879Czechoslovakia 176	7,836	19	-France 	66,109	56,031	45	58Germany ...	-	-	-	22Hungary ....	-	-	220	-Italy 	
The Nether-	23,459	602	25	140lands 	1,660	3,197	70	-Spain 	-	-	-	44Sweden	20,997	24,743	6,719	-Switzerland .	-	56	-	-Totals ....	196.096	241,907	60.749	7,383


NATIONAL ART GALLERY
Mr. Church:: 1.	What has been done since last session of the house to decide the question of a new national art gallery for Canada?

2.	Has the president of the National Art Gallery, Dr. H. S. Southam, M.A., LL.D., resigned?
3.	Will appropriate action be taken to thank him for this important national work herein?


Mr. St. Laurent:: 1.	The government has given consideration to the question of a new building for the National Art Gallery of Canada and has authorized the board of trustees to proceed with the necessary preliminary inquiries regarding the most suitable type of construction.
2.	Mr. Southam has resigned as chairman of the board of trustees, but he remains a member of the board.
3.	On the occasion of Mr. Southam's resignation Mr. Mackenzie King, who was then prime minister, expressed to Mr. Southam, in a letter dated January 29, 1948, the appreciation of the government for the fine services which he had rendered. A copy of this letter appears below. It gives me much pleasure now to add my thanks and appreciation for what Mr. Southam has done and for the support which he continues to give to the national gallery.
Office of the Prime Minister Canada
Ottawa, January 29, 1948
H. S. Southam, Esq.,
Ottawa.
Dear Mr. Southam:
The government has acceded reluctantly to your request to be relieved of the responsibilities of the chairmanship of the board of trustees of the national gallery. I should, however, not like the occasion to pass without expression, on behalf of the government, a word of appreciation of the fine national service you have rendered in the nineteen-years you have been chairman.
During that period the national gallery has made a steadily growing contribution to the cultural life of our country, and has become in increasing measure, not merely a repository of the art treasures of the nation, but also a centre of artistic inspiration. Under your chairmanship the board of trustees have guided and fostered this development and laid enduring foundations for the future of the national gallery.
It is a source of satisfaction to the government that you are to remain as a member of the board, in which capacity we know you will continue to render valuable service to the national gallery and to the appreciation of the arts in the country at large.
With kind personal regards,
Yours sincerely,
W. L. Mackenzie King


NATIONAL LIBRARY
Mr. Church:: 1.	What has been done since the last session of the house to decide the question of a new parliamentary library?
2.	Have any plans been prepared for it?
3.	What action will be or has been taken on>
it?


Mr. St. Laurent:: I assume that the hon. member is referring to the proposed national library for Canada.
Questions
The royal commission on national development of the arts, letters and sciences has been asked to consider the "ultimate character and extent" of the national library, and no large-scale developments will take place until the report of the commission has been received. Meanwhile, however, much useful preliminary work can be done. The national library advisory committee, which the government appointed about a year ago, met in March last, and recommended that a bibliographic centre be established without delay. An appropriation of $18,950, included in the supplementary estimates submitted recently to the house, will enable a start to be made upon the organization of this centre within the next few months. The civil service commission will soon invite applications for the first four positions on the staff of the centre, and work on a national union catalogue should start immediately after the new year. To begin with, this catalogue will list the contents of the thirty-five or more libraries in Ottawa belonging to the various branches of the federal government. Later the contents of special collections elsewhere, such as the famous Canadiana collections in the Toronto public library and the Gagnon collection in the Bibliotheque Municipale in Montreal, will be included. The intention is that ultimately the union catalogue should list the contents of every important library in Canada.


PENITENTIARIES
Mr. Church:: 1.	Did a fire take place recently at the Kingston penitentiary?
2.	What fire inspection is there in these institutions?
3.	Are they under the administration of crown officers of the justice department, such as the commissioner?
4.	Was the said commissioner present when the fire happened, or did he learn of it from his officials who were present?
5.	Has the minister visited any of the penal institutions since his appointment?


Mr. Garson:: 1.	Yes.
2.	Under the warden the plant engineer is responsible for the fire protection service in the penitentiary. The plant engineer is the penitentiary fire chief. Fire inspections are held regularly and reports submitted to the office of the commissioner of penitentiaries every three months.
3.	Yes.
4.	The commissioner was not present. He learned of the fire from the warden.
5.	No.

Combines Investigation Act QUESTION PASSED AS ORDER FOR RETURN


NORTH SHORE CONSTRUCTION COMPANY
Mr. Gagnon:: 1.	Have any contracts been granted to the North Shore Construction Company, Limited, 307 Castle building, Montreal, by departments of the federal government, since 1940?
2.	If so, for what amounts and in what places?
3.	What are the names and addresses of the officers of the said company?



MOTIONS FOR PAPERS


Mr. Coldwell:: For a copy of all letters, memoranda and communications from Mr. Donald Gordon, or any member of the staff of the wartime prices and trade board to the flour milling industry or any flour milling company authorizing the making or maintenance of price agreements between December 1, 1941 and September 15, 1947, or subsequently. Also, for any communication giving the flour milling industry any assurance that price fixing agreements made during the control period would not make them liable to action under the Combines Investigation Act.


Major James William Coldwell: For a copy of all communications, memoranda, etc., from Mr. Donald Gordon to the Minister of Justice or to the Minister of Trade and Commerce, reporting any assurances given by the wartime prices and trade board to the flour milling industry or companies that they would not be held liable under the Combines Investigation Act for price fixing and similar agreements or understandings reached among them between December 1, 1941 and September 15, 1947.



PRAIRIE FARM ASSISTANCE ACT


Hon. Alphonse Fournier (for the Minister of Agriculture) moved: that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to present a bill to amend the Prairie Farm Assistance Act, 1939, by reducing the area taken out of payment in an eligible area when contiguous to an ineligible area; by reducing the size of an eligible area within an ineligible township and contiguous to one that is eligible; and to bring into payment any half township outside areas already established on a legal township basis but not contiguous thereto.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.


[Stage Direction]
Motion agreed to.
SMr. Garson.]


Hon. Siuart S. Garson (Minister of Justice) moved: the second reading of Bill No. 144, to amend the Combines Investigation Act.
He said: Mr. Speaker, in moving second reading I shall follow the usual practice of discussing only the principles of the bill. Those principles are two. The first is that of withdrawing from corporate accused in prosecutions under the act the option it now has of choosing whether it shall be tried by a jury or without a jury. The second is that in prosecutions under this act there shall be a rebuttable presumption that an employee acting in connection with his employer's business has authority so to act, and a rebuttable presumption that relevant documents in the business files of those involved in an alleged combine are authentic records from which a court or a jury may properly draw any reasonable inferences.
To begin with, may I say that the entire contents of this bill are made up of recommendations of the combines investigation administration, which have been approved by the government.
I shall deal with the principles of the bill in the order in which I stated them.
Under the present law, offences under the combines act and under section 498 of the Criminal Code can be tried only by a superior court judge with or without a jury, at the option of the accused. The proposed amendment provides that, not in the case of an individual but only in the case of a company, the company shall be tried by a supreme court judge without a jury, and shall not have the option of being tried with a jury. After the adoption of this amendment an individual, of course, can still elect jury or non-jury trial at his pleasure.
Jury trials are singularly inappropriate for the trial of combines cases, because of the complexity and volume of the evidence and the length of time required to present these cases to the courts. In that connection I might cite two fairly typical cases. First is Rex v. Container Materials Limited et al., where the number of pages of transcript was 5,111, the number of exhibits tendered 323, and the length of trial in days, 39. The second is Rex v. Imperial Tobacco Company of Canada and others, in which the number of pages of transcript was 8,798, the number of exhibits tendered 1,127, and the length of trial in days 56.
In these cases the accused invariably are companies or incorporated business firms or officials of such companies or firms or of trade

associations made up of a number of these Arms acting in an industry. Of necessity the evidence is largely documentary; and if a dozen or more companies and individuals are indicted, as is usually the case, very close study must be given to their corporate interrelationship one with the other and to the usually involved arrangements into which they enter in order, as alleged, to control prices or otherwise limit competition. Activities of all the accused and their principal employees must be traced in evidence over a considerable period, in some cases over many years, and also in many related aspects.
The presentation of evidence drawn from many different sources and relating to many different matters is extremely difficult in any jury trial, as I think any legal member of this house will agree; and it imposes a heavy burden upon the presiding judge and upon counsel in the submission of the evidence to the jury. An equally heavy burden-in my own view a greater one, as a matter of fact- is placed upon the jurymen, who in almost all cases are laymen in relation to the problems with which the case deals, in analysing and weighing the intricate evidence presented during the trial, which usually occupies several weeks, and ultimately arriving at a conclusion with respect to the involved agreements, arrangements and transactions which form the substance of the charge.
Non-jury trial of charges of this sort permits a much more orderly and concise presentation of evidence to the court and a better-ordered arrangement of the facts brought out in the documentary and other evidence. All documents do not have to be read aloud, as must be done in a jury trial; and when you have exhibits running into the thousands you can see what a tremendous burden is imposed upon counsel on both sides of the case in retaining the interest of a jury throughout the reading aloud of documents. If a judge is trying the case without a jury, he may dispense with the full reading of lengthy records of which only a few passages may be either important or relevant. The possibility of mistrial through death or illness of a juror in cases the trial of which extends over a long period, such as those I have mentioned, or through procedural errors or through misdirection by the trial judge, is avoided or reduced. The length and expense of the trial, both for the crown and for the accused, is also reduced.
Admittedly in some cases two trials may be necessary after this amendment passes, one for the companies and for the individuals who may elect non-jury trial, and one for those individuals who may choose to elect trial by jury. But such a split trial can occur even
Combines Investigation Act under the existing legislation. In both the A.B.C. plumbing case in 1931 and the tobacco case in 1941 there were split trials under the present legislation, one trial for those electing a jury and one for those electing nonjury.
In this connection I should like to draw a clear distinction between the principle of withdrawing the privilege of jury trial from a corporation, as we are proposing to do here, and that of withdrawing a jury trial from an individual, which we are not proposing to do. The arguments for a non-jury trial in combines cases could apply, perhaps not to the same extent but to some extent, to trials of individuals as well as trials of corporations, but we are not proposing to withdraw the right of an individual to trial by a jury of his peers, because of the strong British and Canadian tradition in favour of that principle.
We have it in mind that a distinction can be made between a natural person, who must appear in court himself to answer charges and is subject to both fine and imprisonment, and an artificial person such as a corporation, which appears in court only through counsel, and cannot, of course, be penalized by imprisonment. If the rights of the corporation are otherwise adequately protected, there is no unfairness in limiting the trial to a judge without a jury. The prime consideration, we submit, must be the ends of justice and the interests of the public. The public advantages in connection with this matter are many, and we affirm that the corporation is under no undue hardship by reason of the limitation which we propose.


John George Diefenbaker: Will the minister permit a question at this point? He pointed to the distinction between a natural person and an artificial person. Is there any provision in either Great Britain or the United States for the denial to an artificial person of trial by jury?


Stuart Sinclair Garson: I presume my hon. friend's question is intended to be relevant to the matter we are discussing.


John George Diefenbaker: The hon. gentleman spoke of the British tradition.


Stuart Sinclair Garson: In Great Britain, as I understand it, an organization of the type which we have under the Combines Investigation Act has only recently been set up. Last spring the head of that body visited Canada to find out how we were carrying on under our act. The United Kingdom did not propose even to pass an act creating criminal offences until the matter had received careful con-
45781- 1094

Combines Investigation Act sideration. I am sure therefore that the question of withholding from a corporate accused the privilege of being tried by a jury has not arisen in that country.


John George Diefenbaker: They proceed under the criminal law.


Stuart Sinclair Garson: I would not want my hon. friend to leave the implication by his question that we are suggesting a change in anything other than the prosecutions under this act or the related section of the Criminal Code. It merely applies to such proceedings. If the hon. member followed my remarks carefully, he must have seen that we were basing the reason for this change upon the nature of this particular type of prosecution.
As I was saying, in Great Britain they have not yet arrived at the point of passing criminal legislation which would correspond to our Combines Investigation Act. The question of their withdrawing this privilege, therefore, from a corporate accused has not yet arisen. I cannot answer my hon. friend's question relating to the United States practice, but in any event their approach to this whole matter is considerably different from our own, as I think he is well aware.
The second principle has to do with the establishment of the rebuttable presumptions to which I have already referred. The necessity for introducing amending legislation at this time, as I am sure all members are aware, has arisen by reason of the uncertainty in the law resulting from the decision of the Ontario court of appeal in February, 1949, in the dental supplies case. The problem created by this decision has been carefully studied, first of all, by the leading counsel in that case, and then by the legal advisers of the Department of Justice, as well as the combines investigation branch of that department. Section 3 of the proposed bill represents the results of that study.
Perhaps some considerable amount of light will be shed upon the provisions we have before us for consideration if I make some reference to the dental supplies judgment. The prosecution of members of the Canadian Dental Trade Association was undertaken by the Attorney General of Canada after a report had been made by the commissioner alleging that a combine existed amongst the various members of the association, which included both manufacturers and dealers. Eighteen corporations with head offices in various parts of Canada were tried at Toronto in March, 1948. At the end of the crown's case, the trial judge acquitted the accused, upon the ground that some five hundred documents presented as evidence during the three weeks of trial had not been sufficiently authenticated. This judgment was confirmed by the
fMr. Garson.]
unanimous judgment of the court of appeal on February 28, 1949. The argument on appeal was heard in the fall of 1948, the latter part of September and October, but the judgment was reserved and was not delivered until 1949.	.
The documents on which the crown based its case had been introduced in evidence on proof that they came from the business offices of the accused companies and that, coming from those offices, they had evidentiary value. Crown counsel argued that the court should apply to the companies the principle, long established in conspiracy trials, that documents and other things found in the possession of the accused are evidence against him. The crown claimed that the contents of these documents fully established the interest of the companies in the alleged illegal agreements, and also established the authority of the officers and employees to enter into those agreements on behalf of their respective companies. The trial judge, although at the beginning of the trial he had admitted these documents in evidence, rejected the crown's argument and refused to let the documents go to the jury, on the ground that they had no probative value without further proof.
When the case came before the court of appeal, the court, in a unanimous decision delivered by the chief justice, confirmed the trial court judgment and established the principle that where companies are accused, the criminal acts which are charged against them must be brought home to the companies by more direct evidence than the filing of these seized documents. In this connection the chief justice stated:
The proof required, however, in the case of a company, differs somewhat from that required in the case of an individual. If the act relied on is that of an officer, servant or agent of the company, there must be evidence that he had authority from the company to perform the act. Mere possession of a document by a company, in the sense that the document was on its premises, and even in the company's files, may not, without more, afford ground for an inference that its contents had come to the knowledge of its board of directors, or of someone having authority from, the company to deal with the matters to which the document relates.
At a later point in his judgment his lordship said:
There is, however, one objection common to all the letters. There is no evidence that the writing of any of them was authorized by any of the accused companies, nor is there evidence that anyone having authority to bind the company had any knowledge of the sending of any of the letters or of their receipt or of their contents.
Sir, most combines cases involve combination or conspiracy among a large number of companies, and usually over a considerable period of years. The basic agreement between the companies, if it exists, and if illegal, is normally secret and not contained in any

formal documents. Ordinarily its existence, its nature and its effect must be deduced from the acts of company officials recorded in a vast amount of correspondence, memoranda, and other documents found on the files of the companies and their associates. Oral evidence of these facts is often not available or singularly unreliable. It requires no great amount of imagination to realize that, when you are seizing documents in the possession of the corporate accused, the securing of corroborative oral testimony from the officials or employees of the accused corporation is in the nature of things a difficult matter.
If no amendment such as we now propose in this instance were made, the crown, in most combines cases, would be required to prove by oral evidence the authority of company officials to bind their company, and in effect we would be required, directly or indirectly, to supply oral proof of virtually all the facts which are set forth in the documents.
In the trial of offences in conspiracy cases, this so-called possessory principle has been frequently applied. Its application in a case of this sort means that these incriminating documents would, without oral proof, have such probative force as the jury or the judge might be disposed to give to them. One of the effects of the decision in the dental supplies cases is that of making a distinction between individuals accused and corporations accused with regard to the possessory basis of proof.


John George Diefenbaker: That was not a new principle. It was not enunciated for the first time in that case.


Stuart Sinclair Garson: Well, I am stating that it was enunciated in that case, and no more than that. When my hon. friend speaks he can show that it was not enunciated for the first time in that case.
Another practical result of the dental judgment is that if this amendment is not enacted the crown will have to prove by oral evidence the authority of company officials to bind their respective companies. This means that positive proof would have to be given by word of mouth, by having witnesses of virtually all the facts which, under the possessory rule in the case of individuals, can be inferred from mere possession.


Mr. Smith (Calgary West):: That is what made me wonder why the minister did not appeal the judgment. I think it is wrong.


Stuart Sinclair Garson: If my hon. friend thinks that the judgment is wrong, I hope he will support this amendment.


Arthur Leroy Smith: That is a
different principle altogether.
Combines Investigation Act


Stuart Sinclair Garson: If witnesses from the companies must be available to prove authority, they will usually be capable of proving by direct oral evidence the writing of the documents and the truth of the facts stated in them. Thus the dental judgment gravely limits the application of the possessory principle, and tends to establish one principle for companies which are accused and another principle for individual persons who are accused.
In considering this amendment one of the facts which must be realized is that these combines prosecutions are not by any means ordinary run-of-mine pieces of litigation. Because of the special nature and the extraordinary complexity of combines cases, in all instances except the most extremely simple ones an unnecessarily heavy burden is placed upon the crown by the decision in the dental supplies case.
The problem which the crown faces in a typical combines prosecution can be illustrated by the following paragraph from the memorandum of fact and law submitted by the crown to the court of appeal in the dental supplies case. This is an extract from our factum in that case:
24. In this case counsel for the crown were instructed that there were over 2,000 relevant documents in the possession of the accused extending over a period of eighteen years. The proving of all these documents by proof of handwriting or other execution was impossible in practice, and any substantial attempt to do so would have taken months of trial, required the attendance of witnesses from all parts of Canada and abroad and would have left unproven in that way, documents vital to the case.
That is to say, it would take months; it would involve the bringing of witnesses from all over Canada and abroad. Even then there would be vital documents which it would be impossible to prove by oral evidence because oral evidence in relation to them does not exist; although, if they had been tendered in respect of an individual case or a natural person, the mere fact that they had been taken from the possession of the accused would admit them as evidence for whatever probative value the jury or the judge might think they should have.
In this connection, Mr. Speaker, there is one thing I should like to emphasize strongly. We are not suggesting for a minute that the presumption which the tendering of these seized documents establishes against the accused is an irrebuttable and conclusive presumption. All we are saying is that we put them in for whatever value the court chooses to give to them, and the accused, if they be innocent, can then come forward with cogent evidence to the contrary and rebut the presumption which has been raised by the admission of these documents.
1716	HOUSE OF
Combines Investigation Act
I hold in my hand the report on some leading cases of law relating to this possessory principle. I do not think I shall detain the house with them. Perhaps it would be preferable if I let the hon. member for Lake Centre (Mr. Diefenbaker) develop the legal proposition to which he referred a few minutes ago, and if necessary I can reply to him at the close of the debate.
But this much should be said. I think the hon. member will agree with me that, so far as natural persons are concerned, the possessory principle is well established. So far as the principle applies to the corporate accused, we have successfully invoked it in several of the prosecutions, in order to establish a case. The cases of Rex v. Simington and Rex v. Container Materials Limited, to give two of them, are in point.
One of the reasons this proposed change in the legislation is necessary is that it has been the experience of the combines investigation administration that where agreements, illegal under the Combines Investigation Act, are entered into, it is seldom indeed that the board of directors of an accused company goes to the trouble of formally authorizing the entering into of that agreement by their concern. It is also seldom that any person in an official capacity in a company does so. And if it be necessary in these cases, where the documents seized from a corporate accused, when they are pieced together in a very large jigsaw puzzle-if that is the appropriate figure of speech-show the establishment of the agreement, that we then have to show that the board of directors authorized it, or that the general manager authorized the agreement, I should think there would be very few occasions indeed where it would ever be possible to secure a conviction.


Arthur Leroy Smith: What officers does the minister think could give such authorization? Would a sales manager be sufficient?


Stuart Sinclair Garson: I do not think there is any statement as to what particular officers could do so. The point, in reply to my hon. friend's interjection, is that the onus is upon the crown to show that the acts complained of were authorized by some person who had authority.


Arthur Leroy Smith: It is a normal onus, in any case.


Stuart Sinclair Garson: It is a normal onus in most cases where the agreements you are attempting to prove are legal ones upon which a company may be suing or depending to establish a defence. But where an agreement is an illegal one, a prudent company does not as a rule delegate to its responsible officers, or its people with authority, the forming of illegal agreement.


I think it might be of service,, and shed some light upon the matter, if I were to refer to some of the typical documents which have to be put in evidence in cases of this kind. Almost all evidence in a typical combines prosecution consists of informal documents such as minutes, memoranda and some letters. Only very rarely is the case based, either in whole or in part, upon any formal contracts or agreements between the parties. Usually the informal documentary evidence either specifically describes the agreements or contains statements which clearly warrant the inference that agreements were entered into.
Most of the evidence submitted consists of documents coming from the possession of or otherwise proved as originating from someone who has participated in the alleged combine. Again, the documents almost always come from members-usually incorporated companies-of the combines who are actually accused. They may thus come from the accused companies or firms, from their branches, or from the possession of officials of such companies or of such firms.
Another important body of evidence is usually found in the possession of the secretary of the trade association to which the accused belonged-a trade association which in some cases the crown alleges was formed for the purpose of achieving an illegal agreement of the firms in it. Occasionally evidence may be found in the files of companies which were originally in the combine but which have now discontinued business or have been taken over by accused companies.
As I have already indicated, documents adduced as necessary evidence sometimes number several thousand. In most cases, however, the most essential or primary evidence may be only a selection of some three or four hundred documents out of the thousands. These usually consist of memoranda purporting to record meetings at which agreements have been made or implemented, and also selected key letters which record or refer to arrangements between the accused. Usually much of such principal evidence is found in the possession of the trade association secretary, although in some cases, where the secretary has carefully avoided keeping incriminating evidence, the documents may be found scattered in the files of the various accused or their associates. Also usually essential are agreed price lists or agreed lists of customers which have been distributed among the members of the alleged combine.
The remaining documentary evidence in a typical case consists of minor memoranda of meetings, inter-office memoranda and a large

body of miscellaneous letters. This remaining evidence is usually of a supplementary nature illustrating or corroborating the essential agreements, showing how they have been carried out through the relevant period and showing the participation of the various accused corporations.
It can be seen, I believe, from the examples I have indicated, that if the law were permitted to remain in the condition in which the judgment of the court of appeal in the dental supplies case has left it, a body blow would be struck at the administration of the Combines Investigation Act; and if this chamber desires that we should continue to have a Combines Investigation Act administration in this country, with powers that are effective, then the passage of the bill now before the house is indispensable and essential to the working of the act. It is upon this basis that we ask the support of hon. members for the second reading of the bill.


George Alexander Drew: Mr. Speaker, there is a great deal more involved in the motion now before the house than simply the second reading of a bill asking for certain amendments to the Combines Investigation Act.
We are asked to support Bill No. 144, to amend the Combines Investigation Act. The motion is that the bill be now read the second time. In considering the effectiveness of any amendments and the desirability of now adopting second reading of this or any other bill, it is essential that the provisions of the proposed measure be considered in the light of the surrounding circumstances known to hon. members.
The question whether the bill should be read the second time in its present form is related to matters that have already been briefly under discussion in this house. It is true that if the bill receives second reading it will be referred to the committee of the whole house, at which time amendments may be moved to the bill as it stands, or other amendments to the act proposed.
But it goes a great deal further than that. It is now necessary for every hon. member of this house to ask himself whether the proposed amendments are necessary; whether they are adequate, and whether they will have any appreciable effect if the government continues to assert its right to disregard the laws passed by the parliament of Canada. Members of this house are not here merely for the purpose of hearing bills read and registering their votes. Their action here is intended to have some effect. More than that, the time has come for every hon. member to realize that parliament, not the government, is the supreme authority.
Combines Investigation Act Under our parliamentary system the government is merely the administrative body chosen from the members of the house by the leader of the government and nominated by the representative of His Majesty the King to form a government. That government at all times is responsible to the house. That government at all times must answer to the house. That government at all times is duty bound to observe in the strictest details the provisions which the parliament of Canada has seen fit to enact as the laws of this country.
The correspondence between the Minister of Justice (Mr. Garson) and Mr. F. A. McGregor, commissioner under the Combines Investigation Act, tabled in this house a week ago, discloses that other amendments have been under consideration. Those amendments have been described by the commissioner, and it would appear that there is no doubt that they were discussed. Already there have been press reports, from what are commonly described as well-informed sources, to the effect that it is intended to review the whole act at the next session of parliament. Presumably the other amendments that were discussed and that are referred to in the correspondence between the Minister of Justice and the commissioner under the Combines Investigation Act will be under consideration at that time. For this and other reasons it should be remembered that what is now before the house is only part of what the government obviously has in mind in regard to this act.


Stuart Sinclair Garson: I am sure my hon. friend does not wish to misrepresent the government's position. What is now before the house represents the whole of what the government has in mind in relation to this act, and it is so submitted to this house.


George Alexander Drew: Then we may take it that the government has no intention at the next session of the house of going beyond the amendments now put forward, so far as it can foresee?


Stuart Sinclair Garson: I think my hon. friend's difficulty arises from the fact that in reading the letter of the commissioner under the Combines Investigation Act he saw there reference to points that were raised in discussion in the cabinet itself and which never got to the point of being government policy. Government policy which is involved today is the policy set out in this bill. With regard to what may or may not be done at some time in the future by this government, that is another matter entirely, but the government policy that is involved in this matter is set out in the bill.

Combines Investigation Act


George Alexander Drew: Then we are left in the same difficulty in which we were before; we do not know what the government policy is in regard to this act.


Stuart Sinclair Garson: It is right in the bill.


George Alexander Drew: The minister has made it clear that he is not prepared to say that this bill at the moment represents the full statement made earlier in regard to this matter.


Stuart Sinclair Garson: That is precisely what I do say, and in case there should be any misapprehension about it, let me repeat it. The bill which is before the house now was drafted on the basis of recommendations made by the combines investigation branch and considered in government council on more than one occasion; other provisions were considered and were, as forming part of this bill, rejected, and the bill now before the house does represent government policy.


An hon. Member:: At the moment.


George Alexander Drew: It is clear that this bill does represent government policy so far as it goes. Naturally we are not in position to know exactly what has taken place, and a great deal more has taken place than is disclosed by this correspondence. It is for that reason that I propose to introduce an amendment to this motion before the conclusion of my remarks.
Members of this house should know exactly what has taken place. The trouble is that we have had at least two different explanations for the government's action in not dealing with the report of the commissioner under the Combines Investigation Act, which had so much to do with the recent resignation of that experienced official. It will be most helpful to the members of this house if they know what has been under discussion, because the explanations that have been given leave this house in great uncertainty as to what actually took place.
I submit that the motion to give this bill second reading now brings directly in issue in this house the circumstances which have brought the administration of the Combines Investigation Act so prominently to the attention of the people of Canada within these past few days.
In considering what changes, if any, should be made in the Combines Investigation Act, and in determining the procedure which should be followed in deciding what changes should be made, we must of necessity review the position taken by the government in regard to its responsibilities under the act. It is not enough that we examine the cold words of the act. It is also necessary that we examine the attitude of the government toward the enforcement of it, so that we may

know how effective any amendment will be, or what further steps should be taken to prevent even this government from defying the law as passed by the parliament of Canada.
Any consideration of the act at this time would be meaningless unless the circumstances leading to the resignation of Mr. F. A. McGregor are carefully examined in every essential detail. A fundamentally important issue is raised by the action of the government following the delivery of Mr. McGregor's report which recommended the prosecution of a number of milling companies for what the commissioner regarded as breaches of the act. It does not seem to me that the question whether there was or was not a breach of the Combines Investigation Act, in the particular case to which I have referred, is really the fundamentally important issue before the house at the present time. The sequence of events is not disputed.
According to Mr. McGregor, the investigation of the alleged combine in the milling industry was started with the knowledge and approval of Mr. Ilsley, who was then minister of justice. So far as I am aware, that statement has not been challenged. If it is correct, then the investigation proceeded with the knowledge and approval of the minister to whom the commissioner is directly answerable. It is clear that the Department of Justice must have been aware at all times that the investigation was proceeding and approved what was being done so far as the conduct of the investigation was concerned.
Mr. McGregor completed his investigation and made his report to the Minister of Justice on December 29, 1948. Section 27 of the Combines Investigation Act leaves no doubt whatever as to what must then be done. It is not optional; it is mandatory. Subsection 5 of section 27 reads as follows:
Any report of the commissioner or a special commissioner, other than an interim report or a report of a preliminary inquiry under section 13 of this act, shall within fifteen days after its receipt by the minister be made public, unless the commissioner states in writing to the minister that he believes the public interest would be better served by withholding publication, in which case the minister may decide whether the report, either in whole or in part, shall be made public.
There is no authority given to the minister to withhold publication of a report after fifteen days have elapsed unless the commissioner has expressed in writing to the minister his opinion that the interests of the public will best be served by withholding publication of it. Therefore, as of January 13 of this year, the Minister of Justice was in default as to a mandatory requirement of a law enacted by this parliament.

There may be a tendency on the part of some hon. members to think that the question of publication is a relatively unimportant detail. There may be a tendency on the part of some people to regard publication as merely a formality, and to think that the violation by the Minister of Justice of a law passed by this parliament, such violation being with the approval and decision of the government, is in itself a relatively unimportant matter. This is not the opinion that has been held by others; it is not the opinion that was held by the gentleman who preceded the present Prime Minister (Mr. St. Laurent), and whose opinions are so frequently cited with approval by members of the government. Publication was regarded as extremely important, and at all times it was emphasized that the publication of such reports was for the purpose of informing the public as to what had taken place, and of bringing to public attention those things which, by publication itself, might tend to prevent a repetition of the same events.


Louis Stephen St-Laurent: I think the hon. member has made it clear that it is his intention to revive the debate we had last Monday on this subject. It is a wholesome rule that there should not be two debates on the same subject during the same session. Most of what the hon. member has said so far was said last Monday by the hon. member for Lake Centre (Mr. Diefenbaker), and was followed by a lengthy and spirited debate which came to a conclusion just before eleven o'clock on that day. Under the rules of the house I take it that that concluded consideration of the matter for this session. I do not think it would be proper to allow a precedent to be set that the rule precluding repetition of the same debate in the same session should be disregarded.


Mr. McGregor:: Just a little steam roller.


George Alexander Drew: Mr. Speaker, this is not a revival of the debate introduced by a device employed by the Minister of Trade and Commerce (Mr. Howe) last Monday. This is a debate on a bill to amend the Combines Investigation Act; and unless hon. members are free to discuss the only information they possess as to the way in which the government has administered this act, they will be called upon to decide this point without the opportunity of carrying on an effective debate at all. The introduction of a limited aspect of this subject, and the explanation given by the Minister of Trade and Commerce of his having imposed his views upon the Minister of Justice, in no way terminated the debate on the point now before us. I think it should be explained why it is so essential that we
Combines Investigation Act be free to examine the records that are before us. We have two distinctly different explanations.


Louis Stephen St-Laurent: Mr. Speaker, I should like you to rule before the hon. member takes it for granted that what he says goes, without the necessity of any ruling from the chair.


Mr. Knowles:: I should like to speak to the point of order raised by the Prime Minister (Mr. St. Laurent), which I regard as one of the most serious points of order to have been raised during the time I have been in this house. Without quoting directly, the Prime Minister paraphrased the words found in May at page 316 of the thirteenth edition. Those words, of course, are quoted in various other volumes, but let us go back to May; he is the authority. The sentence the Prime Minister paraphrased reads:
It is a wholesome restraint upon members to prevent them from reviving a debate already concluded; and there would be little use in preventing the same question or bill from being offered twice in the same session, if, without being offered, its merits might be discussed again and again.
Surely when one reads a sentence like that it is necessary to see it in its context. Please note that reference is made to the rule which prevents the same question or bill being offered twice in the same session. That rule is found in the same edition of May at page 292:
It is a rule . . .
Please note that this is not a wholesome restraint; this is a rule, which is quite different.
It is a rule, in both houses, which is essential to the due performance of their duties, that no question or bill shall be offered that is substantially the same as one on which their judgment has already been expressed in the current session.
There is the rule. You cannot bring before the house again a question or a bill-and a question is a motion-on which the judgment of the house has been taken. I submit, Mr. Speaker, that the question of the McGregor-Garson correspondence, the failure of the Minister of Justice to carry out the law, has not been officially before this house. Certainly the judgment of the house has not been taken on the matter. In support of my contention that the matter has not been before the house I remind you, sir, and members of the house, of the times without number we have been told that the official record of what goes on in this house is the Journals, not Hansard. Your Honour will remember making such rulings when you were chairman of the committee of the whole in the last parliament. As a matter of fact the ruling that has been given in that connection is
1720	HOUSE OF
Combines Investigation Act well supported by citation 253 in Beauchesne, second edition:
The Journals are prepared under the direction of the Clerk by an officer of experience called the clerk of journals. They are made up from the Clerk's scroll . . .
And please note these words:
. . . and whenever any question arises as to any proceeding which has taken place, the Journals alone are held to be correct.
Reference has been made to the debate which, according to Hansard, took place in this house last Monday, November 7; but I ask you, Mr. Speaker, and the Prime Minister to look at the Journals, in other words the Votes and Proceedings, for Monday, November 7. On page 211 you will find this entry:
The order being read for resuming the adjourned debate on the proposed motion of Mr. Fournier (Hull): That Mr. Speaker do now leave the chair for the house to resolve itself again into committee of supply, and on the proposed motion of Mr. Knowles in amendment thereto.
Then follow several paragraphs which constitute the ruling of Mr. Speaker, and the entry goes on:
The house then resumed the adjourned debate on the proposed motion of Mr. Fournier (Hull):	That
Mr. Speaker do now leave the chair for the house to resolve itself again into committee of supply.
And on the proposed motion of Mr. Knowles in amendment thereto:	That all the words after the
word "that" to the end of the question be struck out, and the following be substituted therefor:
"this house is of the opinion that the government should give consideration to the introduction of legislation amending the Income Tax Act so as to make it possible for taxpayers to deduct trade union dues from income before computing the amount of income tax to be paid."
And after still further debate, the question being put on the said proposed amendment, it was negatived on the following division:
Then appears the list of 48 yeas and 108 nays. The next entry is:
And after further debate, the question being put on the main motion, it was agreed to, on division.
The main motion was that moved by the Minister of Public Works (Mr. Fournier) in the place of the Minister of Finance (Mr. Abbott) for the house to go into committee of supply. I remind the Prime Minister and you, Mr. Speaker, of what I just read from citation 253 in Beauchesne, second edition, which is citation 169 in the third edition:
. . . whenever any question arises as to any proceeding which has taken place, the Journals alone are held to be correct.
I have had an opportunity of discussing this matter from time to time with various officials of this house, both on the floor and outside; and we have been told time and time again-


Some hon. Members:: Hear, hear.
[Mr. Knowles.)


Stanley Howard Knowles: The hon. member for
Kamloops (Mr. Fulton) is saying "hear, hear" because he was with me during one of those discussions. We have been told time and time again that what has happened in this house on any occasion is what is recorded in the Journals. Officially what was before us last Monday was, first, a motion to go into supply and, second, an amendment which I moved with respect to trade union dues. The judgment of the house was taken on those two propositions, first on my amendment and second on the motion to go into supply. The judgment of the house was not taken on the discussion initiated by the Minister of Trade and Commerce with respect to the McGregor -Garson incident.
Well, Mr. Speaker, if that is not sufficient argument to indicate the complete impropriety of the point of order raised by the Prime Minister, I ask you to consider the precedents in the case. I confess I thought this question might be raised, and yet I could not believe it would be. Nevertheless, since one must be prepared for anything in this house, I thought it might be well to spend some time over the week end studying the whole question, and I did so. My study included looking up what has happened in the past, but before I cite precedents I would draw attention to citation 6 in Beauchesne, third edition:
In the interpretation of the rules or standing orders the house is generally guided, not so much by the literal construction of the orders themselves as by the consideration of what has been the practice of the house with respect to them.
I point out that there is no rule or standing order supporting the contention put forward by the Prime Minister. Rather the rules and standing orders are the other way; but even if there were any citation on which the Prime Minister could draw, such as the first one I quoted from May, page 316, out of its context, you must apply to it the terms of citation 6, which I have just read, that the house is guided by consideration of what has been our practice in the past.
Hon. members will recall that, time and time again, grievances have been raised on the motion to go into supply. Usually they are raised by private members, but last Monday it was a minister. The important point is that permission to discuss these grievances again has been granted when the bill or resolution or the item in question was reached. Never in my experience has the discussion of a matter on a motion to go into supply, provided that no amendment was moved and the judgment of the house taken thereon, been the basis for preventing a discussion at a later stage. Just think for a moment of the significance of such a ruling if, by any chance, it were to be made. It would mean

that from this moment forward, at any time that the government wanted to prevent discussion of a matter under difficult or embarrassing circumstances, a minister could discuss it briefly on the motion to go into supply, and the house would be prevented from discussing it thereafter; that would be the effect of such an unthinkable ruling.
May I now give some of the precedents which can be cited in support of my contention. If I am involved in some of them, it can be understood; because these are the ones of which I thought first when I started looking them up.
In the session of 1948, on the 19th of April, an order in council was passed which lowered the rate of interest and increased the cost of government annuities. The first opportunity of raising the question was on the motion to go into supply on April 27, 1948. There is a particular parallel between that case and this one, because on that occasion there was also before the house, on the motion to go into supply, an amendment moved by my leader, the hon. member for Rosetown-Biggar (Mr. Coldwell) with respect to freight rates. In order to raise the annuities question I had to wait until the judgment of the house had been taken on that amendment, even as last week the Minister of Trade and Commerce (Mr. Howe) had to wait until the judgment of the house had been taken on my amendment concerning trade union dues before he could discuss the McGregor report.
To go back to 1948, when the freight rates amendment had been disposed of, I raised the question of the government's action by order in council on April 19 which changed the rates on annuities, and I was followed by three or four other speakers, all protesting the action taken by order in council. This discussion appears in the 1948 Hansard at pages 3358 to 3371. Despite the fact that the question was raised on the motion to go into supply, and was discussed, but without taking the judgment of the house just as we discussed this matter on the motion to go into supply last Monday, when June 17 came and the government moved second reading of the bill to amend the annuities act-just as today the Minister of Justice is moving second reading of the bill to amend the Combines Investigation Act-after the motion was made by the parliamentary assistant to the Minister of Labour I rose and once again protested the action of the government by order in council on April 19, even as I had done on the motion to go into supply on April 27. I was followed, on June 17, by Mr. Menary, then by our old friend Mr. Mac-Nicol, the former member for Davenport, and-
Combines Investigation Act


Mr. Speaker:: Order. I believe the hon. member could shorten his remarks by merely giving the references, and I could then look them up.


Stanley Howard Knowles: I am prepared to do that. May I emphasize the point that, on that day, approximately seven or eight members were permitted to speak on the second reading of the bill. The question discussed was not the subject of an amendment in the bill; it related to the administration of the act, and in particular the action taken by order in council on April 19. There was no question about this discussion being in order.
Another occasion was that of the change in government policy with respect to Trans-Canada Air Lines flying the Pacific. On May 10, 1948, I raised this question on the motion to go into supply, after asking several questions on the orders of the day. The discussion will be found on pages 3803 to 3805 of Hansard. That did not prevent us, however, from discussing the matter again on May 17, 1948, as appears from pages 4022 to 4025 of Hansard for that year, 1948.
May I remind hon. members of another well-remembered case which had to do with flood conditions in British Columbia a year and a half ago. On May 31 that matter was brought up by the member for Kamloops (Mr. Fulton) on a motion to go into supply, as appears from page 4592 of Hansard. After the debate ended, the motion carried. On June 14 a new motion to go into supply was before the house, and the same question was raised by the member who now represents Coast-Capilano (Mr. Sinclair). This discussion is recorded at page 5203 of Hansard, and the motion was passed. On June 21 another new motion to go into supply was before the house, and on that occasion, as recorded at page 5586, the member for Fraser Valley (Mr. Cruickshank) introduced the subject. At neither of these subsequent points was it ruled that the matter could not be discussed again because it was discussed on a previous motion to go into supply.
Another interesting case can be found back in 1941-I have not the page numbers of Hansard for the 1941 case, but it is recorded at the end of volume II and the beginning of volume III. The motion to go into supply was amended by the former member for Haldimand, Mr. Senn, and a lengthy debate ensued on the amendment. The amendment was proposed on March 26, and the debate was still in progress as late as April 7. It was the general desire of the house to get into committee of supply, so it was agreed that the member be permitted to withdraw his amendment. He withdrew the amendment on April 7 to permit the house to go into

Combines Investigation Act committee of supply, and on the next day, April 8, the member for Lake Centre was permitted to move the same amendment and reopen the question, on the theory that in the previous debate there had been no decision because the amendment had been withdrawn. In other words, the judgment of the house had not been taken.
Something of a precedent has already been set in this session. In the course of his remarks on the address, the member for Vancouver-Quadra (Mr. Green) had something to say about the pipe line which is going into Wisconsin instead of to the lake-head. Later, on October 4, as appears on page 519 of Hansard, on a motion to go into supply the member for Vancouver-Quadra raised the question again. But even though the question had thus been raised on the motion to go into supply, that did not prevent the member for Calgary West (Mr. Smith) from discussing the subject when he spoke on the budget on November 1, as recorded at page 1327 of Hansard.
Members of this house who have been here for some time know that repeatedly, on a motion to go into supply, members have raised such questions as veterans affairs, housing, old age pensions, Prairie Farm Assistance Act, Prairie Farm Rehabilitation Act, unemployment-


Mr. Speaker:: The hon. member may
complete his remarks, but I think he should just give his references.


Stanley Howard Knowles: I submit that the point of order which the Prime Minister has raised is one of the most important that has been raised on the floor of this house, but since it is one o'clock-


Mr. Speaker:: I should like to hear the conclusion of the hon. member's remarks so that I can give my ruling when the house resumes.


Stanley Howard Knowles: All right. I am prepared to conclude my remarks.
I have no doubt that the references I have produced and my general statement will refresh the memory of members, and make it clear that there is no question as to the practice of parliament, and our rights in this matter. It would be a most serious abridgment of the rights of free speech in this parliament if this ancient doctrine of the right to raise grievances on the motion to go into supply were used as a means to prevent discussion at a later stage.
I submit, Mr. Speaker, that you are faced with one of the most important decisions since you have assumed the high office you now hold. I am sure you will make the right decision.


John George Diefenbaker: I should like to make certain representations on this subject. Particularly, sir, I should like to draw your attention-


Some hon. Members:: It is one o'clock.


George Alexander Drew: If a ruling is to be made when we resume, the representations should be made now. I was going to make a brief representation myself. I said nothing about the rule, because, to be quite frank, I did not think the objection was being raised seriously. I do wish to make a reference to the rule itself, which answers the question. If a decision is to be made at three o'clock, I would hope that any representations that are to be made will be made before we rise.


Mr. Speaker:: With the consent of the house I shall hear representations now from the hon. member for Lake Centre (Mr. Diefenbaker).


Some hon. Members:: No. It is one o'clock.


Mr. Speaker:: Order. I want to give the hon. member the opportunity of making representations with regard to this matter. On the other hand I should like, if possible, to give the decision at three o'clock.


George Alexander Drew: Mr. Speaker, I would not wish to have it suggested that I am now discussing the issue before you; but I should like to point out that I concur in what has already been said, that this is one of the most important issues in the matter of procedure that has come before the house. So far as a ruling is concerned, I do not think any hon. member should be curtailed in his discussion of the matter, because I agree that the effect would be most serious. You should have before you, sir, before a decision is made, all the representations that any hon. members may wish to make. From what has been indicated it would seem to me that these representations cannot be heard in a few minutes.
At one o'clock the house took recess.
The house resumed at three o'clock.


John George Diefenbaker: Mr. Speaker, there are one or two references I should like to add to those already made in what I may be permitted to call the exceptionally able argument of the hon. member for Winnipeg North Centre (Mr. Knowles).
He pointed out that Hansard is not an official report. That had already been dealt with by Your Honour in Hansard of March 18, 1949, page 1611. On that occasion you,

sir, were Deputy Speaker, and as chairman in committee you mentioned Hansard and said, among other things:
I happen to have before me a copy of the Hansard of the British house, dated February 16, 1949, where Mr. Speaker in making a ruling stated:
"I think the right hon. and gallant gentleman said that it was a mistake in the official report. Hansard is not an official report."
Then you went on to quote from the report of what took place in the House of Commons on February 16, 1949, at page 1146. I am not going to read what was said on that occasion, except to point out and to summarize it by stating that the Speaker of the British House of Commons declared and decided that Hansard was not an official report. Of course Hansard is not an official report in the courts of law, either, where only the Journals are accepted.
There is further reference to the same point to be found in the parliamentary debates of the United Kingdom for August 3, 1944, page 1607, where the Speaker said as follows:
Hansard is really unofficial as far as division lists are concerned.
In that instance someone had raised the objection that his name had been omitted from Hansard.
Now I come to the point tentatively suggested for your consideration Mr. Speaker, by the Prime Minister (Mr. St. Laurent). He advanced it without argument and more or less, as I saw it, as a question, without pressing too strongly the citation to which he referred. I would say this, that the Journals of the house show that no decision was made on November 7, except in so far as the motion to go into supply was concerned, and the amendment to that motion by the hon. member for Winnipeg North Centre.
I think one way to find out whether or not what took place from the discussion on November 7 could be referred to would be to reduce the situation to its ultimate conclusion. Citation 345 in Beauchesne's third edition states:
The ancient doctrine that the redress of grievances should be considered before the grant of supplies is maintained in the House of Commons of Canada by the provision of standing order 49 that the motion for the Speaker to leave the chair can be amended: and the amendments need not be relevant but may relate to every question connected with public administration.
Then a little later on it says this:
Members may discuss various matters on the motion for the Speaker to leave the chair without any amendment being proposed; but once debate is stopped on one matter and another matter intervenes, members cannot again discuss the former.
In the event that a minister of the crown did not desire a discussion to take place on a matter of interest to the people of Canada,
Combines Investigation Act all he would have to do would be to rise in his place in the house when the motion was made that the Speaker do now leave the chair, and have an amendment and a subamendment proposed. That would deny any further amendment or subamendment. Having done that he would rise in his place and speak for one or two minutes on the matter in question; and after he had spoken, another member would rise and begin to deal with a different matter, which during that session would end the discussion of the matter raised by the first member.


Mr. Si. Laurent:: If an amendment or subamendment had been moved it would have to be disposed of by decision of the house.


John George Diefenbaker: Yes; once there is a motion, an amendment and a subamendment, there can be no further subamendment. When a subamendment is moved, a person who does not wish to have a discussion of any subject-and it could come from this side as well as the other-would simply rise in his place and for a moment make an explanation, and then he would have somebody immediately follow him, dealing with some other subject. That would end for that session any further discussion.
This would lead to a position wherein parliament would indeed be throttled and its voice be silenced at the wish of one or two members in the house. I submit that the very fact that that would be the result indicates why it is there are no authorities I can find that will support the view that, when a matter is merely raised and no motion or amendment is based thereupon, the fact that something is referred to denies further discussion.
During the noon recess I looked up the first reference to be found in May in this matter.
It is to be found in Commons Journals, volume 113, 1857 and 1858, page 65. This motion arose under the following circumstances: There was a controversy at the time regarding foreign affairs, in which the government of the day was desirous of not having any discussion. A motion was made, and a bill to meet the particular facts of the case was introduced. There had been a discussion of the subject during the preceding week, as will be seen in British Hansard for February 11, 12 and 13. On February 19 a motion was made by the government, and an amendment moved covering matters that had been discussed but not decided upon during the preceding week. The question being proposed, no exception was taken to it, and it was an amendment that had the result of defeating the then government. That is how serious the amendment was on that occasion. Yet no question was raised that because some

Combines Investigation Act casual discussion had taken place the week before, without decision, that fact would deny further discussion.


Mr. Pouliol:: Please do not be too technical.


John George Diefenbaker: That admonition is aimed in the wrong direction. I suggest that when one realizes the effect in this and in any other case in parliament of a mere reference to a matter discussed by one or other members, without any motion or amendment based thereon denying further discussion, then it must be realized that so far as parliament is concerned many matters discussed regularly would be denied discussion by the simple expedient of casual reference by one or other members in the house.


Jean-Paul Stephen St-Laurent: Mr. Speaker, I do not think anyone would suggest that casual reference to a subject arising during the course of the debate on the address, or the debate on the budget, or the debate on the motion for Mr. Speaker to leave the chair, would preclude further discussion. It is always a question of substance. Has there been a substantive debate on the matter, or has there not been such a debate? It may very well be that, where the motion is for the Speaker to leave the chair, no subject introduced by a member of the government could be regarded as an introduction of a subject for decision, because the question for decision is whether the Speaker shall leave the chair or not.
Hon. members will realize it has frequently happened in this house-I think the argument of the hon. member for Winnipeg North Centre (Mr. Knowles) is a good reminder- that there have been repetitious debates on the same matter. I raised the question this morning, for the Speaker to decide, whether or not we are to have regard to the substantive rule that matters shall not be twice debated on their merits at the same session.


George Alexander Drew: Mr. Speaker, the rule to which the Prime Minister (Mr. St. Laurent) has referred itself answers the argument whether or not this matter has been disposed of in such a way as to preclude further debate on the same subject. The relevant citation reads:
It is a wholesome restraint upon members that they cannot revive a debate already concluded; and it would be little use in preventing the same question from being offered twice in the same session, if, without being offered, its merits might be discussed again) and again.
In the first place, may I point out that no question has been presented to this house in regard to the Combines Investigation Act or the subject matter of the statement introduced by the Minister of Trade and Commerce last Monday on the motion to go into supply. In the second place, there was no debate on

the Combines Investigation Act, the circumstances related to Mr. McGregor's resignation, the violation of this law by the government, or any related subject, which was actually concluded.
The reason for this rule is so obvious that it needs little elaboration. If the members of this house deal with a motion which brings before the house arguments on both sides and then make their decision, it must certainly seem to be, not only a wholesome restraint but a very common-sense limitation upon the time to be taken in a particular debate to say that that same debate must not be revived. This debate was not on the Combines Investigation Act, on the administration of that act, or on the breach of the law by the government.
There was a motion to go into supply. There was an amendment to that motion. Availing himself of the opportunity to use such a motion to introduce the subject-I do not question the fact that that practice is established-the Minister of Trade and Commerce dealt to a limited extent with a particular aspect of the problem now before the house. May I point out what the difficulty would be if a ruling were made that the debate is limited by what occurred on Monday. Reference was made to the Combines Investigation Act and to action taken under that act. Does this mean that we cannot discuss it at all? If so, the explanation of the Minister of Justice, and everything else that has been said, is out of order.
At what point does the knife fall? At what point does the iron curtain descend? Unless it is possible at the same time to say just how far this limitation goes, then the limitation extends over the whole field of discussion of the Combines Investigation Act. All that this house has had in regard to this matter is a statement, presented on a motion that had nothing directly to do with it, in which the Minister of Trade and Commerce gave his understanding of the action that had been taken, which incidentally is in conflict with the explanation given by the Minister of Justice.


Mr. Rowe:: He did as he was told.


George Alexander Drew: Oh, yes; he did as he was told. The point that I now raise is that if any such ruling as this were made, not only would it be an easy device for effectively preventing debate on what might be regarded as a subject that the government did not wish to discuss; there would also be a never-never land created in which no one could tell exactly at what point the debate would be permitted to extend and where it might not.
The statement to which reference has been made was simply a limited statement as to

the broad point of view in regard to what had occurred. I fail to see how any hon. member of this house could possibly determine at what point he would be infringing upon the restriction suggested by citation 245 if it were ruled that what has taken place on the motion to go into supply can be regarded as a limitation upon further discussion of that subject although there was no conclusion.
Again I emphasize this point. The rule is that you cannot revive a debate already concluded, but no debate on any aspect of the Combines Investigation Act has been concluded, or upon the conduct of any minister or any official of this government. There is the provision that there shall not be a revival of a debate upon the same question. Subject is one thing; question is another. "Question" implies that there was an opportunity for the members to deal with the question before them. They did not have that opportunity in the motion before the house last Monday, and, therefore, within the actual wording of citation 245, I submit that nothing has occurred which limits full discussion of any aspect of what has already been mentioned in this house.


Jean-François Pouliot: Mr. Speaker, before you rise to give your ruling may I draw your attention to a few facts which are not without importance.
In the first place, this is not a question of parliamentary procedure, because there is no standing order on the matter. This is purely a question of parliamentary practice. As there are no precedents that apply to this case, you will have to use your good sense, your experience and your sound judgment to give a ruling that will satisfy the mind of every one of my hon. colleagues.
The debate on the point of order has been on a high plane. The hon. member for Winnipeg North Centre (Mr. Knowles) made a learned speech, but he spoke Greek, to me. The leader of the opposition (Mr. Drew) made a scientific speech but he spoke Hebrew. The hon. member for Lake Centre (Mr. Diefen-baker) was too technical, and he spoke either Latin or Armenian. I do not know which. We must approach the matter from the point of view of reason in order that the Chair may give a ruling that will serve not only for this occasion but for the future. The main thing is to know what is meant by a revival of debate. No one has defined it. It is up to you, Mr. Speaker, to say what is a revival of debate. How often, when points of order are debated, do I realize that hon. members take definitions for granted. There is no standing order to
Combines Investigation Act cover what is a revival of debate. We have no precedent, and yet we talk about it as if we all knew what it is. Please tell us in your ruling, Mr. Speaker, what is a revival of debate.
The second point is that none of the opposition members who have spoken have shown the relation that exists between a debate on the McGregor report and a debate on the amending bill. If there is no relation, then there is no revival of debate. If there is some relation there might be a revival of debate, or the McGregor incident might be considered as an interlude between the first and second readings of the bill. I should like any member of the opposition, or any other member of the house, to tell me what the relation is, if any, existing between the McGregor report and the debate on the second reading of the amendments to the combines legislation. Relying on your sense of justice, experience, and fair play, Mr. Speaker, I leave it to you to make a decision that will be memorable in the annals of parliament.


Mr. Speaker:: Order. I have heard many representations. If there are any references which have not been given previously I will hear them, but I think any further remarks might be repetitious.


Mr. Browne (St. John's West):: I have a matter that has not been mentioned before.


Mr. Speaker:: Would the hon. member mention it briefly.


William Joseph Browne: Citation 488 of Beauchesne, second edition, 1927, reads:
Whenever an order of the day has been read for the house to resolve itself into the committee of supply or the committee of ways and means, the motion ''that the Speaker do now leave the chair" must be proposed, except in cases provided by standing order 28. When such motion is proposed, it shall be permissible to discuss any public matter within the powers of the federal parliament or to ask for the redress of any grievance, and it is not necessary to move an amendment for that purpose; provided that the discussion and the amendment, if one is moved, shall not relate to any decision of the house during the current session, nor to any item of the estimates, nor to any resolution to be proposed to the committee of ways and means, nor to any matter placed on or whereof notice has been given in the order paper.
The present bill was introduced on November 4, and I humbly submit that the Minister of Trade and Commerce (Mr. Howe) was out of order when he discussed the matter on Monday last.


Mr. Maclnnis:: Mr. Speaker, I shall be very brief. I am suspicious of too many words because they are sometimes used to bury a subject. I think the question is a simple one, and it rests wholly on this point. Is a member or a supporter of the government, by the introduction of a subject on the motion to go

Combines Investigation Act into supply, going to prevent any further discussion on that subject during the same session? If that should be your ruling, it is the end of free debate in the house. That is the point I wish to make. I do not know whether, when the Minister of Trade and Commerce (Mr. Howe) raised the question last Monday, he had that purpose in mind, but if your ruling today is that any discussion on this subject is out of order that will be the result.


Mr. Speaker:: May I, at the outset, thank hon. members for the extended and helpful observations they have made on this important matter. I have allowed a full and unrestricted debate on the point of order because I realize it is a very important one, and I think the house is most anxious that I should have all the pertinent citations before me when giving my ruling.
After the order of the day has been read for the second reading of a bill or otherwise, the remarks of members must be "strictly relevant to the business under consideration." (Beauchesne's Parliamentary Rules and Forms, third edition, citation 140).
The "business under consideration" on the second reading of a bill is the principle of the bill. Members must accordingly confine themselves to a discussion of that principle and must refrain from introducing or referring to extraneous matters. (Bourinot, Parliamentary Procedure, fourth edition, page 509). The words which I am about to utter refer directly to this bill.
On the second reading of an amending bill -hon. members will notice that this is an amending bill-it is the principle of the amending bill, and not the principle of the act to be amended, which is the "business under consideration." The discussion must therefore relate exclusively to the principle of the amending bill. If, for example, a bill were introduced to amend a certain section of the Criminal Code of Canada, the discussion would have to relate to the principle of the particular amendment. It would be irregular to enter upon a general discussion of the Criminal Code as a whole. See Blackmore's Speakers' (Denison's and Brand's) Decisions, 1857-84, at page 70.
The principle of the present bill, an act to amend the Combines Investigation Act, is that it is desirable to facilitate the enforcement of that act by providing for the institution of proceedings by the Attorney General of Canada, by eliminating jury trials where corporations are charged with offences under the act, and by modifying and clarifying the applicable rules of evidence. The present discussion should accordingly relate exclusively to this principle. It is not in order to

discuss the principle of the Combines Investigation Act itself, or to discuss clauses of that act, or other matters, not clearly related to the principle of the amending bill.
It seems clear that a renewed general discussion of the McGregor report, a debate on which took place on November 7 on the motion to go into supply, is not in order on the motion for the second reading of this bill, because the discussion must relate exclusively to the principle of the amending bill.
Most of the discussion on the point of order has turned on citation 245, Beauchesne, third edition, which restates a passage from May's fourteenth edition, and reads as follows:
It is a wholesome restraint upon members that they cannot revive a debate already concluded; and it would be little use in preventing the same question from being offered twice in the same session if, without being offered, its merits might be discussed again and again.
I am of the opinion that this citation would not preclude all reference to matters dealt with during the earlier debate on the motion to go into supply so long as the reference can be shown to relate clearly to the principle of the amending bill now before the house. In reaching this conclusion I have also been conscious of the fact that the matter of the McGregor report was raised on the motion to go into supply as the result of a ministerial statement, and not by a private member raising a grievance or speaking in opposition to the motion. This being so it would seem inequitable to rule out of order all reference to the matters dealt with at that time.
On the other hand, it seems to me there are many aspects of the McGregor report which bear no relation to the bill before the house, and the discussion of which would not be in order on the motion for second reading. Nevertheless, in view of all the circumstances connected with the present debate, I think some reasonable leeway should be allowed. I refer to May, 14th edition, at page 497:
Debate on the stages of a bill should be confined to the bill, and should not be extended to a criticism of administration . . . but the Speaker remarked, when called upon to enforce this rule, that on many such occasions some licence was conceded to hon. members who addressed the house; and the rule is occasionally relaxed.
Accordingly I am inclined to think that the leader of the opposition (Mr. Drew) should be permitted to proceed. In saying this, however, I should like to express the hope that all hon. members will bear in mind the necessity of discussing the principle of the bill, so that it may not be necessary for the Chair to qualify the indulgence which has been granted.


George Alexander Drew: Mr. Speaker, at the time the discussion arose in regard to the point of order I was referring to the views which have been expressed by Right Hon. W. L. Mackenzie King in regard to the importance of publicity and its effect in dealing with this subject. Because of the fact that during the greater part of the time the present act has been in force he was Prime Minister of Canada, I should like to read into the record his remarks appearing at page 746 of Hansard for February 2, 1948, to indicate what he had to say as to the importance of the publication of reports. In doing so I recognize that this subject also has been discussed in a more limited way in the exchange of correspondence which was tabled here last Monday. This is what Mr. Mackenzie King had to say:
May I say that this desire to find the facts, making that the basic duty of the committee, is founded upon the very sound philosophy that in the cure of what one might call social wrongs or anti-social evils, those anti-social acts which adversely affect the great masses of the people in their individual lives and homes, publicity in regard to the facts is a much more effective remedy than penalty.
Whatever men may be in their individual lives, there is nothing they abhor more, if they have been guilty of any meanness or taken any undue advantage of their fellowmen, than to have that meanness exposed in public. In regard to this class of social wrong I believe that if there are people to-day in Canada who are hoarding where they should be selling, and if there are others who are profiteering where they should be glad to do what is fair, such people will quickly take notice of the fact that this House of Commons has appointed a committee which can go into any single phase of this problem and bring individuals from any part of the country to answer for situations in which they may be involved.
I for one firmly believe in the power of publicity when based on facts. Public opinion plays a very large part in determining the course of events and the conduct of human beings. However, if public opinion is to be effective and to be of national service, it is very important that opinion be fully and clearly informed. The trouble with the situation to-day is that there is not sufficient knowledge of the facts to enable public opinion to be formed intelligently.
I end the quotation there because I believe what was said on that occasion has a very direct bearing on the view that has been expressed here, that there should be more information in regard to certain facts. As far as the present bill is concerned, it makes certain limited proposals. The Minister of Justice (Mr. Garson) has given his reasons for the amendments he is proposing. He has suggested that those constitute only part of what had been discussed as a result of the recommendations of the combines investigation branch.
The reason for emphasizing what has taken place is this. In deciding what course should now be followed, it is essential that we
Combines Investigation Act recognize exactly what has been done already under the act as it stands. In order that there may be no suggestion that a review of this point will not be relevant to the subject matter in question, I indicated that I proposed to move an amendment that this whole matter be referred to an appropriate committee in order that further information might be obtained. If hon. members are to form an accurate judgment as to whether or not there is reason to place this question before a committee, it is essential that they examine what actually took place. Whether or not the report was correct in its conclusions, whether the commissioner may have overlooked some facts which should have been taken into consideration, or whether the report itself failed to show what the government regarded as adequate reasons for proceeding under the act, all have no bearing whatever upon the mandatory requirement that the report shall be published by the minister. In his letter of November 4 to Mr. McGregor the Minister of Justice gave this explanation for his failure to publish the report:
The government therefore took the responsibility of withholding publication of your report pending the amendment of the Combines Investigation Act to cure the difficulties created by the dental supplies judgment.
That reference can only be to the amendments now before us; therefore these very amendments bring directly into consideration the withholding of this report and the reasons for doing so. The government, through the Minister of Justice, was asked upon what authority it relied when it made its decision not to act under section 27, subsection 5, of the Combines Investigation Act. To this direct question the Minister of Justice is reported at page 1524 of Hansard as saying:
Well, Mr. Speaker, it relied upon the fact that any democratic government is answerable to the people of the country for its acts.
That statement, Mr. Speaker, is a challenge to our whole system of responsible government. It implies that the government has the right to make its decisions and then withhold any knowledge of those decisions as long as it sees fit. Then, at some future date, the government can let the public decide what they think about the limited information they have in regard to what took place. That is not our system. Our system is clear. The members are responsible to the people and the government is responsible to parliament. It is essential that we bear that in mind in reviewing what has taken place.
This report of the commissioner under the Combines Investigation Act was delivered to the Department of Justice on December 29, 1948. The act required that the minister publish that report within fifteen days. It
1728	HOUSE OF
Combines Investigation Act should have been published, therefore, by January 13. This house met on January 26. Assuming that the minister felt there might be good reasons for withholding publication, and that he thought he was justified in doing so, then at least it was his bounden duty to explain to the house as soon as it met that he had taken this course. This would have enabled parliament, to which the government is answerable, to express its opinion on that decision without delay. That was not done. There was no hint that this report was being suppressed. On the contrary the fact that the government continued to withhold any action, and that it did withhold this report until more than two years after the alleged offences had been committed, has perhaps resulted in the further fact that, no matter what case may be made by the report, no action can be taken. However, that is another subject.
Once again, might I emphasize that we are not called upon to pass upon the findings of the commissioner in determining the correctness or otherwise of the actions of the government in this case. What every member of this house should be concerned about is the unquestioned violation of the act by the Minister of Justice, and his unexplained failure to place this whole subject before the House of Commons after it met last January. If the facts were so clear, why was this whole question not placed before parliament at that time? Could there be the slightest doubt in the mind of any hon. member as to the real reason for suppressing this information? In explaining the violation of the act last Monday, the Minister of Justice said the government relied, as I have said before, upon the fact that it is answerable to the people. The government took extremely effective steps to see that the people had no knowledge of this matter when the people did have a chance to express their opinion.
These words of the Minister of Justice disclose a state of mind which makes this incident more serious than it already appeared to be. The government broke the law; there can be no dispute about that. Asked for an explanation, the Minister of Justice blandly replies, in effect, that the government is answerable, not to parliament but to the people at such time as they have a chance of expressing their opinion. This raises a far more serious issue than the violation of the Combines Investigation Act by the government, serious though that is. It is doubtful whether hon. members have been confronted with so serious a fundamental issue since confederation. The law which has been violated by the government was a law passed by parliament. It is all very well for the Minister of Justice to smile, but the very


fact that he smiles indicates how careless some members of the government have become about the constitutional practices upon which the survival of our system will ultimately depend.
One of the suggestions put forward in regard to this act and to the problems raised is that the act itself would be the basis upon which companies that had been doing a public service might be pilloried. In view of the fact that certain amendments are under discussion, necessarily the whole act is under consideration at the same time. It would be well to go back to the speech with which the present act was introduced in 1923. On May 7, 1923, the then Prime Minister emphasized something that seems to be overlooked by those who feel that the terms of the act may be unduly harsh. At page 2520 of Hansard of that date, Mr. Mackenzie King is reported as follows:
I notice that many of the newspapers of the country have reported that the government is endeavouring by this legislation to legislate against combines as such, to legislate against the right of manufacturers or merchants to fix a resale price. There is nothing of the kind in the legislation. As a matter of fact, it proceeds from a diametrically opposite point of view. I explained that, I think, pretty fully at the time of introducing the bill. It proceeds broadly on the theory that in this age of commercial and industrial competition, not merely between industry and industry and locality and locality, between the industries of one province and those of another, but between the industries of one country and those of another, the industries, one might almost say, of one continent and those of another, large combinations of capital, organizations of business in a large way, are an absolute essential if the business of our country is to hold its own in competition with the business of other countries. But just because it is recognized that it is necessary to have these large organizations of business, so the government recognizes that some restraint must be placed on the possible abuse of great power which may come into their hands.
It was for the purpose of restraining such possible abuses that this act was introduced. The act does not make every combine a law breaker, but the act prohibits only such combinations as are likely to operate to the detriment or against the interests of the public. Section 498 of the Criminal Code, which has been referred to by the Minister of Justice (Mr. Garson), deals with the same subject, and also contains a similar limitation upon its effect because it provides that there is an offence only if there is an undue limitation of competition. What is undue or what is contrary to the public interest is for the courts to determine.
This matter is one which has been brought before the house by the exchange of correspondence. One of the things which hon. members should bear in mind is what was said by Mr. McGregor in his memorandum

accompanying his letter to the Minister of Justice. I quote from the second page of his memorandum:
There is greater need now for strong action under the combines act than there has been at any time in the past twenty-five years. To an alarming degree price fixing activities such as we reported in the flour milling industry have been developing in the post-war years; some of them originated in the war period; and some were started, as in the flour milling industry, even in the pre-war years. To meet the situation, to prevent these practices which are designed to limit or eliminate the public safeguard of price competition, there is every reason why the powers of the combines act should be strengthened. Council accepted in the present bill our proposals of three amendments, including a very important amendment designed to meet the difficulties of the dental judgment; but the only suggestions from the council which you called on me to consider seriously were provisions which would have had the result of limiting the effectiveness of the legislation.
I have in mind such proposals as those to eliminate the commissioner's initiative in launching inquiries, to place serious limitations on the requirement that reports be made public, and to provide for exemption, after prior approval, of certain types of agreements to restrict production or eliminate price competition. These suggestions have not been included in the present bill, but my understanding from you is that consideration of them has been merely postponed pending a proposed "overhauling" of the act. Overhauling of the act could serve many useful purposes. I am apprehensive, however, particularly in view of the nature of the changes which have been suggested for consideration, of the ultimate result of any revision of the statute which would include changes along these or similar lines.
Since this is a statement of the commissioner under the combines act it is of the utmost importance that hon. members know whether it does correctly interpret the situation which exists, because an understanding of that is essential if a sound decision is to be made in regard to the issue which is now before the house.
One thing, of course, that is always in the minds of hon. members when a matter of this kind is under discussion is what the position of the government is in regard to the numbers of hon. members who support it. The challenge that is now before the house is not merely as great a challenge to members of the opposition as it is a challenge to every member of the party who supports the government to reassert the responsibility of parliament on this occasion. After all, if the members of any party are simply to vote in accordance with the place where their names are included in the list of members of this house then it will be quite unnecessary to attend. The government could introduce its legislation and the vote could be taken on the basis of the numbers of members here, and the result would be in accordance with practice of that kind.
Our whole system has been based upon the assertion of members of every party of the basic principles of our parliamentary
Combines Investigation Act system. Certainly the government has a great majority, but let us remember that there has hardly been a time in the history of parliaments when the government was not reasonably assured of a majority in the house when it presented legislation. That is not the basis upon which debate proceeds. Debate proceeds on the assumption that hon. members will give it their consideration and vote in accordance with the reasons that are put forward and with the needs of the people of this country and the best interests of Canada as a whole. If our parliamentary system is in jeopardy, then those who have the greatest responsibility are those who constitute the majority. The greater the power the greater the responsibility, and in this case that responsibility is very heavy indeed.
I	propose to move an amendment,
Mr. Speaker, which will make it possible for hon. members to deal with it with the kind of information which they should have. I therefore move, seconded by the hon. member for Lake Centre (Mr. Diefenbaker):
That the said bill be not now read the second time but that the subject matter thereof be referred to the standing committee on banking and commerce with instructions that they have power to send for persons, papers and records and that in addition to other recommendations with respect to the subject matter of the said bill they shall also have power to report upon the extent to which the effective administration of legislation relating to restrictive trade practices has been, or is being, prejudiced by the action of the government in failing to carry out the mandatory requirements of the existing law.


Major James William Coldwell: This is an important debate from a number of points of view, not the least being the situation under which this matter was brought into the House of Commons. May I just summarize. Less than two weeks ago I asked the Minister of Justice (Mr. Garson) a question as to whether a report had been made on the flour milling industry. He said that he would answer the question the next day. My colleague, the hon. member for Vancouver East (Mr. Maclnnis), asked whether the commissioner under the act had resigned. The same answer was given. The next day we learned that a report had been made and that the commissioner had resigned. It was then we were told that this particular bill would be introduced to amend the Combines Investigation Act. It is safe to say that at least the introduction of this amending bill was expedited by the questions that were asked in the house, and that brought to light both the resignation of the commissioner under the Combines Investigation Act and the fact that the report had been suppressed.
I want to say to the government and to hon. members that when the government

Combines Investigation Act took upon itself-and let us remember that the minister acted after having received advice from the government regarding this matter-to suppress the report it violated one of the fundamental principles of our parliamentary democracy. I have no recollection of anything of the kind being done in the course of our parliamentary history in Canada; but I would remind hon. members that in 1649 an English king was beheaded because he did exactly what the government has done in this connection. I would remind hon. gentlemen that in 1688-89 another king, James II, was compelled to vacate the British throne for doing precisely what the government has done in this connection.
While there are several of them, there are at least two basic documents upon which not only our own parliamentary democracy but the democracies of the United States and of all other English-speaking democracies are based-Magna Carta and the Bill of Rights.
The Bill of Rights was introduced into the British House of Commons in 1689. After reciting their grievances this is what it sets out in the very first two clauses:
And thereupon the said Lords Spiritual and Temporal, and Commons, pursuant to their respective letters and elections, being now assembled in a full and free representation of this nation, taking into their most serious consideration the best means for attaining the ends aforesaid, do in the first place (as their ancestors in like case have usually done) for the vindicating and asserting their ancient right and liberties, declare:
1.	That the pretended power of suspending of laws, or the execution of laws, by regal authority, without consent of parliament is illegal.
2.	That the pretended power of dispensing with laws, or the execution of laws, by regal authority, as it hath been assumed and exercised of late, is illegal.
I say to the Minister of Justice (Mr. Garson) that that is precisely what happened in connection with this report, namely that the government exercised a pretended power of dispensing with the execution of a law, a statute, passed by this parliament. And, having assumed that power, it exercised the power illegally.	.
Then, in our own parliamentary history, in 1873 in the House of Commons the Hon. Edward Blake, who I believe in those days was a member of the Liberal party, said this:
It makes no difference to a free people whether their rights are invaded by the crown-[DOT]
That is, by regal authority-
-or by the cabinet; what is material is to secure that they shall not be invaded at all.
I say in this connection that while we will support the amendment offered by the leader of the official opposition (Mr. Drew) I regret that it is in the terms in which it is. I think what we should be doing in this house in the discussion this afternoon is moving a vote of

censure of the government, and asserting our right as a parliament to discipline the government for the breaking of the law of this land.
However, we will support the amendment [DOT] offered by the leader of the official opposition. As I have said, this matter is much more grave than appears on the surface, if we allow what has happened to go without complaint. If we allow the cabinet to usurp the rights of this parliament, to set aside acts of parliament and to neglect to fulfil and to execute the statutes of this parliament, we are jeopardizing the whole parliamentary system as we have known it throughout the years.
Let me say at the very outset that to my mind this is the fundamental issue in the debate. It is true that we are discussing amendments to an act on our statute books. But what use is it to discuss amendments to any act of parliament if the government arrogates to itself the right to set aside acts of parliament? What guarantee have we that these amendments now before the house will not be treated lightly by the government of this country? And I say to the Liberal majority in the house that if they are true to the principles of Liberalism they should be repeating what we have been saying in the house today, and what we said on that former occasion a short time ago when the matter was before the house.
And so, while we welcome these amendments, we feel the house should have had an opportunity of expressing itself with regard to the suppression of the report, to which reference has been made this afternoon. And I say this, that whether it was deliberate or not, the manner in which the previous debate was instituted the other afternoon precluded the possibility of the opposition-or indeed any member in the house-calling upon the house to make an effective protest by way of a vote. That prevented a discussion-and I am glad, Mr. Speaker, that your ruling today was such that it does not rule out entirely references to the grave matters to which I have just referred.
This also I wish to say, that the party I have the privilege of leading in the house has always been keenly interested in this particular type of legislation. From time to time we have raised the question of the growing trustification of this country, of the participation of powerful interests in Canada in international cartels. Sometimes we have felt that very little attention was being paid by some hon. members to these matters, and that very little care was being exercised in connection with them.
I say I am glad this legislation has been introduced, because two years ago within a couple of weeks, after a conversation with the

present Prime Minister (Mr. St. Laurent), who was then secretary of state for external affairs, I wrote him a letter which I wish now to bring to the attention of the house to indicate how interested we have been over the years in these matters. I shall quote the material part of this letter dated at Ottawa December 4, 1947, as follows:
As far as I have been able to find out, there appear to be both price agreements and monopolies, which I readily admit are rather difficult to detect, but which, from all appearances, certainly exist and should be investigated.
My fear is that our legislation regarding the control of monopolies, is inadequate, and the needs of the present situation far beyond the scope of our present staff, which is much too small.
However, my opinion is that monopolies, in various degrees, exist in aluminum, cement, our principal chemicals, in rayon yarn, in the production of steel rails, and, of course, in nickel, lead, some iron and steel products, and some nonferrous metal products.
As to price agreements, I think it is pretty well known that, where there is any competition in fertilizers, price agreements exist. It was well established-although an appeal, owing to the death of the judge, was not made-that the tobacco products are subject to price agreements and price fixing; also it was established that rubber footwear and the principal leather industries have agreements regarding prices, and that there are large areas of plumbing and heating equipment and hardware products in which there are price agreements.
You will recollect too, that the moving picture industry was acquitted on technical grounds of combination in 1931.
Price spreads investigation made some disclosures regarding the manner in which live stock prices appeared to be agreed upon each day, by Canada Packers and Swift Canadian. In the opinion of persons who have had personal experience with these two companies, and whom I know well, these practices continued after the investigation, and may still continue. In any event, these seem to be operations into which investigation is warranted.
Early in the 1920's, the fruit wholesale monopoly was investigated by, I believe, the Duncan commission, and certain disturbing facts were established. As lately as 1939, a combine was reported by the commissioner, in the wholesaling of fruits and vegetables in western Canada. Again, the action failed on-what appeared to be-highly technical grounds, and there was no appeal.
In view, however, of the recent increases in prices, I should think that immediate fields for an investigation might be fertilizers, canned goods, textiles, rubber footwear, and, I would include, farm implements-about which a parliamentary committee made a report in 1937.
I realize that this is a pretty formidable list, but I do not think that, even then, it is exhaustive. In my opinion, Canadian industry has become more and more under the domination of monopolies, and more and more guilty of price fixing; in other words, I believe that competition in many major lines of endeavour is non-existent.
I thought I would read that letter lest it be said that we are taking advantage of the introduction of this legislation to talk about combines without having suggested anything in regard to meeting this situation from time to time. As I said in that letter two years ago, the legislation we have had
Combines Investigation Act on the statute books has been inadequate and we welcome the amendments that have been introduced. However, in voting, as I expect we shall do, to refer the subject matter to a committee of this house, we are not in any way trying to delay the passage of this measure. Arising out of the meetings of that committee might conceivably come recommendations for the further strengthening of the Combines Investigation Act. However, much as I welcome these amendments, I do not think they are exhaustive by any means.
As I have said for years, Canadian industries have been subject to the control of powerful nation-wide monopolies and combinations. The competitive system upon which the free enterprise system, as my hon. friends like to call the present system, relies has been quite largely destroyed in our country. If we accept the definition that competition involves primarily competition in price among manufacturers and producers, then I submit that there is no competition at all in major sectors of our national economy.
I learned from the classical economists, which I used to study years ago and which I occasionally read from time to time, that the very basis of regulation in an unplanned or free enterprise system, such as was defended and indeed visualized in the early years of this and the last century by the economists of the capitalist era, is that each manufacturer or producer decides independently of all other manufacturers or producers of the same class what the selling price of his article shall be. That was a classical definition.
The fact that we have manufacturers producing the same type of article competing and advertising for sales does not involve real competition in price which, as I have said, must be present if we accept the classical position as the basis for competition in a free enterprise or capitalist system. The feature of the Canadian economy today which has been developed since the early days of the present century is that few producers or manufacturers of basic commodities have survived. The number has been whittled down until it can be said that just a handful of manufacturers dealing with a particular commodity-this is illustrated in the report of the flour milling industry that has been placed before the house-have succeeded in occupying a monopoly position where they get together and decide that there will be no competition in prices.
This is particularly true in certain of our great industries. For example, in oil we have Imperial Oil. In the chemical industry we have Canadian Industries Limited. The same applies to the iron and steel industry. In the case of farm implements it was shown

Combines Investigation Act conclusively before the parliamentary committee which sat in 1936 and 1937, as it was shown before the Saskatchewan legislative committee and before a committee of the congress of the United States, that the farm implement business was dominated by two great companies, International Harvester and John Deere. We all Should know the story of cement in this country where Canada Cement has a complete monopoly. The brewing and hard liquor industries are in the same position. The hard liquor industry is monopolized by one, two or three firms. While there may be more than two or three firms in the brewing industry, price levels are maintained.
The reports by the investigators under the Combines Investigation Act have shown conclusively that price agreements eliminating price competition have been arrived at. We have reports before us dealing with dental supplies, bread baking, optical goods, tobacco, fruits and so on, while parliamentary and legislative committees, as I have pointed out, have shown that the same sort of thing is to be found in the field of farm implements. The situation revealed in western Canada in connection with the bread baking industry is such that prosecutions should be proceeded with by the federal authorities.
As has already been indicated, we 'have the report on the flour milling industry which the government concealed and now states its refusal to act upon.
In addition to the amendments being introduced at this time, I think amendments should be introduced to the Criminal Code whereby combinations of this sort extending over long periods of years can be prosecuted, not only for what may have been done in the last two years but for what may have been done throughout their entire history as a combination. The alleged limitation in the Criminal Code in connection with this particular type of combination and price fixing should be removed and any companies involved should be held accountable for anything done over a reasonable period of years.
The facts are self-evident and there is no question in my mind that under the act as it now stands the flour milling industry could have been attacked successfully earlier this year had the report of its operations been made public and had the government proceeded to take action against them.
I say that the flour milling interests could have been attacked successfully for their operations during the war period. Not one tittle of evidence has been produced to show that the government, the wartime prices and trade board, or any of its officers, authorized the stifling of competition between December, 1941, and September 15, 1947, when I understand these investigations were started, and
[Mr. Coldwell.l

commenced incidentally, as the leader of the opposition (Mr. Drew) said today and as I said the other day, with the knowledge and the approval of the then minister of justice, the Right Hon. J. L. Ilsley. From having studied the report I say that I believe, under the unamended terms of the act, there was an excellent chance of succeeding with the prosecution of the flour milling industry for its activities during the war period.
As the minister knows, I have asked for documentary evidence to support the contention that what the flour milling industry did in the war years was done with the authority of the wartime prices and trade board. I have been told that considerable research is necessary in order to produce any such documents. Consequently I think it is pretty safe to assume that up to the present time neither Mr. Gordon, nor any of his wartime officers, nor the minister, are aware of any documentary evidence or any authority given directly or indirectly, under which the milling industry maintained high prices and endeavoured to eliminate price competition in their industry in the war years.
For a moment I want to refer to one or two parts of the report to substantiate what I say. For, while the amendment is designed to strengthen the act, and we welcome it, have we any assurance that when we pass the legislation and the act is strengthened this matter will be proceeded with and these great interests prosecuted? On June 12, 1942, we find this:
. . . now that the export business has been so drastically reduced, higher prices in the domestic market are inevitable. Unless export business picks up, it will certainly be necessary for the mills to come to some agreement to maintain ceiling prices and we believe efforts will be made along this line shortly.
Let me point out that ceiling prices were authorized but minimum prices were never authorized. The other day-I thought rather unfairly-the Minister of Trade and Commerce (Mr. Howe), or was it Mr. Gordon in the document which the minister read, compared the milling interests with the gasoline interests. I believe it was the Minister of Trade and Commerce. That is an entirely different situation. The wartime prices and trade board set a fixed price on gasoline. It could not go up; it could not go down. They set a ceiling not a floor on cereal products, including flour. One gentleman, Mr. Soward, wrote to the officers of his company, the Maple Leaf Milling Company, and on October 5, 1942, an informal meeting of the executive committee was held and the following recommendations were made for submission at the next executive meeting:
It was realized that the first step to be taken in respect of correcting certain conditions within, the

industry, in so far as our members are concerned, was to petition the flour administrator to establish uniform ceilings on flour for the different categories of trade, based on the highest ceilings which any mill could establish, and which would constitute a uniform price. The next step considered necessary was a guarantee by all mills to advance to, and maintain their prices at, the ceilings established.
In this respect, however, the view was expressed that perhaps all mills could not sell at the same price in all sections of eastern Canada, and as a means of overcoming that difficulty it was suggested that any mill would have the privilege of declaring, in meeting, its intention to sell (in territories designated by the mill) at a discretionary price of 10 cents per barrel under the uniform prices set by the flour administrator.
While such a submission was subsequently made to the flour administrator, uniform prices were never established by the wartime prices and trade board. Indeed, the establishment of a uniform structure and prices was finally agreed upon by the industry for the province of Quebec, and at a meeting of the Quebec sales managers on November 2 a proposed new selling structure and prices were set up. I bring that to the attention of the house because that was wartime, 1942. Wherever we look in the report we find that, while the wartime prices and trade board set ceilings, they did not set floors. Whatever the association may have tried to do, reading the report I can find no evidence to support the suggestion that they did so by authority of the wartime prices and trade board. I could go on reading extract after extract from their minutes to bear out what I say. For example, there are the minutes of the meeting of the association of the 21st of April, 1942, reading:
Arising out of a long discussion of recent developments in certain centres (Kamloops, Calgary and Trail were cited as cases in point), the following resolution was unanimously adopted.
"There shall be no reduction in the dealer structure by any kind of independent action to meet any local price situation. Each situation as it arises shall be reported to the secretary as the means to obtain complete executive action."
Then I find this in the minutes of October 21, 1943:
The dealer list is to be maintained without deviation in all classes and categories of the trade.
It is the association's decision, not that of the wartime prices and trade board. Who was the controller? The controller was the manager of one of the great milling companies. Again I emphasize that, in my opinion, without strengthening the act-and I am glad it is being strengthened-a prosecution could have been undertaken under the old act with at least some chance of success. Again I want to emphasize that the wartime prices and trade board set maximum prices, and as far as I can find anywhere in the report they gave no authority which would justify the actions of the association. I look forward to
Combines Investigation Act seeing what the minister can produce in the course of the next day or two. So far as I can see the board gave no authority to sellers to combine to prevent price reductions below the ceiling level; indeed, quite the opposite.
On May 26, 1947, just before controls were removed, we find documentary evidence to show conclusively that the association was endeavouring to force some companies to maintain prices which those companies did not think they needed to maintain. It is the same with mill feed, a very important item to our farmers. In the minutes of an executive meeting of August 18, 1944, I find the following:
Members of the Alberta group shall take immediate steps to examine the basis of sales of coarse grains and mill feed, interior British Columbia, and so be prepared to resolve the common problem at the next executive meeting.
Therefore I say that this matter is of paramount importance from two points of view. The first point of view which I mentioned was the importance to the life of this parliament, the preservation of our democratic institutions in Canada, of our adherence to parliamentary practice, and indeed more than that, of our adherence to the basic principles of the Bill of Rights and the rule of law. I say, further, that as far as the evidence goes, in the report we have read during the last few days no suggestion can be found anywhere that at any time Mr. Donald Gordon or Mr. Ken Taylor gave any assurance to the milling industry or encouraged them to maintain prices at the maximum ceiling level. No action was taken by the wartime prices and trade board to set a floor price, nor was any encouragement given the milling industry to prevent reductions in domestic prices.
Now let us take a look at a paragraph on page 115 of the report which I am going to read because it has a bearing on the discussion we have heard in this house:
Simultaneous and uniform price increases were put into effect on September 15, 1947, when the wheat subsidy was withdrawn and flour prices were decontrolled. Flour was increased by $4.05 per barrel and mill feeds by $10 per ton. While the investigation which followed disclosed little documentary proof of agreement on these particular price increases . . .
Indeed, if I may say so, the people who were investigated denied that there was any agreement.
. . . examination of company and association records disclosed a series of price fixing agreements over a period of years. In the oral hearings association members contended that the uniform price increases in September had not been determined by agreement. . . .
Yet last week we were told that on September 15, when the controls were coming off, Mr. Ken Taylor got in touch with the flour controller and together they agreed on an. increase of $4.05 per barrel.

Combines Investigation Act


Stuart Sinclair Garson: Oh, no, Mr. Speaker.


Major James William Coldwell: I am quoting from the report.


Stuart Sinclair Garson: My hon. friend says we were told that Mr. Ken Taylor and Mr. McGregor got together and reached this agreement.


Major James William Coldwell: No; I said Mr. Taylor and the dour interests.


Stuart Sinclair Garson: The house was not told that by me, and I think I was the only one on this side who dealt with that subject matter in the debate. However, I shall be glad to deal with the point later on. That certainly was not the case.


Major James William Coldwell: Then I shall put it in this way: that it was indicated in this house that Mr. Ken Taylor informed the millers that the government thought a price increase of $3.95 would be about right; that they wanted a higher price, I think $4.25 or $4.45; and that there was a sort of understanding that $4.05 would be all right. That, I think, is a statement of fact.


Stuart Sinclair Garson: I have no objection to my hon. friend using any figures he wishes as long as he does not put them in the mouth of any person on this side of the house. I do not know where he got those figures, but certainly I never used them. What I said was that Mr. Ken Taylor, under the instructions of the government, had dictated a certain figure of $4.05 for flour and $10 for mill feed, and the direction went through on that basis.


Major James William Coldwell: One or other of the ministers if I am not mistaken referred to this matter of the price discussion between Mr. Taylor and the millers, and I was under the impression those figures were given. In any event there was a discussion.


Stuart Sinclair Garson: Whatever discussion there may have been, the point was that in the end Mr. Ken Taylor, under the instructions of the government, directed the industry that a certain level was to be maintained.


Major James William Coldwell: He directed the industry after controls had come off? What authority had the government to direct Mr. Ken Taylor or the industry to set a price, when controls were coming off?


Stuart Sinclair Garson: What he did was this. He intimated to the industry that in spite of the fact that controls had come off it was the desire of the government that there should not be an excessive increase in the prices of flour and mill feed, and that a specified increase of $4.05 and $10 would be acceptable, but that if this were not adhered to the government would have to consider the reimposition of controls.


Major James William Coldwell: Well, I am going to continue reading the paragraph I was quoting when interrupted:
In the oral hearings association members contended that the uniform price increases in September had not been determined by agreement, although some members admitted that prior to decontrol they had discussed their increased costs. The only discussion of the subject recorded in the confidential memoranda in the east was at a meeting on March 21, 1947, when agreement was reached to convene the eastern sales managers "for the purpose of arriving at proper selling structures in preparation for decontrol: the combined views to be considered by the general sales managers in meeting."
My hon. friend has just drawn to my attention that in his speech on November 7 the Minister of Justice said:
After considerable remonstrance and discussion the millers accepted $4.05 for flour and a price of $10 for mill feed, the desire being that the price of flour should, not be held down at the cost of having mill feed rise too high.
I thought the other figures were given at that time also.


Stuart Sinclair Garson: Not at all; and they accepted the figure which had been determined by Mr. Taylor.


Major James William Coldwell: Well, we need not quarrel over that; but when they say there was no agreement among themselves, from what the minister says and from what this report says it is obvious that they must have reached agreement among themselves to accept a suggestion made by Mr. Ken Taylor on behalf of the government at that time.


Stuart Sinclair Garson: Is my hon. friend implying that such an agreement is contrary to the act?


Major James William Coldwell: I suggest that such an agreement was contrary to the act.


Stuart Sinclair Garson: In other words, if the director came along and instructed them as to a certain price they were to take by way of an increase and they all agreed to conform to that ceiling, that would be contrary to the act?


Major James William Coldwell: That would be contrary to the act. That is price fixing. As a matter of fact price control was a matter of ceilings, not floors, and there was no reason in the world why the flour millers should all raise their prices by $4.05 a barrel. That is the point.
So, Mr. Speaker, one could go on quoting from this report to show that throughout the wartime period the milling interests got together, disciplined one another if there were any inclination to sell below the ceiling price, and did everything they could to maintain a price that was high. In fact in one place they say they wanted the ceiling fixed at the very highest level that could be attained by any one of them. So I think the

evidence before us is of such a nature as to bring them within the meaning of combination and price fixing under the act we are proposing to amend today. Let me quote further from page 114 of Mr. McGregor's report:
The practice during the war years to which exception is taken in this report is the same practice to which exception is taken with respect to other times, that of agreements to remove competition in price. In the war years regulations established maximum levels beyond which prices could not be increased. In this period concerted efforts were made to prevent competition by securing agreement as to the prices which the members would follow. Such joint action was neither required nor sanctioned by the prices board or any other government agency. Board policy was definitely directed to the maintenance of competitive conditions with respect to prices.
That is what the public of Canada understood throughout the entire period of the war. It is all very well for the milling interests to say that they were authorized to do these things when no authority can be found. Indeed, in Mr. Gordon's own statement, which was read into the record at page 1502 of Hansard of this year, Mr. Donald Gordon said -I am omitting some words which do not alter the meaning:
-the ceiling price-would naturally become the fixed price and, such being the case, any "agreement" in respect of prices would have been meaningless.
If you look across at the next column on the same page, about the middle of the column, you will find Mr. Gordon says this: -no practical system of uniform prices was ever discovered and it remained in the realm of wishful thinking throughout the period of control.
In order to be fair, perhaps I should read the next sentence:
Nevertheless, I have no doubt that the flour administrator in collaboration with the industry did his utmost to insure orderly conditions in the industry in the interests of maintaining supply as well as price stability.


Stuart Sinclair Garson: Price stability.


Major James William Coldwell: But price stability at the ceiling, you see; that is the criticism. It was always the highest price, not the lowest brought about by competition within the milling industry.


Stuart Sinclair Garson: I should like the house to have a correct impression of that. It was price stability at the ceiling because, to the extent that it went below the ceiling, it had to come out of the public treasury.


Major James William Coldwell: 
Stuart Sinclair Garson: On what page is that?


Major James William Coldwell: Page 114 of the report.
On page 36 of the report we find the following:
On September 15, Lake of the Woods, Maple Leaf, McDonald and Robb, Ogilvie, Purity, Quaker, Robin Hood and St. Lawrence all increased the price of hard wheat flour by $4.05 per barrel and mill feeds by $10 per ton.
Now, what about this? The report says:
In the course of the oral examination of representatives of the member companies of C.N.M.A., it was contended that the amount of the advances had not been reached by agreement, although it was admitted by some that prior to decontrol they had discussed with others the increased costs with which they were faced. It was also contended that the amount of the flour increase was not in fact sufficient to cover all increases in costs which had arisen since the basic period in 1941.
Again and again in this report the milling representatives deny that there were agreements. Yet, running all through this report- I am speaking of the war years now because the other evening I dealt with the years prior to the war-in the correspondence, the memoranda and the minutes there are indications that every attempt was made to secure price agreements.
On May 16, 1943, a discussion ensued with respect to the recent notification to mills that the price of flour in respect of ships' stores business, or at least in respect of quotations to the Department of Munitions and Supply had been decontrolled. The report says:
Finally it was agreed that in connection with the Department of Munitions and Supply, quotations in so far as Halifax is concerned, shall be made in behalf of all members by Mr. A. G.
1736	HOUSE OF
Combines Investigation Act Watson, and by Mr. J. P. Whitney in so iar as Saint John is concerned-the orders so received to be distributed in turn to each of the members by Mr. Watson and/or Mr. Whitney in a manner to be determined by them.
There is to be no competition. The millers decided, in spite of the fact that the Department of Munitions and Supply was to buy decontrolled supplies, there would be no competition.
On May 18, 1943, the agreement was explained by D. A. Campbell, the St. Lawrence Company, to A. G. Watson, sales manager at Halifax, as follows:
At a meeting of the executive of the Millers' Association today, the perennial question of prices for ship's stores came up for discussion, and it was the unanimous opinion that you should take over the selling of ship's stores for all of the mills (in Halifax), and that Whitney would perform the same service in Saint John. By "ship's stores" was meant the quotations to the Department of Munitions and Supply, and did not refer to the supplies for oceangoing vessels, for which there does not seem to be a great deal of difficulty.
When the Department of Munitions and Supply called for tenders, expecting some competition in prices, the millers took steps to see that there was no competition in prices. They had one person setting the prices. In the debate a week ago I drew attention to the fact that in Vancouver they had a formula whereby the various prices were changed around to meet the demand for competitive prices, which defeated that objective altogether.


Mr. Deputy Speaker:: I am sorry to have to inform the hon. member he has exhausted his time. He may continue with the unanimous consent of the house.


Some hon. Members:: Go ahead.


Major James William Coldwell: With the consent of the house, I shall conclude in a moment. On page 34, the report says:
During the oral examination of representatives of the various companies it was stated by some that this system was introduced to meet existing emergency conditions.
I could continue quoting from the report, but I shall not do so because my time has expired. I shall conclude with these remarks. While I believe the McGregor report was amply justified by the conditions that existed prior to the war, it was equally justified by the conditions he discovered existed during the war. Those of us who know the careful manner in which Mr. McGregor, who admittedly is one of our most highly respected public servants-the Minister of Justice nods his head, so I think we are all agreed about that-would not question his motives in the making of the report. I believe we all regret that he has seen fit to relinquish that position. I am sure that had the millers said, at any time subsequent to the commencement


of this examination, "Here are the facts. We were authorized to do this by the wartime prices and trade board; we were authorized to do it by the government", at that point the investigation would have stopped and this report would never have been made. But evidently that defence was never made. Apparently there was conversation between Mr. McGregor and Mr. Ken Taylor even before October 22 last; and apparently nothing of this sort was brought to light. It does seem to me, rightly or wrongly-and I believe rightly-that this business of saying that there was authority from the wartime prices and trade board for the mills to endeavour in this country to maintain cereal prices at the ceiling level throughout the war was more or less an afterthought and has no validity in fact.
It is a pretty lame excuse that the government is making, as lame an excuse, may I say, as the excuse for withholding the report which, in my opinion, is an illegal act under the traditional statutes and concepts of democratic government in this Canadian parliament.


Mr. Solon E. Low (Peace River):: Mr. Speaker, it is not my desire to repeat the things which have been said in this debate today, but I do feel that there are two things which should be emphasized before the vote is taken. The first is one that cannot be emphasized too often and too strongly. The second is a proposal which I am going to make for the consideration of hon. members.
In the debate thus far, and in the one which took place last week, some very harsh words were spoken, and I suppose one of the most direct censures which a government has ever received, at least in my experience, was expressed. I would very much dislike to see the Minister of Justice's head roll off the block; I would not like to see him taken to the place of execution. But while I say that, and express my friendship for him, having known the hon. gentleman for more years than he has been in the house, I must emphasize our position with regard to the impunity with which the government appears to have broken the law. I must say that I feel sorry for my hon. friend the Minister of Justice (Mr. Garson). He came down here from one of the western provinces early in the fall of last year, not long before this report that had been the subject of a good deal of discussion was presented.


Stuart Sinclair Garson: Some time afterwards.


Solon Earl Low: Afterwards. I stand corrected. That is all the more reason why I should say what I am saying. For that reason I think he has been made the goat in a very nasty situation. He has inherited, shall we say, a very

bad situation. There is no doubt that this whole question should not rest on his shoulders; but, as a responsible minister, he has been a party to breaking the law, and in doing so has contravened the very important principle of the responsibility of the executive to this body, the House of Commons, and has also denied what should guide us all in this country, namely, the rule of law.
I made our position quite clear the other day on this very important principle. I repeat that no excuse under the sun is sufficient to warrant that, not even the excuse given by the Prime Minister (Mr. St. Laurent) in another debate, an excuse which seemed to turn on the fact that certain companies in Canada had rendered good service during wartime. I do not care whether they gave good service during wartime or not. So did all the Canadian people. Whether they were small or large I say, Mr. Speaker, that the companies had no right to any consideration that would not be given and could not be given to the general public, to individuals, who constitute the Canadian public. It is because I feel so keenly about that that I shall support the amendment. I am speaking on behalf of my group. We shall support the amendment moved by the official opposition. In supporting it, Mr. Speaker, I should like it to be known that the Social Credit group look upon it not just as a convenience or something that might produce new ideas with respect to the Combines Investigation Act. We look upon it as a vote of censure of the government. It may be productive of good. I hope so. It does seem strange to us that it has taken twenty-two or twenty-three years for the government to discover that convictions under the Combines Investigation Act could not be obtained or were very difficult. That is the admission; otherwise this bill would not be before us today.
I wonder who has been derelict in his duty in this respect. I am wondering how many times, if at all, the commissioner of combines during those twenty-two or twenty-three years presented requests to the government for amendments to the act so that it could be strengthened and made an instrument for the protection of the Canadian people. If he did not make requests for amendments during those years to put teeth into the act, then of course some of the responsibility must rest upon the commissioner of combines. If he did make requests, then of course the government has been guilty of dereliction.
We of this group welcome the amendments which are now before us. We think that they will strengthen the act in a good many ways. I am quite in agreement with the principles outlined by the minister in his
45781-11OJ
Combines Investigation Act introductory speech this morning. However, we do not think that the amendments now before us are sufficient to make the act do what it originally was designed to do. To us the Combines Investigation Act should be so strengthened as to ensure two important things for the Canadian people. The first is the establishment in our country of a condition of free enterprise, of free competition. I want to emphasize a condition of free competition. There cannot be freedom in any sense of the word for the average run of Canadian people if we have not freedom of competition in Canadian business.
We do not want to see large accumulations of capital wielding such power as to be a danger to the Canadian people. We do not want to see small companies destroyed, driven out of business through larger companies and combines exercising undue influence either with governments or under law. We have been fighting as strongly as it has been possible for us to fight for a condition of competition, because we feel that therein lie the seeds of success of the private enterprise system. Deny the right of real competition and you deny private enterprise, and you play into the hands of those people who constantly say, "There is an example of private enterprise for you",-the people who declare that one of the reasons why this act is being amended today is that we are admitting that private enterprise has failed.
I deny that. Private enterprise has not failed. We have to admit honestly that there are abuses of private enterprise, and it is those abuses we are trying now to obviate, to make impossible. I say now that that is the true function of government, to lay down such conditions as will regulate and make possible a system of private enterprise in the interests of all the people.
The second thing we believe a strong and effective Combines Investigation Act should do is protect the people of the country from the power that is often wielded by the accumulation of capital, for the purpose of establishing monopoly control in their interests. We have no truck or traffic with such breaches of decency. We condemn it in the strongest possible way; and when I say that we condemn it, we condemn the irresponsible use of power in the hands of people who have accumulated vast wealth and use it for their own selfish ends.
But happily that has not been the rule in this country. Though we have frequent examples of combines, and attempts at combines, I am happy to stand here and say that from my observation it has been the exception and not the rule. But the combines act ought to provide protection for the people
1738	HOUSE OF
Combines Investigation Act of Canada against those exceptional cases. It is that sort of thing which we plead with the minister to establish.
There are some who will say that some new method ought to be found of protecting the interests of parliament as well as of the people. I am one of them. Section 27 (5) of the Combines Investigation Act provides for the rendering of a report by the commissioner. As I understand, when a report is ready the commissioner presents it to the appropriate minister-in this instance the Minister of Justice-and unless at the same time he makes a request in writing to the minister that the report be withheld from publication, it is clearly the duty of the Minister of Justice to see to it that the report is published, in the interests of the Canadian people.
In at least one case we know of, that was not done. I am wondering if, in order to prevent a repetition of the sort of irresponsibility we have witnessed, it would not be wise to insert an amendment to section 27 to the effect that, at the time the commissioner under the act renders his report to the Minister of Justice, he shall at the same time lay on the table of the House of Commons or deposit with the Clerk thereof another copy; so that if within fifteen days the commissioner has not presented to the minister a written request to withhold the report the Clerk of the House would be free to see that it is published.


John George Diefenbaker: What is to prevent the minister from hiding it in that case as in the present one?


Solon Earl Low: Nothing, of course, except the watchfulness of members of the House of Commons.
It is patently clear that there is a growing disregard for parliament on the part of the executive. In the four years I have been in parliament I have certainly witnessed case after case of that kind. It seems to me however that if such a change were made in the act the commissioner might feel that he is responsible directly to the House of Commons -which is, I think, as it should be. And because he would be responsible directly to the house in that measure, the Clerk of the House would be in duty bound to publish the report, and the desired effect would be obtained through investigation, even though the Minister of Justice were inclined to hide ft, as has been done in this instance.


Major James William Coldwell: Only the minister is responsible to parliament.


Solon Earl Low: I understand that is so under the act. But the effect of my suggestion would be that the commissioner under the Combines


Investigation Act would become responsible to this body, and not only to the Minister of Justice.
That principle is followed in the provinces in connection with auditors, and has worked well. It has been a wonderful protection enjoyed by the people against irresponsible expenditures on the part of provincial governments. It is recognized quite universally, I think, that that is a good provision. The federal auditor general is in a similar position.
In all cases where the protection of the public against insidious powers exists, that principle is sound and good. I would ask hon. members, particularly the Minister of Justice, to weigh the suggestion. I know what his reply would be, of course. He would say, "Well, if I admit any such principle is a good one, I am condemning myself." I realize that, and I would not ask him to rise in his place and agree to it. But when the present amendment is out of the way it might just be possible that someone else would offer an amendment to section 27 which would incorporate the suggestion I have just made.
I have spoken longer that I had intended. I do wish to register however my complete abhorrence of the attitude of executive government in this country which overrules and overrides law that has been laid down to guide that government as well as individuals throughout the country.


Thomas Langton Church: Mr. Speaker, I wish to take part briefly in the debate this afternoon. In doing so might I point out that as head of a municipality for many years, particularly after the first great war, I noticed marked increases and spreads in prices. I saw the effect of those conditions upon the working classes in my city, and upon the small farmers.
I rise to support the amendment of my leader, which states-
That the said bill be not now read the second time but that the subject matter thereof be referred to the standing committee on banking and commerce with instructions that they have power to send for persons, papers and records and that in addition to other recommendations with respect to the subject matter of the said bill they shall also have power to report upon the extent to which the effective administration of legislation relating to restrictive trade practices has been, or is being, prejudiced by the action of the government in failing to carry out the mandatory requirements of the existing law.
That is a good motion, and a lifesaving motion for the government, as well. Speaking as a private member, may I say that the government often forgets that the private member is the connecting link between the government of the day and the electors. Where he ceases to function and permits himself to become a yes-man or a nodder, parliamentary government is at an end.

The people back in the constituencies do not expect hon. members in any part of the house to act as yes-men or nodders in days like these. Those who have sent us here are the ones who suffer from sky-high prices.
I remember in 1917 when there was a serious coal famine in our city, but at that time the price of Pennsylvania hard coal was only about $6 per ton. Today the price has skyrocketed until it is up to $23.50, and when you allow $1.50 to the retail man for delivering, it totals $25 per ton. It is fortunate that owing to Providence we have had a mild fall so that little coal has been used.
As far as I can see, the government has dealt with this report as a matter of policy rather than as a matter of law. The government apparently does not acknowledge what it owes to the opposition for the support they are being given in this amendment. This amendment will act as a lifesaver. I remember back in the thirties when we had the Stevens committee and it is most regrettable that we lost the services of Mr. Stevens, who had the support of the white-collar workers in Ontario. The work of that committee in connection with price spreads was one of the most important tasks ever done by a committee of this house.
Governments begin to die the moment they are born. I am not a bigoted party man. I submit that as a House of Commons we should seek to carry one another's burdens and so fulfil the law of Christ. I referred to St. Luke the 11th chapter the other day and to what He had said about lawyers. A few years ago we had a select committee of the house, the Stevens committee, which went into the whole question of prices and spreads. It will be noticed that the amendment proposed by the leader of the opposition (Mr. Drew) would give the committee power to send for persons, papers and records. The committee would be entitled to send for crown officers and examine them as to why the law was not carried out. They could deal with the decision of Mr. Justice Barlow who ruled that there had been no proof that the directors of the companies charged had a guilty mind, which must be proved in the case of corporations.
I followed the work of Mr. McGregor in connection with the electrical combines case and other matters like that where it was found that they were interlocked and there was no way of attacking them. As I 'said the other day in connection with this matter, combines have flourished in Canada like the green bay tree. That is something which cannot be contradicted. We had an example the other day in connection with coal, and we have
Combines Investigation Act another example in connection with telephones where one company has jurisdiction over the two central provinces and is interlocked with Northern Electric. They are now proposing to increase the rates which will mean that a telephone is just a luxury. That is just one other industry that I can mention.
This committee will have the power to send for the law officers of the crown and find out why this is going on. The Stevens committee on prices and spreads found out in 1934. They represented the white-collar workers all over Ontario, the small mill man and so on.
In the days of Sir John Macdonald and Sir Wilfrid Laurier nearly everyone in Canada owned some property in the form of a small farm, a small mill, a blacksmith shop, a grocery store, a team and wagon, a country general store and things like that. In those days Canada was a nation of property owners. In the city from which I come sixty-five per cent of the people owned their own homes. Land was cheap and they could buy for as low as $6 per foot, the civic car lines gave them service, and they were able to build houses all over the city. Now that has all passed away and we are no longer a city of home owners because many have lost their homes because of high taxes and the high cost of living.
This committee should be established and it should follow the practices followed by the Stevens committee. It should go over this report and send for the crown officers. Last spring I contended that these trusts and combines in restraint of trade were flourishing like the green bay tree. At that time I gave a list of them extending from the Ottawa river to the Nipigon, the companies that controlled coal, copper, tin, zinc, platinum, asbestos, aluminum and many other commodities. All these companies are controlled from New York. I believe in the policy of Canada for Canadians.
I referred to the work of Lord Hewart on the new despotism in which he complained about the rules and regulations which permitted the restraint of trade and all that kind of thing. I hope when this committee meets it will tackle this problem in the right way. If they do they will find that what I say is correct. No doubt the report on the milling industry will be before the committee and they can send for Mr. McGregor or any others who have anything to do with it. The government policy has been all wrong. As I say, they have dealt with this whole problem as a question of policy, rather than as a question of law. The government had the power to act, but they did not go ahead. The report speaks for itself and I am not going to repeat what was said the other day by the hon. member for Rosetown-Biggar (Mr. Coldwell).
1740	HOUSE OF
Combines Investigation Act
We have now reached a position where the cabinet have ruled the roost long enough, and it is the duty of private members to regain some control over administration. The actions of the cabinet put me in mind of the days of the Family Compact when the executive tried to usurp the powers of the crown. You know what happened then. The actions of the government resemble those in a star chamber proceeding. We are back in the days when governments assumed liabilities and responsibilities beyond their powers, and usurped the functions of the House of Commons. If the executive want to rule the roost that way, then we might as well all go home. The duties of members of the House of Commons and of the Senate have been automatically abolished by such procedure. When did that happen? Fifteen days after the 29th of December, 1948, when the report should have been tabled. It should have been made available then to every member of the house, instead of being withheld until after the election. It was just pigeonholed. It was the duty of the proper minister of the crown to lay it on the table of the house, thus making it available to the house and to the country.
After all, who is paying for the report? No member of the cabinet is paying for it. It is paid for by the working classes, the large and small taxpayers. By way of income tax, sales tax and other taxes, the city of Toronto contributes almost one-third of the cash taxes of the whole dominion. It is not the cabinet's money; it belongs to the people who pay taxes. In the city of Toronto, a constituency of which I represent, they are paying almost one-third of it. It is an industrial city, and yet it has no member of the cabinet at the present time. That is one feature of the new despotism which is referred to in Lord Hewart's work, namely, where cabinets usurp the functions of parliament.
I believe the day has come when no minister of the crown should act in such a way. I appeal to the younger private members on the government benches. After all is said and done, the motion of the leader of the opposition (Mr. Drew) will act as a lifesaver for them when they go back to their constituencies because it will afford a proper investigation of the whole question of monopolies and restraint of trade. So far as municipalities are concerned, it has been a dead letter for a long time. Nothing was done about the coal famine in Toronto and many other monopolies which we have had. The records would also be before the house.
I do not wish to refer particularly to Mr. McGregor's report because it may not be quite in order to do so. His conclusions are as clear as crystal. The leader of the opposition


referred to them. The hon. member for Rosetown-Biggar (Mr. Coldwell) and the leader of the Social Credit group (Mr. Low) also referred to them and read certain extracts from the report. The report shows that the large milling companies sought to drive the smaller companies out of business. It shows that the larger companies were interlocked. There is no doubt about it, if you have a committee the officials can be summoned before it.
I wish we had had this report at the time of the Stevens inquiry. That preceded this report, and I should like to quote what some of the members said about the Stevens report and the good work that was done. You will have an opportunity to go into these matters at the proper time if the measure is referred to a committee. In the section of the report dealing with Mr. McGregor's conclusions I find the following:
This report follows another report on a related subject, an alleged combine in the bread baking industry in western Canada. Both reports disclose developments of much the same character-control of the industry concentrated in a few very large corporations and the efforts made under the leadership of the dominant groups to control competitive activity. They describe measures which have been taken to link the two industries by means of the financial control of some chain bakery companies by some flour milling companies and how this limiting of competitive purchases by the baking industry has had its impact on the flour milling industry. Each group within its own field has sought in its own way to attain the objective of eliminating price competition as a factor in business enterprise. This report is concerned with the measures taken by the principal flour milling companies which have been associated in the Canadian National Millers Association and C.N.M.A. (western division).
And also to some extent in the eastern division. There is no doubt that there was collusion. The report shows it, and the evidence shows it. Mr. McGregor winds up his report-and this is all I shall have to say about the report-by directing the attention of the minister to certain facts. I find these words in Mr. McGregor's conclusions:
The disruption of the restrictive agreements which infrequently did occur as a result of such market conditions cannot be regarded as a substitute for the safeguard of freedom of competition which should prevail as a general characteristic of business enterprise.
In another place I find these words:
The potential and actual operations of small mills and the presence of surplus capacity in the large mills, it was argued, would operate to prevent any effective agreement by the larger mills to curtail their competition in price in any substantial degree. The argument advanced was that each company with surplus capacity would actively compete with the others to get that volume of business which would enable it to keep its mills operating at the highest capacity possible.
That did not work out as shown by the definition of a combine in the Combines Investigation Act. The report goes on:
The definition of a "combine" in the Combines Investigation Act includes a combination carried on

by agreements having or designed to have certain effects, such as the fixing of common prices and the lessening of competition, which has operated or is likely to operate to the detriment or against the interest of the public.
The report goes on to quote from the decision of Mr. Justice Raney in Rex. v. Alexander, 1932, 2 Dominion Law Reports, page 123. The commissioner decided that the language used by Mr. Justice Raney would be applicable to this case. The quotation given in the report reads:
But the system adopted by the Electrical Estimators Association is not to be judged by its accidents, but by its tendency-not by the circumstance that sometimes the members of the association made no profit, or sometimes made too much, but by what the thing was in essence that the defendants were seeking to accomplish. That thing was the prevention or lessening of competition.
There is no doubt that the western and eastern divisions of the milling association tried to control their prices. You will notice that the prices in the eastern and western divisions were all top prices. They were up at the ceiling all the time, not the floor. All the business they did with the government was at ceiling prices. There was no floor price at all. The evidence shows that they interfered with the small millers, such as at Midland and others, and if a committee is set up that evidence will be before it in restraint of trade.
As far as I can see, in this case we have the cabinet on the one hand and the House of Commons on the other; and for all this house knows about these matters we might just as well all go home and let the executive rule the roost and run the show, assuming the functions of both houses of parliament. Within fourteen days after December 29 of last year the public were entitled to learn about the report made by this government official. It was not a secret report; it was an open report made under the act. The cabinet were not entitled to see that report first; far from it. The people who paid for the report were entitled to learn the gist of it, as they have been told about other reports. Every department of the government is doing this sort of thing, keeping information from the public who pay for it.
Publicity has been the greatest deterrent in preventing monopolies and restraint of trade in this country. Away back in 1934 the Stevens committee did more to call attention to monopolies and the way restraint of trade was flourishing in Canada than has been done since confederation. That committee electrified the public by the way it conducted its business, and did a great work for the people of this country. I am a party man, I suppose, because I am a Conservative. I may be the only one left, I do not know; but I have supported certain definite principles ever
Combines Investigation Act since I have been a member of the house. Sometimes I think it would be far better if we made this a national party, and not something like what they have in Manitoba and British Columbia. When our late leader, Lord Bennett, was with us we were a national party. He was a supporter of a wide open inquiry. It was not the case, as Saturday Night says, that nothing was done. More was done by the Stevens committee on price spreads and their regulation than by all the Saturday Nights I ever read, so they are not correct in that statement. That committee had the complete support of the government of that day.
So I wish to record my protest against the way this matter has been handled. I have never had any confidence in these monopolies in restraint of trade. They seem to go on forever; and they will continue in Canada until we have a House of Commons composed of members who will cease to be yes-men and in restraint of trade. They seem to go on nodders.


Mr. J. W. Noseworihy (York South):: Mr. Speaker, I rise to support the amendment. I would have preferred a motion that would amount to a vote of censure upon the government but I think perhaps the amendment is more realistic, for I cannot imagine anything this government might do that would induce its overwhelming number of supporters to endorse a vote of censure against it.
I am quite sure there is justification for sending the bill to a committee. For a moment I want to touch upon the withholding of the McGregor report, and the attitude of the minister and the cabinet toward that action. I doubt if there has been another instance of this kind in all Canadian history. Here we had a cabinet minister, with the approval of his associates, deliberately violating a statute passed by parliament, going through months when parliament was in session and hiding that information from parliament. Then we had the government going through a general election, still withholding that information from the electorate; we had them going through a miniature election, in a whole series of by-elections, still withholding that information, and not until those byelections were out of the way was it possible to drag this information from the cabinet. As I have said, I doubt whether there has been another instance of this kind in the history of the Canadian parliament.
I want to emphasize, as did the leader of the official opposition (Mr. Drew), the hon. member for Rosetown-Biggar (Mr. Coldwell), and other speakers, the seriousness of that situation as it affects our parliamentary system. If we are going to accept the principle that a cabinet minister or a cabinet

Combines Investigation Act may with impunity disregard legislation passed by parliament; that a ministry can meet parliament without divulging such information; that a government can go to the country in a general election and withhold it, and go through a series of by-elections still without divulging it, where are we? What becomes of our parliamentary system? If the Minister of Justice (Mr. Garson) and the cabinet are above the law, what is the use of having laws enacted by this parliament? That is the situation which must be faced, and because it is so serious I regret it is not possible at this time to bring in a motion of censure on the government.
The minister has referred to his responsibility and that of the cabinet to the country. As has been pointed out already, he has entirely overlooked the fact that all through Canadian parliamentary history it has been an accepted principle that the cabinet is responsible to the House of Commons. Cabinet ministers are elected, as all other hon. members are elected, as representatives of constituencies. They are appointed to the cabinet by the Prime Minister. The cabinet is directly responsible to the elected representatives of the people. If we accept the suggestion of the minister that they are directly responsible to the country, what becomes of their responsibility to this house? Here they withhold information from the electorate, and rely upon the fact that the public has a short memory and probably will be induced to forget this incident within the next four years, before the government must go to the country again. To properly describe this action I would have to use language which would not be parliamentary, so I shall content myself with saying that this whole matter produces a very unpleasant odour.


An hon. Member:: It stinks.


Joseph William Noseworthy: That is what I mean. There are good reasons, Mr. Speaker, why a committee should be set up. There are some things this house should know. We have received from the Minister of Trade and Commerce (Mr. Howe) one reason for the withholding of this report. In the daily press we have read a report, published with the approval of the combines commissioner, which is completely at variance with the statement made by the Minister of Trade and Commerce in this house. Both these statements cannot be right. One or the other is wrong. I submit that before the members can vote intelligently on the second reading of this bill, there should be an opportunity to bring Mr. McGregor before a committee of this house to get his side of the story. Then we could attempt to find out, if possible, which of these two statements is the correct one.

There are other things we should know. It has already been pointed out that this act has been in force for approximately twenty years. It is only now that the government has discovered that the act cannot be enforced. I believe the house should have the opportunity of ascertaining whether recommendations have been made to the government during those years for amendments to this act. The members should have the opportunity of ascertaining whether the commissioner, who was responsible for the enforcement of this act, or the government has been at fault for leaving the act on the statute books for twenty years and only now discovering that it cannot be enforced.
Furthermore, there has been a suggestion that the proposed amendments to the act will not do the job the act was designed to do. I submit this house should have an opportunity of finding out whether those amendments will provide the necessary machinery to secure convictions or whether there should be other amendments than those which are proposed. These are some of the questions which I believe should be discussed and to which some answers should be found. These answers can be found only in a committee.
I should like to go one step further. While we are overhauling this Combines Investigation Act, I think it is about time this parliament set up a select committee on small business. There is ample evidence in this report that the particular industry under investigation attempted, apparently with success, to squeeze the small concerns out of business. It is no secret that that is happening all across the country. Numerous reports have been submitted indicating that chain stores and large industries deliberately force small businesses out of existence. I would think that this government, which prides itself on maintaining the free enterprise system, would show some concern for the small businessman at this time in our history. I believe there are approximately
120,000	to 125,000 small businessmen in Ontario alone. I would think such a government would show some concern for the protection of these men.
I suggest that consideration be given to the establishment of a select committee of this house on small businesses. I know the minister's answer. I know the attitude other cabinet ministers have taken when members have suggested that other committees, such as the veterans committee, be set up. Their attitude has been that the cabinet is responsible for these things. I know there is a difference between our system of cabinet government and the United States system. Accepting the principle that the cabinet is responsible to parliament, then we suggest

there is a place for these committees to advise, to investigate, to acquire data and to enable the members of the house to serve a more useful purpose than merely being rubber stamps for a Liberal cabinet. If the cabinet is prepared to restore to this House of Commons a vestige of the authority that is historically its right instead of attempting to assume full control in its own hands, then these committees could be set up.
Therefore I would ask the minister, when he is overhauling this Combines Investigation Act, to give consideration to setting up a select committee of the house on small businesses, similar to that which is functioning in Washington. I have reports of the meetings, investigations and recommendations of that committee. In so far as there exist in the business world of this country situations that are similar to those in the United States, I would urge that my suggestion be taken into consideration.


John George Diefenbaker: Mr. Speaker, I do not intend to traverse the ground I covered the other day in reference to the minister's suppression of the McGregor report. There are additional phases in connection with it that I believe deserve to be mentioned. The minister has introduced a bill asking for changes in the Combines Investigation Act. Naturally, the question that occurs to one is this: If that same minister would not carry out the law as it was, is there going to be any assurance that with the law changed there will be any greater desire or zeal to carry out the specific provisions of that law than has been shown by the minister since January last?
As I listened to the minister the other evening, I awaited with interest the explanation he was giving to this house when he explained the reason why a mandatory act, by him to be performed under that statute, had been deliberately held up, had been deliberately spurned. One does not have to go back to 1649, as the hon. member for Rose-town-Biggar (Mr. Coldwell) did; but that was the first example, and it had a salutary result for approximately a hundred years. Not since 1763-


Stanley Howard Knowles: That Stuart did not do it again.


John George Diefenbaker: -during the days of George III has any minister dared to contravene a statute passed by parliament and deliberately refuse and neglect to carry out that statute. I see the Minister of Trade and Commerce (Mr. Howe) smiling.


Mr. Howe:: May I ask my hon. friend one question?


John George Diefenbaker: Yes.
Combines Investigation Act


Clarence Decatur Howe: Does he remember the flour milling report made by the same commissioners in 1933? Does he remember what became of it?


John George Diefenbaker: That is a very good question. The provision for publication was brought in by this government in order to prevent any minister, of whatever persuasion he might be, from refusing to carry out the recommendation of the men in charge of the administration of the combines act.


Clarence Decatur Howe: Do what R. B. Bennett did. He dropped it in the wastepaper basket.


John George Diefenbaker: In 1937 terms were put in the act in order to prevent publication being avoided. What may have happened in 1932 or 1933 did not happen under a statute that imposed upon a minister a mandatory responsibility.
The explanation given by the minister may be found on page 1521 of Hansard. He said:
Unless you can rely upon the possessory principle as regards the corporate accused it would be extremely difficult in some cases to secure a conviction..
That is why we are bringing forward this amendment. That is one reason why we wished not to act upon the flour report or to publish it until we had our legislation in shape.
On page 1522 he said:
If we get our amendment we will certainly be in a far better position as regards this-
That is the flour report.
-or any other report than we are in now.
Sir, that explanation has no basis in fact. My hon. friend went through a labyrinth of excuses in order to arrive at that conclusion. He states that one of the reasons why he did not carry out the law requiring publication was to assure that within fifteen days the law would be amended to enable him to proceed, and no doubt proceed with a degree of hope of success. I did not see through that the other night until the Prime Minister (Mr. St. Laurent) himself spoke, and then I began to realize exactly the significance of what had transpired in this case. The Prime Minister explained that under a section of the Criminal Code-and the section would be applicable to the Combines Investigation Act-the period of limitation for taking action is two years. What actually has happened is that the government hid the report. The minister hid the report. He kept it under lock and key as far as parliament and the Canadian public were concerned until any right of action had been outlawed. He said in effect on November 7: "When I get these amendments I intend to proceed against these corporations." I ask him to tell us when he replies whether he is going to proceed. If

Combines Investigation Act he does, he will not get as far as the government of this country got in the dental supplies case.
The report implies that there were offences committed after the wartime prices and trade board ceased to operate. According to Mr. McGregor, on September 15, 1947, there were uniform increases that were beyond anything that was justified. That means that any action to be taken, even on the alleged offences after the operations of the wartime prices and trade board, had to be taken sometime before October 15, 1949. I ask the minister; did he hide the report so that he would be certain that action would be outlawed in any proceedings taken?-because that is the result. It is even more serious than a deliberate flouting of parliament. In one of the Letters of Junius a case of dictated autocratic action is dealt with in these words:
Is he only the Punch of the puppet show to speak as he is prompted by the chief juggler behind the curtain?


Jean-François Pouliot: Who is he?


John George Diefenbaker: My hon. friends on the other side can answer that. The Minister of Trade and Commerce. I would not call him a juggler, but he was the one who determined what the Minister of Justice should do. No Minister of Justice, or any other minister, much less the Minister of Justice, should have allowed himself to be the instrument whereby a report that should have been brought before parliament, or at least published within fifteen days, was kept away from the people of Canada so that no one now can take action regardless of the guilt of those mentioned in the report-and I am not saying that there is guilt; it is not for me to say.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
John George Diefenbaker: Mr. Speaker, at recess I had just mentioned the fact that the effect of holding up the report until the month of November had the result of actually preventing any prosecution taking place.
It was some three years ago, when the amendments were before the house, that I suggested that certain changes be made. One of them, accepted by the then minister of justice, the present Prime Minister (Mr. St. Laurent), had the effect of allowing any person in this country to take proceedings for alleged infractions of the Combines Investigation Act. Up to that time it was impossible for a private person so to do.

The result of holding up the report, therefore, has been that the right of every or any person in this country enjoyed under that amendment to take proceedings has in fact been entirely denied.
One other matter to which I should like to refer has to do with the question of publicity. There are some who feel that publicity in advance of a trial is a denial of the principles of British common law and our own traditions, and that while a report may be made to the minister, it ought not to be published. I raised that point myself in 1948 in connection with the optical case.
As an answer to the Minister of Justice (Mr. Garson) I should like to read the reply of the then minister of justice, the Right Hon. J. L. Ilsley, as it appears at page 4919 of Hansard for June 8, 1948, where he stated:
As I said the other day when the hon. member raised this question on the orders of the day, that section or a similar section has been in the act from 1910 down to the present time. Of course, from 1923 until 1935, I think, the registrar was the important man; the general course was that the registrar made an investigation and a report, and the act was silent as to whether that report should be published or not. But if he reported that there was a prima facie evidence of a combine, a special commissioner was appointed; and the special commissioner's report was subject to exactly these provisions. From 1937 on, those provisions have been in the act.
That is, provisions for mandatory publication. Then he continues:
I submit that it is necessary that there be publicity. At least, it is my contention or submission that there should be publicity. This offence is not at all like an offence that speaks for itself. It is all a mystery. The public has no way of knowing whether there is any combine or not. It is not like theft, bank robbery, or any of those other overt or open acts where it is clear that there has been an offence. Here there is just a dark surmise and that is all. If the public is to know anything at all about this, it must be explained to them by the report of somebody who has made an investigation. If you have no provision that that report is to be made public, there is no possibility of an opportunity for public opinion to operate on governments, attorneys general or ministers of justice. There is no possibility of that; and you have to make a strong assumption that public officials will be fully alive to their responsibilities.
At that time Mr. Ilsley made it clear that he regarded the necessity of publication of the report as of first importance in connection with revealing trading activities that contravene the Combines Investigation Act. That, I suggest, is the answer to both the Minister of Trade and Commerce (Mr. Howe) and the Minister of Justice (Mr. Garson), and to the Prime Minister, all of whom indicated that the reason there had been no publicity was that if publicity had been given there would have been a challenge to the government to prosecute, and that it would apparently put them into a difficult position.

On the same occasion, as reported at page 4920 of Hansard, I asked Mr. Ilsley this question:
I am not going to pursue the subject further, except to say that apparently the Attorney General of Canada, on receiving a report from one of the officials, under the Minister of Justice, in which definite findings are made of a combine, still has to be satisfied that the report which so indicates has a foundation for the conclusion reached by the commissioner.
Mr. Ilsley replied:
Absolutely; certainly he does. The Attorney General of Canada is not bound to do what the commissioner under the Combines Investigation Act tells him. He is not obliged to take his facts, and he is not obliged to take his law. Presumably he will take his facts.
Those two excerpts from the words of the then minister of justice answer government spokesmen who say that the reason they did not give publicity to the report, and failed to carry out the mandatory provision, was one of two reasons-either that it would have given publicity that should not be given or, secondly, that the government would have been placed in a position where it would have to prosecute.
I do not think I am guilty of overstatement when I say that I know of no action by any government giving its support to private enterprise that will do more to undermine public belief in free and private enterprise than the fact that the publication of this report had been stifled until action can no longer be taken. If after producing the report according to law the explanation had been then made which has now been made, public opinion would have reacted either as against or in favour of the course pursued by the government.
I realize that, when discussing the question of combines, all too often it becomes a witchhunt wherein any wrongdoing on the part of private enterprise becomes the subject of bitter attacks. I believe in private enterprise. I want to see it preserved. Over the years, and particularly during recent years, it has been and still is being diminished almost everywhere in the world.
During two wars there has been regimentation in the economic world that has left the feeling that there is need for regimentation in the days of peace, and that by the simple exercise of state control all our economic problems can be solved. The result of control by the executive during two wars has been that people believe that the state can and does create wealth.
In discussing the need to amend the Combines Investigation Act, I believe that there is a happy medium between the British and American attitudes. The British attitude, so far as monopoly is concerned, is that unless such monopoly interferes with the rights of 45781-1111	>
Combines Investigation Act other producers, competitors or consumers, the bigness of a business should not of itself alone be ground for prosecution. [DOT] The attitude of the United States during recent years has been that the bigness of business in itself is an offence. In the last two years in the United States many prosecutions have been launched by the attorney general against great corporations whose paramount offence has been the size of the industries that have been proceeded against. All business is big as compared with what it was 20, 30 or 40 years ago.
The purpose in mind under combines legislation should be to provide equality of opportunity under the law so that every individual or number of individuals in our country may have the opportunity of risking capital in which the state is neither the insurer nor a partner. In other words, what a combines act should do is to provide equality under the law so that big and small businesses have equal access to markets and whereby the individual is protected against exploitation. Not only should the consumer be protected; the business competitor also should be protected. The purpose of anticombines legislation should be to assure that degree of fair dealing as between business and citizens of the state as will guarantee the greatest benefit for the greatest number.
One of the great criticisms of our system is that it lives by returning profit. Business requires profit. Profit is of prime importance to the maintenance of our way of life. The profit system spells our prosperity. Having said that, I believe that when any business or group of businesses operate in concert so as to injuriously affect either the consumer or other producers or prejudice the state, then the state has a responsibility to step under law to punish and prevent.
When amendments to the combines act were introduced three years ago the then minister of justice, now the Prime Minister (Mr. St. Laurent), indicated the need for something being done in order to improve the act, and amendments were introduced and passed. There have been several attempts to improve the combines act, one in 1937, one in 1923 and on one or two other occasions. However, no matter what amendments are made to the combines act, if the government of the day charged with the responsibility of carrying out the law regards political expediency as a justification to not follow the rule of law, then the law is meaningless.
In 1946 I believed that as a result of the changes made there would be protection of the Canadian people against what Mr. McGregor referred to in his recommendations regarding cartels as an illegal monopolistic trend that had grown up during the

Combines Investigation Act war, xhe result of which was to deny Canadian citizens that freedom from unjust trade practices that they should enjoy if private enterprise is to perform its function. In 1920 the former prime minister of this country used to refer to the "hidden hand of plutocracy".
He came to power in 1921. The exploitation by certain monopolies during the time the present government has been in power since 1921-there were five years during which they were out of power-has been such that every indication is given that the law has not been enforced. And I mean no reflection on Mr. McGregor. The law can be enforced only if those charged with the administration of justice carry out the recommendations of the commissioner.
The Minister of Justice is not bound by what the commissioner finds. He must examine what he says but he must publish the commissioner's findings. I do not want to appear to place it all on the shoulders of the Minister of Justice. Far be it from me to do that. The minister was merely the instrument whereby the government of this country acted in a manner that has not been duplicated since the days of King George III in 1763. Never since has any minister or any government dared to depart from the rule of law. Some there are who wrongly contend that there is one law for the powerful and another law for the weak, and the fires of such criticism are kindled when a thing like that is permitted to occur and when parliament views it with almost dispassionate disinterest.
Now we have another bill. The hidden hand of plutocracy which was spoken against in 1919 and 1920 must have been so hidden that it has not been discovered by the present government or its predecessors in office. I return to the tobacco prosecution, and I refer to that case, as I did to another, as a debacle. These companies had been convicted and an appeal allowed on a technical objection. I asked in 1946 why the government did not go ahead and prosecute again as the prosecutions had failed on technical grounds. The answer was that the war had come and at all events the companies had reduced their prices by ten per cent.
That was no excuse for not prosecuting. A law on the statute books unenforced is simply an invitation to wrongdoing. When there is a law on the statute books that requires a mandatory act to be done by the minister of any government and when the ministers of that government associate themselves with him in transgressing that law, then they encourage wrongdoing by prospective wrongdoers.


The support of this party has been indicated by the leader of the opposition (Mr. Drew) on the principles of the bill. I am not so sure that the doing away with the jury is a good principle. It is all very well to talk about the difficulty of making a jury understand; the fact is that juries can and do understand when there is wrongdoing that affects them under combines legislation. In Great Britain the company being tried has a right to trial by jury and in the United States it is mandatory. Why trial by jury is being taken away has not yet been explained by the minister to the satisfaction of all hon. members and it should be dealt with at greater length when in committee.
An amendment has been moved which I should like to summarize. It calls for the subject matter of the bill to be referred to the standing committee on banking and commerce with instructions that the committee have power to send for persons, papers and records, and that it have power to report upon the extent to which effective administration of legislation relating to restrictive trade practices has been, or is being, prejudiced by the action of the government in failing to carry out the mandatory requirements of the existing law.
The leader of the C.C.F. party (Mr. Coldwell) said that he would have liked a motion of censure. A motion of censure would have been a specific motion against one or more members of the cabinet, or the whole cabinet. What we are trying to get in connection with this legislation is the power to assure that the mistakes that have been made in enforcement in recent years, and the failure of the government to carry out the law, shall not be permitted to become the practice in this country. Let us submit the bill to a committee. What can we do there? We can get answers to certain questions that we cannot get in the house. We can bring Mr. Gordon before that committee and find out from him what minister gave him authority to place any industry above the law.
The leader of the C.C.F. group has asked for the production of some documents. One would think those documents would be right at hand. The cabinet has been able to consider the McGregor report since January. By this time they should have gathered the documents together, if there were any documents. Then we could have Mr. McGregor appear before the committee. The government says that it wants to put teeth in the law. Mr. McGregor wants teeth in the law. He is the one we should bring before this committee because, according to an outstanding member of the press, Mr. Austin Cross, in an article this morning, we cannot get

Mr. McGregor's side of the question until the end of the year because he is a civil servant, and therefore regards it as part of his bounden duty, and properly so, not to speak out. The newspaper report to which I have referred states:
1.	McGregor cannot talk directly to the press, but only to his minister.
Let us give him a chance to talk to members of parliament in a committee of parliament so that we shall get to the bottom of the controversy. The article continues:
2.	The minister cannot put forward McGregor's views since they are in conflict with the government's views which the minister must express.
Surely we want to relieve the minister of a difficulty such as that. One way to do that is to set up this committee, and the house will thereby relieve the minister of any responsibility for having to say things that cabinet solidarity denies him the right to say.


Mr. Pearkes:: That he is told to say.


John George Diefenbaker: The article continues:
3.	The flour millers were never forced or encouraged or authorized to fix their own minimum prices.
That is an important allegation. Let us summon representatives of the flour millers before the committee. We cannot punish them now; therefore they are in no jeopardy, the two year period of limitation having already run. The next point in the article is:
4.	Board chairman Kenneth Taylor, examined in September, 1947, disclosed no authorization to price fixing.
That refers to the time when he gave evidence before a committee of parliament or the royal commission on prices. Let us bring Mr. Taylor before this committee and find out the facts. The committee could ascertain as well what possible excuse other than political expediency caused the minister, supported by a government that approves of what he has done, to hide a report for a period of nine months during which time there was an election when, as the Prime Minister (Mr. St. Laurent) recently said, "we held all the trumps." Was this one of the trumps that the government held? Was this one of the trumps during the election campaign? If it was one of the trumps, none of us ever saw it. It was kept out of view. The next paragraph in the article is:
5.	Flour millers in evidence showed they were unaware of any exemption for them.
Surely, having given evidence before a committee of parliament or a royal commission, if there had been any such exemption they would have been the first to mention it. There are various other matters mentioned in the article by Mr. Cross summing up some of Mr. McGregor's views
Combines Investigation Act which could be inquired into. These are things that the people of Canada have a right to know. These are things that parliament has the right to know. It is not a question any more of there being any danger for any of the companies in having their officials come before a committee of parliament and testifying as to the facts. Parliament has the right to know what minister instructed Mr. Gordon in the days of war to advise any industry in Canada that during that period it was or could be above the law. These are a few of the matters that would be brought out.
No longer would we have ex parte statements such as that of Mr. Gordon which was read into the record the other day by the Minister of Trade and Commerce (Mr. Howe). We would have Mr. Gordon before us. After all, he should be given an opportunity to explain, instead of being placed in the position of having a statement read regarding his views.


Mr. Speaker:: The hon. member's time has expired.


Jean-François Pouliot: Mr. Speaker, I confess that I cannot follow the hon. gentleman who has reached the heights of eloquence once more in debating this important matter. I should like to see the cat come out of the bag. There have been so many insinuations about different people that I should like to know who the guilty party is. My hon. friend was wrong in using general terms for his accusations. He complains of Donald Gordon, and he makes a saint of Mr. McGregor. How is it that McGregor became a saint as soon as he wrote this report? How long has he been there? When I first entered the house he was private secretary to Mackenzie King. When Mackenzie King was prime minister, McGregor was mute and dumb, and the only thing that he did was to make an investigation into the coal combine in which case a noted Tory, the crutch of Arthur Meighen, Senator Webster, was the guilty party. '


Arthur Leroy Smith: Nonsense.


Jean-François Pouliot: Who will deny that Senator Webster was the crutch of Arthur Meighen? He was a Tory.


Arthur Leroy Smith: More nonsense.


Jean-François Pouliot: McGregor made a report and action was taken. The Webster interests were sued for $25,000. Webster amalgamated his company and it was left there. Who is the Tory who complained against Webster? Where is he? There is not one to say a word. I admit that the hon. member for Lake Centre (Mr. Diefenbaker) has a gold and silver tongue as a speaker for his party, but he was not in

Combines Investigation Act the house at that time. There were other celebrities of the Tory party, and they were mute and dumb. Not a word was said about Webster. Everybody who bought coal suffered from that combine, and not a word was said about Webster by members of the Tory party. Webster was a Tory and he was a saint. My hon. friend is one of those Tories who have a gift of making saints of civil servants when their actions suit the policies of the Tory party. Every time there is a leak in regard to public business that should remain private until told the house by the responsible minister, that civil servant becomes a saint, a holy man.


An hon. Member:: Ten months!


Jean-François Pouliot: What is the matter? I am sure the hon. member for Kamloops (Mr. Fulton) is jealous of the hon. member for Lake Centre (Mr. Diefenbaker), who thinks so much of the civil servants who speak through their hats most of the time. Not long ago the hon. gentleman was vituperating civil servants who had not spoken through their hats. He said, "Let us bring Mr. Taylor; let us bring Mr. So-and-So; let us bring those who have said nothing. We will make them talk". I know he is one of the most brilliant lawyers in the country; I know his clients will not be disappointed when he appears in court to defend their interests; but he reminds me of an old politician who was a successful candidate on one occasion thirty years ago but was never successful again. He was one of the best lawyers in the district, but he could not succeed in being elected. My hon. friend has succeeded in being elected, but he will not help his political fortunes by continuing to discuss matters as he has done tonight; and he knows I have great admiration for him.
Well, Mr. Speaker, it being established that the Tory party had some culprits in combines, I must come back to McGregor for a minute. A moment ago I said I knew him when he was the secretary of Mr. Mackenzie King. He was there for a time when Mr. Mackenzie King was prime minister. He said very little; he conducted the coal investigation and made other reports which few people ever read. He never complained that no action was taken on his reports. He waited until Mr. Mackenzie King had gone and then began to make a fuss, to the great enjoyment of the Tory party and the C.C.F., and perhaps the Social Credit group; I do not know yet. Then he was consecrated as a great man, one upon whom we could rely.
McGregor! Does the hon. member for Lake Centre really know what was the trouble and what was the combine? Would he dare mention the name of Mr. Morrow, of Toronto,
tMr. Pouliota

one of the directors of the flour companies mentioned by McGregor in his report, together with many other Tories? Would he mention the president of a Toronto bank, the president of Canada Bread and of Strachan? In other words, does my hon. friend really know what was the combine? He gave us a long dissertation tonight, as others have done, including the leader of the opposition (Mr. Drew). He said, "It is awful," but what was wrong? What was wrong was that during the war the millers made the price lower and lower in order to destroy the small bakeries, to their own advantage. They were able to succeed in that because of their subsidiaries, which were making cake as well as bread. There was no ceiling on cake, or the ceiling was higher, and the greater profit they made on cake allowed them to reduce the price of bread to rock bottom, in order to destroy the small bakeries and get more power for themselves later on.


John George Diefenbaker: You had better tell that to the Minister of Justice.


Jean-François Pouliot: I say that to you, Mr. Speaker, for the benefit of all my colleagues. I know it is true, and if the hon. member for Lake Centre has never heard about it I tell him now, so that he may know what was the combine. That was it. Who was responsible for it? Those responsible were the directors of the big milling companies that had subsidiaries producing both bread and cake, and who were selling cake at higher prices in order that they might sell bread more cheaply, not for the convenience of the Canadian people but in order to ruin the small bakeries. Representations were made about this situation by individual bakers at the time Mackenzie King was here, but no action was taken. No complaints came from the Tories, who never knew about it until they were told this evening.
That having been said-without offence, I hope-let me take up these companies. The first is Purity Flour Mills Limited. The directors are: D. I. Walker, president and manager, Toronto; R. H. B. Ker, vice-president, Victoria, B.C. Then follows a list of tycoons living in Toronto, whose names I shall read: H. D. Egly; J. H. Gundy; F. G. Lawson; I. C. Hall; Colonel K. R. Marshall; C. F. B. Tippet; M. W. McCutcheon; J. A. McDougald. The subsidiaries are the Brack-man-Ker Milling Company Limited and the Purity Baking Company Limited, both wholly owned.
That is the first one; now I come to the Lake of the Woods Milling Company Limited. Mr. C. H. G. Short is president and managing director; and I can tell my hon. friend that this same Mr. Short is in the grain business.

You know Mr. Short? He is president of the Lake of the Woods Milling Company, a great man, a great miller.


Major James William Coldwell: And he was the flour
controller.


Jean-François Pouliot: Yes, he is. The vice-president is Mr. Walter Molson; the assistant general manager is W. L. MacGregor; and the other directors from Montreal are R. W. Reford, P. F. Sise, Alphonse Raymond and N. J. Dawes. There are also Mr. Isaac Pitblado of Winnipeg, Mr. J. W. Hobbs of Toronto, and Mr. J. H. Pillman of London, England.
The subsidiary is Inter-City Bakeries Limited. The president is Mr. C. H. G. Short, the flour controller. The vice-president and general manager is R. R. Hutchison; R. W. Reford, P. G. Robertson, Walter Molson, W. L. MacGregor, and C. W. Cotter, Ottawa, directors. They also control the Keewatin Flour Mills Company, the Medicine Hat Milling Company and the Sunset Manufacturing Company which operates a jute and cotton bag factory at Winnipeg. These subsidiaries are wholly owned. There is also Browns Bread Limited, Toronto and Hamilton; Standard Bread Limited, Ottawa; Standard Bread Limited, Montreal; and A. and L. Strachan, Limited, Montreal. Those all belong to the Lake of the Woods Milling Company.
Then there is Robin Hood Flour Mills Limited, operating the business of the International Milling Company. The head office is located at 100 West Tenth Street, Wilmington, Delaware. F. A. Bean is the chairman. Charles Ritz, president; Atherton Bean, executive vice-president; J. M. Bruzek, P. B. Hicks, and A. B. Dygert, vice-presidents, Minneapolis. They have funny names. There is Mr. John Tatam, W. G. McLaughlin and G. H. Clark on the board of directors. Let us go once more to Toronto, and I shall ask my hon. friends from Toronto: whose is the hidden hand in Toronto? All these people are respectable people. There are some funny names, but that is not important. I shall ask my hon. friend the member for Lake Centre to tell us whose is the hidden hand behind the curtain? I do not mean civil servants, I mean the big businessmen, powerful men.


An hon. Member:: Mr. C. D. Howe.


Jean-François Pouliot: Well no, his name is not on this list.


Stanley Howard Knowles: His name is on a boat.


Jean-François Pouliot: No, it is Tatam or Pillman, or one of the other funny names.
Let us go to Toronto to the Maple Leaf Milling Company Limited. There is D. C. MacLachlan, president, and K. F. Wadsworth, vice-president and general manager. G. W. Stepan is the vice-president at Montreal. Are
Combines Investigation Act they the guilty men? Where is the leader of the opposition? He should listen to this and tell us about his friends from Toronto. The board of directors consists of Everett Bristol, G. C. Leitch, J. G. Singer, P. G. Kingsburgh, all of Toronto; E. E. Buckerfield of Vancouver and H. E. Sellers of Winnipeg. My hon. friend the member for Lake Centre should come down to earth from that high altitude at which he was flying and listen to this.
The subsidiaries of the Maple Leaf Milling Company Limited are the Canada Bread Company Limited, Canadian Bakeries Limited, Hedley Shaw Milling Company Limited and the Campbell Flour Mills Limited. The latter two are wholly owned. One of the other milling companies mentioned owns a manufacturing plant for jute bags and this company owns a line of steamers, the Port Colborne and St. Lawrence Navigation Company Limited, which is wholly owned. The Maple Leaf Milling Company also has a subsidiary, Eastern Bakeries Limited, which operates a chain of bakeries in the maritimes.
With regard to the Canada Bread Company, I should say it operates 21 bread and cake plants and 29 distributing depots.


William Joseph Browne: On page 10 of the report, it says 59.


Jean-François Pouliot: Perhaps my hon. friend is more up to date than the member for Lake Centre or my humble self.
Now, let us look at Canada Bread. A. V. Loftus is the president and general manager -that is a new man; A. W. Holmested, vicepresident; K F. Wadsworth, H. N. Bawden, Frank Hannibal, D. C. MacLachlan, our friend, and G. C. Leitch, our other friend from Toronto. They are the directors of Canada Bread. If my hon. friend desires to have some information, I shall give it to him.


Thomas Langton Church: Do not blame Toronto for all those directors; they do not belong there.


Jean-François Pouliot: The Canadian Bakeries
Limited of Calgary, makers of bread and cake, operate 17 bakeries in British Columbia, Alberta and Saskatchewan and are controlled by Maple Leaf Milling Company Limited. K. W. Ward is the director and general manager, Calgary; D. C. MacLachlan, our friend, vice-president; K. F. Wadsworth, another friend; D. A. Ross, secretary-treasurer and general manager, Calgary; E. Buckworth, another friend; and H. Evans of Edmonton.
I have read some of these names, but I am not through yet. There is the St. Lawrence Flour Mills Company Limited. The directors are, D. A. Campbell, president and managing director; G. W. Grier, vice-president, C. E. Gravel, J. H. Labelle and R. E. Chadwick, of
1750	HOUSE OF
Combines Investigation Act Montreal. Then there is W. A. Murphy of Winnipeg; A. G. Watson, Halifax, and G. C. Deeks of Toronto.
Next there is the Ogilvie Flour Mills Limited which is one of the largest. Let us look at Ogilvie. The chairman is the Hon. C. A. Dunning, and the president Mr. G. A. Morris. The directors are Sir Montagu Allan, R. H. McMaster, Beaudry Leman, A. M. Vaughan and L. J. Belnap, of Montreal. Then we have F. K. Morrow of Toronto. I shall ask my hon. friend the member for Lake Centre if that old friend of Bennett's is a bad man.


Mr. Smith (Calgary Wesl):: How did he get
in with Dunning?


Jean-François Pouliot: Just the same as we do together, but under different circumstances, naturally. Mark you, Mr. Speaker, I say nothing against these men, but I ask questions. I name all the directors of the milling companies mentioned by Mr. McGregor in his report. All the so-called culprits referred to anonymously by the member for Lake Centre and by the leader of the opposition are before the bar of the house. I should like the member for Lake Centre, who is the only member I have named who is present, to name them. Along with Mr. Morrow, there is A. Earwaker, Hamilton; Robert McKee of Vancouver; H. N. Davis, vice president; H. Groom, in charge of sales; E. B. Frost, western division; A. Atkins, in charge of operations.
The subsidiaries are the Ogilvie Grain Company Limited, the Seaforth Milling Company Limited, and Glenora Securities Limited. If the Tories are as brave as they should be they should name the guilty people. They have made accusations against the government; they have denounced the government; they have used generic terms condemning everything. I mentioned these names one after the other in an intelligible way.


Mr. Brooks:: That is understood.


Jean-François Pouliot: I mentioned Mr. Earwaker in an audible voice in the House of Commons. Let us page Mr. Earwaker. I mentioned these names. I have my personal views about it. This is not the time for me to say what I think about it. I said enough at the beginning. I noticed that what I said was new to those who were supposed to know. It is true; it is a fact. I went through these names of company directors at the last moment. I did not have time to check the number of cake bakeries, of bread bakeries throughout Canada controlled by the millers themselves. Would the hon. member for Lake Centre (Mr. Diefenbaker), would any members of the


C.C.F. group, would any Conservative, any member of the loyal opposition of His Majesty, Conservatives, Socialists, or Social Crediters mention one name among those whom I have enumerated one after the other? They are all directors of the companies. They are those who made the policies of the companies, the policies denounced only after Mackenzie King has gone home. I am most surprised that my hon. friend who complained so much of Mr. Mackenzie King when he was the prime minister and leader of this party now canonizes him. They canonized Mr. Justice Ilsley and they canonized McGregor.


John George Diefenbaker: When did that happen?


Jean-François Pouliot: Just a moment ago. I believe that when someone is quoted by my hon. friend he pays a great tribute to him, and he must pay attention to what he said if he is going to quote him in the House of Commons. Perhaps the word "canonized" is pretty strong. He has canonized McGregor. One a day is enough. But nevertheless he spoke in more eulogistic terms of the former prime minister of Canada than he did when he was the leader of this party.
Now, sir, I have said enough. I could say much more but I am anxious to hear who is behind the curtain, who is responsible for the errors made by the government. Let my hon. friend pick out any one of the names I have mentioned. After he has done that he will be qualified to make another fine speech, to repeat some sonorous sentences and make gestures which are much more graceful than mine, and thrill the House of Commons with his eloquence. I am expecting that, but I hope that before that takes place the hon. member for Lake Centre will prove to the House of Commons that he is enough of a man to select those whom he has in mind out of the names I mentioned a moment ago. I expect him to do that, and I am sure he will do it.


Mr. E. G. Hansell (Macleod):: Mr. Speaker, I have listened with a good deal of interest today to the previous speakers who have taken part in this debate on the bill to amend the Combines Investigation Act. It appears to me that we have listened to a good deal of crack oratory and the matching of nimble wits.


An hon. Member:: Crack or cracked?


Ernest George Hansell: I wanted to be polite and I said "crack". I trust that my speaking at this time will not be a case of a fool rushing in where angels fear to tread; for I do not claim to be a crack orator, neither have I much knowledge such as becomes the legal profession. But I have been doing a little reading lately in respect to monopolies and

combines and business in general, as well as reading the explanations that have been given by the Minister of Justice (Mr. Garson) and the Minister of Trade and Commerce (Mr. Howe) and the correspondence that went on between Mr. McGregor and the Minister of Justice.
I believe the bill to amend the Combines Investigation Act is worthy of support. I favour it. But I cannot quite convince myself that it goes far enough. It seems to me that the amendments are pretty well confined to the strengthening of the hands of the government for the purpose of prosecutions. That is all well and good as far as it goes. Whether or not it will take care of what sometimes happens in monopolies and combines in respect to unfair business practices I do not know, and perhaps it remains to be seen.
I once heard a speaker say something to this effect, that there was nothing wrong with a monopoly as such if it put on the market its production at cheaper consumer prices. I do not know that I altogether agree with that, but I have thought of the statement a good many times. All people are consumers and all would benefit even though it were a monopoly which put on the market production at a lower price to consumers. Perhaps there might be some confusion in respect of monopolies and combines.
I am not satisfied in my own mind that a monopoly and a combine are exactly the same thing. To all intents and purposes for argumentation I suppose we could put them together, but I think we should distinguish between them. I trust that I may not be accused of splitting hairs, but there may be a difference between a monopoly and a combine in this respect, that a monopoly, which term stems from another word, the Greek word "monos" which means first, all in one, or alone or single, put it whichever way you like, applies to a company which is the only one in that particular business.
That could constitute a monopoly. But a combine is just a little broader than that. A combine could consist of several business concerns in the same industry conniving and combining their efforts for a particular purpose. It seems to me that is the thing we are dealing with in the Combines Investigation Act.
We in this corner of the house believe in free competition. I believe that generally speaking the Canadian people believe in free competition, provided that free competition is also fair. We have been told over and over again that competition is the life of trade. I believe that we must maintain in Canada that same free competition, provided it is fair. For if we lose out here, then I
Combines Investigation Act am afraid we are losing the one great principle of freedom that has made democracies, and particularly the western free enterprise countries, the powerful nations that they are today.
However, perhaps it is not just as easy as that. Some interesting information came out from Washington the other day, where a house judiciary committee of congress is sitting investigating monopolies in the United States. A few days ago Mr. T. K. Quinn appeared before that subcommittee. Mr. Quinn was a former vice-president of the General Electric Company. A man of that status knows something about business. I should like to quote from a press dispatch one or two of the statements Mr. Quinn made to that committee. The press dispatch from Washington, November 3, states:
An excess of concentrated private economic power has fostered big government and big unions, and is driving this country towards socialism, T. K. Quinn, president of the T. K. Quinn Company, New York, told a house judiciary committee today.
I want hon. members to take note of what he said there, because it seems to me that if big business is not regulated in a fashion so as to see that it is fair in its competition, perhaps we shall be driven into state socialism. Another expression from this article is:
Mr. Quinn told the subcommittee, which is investigating monopolies, that the system of concentrated power in relatively few hands was "inconsistent and opposed to democratic objectives."
Then later on it states:
The ultimate safe solution to the problem of "bigness in business is physical and financial decentralization," Mr. Quinn advised the subcommittee.
Before Mr. Quinn had finished giving his evidence he made several proposals which he thought might help to deal with that situation. I place these proposals on Hansard only by way of passing them along to the appropriate authorities for consideration. I do not do so because I necessarily agree with all of them; in fact with one or two of them I do not agree. The Minister of Justice (Mr. Garson) may take them for what they are worth. Mr. Quinn's proposals included the following:
1.	Banks and insurance companies would not be permitted resources in excess of-
-and the sum of a billion dollars is mentioned here. But of course that would be applicable to the United States.
2.	Officers and directors would not be permitted to serve for more than one private corporation for gain.
That is one proposal with which I agree, because it would put an end to that vicious thing known as interlocutory directorates.


An hon. Member:: Interlocking.

Combines Investigation Act


Ernest George Hansell: I must have thought I was in that other debate.


Stanley Howard Knowles: It sounds more like a minstrel show to me.


Ernest George Hansell: Probably I was suffering from stare decisis when I used that term. Then it continues:
3.	Corporations would be required to report annually, or oftener, complete profit and loss and financial statements by department, and subsidiary lines of business, and totals.
4 No corporation would be permitted to buy the stock or assets of any other corporation or individual without the approval of a governing commission.
It seems to me that is a good suggestion.
5. They would not be permitted to raise or decrease prices without specific approval of the federal trade commission.
Some adjustments might have to be made in that last one. Mr. Quinn however is only making suggestions which will help to stay the growing tendency toward centralization of business power in the hands of monopolies and combines.
There is another side to the picture, just the same, and I should like to offer some suggestions on that side. I now refer to an article headed "What Chance Has Small Business", appearing in the Reader's Digest. The writer is Samuel T. Williamson, formerly an editor of Newsweek and a staff writer of the New York Times. Mr. Williamson goes on to say that small business, to a very large extent, is the life of business in a nation. He does indicate that many small businesses at first go under, but he does not necessarily blame big business for putting them under, and states:
Sometimes a half million firms, most of them small, disappear in a year-sold, merged or just abandoned. Only one of two retail stores survives its first three years under the same management. Less than one store in three lasts more than seven years.
Then he goes on to say:
On the other hand, studies of retailing in-
Certain industrial states-
-show that the same mortality rates existed twenty and thirty years back.
Then he goes on to say that three economists who had analysed certain industrial districts discovered that stores did not last any longer a hundred years ago than they do now. Those facts are rather interesting. He goes on to say this:
In 1900 there were 21 firms for every 1,000 people. Today there are 26. And despite trends toward bigness, the average business firm has the same number of employees as at the beginning of the century.
Then he goes on to point out another rather interesting thing, that big business is sometimes dependent upon smaller business. He refers to one automobile company that buys


from nearly 1,100 different firms. One speedometer maker, one of those 1,100 firms, buys from 200 independent suppliers. That is an interesting thing to learn. Then he goes on to say:
Even when large concerns do a big proportion of the business in their line they encounter smaller firms' competition.
I know that that is not always true, but that is what he says. He continues:
When U.S. Steel was formed it controlled 65 per cent of steel production. Just before world war II its share was 38 per cent. Today it is 33 per cent.
I should like to read into Hansard two more paragraphs which I believe are important. He says:
Almost every big business one can think of started small. Small business is the hope and beneficiary of competitive enterprise. As long as there are people who would rather work for themselves even if it means working harder, and as long as small units can do some things better and cheaper than big ones, small business has a future. As long as competition is free and fair it need not fear big business.
Business freedom may be measured by these questions:	Are people free to invent new devices, to
bring out new products, to organize new services? Can people buy what they need from more than one producer or seller? And are the producers and sellers operating on a competitive basis? If so, small business-any business-is free.
I would point out to the Minister of Justice, who has the responsibility of administering this act, that I believe what Mr. Williams says there is true. It is the responsibility of the government through its Combines Investigation Act to see that competition is fair. I once heard President Roosevelt say something which has stuck with me throughout the years; he said that big business is not always bad business. I believe that, but I believe also that if big business becomes bad business, it is bad indeed. We cannot permit big business to become so powerful that it is above the government or above the law.
I do not want to be uncharitable, but it does seem to me that in the discussion that has taken place, in the report that has been submitted, in the correspondence and memoranda that have been exchanged, it is indicated that the milling industry of Canada had become so powerful that it could influence Mr. Gordon to offer it protection if it behaved itself. Perhaps that is putting it rather crudely. I am not making any criticism of Mr. Gordon because I believe he was the man for the job.
We know that he came in for considerable criticism during the war because many people regarded him as a dictator. I am not saying that he was because I never ran into conflict with him, but I do know that that was the opinion of some people. We do know that he was armed with all the power that a man needed in order to prevent inflation and bring prices into a reasonable position in respect to

trade and business. In that respect he was all-powerful, and yet it appears to me that we have a glaring example that he was not powerful enough to deal with a great industry without saying:	If you will help me here,
then you will be privileged.
I mention that in passing because unquestionably the evidence would indicate that that one big business was indeed a powerful business. I submit that the teeth of the Combines Investigation Act should be so sharp that big business that attempts to manipulate prices and distribute its product in such a way as to squeeze out small business can be dealt with. That is when big business becomes bad business, when it is able to so manipulate prices and so distribute its products as to squeeze out its weaker competitors. That sort of thing is inconsistent with our democratic way of life, a way of life which should grant to every man an equal opportunity to make good in business without fear of being destroyed by unfair business practices on the part of giant competitors.
We do know that there is a strong feeling among people that the big shot can get away with anything while the little man can get away with nothing. I do not think any business should be getting away with anything. Fair business is fair business. There is a feeling among people-I do not know whether it exists generally-that if a poor man steals a loaf of bread he is put in jail, but if the big shot steals a million dollars he is looked upon as being a rather brilliant and smart man.
I do not know that that would hold true in the administration of justice in Canada, but just the same that is what people think. A few years ago I met a man who had the experience of running for a seat in this House of Commons. He was waging his election campaign in the old days when he was on relief. He was a poor man, and during his campaign he wanted to get from one place to another, and he had to hitch-hike. Just as he was crossing a railroad track he saw a handcar sitting there and he said to himself, "I have no money, and there is a handcar. What does that add up to?" He got on the handcar and pumped his way for several miles to his destination, the next town.
The fact of the matter was that he was arrested and sent to jail. When he was running his election campaign a man in one of his audiences jumped up and said, "Are you bidding for our votes to enter the House of Commons?" He said, "Yes." The man in the audience said, "Is it not true you have been to jail?" That stumped him for a moment. Was he a jailbird? The way he answered was to say: "Yes, I have been to jail and I want to tell you the reason why I went to
Combines Investigation Act jail. I went to jail because I stole a handcar. That was my fatal mistake. Do you know what I should have done? What I should have done was to steal the whole railroad. I stole a handcar and was put in jail, but if I had stolen the whole railroad I would not be here asking you to vote for me because I might have been put in the Senate." In telling that story I cast no reflection on that august body, but that actually happened. You will want to know whether the man was elected. Believe it or not he was, and he sat in the house for a number of years.
What I am getting at is that the Combines Investigation Act must deal with business in such a way that it will guard the fairness of competition at all times. If there are any amendments needed to the Combines Investigation Act, I believe they must be made in order to strengthen the hands of the government in the administration of the act and in prosecutions under it. Believe me, unless there are prescribed penalties that will teach the powerful business tycoons that they must be fair, there is no use fooling around with the Combines Investigation Act at all. When I say they have to be taught and punishment must be meted out, I mean exactly that. There is little use in imposing on big business a fine of several thousand dollars or even $100,000. To my mind that is not punishment. I know that the minister may say that it is pretty hard to prescribe the particular punishment for an infraction of this law, but I believe it can be done.
I am not prepared now to say how it could be done, but I believe it could be done in such a way as to expose these men so that they will not get away with the attitude that, because they are business and financial tycoons, big shots, therefore they can do what they like. Their misdemeanours should be advertised high, wide and handsome. I do not know why their businesses should not immediately be put temporarily under the control of an administrator. Let the government step in with an administrator and advertise the actions of these men. They could advertise what they had done in newspapers and on the labels of the products if they wanted to do so. Let them advertise that the business is temporarily operated under a government administrator by reason of the fact that Mr. So-and-So, Mr. So-and-So, Mr. So-and-So, director So-and-So, President So-and-So have been guilty of unfair business practices. If there were teeth of that nature in the law then I think they would be pretty careful what they did.
I think I have said enough about the matter. I am in favour of the amendments to the bill, and I am saying that generally I think business in Canada is fair. I believe

Combines Investigation Act we can say that. I believe that the businessmen ot Canada have a desire to be fair and to do business legitimately, but if it is discovered that they are unfair in their business practices then let us call them to account for their actions and teach them in no uncertain way.


William Joseph Browne: Mr. Speaker, I rise for the purpose of supporting the amendment proposed by my leader, and I suggest to the Minister of Justice (Mr. Garson) that the proposal made by the leader of the opposition (Mr. Drew) is a reasonable one. The debate has disclosed that the matter is of a very grave, serious and fundamental nature. It affects the lives of everyone in the country and some outside of it.
A few days ago, speaking in another debate, I expressed the opinion that Canada was fortunate in that it had enjoyed good government. The events of the past few days compel me to modify that opinion, not only because of the revelation that a report, which by statute had to be made public within a fortnight, was kept secret from the public who are entitled to see it and also from the present session of the house and the session of the house held last spring, but also because of the contents of this report, and the contents of other reports that have preceded it, especially the one on the breadbaking industry in western Canada. I took the trouble to read a report of a committee of this house that was appointed in 1948 to investigate the rise in the cost of living. It is called the House of Commons committee report on prices.
In that report they drew attention to many practices they strongly condemned, and urged that the combines investigation commissioner should have greater funds at his disposal so that his department might be able to do greater work. Subsequently, on the recommendation of that committee, a royal commission was appointed which also approved of the work being done by the combines investigation commissioner and condemned certain practices which it learned were going on in this country and which were responsible for the rise in the cost of living.
Everyone in this country, rich or poor, no matter what his occupation, professional or layman, whether lawyer, doctor, fisherman, labourer, clerk or mechanic, is affected if there is a one point increase in the cost of flour. By every cent that flour rises everybody in Canada is affected. In my country we had no combines investigation act, and I was not familiar with the workings of this legislation. I do know, unfortunately, that some of the practices condemned in these reports, and which are illegal under the Combines Investigation Act, were carried

on in Newfoundland. I know, too, that during the war these flour companies which were selling at the ceiling price here in Canada under subsidies from the federal government were not selling at any ceiling prices in Newfoundland. Hon. members will be surprised to learn that we were paying from $17 to $20 a barrel for flour. There was no limit to the profits these flour companies could make in export trade. I know the combines investigation commissioner has attended international conferences whose aim was to prevent corporations such as these taking advantage of the public not only in their own country but in other countries as well, and I wish his attention had been directed to the prices being asked for flour in Newfoundland.


Mr. Slick:: He would have had no jurisdiction in Newfoundland; we did not have confederation then.


William Joseph Browne: The hon. member for Trinity-Conception (Mr. Stick) says he would have had no jurisdiction in Newfoundland. Well, he would have jurisdiction now, and it would not be too late for him to come and make that investigation. Whether or not any investigation is made, we know now what they were being paid for wheat and flour in this country, and we know the profit that was being made in Newfoundland.
There are several things to which I take exception in these revelations, and which I think every hon. member, no matter what his party affiliations, must find reprehensible. The first is the suppression of the report. No justification has been presented to this house for withholding the report. It was a statutory obligation upon the Minister of Justice and the best that can be said in that connection is that he was prevailed upon by other, more influential members of the cabinet to withhold it. But then what about the interview described by the hon. member for Vancouver East (Mr. Maclnnis), who had a question on the order paper asking if a report had been filed. The Minister of Justice went to his room in September and asked if he would mind withdrawing his question because the minister had some legislation to bring down and he would like to have the legislation ready at the same time the report was presented.
Who will deny that this is important legislation? Considering the seriousness with which hon. members regard this question, will anyone in this house deny that it is an important matter? Look at the publicity it has received across the country. Was there any mention of the amendment of the Combines Investigation Act in the speech from

the throne this session? Was there any mention of it in the speech from the throne last session? There was not; and why? It is evident that the government did not intend to do anything about the Combines Investigation Act until they were forced into it by the combines investigation commissioner, Mr. McGregor. The Minister of Justice tabled the memorandum and letter of Mr. McGregor and was willing to have them appear in Hansard. However, the Minister of Trade and Commerce (Mr. Howe) rose in his place and said, "No, I am not going to have it," and as acting leader of the government his will prevailed again. But when the Minister of Trade and Commerce spoke here on Monday last he took advantage of the opportunity to read a contrary opinion into the records of this house. If the government were sincere and honest and earnest about these things, why should they resort to such subterfuges as I have just described?
During the discussion there was some crossfire, and some heated words were exchanged across the floor. How many hon. members remember the remark by the Minister of Labour (Mr. Mitchell)? He said, "What is all the fuss about? I had twelve officials of my department resign in one day. Why all this fuss about one official?" There is present this evening one hon. member who may remember back to 1910; I am referring to the hon. member for Inverness-Richmond (Mr. Carroll). In January of that year another minister of labour rose in his place to introduce the very act we are discussing this evening. That minister of labour was none other than Right Hon. W. L. Mackenzie King, who introduced the first Combines Investigation Act. Some hon. members, perhaps even some Liberal members, may not be familiar with the early history of Mackenzie King. He was especially chosen by the great Sir Wilfrid Laurier to attend every university at which he could acquire erudition-some knowledge on the subject of labour. Sir Wilfrid Laurier looked to the future, and he chose this man and sent him to Toronto, to Chicago, to Harvard, to Cambridge, so that he might acquire every possible bit of knowledge. Then Mackenzie King rose in his place in this house in 1910 and introduced the first Combines Investigation Act. At that time he said, "In this country and in the United States the people are noticing two phenomena, first a rise in the cost of living, and second an increase in the number of mergers and combines; and the people associate the two things. As the combines increase in number and in strength the cost of living goes up". Then he went on to give an elaborate
Combines Investigation Act account of the increase in the cost of living, together with an account of similar legislation in the United States and Europe.
That was the first Combines Investigation Act. It was to provide for the investigation of combines, monopolies and trusts which might enhance prices or restrict competition to the detriment of purchasers. At that time Mr. Mackenzie King said the people had a right to look to the government for protection of their liberties. And despite what is sometimes said by my friends of the C.C.F., as in the days of old the people looked to the king to protect them against the strong, rich men, the "combine" men of those days, so today the people have a right to look to the government to protect their liberties. If the government should choose to protect the privileges of the rich men, then they do an injustice to the great majority of the people of this country.
The matter of the cost of living needs no elaboration today. There is no need to give any analysis of it, as Right Hon. W. L. Mackenzie King did in 1910. There is no need to doubt about combines and mergers today because we know they exist in greater number than ever. Mr. Mackenzie King said that, "unfortunately, human nature being what it is, we cannot believe that management considers primarily the good of a nation as a whole as opposed to those whose capital rests in their hands". Is that not an effectual answer to the statement of the Prime Minister when he referred to the patriotism of these great industrial magnates? In the course of my remarks, I shall have something to say which will cause hon. members to question whether or not those gentlemen were so patriotic as they have been represented to be.
Mr. Mackenzie King also suggested it was "the business of the government to see that no private interests are allowed to operate against the public good". Thirty-nine years have gone by since then, and many changes have occurred. There have been two world wars, kingdoms have fallen, and Mackenzie King is no longer active in the political life of this country. There is also the question of small businesses to consider. In 1924, there were 437 small mills operating in this country, and by small mills the combines commissioner means a mill producing less than
1,000	barrels of flour per day. In 1931, there were 372. In 1934, there was an increase to 435; but in 1947, the figures stood at 181. I say that is a serious indication that small businesses are gradually being absorbed by these great combines.
Now, what of Mr. McGregor? Who was he? Some bitter reflections were cast upon that gentleman by the member for Temiscouata (Mr. Pouliot). I do not know what personal

Combines Investigation Act rancour exists between these two men. Perhaps hon. members are not aware of the fact that Mr. McGregor was a citizen of Ottawa, the son of a grocer in this city. He left school at the age of thirteen, and went to work in a newspaper office. After returning to school for some time, he worked in the post office and then for several years acted as private secretary to Mackenzie King. For six years, he acted in that capacity when Mr. Mackenzie King had become prime minister. When Mr. Mackenzie King needed a man to act as combines investigation commissioner, therefore, whom should he choose but Mr. McGregor, the man who had been trained under his eyes? For twenty-four years, Mr. McGregor has carried on his duties, as I understand, fearlessly, honourably and honestly. He is capable, efficient, and incorruptible. Men like that are few in any government. Shame on the government that did not make some effort to retain in its employ a man of that calibre. They allowed him to be sacrificed to the interests of these flour magnates, who are not the friends of this party but the friends of the government in power.
Is there a need for such legislation? The report of the commissioner is the answer. He says there is a greater need than ever. The report of the committee of this house on prices and the report of the royal commission all indicate the need for strengthening the power of the commissioner against these combines. In the last twenty-five years, there has been an enormous growth of these corporations. I know of one institution that has two business houses in this city, and since 1921 it has multiplied until it now has 121 in Ontario. Last year, it turned over $73 million. What small businessman could open a shop within half a mile of such a giant corporation? These are financial and commercial octopi that swallow every competitor coming within their reach. These chain stores and multiple stores are injurious to the economic health of this nation, and so are the combines.
To whom was it good news when the government suppressed this report, if not to the corporations named in this report? Do you not think the directors of these companies, the men whose names have been mentioned, shouted "Hurrah for the Liberal government that has stood by us; they are our friends"? Can anyone be blamed for believing that these men acted in that manner? Why did the government suppress this report? Does the Minister of Justice tell the prosecuting officers that they must not take action against other people accused of offences? Eleven companies operating flour mills across Canada had intentionally assisted in the formation and operation of a combine,

and yet they are not to be prosecuted. They cannot be prosecuted, in fact, because the report was suppressed until the two years prior of limitation had expired. Under the Criminal Code no prosecution can be launched two years after the alleged offence. I agree with the hon. member on my left who remarked that that provision of the Criminal Code should be amended to give greater latitude in the prosecution of combines.
Here is legislation which we are told has been recommended by Mr. McGregor, the man in whom the government no longer has confidence. The government must have been aware of the need of this legislation for some time. They must have been aware of the growing number of great corporations and the growing power of those corporations. No matter what amendments are passed at this session, those corporations will not fear such legislation when they realize that the government has practically ruled out the commissioner and suppressed his report condemning them.
An examination of this act raises two questions in my mind. Does it go far enough or does it go too far? Does it go too far against corporations who are so patriotic as to co-operate with the government in time of war? The member for Temiscouata, in his amusing speech, read out the names of the directors of some of the companies that were condemned. I should like to draw the attention of hon. members to the report on the bread-baking industry in western Canada by Mr. Goldenberg, a special commissioner under the combines act. If hon. members have not read it, I recommend that they read it. If they will turn to page 100 of that report, they will find that two directors of the Ogilvie Company were conspiring on October 22, 1947, to put a man in northern Saskatchewan out of business. They bought him out for $100,000 and, if they had not done it, the Maple Leaf Company would have. Both these companies were in cahoots; they were combining to get that man out of business because he was an independent baker who was selling his goods at a price lower than the bakeries which these two giant corporations controlled.
If any honest man from Saskatchewan, Alberta, Manitoba, or British Columbia will read that report, he cannot help but condemn those two corporations. At least, he will then be able to understand why Mr. McGregor had reason for bringing in a report against this flour milling industry. For these are the same men who Mr. McGregor says have committed offences, and whom the government have chosen to exonerate.
The hon. member for Temiscouata (Mr. Pouliot) asked whether we could name a man. Well, there are two men. Their names

are right in the book on page 100. They are Mr. E. B. Frost and H. N. Davis, vicepresidents of Ogilvie Flour Mills. I do not care, Mr. Speaker, whether they are Tory or Liberal. Men who put up the price of flour or put up the price of bread and steal money from the poor, the poorest of this land, deserve no consideration whether they are Liberal or Tory or whatever they call themselves. They are not interested in the welfare of either party. They are interested only in themselves. They are selfish men. They want simply to have no competitors. They do not want to see anybody exist but themselves.
I think all hon. members, and especially the members of the government, must ask themselves this question: What is the state of this country? One would think sometimes that Canada is the only country in the world. One would think that there was no such place as Russia, where there are twenty million people who are slaves. One would think that there was no such place as China, where four hundred million people are being put under the control of the czar of Russia. It does not seem realistic sometimes to listen to the debates. All over the world there is a fear of the spread of communism. Have we no fear that communism will arise amongst us?
Czechoslovakia voted the communist government into power, and look at the condition of that country today. The other day the Minister of Finance (Mr. Abbott) announced to the country, through this house, that he was permitting landlords to raise rents. Look at the furore that he raised at the same time all over this country. There were protests. Why were there so many protests? There were so many protests, Mr. Speaker, because, as he said himself, the majority of the people of this country were living in rented homes. I think he was wrong. I hope he was wrong because if that is the state of Canada then I fear for it, unless some influence is brought to bear to change the tide and help to get the people in their own homes. I know of small places in the district that I represent, and probably hon. members who represent rural ridings know the same thing, where every man owns his own home. Not a person is worried about whether the rents go up or down because there is nobody paying rent. They all own their own homes. They are independent men. They do not care what happens. But the men who live in the cities, the men who live in rented rooms, men and women who live in lodgings, are the people who are fearful. These people who are drawing their weekly or monthly salaries and who live on fixed incomes are the ones who are fearful. If the price goes up there may be penury or poverty for them.
Combines Investigation Act


Some hon. Members:: Order.


Mr. Deputy Speaker:: If the hon. member is speaking on housing he is out of order.


William Joseph Browne: No, I am not.
On the point of order, may I say this. What I am drawing attention to is that we have to look at the people of this country as a whole, not as to the amount of money they are paying for their bread or for their rent. We want to see the people own their own homes.


Mr. Deputy Speaker:: Order.


Some hon. Members:: Order.


Mr. Mutch:: Why don't you read the bill just once?


Mr. Deputy Speaker:: Order.


William Joseph Browne: I cannot see who is speaking but I know the remark is not a very intelligent one. What I wish to say, Mr. Speaker, is this. What we want to see is a stop to this growth of combines, and a stop to this growth of chain stores and multiple stores. We want to see small businesses increase all over the country so that there will be a greater number of small businesses and people will become more independent. Then the country would be a better country. There is a way to do it. It should be done through this committee or it may be done in some other way. But I would make a suggestion, as the hon. member who spoke before me suggested a number of methods. This is a suggestion for the Minister of Finance. There should be a tax according to the number of businesses that a man or a company has. If a company has one business it pays a small tax; with two businesses a little higher tax; with three a little higher, and so on. When they get into hundreds of businesses then they should pay a million dollars a year in taxes for having that privilege. That is the sort of thing I recommend. It may be a novel idea to the Minister of Justice (Mr. Garson) but I ask him to think it over. Think it over, and see if there is not something in it. Some positive legislation must be enacted. The combines investigation commissioner admits that the act is not enough. The Minister of Justice knows that the act is not enough, and that is the reason he has brought in this legislation. But I will tell him now that he will not succeed even with this legislation. The cases take too long, and the owners of these businesses are watching. They are watching when the investigator comes around, and they report it to one another.
As the commissioner said himself, the flour mills did not put up their prices after September 15. They knew he was conducting an investigation and they were minding their

Combines Investigation Act p's and q's after that date. The individual is becoming more powerless every day. Before it is too late, before socialism or even communism should come to this country I ask the government to give serious consideration to some of the ideas that I have mentioned. Let us stop this strangling growth of giant corporations. If we do not we shall have socialism or we shall have the welfare state, the servile state it was once called, and it would mean the same thing. We may have security but we shall have no freedom. In this country we want to restore freedom of trade, freedom of competition, because there can be no liberty without economic liberty. That, Mr. Speaker, is a thesis for another speech and I do not think I should go on with it at the present time.


Angus MacInnis: Mr. Speaker, big business has so few friends here tonight that my usual sympathy for the underdog almost convinces me that I should come to its defence, but since big business is not the question before us I shall have to leave my defence of it until some other time.
We are supposed to be debating the second reading of a bill that was moved this morning by the Minister of Justice (Mr. Garson). While I have not found myself in general agreement with the minister in regard to the flour-milling report, I am bound to say that he made such a good job of explaining the amendments proposed in the bill that there is really nothing much left for me to do. The amendments proposed are three in number, and they are fairly simple. Indeed, so simple that I am puzzled why it took the Minister of Justice so long to introduce them into the house.
Having said that, I may as well go on with the discussion that has been in progress here since early this afternoon, namely, why the report made by the commissioner of the Combines Investigation Act was not tabled in the house nor published. It did not have to be tabled in the house, but why was it not published within the requisite time provided by law.
I read the speech made by the minister last Monday, and really as a defence for not making the report public it is about the weakest thing that I ever read. I heard it as well as read it. But coming back to the proposed amendments he said-
If we get our amendment we will certainly be in a far better position as regards this or any other report than we are in now. I am going to base my request for support of the amendment on the position that I would not take the responsibility of prosecuting on any report unless we have this amendment.
I do not know what effect the amendments may have in regard to future reports, but if
{Mr. Browne (St. John's West).]

there is any validity in the opinion expressed last Monday night by the Prime Minister (Mr. St. Laurent) the amendments are certainly of no value so far as this report is concerned. Knowing what I do and, as I mentioned last Monday, that I was told that the draft of this bill was ready on September 21, I am inclined to the opinion that if Mr. McGregor had not resigned and forced the issue this bill would not be before us even now.


Stuart Sinclair Garson: I am sure my hon. friend wishes to be fair and to state the facts, and that he will accept my interjection to the effect that the statement he has just made is quite incorrect. This amendment would have come down in any event; and so far as the commissioner's resignation is concerned, I may say that it was quite unexpected.


Angus MacInnis: I shall have to take the minister's word for it. But that rather confirms my suspicion, that it was not until the minister had received the resignation that the notice was put in Votes and Proceedings. If it was the intention of the minister to introduce the bill in any case, then why was the introduction of the bill being held up? Surely it was ready quite a long time ago.
Speaking on Monday night the minister said:
One of a number of matters which I found upon my desk at that time was the report of the combines investigation commissioner in connection with the flour milling industry. I should like to lay before you, Mr. Speaker, and through you, before the members of the house, the situation as I then found it. I took this report which was upon my desk-a report which had not been delivered to me in person because I was not here to receive it, upon a matter about which I had no more personal information than I have about the present state of affairs in Siam-
Then he mentioned that he took the report to cabinet, and found that there was objection in cabinet to the report; and that objection arose, according to the information we have heard in the house, because Donald Gordon had made a statement, or the Minister of Trade and Commerce (Mr. Howe) had made a statement, that certain undertakings or instructions had been given to the milling companies during the war years.
But is it not strange that apparently between the time the minister came into his office after his election in January, 1949, up until October 22, there was no effort made to bring together those people, Mr. McGregor, Mr. Gordon, and others, who could explain what it was all about? If the minister did not know anything more about the report than he knew about the state of affairs in Siam, surely there was a man in his department who knew something about the report. Surely Mr. McGregor knew something about the report-and Mr. McGregor would have been

glad to explain the report to him. As a matter of fact I rather think Mr. McGregor knew more about the report than the Minister of Trade and Commerce did; and if Mr. McGregor had been consulted perhaps he could have told the minister that there was no reason in the world why the report should not be made public. If there was a reason, perhaps the minister could have induced the commissioner to give him a written statement to the effect that the report should not be published at that time.
We come to another point. If the minister did not know what to do with the report in January, 1949, he did know that the law required him to make the report public. He knew that parliament was meeting on January 26, and he could have come to parliament at that time saying that he had this report and that for certain reasons he did not want to make it public until he could amend the Combines Investigation Act.
Surely that would have been the logical and reasonable thing to do. Parliament had neither to prorogue nor to be dissolved on April 30. We could have stayed here until we had amended the Combines Investigation Act so that, as the minister has said-
-we will certainly be In a far better position as regards this or any other report than we are In now.
Had the minister done that, the milling companies could have been taken into court, because I understand that was prior to the expiration of the two years' time limit in which prosecutions could be started. There does not seem to me to be a single out for the minister-not a single out. It has been said that he has been hiding the report. I do not say he was hiding it, but he certainly did nothing to bring it to light.
Then we come to the replies he gave to the hon. member for Winnipeg North Centre (Mr. Knowles) at the conclusion of his speech. At page 1524 of Hansard we find this:


Stanley Howard Knowles: Will the minister tell the house on what authority the government relied when it made the decision to violate the provisions of section 27 (5) of the act?


Stuart Sinclair Garson: Well, Mr. Speaker, it relied upon the fact that any democratic government is answerable to the people of the country for its acts.
That would be a splendid answer if it were not for one fact, that the people did not know anything about the act of the government. So he hides behind the fact that the government is responsible to the people; but the people can carry out their responsibilities only when they know what the government is doing. And this government was very careful not to let the people know what it was doing.
The Combines Investigation Act was set up to protect the people of Canada. The
Combines Investigation Act provisions in that act were binding not only upon the commissioner but also upon the government. I am going to draw the attention of the house to something else the minister said. I really did not think the minister would stoop to this sort of thing. His genial, open countenance is such that one would not believe anything like this of him. He said, as reported on page 1520 of Hansard of November 7, 1949:
Mr. McGregor refers to my predecessor, the Right Hon. Mr. Ilsley, as having authorized these proceedings to go forward, but Mr. Rsley's giving authority had nothing but academic significance, because his authority was not required. The commissioner himself has complete authority to go forward without authority from the minister. To charge the government that places in the hands of one of its civil servants that measure of authority with neglect in this matter seems to me to be somewhat unreasonable.
I did not understand that Mr. McGregor was charging the government with neglect.


Stuart Sinclair Garson: I was not suggesting for a minute that Mr. McGregor was.


Angus MacInnis: Whom has the minister in mind?


Stuart Sinclair Garson: My hon. friends and his colleagues.


Angus MacInnis: That is fine.


Stuart Sinclair Garson: I am very glad my hon. friend brought that up because there was not the slightest suggestion that Mr. McGregor had anything to do with it at all.


Angus MacInnis: All right, my mind is clear on that now.


Stuart Sinclair Garson: I think my hon. friend will admit that he has been making a slight charge of neglect.


Angus MacInnis: I am still charging the government with worse than neglect. Indeed, what the minister has done would have been a cause for impeachment at one stage in British history. I do not think the minister really understands the enormity of his offence. What in the world is the use of putting laws on the statute books if the government takes the position that they will carry them out, or be governed by them, just as they see fit. That is the position to which the minister has brought our laws. The minister went on:
But, sir, notwithstanding this very great authority which the commissioner has, we in the cabinet like to feel that we have a small residue of responsibility, if I may speak jocularly, for matters of policy.
Is not the responsibility and the authority of the combines commissioner outlined in the act? Did the combines commissioner go beyond the provisions of the act? He did not.

Combines Investigation Act


Stuart Sinclair Garson: I am reluctant to interrupt my hon. friend, but I think he is taking that last sentence completely out of its context. If he will look down the column of Hansard just about an inch he will see where it is stated that we had had a number of suggestions with regard to matters of policy in the way of suggested amendments to the act. If my hon. friend will just connect up the matters he is complaining about with the context to which it refers, I think it will all be self-explanatory.


Stanley Howard Knowles: You hope.


An hon. Member:: Read it all.


Angus MacInnis: I have no objection to reading it all. There were a number of interjections similar to those the minister is making tonight. After leaving out the remarks of minor individuals, we find this:


Stuart Sinclair Garson: We had a number of ideas from Mr. McGregor and his associates, in respect to the formation of which he was under no restrictions whatever. Any good ideas that occurred to them they put down and sent to me and I took them into cabinet. There were no restrictions whatever. Well, we had a few ideas ourselves-


Stuart Sinclair Garson: That is the point; now you are getting to the point.


Angus MacInnis: The minister continued:
-and we, with some timidity in view of the great powers that the commissioner had, ventured to put these forward, and he turned every one of them down. These are the ones he refers to in his letter.
I do not think there is anything wrong with that. Here is the minister putting certain ideas before the commissioner in connection with something about which he knows no more than he does about the affairs of Siam, and then the minister objects because the commissioner does not accept them.


Gordon Graydon: He should have seen C. D. Howe first.


Angus MacInnis: My opinion is that he saw C. D. Howe too often. He should have gone into his own office, locked the door and told his office boy not to let C. D. Howe in. Then perhaps he would not be in the jam in which he is today. Mr. McGregor has had long experience in combines investigation. He made suggestions to his minister and the minister brought them to the cabinet. Surely Mr. McGregor's responsibility was completed at that point. The cabinet was not compelled to take his suggestions. The minister was not compelled to take his suggestions. If that is so, why bring them up, why refer to them here?


Stuart Sinclair Garson: As my hon. friend is asking a question I shall be glad to answer it.


Angus MacInnis: It was just a manner of speaking, but I have no objection to the minister answering it because I have seen his other answers and I do not think much of them.


Stuart Sinclair Garson: Perhaps this is the type of question the hon. member likes to ask and not have answered. My answer is this: Everything that was done was quite proper. It was quite proper for Mr. McGregor to make his suggestions and for those suggestions to go to cabinet. I think it was equally proper for cabinet to have some responsibility about matters of policy and to make certain suggestions and to get Mr. McGregor's opinion on them, as my hon. friend has just been suggesting we should do. The point in this excerpt which seems to have escaped my hon. friend is that I was referring to the complaint in Mr. McGregor's letter of resignation that the council had had the great temerity to make some suggestions on its own behalf. The point that I was making was that we had had the temerity to make suggestions and he had turned them down, and that closed the matter. That is the significance of that excerpt.


Angus MacInnis: I read Mr. McGregor's memorandum several times and I do not find any great complaint by Mr. McGregor that the minister or the cabinet did not accept his suggestions. He merely mentions that they did not.


Stuart Sinclair Garson: He complains that we have had the temerity to send back suggestions to him.


Angus MacInnis: The word "temerity" is not used in his letter at all; there is no such word in his letter. From the time Mr. McGregor's letter of resignation was tabled in the house there has been an attempt by the government to make Mr. McGregor's position as untenable as it possibly could be made.


Stanley Howard Knowles: It is the minister who is really in the impossible position.


Angus MacInnis: There have been several references tonight to free enterprise. I do not know whether those who made those references realized that the purpose of the Combines Investigation Act is to keep enterprise free. What is wrong today with free enterprise is that those who are advocating free enterprise do not believe in free enterprise. They believe in monopolies and combines. That is why I have a file of reports so thick that it is a burden to carry downstairs, all of them showing how certain industries combine for one purpose or another.
We had an investigation a little while ago into the bread-baking industry and I should like to read a little bit of the evidence from

that report to show how fond free enterprisers are of free enterprise. This evidence was taken in Winnipeg. The witness was Mr. Conrad, and in the report I find the following:
Q. The Commissioner:	Did Mr. Addems have
authority to cut off supplies from Safeways, if they did not maintain the price?
A. I don't think he would do it.
Q. Did any such incident arise in connection with any retailer who didn't maintain your price?
A. There was one instance, if I remember correctly. That was with Safeways. They wished to sell our bread at one cent less than the other stores sold it for. We couldn't agree to that, we were price minded, and we lost business because we couldn't agree to it.
They lost business because they would not sell to Safeways. It continues:
Q. They were prepared to pay you the wholesale price and they wanted to sell it at a lower price than your other customers?
A. Yes.
Q. That being contrary to policy, you refused to sell them unless they were prepared to do as the others did?
A. Yes, that is right.
I wonder if that is free enterprise. The next item of evidence to which I wish to refer was taken in Vancouver, and is found on page 302 of the evidence:
The policy was also confirmed in evidence by Mr. Colwell, of Canadian Bakeries, as follows:
Q. What does bread retail at in the stores in Vancouver?
A. Eleven cents.
Q. What would you do if one of the retail stores should sell at 10 cents?
A. We would refuse to serve him.
Q. That would be your policy?
A. Yes. As a matter of fact I might add that has been the policy of the company ever since I have been with them. 1 started with them in 1912. Shellys first and then Canadian Bakeries, since 1912. I don't know of any single day we have not maintained the retail sale of our bread.
Q. That has been the policy of the company all the way through?
A. Yes it has.
Q. You have never weakened?
A. We could have held Safeways if we had let them sell at ten when the price was advanced: we told them we wouldn't do that and we didn't serve them.
The above quotations are to be found on page 81 of the report on the bread-baking industry in western Canada. Turning to the next page, and again in British Columbia, under the heading of "Agreements on tenders", the report reads:
As in Alberta and Saskatchewan, the bakers in British Columbia discussed and agreed upon uniform tenders for the provision of bread to the armed services.
The Minister of National Defence, whoever he was at that time, would ask for tenders for bread. They would go to great pains to advertise, and the particular bakeries would get together and decide on the price at which
Combines Investigation Act they would sell bread to the army, or sell bread to the people of Canada. The report goes on:
On December 17, 1941, Mr. G. R. Law, manager of Weston's, Victoria, wrote to Mr. Conrad:
"We have sent in the army tender for the contract January 1 to March 31 at 5 cents. Our last contract was for 51 cents. You will remember we discussed this on your last visit. Mr. Land of Canadian Bakeries and myself discussed this very carefully before submitting the tender and decided that with so much cheap bread around and with Vancouver bakers dropping their price we would be better to go to the five cent price. Our tender had to be in before I could get anything definite on what the Vancouver bakers were going to do although I had been advised that they were going to 4-90 at least. The tender, by the way, has been accepted.''
That letter was exhibit 405 in the inquiry. Then we come to July 2, 1943, when Mr. Conrad of Weston's wrote to Mr. B. M. Colwell, manager of Canadian Bakeries, Vancouver. I think this quotation will show whether the prices board was making agreements to keep up prices. It reads:
The food administrator at Ottawa is complaining and has complained to officers of our parent organization that there is in Vancouver in effect a combine to regulate and keep up the price of bread to the army. Furthermore, he is sending Mr. Malkin to Vancouver to investigate the situation. I believe it would be a good idea if all the members of the association would get together and work out their ingredient, factory, administrative and shipping container costs, etc., so that they will be in a position to have time to discuss their own costs and be able to prove when the time comes-
That is, when Mr. Malkin arrives in Vancouver.
-that the price of 4-75 cents per pound is justified. To my mind there will be no difficulty about this whatsoever. One point which I believe to be very important is that since the bakeries have enjoyed a higher volume of business by their own right, the army volume of business is baked in overtime which would have effect of increasing labour costs. In my own mind and as far as our organization is concerned, there is nothing wrong with the price quoted to the army, considering the local conditions in effect at both Vancouver and Victoria.
Surely with all the information on the flour milling case that the Minister of Justice (Mr. Garson) could have had by requesting it, and with experts to explain it to him, there was no necessity for him to take the advice of people who did not know anything abo.ut it. If he had only read the letter that accompanied the report from Mr. McGregor he would have found that the investigation was begun in September, 1947, that hearings were held in Winnipeg in October and November, 1947, and in Toronto and Montreal in January, February and March, 1948. The second last paragraph of the letter reads:
At my request counsel for the commission prepared a detailed summary of and commentary on the evidence which I then sent to the companies and persons involved as notice of the matters

Combines Investigation Act alleged. At the same time they were invited to supplement in any way they wished the representations and evidence already given during the hearings in regard to the same matters. Full opportunity was then given for those involved to present such further representations and evidence. Written or oral argument was then presented by or on behalf of all to whom notice had been given. In some instances the argument was directed primarily to a claim that the commissioner had acted without jurisdiction and without giving them adequate notice. On June 4, 1948, further hearings were held before me in Ottawa during which argument was heard from an officer of one company and its counsel.
In no case did these companies claim or bring forward proof that there were any understandings or instructions from the wartime prices and trade board or from any officer thereof. I suggest to the minister and to the government that they accept the amendment moved by the leader of the opposition and allow the matter to go to a committee where we can bring all those together who have different ideas on these matters, where we can get their evidence under oath, if necessary. Then we can come to our own conclusion as to who is right and who is wrong. Until that is done we shall not know who is right and who is wrong.


Some hon. Members:: Question.


Arthur Leroy Smith: The only applause I get when I rise to speak is the word "question" from my good friends across the way. This debate has taken a course which greatly interests me. One of the most interesting things I have heard, I think, is the story of a friend of the hon. member for Macleod (Mr. Hansell) stealing a handcar. I know something about handcars; I earned my living pushing one all one summer when I was seventeen. The hon. member's friend must be a powerful man, because one man cannot push a handcar if there is the slightest bit of grade. So I think probably his friend preferred jail to pushing the handcar; in any event he would if he were smart.
There is something I am very anxious the Minister of Justice (Mr. Garson) should answer when he comes to close this debate. The thing that is bothering me is why we need the Combines Investigation Act at all.
I refer hon. members to sections 498 and 498A of the Criminal Code, and I think perhaps the minister will admit that I should have some knowledge of this because in a case which has been much discussed here, known as the tobacco case, I was prosecutor until I was fired by the premier of Alberta, who at that time was also attorney general.
I was not fired for knowing nothing about it; nevertheless I was fired. Then the gentleman who is now chief justice of Ontario, whose name I believe is McRuer, was paid by this government to prosecute the case;

Combines Investigation Act fifteen days after it was delivered. I do not know that I have ever felt more sorry for a man in my life than I do for him. The minister has been ill-advised, and at law what is he doing now? He is pleading guilty, and then calling the Minister of Trade and Commerce (Mr. Howe) to give evidence of character and extenuating circumstances. That is the simple position in which this house finds itself at the moment.
What is all this difficulty about? The ministers frankly disagree with one another, then drive one another home to dinner and that ends that. They laugh it off in this house. They are not the people who are really at cross-purposes. Their difficulty was a simple one; shall be publish it or shall we not? Shall we break the law or shall we not? Let us break the law because we will bring in some amendments and morally we shall be free. Legally, they are in breach of a mandatory statute. The two men who are really interested are McGregor and Gordon. McGregor says, I do so and so, and he puts it in writing to the minister. He leaves it on the minister's desk, which is all he is entitled to do.
Mr. McGregor was entitled to say that, in his judgment, this report should not be made public. Apparently, without any cloudiness in his eyes or in his brain, he decided not to so recommend. His failure to do that put the minister in a spot, Mr. Speaker; there is no doubt about that. The minister had only recently arrived from a little place called Winnipeg, which is neither east nor west, and never the twain shall meet until earth and sky stand presently, and all that sort of thing. The minister was faced with this difficult problem. He was the junior member of the cabinet. These big boss boys who have been here for some time said, "Stuart, do not do it; we might get into difficulty". The minister said "Where do I go from here?" Ten months later these bosses said, "Publish the thing because McGregor has resigned". No one knows how I get these secrets from the cabinet but, really, that is about what took place.
The difference is really between Mr. McGregor and Mr. Gordon. Let us get McGregor and Gordon before a committee, leaving out the sin of omission which at law, as the Minister of Justice knows, is often worse than a sin of commission. Who are the people who meet head on over this whole business? It is Donald Gordon and Fred McGregor, that is who they are. One said so-and-so and the other said something quite to the contrary. One says the whole thing is excusable because he told these companies, both verbally and in writing, that they were free of the Combines Investigation Act for as


long as the wartime prices and trade board was in existence-not for the period of the war, but as long as prices were under the control of that board.
A request has been made for that correspondence. It has not been produced. A memorandum from Donald Gordon has been produced. I am not criticizing anybody. I do not do that until I get the facts. I will admit that Donald Gordon is perhaps the best Scotch singer of whom I know in Ottawa. When it comes to his judgment of the Combines Investigation Act, however, I want to know what he knows about it. I should like to know whether he was accurate in the memorandum which he gave to the Minister of Trade and Commerce and which the Minister of Trade and Commerce, through the great kindness of his heart and nothing else, read to the little children of this house. We are to accept the crumbs that fall from our master's table and we are supposed to be well satisfied.
I have outlined what the amendment requests, that we might have a committee in which we humble members of parliament might be able to ask these great civil servants a few simple questions. Is that unreasonable? Is there anybody on the Liberal side who would suggest to me that that is unreasonable? Remember, I know that in the back of your minds you all have the idea that the man who is talking is seeking to do some terrible thing politically, or something of that sort. But there are limits in these committees. We have good chairmen of these committees. I would suggest that the senior hon. member for Halifax (Mr. Isnor), who I think is one of the fairest chairmen of committees that I have ever known-and that is no reflection on anyone else, but he is tops- be made chairman of the committee. Then, let us get Fred McGregor; let us get Donald Gordon. They differ in this thing and in various things. And let us, the members of the House of Commons, find out what the true situation is. There can be no ministerial difficulty about it, because either of these men is right or he is wrong. The story we get from them is this. First, Gordon says that in a limited period he gave these undertakings verbally and in writing. Well, he can tell us to whom he gave them. If they are in writing he can produce the letters that he wrote. If they are oral he can tell us. In the meantime, little McGregor, little wee McGregor as he is now, not what he was just a few weeks ago, can give us the reasons in some detail for his resignation. That is all the amendment means. Is there anybody who will suggest that that is unreasonable in any way?

What is the other side? We won't grant a committee. We won't permit these questions to be asked. We won't have these men meet one another-I trust face to face. I believe they are very good friends even now, but one of them can be mistaken. Let us put it on the best ground we can. Let us find out which one is mistaken or which one perhaps is being even more than mistaken. And then let the members of the House of Commons form a judgment on the whole matter.
I turn now to another aspect of the amendment itself. I hope the Minister of Justice (Mr. Garson) will correct me if I have misinterpreted the meaning of the section dealing with evidence. As I remember it, the old law of the scoop shovel method, which was backing a truck up and throwing everything up on the judge's desk, came from a case about twenty or twenty-five years ago from the same court of appeal in Ontario. It was Rex v. Clark or some such short name. I am not sure of it, but it was an appeal court case, and that is where we got into this habit of trying to prove things in that way.
May I say to the lay members of the House of Commons that you do not need to have conspirators all in one place or have them together. You may convict people of conspiracy who have never seen one another or have never heard of one another. That is part of it. You first show that there is a conspiracy and then here we go gathering nuts in May, and you pick them in Siam or in London or in any other place. They have never seen each other, and yet under our law they may be guilty of conspiracy.
I am going to say this to the Minister of Justice. We should exercise the greatest care in finding a man guilty before trial. Let me say at once I agree with him that the amendment to the statute says that what the government seeks is the rebuttal presumption. That of course means that I am guilty but I may have a chance to prove myself innocent. That is exactly what the rebuttal presumption is. I often think that perhaps the further we wander from the great rule of English law that a man is innocent until he is proven guilty the more we incur grave, perhaps not consequences but, I fear, consequences which may arise from something like that. Under the Criminal Code the only one that I remember at the moment is one that I am in hearty agreement with, namely, in connection with drugs. I am in hearty agreement with the principle that in the case of any person found in possession of drugs we should say to him, you are guilty unless you prove yourself innocent. But with great respect, Mr. Speaker, I cannot-perhaps it is my training
Combines Investigation Act in law-say other than that I find it difficult to accept the idea which is inherent in this bill that we need to depart from the old idea of innocence until guilt is proven. I repeat what I said a moment ago.


Stuart Sinclair Garson: Will the hon. member permit a question?


Arthur Leroy Smith: Yes.


Stuart Sinclair Garson: In his prosecution of the tobacco combines in Edmonton did he not himself as prosecutor invoke this possessory principle in getting admitted as evidence these truckloads of documents which he brought to that trial?


Arthur Leroy Smith: Oh I did, yes, but I failed to have them admitted as evidence. They were all marked for identification; and when I explained to His Lordship and asked him, which was quite nervy for counsel, why they were not marked in evidence, he told me that I had a lot of experience at the bar and that I should know. I then went to the attorney general of Alberta and suggested that we have a stay, that I could not get any further with the rulings I was getting from the judge. I was relying on that Ontario case of which I spoke.


Stuart Sinclair Garson: I am not implying any criticism of my hon. friend as counsel. I was just asking for information as to whether in that case he did not invoke the same possessory principle which he now decries in this bill.


Arthur Leroy Smith: No. May I make myself very plain about this. At the moment I was not discussing that. I was discussing the rebuttal presumption. I had finished dealing with the evidence. The minister will remember I did say that I could call and did call officers of these various corporations who explained whose signature that was, what his job was, what an executive was, what his position was, what his authority was; in fact, the difficulty that the minister ran up against in the dental case. I still say that the officers of these corporations are available. If they are dead they have successors who are quite capable of telling whose signature this is and the other is, what his position was and the authority he had to carry on the corporation's business. When I was interrupted by the minister-and I welcomed it because I am trying to be helpful; I hope the minister will interrupt me if I make any mistakes-I was turning back to the old principle of the rebuttal presumption which is contained in the bill. As I say, under the Criminal Code

Business of the House
the only one that I remember-there may be others-is that of people being charged with possession of dope.


Some hon. Members:: Eleven o'clock.
On motion of Mr. Smith (Calgary West) the debate was adjourned.



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow we shall take up first Bill No. 142, to amend the National Housing Act, 1944; then second reading of Bill No. 145, respecting the acquisition of the Temiscouata railway; then Bill No. 146, to authorize the granting of a subsidy to the government of the province of British Columbia in aid of the construction of an extension to the Pacific Great Eastern Railway; and lastly the house in committee of the whole on Bill No. 12, to establish the Canadian Overseas Telecommunication Corporation.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday, November 15, 1949