1949-10-31

Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, I now table copies of further correspondence with the provincial premiers with respect to amendments to the British North America Act. Perhaps it would be desirable to have them printed as an appendix to Hansard, as was done before; and if you would so order, sir, I believe that would meet the wishes of most hon. members.


Mr. Speaker:: With the approval of the house I shall make the appropriate order.
(For text of further correspondence, see appendix, page 1319.)



PUBLIC ACCOUNTS


Mr. James Sinclair (Parliamentary Assistant to the Minister of Finance):: Mr. Speaker, on behalf of the Minister of Finance I wish to table the Public Accounts of Canada and the report of the Auditor General of Canada for the fiscal year ending March 31, 1949.
It is regretted that copies for general distribution are not yet available, but they should be available within a few days.



NATIONAL TRADE MARK


Right Hon. C. D. Howe (Minister of Trade and Commerce) moved: the first reading of Bill No. 133 (from the Senate), respecting the application of a national trade mark to commodities and respecting the true description of commodities.
Motion agreed to and bill read the first time.



PRIVATE BILLS


[Stage Direction]
Bill No. 134, for the relief of Cicely Manley Sampson.-Mr. Winkler.
Bill No. 135, for the relief of Paul Paquette. -Mr. Winkler.
Bill No. 136, for the relief of Joseph Simon Adelard Barrette.-Mr. Winkler.
Bill No. 137, for the relief of Edith Daisy Steer Catto.-Mr. Winkler.
Bill No. 138, for the relief of Gwen Pollock Harris.-Mr. Winkler.
Bill No. 139, for the relief of Sonia Eagle Davies.-Mr. Weir.
Bill No. 140, for the relief of Evelyne Louis Steinwold.-Mr. Winkler.
Bill No. 141, for the relief of John Gilbert Speak.-Mr. Winkler.

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


Mr. Wright:: 1.	How much additional freight was paid by the wheat board on wheat shipped to Fort William and Port Arthur from points tributary to Vancouver during each of the crop years, from 1939-40 to 194849. inclusive?
2.	During the same crop years, what surpluses accrued to the wheat board through lower freight rates from points tributary to Port Churchill on wheat shipped to the Port of Churchill?


Mr. Mcllrailh:: Additional Additional freight paid freight paid
1.	Wheat crop gross	net1939	
$2,015,615.44	$2,015,615.441940	
3,543,171.31	3,543,171.311941	
1,027,883.68	1,027,883.681942	
896,073.57	896,073.571943	
940,181.74	852,167.831944	
1,664,226.17	1,660,651.48
Note: During the war years from 1939 to 1944 the ocean shipping was such that only a very small quantity of wheat could be exported through Pacific coast ports. Under these circumstances substantial quantities of wheat were moved eastward from delivery points having a freight differential in favour of Vancouver.
Additional Additional Wheat crop	freight paid freight paid
account	gross	net1945	
$ 150,353.46 $	66,434.471946	
361,019.79	21,331.801947	
686,184.63	16,674.741948	
396,708.73	24,084.76
Note: From August 1, 1945, to date, the bulk of additional freight paid on the eastern movement of wheat from delivery points in

Questions
the Vancouver freight rate area has been recovered in board sales. The principal recoveries were from the United Kingdom and from the agricultural supplies board in respect to feed wheat shipped eastward.
2.	Crop account
1939		 $ 9,760.22
1940		 1,129.44
1941		 -
1942		 -
1943		 -
1944		  -
1945		 859.45
1946		 47,615.59
1947		 31,063.04
1948		 46,658.69
Note: The figures shown above deal exclusively with the freight saving on wheat shipped to Churchill as compared with the freight which would have been paid on the same wheat had it been moved to the lake-head. These figures do not take into account the diversion charge paid to elevator companies in respect to Churchill shipments. From August 1, 1939, to July 31, 1949, the Churchill diversion charges were as follows:
From August 1, 1939, to July 31, 1940, lb<t per bushel.
From August 1, 1940, to July 31, 1947, 1<J per bushel.
From August 1, 1947, to date, 1 per bushel.
The following table shows diversion charges paid by the board on wheat shipped to Churchill:
	Diversion
Crop year Crop account	Premiums Paid
1939 			$ 5,707.77
1940 		 .		 457.24
1941 	 		
1942 		-
1 942	
1944 			
1945 			 703.03
1946 			 48,187.81
1947 			 55,120.78
1948 			 63,108.86



SALES TAX-ICE CREAM

Mr. Knight:: 1.	Has the government received widely spread representation requesting the abolition of the sales tax at present imposed upon ice cream?
2.	If so. what action has been taken by the government in regard to these requests?


Mr. Sinclair:: 1.	Yes.
2.	None.



R.C.A.F.-FLYING RISK ALLOWANCE

Mr. Johnston:: 1.	Is flying risk allowance being continued in the air force? If not, When will it be restored?
2.	Have there been any changes in the allotment of this allowance? If so, what are they?
3.	What branches of the air force receive this allowance?
4.	Under what conditions is risk allowance given?
5.	What is the amount payable?


Mr. Blanchette:: 1.	Yes.
2.	Yes, as follows:
(a)	Active service during the war, flying pay (now risk allowance).
Officers-General list, $2 a day; Non-flying list, $2 a day for each day of flying on duty in service aircraft.
Other ranks-Aircrew, $0.75 to $1 per day dependent upon qualification, e.g., pilot, air gunner, etc. Non-aircrew, $0.75 per day for each day of flying on duty in service aircraft.
(b) Peacetime	service-Risk	allowance
(formerly flying pay), payable under conditions stated in answer to question 4 and at the rate stated in answer to question 5.
3.	Aircrew officers, aircrew trainees, and crewmen (other ranks) who fulfil the conditions stated in answer to question 4.
4.	Risk allowance is payable to:
(a)	Aircrew officers on the strength of units whose normal function is flying.
(b)	Aircrew officers not on the strength of flying units, provided they fly as members of an aircrew for not less than eight hours per month.
(c)	Personnel undergoing flying training, for the full period of such training.
(d)	Other ranks who form part of the crews of aircraft in accordance with established quotas, ranging from one crewman for every four two-seater aircraft to four crewmen for each multi-engined aircraft engaged in photographic operations and fitted with Shoran equipment.
5.	$30 per month for all ranks.



CANADIAN NATIONAL RAILWAYS


Mr. Brooks:: 1.	What quantity of United States coal has been imported for use by the Canadian National Railways, Atlantic region, for (a) the calendar year 1948; (b) the year 1949 to October 1?
2.	What quantity of American coal is on hand for use by Canadian National Railways at Campbellton, New Brunswick?


George James McIlraith: The Canadian National Railways advise as follows:
1. (a) 272,625 tons; (b) 151,282 tons.

2. The stockpile at Campbellton includes coals of Canadian and United States origin. Quantities are not separated, but United States content is estimated to be about 18,248 tons.



TEXTILE INDUSTRY


Mr. Coldwell:: 1.	Has the government received a request from Mr. Samuel Baron, Canadian director of the Textile Workers Union of America, for a royal commission to investigate conditions in the Canadian textile industry resulting from devaluation?
2.	If so, has the government given consideration to this request?
3.	Has any decision been reached?
4.	If so, what is the nature of the decision?
5.	Will the government consider the appointment of a royal commission to investigate all phases of the Canadian textile industry, including capitalization, profits, wages, and working conditions?


Mr. SI. Laurent:: 1.	Yes.
2.	Yes.
3.	Yes.
4.	The government believes that it is as yet too early to assess the results of devaluation on our trade with the United Kingdom in textiles. Therefore it does not feel that such a royal commission should be appointed.
5.	No.



AGRICULTURE


Mr. Viau:: 1.	Did the Department of Agriculture request through the civil service commission during the years 1948 and 1949, applications for record of performance inspectors?
2.	If so, how many are to be employed in the various centres throughout Canada?
3.	How many for each province?
4.	How many in each province are required to have a knowledge of both the English and French languages?
5.	Were applicants for Manitoba required to have a knowledge of both the English and French languages? If not, why not?


Mr. McCubbin:: 1. Yes.
2 and 3. Prince Edward Island, 4, 1 vacant; Nova Scotia, 5; New Brunswick, 5, 1 vacant; Quebec, 37, 3 vacant; Ontario, 81, 7 vacant; Manitoba, 2; Saskatchewan, 3; Alberta, 3, 1 vacant; British Columbia, 8.
4.	A knowledge of the English and French languages is not required in any province with the exception of Quebec. In this province seventeen are required to have knowledge of both English and French languages.
5.	No. In order to give adequate service to breeders operating under the policy in
Questions
Manitoba it has not been found necessary to require a knowledge of both the English and the French language by the inspectors.



INDIAN HEALTH SERVICES


Mr. Shaw:: 1.	Does the Department of National Health and Welfare (Indian health services) have a set schedule of fees payable to the medical profession across Canada for the care of Indians when such attendance is rendered on a fee for service basis?
2.	Are all accounts submitted by members of the medical profession for service rendered to Indians, paid in accordance with this set schedule?
3.	If not, under what circumstances is a different schedule applied?


Mr. Claxion:: 1.	Yes.
2.	Yes.
3.	See answers to Nos. 1 and 2 above.



QUESTION PASSED AS ORDER FOR RETURN


[Stage Direction]
Mr. Nose worthy:
What consideration is the government giving to the provision of a post office for either or both the village of Forest Hill and the township of York?


Mr. Argue:: For a copy of all correspondence, telegrams, agreements and other documents exchanged between the government of Canada and the provinces of Alberta and Saskatchewan since January 1, 1944, in connection with irrigation development within these provinces?



IRRIGATION


Hazen Robert Argue: For a copy of all orders in council passed since January 1, 1944, setting forth government policy in relation to irrigation development in Alberta, Saskatchewan and Manitoba.



YORK TOWNSHIP, ONT., POST OFFICE-FOREST HILL

Mr. Noseworihy:: For a copy of all correspondence, telegrams and other documents exchanged between the office of the Postmaster General, and individuals and organizations, in Forest Hill and York township, between January 1, 1946 and October 25, 1949, relating to the provision of a post office in Forest Hill and/or York township.



ATOMIC ENERGY


Clarence Decatur Howe: That a special committee be appointed to examine into the operations of the atomic energy eontrol

Atomic Energy
board; that the said committee be empowered to sit during the sittings of the house and to print such papers and evidence from day to day as may be ordered by the committee; and to report from time to time; that the said committee consist of Messrs. Breithaupt, Brooks, Coldwell, Bourget, Gibson (Comox-Alberni), Green, Kirk (Digby-Yar-mouth), Low, McCusker, Mcllraith, Murphy, Pinard, Stuart (Charlotte), Winkler.
He said: Mr. Speaker, in moving that a special committee of the house be appointed to examine into the operations of the atomic energy control board, it might not be out of place for me to recall briefly the developments that have taken place in this field in Canada.
Canada's association with the development in nuclear physics dates back to Lord Rutherford's investigation of radioactivity at McGill university in 1899. In Canada, as elsewhere, this research was at first largely a matter of concern of the physics departments of the various universities. It was pure research concerned with driving back the frontiers of human knowledge rather than with any so-called practical application of the knowledge thus gained.
The theoretical equivalence of mass and energy had come to be accepted early in this century. However, it was not until 1939, with the discovery in Germany that, under certain conditions, the atom of a particular isotope of uranium would split into two nearly equal parts, that the matter began to assume practical implications. This split, or fission, as it came to be called, was accompanied by an enormous release of energy. Very soon the theory was advanced that the process might be made to propagate itself as a chain reaction.
Calculations made at the time showed that a few pounds of uranium undergoing fission might release energy equivalent to something like 20,000 tons of T.N.T. Thus the possibility opened up of a new weapon of war of fantastic power relative to anything which had been previously used. When world war II broke out, the possibility of producing a weapon based on a nuclear chain reaction became of immense importance to all governments. If this could be done, obviously the nation which succeeded first might well gain a decisive advantage.
From 1940 on, information on the possibility of producing an atomic weapon was interchanged between Britain, the United States and Canada. Towards the end of 1942, plans were made for an important section of the work to be carried on in Canada, and accordingly a joint laboratory of United Kingdom and Canadian staff was established in Montreal under the administration of the national research council. In addition to carrying out the research work in the Montreal laboratory, and other research in the national research council in Ottawa, in the
(Mr. Howe.]
laboratories of the Department of Mines and Resources and at the universities throughout the country, Canada contributed many men to the scientific work on projects in the United States and in the United Kingdom. We also set up the necessary control of radioactive substances under the metals controller.
A further development was the decision to build a pilot plant for the production of plutonium by a heavy water reactor at Chalk River. I might say that the scientists had worked out two or three alternative possible methods for producing plutonium, which is a new element possessing explosive properties. The United States, which was carrying the development burden at that time, largely because of its great resources in money and productive capacity, undertook to try out two or three possible methods, but this method of using the heavy water reactor was not one of them. It was suggested that Canada try it; so that line of development was undertaken as a Canadian project. This plant was approaching completion on schedule when the war ended. We then found ourselves in the very fortunate position of having in existence facilities capable of carrying forward research in atomic energy, but not so large nor so expensive to operate as would make their continued use prohibitive in peacetime.
The atomic energy control board was established by the Atomic Energy Control Act, 1946, to administer the atomic energy program in Canada and continue the control of radioactive material. As hon. members will recall, the board reports to the committee of the privy council on scientific and industrial research, as does the national research council. The chairman of that committee, of course, represents the committee on the floor of the house and tables the annual reports of the board.
Shortly after its formation the board was made responsible for the control and administration of the Chalk River plant. In order that large scale research on the production and application of atomic energy might be carried on in Canada, the board decided that this plant should be completed and maintained as a research establishment. It requested the national research council to operate the plant on its behalf.
The plant and the associated residential village are located on expropriated areas totalling about ten thousand acres, of which the village accounts for slightly less than one square mile and the plant site for the other fifteen square miles. A quite small proportion of the plant site is actually occupied by the plant proper, the remainder assuring isolation from privately owned

property. The fact that the property adjoins one end of the large Petawawa military reserve reduced the amount of land which had to be expropriated, that end of the reserve being unoccupied. The plant consists of approximately one hundred-odd buildings and structures, along with the outside steam, air, power, water and sewer lines serving them.
Of most of the buildings it need only be said that they are of conventional type, built for semi-permanence. All are on concrete foundations, and most are of wooden frame construction. There are, however, a number of structures which, by their nature, are of a permanent type. Into this category fall the power house, filtration plant and pile building, all of which are of concrete, steel and brick.
The pile building is the central feature of the project, but it will be realized that the details of the pile are still of a secret nature and cannot yet be disclosed. Recently, however, the pile has been referred to by the director of reactor development of the United States atomic energy commission as having the most advanced design and performance of present known reactors.
In order to house plant personnel, a spot on the Ottawa river six or seven miles away from the plant was chosen for the site of a village. Although this extent of separation of plant and village may have been unnecessarily large, the site chosen is considerably more attractive than those available nearer to the operating area. At the village, housing units were provided in single dwellings, mostly of the wartime type, in multiple dwellings, in staff hotel and dormitory blocks. The village has a population of nearly two thousand. There is not sufficient living accommodation in the village to house all the employees, but more houses are being built each year, and it is hoped to remedy the situation within a few years.
I should like now to say something about atomic energy in general, and then speak of what is going on in the plant.
When the first bomb was dropped, it was realized that an unbelievably large source of energy, which it had been thought would never be practically available, had actually been tapped. It was, and still is, impossible to say just when or how this reservoir of available power will be harnessed in a large way to peaceful pursuits, but it is certain that the world's potential source of energy has been increased many thousandfold by this development.
To give a practical illustration, I hold in my hand a small cylinder of natural metallic uranium. It has been calculated that if every
Atomic Energy
bit of this very heavy metal could be turned into energy, we would get the same quantity of power that could be developed by about 500,000 tons of coal, or about the power we now get out of the large Shipshaw plant in one year. Of course this cannot be done at the moment, but there is little doubt that some day we shall be able to fly to remote areas, in one small aeroplane, more potential power in the form of nuclear fuel than can be hauled today in a hundred railway coal cars, and one does not require an extraordinary imagination to envisage what that may mean to future development. But there are many problems to be solved before commercial atomic power is an economic reality. Chalk River is working vigorously on the fundamental problems involved, and is keeping in as close touch as possible with what is going on in other countries.
While commercial atomic power is definitely not just around the corner, there are immediate dividends in connection with radioactive isotopes and their use in medicine, biological research and industrial applications which some people feel may ultimately yield greater and more significant returns than all the conceivable applications of ordinary power.
Radioactive isotopes have three main uses. They are useful as tracers in research and analytical procedures. They hold great promise in the field of medicine for clinical use as a radioactive source, and they have almost limitless possibilities in the broad field of industry, for control and other purposes.
Perhaps a few examples would be helpful. For instance, iodine is known to concentrate in the thyroid gland; hence if a compound containing radioactive iodine is given to a patient, the course of its path through the body may be traced and the rate of accumulation in the thyroid can be determined by instruments outside the human body which record intensities of radiation. It can easily be seen that in a similar way, where treatment by radiation has proved helpful, it may be possible in the future to carry that radiation to the proper tissues by radioisotopes.
There is surely an immense field for the use of tracers in research work in chemistry, in biology and in medicine. In determining just what happens in biological processes, the tracer techniques provide a new tool as potentially novel and useful as was the microscope when first introduced. In the treatment of disease there is a future so hopeful that many believe the benefits from medical research alone will some day repay manyfold all our considerable expenditures.

Atomic Energy
I could go on giving you scores of examples of the use that is now being made of radioisotopes by Canadian scientists, but time will not permit. I do want to say, however, that in the field of agriculture also the experiments being carried out in western Canada have already given most important information about the way in which plants take up elements from fertilizers, where the various nutritional elements in feeds go, and how they are assimilated. It is predicted that the use of tracers will have a profound effect on agricultural science and production.
But perhaps the greatest quantitative use of tracers will be in industry. Even today isotopes and radiation are being used in scores of industries, in chemical plants, in metallurgy, in textiles, in the oil industry, and in thousands of plants, particularly in the United States where intensive studies are being made everywhere to see if industrial processes cannot be unproved and costs cut down by use of this new technique. For instance, in mixing chemicals, tracers can indicate accurately how much of each type is in the final product. Again, where raw materials from different parts of the world go into one product, and where quality is effected by blending, tracer techniques can provide easily the definite answer wanted as to just how much of each ingredient is in the final product. In metallurgy the uses are obvious and many. In studies of the wear of bearings it has been possible to detect the migration of atoms of metals from one piece to another, information that it was heretofore impossible to obtain. Also the phenomena of annealing, grain growth, and transformation of one type of iron into another can be closely studied. I could go on with other uses, but I think it is hardly necessary for me to do so.
I should now like to say something as to what is being done at the moment at Chalk River. The pile is running satisfactorily; the project is producing, using and distributing a series of radioisotopes, and the research and engineering staffs are extremely busy on an extensive series of investigations on the chemical, biological, medical and industrial uses of isotopes. The project is also carrying on fundamental nuclear investigations on the effect of radiation on structural material which are necessary before commercial atomic energy plants can become a practical economic reality.
I might say that for the most part the materials that are used in ordinary construction cannot be used in handling radioactive material, since they absorb radioactivity from the material, hence a whole

technology of new materials must be worked out as we adapt atomic energy for commercial use.
In the field of radioactive isotopes the situation has more immediate promise. Chalk River is now making dozens of different kinds and is regularly distributing to Canadian universities and institutions quantities of many of the more important radioisotopes, such as radioactive phosphorus, sodium, carbon, calcium, iodine, etc. In addition, of course, even larger quantities are being used in the national research laboratories at Chalk River and elsewhere.
From what I have said I hope that hon. members will appreciate that the Chalk River project is not an ordinary industrial undertaking. It is really an exploration expedition into a land of great promise. We have a professional staff of about 195, an additional 965 non-professional employees, and, besides the output of isotopes and plutonium, many original scientific papers are being issued, and these are rapidly establishing the scientific quality and reputation of this Canadian scientific centre, which even now is a place to which the great scientists of the world come for discussions and information. While the tangible and immediate results in production, in research and in development are impressive and worth while, I would like to remind the house that the ultimate results of the best research can seldom be immediately discerned. We know by experience that where we have first-rate research in any field there is almost sure to be an overflow into adjacent fields, and the unexpected harvests are often the most valuable.
I suggest to the house that this rather large enterprise started at Chalk River in a time of war is turning out to be an absolutely first-rate effort that will continue in the years to come to be a credit to Canada in every sense. I suggest that the committee will find its study of the work being carried on in the field of atomic energy of absorbing interest. Although I have been intimately associated with this work from 1942 to the present time, I would hesitate to lay claim to any scientific knowledge of the subject. I say that so that members of the committee will not be so ambitious as to hope to be able to master the science in a few sittings. The committee can count on the fullest co-operation from the atomic energy control board, from the national research council, from the staff at Chalk River, and from the government as a whole, in any direction that will facilitate its work.
Hon. members may have noticed that the powers of the committee as set out in the resolution do not include the power to send

for papers and persons. The reason is that we have secrecy provisions in the field of atomic energy which are common to Canada, the United States and Great Britain. The agreement between the three powers provides that certain classifications of information- a smaller class now than during the war years-must be kept wholly secret. Certain communications come to me which I am not at liberty to disclose to anyone else. Therefore we think that difficulties might be presented if the committee had the power to send for papers. All the information about atomic energy is in the hands of officers of the government. I can give the members of the committee the assurance that any member of the government the committee wishes to question will be presented before the committee, and that any papers that may be called for will be presented to the committee, provided that they are not still on the classified and secret list. With this assurance the committee should have no difficulty in working within its present terms of reference.


Mr. Howard C. Green (Vancouver-Quadra):: Mr. Speaker, this is one of those happy occasions on which every party in the house is in agreement. As I listened to the Minister of Trade and Commerce (Mr. Howe) this afternoon and looked around the chamber I thought that one very promising feature of the occasion was the interest being taken in this debate. It recalled to my mind the debate which took place in 1946, when the bill was passed setting up the atomic energy control board. At that time barely a handful of hon. members stayed in the house, even to listen to the minister. Perhaps the reason for that was that the hon. members, like Canadians generally, were overwhelmed by the immensity of the development of atomic energy, and particularly overwhelmed by the power of the atomic bomb. However, in the intervening three years we seem to have developed. It is a hopeful aspect of the matter that so many hon. members are interested today. I believe the public generally are also greatly interested in this question of atomic energy.
The official opposition can hardly oppose the setting up of this committee, because we have pressed for it from the time of the first debate in 1946. Throughout we have been supported by the members of the C.C.F. party and of the Social Credit party, and have been grateful for that support.
The situation of course, Mr. Speaker, has been an anomalous one, because from the start in the United States they have had a committee of congress. In fact they have had three committees: a committee of congress, a committee of the defence forces, and a
Atomic Energy
committee chosen from scientists and from the business world. These three committees were set up as watchdog committees to check the operations of the United States atomic energy commission. In Canada we have had nothing of the kind, and the Minister of Trade and Commerce alone of all hon. members-perhaps there have been one or two others-has been the only one in Canada really in touch with the development of atomic energy. That has not been entirely wise, particularly because Canada has been concentrating on the development of atomic energy for peaceful uses.
I am sure that the setting up of the committee will give the members of the committee a better understanding of the potentialities of atomic energy. Further it will be noticed that power is given to the committee to report back to parliament. In that way all hon. members should get a better understanding of atomic energy. I suggest to you, Mr. Speaker, that in a country where we have a democratic system of government it is essential that on all public questions parliament should be kept informed to the greatest degree possible.
I hope also that as a result of the setting up of this committee the Canadian people will get a better understanding of the potentialities of atomic energy. Much interest is now being taken in this subject, as I said a few moments ago. Of course that interest was heightened by the announcement a few weeks ago that the Soviet union is now able to make the atomic bomb. I am confident that that impressed itself on the minds of the Canadian people, just as it did on the minds of hon. members. Furthermore, Canadians have always taken a deep interest in new developments, because we are still a pioneering people, and perhaps take greater interest in new things than any of the countries of the old world.
Although Canada has been working in the industrial field with regard to atomic energy, there has been little opportunity for our people to follow what is being done. Consequently there has been much lack of knowledge, and great confusion with regard to this question. I am sure the position today is that as a result there is no public opinion behind the plans of the government with regard to atomic energy. In the long run the burden of making decisions concerning atomic energy, or any other question, rests squarely on the shoulders of the people as a whole, and not solely on members of the government or members of parliament.
The minister has pointed out that Canada is in a favoured position with regard to atomic energy. Of course this is true. There

Atomic Energy
are several ways in which we have been particularly favoured. In the first place we got in on the ground floor. As the minister said today, Canada has been involved in the development of atomic energy since 1940. We were in at the start with the American and the British. I hold in my hand the declaration on atomic energy which was made on November 15, 1945, nearly four years ago, by the President of the United States, the Prime Minister of the United Kingdom and the Prime Minister of Canada. It was an historic declaration. I suggest to hon. members who are here for the first time that they would be well advised to secure a copy and read the statesmanlike declaration made at this time by the leaders of these three countries.
Canada has been a partner from the start, although I notice in the press of today an indication that we are not quite a full partner. Apparently the United States is not yet in a position to make full disclosure of the developments in that country for industrial uses. I believe the Minister of Trade and Commerce was quite correct in taking the stand he is quoted as having taken, to the effect that so far as Canada is concerned she proposes to continue supplying the United States with uranium, although the government of the United States had not yet received power to pass on all the information available in that country. Apparently part of the agreement between the United Kingdom, the United States and Canada was that such information should be exchanged. This agreement expires at the end of this year, and Canada has now offered to carry on her part by continuing the supply of uranium. I feel confident that in due course the United States will make arrangements to give Canada and Great Britain any information that may be available for industrial uses.
We are also in a favoured position-and in this instance a more favoured position than the United States,-because we have the raw materials. We have the uranium in Canada, and also the hydroelectric power with which to produce heavy water,-one of the essential components in the use of atomic energy in the industrial world. I do not pretend to know anything about the scientific end of this business, nor do I suppose many hon. members who will serve on the committee will know much about it, even after we have completed our deliberations. Certainly, however, Canada is in a most favoured position in being able to supply the necessary raw materials.
We are in a favoured position too, because the Canadian people from coast to coast are interested in prospecting. In these days one ing into one's own back yard, in search of
[Mr "reem]
never knows when a prospector may be peer-uranium. There seem to be only a few who are successful, but the urge to go out to find uranium is now very much like the old urge to go to the Yukon to find gold. This urge to prospect is a good thing.
Then we have the scientists and engineers. I believe tribute should be paid to Canadian scientists for the part they have taken in the development of atomic energy. In this connection one must also pay tribute to Canadian universities, of which ten, according to the annual report of the atomic energy control board for the fiscal year 1948-1949, are co-operating with the board. These are the universities of British Columbia, Alberta, Saskatchewan and Manitoba; McMaster university, the university of Toronto, Queen's university, McGill university, Macdonald college and Dalhousie. All have rendered excellent service-and there may have been others.
Finally, Canada is a member of the atomic energy commission of the United Nations, and we shall continue to hold that membership even when not a member of the security council. As I understand the situation, the eleven nations which have representatives on the security council, and Canada, constitute the atomic energy commission of the United Nations.
Canada appears to be the leader in the industrial field. I have before me a press dispatch containing a speech made three or four days ago by Dr. C. J. Mackenzie, president of the national research council and chairman of the atomic energy control board. He is quoted as saying:
Canada's experimental work so far has placed her in the forefront of the nations in the industrial field. Canada's main interest is in the peacetime application of atomic energy.
Today one need not dwell on the potentialities of atomic energy. The minister has placed on record some startling statements concerning those potentialities. In a speech delivered on May 28 he made this remarkable statement about atomic energy:
Canada is in the front line of this the most exciting scientific venture of all times.
A somewhat similar statement has been made by Dr. Mackenzie. Last Saturday a statement was made by Kenneth F. Tupper, the new dean of the faculty of applied science and engineering at the university of Toronto. Dean Tupper has been associated with the work at Chalk River, and, in the course of a statement somewhat similar to that made by the minister, he pointed out one great difficulty, namely, that because of the military uses to which atomic energy can be put, the development for industrial purposes is being held back. In other words the need for some

military control is making it more difficult to develop atomic energy for peacetime purposes. He said in part:
The peacetime use of atomic energy for fuel or power awaits the solution of its international control . . . Until we have achieved a state of assured world peace, nations will not forgo the hoarding of nuclear fuels for possible military use.
The article goes on to say:
Dean Tupper, who since 1947 has been director of the engineering division of the atomic energy project at Chalk River, said there was not the slightest doubt that atomic energy could be used for fuel.
So we shall still be hampered by the failure of the nations of the world to agree on some method of controlling atomic energy, in a military sense.
Concerning what this wonderful development may mean for Canada, we of the official opposition believe that, to as great an extent as possible, atomic energy should be used in Canada for Canadians. We do not say that it must not be supplied to other nations, but
we urge that it be used in Canada for Canadians to the fullest possible extent. We believe, too, that in this field Canada can be of great help to other nations. There is a significant paragraph in the declaration on atomic energy made in 1945 by the three leaders. It reads as follows:
Representing as we do the three countries which possess the knowledge essential to the use of atomic energy, we declare at the outset our willingness, as a first contribution, to proceed with the exchange of fundamental scientific information and the interchange of scientists and scientific literature for peaceful ends with any nation that will fully reciprocate.
I hope that this is still the policy of the Canadian government, because I have no doubt that the declaration expresses Canadian feelings. The developments in Canada may be the means of helping not only Canadians but the peoples of all nations. I sometimes wonder if creating better means by which nations can help other nations, may not be the only way to bring about world cooperation and indeed to do away with war.
In conclusion I should like to say a word or two about this special committee. We realize that the setting up of the committee is in the nature of an experiment. It is a special committee and as such will pass out of existence at the end of the present session. We hope that if the work of the committee is successful the government will have it appointed again in the session of 1950. Some comment has been made on the fact that no power is being given to the committee to call witnesses or to send for papers, but the Minister of Trade and Commerce explained that this afternoon.
I do not think the government need worry about the committee. The importance of the
Atomic Energy
subject is clearly realized, not only by members who are to serve on the committee, but also by the house at large. Personally I feel it a great honour to be chosen to serve on the committee and I am confident that all other hon. members who are to serve on it feel the same way. I think the minister will find that a deep sense of responsibility will be shown by the members of the committee, and I am sure that they will take up their work in a spirit of service to their fellow Canadians.
Mr. M. J. Cold well (Roseiown-Biggar):
Mr. Speaker, like the Minister of Trade and Commerce (Mr. Howe) and the hon. member for Vancouver-Quadra (Mr. Green) I feel that while this debate may not be the most important of this session, the subject under discussion is probably the most important we could discuss at this or any other time. None of us know much about atomic energy, but some of us have been interested in it from the time the first bomb fell on Hiroshima.
I had the good fortune in December, 1945, to be invited to attend a meeting in New York called by the New York Nation, to which a number of scientists who had been instrumental in splitting the atom and in making the bomb had been invited. My contribution this afternoon will to some extent be made upon the basis of what I learned at that time, and the information I have been able to obtain since from the bulletins issued during the last several years by a group of atomic scientists.
It is true that in the United States they have several committees dealing with atomic energy, one being a congressional committee; but I hope that our committee will not follow the course pursued by the committee of congress, which has been mainly one of witch-hunting and has been of little value in the field of atomic energy. Indeed I would go so far as to say that it has been distinctly detrimental to the best interests of the development of this great power in the United States and throughout the world.
It is important that members of parliament, even those with scientific and engineering knowledge as limited as my own, should have some understanding of this most important problem. As I think I said in this house in 1946, the discovery of atomic energy is the greatest discovery made by man since the discovery of the use of fire. It has promise of great development, for good or for evil. I saw a paragraph in a recent atomic energy bulletin, the "Bulletin of the Atomic Scientists" for August and September, which I think is worth putting before the house,

Atomic Energy
because it emphasizes the difficulties faced by a legislative body such as this when dealing with a matter of this kind and formulating policies in regard thereto. Referring largely to the activities of the congressional committee in the United States, the bulletin states:
If the democratic system of government is not to become a mere shell, through the incapacity of the legislators to understand some of the most important things about which they legislate, some changes are needed. In the first place, the legislators must be provided with really competent advisers, whose integrity, independence, and competence they trust. It will also be necessary for the AEC to take the responsible members of the committee more intimately into its confidence than it seems to have done, so that the committee will not suffer from the sense of bafflement which only aggravates the elements of pettiness and pique which are so often present in our political life. Beyond this, major political parties or at least their congressional representatives, could perhaps give consideration to introducing some representation of scientists and technologists into their inner councils, and even into congress (if a constituency can be found willing to have such an unorthodox representation, and if scientists are capable of that degree of public spirit and political ambition). A few competent scientists and engineers, scattered over the benches of the majority and of the opposition, might enable committees dealing with scientific and technical matters to lift future investigations of the AEC-and the AEC should be probed by congress often and deeply-to a much higher level than Senator Hickenlooper has achieved.
I think that statement is perfectly true. We do not want to descend to the level to which they have descended in the United States. We want to be in position to listen to the advice and information which can be given to us by people whom we can trust. After all, I believe we have a group of men and women working in the scientific field in this country, at Chalk River and in the national research council, which in proportion to our population is one of the best in the world. In one of these bulletins- I cannot just put my hand on it at the moment-I remember reading an article by Professor Harold Urey, one of the modern atom scientists. Discussing the difficulties that had arisen in the atomic energy commission of the United Nations, he went on to say that the technical problems before that commission were elucidated by the one man who understood them intimately, and he named General McNaughton, Canada's representative on that commission. Consequently we do not have to be ashamed of what Canada has done and is doing in this field.
I am happy indeed to have an opportunity of serving on this committee. I know that many other hon. members envy some of us the opportunity we have been given in this connection. The hon. member for Vancouver-Quadra (Mr. Green) remarked that this matter

had been brought to the attention of the people of Canada once again by the announcement, two or three weeks ago, that Russia had succeeded in making an atomic bomb. If I may refer to the conference I attended in New York in December, 1945, I remember distinctly that Professor Szilard and others who spoke on that occasion prophesied that within a measurable period of time-some of them said within five years-the atomic bomb would no longer be a secret resting with one, two or three countries. After all, if scientific knowledge is to be useful to the world, it must be made freely available. I do not think the hon. member for Vancouver-Quadra quite meant this, and if he did, I do not go along with him; but I understood him to say we should endeavour to use our knowledge of atomic energy purely for the good of the Canadian people.


Howard Charles Green: No, I did not say that.


Mr. Coldwell:: I did not think the hon. member meant that, though that interpretation might have been placed upon his words. This is a world problem, and I am one of those who believe that no amount of blacking out on the part of Russia, the United States or any other country can prevent scientific knowledge from passing around the world and becoming available to all first-class scientists. This, I think, has been illustrated by the fact that recently we have learned that the atomic bomb is no longer the secret of any one nation.
I refer again to the most recent of these bulletins I have already mentioned, that of October, 1949

and here I am quoting an authoritative document in this particular field. The board of sponsors comprises J. Robert Oppenheimer as chairman, Harold C. Urey as vice-chairman, and among the members such names as Albert Einstein, James Franck, E. U. Condon, and a number of others; therefore it can be regarded as an authoritative document in regard to these matters. These scientists give a new warning to the world. In a letter signed by Harrison Brown, James Franck, Joseph E. Mayer, Leo Szilard and Harold Urey, they quoted from an article in the New York Times of September 28, 1949, in which General Walter Bedell Smith, former ambassador to the Soviet union, speaking of Russia's production of atomic bombs, was reported to have stated:
I said a month ago at the governors' conference in Colorado that they would probably test the bomb in a few months. However. I believe that it will take Soviet Russia at least ten years to get to the point of mass production that we have now reached. I know that American techniques and industrial

skills are far better than the best the soviet can offer. There is no reason for the soviet to reach, in less than ten years, the mass production that we have reached now.
Commenting on that statement, they say:
We, the undersigned, are aware of the problems involved in the large-scale production of atomic bombs. To our regret we have to say that the above statement, attributed by the New York Times to General Bedell Smith, has no basis in fact.
That is signed, as I have indicated, by the scientists I named. In our discussion of this important matter I do not think we should concentrate upon the atomic bomb. I had hoped that long ere this the United Nations would have reached agreement on a plan to control it. I think I understand fairly well the plan that was approved by the assembly of the United Nations, the only people voting against it, if I remember rightly, being the Soviet union and the nations associated with it or under its domination. That plan has not been made effective. Last Saturday night, in the weekly report from the United Nations at Lake Success, given by our own Secretary of State for External Affairs (Mr. Pearson), I noticed a new suggestion, a modification of that plan, so in the light of more recent events perhaps the nations are reconsidering the situation.
I believe we must have world control of atomic energy in some form, with adequate inspection, and no iron curtain to keep inspectors out of any country at all. We must have free access, for inspection, to all factories, industries, and so on, producing atomic energy materials. In this way we can probably approach the time when atomic energy may be used for the good of mankind. I do not think any of us in the house this afternoon could have helped being greatly impressed when the Minister of Trade and Commerce held in his hand a small cylinder of uranium and told us that, turned into energy, it could replace hundreds of thousands of tons of coal, if mankind could but reach the stage at which that energy could be so utilized. In some respects it is almost a terrifying thing, not only from the point of view of war but from the point of view of peace. It means that if this comes about-[DOT] and I should not say "if", because it will come about-it will mean a complete revolution in our society, a complete transformation of our industrial processes, a greater industrial revolution than that which occurred when coking coal was first used for the manufacture of steel, starting the industrial revolution of almost two hundred years ago. I think perhaps that thought was in the mind of one of the men who split the atom when he spoke in New York, as I heard him speak, on the occasion to which I have referred. I have
Atomic Energy
in my hand a transcript of his speech; and on that occasion Dr. Leo Szilard, one of the famous atom scientists, said:
On. the third day of March, 1939, Dr. Walter Zinn and I performed a simple experiment on the seventh floor of the Pupin building at Columbia.
After two days of preparation, everything was ready and all we had to do was turn a switch, lean back and watch the screen of a television tube.
If flashes of light appeared on the screen, that would mean that neutrons were emitted in the fission process of uranium, and this in turn would mean that the large scale liberation of atomic energy was just around the corner.
We turned the switch and we saw the flashes. We watched them for a little while and then we switched everything off and went home.
That night there was very little doubt in my mind the world was headed for grief.
This crucial phenomenon was independently discovered just about the same time by Anderson and Formi, and by Halban, Joliot and Kovarski. They used different methods, but arrived at the same conclusions; and I have, therefore, good hopes that my own plea of not guilty will receive merciful consideration in the heavenly court of justice.
The first use to which this great new potent energy was put was the mass destruction of mankind.
A little later in the same address, the same scientist said this:
Let me try, then, to reduce to a simple formula what I believe to be the difficulty that we have to overcome.
Politics has been defined as the art of the possible. Science might be defined as the art of the impossible. The crisis which is upon us may not find its ultimate solution until the statesmen catch up with the scientists, and politics, too, becomes the art of the impossible. This, I believe, might be achieved when the statesmen will be more afraid of the atomic bomb than they are afraid of using their imagination, because imagination is the tool which has to be used if the impossible is to be accomplished.
I hope this committee will have the effect of bringing the challenge to us in this House of Commons and making us consider the impossible, not only in the field of science, but also in the field of social relations, based upon the scientific implications of atomic energy and the like. Therefore, Mr. Speaker, in appointing this committee I believe the house is taking a proper and logical step. It is taking a step which is essential for the well-being of our country. By informing the members of the House of Commons on the atomic energy problem, we shall enable all hon. members to do something about informing the people of the country about atomic energy and its possibilities.
I know the difficulties that have arisen- the determination on the part of the Soviet union, for example, that there must be no interference with her national sovereignty; that the factories of the Soviet union must be under the control of that country and not subject to any world authority. This is

Atomic Energy
bedevilling the situation today, perhaps in part because of a lack of confidence among the great nations of the world. Whether for this or for any other reason, I believe Canada should do as it has done; it should join the other democratic countries in demanding that this great power be subject to complete international inspection under United Nations authority. Every facility for inspection should be given without let or hindrance.
Of course this does mean that at least we have moved some distance along the road towards the day of the parliament of man, when national sovereignty as we have known it will have ceased to be a problem to the peoples of the world. Retaining our special national culture and our national attributes, we may yet find a way of overcoming international difficulties.
As I said in the beginning, in the field of science it is impossible to maintain secrecy. As Szilard points out, certain scientists discovered how to split the atom about the same time as he did-Joliot and Kovarski in France; Halban in another country, and the others he named. No doubt by that time the Germans and Russians had also learned that part of the secret.
At the same conference I remember an address of Dr. Henry DeWolf Smyth, who, as many hon. members will recall, wrote the report on the first atomic bomb explosion in New Mexico before the bomb was dropped on Hiroshima. He has something to say which I think we should bear in mind in this young country. It has a particular bearing upon the resolution moved by the hon. member for Saskatoon (Mr. Knight) in the field of education. He said:
The most important technical resource of a nation is neither raw materials nor equipment, but educated men. Obviously we will need an increasing supply of such men in the post-war period. Under wartime policy the training of such men practically stopped. The policy of the selective service has made students in the sciences almost non-existent. The resumption of training must be .encouraged in every possible way. The scientific men from the universities on the wartime projects should be returned as soon as possible to their normal activities of teaching and research. The welfare and safety of this country can be assured only by leaving them free to pass on what they have learned to a new generation of educated and trained men. If we lock our scientists up in secret laboratories, neither they nor the country will develop. The free interchange of ideas, nationally and internationally, is the strength of science, as indeed it is of every other department of men's lives.
Ideas are a common inheritance from thoughtful men in all countries and all civilizations. To speak of continued secrecy in the field of thought and discovery is to deny our moral birthright and the very tradition which has brought us this far from savagery. Secrecy in any field of peacetime is fatal to man's growth and to any hope for a world society.
The tragedy is that, owing to a lack of confidence among the great nations of the

world, secrecy has been enjoined in many areas of scientific research. But it seems to me that in our own country, with the development of groups of scientists, young men in our universities trained in science, with a national research council and the Chalk River project, we have a remarkable opportunity to develop more and more able scientists to the end that atomic energy may be brought under human control and utilized for good, not only in our own country but in the world generally.
When we say that atomic energy should be utilized for the good of our country and for the world generally, let us bear in mind the fact that politics must keep up with science so that legislators and scientists may march side by side. Atomic energy is bound to bring in its train industrial revolution. We must guide the political and social revolution to keep pace with it, so that we shall not fall into the kind of disaster experienced after the industrial revolution of years ago; or, indeed, that the world may not fall asunder and mankind perish in the flames of war.


Mr. Solon E. Low (Peace River):: Mr. Speaker, I am in that unfortunate position in the speaking list that when an important topic of this description comes before the house, by the time it is my turn to speak there is little left to say. This is particularly true when I am preceded by eloquent speakers who have given great thought and study to the problems before the house. This afternoon therefore I do not intend to take up much time, but there are perhaps a few things that have not yet been said. Those only I wish to stress.
At the outset, Mr. Speaker, let me say that we welcome the setting up of this committee. When it was proposed by the hon. member for Vancouver-Quadra (Mr. Green) some time ago we felt that it was a desirable thing to do. We thought that the government's acceptance of the recommendation showed that they too sensed the great importance of getting before the people of Canada certain information which they should have. In spite of the fact that atomic energy investigation and development in this country have remained almost entirely "top secret" to date, the people of the country ought to know certain things.
The reason is quite plain. Nations are governed by the attitudes of the masses. If we expect our people to behave in a sensible way, sensible attitudes must be cultivated amongst them. The only way in which such sensible attitudes can be cultivated is to get before them as much information as possible. That means that the government cannot continue for any length of time to keep things

locked up in the secret list entirely. That was one of the great reasons why at the time we felt constrained to support the hon. member for Vancouver-Quadra and the official opposition in asking the government to set up this committee.
It is only natural that the atomic energy board, having regard to its very nature, should let out to the people and to the members of this parliament as little information as possible. By the very nature of things, it is an ultra-conservative board. The setting up of this committee is going to go a long way toward helping the people of Canada to get what they should have and therefore toward helping them reach a sensible attitude.
I should like to explain just what I mean by a "sensible attitude". I have heard what has been said by people who have been influenced by the sensational aspects of reports of the development of atomic bombs for destructive purposes for war. There can be no settled state of mind where people are swayed by the emotional and sensational aspects of such reports. It is therefore important that the people be let in on as much of the information as it is possible for them to get.
The hon. member for Rosetown-Biggar (Mr. Coldwell) quite eloquently and well, I thought, brought out the point that, if we are seriously to attempt to prevent the widespread application of atomic energy for destructive purposes for war, we must see to it that the people are in possession of the facts as far as we can possibly get those facts to them. They are in this position. They are the victims of a world-wide campaign, on the part of the enemies of free men, which is designed to get people to do, under the threat of war, what their enemies usually get them to do under the duress of warfare itself. I am satisfied that one of the reasons why Russia and her satellities are not prepared to submit to international control of atomic energy, and particularly the inspection part of it, is that they hope to obtain, under the threat of war, what they would normally be able to obtain under the duress of war if they thought they could lick the world. That seems to be the way they have been carrying on for years.
I feel quite satisfied that they do not want to go to war and they do not want to see atomic energy let loose upon the world, because they know that they would be amongst the victims, the same as other people. If Canadians, the people of the United States and of the other democratic countries can be influenced to do, under the fear of war, things that the enemies of free men want them to do, then those enemies have accomplished their purpose without having to resort to the
Atomic Energy
force of arms. As free men in a free country I think that our duty ought constantly to be to seek out the source of our enemy's power and strength and then, before he starts using or realizing on that strength for his own purposes, to see to it that his powder is wet so it will not go off. One of the best ways of making sure that his powder will not go off is to have a well-informed people with a sensible attitude. I believe that attitude can be settled fairly well if this committee performs its functions as I think it will; and I therefore say, Mr. Speaker, that we are happy that this committee is being set up.
There is one other thing I should like to mention before I sit down and it is this. I hope that the terms of reference in the resolution itself are broad enough so that the members of the committee may investigate production of uranium in this country. When I say "investigate production" I mean this. I am aware of a good many places where uranium ore could be produced in much greater quantities than it is being produced today. Why it is not being produced is something that I think ought to be generally known by this House of Commons; for there is no element known to man today that is so important as uranium. If there are discouragements to the production of uranium, I think we should know it; if there are not sufficient encouragements to the production of uranium ores, then I think the members of the House of Commons ought to know it. If the investigation is conducted on a scale broad enough so that this phase can also be studied, perhaps out of the work of the committee may come certain new and better encouragements to the faster production of uranium ores for our stockpiles-not for war purposes; I am not by any means so greatly concerned about that as I am for peacetime purposes.
I echo the sentiments of my hon. friends who have spoken before me. Let us concentrate as far as is humanly possible upon the peacetime aspects of atomic energy. After all, they are the ones which contribute to the happiness and prosperity of the people and therefore they are the ones which should receive our greatest study. But at the same time let us not overlook the fact that there is every possibility that our enemies have the atomic bomb. Let us therefore be wise in what we say and do with respect to reserves of those things which might help to make us equal in a world where there is no complete friendship amongst nations.


Mr. T. L. Church (Broadview):: For a few minutes, Mr. Speaker, I wish to call to the attention of the house the cause and effect of this proposed resolution, if we pass it. I referred to the matter the other day, in
iis:

Atomic Energy
connection with what has been done so tar. The resolution of the Minister of Trade and Commerce (Mr. Howe), who has taken a great interest in this work since the fall of Japan, reads as follows:
That a special committee be appointed to examine into the operations of the atomic energy control board; that the said committee be empowered to sit during the sittings of the house and to print such papers and evidence from day to day as may be ordered by the committee; and to report from time to time . . .
So far so good; but if you look a little closer at the work of the committee to be appointed you will see that all they will be doing is collection of some information about this very grave question that confronts the world today. It is either extinction of the human race or something else in the way of peaceful use of this great power. We have to look at the cause and effect of the resolution. Canada has spent considerable sums of money on a plant in the Ottawa valley. Canada, along with United States, has made a study of its effects in peace or war, which is the right thing to do I suppose. I called attention to this matter after the fall of Japan:
The main point to remember about the atomic bomb is that its use may depend on the gradual restoration of a more civilized world. Humanity may have to face the question-which is the least unendurable, a vast physical destruction or the surrender of the whole of mankind to a diabolical tyranny such as the world has never seen?
That is correct. It is quite true that the atomic weapon cannot be separated from the great problems of peace and war. You cannot separate them by appointing a committee with very limited power. We are a nation of only eleven million people. We have not the capacity or the method and manner of handling this problem. It is quite true, as I say, that this atomic weapon cannot be separated from the whole question of war and peace.
The atomic bomb-as it is popularly called-is a more dreadful weapon than any that have so far appeared (there may be worse coming). But it is, after all, just a weapon. Thus we are driven back to considering the causes of war.
The resolution does not go far enough in that connection. They should consider the whole problem if they are to consider it at all.
I am reading now from the Dean of Chichester's address which appeared some time ago in Everybody's magazine which is edited by a very great man Mr. Pote in England. He called attention to a very great situation which confronts the mother country. He is also backed up in what he says by a man whom I regard as one of the greatest men of England, the Most Rev. and Right Hon. Cyril F. Garbett, Archbishop of York,

who spoke in the cathedral at Victoria, British Columbia, just a week ago yesterday. In that address as reported in The Canadian Churchman of the Church of England, he called attention to what was going on in the world. The report of his address reads in part:
"Our age does indeed need good news. We live in an age of crisis; millions of people are sorrowful, anxious and worried. People are more worried perhaps than at any other time in history.
Over mankind hangs the danger of the atomic bomb with all its awful possibilities. There is the deepening shadow of atheistic communism blotting out both faith and freedom.
The Christian faith has good news today-it has news of God.
Christianity teaches that God is the living Lord, infinite in His love for humanity. God is not an impersonal power.
Sometimes people ask, is man of any value? The Christian faith replies, "Every man and child has value in the sight of God and God cares for them."
He told the congregation this life was a school preparing people for a great life after death. "God was ready to help and individuals and nations have failed because they did not ask for that help."
I might call the attention of the house to the fact that Canada has made a study of this problem since the fall of Japan. The other day the western powers announced that Russia has produced an atomic bomb. She knows all about it. She has also got more deadly weapons than that at the present time. I am not one of those who believe what the Prime Minister (Mr. St. Laurent) said the other day about the whole question, that we would have no war at least for five years. I notice he is not in his seat today. Therefore I have to be careful and not misquote what he said. I understood him to say that war is not probable for about five years. I noticed something in the press and in Hansard about it. He said there would not be another war for that period of time. I referred to it the other day and at the session last spring, and he did not correct me. I believe he was too optimistic in his statement. I believe he was for many reasons. May I ask this question. If we appoint this committee to secure this information firsthand is Canada secure or is she not? I say she is not secure on the sea, on the land or in the air, and we are now faced with a deadly weapon which may destroy the whole human race. With the limited power given to this committee I doubt whether we can accomplish anything.
I hold in my hand a picture of the United States atomic energy plant. It is a peaceful looking village away down in Oak Ridge, Tennessee. That manufacturing plant is the birthplace of the atomic bomb. Russia knows everything that is going on down in Oak Ridge, Tennessee. She knows more than we in Canada do about it. We are supposed to get our information from the UNO. If we are depending on the UNO we are leaning on

a weak reed. We have had some of it before. We have had two wars in one generation. It may be three strikes and we are out this time. When the western powers announced that Russia had the atomic bomb, Russia prepared a new peace offensive, if you please. That is what they have always done. Germany did the same thing, and we had two wars in a single generation. Russia is now doing it. They have adopted a peace offensive at the UNO, and the writers have been giving effect to it. The time has come when we should be wide awake on this question. This whole matter started on August 6, 1945, by an event which, as is stated by the Dean of Chichester-
-shocked the world. The bomb that dropped on Hiroshima revealed that man had in his power a means of destruction so vast and so sudden that it could conceivably wipe out, without a word of warning, the whole industrial capacity of a nation. Since then, still vaster weapons of destruction are in the making.
This is by the same people. He continues:
Blotting out the civilization of continents closely packed with human beings, like Europe or North America-
And, in Canada, Montreal, Toronto and other large centres.
-seems to have come within the range of possibility. Small wonder was it that in most countries, immediately after the war-
Continues the Dean of Chichester-
-there arose a demand that humanity must instantly discover either a means for controlling the monster it had created, or else eliminate altogether such fiendish devices. Indeed, there were not a few who said that since war had become so manifest an absurdity the only thing that sensible and reasonable people all over the world could do, was to abandon war altogether.
No doubt it would, if the majority of people in the world were sufficiently reasonable and sensible- and, what is supremely important, prepared to act together with insight and vigour.
It is quite true that the atomic weapon cannot be separated from the whole problem of war and peace.
Then he goes on to ask: Why do wars happen? He asks this question: What is it that causes these wars? I say one of the causes is pacifism. Only the other day Mr. Churchill said in the British House of Commons, in a debate on foreign affairs, that Britain never consented to Russia's being asked to come into the Pacific-and Mr. Churchill said the same thing three or four years ago. Russia had nothing to do with the Pacific before they were invited. And they were invited by whom? They were invited by the United States a week before Japan fell. The late President Roosevelt and General Eisenhower invited Russia to come into the Pacific.
What did Russia do? Immediately, in less than three days, they landed 500,000 troops in Manchuria. They must have gone up by
Atomic Energy
way of Alaska to cross. What further did they do? They caused this whole situation- communism, and all that kind of thing-in Asia. They have China by the throat now- with the British fleet away up the river, something which never happened before in tour centuries.
They were invited to come into the Pacific and have caused all kinds of damage. The Dean of Chichester refers to the condition in Asia, and to the fact that Russia now has most of Europe in its grasp, and it may be that Asia is in the same position. He points out that humanity has but one choice, and then continues:
Fortunately the west can confront Russia with overwhelming strength in industry, munitions and manpower, and has established a lead in atomic research which will be immensely difficult for the Kremlin to overtake. It is our duty to do all in our power to preserve that lead.
Yet, assuming that a balance of power in our favour is maintained, the question remains, "Is this sufficient to enable the world to settle down? Is it conceivable that there can really be a secure and contented world while Russia holds half Europe in thrall? Can genuine peace be established while Europe is half slave and half free? Again, is not more than Europe involved? If Asia, besides China and including India, Burma and the East Indies, come under the Russian grip can there be world recovery?" These are questions for the second stage of the conflict in which we are all at present engaged. When retreat is forced on Russia somewhere, the scene may brighten everywhere.
So I say it is a duty to encourage peace-loving countries. And do not forget this one fact, as the Dean of Chichester points out:
It is not armaments that make wars, but the people who have control of the armaments. Wars are not caused by things but by the mind of man. The United States. Great Britain, France, Holland, Belgium, and Norway had greatly reduced their armaments after the first world war. Denmark had practically abolished armaments altogether. This did not save any of these countries. There was another country, populous and powerful, that was bending all its energies to the preparation of war,-
And he was referring to Germany-
-which was greatly encouraged in its preparations by the weakness of the peace-loving countries and their obvious unwillingness and unreadiness for war.
Britain abandoned the finest army, navy, and air force the world had ever seen, after the first war. The result was that when another war came she had nothing. Then, he continues:
The truth is that wars in modem times are caused by the emergence of a group of determined men who are able to rouse and mobilize within their nation a passionate desire to expand and dominate. They aim at indoctrinating their people with a conviction of superiority, an imposing idea that they are destined to rule the world, because of their great strength and particularly because they alone possess the true political philosophy for which the whole of mankind is waiting. The kindling idea, universal in its scope, and simple in

Atomic Energy
its expression, plus the sense of destiny, are essential to the war-machine. Men and women need a great cause, or what appears to be a great cause, if they are to be keyed up to endure the vast sacrifices that war, and preparation for war, demands.
The idea may be-in fact generally i9- an illusion, masking the inner essence, which is the love of power and more power. That is the real driving force of those who have managed to get control of the national mind and the national resources. But without the idea-the world view-that control can never be obtained. Of course, ruthlessness is also essential. The idea kindles the idealist, the concentration camps and the purges keep the less convinced and the feebler folk tied to the chariot wheels of aggrandizing power.
It was thus that Napoleon spread the rule of fire and the sword across Europe, with the slogan of "Liberty, Equality, Fraternity." It was with the glorification of kultur that Imperial Germany set out to conquer the world. "National Socialism," combining national destiny with what sounded like a broad philosophy of human equality, welded the German people into a devastating military machine under the fanatical leadership of Hitler.
I have almost concluded what I wished to say in this connection. Let me ask this question: Are we secure, or are we insecure? I say we are not secure, and for the reasons I have given. We can do little or nothing to prevent an unfortunate situation from developing, as that great man Churchill, who is the voice of England, has said.
Dr. Garbett preached in the constituency of my hon. friend from Nanaimo (Mr. Pearkes) the other day, and called the attention of the Canadian people and of the empire, of America and of Great Britain to what is going to happen if atomic warfare succeeds. Are we secure on land, on sea and in the air? I say we are not. We are doing just what we did after the first war. At that time we liquidated the finest army, navy and air force we had ever seen-and now, after this war, we make the same mistake.
What about coming wars? For no doubt a war will come. It may come like a thief in the night, the way the first and second world wars came. I can remember being laughed at in this House of Commons when I quoted from the thirty-seventh chapter of Jeremiah. I referred to that chapter on September 10, 1945-and they did not laugh then. What I said was:
Where are now your prophets which prophesied unto you, saying, The king of Babylon shall not come against you, nor against this land?
When the war came, some of the pacifists in this house said: "What is the use of our sending across an army every few years when we can get all the defence we require from Washington?" There may have been some reason to say that at the time, but I can tell you that, unless we get rid of our present way of thinking, the third war will come before we know it. It will come as the other two came, like a thief in the night. Canada will be found unprepared on land

and sea, and in the air, as far as the necessary atomic energy for defence purposes is concerned.


Mr. Alistair Stewart (Winnipeg North):: Mr. Speaker, I must admit that I was rather disturbed when I read this motion, which was to the effect that a special committee was to be appointed to examine into the operations of the atomic energy control board.
It seemed to me that the motion was rather restricted. I wanted to know how this examination was to be related and how it was going to tie in for instance with industry, with external affairs and with national defence. One could scarcely consider the operations of this board in a vacuum; they have to be related to other branches of government. In his speech when introducing the motion the right hon. gentleman cleared up some of these doubts when he told us that the committee would get the fullest cooperation from the government as a whole and that any member of the government whom the committee wished to call would be brought before it. However, I feel that if this committee is to do the job which we hope it will do it will have to get information which perhaps has not been published hitherto. I have never been impressed with the necessity for setting up such a committee without its having reference to other branches of the government.
As the minister said, in 1945 the bomb was burst over Hiroshima. We had found the secret of atomic fission, we had split the atom, and once we had done that we had to find ways and means whereby we could unite the world. We failed to do so, and we shall probably fail again in the predictable future. That being so and without falling into that error of which the hon. member for Peace River (Mr. Low) has spoken, of being the victim of a campaign of fear, I say that we are faced now as we were faced then with the simple elementary choice of life or death. The fact is that I am afraid for my family and I am afraid for my neighbours' families. I am afraid for that woman in Japan who some fifty years from now may give birth to some sort of distorted monster when she hoped to give birth to a normal child because her ancestors had been subjected to atomic radiation in Hiroshima. There is great reason for fear in the world today.
There is another reason why I was somewhat disappointed with the minister's statement. He has the habit of taking the most important facts and treating them with insouciance, a habit which I find to be on occasion delightful; but I do not think today was the time for him to play the part of

Pollyanna. I think it would have been more appropriate if he had taken the role of Cassandra.
I think I am correct when I say that the danger from the use of atomic energy is greater than it was some years ago. I agree with my leader when he says that we should not concentrate on the atomic bomb. Nevertheless that aspect of atomic energy must get more consideration today rather than its relation to medicine or industry, useful as they may be. Consideration must be given to the military aspects of this matter whether we like it or not.
No sane person treated the explosion of the first bomb with enthusiam. There was nothing but the utmost gravity. Indeed, Dr. Urey, on behalf of some of his fellow-scientists, approached the President of the United States a month before the bomb was exploded and suggested that further atomic development be postponed. I do not know the reason for that request, but I think perhaps it was that he felt the world was morally incapable of handling such a source for good or for evil. But for reasons that we do not know the high command decided to go ahead and use the bomb.
One or two months later, as was pointed out by the hon. member for Vancouver-Quadra (Mr. Green), there was a meeting of the Prime Minister of Canada, the Prime Minister of the United Kingdom and the President of the United States. They issued a declaration on atomic energy, and I should like to quote one portion of that as follows:
Faced with the terrible realities of the application of science to destruction, every nation will realize more urgently than before the overwhelming need to maintain the rule of law among nations and to banish the scourge of war from the earth.
Those hopes have not been realized. There is no rule of law among the nations. The scourge of war is still an ever-present fear among the people. The fact is that in the world today national security is an obsolete idea. We have to recast our minds accordingly. What then is going to be the role of the committee? Will the committee approach this problem of atomic energy in the light of the policy which we have pursued in external affairs?
Theoretically there are several avenues which may be open to us, but there is only one which I think is practical. It was hoped in 1945 that we could have one world, but owing to the intransigence of Russia that hope largely disappeared. Russia alone cannot be blamed for its disappearance. One world was possible if we followed logic and reason. But human instincts are stronger and they have made it impossible to have one world.
Atomic Energy
Humanity has exercised its inalienable right, the right to be stupid. We have exercised that right to the uttermost. If we continue to exercise that right we are going to have to pay a penalty greater than the most pessimistic of us ever believed would be imposed. Had it been possible to have some degree of international control, the atomic bomb and whatever secrets there are associated with it would have been in the hands of a central authority under the aegis of the United Nations. But if that control was to be successful, supervision would have to be exercised over the activities of other nations, and that supervision is not possible, again in large measure due to Russia.
In any event I am not sure that I am in complete agreement with the theory of an international police force because such a force might lull the innocent into a sense of false security. Then we have had the concept of a balance of power. This has been present in the world since the days of Athens and Sparta. It prevailed up until the days of the last war, but it has never worked. The results of such a policy, war, have been inevitable. What policy then are we going to pursue?
I think there is only one we can follow, and it is certainly not based on the concept of one world or the maintenance of international law and order. We must accept the situation as it is and be determined to try to maintain our security; we must accept the fact that there are two worlds, those who are with us and those who are not.
Our security will depend upon our having such a preponderance of force that any potential aggressor will think twice, indeed three times, before he does anything. We can only keep that preponderance of force, we can only exercise authority in the world when we retain the confidence of the smaller nations, when they are clear in their minds that atomic energy will not be used as an instrument for the furtherance of national policies.
Atomic energy has to be considered in the light of these matters. Already we have created a nucleus in those nations which are signatories of the North Atlantic treaty. I think the time has come when we must definitely make up our minds that national sovereignty is one of the great evils in this world and that, while the time is not ripe to surrender it fully, nevertheless for our own defence we should approach these nations which are already allied to us and say that we are willing to surrender that part of our national sovereignty dealing with national defence, asking them to do the same for the good for all. Perhaps the greatest question mark in that regard would be the United States. Mark you, I am asking for only a limited surrender of national sovereignty. I

Atomic Energy
would be willing to go further, but I do not think that would be practical at the present time, so I suggest only that we surrender that part of our sovereignty dealing with defence.
In the Soviet union there is what we call the iron curtain, which we rightly condemn. There we have a situation in which scientists, physicians, authors and artists are compelled to hew to the Marxist-Leninist line, or they are on the outside. That may give us certain advantages, because if science is to produce any results at all it has to be free and unfettered, and obviously that is not the case in the Soviet union. There may be one exception to that however. I suspect that those scientists working on atomic energy have been completely and utterly free from any partyline doctrine.
In the United States, however, we have the situation to which the leader of my group referred. There they do not have an iron curtain, it is true, but they are conducting a witch-hunt, creating an embryonic curtain of fear behind which men prominent in science will no longer contribute their science and skill for the benefit of the nation as a whole. Instead they are going into other fields of endeavour, and as a result the nation is the loser. There we have the situation where an accuser may say, "I do not like your views; therefore you are a communist," and that word having been attached to an individual, his future becomes rather uncomfortable. There is a situation which, thank heaven, does not exist in our country. I believe we have been remarkably free from that type of hysteria, and I think it is something of which the people of the United States will rid themselves in good time.
How will this committee consider atomic energy and its implications in regard to our defence? For instance, what kind of army, navy and air force do we need in the light of atomic discoveries? What sort of army, air force and navy do we have as the situation exists today? Is it possible for this committee to work adequately without considering this other branch of government? What should be the place of private enterprise in this new technology? What is the status of research in industry? How is it being helped by the government, as it may have to be since that type of research can be so expensive? More important, what reservoir of trained scientists do we have or are we producing in Canada? What is being done to aid pure research, which is so vitally important, in our universities and laboratories? What endowments have been granted by the national government to ensure that research work goes on through the years? What is being done in connection with medicine? Above all we have to consider in

terms of immediacy this whole problem of atomic energy and the evil uses to which it may be put. I sincerely hope this will not be a partisan committee; and there is no necessity for that. In the past, quite rightly, the government has invited members of the opposition to accompany the Canadian delegation to the United Nations, as observers. The government still takes the final responsibility for policy; nevertheless I think those delegations may have received some benefit from the advice tendered by the members of other parties. That was a good idea. That practice has been halted for the time being, but I hope it will be renewed later on. I believe the same should be true in connection with national defence. If we are to have a committee that will be adequate, any question concerning national defence should be outside the purview of party politics. That is a matter which affects every person in this country, and I believe that ultimately this committee will have to be broadened to deal with the whole question of national defence and perhaps also our external policy. That, of course, will make it a vastly different committee from that now envisaged, and obviously a most important one.
We are living, I think, on borrowed time. I may appear to be unduly pessimistic; but when a man of the stature of Harold Urey can reiterate after four years that he is even more afraid, I see no reason why I cannot admit my fears, too, without being accused of pessimism. The threat is there; and if we are to meet it we may have to travel new, uncharted roads. We may have to be a little more original than we have shown ourselves in the past, because always we have been content that other nations should lead and we should follow behind. Our future is at stake; the welfare of Canada is at stake; and I see no reason why we cannot give that sort of leadership, in dealing with these matters of national sovereignty, which I have already suggested. Otherwise I am convinced that we can say with Macbeth:
And all our yesterdays have lighted fools
The way to dusty death.
Motion (Mr. Howe) agreed to.



CANADIAN NATIONAL RAILWAYS


Hon. Alphonse Fournier (for ihe Minister of Finance) moved: that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to bring in a measure to authorize the Canadian National Railway company to issue securities not exceeding $19,766,890 in principal amount to provide the moneys necessary

to meet capital expenditures made or capital indebtedness incurred during the calendar year 1949; to authorize the governor in council to guarantee the principal and interest of securities issued by the company for the purpose aforesaid; to authorize the making of temporary loans to the said company secured by such securities and not exceeding $19,766,890 in principal amount to enable the said company to meet such expenditures and indebtedness; with authority to give financial aid and assistance to other companies of the said national system and to authorize the Minister of Finance to place at the disposal of the national company or the Trans-Canada Air Lines, such amounts as may be necessary to enable them to pay operating and income charges if at any time before the first day of April, 1950, the available revenues of the national railway system or the Trans-Canada Air Lines and subsidiaries, respectively, are not sufficient to pay such charges:	Provided that all such amounts shall be
reimbursed to the minister from the recipients' annual revenues in so far as such revenues are sufficient, any insufficiency to be provided for by subsequent deficit appropriation by parliament.
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.


Alphonse Fournier: 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 Emergency Gold Mining Assistance Act in respect to the manner of calculating the amount of assistance that may be paid operators of gold mines, as prescribed by the act; also to empower the governor in council to prescribe by regulation, in the case of a mine producing gold in concentrates during one period and not producing bullion from such concentrates until a later period, the time when the gold shall be deemed to have been produced and the manner in which the cost of production thereof shall apply.
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.


Alphonse Fournier: that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to bring in a measure to provide for the purchase by the government of Canada of the Temiscouata railway and that the Minister of Finance may, out of unappropriated moneys in the consolidated revenue fund of Canada, pay any
Proposed. Legislation
amounts, not exceeding in the aggregate four hundred and eighty thousand dollars, that are payable under the terms of an agreement dated the 14th day of October, 1949, between His Majesty the King in the right of Canada and the Temiscouata Railway Company at such times and in such manner as are set out in the agreement.
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.


Alphonse Fournier: that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to bring in a measure to authorize the governor in council to grant to the province of British Columbia a subsidy of fifteen thousand dollars per mile, but not exceeding eighty-two and seven-tenths miles, towards the construction of a line of railway from Quesnel to Prince George in the province of British Columbia.
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.
Alphonse Fournier: that the house go into committee of supply.
He said: Mr. Speaker, on Friday I announced that at some stage today we would move to go into supply to call one item, that of the Department of External Affairs. As all hon. members are aware, the Secretary of State for External Affairs (Mr. Pearson) is spending most of his time at the United Nations meetings. Arrangements are being made for him to be here one day in order that we may have a general discussion on the first item of his estimates. Perhaps we shall be successful in having this Friday set aside for that purpose.


Howard Charles Green: Next Friday?


Alphonse Fournier: Friday next; although it is not definite, we hope to succeed in our attempt.



INCOME TAX


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I appreciate the desire expressed by the Minister of Public Works to go into supply at least some time today

Income Tax Deductions so that one item of the Department of External Affairs can be called. Before Your Honour leaves the chair, however, there is a grievance concerning which I should like to speak, in the hope that I can bring the matter to the attention of the government with sufficient force that the Minister of Finance (Mr. Abbott) will do something about it.
Early in this session I directed a question to the government concerning the matter of trades union dues, with particular reference to the question of their deductibility for income tax purposes. The reason for my question was that this matter was the subject of a decision by Mr. Justice Angers of the exchequer court on June 8 of this year, following which certain announcements were made by the officials of the income tax department which I felt were discriminatory against trade unionists. On September 27, my question to the government was answered by two ministers, the Minister of Finance and the Minister of National Revenue (Mr. McCann). I indicated at the time that the orders of the day did not permit the remarks or further questions that I might like to make in reply to their answers, and I said I would raise the matter at a later date. It is for that reason I am rising now.
As hon. members are aware, there was a period of time, particularly during the years 1945, 1946, 1947, when lawyers, doctors and teachers were permitted to deduct their professional fees from their income before computing their income tax. This right was accorded to those people under the provisions of section 6 (1) (a) of the Income War Tax Act. That section reads as follows:
6. (1) In computing the amount of the profits or gains to be assessed, a deduction shall not be allowed in respect of (a) disbursements or expenses not wholly, exclusively and necessarily laid out or expended for the purpose of earning the income;
The section is put in the form of a double negative, but turning it into the positive it means that if anyone can show that certain expenses were wholly, exclusively and necessarily laid out or expended for the purpose of earning the income, they can be deducted. Since it was possible for doctors, lawyers, and teachers to claim that their professional fees were necessarily laid out in order to pursue their profession, they were allowed to deduct those fees.
During those same years trade unionists felt that the same right should be accorded to taxpayers who pay trade union dues. This position was taken particularly by trade unionists in closed shops or in what has, in the meantime, come to be known as the Rand formula type of shop. Despite the fact that trade unionists contended that their case was comparable with the case of doctors, lawyers

and teachers, the income tax department refused to allow the claim of trade unionists in those years. One particular trade unionist, Mr. Cooper by name, of the city of Winnipeg, a moving picture projectionist, made his claim upon the income tax department for the deductibility of his trade union dues for the taxation year 1945. Having been turned down, he went through the procedures prescribed in the act.
When after Mr. Cooper had done his best but the income tax department stood firm and refused to grant him the right to deduct the fees he had paid in 1945, he took the case to the Exchequer Court of Canada. The documents in the case were actually given to the exchequer court by the income tax department on February 3, 1948, and on April 23, 1948, Mr. Cooper filed his statement of claim. The case was heard on September 7,
1948,	and judgment was rendered on June 8,
1949.	When that judgment was given by Mr. Justice Angers, it was in favour of Mr. Cooper. He was given the right to make the deduction that he had sought, and was also awarded the costs of the action in full.
The result of that decision by the exchequer court establishes clearly that during the years 1945, 1946 and 1947 trade unionists had, legally, the right to deduct their fees for income tax purposes. But, although the decision of the court established, retroactively, that trade unionists really had that right back in 1945, 1946 and 1947, they were in fact denied the exercise of that right during those years because the income tax department interpreted the Income War Tax Act the other way.


Mr. Graydon:: They had it; then the government took it away from them.


Stanley Howard Knowles: That is precisely what happened.


Gordon Graydon: Why did they do that?


Mr. Maclnnis:: You had better ask the government.


Stanley Howard Knowles: That is for the government to answer. The act made it clear that people who laid out moneys wholly and necessarily for the purpose of earning an income could deduct those expenses from their taxable income before computing their income tax. The income tax department ruled that in the case of doctors, lawyers and teachers, that provision included the right to deduct their professional fees.


Mr. Abbott:: Not if they were on salary.


Stanley Howard Knowles: I beg the minister's pardon.


Douglas Charles Abbott: No.


Stanley Howard Knowles: In 1945, 1946 and 1947 they were permitted to do so. If necessary, I can quote some of the minister's words back at him. The minister knows that the matter was brought to a head by the Bond and Rutherford cases where lawyers contended that they had the right to make that deduction even if they were on salaries.


Douglas Charles Abbott: And that was upheld by the court.


Stanley Howard Knowles: And that was upheld by the court. So that is the way the matter stood during the years 1945, 1946 and 1947.


Douglas Charles Abbott: I am sure I am right when I say that the income tax department interpreted the law as not permitting the deduction of professional dues such as lawyers' fees to the bar society or union dues by men who were on salary. In the Bond and Rutherford cases the courts held that the legislation was broad enough to permit such a deduction. The law has been amended to bring into effect what was for years considered to be the law and what has been the law in England for years.


Gordon Graydon: It is very technical, is it not?


Douglas Charles Abbott: It is very technical, but the law is that such deduction should not be allowed. Salary and wages have always been net income.


Gordon Graydon: I do not think the government is right-


Stanley Howard Knowles: If I may, Mr. Speaker, I should like to have the floor.


Douglas Charles Abbott: I just wanted to correct a statement of fact.


Stanley Howard Knowles: I am still not satisfied with the statement the minister made because, as a matter of fact, in an answer he gave to me on September 27 this year, he referred to the fact that the decision of the exchequer court in the Bond and Rutherford cases was one of the reasons why, in 1948, the government amended the act to bring it in line with what they had wanted all along.


Douglas Charles Abbott: With what it had been doing all along.


Stanley Howard Knowles: I can tell him that during those years lawyers were applying for this exemption-although some of them did not know about it until I raised the matter here in the house-and were getting it; and teachers were also applying for it and getting it. Teachers were getting their federation fees allowed as a deduction before and during the year 1947, and there are teachers in this house who can testify to that fact. I
Income Tax Deductions also have on my desk a bulletin of the Saskatchewan teachers' federation for the year 1948 or 1949, I forget which it was, reminding teachers that they still had that right; but the teachers' federation later on was informed that that decision had been changed.
What I am saying is that for the years 1945r 1946 and 1947 certain people did get an allowance for their professional fees, and those people included at least some of the members of the groups that I have named. During that period of time the desire of trade unionists to have the same right accorded to them was expressed in a number of ways, notably by the claim of Mr. Cooper made first on the income tax department and then by way of appeal to the Exchequer Court of Canada. It is a strange coincidence that Mr. Cooper filed his statement of claim on April 23, 1948, and on May 18, 1948, a resolution was introduced in this house to change the Income War Tax Act for the year 1948 with respect to that matter, so as to bring into effect the principle that the minister enunciated a moment ago, by way of an interruption.
I recognize the difference between the principle as it obtained in the wording of the act up until the end of 1947 and the principle that the government has had written into the act since then. Whatever the intention of the government may have been in the wording of the act up to the end of 1947, the principle was fairly clear, namely, that expenses necessarily involved in the earning of income were deductible. The principle that has been written into the act effective as from January 1, 1948, is that expenses are deductible only if they are expenses incurred by people whose income is gross, from which other deductions are made. The corollary of that new principle is that if your income is in the form of salary or wages it is regarded as net and no deductions of this kind are now being allowed.
It is true that the minister achieved that purpose by the amending bill that was put through this house in 1948. That bill has in it a section, 3 (1), which amended section 6 of the old act by adding a new subsection, which reads as follows:
(6) In computing the income from an office or employment, no amount is deductible for a disbursement or expense laid out for the purpose of earning the income; Provided that, where a taxpayer is an employee of a person whose principal business is the transportation of goods, passengers, or goods and passengers, and the duties of the employment require him regularly,
(a) To travel, away from the municipality where the employer's establishment to which he reports for work is located and away from the metropolitan area, if there is one, where it is located, on vehicles used by the employer to transport the goods or passengers, and

Income Tax Deductions (b) While so away from such municipality and
metropolitan area, to make disbursements for
meals or lodging,
amounts so disbursed by him in the taxation year to the extent that he has not been reimbursed and is not entitled to be reimbursed in respect thereof may be deducted in computing his income from the employment.
The effect of that section was to provide certain exceptions to the newly-written-in principle, but at the same time it did establish the principle that salaries and wages were in most cases to be regarded as net. That principle has been carried forward into the new Income Tax Act which has been in effect since January 1 this year, and the section laying down that principle is now 12 (1) (a) which reads:
12. (1) In computing income, no deduction shall be made in respect of
(a) an outlay or expense except to the extent that it was made or incurred by the taxpayer for the purpose of gaining or producing income from property or a business of the taxpayer.
I point out that under the old Income War Tax Act the old section 6 (1) (a) talked about income, and expenses involved in earning an income; and it was under that particular definition of income that Mr. Justice Angers felt that trade unionists ought to be treated in the same way as doctors, lawyers and teachers. But in the new act, section 12 (1) (a) talks not about income in the broad sense but about gaining or producing income from property or a business of the taxpayer. It seems that under that section and under certain other prohibitions, the situation has now been made clear in the act; or at least it is clear that the government wanted it that way and feels that it now has a wording that says you may not get this deduction unless you are a lawyer working for fees or a doctor working for fees, in which case if you have a gross income from which other items are deducted as expenses, then you can deduct your professional dues. In other words, a line is now drawn through the doctors and through the lawyers. Some of them are permitted to deduct their fees to the medical society or the law society and others are not. There may be the odd case of the trade unionist who is the owner of a plant at which other trade unionists work, in which case he might be permitted to deduct his trade union fees whereas his brother trade unionists who work for him would not have that right. What I am trying to suggest in this is that the line is unfairly drawn when you try to draw it between gross income from fees and net income from wages or salaries. Surely, the lawyer who is employed by a firm has to pay out the cost of his law society fees just as much as the lawyer who is working on individual cases. Surely the same thing holds for

doctors. The doctor who is employed in a hospital or by a firm and is on salary has to pay his fees to the medical society in order to carry on that work. Surely he should have the right to a deduction just as much as the doctor who works for gross fees from patients. Similarly, it seems to me, the fair thing to do would be to admit that in the case of teachers who are members of a teachers' federation and have to be-in some provinces there is a law which requires them to be members of the federation-the fees that they pay to that federation should be accepted as an expense in connection with that business.


Gordon Graydon: Don't forget the farmers.


Stanley Howard Knowles: Yes, if they are required to belong to an association of a similar nature they should be in the same class. The point is that the same principle should be applied with equal fairness to all.


Douglas Charles Abbott: There are not many farmers on salary.


Stanley Howard Knowles: My point is that in principle the trade unionists have a very strong case.
The minister may say that I am jumping to conclusions, or that I am drawing an unwarranted inference, but it does seem strange to trade unionists that just at the time that their claim was being pressed, even taken by Mr. Cooper to the Exchequer Court of Canada, the law was changed. Prior to that time it was possible for others to have it. Attention was drawn to this fact by previous exchequer court decisions, as in the cases of Bond and Rutherford. Then on April 23, 1948, a statement of claim was filed in the Exchequer Court of Canada by Mr. Cooper, and lo, within a month, on May 18, the minister introduced in this house a resolution to take away that particular right to deduct these professional fees from doctors and lawyers on salary, and from teachers in almost all cases-a right which trade unionists were in the meantime trying to get for themselves as well.
I feel that the time has come for the government to reconsider this whole position and introduce the necessary legislation to give that right to all of these people who have to pay out a fee of the various kinds that I have named in order to carry on their profession or their work, and that that fee should be allowed as an income tax deduction. The amount of money involved is not great. The Cooper case to which I referred involved a tax amount of $35 when it was all through. Mr. Cooper spent a great deal more than that as costs of the case, but the government was ordered to reimburse him to that extent. In most cases the amount of

money involved is not great. It is one of those little things where a principle is at stake.
I can tell the minister that there is support for this proposal not only among trade unionists. There was an exchange here a moment ago with reference to farmers. May I tell the minister and the hon. member for Peel (Mr. Graydon) that I have before me a couple of editorials from the Western Producer, a farm paper, in which they came to the support of the position of trade unionists as well on the basis of simple ordinary justice.
Earlier this afternoon the minister and I had some disagreement but we reached a certain amount of agreement in that we both know that the principle which the government now seeks to pursue is that if your income is gross in the form of fees out of which you have to pay rent and other expenses then you can include as one of your deductible expenses your professional fees; but if your income is a salary or wage, then it is net, and you are not permitted to deduct either your dues to the law society, or dues to the medical society or to the teachers' federation or to a trade union.
I point out to the minister that that supposedly ironclad principle that salary and wages are net is upset immediately. The very clause 1 was quoting a moment ago which laid down this principle includes in it two of the exceptions. One of the exceptions is the case of people who are engaged as employees of transportation companies and have to be away from home. Their board and lodging away from home, if it is paid out of their net salary, can be deducted for income tax purposes. I agree, in fact I fought for that right. Another exception is that of a salesman whose business it is to sell negotiable contracts. Another exemption is that of a clergyman maintaining a manse or residence in which he has to hire a housekeeper. Another exception, if I dare mention it, has to do with ourselves. A certain portion of the net income that we receive for being members of parliament is treated as covering expenses which we have to incur in connection with our spending so much time at Ottawa, in order to earn the rest of it; therefore it is not taxable. The same applies to the provincial legislatures.


Douglas Charles Abbott: For some others. It does not apply to members of the government.


Stanley Howard Knowles: I do not see the minister offering to trade positions with any of the other members of his party because of that difference.


Douglas Charles Abbott: The hon. member might be surprised.
Income Tax Deductions


Stanley Howard Knowles: The same situation applies in the provinces if the legislatures wish to make it that way. In other words, the point I am making is that the government lays down this principle which is supposedly ironclad, which provides that salaries and wages are net, and that there can be no deductions from them of that kind, and then we immediately make these various exceptions in the act, with most of which I thoroughly agree. Since we have gone so far as to admit that there are these many cases where an expense is necessarily laid out for the purpose of earning a taxpayer's income, I contend that we should do the same thing for trade unionists, along with doctors, lawyers and teachers who were getting it until the trade unionists also tried to get it.
The other day I picked up a little squib in the Ottawa Journal, which is dated September 30, commenting on the answer the government gave to my question on an earlier date in these terms:
Decision of the government that labour union dues are not deductible for income tax purposes is understandable: otherwise it might be accused of granting special privilege to one class of Canadian citizen.
I thought that that was about the high point of misunderstanding of a request being made on the floor of this parliament. No one is asking for special legislation for one group, namely, trade unionists. We are simply asking that they should have the same consideration that other groups of people have had on identically the same principle, namely, that it is an expense necessarily and wholly laid out for the purpose of earning their income.
I think that states the case. I could argue further about the wording of the act as it was before, and as it is now. I am not satisfied that a case could not be made out under the present wording. It would hinge on the question how to define the word "business". Is it not your business when you are employed as a worker? Is not a printer's work his business, just as a lawyer's work is his business? Though one might try to argue that, the government has certainly made it clear that what they have been trying to do is to overtake the law as they previously wrote it, in view of the decisions made by the exchequer court. Mr. Justice Angers of the exchequer court made it clear in his decision that the law provided that doctors, lawyers, teachers and trade unionists should have that right, and step by step that right has been taken away from most of these people, but it has not been taken away from certain others. I know how careful one has to be when mentioning our own position in the House of Commons; but it does seem to me that since the principle has been recognized, and we all agree with it, that a portion of our

Income Tax Deductions income is necessarily laid out in connection with our work and should not be subject to tax, we should fight all the harder for others to have exactly that same right, that same guarantee. And so, Mr. Speaker, to bring this matter to a head-because I feel it is important, and because I believe it is one to which this house should ask the government to give consideration-I wish to move an amendment to the motion now before you, seconded by my colleague, the hon. member for Saskatoon (Mr. Knight), as follows:
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."


Mr. Speaker:: Before the question is put, I wonder if the hon. member for Winnipeg North Centre (Mr. Knowles) who, I know, is always most anxious that not only his motions but any discussions he has in hand should be in order, has read citation 467, Beauchesne, third edition, where, about a third of the way through the paragraph, it states-
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-
And this is the pertinent part to which I would direct the hon. member's attention- -nor to any resolution to be proposed to the committee of ways and means.
Does not this discussion relate to a resolution about to be proposed to the committee of ways and means?


Douglas Charles Abbott: Mr. Speaker, if I may have a word on that, I was going to say-


Stanley Howard Knowles: Is this on the point of order?


Douglas Charles Abbott: Yes, I was going to speak in answer to the hon. member respecting what I might describe as the merits of his presentation, and point out that there is, of course, the fullest opportunity to discuss the question he has raised when we are in committee on the resolutions which I tabled with my motion to go into committee of ways and means and, secondly, when the bill based on the resolutions is introduced for discussion in the house.
This is not a new question. It has been up time and again before the committee. It has been argued before me and before my predecessor, Mr. Ilsley. We have heard arguments both for and against wages and salaries IMr. Knowles.]
being considered as net income, as against gross income. There is nothing new in it. The only thing that is new is that a judge of the exchequer court held that an interpretation which had been placed on the Income War Tax Act was not a correct one, and that one was entitled to deduct union dues, among other things, from salaries. The law was amended to bring into effect what had always been considered the law.
I was going to suggest however that there are other proceedings before the house on which this could be discussed appropriately. I am sure my hon. friend was entitled to bring forward his grievance respecting a certain section of the community, but I doubt whether his amendment, in the form in which it appears, is in order, for the reasons Mr. Speaker has indicated.


Stanley Howard Knowles: If I might rise to the point of order, beginning at the point where the Minister of Finance left off, I would point out that if it is not in order to move the amendment it would not be in order to make the speech.


Douglas Charles Abbott: Oh yes.


Stanley Howard Knowles: Apparently the Minister of Finance thought I was entitled to make the speech, but not entitled to move the amendment.


Mr. Cote (Verdun-La Salle):: He did not
say that.


Stanley Howard Knowles: Well, if it is not precisely what he said, it is certainly the spirit of what he said. I would point out that citation 467 does not stand in the way of my amendment because of the part which says that an amendment must not relate to any decision of the house during the current session because, as has been pointed out, the decision-so far as the house is concerned-was made by an amendment to the Income War Tax Act in a previous session.
Then, as to the question Your Honour has asked, may I say that the very point about which I am complaining is that there is no resolution included in the ways and means resolutions presented by the Minister of Finance which deals with the matter I have raised. That is exactly my grievance- namely that despite the requests I made to this effect last year, and despite my questions earlier in this session, and the fact that there has been an exchequer court decision, and despite editorials in newspapers and general interest, it has not been proposed at all.
The citation at which Your Honour is looking with a quizzical eye contains this expression-
Nor to any resolution to be proposed to the committee of ways and means.

As I have already said, that is exactly my grievance-that there is no such resolution to be proposed by the minister, or anything like it.
While I am on my feet, speaking to this point of order, may I direct Your Honour's attention to two rulings recorded in the very book in Your Honour's hand. One of these is found at page 699, a ruling given on May 9, 1916, by Mr. Speaker Sevigny, the headnote of which states-
Any member of the house may bring before it, on the motion to go into supply, any matter which, in his opinion, may be detrimental or advantageous to any section of the population.
The other ruling to which I have referred is a lengthy one of May 10, 1929, by Mr. Speaker Lemieux. It is recorded at page 797 of the same book, and its theme is the same as the one to which I have just referred, namely, that wide latitude is the rule, when it comes to the expression of members' grievances on going into supply. The part of this decision by Mr. Speaker Lemieux to which I direct Your Honour's attention particularly is found in the last paragraph on page 799 where it states-
I have come to the conclusion that the expression of any reasonable grievance on the motion for the Speaker to leave the chair is a sufficient reply to bring a member's speech under the provision of standing order 37. I cannot conceive a case where he could then be irrelevant. It is not necessary that his observations should deal with the subject matter of the resolutions to be considered in committee. The member objects to anything being considered at all until he has had a hearing.
I am contending that Speakers in the past have taken the position that when there was any doubt, the benefit of wide latitude should be given to members raising any reasonable grievance, provided always that they did not contravene any other rule.
I would submit on the point about which Your Honour has asked the question-and I have noted that you did not rule upon it- namely the reference to a resolution going into committee of ways and means dealing with the same subject, that that is precisely the reason for my raising it at this time. I have done so because there is no proposal such as mine in the resolutions put before the House of Commons by the minister at this time.
So far as the motion for Mr. Speaker to leave the chair to go into committee of ways and means is concerned, which involves another debate, namely the debate on the budget, there is already an amendment and a subamendment, and no further amendment or subamendment would be permitted.
Therefore I am left with no way to bring forward an amendment of this kind other than by doing it on a motion to go into supply
Income Tax Deductions either today or some other day. I am confident that the amendment which I have moved is fully in order.


Angus MacInnis: Mr. Speaker, may I say just a word or two in order to emphasize more definitely the point raised by the hon. member for Winnipeg North Centre (Mr. Knowles) when he first spoke, that if the amendment is not in order the discussion is not in order. I should like to quote citation 488 of Beauchesne, second edition, as follows:
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,-
The discussion and the amendment are on exactly the same footing and, if the amendment is not in order, the discussion is not in order. That is really the only logical conclusion anyone could draw. If a thing is not in order when the amendment is moved, it surely could not have been in order before the amendment was moved. The citation continues:
-shall not relate to any decision of the house during the current session,-
There has been no decision of the house during the current session.
-nor to any item of the estimates,-
I do not think there is an item in the estimates under which this matter can be discussed.
-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.
I do not think any of those points interfere with the present discussion and the amendment.


Mr. Speaker:: Does not the hon. member think that the discussion and the amendment relates to a resolution to be proposed to the committee of ways and means? I say now that I agree fully that, if the amendment is out of order, the discussion also is out of order. I do not think there is any doubt of that. I am rather of the opinion that both the discussion and the amendment relate to a resolution to be proposed to the committee of ways and means.


Angus MacInnis: Will you please state what resolution you refer to, Mr. Speaker? A series of resolutions have been placed before the committee by the Minister of Finance, but there is no resolution dealing with trade union dues.


Douglas Charles Abbott: May I say just a word on that. There are two resolutions to be placed before the committee of ways and means. One is

Income Tax Deductions that the Excise Tax Act be amended in certain particulars and the other is that the Income Tax Act be amended in certain particulars. The income tax resolution sets out a number of ways in which the Income Tax Act is to be amended, but all the amendments do not necessarily have to be preceded by a resolution. It is perfectly true that the resolution having to do with the Income Tax Act does not propose that that act be amended by permitting the deduction of expenses from salaries and wages for income tax purposes, but the particular section which is referred to is being amended in other particulars. There will be the fullest opportunity when the income tax resolution is before the committee to discuss this matter.


Angus MacInnis: If the hon. member for Winnipeg North Centre is debarred now from moving his amendment because of the resolution referring to the Income Tax Act, will he be in position to move that same amendment when that resolution is before the committee?


Mr. Knight:: I should like to speak on this amendment.


Some hon. Members:: Order.


Mr. Speaker:: I must decide whether or not the amendment is in order. If it is not in order, then any discussion will be out of order.


Alphonse Fournier: The only way in which an hon. member could move to have expenditures increased-the object of this amendment would be a decrease in revenue to the Department of National Revenue-would be by a private member's resolution. There is actually one on the order paper moved by the hon. member for Quebec-Montmorency (Mr. LaCroix) in which he asks that consideration should be given to the advisability of amending the Income Tax Act to permit certain deductions to be made. The amendment moved by the hon. member reads:
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.
The motion standing on the order paper in the name of the hon. member for Quebec-Montmorency reads:
That, in the opinion of this house, the government should give early consideration to the advisability of amending the Income Tax Act.
I do not see how a private member, even at this stage, can move to change a budget resolution which is actually before the house except by means of a private member's resolution.


Angus MacInnis: I should like to move the adjournment of this debate.


Alphonse Fournier: Seeing that I have not succeeded in having the house go into committee of supply, I think at eight o'clock we had better revert to the resolution standing in the name of the Minister of Reconstruction and Supply (Mr. Winters).
Motion (Mr. Maclnnis) agreed to and debate adjourned.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.


Hon. Robert H. Winters (Minister of Reconstruction and Supply) moved: that the house go into committee to consider the following resolution:
That it is expedient to present a measure to amend the National Housing Act, 1944, and in particular to provide that the assembly of land for residential purposes and the construction of housing projects for sale and for rent under arrangements by which the capital costs and the costs of operation of such projects will be shared seventy-five per cent by the federal government and twenty-five per cent by the provincial governments be undertaken jointly with the said governments; and further to authorize the making of loans to prospective home owners in addition to basic joint loans under the act in amounts not exceeding one-sixth of such basic loans; to authorize an increase in the loans that may be guaranteed for home improvement and home extension purposes under the act, and to increase the aggregate amount presently authorized for loans and losses under part I of the act, the funds for the said purposes to be provided out of the consolidated revenue fund.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion?


Mr. Fleming:: Is the minister not going to make his statement now?


Robert Henry Winters: I have a short statement I intended to make, but I had rather expected the house might prefer me to make it in committee, so hon. members could ask questions. However, I am in the hands of the house as to when I should make the statement.


Some hon. Members:: Carried.


Some hon. Members:: No.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion?


Some hon. Members:: No.


Donald Methuen Fleming: If the minister is not going to speak-


Robert Henry Winters: Very well; I shall make my statement now.
The resolution deals with the proposals for dominion-provincial housing arrangements. It also makes provision for a change in the National Housing Act whereby loans will be made to home owners who have constructed or purchased houses at a price which is considered to be fair and reasonable. On September 21 I made a statement on these two matters, and I doubt if there is much I can add which will be helpful to hon. members at this resolution stage. I propose to make a more detailed statement at the time of second reading after hon. members have had the opportunity of reading the bill.
We are establishing a pattern for long-term housing development by making provision for joint participation by the dominion and the provinces, together with such participation by the municipalities as the provinces deem desirable. The legislation which we intend to introduce is of an enabling character. It does not commit the provinces. It will enable this government to enter into arrangements with respect to housing projects with any province which considers that joint participation between the two governments is desirable to develop housing within that province. We have no knowledge of the extent to which provincial governments will participate in arrangements contemplated by the legislation, and it may well be that certain provinces will feel that the type of assistance proposed is neither necessary nor desirable for that province. Conversations have taken place with each province in order to determine a general pattern of arrangement which may be suitable. No commitment was sought from the provinces at the time of the conversations. We believe that the province is the best judge of whether the type of arrangement now proposed is desirable. We have already had indication from some provinces that the contemplated arrangement is a suitable basis for joint co-operation. There is no room for the suggestion that the proposed enabling legislation is binding upon the provinces unless they wish to take advantage of it with respect to specific projects.
I would like to emphasize that although financial participation by the municipalities may not be necessary, nevertheless full cooperation of the municipalities will be sought. Hon. members can be certain that neither the dominion nor the provinces can proceed very far without advice and co-operation of the municipalities. The arrangements provide that if any proposed project is deemed to be reasonable, the dominion will be prepared to proceed with the provinces in land assembly, 45781-83
National Housing Act
the building of houses for sale, and the erection of rental housing either on an economic or a subsidized basis. I would point out that the dominion will be dealing with the ten provinces, or as many of them as find the arrangement acceptable, and they in turn will be dealing with the municipalities. It is likely that in the actual development of projects the three levels of government will work closely together. However, the federal government is not prepared to consider proposals from municipalities unless there is clear indication that the provinces concerned find such proposals acceptable.
Dealing now with the proposed amendments to the home ownership provisions of the National Housing Act,' the changes we are suggesting would have the effect of making it easier for prospective home owners to acquire homes, because they will result in reducing the down payments to approximately half the present amounts. Because it is desired to avoid a stoppage in the number of new starts, and because anticipation of legislation of this kind has had that effect to some extent in August and in September, Central Mortgage and Housing Corporation, with the approval of the government, is indicating to builders and home owners terms and conditions and amounts of loan which will be available if these amendments are passed. I am sure that hon. members will agree that this technique is a desirable step because it would be unwise to create a condition which would interrupt the usual flow of fall starts. Tentative approvals for N.H.A. loans are being given, and this is one important reason why I am anxious to make rapid progress with the legislation.
The other matter dealt with in the resolution relates to part IV of the National Housing Act dealing with home improvement and home extension loans. Hon. members will remember that the home improvement section of the act has not yet been proclaimed. Even yet suppliers of building materials, particularly those in the plumbing and heating field, are having difficulty in maintaining a flow of new materials sufficient to look after the needs of new construction. The government feels that encouragement of the use of these materials for home improvement should not be given at this time by proclamation of that part of the National Housing Act. However, we do feel that if and when conditions change, the government should be in a position to arrange for the immediate proclamation of the home improvement section of the National Housing Act. The resolution makes provision for higher maximum loan to be available to individuals who wish to improve their homes. That section of the act which was passed in 1944 provides that the maximum loan for the

National Housing Act
improvement of a home is $2,000, and for each other unit in the same building an additional loan not in excess of $1,000. Since 1944 there has been an increase in the costs of construction. Therefore, we propose that these limits should be increased to $2,500 and $1,250 respectively. A corresponding increase of 25 per cent is proposed for the appropriation section of Part IV. A similar adjustment is being proposed for the maximum amount of loans under the home extension section of the National Housing Act which has been proclaimed and is in operation.
The bill will contain other ohanges to the National Housing Act, but the three matters which I have discussed are the major amendments which are proposed.


Donald Methuen Fleming: Mr. Speaker, I am sure the house will welcome this opportunity afforded by the government resolution to discuss what is still, by long odds, Canada's No. 1 internal problem, the housing crisis. The members listened with interest to the statement which the minister has just made. They will recall that when the minister made a similar statement in the house on September 21 he said he hoped to put the resolution before the house relatively soon. That was on September 21, at the opening of this session, Mr. Speaker, and on October 31 this first opportunity of debating the resolution is given to the members.
This evening the minister said he was anxious to make rapid progress with the legislation. I venture to say, Mr. Speaker, that the house not only shares his anxiety, but probably anticipated any desire on his part, or on the part of the government, to make rapid progress with whatever proposal the government has for solving this still serious national crisis which confronts us. If the minister is looking for rapid progress, I am sure the house will exercise every endeavour to assist to that end, when it is satisfied that this measure promises some assistance in meeting the problem. The house would have been glad to see some earlier evidence of anxiety on the part of the government to make that rapid progress for which the minister now hopes.
Some days ago I asked the Prime Minister when we might expect the introduction of the resolution. I do not recall the exact date, but I think it was about three weeks ago. In his answer, the Prime Minister gave as the reason for the delay in introducing the measure the fact that some correspondence was pending with the provinces. He said the government hoped to receive further answers from the provincial governments. The minister's statement failed to make any reference

to correspondence with the provincial governments, and indicated that no commitment is sought from those governments by the federal government. I am going to ask the minister if, in the course of discussing this resolution, he will table the correspondence with the provincial governments, because it seems to me that that correspondence, in view of the reference made to it by the Prime Minister, should be before the house in its approach to the resolution and to the bill that will follow.
In common with the minister, Mr. Speaker, I do not intend to attempt to anticipate the provisions of the bill. I propose to reserve my observations thereon until I have seen the bill.
I think it is fair to say that the minister's statement tonight was a rather cautious statement. It did not seem to promise the new heaven and the new earth that characterized so many of the glowing promises in regard to housing with which the government deluged the country during the last election campaign. It may be that, when the bill appears in the house, it will be an improvement on the brief preview to which the minister has treated us tonight. If it is going to make even a fractional attempt to fulfil those government election promises, it will have to be very much bigger and more far-reaching than the minister's statement indicated.
Hon. members will have their own ideas about the particular promises made by the government in the election campaign which really influenced the result. My own experience in that election campaign satisfied me that people wanted housing and health insurance. The people were greatly concerned about housing conditions. I may say, too, Mr. Speaker, with some confidence, that so far as the housing issue is concerned this government certainly was not re-elected on its past performance. It may have been elected on its promises, but it certainly was not elected on its past performance.


An hon. Member:: It was elected on its record.


Donald Methuen Fleming: We of His Majesty's opposition have taken careful note of those glowing and unrestrained promises made by the government during the election campaign. So far as our voices can be effectively heard in this chamber, we intend to hold the government to its promises. We will place the responsibility for curing the housing crisis in this country squarely upon the shoulders of the government because that is where it belongs.


Some hon. Members:: Hear, hear.


Donald Methuen Fleming: Yes, we intend to hold them responsible for curing those ills.


Mr. Whitman:: Do not worry.


Donald Methuen Fleming: Mr. Speaker, we will have an opportunity of measuring the progress, if any, that this government makes on this problem in the coming months and years.
When we look back on these post-war years from 1945 to 1949 inclusive, we can say that so far as housing is concerned they will go down as the wasted years-


Frederick Primrose Whitman: No.


Donald Methuen Fleming: -the years of opportunity that were wasted because the government of the day had neither the courage nor the discernment to tackle this problem and ascertain what was involved in it or to measure up faithfully to the promises it made to the people. Now let us hope, Mr. Speaker, that the wasted years have run their course and that we are now approaching a time when the government is going to appreciate the seriousness of the problem and will attempt to find a solution for this housing crisis. If so, it will be the first time that we shall have seen adequate action to meet the problem.
This problem did not burst upon the country suddenly. The development of it throughout the country was there for anyone to see who gave it any thought. The record during the past five years has been a record of failure, a record of broken promises. After we make all allowance for the conditions that existed we will not be able quickly to forgive or forget the want of frankness on the part of the government in its statements to the people of Canada with regard to housing conditions.
From your experience in the last house, Mr. Speaker, you will remember that when we assembled in the early days of the 1946 session we had fresh in our minds a statement made by a minister of the crown in Brandon. It was one of those glowing statements full of optimism. Between the 1945 and 1946 sessions, he used these words:
We can truthfully say that, in this country at least, the worst is past.
Those were the words uttered by a minister of the crown-


Some hon. Members:: Hear, hear.


Donald Methuen Fleming: -speaking about housing conditions in 1946.


Mr. Cruickshank:: The worst was passed on June 27.


Donald Methuen Fleming: The members who sat in the last house will recall that, in the early days of the session, we were treated to some more of these optimistic pilgrimages into dreamland on the part of the former minister of reconstruction and supply, the predecessor of 45781-83J
National Housing Act
the present minister of reconstruction. .1 cannot say that without also extending to the present minister my sincere sympathy for having to take over a department in which such a botch had been made with regard to housing.


George Alexander Cruickshank: The hon. member will never take it over.


Donald Methuen Fleming: He has the sincere sympathy of the house for having been handed such a lemon by his predecessor. This lack of frankness was again displayed by that same minister on that occasion. What he had to say, you see, was that the picture was looking better. It was a picture he saw through rose-coloured glasses.
Then, sir, it was just three or four months later that the same minister, the present Minister of Trade and Commerce (Mr. Howe), came into the house on July 22, 1946, and made a confession of abject failure in meeting the housing problem. What he said on that occasion was that our immediate shortage, our emergency shortage-he was not speaking simply of a housing deficit in Canada-is 150,000 houses. By spring it will be 180,000, even if we build 60,000 houses this year. He was budgeting for a deterioration of the situation. Hon. members who were cackling and crowing just a moment ago when I mentioned that the minister who at Brandon in January, 1946, had said that the worst of conditions were past, apparently agreed with that statement; as I have said, those who were cackling and crowing will do well to recall that the present Minister of Trade and Commerce (Mr. Howe) speaking in July, 1946, in this house budgeted for a continual worsening of the situation by 20 per cent within the then coming months.


George Alexander Cruickshank: We could build a house while you are talking.


Donald Methuen Fleming: If hon. members will have regard to the facts emanating from government sources, even if they do not do what we have asked for and grant a committee of the house, so that it may be possible to bring facts before the committee, to bring people before a parliamentary committee to make their statements as to their knowledge of this housing situation, nevertheless hon. members would not be wasting their time if they would increase their knowledge-and I am speaking of hon. members opposite-of estimates emanating from government sources as to the shortage of housing in this country.
I spoke about the government estimate as to the situation three years ago. In a speech to the Canadian Construction Association last January-and it is January, 1949, that I am

National Housing Act
now speaking ot-Mr. Mansur, president of Central Mortgage and Housing Corporation, which is the government in housing, had this to say:
The number of household groups, including not only families but also individuals who maintain households, exceed the number of front doors by approximately 350,000.
Then he went on to say, dealing with what he described as the existing emergency:
It would be my guess that the immediate need is of the order of 150,000 units.
The present Minister of Trade and Commerce said in this house three years earlier that the then immediate emergency shortage was 150,000 units. Here is the man who probably wrote the speech that was read on that occasion in the house by the Minister of Trade and Commerce-


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: -who said in January of this year:
It would be my guess that the immediate need is of the order of 150,000 units.
The same deficit three years later! Progress by this government in three precious years in spite of all this boasting and these promises -absolutely nil!


George Alexander Cruickshank: About 57 to 27.


An hon. Member:: Is that all you care about-seats instead of housing?


Donald Methuen Fleming: The hon. member for Fraser Valley yonder who is exercising his lungs so vociferously would do well to contribute some of his intelligence and some of his vocal effort to meeting the housing shortage and to telling the government opposite to get busy and perform some of their numerous housing promises.
The statements by the government sources did not end there, for in April of this year a statement was made publicly by General Young, the vice-president of the Central Mortgage and Housing Corporation, which is quoted in a Canadian Press dispatch of April 28 of this year. He said:
Canada's housing situation is getting worse instead of better.
He says it is getting worse instead of better; that is at the end of April of this year. Let hon. members opposite laugh that off if they choose to do so.
We do not need even to go behind the statement made by the present unfortunate Minister of Reconstruction and Supply (Mr. Winters). He himself, speaking on this subject in the house on September 21 last-and mind you, he is following in the footsteps of
fMr. Fleming.]
a minister who was given to optimism without restraint-said, as reported at page 118 of Hansard:
New housing, even at the present record rate of production, is barely keeping up with current needs and making no important inroads into the backlog.
That is just how serious the housing situation still is in Canada. How serious has it been in these post-war years at any time? It is just as serious now as at any time in these difficult post-war years.
What is the nature of this problem, Mr. Speaker? I make no apologies for saying, as I have said in this house on previous occasions, that the problem has short-term and long-term features; and in any serious attempt that is made in this chamber to write new legislation to cope with this problem we must have regard to both the short-term and long-term aspects of it.
The short-term aspect, of course, is this immediate emergency shortage that I have referred to. The long-term aspect embraces not only the immediate emergency shortage but also the necessity for widespread improvement in housing in Canada that is not immediately classed within that emergency shortage that I have referred to, and the necessity of eliminating much of the substandard housing in this country which is being occupied today and is affording some measure of shelter to some people but which nevertheless is substandard housing by any civilized Canadian standard.
This is a social problem, not simply a financial problem, and it is a social problem of the first magnitude. Bad housing breeds disease and crime. Slum clearance brings economic gains as well as great social gains. On the short-term aspect of it, we see some characteristics of this problem that must fill every Canadian with alarm. My colleague, the hon. member for St. John's West (Mr. Browne), speaking in this house several weeks ago, quoted some advertisements which appeared in a newspaper in my city; they were newspaper advertisements of housing accommodation available but not for families with children. That is a shocking situation, Mr. Speaker.


An hon. Member:: That is Toronto.


Donald Methuen Fleming: That is a shocking situation in Canada. There is not a member in this house who does not view with horror a situation of that kind. It is having a profound effect, sir. Every hon. member in this house knows that it is exercising a profound social influence at the present time on the homes of this country.

A release of the dominion bureau of statistics of August 4 contained these interesting figures:
The estimated number of families in Canada in June, 1948, was 3,088,000, an increase of 46,000 over June, 1947, and 562,701 or 22-3 per cent more than at the 1941 census. The average size of family in 1948 was 3-8 persons as compared with 3-7 in 1947 and 3-9 in 1941. In each region, a decline in size of family took place between 1941 and 1948. This is reflected in an increasing proportion of families in the small-size groups, the percentage of families from two to four persons constituting 74 4 per cent of all families in 1948 as compared with 70-8 per cent in this category in 1941.
Every member in this house knows that one of the factors that have entered into that situation is a lack of housing of the kind that Canadian families ought to enjoy.
It is a matter of the most profound shame to this country that the brunt of this problem has been thrown upon the veterans, those to whom this country owes the most.
On this aspect of home ownership, the minister has made some point of assistance to home ownership. We of the Progressive Conservative party believe that there are great social and economic benefits attached to home ownership, and that these are abundant justification for assistance on the part of the government through loans of the kind that we have under part I of the National Housing Act, and other kinds of loans which we hope will be forthcoming under this legislation, in making it easier for people to acquire their own homes; but let us not close our eyes to this inescapable fact, that the high cost of construction today, coupled with emergency conditions faced by many families, has compelled large numbers of Canadians to buy homes, many of which are beyond their means, I am sure; beyond their means, certainly, unless we have in this country an assurance of a high level of employment and a high measure of economic activity in the years ahead.
Let me deal with the subject of housing for rental. There is a need of housing of this kind of great proportions in Canada today. This question of giving assistance in the form of low-cost housing by arrangements with the provinces cannot be adequately weighed, it seems to me, unless the house is also acquainted with the government's plans with reference to rent control. Certainly this whole question of housing for rent is inextricably interwoven with the problem of rent control. I hope that before the debate on the resolution stage js rinsed the government will give a clear statement or announcement in the house as to precisely what it proposes to do with regard to rent control, because there are great numbers of people in Canada who are today living,
National Housing Act
particularly in the overcrowded urban centres, in a condition of great uncertainty as to what faces them on March 31 next, when the present legislative measure expires. If there is to be any attempt to fob off this problem onto the provinces they need adequate warning of that fact. Sir, I reiterate my plea that the government, in fairness to the house, make its intention and its policy in that respect known before this present debate has run its course.
In his statement the minister said that the government has no intention of dealing directly with the municipalities. Nevertheless, the minister is aware that the municipalities are the governments that have had the greatest problem in relation to housing conditions, because these conditions have been literally on the doorstep of municipal governments, and those who have been suffering from lack of housing have, in the first instance, almost invariably gone to their local government pleading for some assistance.
It would profit this house nothing to try at this stage to engage in a discussion on the niceties of the constitutional aspects of responsibility at the three respective levels of government. Whatever may be said about these technical features, the fact is inescapable, sir, that the problem of improving housing conditions is, and has been throughout this entire post-war period, completely beyond the powers of the municipalities to meet. It has been beyond the power of the provinces to meet. They have not had the resources to cope with them, especially when under the emergency powers such wide legislative power has been vested in the government at Ottawa.
Whatever legislation emerges from parliament's consideration of this subject at this session, I hope that we shall keep before us at all times the necessity of preserving the local feature in administration, because the local governments are in the best position to give oversight and effective administration to plans of this kind.
In considering steps that ought to be taken I do say that representations made by such bodies as the Canadian federation of mayors and municipalities are entitled to respect, to have great weight attached to them in this house. This association is composed of those representatives of the people in their municipal governments who have had this problem literaily on their doorsteps day in and day out throughout the entire post-war period. Many of the suggestions put forward by the Canadian federation of mayors and municipalities to the government have had very great weight, and I am inclined to suspect

National Housing Act
[DOT]that they had some effect in moving the government to take action of the kind that they are taking at long last as contemplated by the present legislation.
When we are talking about assistance to the municipalities I hope, sir, that we have taken some considerable step forward since those days not very long ago when unhappily this government was saying to the municipalities:	"We will not contribute to the
solution of your problem. We are not going to be parties to any subsidy. Any assistance we give to clearing up improper and substandard conditions in any part of this country will be confined to contributions under section 12 of the housing act"-very limited contributions indeed. There is no provision of assistance there toward anything but the assembling of land. Well, sir, at the same time this government, by its policies as administered through Wartime Housing Limited, was literally compelling municipalities to contribute subsidies to the cost of housing erected by that dominion agency, compelling the municipalities which had no choice in the matter, because they had to have housing, and Wartime Housing Limited was, in those days, the only place that they could get housing for rent. That government agency dictated the terms that the municipalities should contribute subsidies in the form of contributions of land and provision of services; yes, and if that was enough, by exacting, in lieu of taxes, payments that very often were little more than a half or a third of the taxes that these same properties would have borne had they not been owned by a government agency.
These municipalities, sir, have had a very unfair share of the load to carry all these years, because the influx to our great urban centres was not the result of any deliberate policy on the part of these municipal governments. The influx into the urban centres occurred in the course of expansion of war production, the result of federal policies almost exclusively; and these municipalities were not in a position financially to meet the need on the scale that then emerged. They were always faced with the possibility that, with the curtailment of war production, there might be an exodus of industrial workers from their areas. In many municipalities, even those that have enjoyed the most rapid growth in these post-war years, there has been a great deal of uncertainty as to how long they could expect it to continue. That has been an additional reason, sir, why the municipalities could not be expected, and were in no financial position, to cope with the problem.
What is government policy with regard to assistance? I am bound to say, sir, that we

have not yet a clear and unequivocal statement of government policy in this country. There was nothing lacking in clarity, there was nothing unequivocal in the statement made by the Prime Minister (Mr. St. Laurent) in Montreal on October 27, 1947, when he said this:
No government of which I am a part will ever pass legislation for subsidized housing.
He was quite content at that time that the government of which he was a member should compel municipalities to contribute subsidies if they wanted low-rental housing built; but he was not prepared at that time to be a member of any government that itself made any contribution to subsidized housing, or would pass legislation for subsidized housing.
It has not been made clear in the vague statement made by the minister on September 21, or in his brief statement in the house tonight, whether the government is still adhering to the policy declared by the Prime Minister, or whether there is in the legislation now about to be introduced some assistance to housing by way of subsidy. We are still waiting for a statement in that regard. At page 119 of Hansard for September 21 the minister talks about public-sponsored housing projects as being within the intent of the government to assist by this new measure. But we are still wondering what this policy is.
We find a good precedent for courageous action, in the neighbouring country to the south of us, in meeting the housing problem as it exists over there. In July last President Truman signed a bill which had been passed by congress, and which embraced these five leading features:
1.	A slum clearance program in which the federal government will put up $1 billion in loans and another $500 million in grants to assist localities.
2.	A low rental housing program to be handled by local authorities, designed to provide 810,000 units in the next six years and commit the federal government to annual maximum subsidies of $308 million over a 40-year period.
3.	A broad housing research program designed to improve the construction of housing, and at the same time reduce costs.
4.	Farm housing aids providing for loans and in some cases grants to improve and rehabilitate farm dwellings with the federal government commitment estimated at $325 million.
5.	A 60-day extension as from last June 30 of temporary authority for the government to insure loans by private lenders up to $2,500 for repairing and remodelling existing structures; a 60-day continuation of authority

to insure mortgages for construction of small homes up to $5,000; and a $500 million increase in the amount of mortgage insurance that the government can issue for singlefamily and multiple-dwelling units.
Thinking in terms used by the Prime Minister (Mr. St. Laurent) in the house in recent days, I suppose we could say that half a loaf is better than no bread. At the present time the best one can say about the statement by the minister on September 21, and his statement tonight, and after reading the resolution before the house, is that at best it looks no better than half a loaf, in comparison with the whole loaf promised by the government during the election campaign.
An examination of this resolution discloses that it falls into four parts, and, without risking wearying the house, I shall speak briefly about it.
The first part of the resolution has to do with the assembly of land for residential purposes and the construction of housing projects for sale and for rent under arrangements by which the capital costs and the costs of operation of such project will be shared 75 per cent by the federal government and 25 per cent by the provincial governments in projects undertaken jointly by them.
I believe the minister is quite justified in saying that no pressure should be brought to bear upon the provinces to compel them to enter into projects of this kind. Nevertheless, I affirm that every encouragement should be given to provinces to embark with the federal government upon co-operative measures of this kind. One can welcome this evidence of co-operation between the dominion and provincial governments. For years we have been waiting for the dominion government to appreciate the necessity for seeking co-operation with the provincial governments in addressing itself to this housing problem. And at long last we can welcome this present evidence of willingness on the part of the federal government to cooperate with the provincial governments.
May I say personally to the minister that, to the extent that he has been responsible for this change of front and this change of heart on the part of the government of which he is a member, I congratulate him-and I believe the whole country will congratulate him- most heartily. It is the only approach that promises the massing of the governmental resources of this country to meet that portion of the problem which is a governmental responsibility.
I have one or two further observations to make. The minister's statement of September 21 went farther than his statement of tonight.
National Housing Act
I trust that does not mean that the government has receded from the scope of the legislation which on September 21 he indicated its desire to introduce. On that date the minister indicated a willingness on the part of the government to look into the problem arising from the shortage of serviced land in the municipalities, and the problem which arose through lack of tax revenue from properties owned by the government or its agencies. In urban centres $600 would be a very modest amount to provide services for a dwelling unit. As a matter of fact in many places in Canada it must be very much more than that. This has been an almost prohibitive cost, so far as most municipalities are concerned that have to face this housing problem within their own borders.
On the subject of payment in lieu of taxes, I hope that before this debate has run its course the Prime Minister, or someone on behalf of the government, will make the statement the government has promised to make as to its policy on this subject. We know the British North America Act has the effect of exempting properties owned by the crown in the right of the dominion from either provincial or municipal taxation. But this does not prevent contributions by the federal government or its agencies, equivalent to what the taxes on those properties would be.
Here is a problem from which there is no escape. These municipalities cannot see more and more of their land falling under dominion ownership, or ownership of dominion government agencies, without feeling the effect of this cramping of their limited tax base. If the government is going to meet this problem at long last, I am sure the House of Commons will welcome it; but the house will want the assurance that the government is not going to meet it in the way they used to tell us they were meeting the problem when they were permitting Wartime Housing Limited to make very limited contributions in lieu of taxes-contributions that very often were not half or even a third of the taxes the same property would have borne had it been in private hands.
On September 21 the minister made reference to the necessity of giving more assistance through the act to co-operative house building, but in his statement tonight he made no reference to that. The resolution is silent in so far as any assistance to co-operative house building is concerned. It seems to me, however, that this new measure will be sorely lacking if there is not some provision in it to make the present provisions of the act more useful than they have been in the past-because in the past their usefulness has been completely limited. If one looks at

National Housing Act
what has been done in the way of co-operative house building in other countries, and he will think naturally of Great Britain and Sweden, he will see that in times past our government has overlooked a real opportunity.
Before I leave this subject of joint action and joint contribution on the part of the dominion and the provinces, may I recall to members of the house that the Canadian federation of mayors and municipalities, after studying the statement made by the minister on September 21, urged that for at least the first three years of this period the dominion government should go further and encourage a greater measure of participation in the program throughout the country by assuming one hundred per cent of the cost for that period. The recommendation of the federation was as follows:
The federation, therefore, urges the federal government for the first three-year period following the enactment of its low-rental housing policy, to assume the full costs involved in projects commenced during this period; and, thereafter, to require provincial financial participation to the amount of 25 per cent of the annual deficit costs of any further low-rental projects which may be commenced. And, moreover, that, during this three-year initiation period, the federal government, in those municipalities where no approved local housing authority exists, proceed itself to construct demonstration low-rental housing projects.
Having regard to the informed source of that recommendation I think the minister should be asked by the house to give it serious consideration and to make a statement as to whether the government will accept it, or, if not, why not.
The second aspect of the resolution is found in these words:
-and further to authorize the making of loans to prospective home owners in addition to basic joint loans under the act, in amounts not exceeding one-sixth of such basic loans.
That problem can be clearly understood because it concerns the difference between the cost of construction of a new home and the mortgage available today under part I of the National Housing Act. It will not be forgotten that it is federal legislation that creates that problem, that is, section 4, subsection 2, paragraph (c) of the National Housing Act. I have said before that there has been far too rigid and unsympathetic administration of the National Housing Act. In determining the loan value, regard has not been had for the high cost of construction; the percentage which has been authorized under part I of the act has not been based on the high cost of construction; it has been determined by the government agency administering that legislation. That is how that problem of the onerous difference between the cost of construction and the mortgage loan arose.

Ontario, under an enlightened Progressive Conservative government, addressed itself one and a half years ago to that very problem because of a lack of action on the part of the government at Ottawa. Why should any province have had to find a solution for that problem, seeing that the problem was well within the legislative competence of this parliament to solve? The federal government was well equipped with funds and surpluses to meet the financial side of the problem, but there just was not enough sympathetic regard on the part of the government opposite for the extent of the housing crisis in Canada to make them undertake resolutely to find a solution.
What the government of Ontario did was to pass legislation under which provincial loans up to a maximum of $1,250 were made available under second mortgages, or one-half of the difference between the mortgage loan under the act and the cost of construction. The provincial government attempted to fill in the gap created by the dominion government.
What the government is now proposing by this legislation is simply to undertake to do what the government of Ontario has been doing for the last one and a half years. One will welcome this prodigal home. At long last one can say that we welcome the adoption by this government of a good example even though they waited one and a half years to follow it.


Some hon. Members:: Time.


Mr. Speaker:: A number of hon. members are calling, "Time," but I would remind them that according to standing order 37 the minister moving a government order and the member speaking in reply immediately after such minister are not bound by the forty-minute rule.


Donald Methuen Fleming: I can assure some of the restless hon. gentlemen opposite that I shall not be long, but I do not intend to spare the feelings of the supporters of the government any more than I have been.
I welcome this indication that the government at long last intends to follow this good example. Hon. members will wish to know why it has taken the government one and a half years to decide to follow this example. Hon. members will wish to know why this government has permitted this problem to exist, not only for one and a half years but prior to that time as well. This problem was pointed out to the government in this house in sessions prior to 1947. Of course they were smug, they were satisfied just as they are today, and they followed the course of just letting the people who were faced with the housing problem worry about it.

The other two features of the resolution probably do not require extended comment. I assume provision will be made to increase the amounts now named in the act to cover assistance for home improvement and home extension, and then a consequent provision for increase under Part I of the act by reason of the second feature of the resolution.
There is one other aspect of this problem which I hope will not be lost sight of, the necessity of encouraging research. Ways must be found of lowering the cost of construction, and research must be carried on with a view to improving methods of construction. There is a limit to what the people in the different municipalities want in the way of standardization in construction, but none the less, under conditions such as we face today and in view of the high cost of construction, research into methods of standardized production and various types of housing must be encouraged.
Perhaps it is not amiss to commend the example set by those municipalities which have taken advantage of the present opportunity to re-examine their building codes with a view to determining, in the light of increased knowledge made available through research, how those codes can be changed to take advantage of new and improved methods, at the same time making it easier for people to build houses.
Again I commend to this government the example of the Ontario government, to which I have referred, which in its legislation of one and a half years ago did not stop at the feature I have already mentioned but went farther to meet other aspects of the housing need. I take advantage of the opportunity to remind hon. members that the head of that forward-looking, progressive government which brought in that legislation was the present leader of the opposition (Mr. Drew). That shows what can happen in a province which is blessed with good government under a Progressive Conservative leader.
With all due respect for other provincial governments, Mr. Speaker, you do not find them taking resolute measures of the kind I have referred to. What are these measures which I commend to the attention of the government and invite them to copy? I referred to the first feature, meeting the need for additional mortgage financing by way of second mortgage. The second feature was provision for financing approved building developments where a new method of construction is applied resulting in a substantial reduction in the cost of housing. Under that provision guarantees of up to $2 million were offered.
National Housing Act
The third feature was participation with municipalities in the financing of redevelopment including slum clearance, where this appeared to be a sound policy. That provision was designed to provide rental accommodation on a larger scale, and sums up to $15 million were allocated for that purpose.
Let me just interject here that it was under these provisions that the now well-known Regent Park development was undertaken in the city of Toronto. Limited assistance- altogether too limited-was given by the federal government under section 12 of the housing act in connection with the assembly of land, and I remind hon. members that this housing project was commended by the Prime Minister (Mr. St. Laurent) when he went to Toronto and viewed it on February 21 last. At that time he called it "a landmark in Canadian housing"; and that was made possible by legislation of the province of Ontario introduced, as I have said, by a forward-looking, progressive and intelligent government.
The fourth feature of that Ontario program was an offer to pay one-half the cost of lands and services up to a limit of $300 per house, for a tentative ten thousand houses under municipal low-rental projects.
It will probably interest hon. members to learn that since this legislation came into operation one and a half years ago 10,000 mortgages have been approved and sums have been advanced in excess of the $10 million originally appropriated, so that an additional appropriation of $5 million was made available to carry on this worthy endeavour to meet the housing problem.
Always in connection with a problem of this kind there must be something more important than the terms of any legislation that may be passed by this parliament. That is the spirit put into the administration and enforcement of such legislation by the government charged with the duty of administering it. The drive necessary to derive the utmost benefit from existing housing legislation has been woefully lacking in this country in recent years. We had to complain as early as 1945, when different departments had this problem all tangled up. At least three departments were playing with it then; and whatever steps were taken to improve the government's approach to the problem-and I say this without the slightest fear of contradiction-were taken in every case in response to suggestions and demands that came from His Majesty's loyal opposition in the last house.
If this government is to make a serious effort to carry out the promises it made to the people during the election campaign we shall expect it to put behind this new program, or this addition to the old program, such drive

National Housing Act
and vigour as unfortunately it has not yet put behind the housing legislation this parliament has enacted. I am sure nothing but the most sustained drive to make this legislation fruitful in the production of homes for Canadians will satisfy this parliament and the Canadian people.


Mr. Daniel Mclvor (Fori William):: Mr. Speaker, I shall be brief. I offer no apology for being proud of what the young minister has done since coming into office. He has shown one of the qualities of a true statesman; that is, co-operation. In the animal kingdom, you know, any animal not willing to co-operate soon passes on. We have the horse, the cow, the sheep and the goat today because they were willing to co-operate for the good of all; and that is just as true of the politician and statesman. If he is willing to co-operate with others who are striving for the betterment of mankind he will have plenty of friends.
I also congratulate the hon. member for Eglinton (Mr. Fleming) on his speech. He always makes a good speech and always has something to say. The statement of the minister this evening was short, just as the down payment that will be required from these young householders will be small. He said a great deal in a very short time. During the summer months, instead of going with his wife and family to enjoy a cool holiday, he was holding conferences with representatives of the provincial governments. On the strength of those conferences we made certain promises; I know I said that if I were not mistaken the minister would bring this matter to a head, and he has done so. Don't I remember how I had my hair pulled, figuratively, when the dominion government stepped into this provincial housing scheme to build wartime houses. I was told very pointedly that a year after the war they would be a burden on the cities in which they were built. I am as sure now as I was then, Mr. Speaker, that it was not a mistake. Perhaps I am more sure now. Those houses are worth more today than they were then. Of course, I do not give the minister credit for seeing that far ahead. When this statement was made by the minister, I know young householders who started saving because they wanted to have a home of their own. They wanted to pay for it. I think the minister is wise, therefore, in requesting that the debate on this matter be not too lengthy. We should have it right away. I know I have had a heart-burning when a young husband and wife with one, two or three children have been unable to find a house. Let us have this thing, and have it right away. As we would say to the old Ford, "Let us step on 
the gas." This measure should be enacted as quickly and as thoroughly as possible. I commend the minister for it.


Angus MacInnis: Mr. Speaker, I thought when the member for Fort William (Mr. Mclvor) began speaking the minister had done so well in the matter of housing that nothing further need be done. By the time he had finished, he had come to the conclusion it was time to do something. Ordinarily, I am not in favour of extended debates on the resolution stage of a measure. I do not think it is the proper time to have a debate because we do not know the contents of the bill that will be founded upon the resolution. I am going to depart from that rule tonight in view of the great importance and urgency of the question which we are now discussing, the question of housing.
If the proposed bill is of sufficient scope to meet the housing needs, it will be welcomed by the people of Canada as no other measure will be welcomed which this government may propose at this session. I am going to trespass on the time of the house because I do not believe the proposed bill will be of sufficient scope to meet the housing needs of the people of Canada. I am basing that opinion on the resolution itself, on the statement the minister made on September 21 outlining the government's intentions, and the addition to that statement which he made tonight. I do not believe that what is proposed will come anywhere near meeting the situation. It is not my intention to criticize as much as it is to try to show the minister and the members of the house the urgent need for housing which exists in every part of Canada. It is a need which is beyond the ability of the individual family, the ability of the municipality, or the ability of the province to deal with adequately.
I admit at once that there are some good points in the resolution and the proposals contained in the two statements. Despite the fact that constitutionally housing is a matter for the provinces, the federal government is assuming a responsibility perhaps greater than it has assumed up to now; that is all to the good. There is the hope, which I hope is well founded, that the provinces will cooperate and that the municipalities will also co-operate so that we can have a housing development participation by the three governments. Up until now the provinces, perhaps for sufficient reasons in most cases and insufficient reasons in some cases, have refused to co-operate in the matter of low-rent housing.
Another important point is, of course, that the federal government is assuming the major share of the financial burden. The fact that the government hopes to use the co-operative

movement is also a good omen. From the concluding paragraph of the minister's statement on September 21, I do not believe that the government itself has yet realized the amount of assistance, not only the amount of assistance but the amount of initiative, that will be required before the problem is solved. The concluding paragraph of that statement reads as follows:
The policy as enunciated by the Minister of Reconstruction and Supply in 1946 is the keystone of our present policy; that is, the creation of conditions favourable to a large housing program by private individuals and companies. Only to the extent that housing needs are not being met is it proposed that the dominion and the provinces will enter the field.
Now, if that is the government's policy up until now, they might as well have no policy at all so far as sixty-five per cent of the people who need houses in Canada are concerned. If there is anything that should be clear to the government by this time, it is that private enterprise will not or perhaps cannot provide houses for those who need them most. During the past four years this has been tried, there has been complete failure despite all the assistance and encouragement the government has given private enterprise.
That the minister himself has doubts of private enterprise's ability to provide the housing needs of the people, I think is made clear by the concluding words of the paragraph I have just read. They are as follows:
It seems to me that only by the co-operative efforts of all levels of government and the house building industry can we maintain our high volume of new residential construction and increase it beyond its present level.
That is not consistent with the first part of the statement which says that the government will only step in when private enterprise has failed. Perhaps this is an afterthought that the government is now going to try to co-operate with the provincial governments and with private enterprise. I am not hopeful of results even in that way.
Let me point this out. I believe there is abundant evidence to prove that private enterprise can build homes for only those who can pay high prices. In the city of Vancouver last summer there were between three hundred and four hundred houses ready for occupancy at one time seeking buyers. Those were homes in the $10,000 to $40,000 class. But the people who need homes in Vancouver cannot purchase houses at those prices, and they could not purchase them even if the down payment were reduced. As a matter of fact, they could not purchase those homes even if there were no down payment at all, because they could not make the monthly payments that would be required
National Housing Act
on houses of that price. That is the problem that is facing the people of Canada and that is the problem that is facing this government.
I should like to quote from various statements from individuals and organizations evidence showing the urgent need for housing in this country. Before I do so, however, let me draw the attention of the house to some figures that were given in an article by Professor Leonard Marsh in the Canadian Journal of Economic and Political Science of February, 1949. The title of the article is "The Economics of Low Rent Housing." The writer says that no family should try to build a house or to buy a house costing more than twice the annual family income. He then pointed out that on that basis 20-7 per cent of those needing homes cannot afford to buy any kind of house; that the next 12-7 per cent cannot afford to buy a house costing more than $3,000 to $4,000; that the next 20 per cent cannot afford to buy a house costing more than from $4,000 to $5,000; and that the next 12-1 per cent cannot afford to buy a house costing more than from $5,000 to $6,000. Here you have 65-5 per cent of those requiring houses in Canada who cannot afford to buy houses priced higher than $6,000.
In my part of the country few houses are being built today which cost less than $6,000. I doubt if any houses at all are being built for less than that. There may be perhaps some three-roomed houses being built for less than that, but I do not think that a house of more than three rooms can be built in western Canada-that is, if it is a modern house-for less than $6,000.
I now want to point out the situation in Vancouver. In a submission made to this government by the Vancouver housing association under date of February 18, 1949, I find the following:
Owing to the tremendous influx of population, the housing situation in British Columbia, already serious at the close of the war, has steadily deteriorated during the last three years, in spite of the relatively high rate of building activity.
In the city of Vancouver alone, the number of houses built has fallen over 2,000 short of the estimated increase in the number of families in each of the last two years.
2. It has become impossible, as a result, to enforce even a minimum standard of health regulations, and slum conditions are steadily spreading outward from the core of our cities.
It is unnecessary to stress the cost, not only in terms of family misery, but in dollars and cents for the community, brought about by these conditions, with their inevitable consequences of ill health, broken homes, juvenile delinquency and social unrest, involving in turn high hospital, penitentiary, police, fire, social assistance and other welfare expenditures.
After the election, along with some other members of parliament representing Vancouver constituencies, and directed by the

National Housing Act
manager or secretary of the Vancouver housing association, we visited some of the worst tenements in the city. We did not visit a great many; we did not have the time to do so. But I am sure that those who were with me will agree that none of the tenements we visited were fit for human habitation. Yet there were families, including young children and old people in large numbers, in those slum tenements.
In a statement issued as late as September, 1949-that is, just last month-the Vancouver housing association mentioned those conditions:
A survey of 1,000 lodging houses by the city health department early this year revealed the following facts: 14-7 per cent of all occupied accommodation were basement or attic rooms; 133 rooms had no window or skylight. Half the lodging houses contained children. There was an average of one bath or shower to every eight persons. In 10 per cent of the houses, there was only one toilet for eleven or more persons. In 20 per cent of the cases the plumbing was graded as poor, in 371 per cent fair. Thirty-two and one-half per cent of the houses were in poor structural maintenance.
Then the statement goes on to say:
One of the most significant points brought out by these tours-
It referred not only to the tours of members of parliament but to those by aldermen of the city as well.
-is the inevitable tendency for the low income families with children to gravitate to the worst accommodation, and it is, of course, just these families who suffer most harm from bad housing and environment.
I am not over-drawing the picture in Vancouver. Vancouver is of course-depending on the parts of it you visit-a city of beautiful homes. Perhaps in no other city of Canada can you find so many beautiful and fine-looking homes; but perhaps in no other city of Canada can you find slums that will compare with ours. The people in my city are therefore concerned about housing. So far as I have been able to learn, they are not satisfied with the proposals made by the government up to now. While those proposals are an improvement over what has been done to date, the people do not believe that they are sufficient to meet the need.
The next publication I want to quote from is entitled "Layout for Living". It is the official organ of the Community Planning Association of Canada with head offices in Ottawa. This publication is speaking for the whole of Canada in the matter of housing. On page 3 I find the following:
In every province there are thousands more families wanting accommodation for rent than there are dwellings to be rented. True, the federal government has built tens of thousands of rental houses since the war-but they are all for veterans. The only houses being added now to the rental supply (and open to all families to try for)

are renting at $50, $60, $70 and up per month. The federal government has offered guarantees to private builders if they will do more rental housing, but even with this it seems almost impossible to get a new apartment to pay for itself if the rent is less than about $70. Yet two-thirds of the urban families in rented shelter in 1948 were paying no more than $30.
These are dominion bureau of statistics' figures.
For this important group of Canadian families- about one in every four of all our families-very little housing has been built since the depression.
That is the situation I should like the minister and hon. members to visualize. I am satisfied that if hon. gentlemen critically approach the problem they will come to the conclusion that the legislation before us is not adequate to deal with it as it should be dealt with.
The next quotation I should like to read is a statement by the chairman of the federation of mayors and municipalities, which appears in the Vancouver News-Herald, of August 31, 1949. Mayor George C. MacLean of St. Boniface, Manitoba, said:
Canadians would be greatly disappointed if the only result of the recently concluded trans-Canada housing tour is to be some sort of federal-provincial arrangement to reduce the required down payment for home purchases.
There he was referring to the housing tour made by the Minister of Reconstruction and Supply (Mr. Winters). I continue:
This is no solution to the housing problem at all. It simply means a lower initial payment- but a higher annual carrying charge. It will encourage some people to begin buying their homes, but it offers no relief to that large aggregation of average workers who, even if no initial equity were required, would still be unable to finance the cost of a minimum standard low-cost home.
He continued:
Broadly speaking the maximum which the average worker's family can afford to put out for shelter does not exceed $25 a month and as the facts show, many can't afford even this.
Compare that wilh the statement in the Canadian community planning association booklet where the rents are from $50, $60 to $70 and up per month and you will appreciate at once why the working people of Canada can find no comfort in the proposals made by the government.
The next publication I wish to quote from is the report of the Canadian welfare council, 1948. On page 5 I find the following:
A word first about living costs where the index now stands at 153 [DOT] 3.
That was in 1948. It is much higher now. I continue:
Agencies in our family division during the past winter attempted to evaluate what was happening to families under their care. The report of this study shows a sharp increase in the number seeking assistance to pay for food, clothing and essential medical and dental care. More mothers are going

to work to help make ends meet with a consequent neglect of children. Increased debts, problems in caring for aged members of the family, older children leaving school for blind-alley jobs, and friction within families, were all reported by most agencies.
And second a comment on housing which is still to be regarded as Canada's number one social problem. Here the point to emphasize is that, although a record number of houses was built in 1947, our national position today is hardly less serious than it was a year ago; nor, if the number of families continues to increase at present rates, are we likely to be any better off next year than we are now.
That situation has not improved in any way whatsoever since this report was published.
At the first session this year I put some questions on the order paper, and they were answered in the form of a return which is to be found in Votes and Proceedings No. 38, for the first session, 1949. The information was given by Central Mortgage and Housing Corporation. My first question was:
How many houses (family units) were built in Canada in the year 1948?
The answer was:
Housing units built in Canada in 1948 numbered 81,243 including 5,146 housing units added by conversion.
My second question was:
How many houses (family units) were constructed with financial assistance under the provisions of the National Housing Act, during the same year?
The answer was:
The number of housing units completed in 1948 with financial assistance under the provisions of the National Housing Act numbered 11,939.
Hon. members will see the small number of people who took advantage of the National Housing Act. The great majority of those who buy or build houses do not need the assistance of the National Housing Act.
My third question was:
What was the total amount of financial assistance?
The answer was:
The total amount of financial assistance through loans approved under the National Housing Act in 1948 amounted to $101,642,194.
Or an average of $8,512 per family unit.
My fourth question was:
How many houses (family units) were built for rental?
The answer was:
It is estimated that 25 per cent of all housing units completed in 1948 were built for rental (Housing Bulletin No. 12, dominion bureau of statistics, page 3). Those built in 1948 with financial assistance under the National Housing Act numbered 1,599.
The need today, Mr. Speaker, is for rental houses. In 1938-39, 45 per cent of the houses built were for rent. In 1948 only about 30 per cent were built for rent, and the greater proportion of them were veterans' houses; therefore not more than 13 per cent of the houses built were rental houses. My time has almost expired, but, as I said before, I want to give
National Housing Act
the minister and the house the feeling as I find it in my city and province and also as it appears to me throughout the country. Despite any criticism I have made, I do not wish to conclude my remarks without expressing my appreciation of the intention of the government as indicated by the minister to assume 75 per cent of the cost of low-rental housing, in co-operation with the provinces.
Again the question is: Will the provinces co-operate? I believe the premier of British Columbia stated in the legislature early this year that he would be willing to co-operate with the federal government. I believe also that the city of Vancouver acquired the legislation necessary to set up a housing authority. It would appear therefore that at least in British Columbia there can be co-operation on the three levels of government.
If our people are to be adequately housed, in my opinion and in the opinion of all those authorities whom I have quoted tonight, there is no alternative to government assisted housing, except a more equitable distribution of the national income, so that more people will receive incomes which would permit them to build their own homes out of savings over a period of time or out of current earnings.
I mention that possible alternative-but there is no hope at the present time that we shall see a more equitable distribution of income. As a matter of fact there is a growing resistance to wage increases. Let me in concluding tell the house that we must make up our minds that if we do not pay for decent housing for those who cannot provide homes for themselves we shall pay for the poor homes in which they are compelled to live. Perhaps I cannot put that point better than it was put by the citizens committee on housing in Halifax, Nova Scotia, not so long ago. This is what they said:
Housing of the poor we are going to provide, let us make no mistake about that. It is only a question whether we shall house them in hospitals, mental institutions, reformatories and jails; or whether we shall house them in cleanly, light and sanitary surroundings where both body and soul will have a chance. Which shall it be?
I have taken up the time of the house to place these matters before the Minister of Reconstruction and Supply (Mr. Winters) in the hope that, if he has not drafted the bill to be founded on this resolution, he will give consideration to what I have said. If he has drafted the bill I hope he will scrap the draft and prepare a new bill which will more adequately meet the need of homes for the people of Canada.


Mr. C. E. Johnston (Bow River):: Mr. Speaker, may I say at the beginning to the new Minister of Reconstruction and Supply

National Housing Act
(Mi-. Winters) that I have greater hopes of seeing beneficial progress through the National Housing Act under his regime than I had under the administration of the minister who preceded him. I do not say this because of any thought that the minister who held the portfolio before had not sufficient knowledge of house construction. I have thought however that perhaps he was a little more set in his ways than the present minister would be.
I believe the measure before the house this evening will make some improvement in the operation of the National Housing Act. I am wondering, however, whether the actions of the federal government in being so ready to participate in joint operations with the provinces arise from a motive of wishing to improve housing conditions-as I hope may be the result in the long run-or whether it is to get out from under some of the difficulties as they have developed under the operation of the National Housing Act.


Mr. Gibson (Comox-Alberni):: Perhaps they want to get in on some of that oil money of yours.


Charles Edward Johnston: Maybe the time will come when they will not need any other assistance -and I hope that time may come soon. As the hon. member for Eglinton (Mr. Fleming) has said with respect to Ontario, I may say concerning Alberta that the province is under excellent management-and that cannot be gainsaid by anyone.


Mr. Hansell:: Oil or no oil.


Stanley Howard Knowles: Gas or no gas.


Charles Edward Johnston: It is hard to say what will be in the new bill. None of us, with the exception of the government, knows what is contemplated in the legislation. Therefore we must be content with what the minister said today and on September 21, and must accept those statements as some indication of the legislation he proposes to bring down.
One thing of which we may all be sure is that there is a national emergency in housing. This is not a new problem, because the emergency has existed for a number of years. I was interested in the statement the minister made on September 21 when, at page 118, he used these words:
This year's housing production will be higher than ever before. It is likely to reach a record high of approximately 100,000 units in 1949.
I looked over that sentence several times, because he had been speaking of the operation of government-planned housing, and of the amendment to the National Housing Act. I wondered whether he contemplated that 100,000 units under the National Housing Act
[Mr. Johnston.)
-because I do not think he could have meant that. 1 think he meant general housing production in the country would be 100,000 units.


Robert Henry Winters: That is correct.


Charles Edward Johnston: I see the minister nods his head, so that would seem to be correct. I hope his estimate is accurate, because he is much more optimistic than I am-indeed more optimistic than quite a number of other people.
I was interested the other day in an article appearing in the Ottawa Citizen of October 13, 1949, which makes reference to the number of houses built in Canada and states that there are 46,326 more families in their own homes. That sounds good-but it is a long way short of the minister's contemplated 100,000. The article I am about to read does not confine itself to operations under the National Housing Act, but refers to the total number of homes built, and goes on to say:
The first seven months in 1949 saw another 46,326 families in their own homes, a 10,000-home improvement over the housing progress of a year before.
This was reported by the bureau of statistics yesterday in its monthly housing bulletin. It showed however-
And take note of this-
-that fewer new homes were started this year than last. Starts during the seven months of 1949 totalled 49,285 compared with 49,452 in the first seven months of 1948.
The minister is going to have to do a lot of building if he reaches that 100,000, or if he reaches only 50 per cent of it. I am going to say to him that if he achieves 75 per cent of his estimate he will be doing a good job- provided, of course, he sees that decent houses are built. I think the need for housing in this country is greater today than it has been for some years past, and there are several reasons for this. First is the rapid increase in population with the resultant increase in all family formations. This, combined with immigration, has created a tremendous housing problem.
Then there is the obsolescence of existing units. Many houses are deteriorating at a very fast rate. I was interested in hearing the hon. member for Fort William (Mr. Mclvor) tell us about the wonderful houses which had been built at the beginning of the war and how well they had stood up. I know the hon. member is not a betting man and neither am I, but if he were I would bet him ten dollars that I could show him houses within two miles of this building which have practically collapsed-if they have not, it is a miracle. I refer to the houses over in Hull.


Alphonse Fournier: Oh, no.


Charles Edward Johnston: Oh, yes. I saw those houses six months after they were built and you could not close a door in them.


Alphonse Fournier: The hon. member should see them now.


Charles Edward Johnston: Do not make any mistake about it, I was in them.


Alphonse Fournier: I know many people who are living in them and they are satisfied.


Charles Edward Johnston: I suppose that as they cannot get anything else they must be satisfied.


Mr. Smith (Calgary West):: What are the odds on this ten dollar bet?


Charles Edward Johnston: We should benefit from
experience. It is not often that I have spoken critically of the government's housing program and I am hopeful that the minister will accept criticism a bit more readily than his predecessor, providing the criticism is not destructive. We should turn our attention to some of the conditions that have been allowed to exist under the National Housing Act to see if some improvement cannot be made. My mind goes back to a housing project to which I have referred on other occasions, the one carried out by the Bow River Construction Company. I should like to indicate some ways in which past failures could be prevented.
First, there was never a trusteeship set up for the down payments that were made. I raised this question about two years ago when I pointed out that it was wrong to permit people to make deposits on houses to a real estate agent or builder who could spend the money any way he liked. In some cases the contracts were not completed and the prospective home owners lost their down payments. I hope the minister is taking this under consideration and has made provision for a trusteeship to cover these down payments. The prospective home owners should have some protection for the money they pay in.
I am not laying all the mistakes that have been made on the doorstep of the government, although they are their responsibility. One other great mistake in the past was the lack of proper supervision. I know that the minister cannot go around and personally inspect all these buildings, but when I spoke on this question four or five years ago I pointed out that this was one of the great mistakes that were being made. I can recall at the moment one instance where an inspector accepted a house for the government in which inferior lumber filled with knotholes had been used for the floors. The floors were completely covered with paper, this inspector admitted that he had not seen them, yet he passed the house as being No. 1.
National Housing Act
These are mistakes which the government can avoid without any additional expense. When the government lets a contract it should see to it that the builder is properly qualified both from the financial point of view and in experience. That condition was not insisted upon in the past. I have here a booklet entitled, "The Integrated Housing Plan", which has been put out by the Central Housing and Mortgage Corporation. I should like to know if the government recognizes this booklet as being authentic? I should like the minister to indicate whether people can place reliance in this booklet which I got just the other day.


An hon. Member:: Who printed it?


Charles Edward Johnston: It is sent out by Central Mortgage and Housing Corporation, Ottawa, Canada, and is marked, "RCM-3". Apparently the minister has not yet given his approval to this and I do not know whether he intends to. Is this authentic, Mr. Minister?


An hon. Member:: No.


Charles Edward Johnston: I should like to know before 1 quote from it.


An hon. Member:: He does not know.


Charles Edward Johnston: Under "credit" it states:
The builder's credit rating must be sound,-
That would be sound.
-and he must satisfy the lending institution and Central Mortgage and Housing Corporation that he is able, both financially and by virtue of experience, to undertake large-scale building operations.
Then I should like to refer to the builder's qualifications. Apparently this pamphlet is being sent out to prospective buyers all across the country. It is a government publication, but in the past this government has let contracts to persons who did not know the first thing about building. I do not think I can give a better example than that of the Bow River Construction Company. Speaking from memory, this company was given a credit rating by Central Mortgage of over $125,000, and I think I am conservative in making that estimate. The president of the company told me that they had not one cent to start with, and they certainly had no building experience whatever.
It is things like these that have caused difficulty. It is things like these that the government can correct without spending one cent. In most cases where building failures have occurred it will be found that they were due to negligence through lack of proper inspection. When people receive government pamphlets like this they put a great deal of confidence in them, and they should be able to do so. When they have the government's word that they have employed a competent

National Housing Act
contractor to build the houses the people naturally expect that their investment will be safeguarded, and they should have every reason to expect that. When I am speaking of failures, hon. members may think the project undertaken in Calgary by the Bow River Construction Company was the only one, but there have been others. There have been failures in Halifax, in Vancouver, in Winnipeg and in Toronto. However, I believe the Bow River construction failure was perhaps outstanding, and I spoke on it at some length in this house. I should have thought the government would have benefited from that criticism, but I was amazed when I read the Ottawa Journal of Thursday, September 29, and saw this heading: "Have down payment on homes held in trust, judge suggests." I was interested in the heading and I read on:
Toronto, September 29 (CP). Judge Ian Macdon-nell, presiding at a judicial inquiry into the failure of the big suburban Pelmo Park housing project, suggested yesterday legislation providing that down payments by home purchasers be kept in trust, may be a means of preventing similar losses.
I heartily endorse that recommendation; it is something I suggested a long time ago. Then the dispatch goes on:
Judge Macdonnell said that although there are many other cases of builders failing to complete homes after receiving money for them, "it is not illegal ... it may have to be cured by some trustee provisions."
An auditor's report yesterday disclosed that the Kershaw Construction Company, whose Pelmo Park housing project failed last May, had a deficit of $135,051 during the previous eight months.
Then notice this:
Fifty-four would-be home owners lost a total of $93,553 on the project.
Just because this government failed to accept criticism in the spirit in which it was offered over a year ago, more than $93,000 was lost by those people who invested all their savings in order to get homes.


Mr. Warren:: That was a provincial company.


Charles Edward Johnston: I don't care what kind of company it was; that practice is carried on by this government under the National Housing Act. The next heading is, "Depositors lose all," and the article states:
The auditor's report said the total assets of the company-$86,700-did not represent anything any of the 54 depositors could realize.
So the assets were in such form that the down payments of the purchasers could not be recovered in any way. However, when I remember the estimates made by Central Mortgage and Housing with respect to the Bow River Construction Company, and remember that the president told me they did not have a red cent to start with, I am

just a little doubtful of that estimate of $86,700.


John Lambert Gibson: You sold
them too well on the social credit theory.


Charles Edward Johnston: I do not know what that has to do with this; but my hon. friend from Red Deer (Mr. Shaw) says this is Liberalism in practice. Now, Mr. Speaker, I am hopeful that the government will benefit by these past experiences. Speaking of these failures, I want to make one other point. This may not come under the Minister of Reconstruction and Supply (Mr. Winters), but at least it concerns him. I believe provision should be made in our legislation so that the Central Mortgage and Housing Corporation could be prosecuted in the ordinary provincial courts. I took up this question some time ago with the Minister of Justice (Mr. Garson), who agreed that there should be some court where both the Central Mortgage and Housing Corporation and-I was going to say the Manufacturers Life-these other institutions could be jointly prosecuted. As it stands today, when you have Central Mortgage and Housing in partnership with a lending institution, no matter how disreputable that lending institution may be, there is no place where those two bodies may be prosecuted. We had a good example of that in Calgary. When we tried to bring them before the court the judge said, "Oh, you cannot prosecute Central Mortgage and Housing in the provincial courts. They are a little god unto themselves, and you must go down to the exchequer court." Then the minister stood up here and said they were a little god unto themselves, and we could not prosecute them without their consent. So there we were stuck. How does the ordinary man get justice? I remember someone saying here the other day that you could find justice if you had the money to pay for it. That may be somewhat exaggerated, but certainly there are cases in which the ordinary man cannot get justice, and this is one of them. I have a great deal of hope for the new minister, though I will tell you in a year or so how it works out. I do trust that he will make some provision under which the courts of this land will be made available to those who are investing their money in these homes.
I hope I am wrong, but I am a little afraid that, with all the emphasis being laid on co-operation with the provinces, the dominion may be endeavouring to get out from under these embarrassing questions and pass them over to the provinces. I believe the suggestions now advanced may ultimately result in a good system of co-operation, if the proper steps are carefully taken.

Let me speak for a moment about low rental housing. One of the things proposed by the minister in his speech of September 21 was the lowering of the down payment by one-sixth. That is going to assist some people to come in under these housing projects. That one-sixth, of course, has to do with the difference between the cost of the house and the amount of the loan. It will be of great assistance in reducing the down payment, and to that extent will be a benefit; but the point I particularly want to mention right now is the purchase price. In the little pamphlet I referred to a moment ago it is mentioned that the price must be fair and reasonable and in his speech the minister emphasized that point. This brings me to the matter referred to the other day by the Minister of Labour (Mr. Mitchell), when he emphasized the sanctity of contracts. I like that expression; but no government in this country has had less regard for the sanctity of contracts than this government under the National Housing Act as administered by the former minister. I want to repeat that; no government has had less regard for the sanctity of contracts than this federal government under the National Housing Act, as administered by the former minister.


John Lambert Gibson: Illustrate.


Charles Edward Johnston: Illustrate? Let me refer to the contracts that were let in Calgary, which ranged anywhere from $6,600 to $8,125. Now, the end price was set; the contract was drawn up; the mortgage was drawn up; and everything was fixed including the escalator clause and the maximum of it was set, too. Then, when the people who bought those houses and signed those mortgages and contracts asked the government to fulfil that agreement, the government said: We have nothing to do with it. All they were asking was that the government abide by the contract. The government itself had set that price. These men had the contracts literally thrown in their face, and they lost all the money they put into them. When we talk about the sanctity of contracts, let us make that apply to this government as well as to any other concern in the country.
I am leaving out about seventy-five per cent of my notes, Mr. Speaker, because my time is running short. I shall have to take those matters up in committee.


Donald Methuen Fleming: Give us some more of those illustrations.
National Housing Act


Charles Edward Johnston: Yes, I want to refer to that illustration. I should like to go back and read some more from Judge Ian Macdonnell's statement of Thursday, September 29.
Angus McClaskey, the Ontario regional supervisor of Central Mortgage and Housing Corporation, said his organization put up twenty-five per cent of the first mortgages on the Pelmo homes.
He said the corporation has been faced with this type of problem for two years and "has come to the conclusion that the solution does not lie in the relationship between the purchaser and the mortgage company."
"We feel that as a corporation we cannot undertake to police vendor-purchaser transactions. We think this matter lies within the field of provincial legislation."
At this point, may I ask, is it any wonder I am suspicious? This is one of the supervisors of Central Mortgage and Housing, one of the officials concerned with the provincial-federal relationship, who is trying to get out from under some of the difficulties.
The article continues:
"Possibly there should be amendments to the Mechanics' Lien Act or in a licensing system for builders."
This is passing the buck to the provinces.
May I stop at this point to indicate one of the other recommendations I made a few years ago-when I mentioned it to the minister he said he was going to give consideration to it but whether he has, I do not know-and it was this: When we have contractors handling millions of dollars, then I believe those contractors should be bonded. They should not be licensed, they should be bonded. If that action were taken, it would not cost the government any more, even if the government had to pay the bonding fee. It would relieve the government of a great deal of responsibility because the bonding company would see to it that the conditions of the contract were carried out.
Mr. McClaskey said it would be impractical for the crown corporation to hold money in trust for would-be home owners.
Now, that is quite contradictory to what Judge Macdonnell recommends, and contradictory to what I believe is in the minister's mind. Mr. McClaskey does not think it feasible to provide a trusteeship for these down payments, and in that I strongly disagree with him.
He said the corporation tried to do this in conjunction with its integrated housing program for veterans. Under this plan, money from purchasers is held in trust. Builders are required to give the corporation a waiver on all liens, . . .
and so on.
I come to this question, Mr. Speaker, of reducing costs. It does seem to me that these houses are costing more money than is necessary when they are built on a large scale.

National Housing Act
There is a difference between a private contractor who is building a house, or perhaps two houses, and a man who is building twenty, forty or fifty houses. There is a great deal of difference in the cost of operation, for instance, in digging the basements. There is a great difference between having a machine come to dig fifty basements at once and having a machine come to dig one basement at a time. In large-scale operations a profit of $500 per unit is a tremendous amount. A great deal of money can be made at that rate. Five hundred dollars' profit for a contractor on a single unit is not too large. I would not think it was out of line at all, but of course it would depend on the type of house.
By means of research in the construction field, we could find new methods of construction. I could point some out to you, but my time is slipping by. Proper building inspection could be provided, and it would materially lower the costs to the government and the builder. Then, we could have proper control of the financing. I refer particularly to the mismanagement of finance by the lending institutions. I shall not dwell on it at this point, except to say that some of these lending institutions-I was going to say appropriate money, but that would not be the right term-are confiscating money which belongs to the purchaser for which the lending institution has never performed one bit of work. I do not think that should be permitted. I shall deal with that at length on another occasion.
I believe there is another point at which we could very well lower the cost of housing, and that is by the government cutting out some of these burdensome sales taxes which apply to items used in home construction. I believe, Mr. Speaker, the government could well afford to do that and the country would appreciate it. I believe the builders, too, would benefit if this government were to appoint a royal commission to investigate housing. I know the minister's answer to that, because I have it before me in the form of a press statement. He does not intend to appoint a royal commission. I have a clipping of the editorial before me, but I shall not bother to read it. It refers to the Canadian Construction Association and Ottawa building contractors who do not appreciate having a royal commission investigate this matter. Despite those two objections, I do not know whether the minister is very determined in his viewpoint. I believe there is a good deal of advantage in having a royal commission investigate the housing problem. Because it is so urgent that we have homes for our people to live in, because it is a financial problem and the government and the taxpayers indirectly have such a large financial 
investment in this project, I believe it would be well worth having a royal commission look into these housing projects.
I intended to speak at some length, Mr. Speaker, on low-rental projects. A great majority of the people in this country cannot afford to pay the rents that are being required. You know it is a strange thing that the people who live in the poorest houses in Canada receive an income so low that the low rents of today are simply far beyond their reach. This housing problem with which we are faced today is not going to be solved by the type of house that is being built today. I have not the time to go into that matter, however.
Perhaps I could just take one moment to read a section from this circular which I received from the Canadian federation of mayors and municipalities. It contains the views of that organization on low-rental housing.
The federation, over the years, and more urgently during recent years, has urged the federal government to initiate a national program of subsidized low-rental housing. It again points out, that, as of the moment, the federal authorities, themselves, estimate that there are 300,000 more family units in Canada than there are houses to accommodate them. The great bulk of these families are low and average wage income families.
Moreover, according to a recent survey of the dominion bureau of statistics, nearly two-thirds of the urban tenants of Canada were paying less than $30 a month; of these, about one-half were paying less than $20 a month; and 5 per cent were paying less than $10.
Measured in terms of the demonstrable unmet need for housing accommodation; and the rentpaying capacity of those who comprise a major part of the population; there can be no question that the greatest housing need in Canada today is that for low-wage income families. Unable to afford the economic rents of new housing at the prevailing high construction costs, their housing needs cannot be met save by some form of subsidized housing.
May I interject and say that I agree with them wholeheartedly. Then they go on;
Meanwhile, the housing problem worsens for low-wage income families. Less and less housing accommodation is available to them because the proportion of new family formations is greater among them than among any other economic groups. With no new housing at all being constructed for low-wage families, congestion becomes greater and greater and conditions, already deplorable, become completely intolerable. The situation has reached the point where any further delay in at least a start on low-rental housing projects can only be regarded as a national calamity.
I think that is sufficient to show what an organization such as the national executive committee and advisory board of the Canadian federation of mayors and municipalities has to say about this condition and it requires no further explanation from me to show how great a need there is for this emergency housing program. I am aware that the minister appreciates all these things. I

am aware that he knows of these conditions because I think they prevail in abundance down in his own neighbourhood. And there are many of those conditions in the rest of Canada. But sympathy is not enough. It is going to take a great deal of daring on the minister's part. He is probably going to have to step away from those old conservative ideas which the former minister of reconstruction had; and he is going to have to be a little bit more liberal in his views and actions. I have great hopes that the present minister will do something to meet the situation. Time alone will tell.


Mr. W. Ross Thatcher (Moose Jaw):: I had
also intended, Mr. Speaker, to speak at some length tonight. In view of what has already been said, however, I shall restrict my remarks to about five minutes, and I shall keep to the resolution and to the statements which the minister made tonight. I feel that the minister took a step-true, it was a faltering and hesitant step; it was a cautious, and even ambiguous step; but it may have been a step.


Donald Methuen Fleming: Forward or backward?


Wilbert Ross Thatcher: I hope it was forward. One had to examine his statement carefully, but I think the step he took was a forward one. It seems to me that in this debate on the resolution, and on the bill when it comes up for discussion, we must keep one fact in mind, namely, that in 1945, according to the government's own advisory committee, there was a shortage of 750,000 homes; and that, according to the statement the minister made some weeks ago, approximately the same shortage still exists. In other words, little progress has been made in meeting the backlog.
I assume that the statement which the minister made today, and the resolution that he has placed before us, is the government's answer to the housing problem. I think it is fair for hon. members tonight to ask themselves and to ask the minister this question: Does this resolution, or does the bill which is to be introduced, offer any tangible solution to the housing problem which is facing us? I hope it does, but from the minister's language tonight I am not quite sure. For instance, the minister said:
The legislation which we intend to introduce is of an enabling character . . . We have no knowledge of the extent to which provincial governments will participate in arrangements contemplated by the legislation . . .
What does that mean? Does it not mean that before any action on housing can be taken the various provincial legislatures will have to be called together? That may be four, five or six months from now. Then if any action is to be taken, each of those
National Housing Act
legislatures must approve and give leadership. In other words, the minister is leaving the prime responsibility up to the various provincial governments; and it looks to me- although I may be wrong-as though action might not be taken until late next spring, if ever, because some of the provincial governments may not be financially able, or may not desire, to take such action on housing.
Exactly what is the government proposing in this resolution? I think there are two main proposals. First of all, the minister is proposing in effect that the down payment should be cut in half. I want to say at once that I think many citizens will welcome this step because formerly they found it difficult to finance the down payment. But the lower down payment is going to mean higher carrying or interest charges, and in the final analysis it is also going to mean a higher cost to the purchaser. The lower down payment simply means a higher mortgage, and many Canadians today cannot even handle the mortgage charges which national housing has at the present time.
Then there is this additional factor, as I understand it, in the province of Ontario. I understand that Premier Frost and his government have for some time carried second mortgages.


Donald Methuen Fleming: For two and a half years.


Wilbert Ross Thatcher: If I have read newspaper reports correctly, Premier Frost is now suggesting that, when this legislation goes through, the Ontario government will discontinue the practice of carrying second mortgages. What does this mean? It means that the average citizen in Ontario, which is the most populous province of Canada, and the province where the housing situation is most acute, is not going to be any better off with regard to the down payment than he was before. What the federal government is taking over, the Ontario government is leaving off. I therefore suggest that one of the main proposals of this resolution may not be effective. The second major proposition which the minister suggests is this. He says:
The arrangements provide that if any proposed project is deemed to be reasonable, the dominion will be prepared to proceed with the provinces in land assembly, the building of houses for sale, and the erection of rental housing either on an economic or a subsidized basis.
I was pleased tonight to hear the minister, and through him the government, at last use the word "subsidized". I hope it means what it purports to mean. I hope that the government really is anxious to do something about subsidized housing; although, as I said when I started, the phrasing is so ambiguous that it is hard to tell. I do not know whether

National Housing Act
the legislation which the minister is contemplating is going to mean a great many more houses for Canada. Certainly the minister was rather dubious on September 21 when he introduced the legislation. As he is reported at page 121 of Hansard, he said:
No one can estimate the amount of additional housing which these proposals will create.
Then he went on to say:
The measures proposed today should be helpful.
I would think they should be or why would he be bringing them before the house? He goes on to say:
They may have the effect of increasing the total number of completions.
They may have, he says. Was there ever such a lack of enthusiasm on the part of a minister when bringing in legislation to meet an acute and desperate problem? If there was, I have not seen it. The minister seems to be anything but enthusiastic. There was one other feature of the statement he made last September 21 which worried me a little. This is what he said about government policy:
The policy as enunciated by the Minister of Reconstruction and Supply in 1946 is the keystone of our present policy: that Is, the creation of conditions favourable to a large housing program by private individuals and companies.
In other words, although the minister admits that private enterprise from 1945 to 1949 has not been able to solve our housing problem, he says that government policy is still the same. I am a little concerned, then. Surely by this time we can see that, if this housing problem is to be met, private enterprise must at least be supplemented by government spending on a substantial scale. The C.C.F. group would suggest a three-point program for improving the acute housing shortage. First we suggest a large-scale program of subsidized low-rental housing. I might say, as was pointed out earlier this evening by the hon. member for Eglinton (Mr. Fleming), that we are not the only ones who have made such a proposal. The mayors association suggested it in 1947. The Canadian Legion suggested a similar program in 1948. The Canadian welfare council have proposed it. Many organizations have suggested low-rental subsidized housing on a substantial scale. I hope that the minister is prepared to embark on this type of housing but I am not sure-


John Lambert Gibson: Whose money would we use?


Wilbert Ross Thatcher: Partly federal government money.


John Lambert Gibson: I thought it was C.C.F. money.


Stanley Howard Knowles: Many Liberal candidates suggested it.


Wilbert Ross Thatcher: In the second place, I -would suggest that private home building should be financed at interest rates of 2| per cent or less. Even in the United States, private home building is financed in many cases at 2 per cent or less. In New Zealand about 30,000 homes have been built and financed at interest rates of 1 per cent or 1J per cent. If New Zealand can do this I see no reason why Canada cannot do likewise. I believe the cost to the dominion government of borrowing money is between 2J per cent and 3 per cent at the present time. Certainly the money should be lent at least at cost, and not at 4J per cent as Central Mortgage and Housing are charging at the present time.
In the third place, Mr. Speaker, the C.C.F. group suggests that some genuine effort should be made to bring down construction costs. I think it is feasible that, by large-scale housing projects, construction costs could be reduced. The Canadian Congress of Labour suggested it the other day.


George Alexander Cruickshank: Would you bring down the price of hardware?


Wilbert Ross Thatcher: Yes, bring that down also. I was interested to note a reply which the Minister of Reconstruction and Supply (Mr. Winters) gave, when he was asked to investigate the high cost of housing. According to the Canadian Press-and I quote the Montreal Star-the minister said this. The heading is: New Housing Inquiry Plea Rejected Winters Says Problem Closely Watched
How gratified those Canadians who have been living in two or three rooms since 1945 will be to note that the problem is being watched. We think that more effective action should be taken. Let me say that we welcome the steps which the minister has suggested tonight. They are the first tangible steps we have seen any member of the government take recently, but we do not feel that they are yet the answer to the housing problem which is facing this country.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


Donald Methuen Fleming: Some of us had hoped that the minister might make some reply to the remarks that have been uttered in the house tonight. He has not done so, and for that reason I take it that it is necessary to ask some of the questions that were indicated in the remarks of hon. members tonight. What policy is the government going to adopt in regard to rent control?


Robert Henry Winters: I am not in a position to enunciate government policy. That is a matter that will be announced in due course by the appropriate member of the government, one of my colleagues.


Donald Methuen Fleming: Is the house, either at the resolution stage or at a later stage on the bill, not to be told what the government's policy is to be in regard to rent control? Are we to be expected to deal with apparently the one measure in regard to housing that the government intends to bring in at this session, legislation that is to have a direct bearing on the building of houses for rent, without having any indication given to us as to the policy, if any, of the government, in regard to tne continuation of rent control? Everybody throughout the country is asking; what is the government's policy on rent control? Tenants are asking it; landlords are asking it; provincial governments are asking it; and this government maintains a sphinx-like silence. Are they to take the house into their confidence on this question?


Alphonse Fournier: Does the hon. gentleman suggest that we hand back rent controls to the provinces?


Donald Methuen Fleming: No, I do not suggest that, but if that is the policy the ministers are going to adopt I do suggest that they make up their minds, and tell the provinces so that the provinces will have some warning to take steps to meet the problem that will thus be created if this government fobs that problem back on them. If this is what the dominion government is going to do, let them make up their minds and say so. It will be a bad enough situation when it arises. If the government is going to throw that problem back on the provinces the very least they can do is to give the provinces some warning of it.
What kind of treatment is this to give to the House of Commons, Mr. Chairman? Here is the one chance we have had this year to talk about housing. Here is the one measure that the government brings forward for action by the house, and we are not to be told what the policy of the government is in regard to the continuation of rent control. Surely that is treating the House of Commons with a measure of disdain and contempt to which it should not submit.


Alphonse Fournier: There	are half a	dozen ways of asking the
same question which has already received a proper answer.


Mr. Fraser:: What is a proper answer?


Alphonse Fournier: It will be announced in due course.


Gordon Knapman Fraser: That is the kind of answer we generally get to all our questions.


Alphonse Fournier: We cannot rely on your questions.


Charles Edward Johnston: In his statement on September 21 the minister said that they were plan-
National Housing Act
ning to co-operate with the provinces. He suggested that possibly some of the provinces might not see fit to co-operate with the government in the proposed legislation. What will be the position of the dominion government in regard to those provinces that do not co-operate with this new plan?


Robert Henry Winters: I do not think I should be put in the position of anticipating what anybody might do with respect to this legislation. When I made my statement on September 21 I said that all the provinces, that is, the appropriate ministers with whom I spoke, were co-operative and that they all viewed the problem as a serious one. While I have no assurance about what they will do with respect to this enabling legislation I am hopeful that all the provinces who have a problem will take advantage of this legislation. Some of them have already indicated that they would. There are others who have given no indication one way or the other. All we can do at this stage is wait and see what happens.


Gordon Graydon: During the minister's discussion with the provincial premiers was rent control discussed?


Robert Henry Winters: My answer to that must be that it was not discussed officially, because at all times I was obliged to take the position that I take here tonight, namely, that I am not responsible for problems of rent control.


Gordon Graydon: I take it there was some talk on it.


Mr. Rooney:: In listening to the remarks of the hon. member for Eglinton tonight I made some notes. One of the main points was that he suggested the setting up of a research department to study building costs. Is it not a fact that the minister is doing this work under the research department of the Central Mortgage and Housing Corporation? If I remember correctly, $5 million was allotted for that work.


Robert Henry Winters: That is right. Under section 27A, part V of the act, there is an amount allotted not to exceed $5 million to cover cost of research, including research into building costs. So far, since the act came into effect approximately $1,250,000 has been spent for research purposes.


Charles Edward Johnston: Of what does the research consist?


Robert Henry Winters: It is set out in part V of the act, which is a long part. I would suggest, with due respect, that hon. members look it up. There is ample opportunity to read it.


Donald Methuen Fleming: I am glad the hon. member for St. Paul's has raised this point, because it has just exposed the fact that there has not been

National Housing Act
behind the administration of this act the drive it requires. I should add for the information of the hon. member that I did not advocate the setting up of a research department; I did not use the word "department" at all. I advocated intensive research, but hon. members will see that we have not been getting it. Provision was made for $5 million in 1945, I believe it was, and we see how little drive there has been behind research in that period of time, when only a fraction of that sum has been spent.
A moment ago the minister completed one of his answers with the characteristic words "wait and see". We are getting tired of that in the House of Commons. I am tired of being asked to wait and see in connection with this matter of rent control. I cannot get an answer from the minister. He says-


The Deputy Chairman:: I am sorry to interrupt the hon. member, but he has had ample opportunity to ask questions of the minister. The minister has already stated that this is a matter of government policy which will be announced in due course. The hon. member should be satisfied with the answer.


Some hon. Members:: No.


Louis-René Beaudoin: If he is not, then I do not think the resolution now before the committee calls for any announcement on rental control. As it states, the resolution before the committee deals with amending the National Housing Act, and I must ask the hon. member to confine his remarks to that resolution.


Donald Methuen Fleming: Mr. Chairman, I have two things to say in reply to your statement: First, I am not satisfied-and let me make that clear. You suggest I should be satisfied, and I say I am not. And further, I do not see how anyone can be. In the second place, I say this-and let the minister deny it if he will; let him stand in his place and deny it- that we cannot discuss a resolution of this kind which contemplates a measure of assistance in respect of house-building and renting without knowing what the government's policy, if any, is in regard to rent control. Those two things cannot be separated; it is not possible to do so.
I turn elsewhere in the house. Perhaps someone else might be able to supply the information, if the minister is not prepared to do so. For instance, we have in the house this evening Liberal members from Toronto -but they have not participated in the debate tonight. I am sorry they have not. For instance, I had hoped-


An hon. Member:: Give them a chance.


Donald Methuen Fleming: They say they cannot, do they? Are there restrictions? Are their

mouths stopped by the government? They have had ample opportunity tonight, if they had wanted to rise in their places and speak. These are the members who last spring were so full of determination to beat the housing problem! Yes, they were going to have it beaten before the snow flies-and we are told we are going to have snowflurries tomorrow. Yet the housing problem is still with us.


George Alexander Cruickshank: We are getting a lot of wind tonight.


Donald Methuen Fleming: The hon. member for Rose-dale sent out a letter recently to members of the House of Commons asking them to bring forward evidence respecting the necessity for continuing rent controls. I should think this should be an appropriate opportunity for him to address the committee on the subject. Then, there is the hon. member for Spadina, who had a good deal to say about housing during the election campaign. The government was going to do great things! Then, at a conference between members of the Liberal party and the mayor of Toronto about two months ago the hon. member for Spadina, speaking on behalf of the assembled Liberal members, assured the mayor that the government was going to carry out its promise, and that we were going to have housing.


Louis-René Beaudoin: Order. I cannot permit the hon. member to go on like this, with that-


An hon. Member:: Stuff.


Louis-René Beaudoin: -sort of speech. The hon. member should ask the minister his questions, or speak to the resolution before the committee. I must ask him to return to the subject matter of the resolution, and not to deal with matters completely extraneous to it.


Donald Methuen Fleming: Mr. Chairman, I am talking about housing. Is not this resolution one which concerns housing?


Louis-René Beaudoin: If the hon. member would talk about housing it would be quite in order.


Donald Methuen Fleming: I affirm that it is in order for members to discuss promises made before the election, in which they stated what they were going to do in the House of Commons, if elected, to improve the housing problem. Surely this resolution relates to the housing problem.
I would like to know what my hon. friend from St. Paul's has to say on this subject tonight. He has a very serious housing problem in his riding-a very serious one. I had hoped the hon. member would take the opportunity to say something about housing in his riding,-


An hon. Member:: Give him a chance.


Donald Methuen Fleming: -and how this government is failing to meet it.


Alphonse Fournier: Carried.


Louis-René Beaudoin: Is the resolution
carried?


Donald Methuen Fleming: No.


George Alexander Cruickshank: Are you the chairman?


Gordon Knapman Fraser: The hon. member for St. Paul's was on his feet. After him I wish to speak.


Donald Methuen Fleming: I sat down because I thought the hon. member for St. Paul's had something to say.


Louis-René Beaudoin: Has the hon. member for Eglinton completed his remarks, or is he acceding to the request of the hon. member for St. Paul's to address a question?


Donald Methuen Fleming: I thought the hon. member was rising to speak and I sat down to permit him to do so.


An hon. Member:: What courtesy!


Donald Methuen Fleming: Has he a question?


Gordon Knapman Fraser: He can't say anything. You have stopped him.


Alphonse Fournier: Go on with your speech, if you have something to say.


Louis-René Beaudoin: Order.


Donald Methuen Fleming: Surely this is the time for those to whom I have referred, and others who are familiar with housing conditions in their ridings, to stand in their places in the House of Commons and demand effective action. If the action they deem necessary to meet housing conditions in their riding includes the continuation of rent control beyond March 31, then let them rise and say so. This is their opportunity.


Alphonse Fournier: What a lecture!


Mr. Henry:: Speaking as one from Toronto, we are perfectly satisfied that we are getting action.


Donald Methuen Fleming: Does that include rent
control?


Louis-René Beaudoin: The hon. member for Peterborough West has the floor.


Gordon Knapman Fraser: I should like to ask the minister a question as to who is allowed to buy or rent a house from Central Mortgage and Housing Corporation. There seems to be some difference in different sections where these houses are put up. I know of veterans who served overseas for five years, who have had their names in from one to three years or more, and who have not yet received
National Housing Act
houses. These are veterans with two or more children. Still they have not houses, while others who have come from outside have been given them. That does not seem right.
I have complained to Central Mortgage and Housing Corporation in my own constituency and also here in Ottawa, but have received no satisfaction. There should be provision for the veterans. I have in mind one case where the veteran has had his application in for two or three years, and has been refused a house. He has been told that he will have to go to the wartime prices and trade board and get a notice from them saying that he has to get out of the house he is in. Despite the fact that Central Mortgage knows that he has had notice from his landlord to get out, they say that he must get this notice from the wartime prices and trade board. Must veterans be put out on the street before they can obtain these houses? It looks to me as though there is a lot of favouritism going on, and the veterans feel that way also. Can the minister tell the committee what the regulations are in regard to this matter and if they are the same throughout Canada?


Robert Henry Winters: There is a point-rating system which has been carried on throughout this entire operation and which is subject to close scrutiny by the Canadian Legion. So far as I know, this system is acceptable to the Legion and 1 have yet to hear of an instance where the Legion has said that there has been discrimination against any veteran. This pointrating system takes into consideration a man's service overseas, the number of children he has, the type of accommodation in which he is living, the length of time he has been in the district and other factors. Every effort is made to administer this system fairly in the interests of all concerned.
It is understandable that there will be those who feel that they have a high classification in one category, but when the over-all picture is viewed it is found that some other veteran has prior right to a vacant rental house. As I say, it has been administered fairly and I believe that belief is held by the Legion.


Gordon Knapman Fraser: Does the minister feel that an outsider should get a house before a man who enlisted from the district? I do not think that is right.


Robert Henry Winters: Other things being equal, I do not think it is fair.


Mr. Shaw:: Is there any way by which inspections can be speeded up? I know of a number of houses where the completion was held up unnecessarily for a period of weeks because the necessary inspections were not made. The individual owner was

National Housing Act
not in position to make the payments necessary to carry on. I know of cases where it has taken twice the normal period to complete the houses that it would have taken had the builders been allowed to carry on with an unbroken continuity.


Robert Henry Winters: I presume the hon. member is referring to houses built under joint loans by Central Mortgage and Housing Corporation and a lending institution. Under that arrangement the inspection is the responsibility of the lending institution. We have been trying to impress upon them the necessity of adequate and prompt inspection and are hopeful that we are coming closer to getting that.


Gordon Graydon: Does the research department of Central Mortgage and Housing Corporation collect data on the need of houses in various parts of Canada? I ask that question in order to ascertain if the information is available should hon. members desire it.


Robert Henry Winters: The research department of Central Mortgage and Housing Corporation carries on studies on a dominion-wide and area basis.


Joseph William Noseworthy: Is Central Mortgage
taking any steps to prevent a repetition of the Pelmo Park incident?


Robert Henry Winters: The project referred to by the hon. member is somewhat the same as the one referred to by the hon. member for Bow River. In that case the arrangements made were the normal arrangements that would be made between an ordinary purchaser and a lending institution, although part of the money involved is federal government money.


Charles Edward Johnston: The minister's answer sounds all right on the surface, but as an actual fact there is not a great deal of relationship between the purchaser and the lending institution. Alterations are actually made in a house after the purchaser has signed the agreement with the mortgage company. The only thing in the form of a contract between any of the parties is the agreement entered into with Central Mortgage and Housing.
The minister says that this is the normal relationship between the purchaser and the lending institution, but as a matter of fact there is very little relationship as far as the purchaser is concerned. The initial work is between Central Mortgage and Housing, the lending institution and the contractor, and in some cases the house is started before the purchaser buys it. With conditions like that existing, I do not think the minister's answer is applicable to the question asked.


Donald Methuen Fleming: Will the minister tanle the correspondence with the premiers on this subject?


Robert Henry Winters: I shall be glad to table that correspondence subject to the usual reservation that we shall obtain permission from the provinces.


Donald Methuen Fleming: Will the minister indicate the policy under this measure in regard to payments to the municipalities in lieu of taxes?


Robert Henry Winters: As I stated on September 21, we wiH pay grants in lieu of taxes on the basis of the normal level of taxes in the particular municipality, subject to approval by the provincial department of municipal affairs or the equivalent department.


Mr. Browne (St. John's West):: Will any definite arrangements be made with the Newfoundland government under this resolution to provide for the clearance of slum areas in St. John's and the building of five hundred houses, according to statements that have been made?


Robert Henry Winters: The bill that will be founded on this resolution will apply equally to Newfoundland. I think the hon. member is referring to operations that would be carried on under the slum clearance section of the present act. There is no reference to that section in the resolution.


William Joseph Browne: That would be under the present act.


Robert Henry Winters: Under the present act.
Resolution reported, read the second time and concurred in.
Mr. Winters thereupon moved for leave to introduce Bill No. 142, to amend the National Housing Act, 1944.
Motion agreed to and bill read the first time.



BUSINESS OF THE HOUSE

Alphonse Fournier: the adjournment of the house.
He said:	Tomorrow we will resume the
debate on the budget.


Gordon Graydon: And if we finish?


Alphonse Fournier: We will try to get into supply and call one item in external affairs.
It being five minutes after eleven o'clock, the house adjourned, without question put, pursuant to standing order.

Appendix
Appendix



BRITISH NORTH AMERICA ACT-PROCEDURE IN AMENDMENTS FURTHER CORRESPONDENCE WITH PREMIERS OF PROVINCES

[Stage Direction]
Office of the Prime Minister Province of Quebec
Quebec, October 26, 1949
The Right Honourable Louis S. St. Laurent,
Prime Minister of Canada,
Ottawa.
Mr. Prime  Minister@: I have submitted today to my colleagues of the executive council of the province the letter which you forwarded to me under date of October 21 and which I have received Monday morning the 24th.
In your letter you say:
"It seems to me that we have both made our positions very clear and that it would not serve any useful purpose to continue our correspondence until such time as we are in a position to extend invitations to the provincial governments to confer with us on this subject."
Indubitably our respective positions have been made "very clear" The government of the province of Quebec reiterates the statements made in the letters which I sent you under date of September 21st last and October 5th and 19th instant.
As you are no doubt aware, our legislature usually undertakes in January to give consideration to the very important measures on the program of our annual session. Will you kindly let me know when the Canadian intergovernmental conference which you propose to call in order to deal with constitutional matters is to be held?
This information is necessary to us, and we should like to have it as soon as possible.
Yours sincerely,
M. L. Duplessis
Office of the Prime Minister Canada
Ottawa, October 29, 1949 Hon. Maurice L. Duplessis, M.L.A.,
Premier of Quebec,
Quebec, Que.
My dear Premier:
I have submitted your letter of the 26th instant to my colleagues in the government and we feel that it would be desirable to hold the proposed dominion-provincial conference to consider a method of amending the constitution in Canada early in the new year.
Since other provincial governments, like the government of Quebec, will no doubt wish to make plans for their legislative sessions, I am writing today to the premiers of all the provinces suggesting that the conference begin its sessions on Tuesday, January 10, 1950, if that date appears to be generally convenient.
I should be pleased to have your views on this point.
Yours sincerely,
Louis S. St. Laurent
THE FOLLOWING IS THE TEXT OF A LETTER SENT TO ALL PROVINCIAL PREMIERS WITH THE EXCEPTION OF THE PREMIER OF QUEBEC:
Office of the Prime Minister Canada
Ottawa, October 29, 1949
My dear Premier:
I have received a letter from the premier of Quebec inquiring as to the date proposed for the dominion-provincial conference to consider a method of amending the constitution in Canada.
I have replied today to Mr. Duplessis suggesting that the conference begin its sessions on Tuesday, January 10, 1950, if that date appears to be generally convenient.
I should be pleased to have your views on this point.
Yours sincerely,
Louis S. St. Laurent
1321

Tuesday, November 1, 1949