1949-02-10

[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver South):: On Monday last the Minister of Reconstruction and Supply promised to have a further investigation made of the Fraserview building project in Vancouver, in order to see if there was not some way in which the several hundred people already living in the area could be protected against interference with their property by Central Mortgage and Housing Corporation. In the intervening days I have received many heartrending letters from these people, and it would appear that the actions of the corporation have been unbelievably arbitrary and annoying. If the minister acts at once, it should be possible to have this sweeping expropriation plan altered. Can the minister make a further report today? I suggest that he himself take a plane to Vancouver and have this question settled.


Hon. Roberl H. Winters (Minister of Reconstruction and Supply):: In reply to the question now asked by the hon. member, and to the supplementary question put by him last Monday, as reported at page 281 of Hansard, I would say that this subdivision is similar to that on Renfrew Heights. It seemed to lend itself well to development of this kind. Where so many veterans are involved, in such a large project it appeared desirable to develop it along lines other than those of the general grid type of development. The number of properties that are privately owned is relatively small.


Howard Charles Green: About three hundred.


Robert Henry Winters: The bulk of the land is tax-sale property now owned by the city of Vancouver. The general plan was developed * jointly by the planning board of the city of Vancouver and the Central Mortgage and Housing Corporation. It was then revised in such a way as to result in the least possible disturbance to private property owners. It is, however, still under consideration. In order to minimize disturbance to present property owners, every attempt will be made to make whatever adjustments are indicated
and still allow the general plan to proceed. To assist toward that end, an official of the Central Mortgage and Housing Corporation is being sent to Vancouver this week end to. go into the outstanding problems and to see what can be done to arrive at mutually satisfactory understandings.


Mr. Maclnnis:: As this project happens to be in the constituency I represent, I should like to add something to what has been said by the hon. member for Vancouver South (Mr. Green). I received today a sheaf of protests, and I tried to get in touch with Central Housing and Mortgage Corporation, for clarification. I understood that the parliamentary assistant would see us this afternoon, and I did not take the matter any further. I believe that Central Housing and Mortgage Corporation has failed to do a public relations job.


Robert Henry Winters: I might say that there is no. parliamentary assistant in this department. I should be pleased to see the hon. members, myself.


Angus MacInnis: Sorry; I was thinking of the minister's former position.



CHORLEY PARK


Mr. T. L. Church (Broadview):: Has the
minister been able to come to any determination about the use of Chorley Park and the old Christie Street hospital for housing and civilian hospital purposes?


Hon. Paul Marlin (Minister of National Health and Welfare):: The hon. member asked' a question about this matter yesterday. That institution is one which is under the jurisdiction of the provincial government. It is a matter over which we have no control, and, as my hon. friend will appreciate, there is nothing we can do about it.


Thomas Langton Church: That was with reference to. the Toronto jail farm at Lansing, not the old Christie Street hospital or Chorley Park. I should like to hear from the Minister of Veterans Affairs and the Minister of National Defence about these matters, because the-people are without homes and have no place to go. They have been turned out.


Hon. Milton F. Gregg (Minister of Veterans Affairs):: In so far as the hon. member's question refers to the old Christie Street hospital, I can assure him that the matter is. under study and will be dealt with as soon as possible.

Inquiries of the Ministry LABOUR CONDITIONS



UNEMPLOYMENT IN VANCOUVER

[Stage Direction]
On the orders of the day:
Angus MacInnis: should like to direct a question to the Minister of Labour. Has his attention been directed to the serious unemployment situation in the city of Vancouver, and is the government giving consideration to assisting the employable unemployed who have no unemployment insurance entitlement or who have exhausted their benefits?


Hon. Humphrey Mitchell (Minister of Labour):: My attention has been drawn to
the condition referred to by the hon. member for Vancouver East. In reply to an inquiry which I made, the regional superintendent of the unemployment insurance commission at Vancouver sent me a telegram advising me that in his opinion the principal reason for the increase in the number of unemployed was the large influx of persons from other provinces, plus exceptional weather conditions which have retarded logging operations and building construction projects. A greater number were getting unemployment insurance benefits because of the expanded coverage and increase in the labour force of the province. But notwithstanding that, Mr. Speaker, I am sure my hon. friend will agree with me that British Columbia is a pleasant place in which to spend the winter.


Mr. Coldwell:: Sometimes.


An hon. Member:: Not lately.


Mr. Speaker:: Order.


Humphrey Mitchell: I think that is indicated by
the smiles of hon. members from British Columbia. But I would point out that some people have to stay in areas in which there is a cold climate, in order to take their part in the nation's production.


Mr. Campbell:: Cold comfort.


Humphrey Mitchell: I can understand that, coming as it does from the hon. member for Peterborough West.


Mr. Fraser:: Mr. Speaker, I will take all
kinds of comments, but the member for Peterborough West did not make that remark. I think the minister should direct his remark to the member on my left who made the interjection.


Humphrey Mitchell: I regret having said what I
did to my hon. friend. I thought it was the hon. member for Peterborough West who made the interjection. However, the observation still stands. I think I should say that when people move from one part of Canada to another they should remember that there


are certain responsibilities which fall upon the individual rather than upon the state. If I decided to live in British Columbia-not that I particularly want to do that-before leaving Ontario I think I would make sure that I did not become a charge on the state when I arrived there.


Angus MacInnis: A charge on the state?


Humphrey Mitchell: I am saying a charge on the state.


Gordon Knapman Fraser: That is a question.


Humphrey Mitchell: To emphasize what I have just said, may I give these figures. In January, 268 families moved from Saskatchewan to British Columbia, 260 from Alberta, 77 from Ontario, 64 from Manitoba, 12 from Nova Scotia and 5 from each of the provinces of Quebec and New Brunswick. These figures for one month give hon. members an indication of the number of people who move into that province during the winter months. I would also point out that the amount of money paid out in November, December and January by the unemployment insurance commission was $2,650,954.81, of which $1,462,296.61 was paid out in the city of Vancouver.
Last fall I made a radio broadcast, directed to Ontario and the prairie provinces, advising people not to go to British Columbia during the winter months. It was almost prophetic. I was not responsible for the weather there, which has been the reason for some of the present unemployment in that province. I must emphasize that people who go there in the winter months must do so on their own responsibility.
There is no federal provision for the payment of monetary assistance to unemployed employables who are not eligible for unemployment insurance benefits or who have lost their entitlement to such benefits because of having been out of work for a considerable time.


Howard Charles Green: May I ask a supplementary question? I take it from the last part of the minister's statement that the dominion accepts no responsibility whatever for the employable unemployed.


Humphrey Mitchell: That is substantially correct at the moment, yes.


Mr. Pearkes:: May I direct to the Minister of Mines and Resources a question which has some bearing on the statement just made by the Minister of Labour? Will the minister now consider returning the meteorological station to Victoria-because ever since the government moved it to Vancouver the weather in British Columbia has been growing steadily worse.



FAMILY ALLOWANCES


[Stage Direction]
On the orders of the day:
Mr. Roland Beaudry (Si. James):: I should like to direct a question to the Minister of National Health and Welfare. Is the minister aware of the fact that the family allowances office in Quebec has been sending out family allowances form letter 331A to parents in the province, asking, among other things, a question about the dates of birth of adopted children? If so, did the minister himself authorize the issuance of the letter in its present form? If not, will he not order a revision of this form letter?


Paul Joseph James Martin: The hon. gentleman was kind enough to give me notice of his question.
The form letter referred to was sent out in all cases where dates of birth, including those of adopted children, could not be verified from provincial vital statistics records. In such cases the experience has been that the child's birth had never been registered, and it is necessary for the family allowance officials to request the help of the parents themselves in furnishing information as to the date of birth. Adopted children are of course eligible for family allowances on the same basis as any other children. In order that the correct amount may be paid, and that duplicate payments for the same children under two different names may be avoided, it is necessary, of course, to establish the correct dates of birth. I may say that in all cases where parents had advised the family allowance officials on their original family allowances application form that the child had been adopted, this form letter was not sent out.
The purpose of the form letter was solely to verify the date of birth of the children in question. Since the hon. gentleman has brought the matter to my attention I am having the form letter looked at to make sure whether or not in the circumstances a revision is desirable.



TRANS-CANADA AIR LINES PRESS REPORT AS TO TRANSFER TO CANADIAN PACIFIC OF OPERATIONS FROM WINNIPEG WEST

[Stage Direction]
On the orders of the day:
Mr. Sianley Knowles (Winnipeg North Centre):: I should like to direct a question to the Minister of Transport. Is there any basis for the press report of a short while ago to the effect that the Trans-Canada Air Lines
Inquiries of the Ministry operation from Winnipeg west might be turned over to the Canadian Pacific Air Lines?


Hon. Lionel Chevrier (Minister of Transport):: The hon. gentleman sent no notice of his question, but notwithstanding that, I may tell him that I have had no notice or advice of the action which he has in mind, and neither, I am sure, has my colleague the Minister of Trade and Commerce.


Stanley Howard Knowles: It is not a matter as to which the government would get notice from T.C.A. It is a matter of government policy.


Lionel Chevrier: So far as government policy is concerned with reference to T.C.A., it has been announced, and if there is any change it will be made known.


Right Hon. C. D. Howe (Minister of Trade and Commerce):: As minister responsible for T.C.A. I should like to say there is absolutely nothing in the suggestion.


Stanley Howard Knowles: Good. That is the answer we want.



SALES FROM SOUTH AFRICA AT PREMIUM OF $6.50 PER FINE OUNCE

[Stage Direction]
On the orders of the day:
Mr. Harry R. Jackman (Rosedale):: I should like to direct a question to the Minister of Finance. In view of the approval by the international monetary fund of the sale by South Africa of newly-mined alloy gold to be used only for industrial or professional work at a premium of $6.50 a fine ounce over the fund's price of $35 a pure ounce, will the government extend the same right to Canadian gold producers?


Hon. Douglas Abbott (Minister of Finance):: Again I am caught by surprise by one of these gold questions, but I am very glad to answer my hon. friend. I have no official information yet as to just what has taken place with respect to the gold sales in South Africa. I was informed this morning that the matter is under consideration by the international monetary fund, and when I have a report as to the decision which the fund has made, I shall be glad to communicate it to the house.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. J. O. Probe (Regina Ciiy):: I should like to direct a question to the Minister of National Defence, of which I sent him notice. Will the minister please inform the house what progress is being made with respect to the
418

Inquiries of the Ministry
distribution of military decorations receivable by participants in world war II?


Hon. Brooke Claxion (Minister of National Defence):: Mr. Speaker, I am sorry I did not get notice of the hon. member's question, but I did answer the question the other day.



REPORTED PURCHASE OF 120 MILLION BUSHELS IN CANADA BY ECA

[Stage Direction]
On the orders of the day:
Mr. A. L. Smith (Calgary West):: Mr. Speaker, I wish to ask a question of the Minister of Trade and Commerce. In doing so I am not going to say a great deal, and I do not wish to be shouted down until I have said a word or two. Again in last evening's newspaper there was a dispatch from Washington which said definitely that Mr. Ralph A. Trigg, president of the Commodity Credit Corporation, stated in evidence before the senate committee on agriculture that they were buying from Canada 120 million bushels of wheat at $2 a bushel. Having regard to his answer given yesterday as to general procedure, at which time he told us what would happen normally, I ask the minister if he will have someone make an investigation and let us know exactly what the position is. Perhaps he would do that tomorrow or Monday or Tuesday.


Clarence Decatur Howe: Mr. Speaker, no investigation is necessary. A sale of the magnitude mentioned by my hon. friend would not escape the notice of the government. In the first place I will tell him we have not that quantity of wheat to sell, and we have not had for a great many months. Obviously if he is referring to a price of $2 a bushel, that is the price referred to for deliveries of wheat under the contract with the United Kingdom. That is the only wheat that is sold at $2 a bushel. The amount of the contract is 140 million bushels for the crop year 1948-49.


Arthur Leroy Smith: I will send the dispatch over to the minister now.



NEWFOUNDLAND


[Stage Direction]
On the orders of the day:	[DOT]
Mr. George A. Drew (Leader of the Opposition):: Mr. Speaker, I should like to ask a question of the Prime Minister. In view of the announcement that the right to appeal to the privy council has been granted to certain appellants in Newfoundland with regard


to Newfoundland's part in the agreement for union with Canada, has the Prime Minister taken into consideration what effect, if any, that would have upon the discussions now taking place in the house?


Right Hon. L. S. St. Laurent (Prime Minister):: I have no information other than that gathered from the newspapers. However my understanding of the situation is that an action was instituted in the courts of justice of Newfoundland, and on motion it was dismissed as being frivolous and vexatious. An appeal was then taken to the appeal court of Newfoundland, and that appeal was dismissed, the appeal court confirming the opinion of the first judge that it was frivolous and vexatious. Now the newspapers report that leave has been granted to appeal to the privy council from the decision that the proceedings were frivolous and vexatious. Even if that appeal were heard, and even if it were allowed, it would not mean anything more than that the plaintiffs in the case would have the right to proceed on the merits of their suit; it being merely a pronouncement on a question of procedure. In view of the attitude taken by the government of Newfoundland as to the terms of this agreement, and the time limit for accomplishing the further proceedings required to bring it into effect, there should be no delay on our part in asking parliament to confirm the agreement.



INQUIRY AS TO SETTING UP OF SPECIAL COMMITTEE ON RADIO BROADCASTING

[Stage Direction]
On the orders of the day:
George Alexander Drew: Mr. Speaker, on two occasions the Minister of National Revenue (Mr. McCann), in response to inquiries as to the setting up of a special committee on radio broadcasting, has left the impression that a committee would be called together if the desire to have that committee were made evident. I wish to leave no doubt that we are anxious to have a special committee proceed with an inquiry; therefore I wish the minister would deal with the matter on the understanding that there is a request that a special committee be appointed to deal with the subject as soon as possible.



NEWFOUNDLAND


[Stage Direction]
The house resumed from Wednesday, February 9, consideration in committee of Bill No. 11, to approve the terms of union of Newfoundland with Canada-Mr. St. Laurent -Mr. Macdonald (Brantford City) in the chair.
The Chairman:: When the committee rose last night, section 23 had been allowed to stand.
On section 23-Debt.


Douglas Charles Abbott: When the committee rose yesterday afternoon I had promised the hon. member for Rosedale (Mr. Jackman) that I would get and give to the committee information respecting estimates of federal revenues and expenditures in Newfoundland. I am prepared to give those estimates now.
First, may I say that it is with some hesitation that I put these figures on the record, because, unless one understands the basis upon which they are prepared, they may be misinterpreted and misunderstood. It is extremely difficult, in fact almost impossible, to make an accurate calculation of revenues derived from a particular province. It is difficult enough, as I have reason to know, to make an accurate calculation of future revenues from the whole of the country. But to determine, for example, the matter of customs duties derived from a particular province is almost impossible. In that respect, at best it can only be an informed guess.
In the case of Newfoundland it was particularly difficult to make an accurate forecast, because substantial changes will occur in the economy of the province at the time of union. The whole course of trade may be altered to some extent through the elimination of tariff barriers between Canada and Newfoundland. In addition, the Newfoundland statistics are not as well developed as statistics here in Canada. However, when the delegates from the national convention were in Ottawa in 1947, we did endeavour to make a rough estimate of the probable additions to Canadian revenue as a result of the union. Those are the figures which appear in the white paper of October 29, 1947. At that time our knowledge of the Newfoundland economy was somewhat less complete than it is today, and some of the estimates were based on faulty assumptions.
The most important reason for making alterations in the figures, however, is not the improvement in the sources of information, but the continued rise in the national income of Newfoundland, which was not foreseen in 1947. As hon. members will recall, our own budget estimate of revenues for that year was on the low side, and for exactly the same reason. As was indicated the other day, when the Newfoundland delegation were in Ottawa last summer they submitted revised estimates of what they considered would be the additions to our Canadian revenue. Officers of my department have gone over those
419
Newfoundland
estimates, and they are inclined to think that they are probably much closer to the truth than the estimates prepared the year before. This is partly due to the fact that the Newfoundlanders themselves have a closer acquaintance with local conditions and also that revenues were higher in 1947 than we had estimated and have risen still higher. I should like to place on Hansard a statement giving the comparative figures for the two years. The statement follows:
Original Canadian estimate as in
white paper New-October 29, foundland Heads of Revenue	1947 estimate
Personal income tax	
$3,200,000	$6,183,000Corporation income tax including withholding tax	
7,500,000	7,500,000Succession duties	
320,000	100,000Customs and import duties _____ 2,000,000	3,415,000Liquor taxes	
400,000	602,000Tobacco taxes	
500,000	2,857,000General sales tax	
4,000,000	4,000,000Miscellaneous excise duties, etc. 1,500,000	1,500,000Post office	
750,000	750,000Bullion, coin, etc	
15,000	15,000

If any of the revised figures for revenue were to be criticized I would be inclined to think that the personal income tax figure is on the high side. But as I have said, these can at best be but guesses and subject to errors which might well run into several million dollars. Moreover, they are based on present rates of taxes and are therefore valid just as long as the present rates are in effect. That is another reason why I hesitate to put them forward as indicating permanent sources of revenue over the long pull.
Then with regard to expenditures, first of all I would draw the attention of the committee to the fact that the figures to which some hon. members have referred and which were given to the delegation from the national convention were based on estimates of the cost of extending federal services to Newfoundland in a typical year rather than in a particular year. If hon. members wifi examine the table in the white paper that follows they will see that that point is brought out very clearly. Therefore, none of the temporary or unusual expenditures that might be expected at the time of union could be included.
That is one reason why the figures are quite different from the 1947 estimates. Let me put it another way. The 1949-50 estimates were made when most of the costs could be foreseen and provided for, whereas the 1947

Newfoundland
estimates were merely an indication of how much federal expenditures might be increased in some typical future year.
The table follows:
		Original estimate	Estimate
		for a	for fiscal
		typical	year
Heads of expenditure	year	1949-501.	Tax agreement payment .. (Including statutory subsidies)	,. $6,820,000	$7,800,0002.	Old age pensions 	.. 2,000,000 to 2,600,000	2,700,0003.	Family allowance payments	,. 8,350,000	8,400,0004.	Departmental expenditures.	. 9,400,000	22,000,000(including capital and	non-recur-	ring items)	
$26,570,000 $40,900,000 to 27,150,000
Additional
Transitional grant	 $3,500,000 $6,500,000
Cost of servicing debt	 2,800,000	2,800,000

Chief reasons for increase:
Increased veterans benefits	 $1,500,000
Health grants	 1,000,000
Increased tax agreements payments.. 1,000,000 Public works (purchase of buildings harbour installations, maintenance,
new construction, etc.)	 7,500,000
Unemployment assistance	 2,000,000
Transitional grants	 3,000,000
As hon. members of the committee are well aware, costs as well as revenue have risen since 1947, and for much the same reason. For example, the tax agreement payments are expected to be at least $1 million higher than the 1947 estimate. A third reason why costs are higher-I am referring here to expenditures which are a cost to the dominion treasury-is the fact that the terms of union extend to Newfoundland certain additional benefits which were not in the original proposals, such as re-establishment credits to veterans. It is also provided that Canada will take over certain services which it was originally contemplated would remain with the new province. In that regard I am thinking particularly of certain fisheries services. Then the Canadian government has introduced a system of health grants in which Newfoundland would undoubtedly participate on a major scale.
On looking over the estimates which have been submitted to me this year by the various departments I find that they are not altogether comparable with the estimates prepared in 1947. In one case, that of the Department of Transport, figures have been put in on a gross basis with no account being taken of offsetting revenues in connection with air services and so on. In the figures for 1949-50 I have made some offsets.

I want to stress again that the figures I have given are only estimates and that detailed consideration by the treasury board has not yet been completed. Also the departmental estimates as such have not been finalized, if I may use that word. The total of expenditures under these headings, if my addition is right, is approximately $50,200,000.
No firm estimate has yet been made of possible railway deficit, but I might say that it was originally estimated that the deficit on the operations of the Newfoundland railway would run to something over $1,500,000.
I cannot stress too strongly that these are only the best estimates that 1 can give at the moment and we must not be held to them as being firm figures. As I said before, detailed estimates have not yet been finally considered and approved.


Thomas Langton Church: I should like to ask the minister a question with reference to the Quebec, North Shore and Labrador railway and the many natural resources to be found in that part of the country. My question relates particularly to section 23, section 24 and section 27, subsection 4. First with regard to section 23. There was some discussion in the British house regarding this matter shortly after the decision of the privy council in connection with Labrador had been handed down. At that time Newfoundland did not have a government of its own; it simply had a governor and a trusteeship.
Was any survey made under section 23 by the government of Canada in connection with the Loan Act of 1933 and the sinking fund established under that act? Certain parties in the parliament across the waters, who were opposed to the union of Newfoundland and Labrador, contended that the fund was not in a liquid state, and Canada assumes a debt accordingly. That is in so far as borrowing is concerned in connection with the sinking fund, for payment of the debt when due. I was wondering if any actuarial report had been received, because I cannot find it in Hansard.
The last question I have to ask is with regard to an agreement which was made by the government of Canada in a bill passed in 1947, involving the Quebec, North Shore and Labrador railway. By that legislation natural resources, power sites, pipe lines, ocean services, hotel services, public lands, wharves, railways, and so on, were given away. I was on the committee at the time. With respect to this private company, has the government of Canada any agreement with Newfoundland about what is to be done regarding the financial set-up of these Labrador properties, their use and purchase? The

minister referred to section 27. Subsection 4 of that section reads:
The government of the province of Newfoundland shall not by any agreement entered into pursuant to this term be required to impose on any person or corporation taxation repugnant to the provisions of any contract entered into with such person or corporation before the date of the agreement and subsisting at the date of the agreement.
As I see it, union with Newfoundland would mean that any agreement made by a Canadian corporation with the government of Canada would not be affected. I was glad to see, when the committee studied that particular bill in 1947, that they made the provision that it would be subject to the companies getting approval of their charter powers, and to consent of Newfoundland, the dominion of Newfoundland or the province of Newfoundland. Is that not so? I should like to find out from the minister if that is not so.


Louis Stephen St-Laurent: I listened as attentively as I could to the hon. member's questions, and they are quite involved. I should like to be as accurate as possible in giving an answer, and I think it will be necessary for me to see and consider the context of his questions in order that I may supplement what I am prepared to say at this moment. I think the hon. member is under a false impression if he feels that any agreement was made in 1947 between the applicants for a railway charter and the government of Canada. There was no such agreement. In conformity with the requirements of the constitution, and the requirements of the Railway Act, persons wanting to construct a railway connecting any part of Canada with another country, or which would be interprovincial, have to get a charter from this parliament. The charter they obtain from parliament does not give them rights in any property. It merely gives them the capacity to exercise the powers of a railway company in accordance with the Railway Act. In 1947, when these applicants were given a railway charter, it was expressly provided that, although they would have the capacity to operate a railway outside Canada, we were not giving them the right to operate one. We were just creating them as a corporation which would have the capacity to operate a railway in Newfoundland territory if it secured permission from Newfoundland to do so. We could not give them any rights in Newfoundland territory, but we could give them the capacity of a corporate body which might receive from the government of Newfoundland the right and privilege of operating a railway there.
With respect to the hon. member's reference to subsection 4 of section 27, I think it might
Newfoundland
be better to deal with that when we come to section 27. It is something that is not designed to apply to that railway at all, but to enable the government of the province of Newfoundland to respect any agreements it may have made with any company, and to provide that it will not be required in making a tax agreement to impose taxes upon corporations with whom it may have an agreement not to do so. The hon. member will remember that, in the tax agreements with them, the Canadian provinces were required to impose a five per cent tax on the income of corporations derived from business transacted within their limits. The Newfoundland delegation said, "We have certain agreements whereby we have commuted the taxes of commercial corporations." They said that they did not want to enter into an agreement that would require them to commit a breach of any previous agreement. Subsection 4 of section 27 was put in for that purpose, but it was not contemplated in any way that it would apply to running rights that may have been granted by the government of Newfoundland, over territory of Newfoundland, to this railway company that was incorporated by parliament in 1947.


Stanley Howard Knowles: I should like to say something further about this same subject, namely, the Quebec, North Shore and Labrador railway, but it does seem to me that the Prime Minister is right, that it hardly comes in here. Perhaps we can discuss it under section 37, which has to do with natural resources, or at least on some section more appropriate than this one.


Mr. Si. Laurent:: Perhaps it could be brought in incidentally under subsection 4 of section 27, which refers to agreements made by the government of Newfoundland. My view is that this subsection was not specifically designated to affect the Quebec, North Shore and Labrador company, but it may be there were contracts that are still in existence, and to which the language of subsection 4 could apply.


Stanley Howard Knowles: I should be glad to leave it until we reach that section.


Mr. Nicholson:: I should like to have the ear of the Minister of Transport for a few minutes. He was not present yesterday when I raised the problem of transportation in Newfoundland. I drew attention to part II of the report of meetings between the two delegations, which mentions that in connection with the railway it will cost approximately a million dollars a year for the next ten years to place the railway in condition, and $7 million for rolling stock. There is a note to the effect that the deficit for 1944-45 amounted to $525,000, and for 1945-46 it amounted to $698,000.

Newfoundland


Jean-Paul Stephen St-Laurent: Would the hon. member permit me to say that I think he should probably wait until we are dealing with paragraph (a) of section 31 which refers in terms to the Newfoundland railway, the taking over of that railway, and the carrying on of its operations by the Canadian government.


Alexander Malcolm Nicholson: The financial aspects are really what I wanted to discuss. The Minister of Finance gave a very low estimate. The Minister of Finance gave an early estimate, I would think, in the light of past performance, and the Minister of Transport was not here yesterday when I mentioned that freight rates in Newfoundland are about twice as high as in the maritimes. In this report I find that the present rate on whale oil from St. John's to Moncton is $1.25, while the projected rate under the Maritime Freight Rates Act is 60 cents. The rates on whale guano are $1.25 and 60 cents; on lingon berries, $1.65 and 90 cents; on cod fillets, $1.40 and 75 cents. The same thing applies to commodities moving to St. John's. The rate on fresh meat from Moncton is $1.24, and the new rate will be 73 cents. The rate on condensed milk is $1.58, and the new rate will be $1. I also understand that present wages in Newfoundland are a good deal lower than in Canada, and that they are to be brought up to Canadian rates. I wonder if the Minister of Transport will indicate how the estimate of one and a half million dollars was reached.


Douglas Charles Abbott: I said that was an early
estimate, and we must not be held too closely to it. That estimate was made in 1947. As yet we have made no estimate beyond that which I gave today.


Alexander Malcolm Nicholson: I think the minister revised his figures yesterday. I believe some member of the government should bring us up to date and give us some idea of the situation. Before many weeks I imagine the Minister of Finance will have to bring supplementary estimates before the house, and I should think at this stage he would be able to give us some idea.


Lionel Chevrier: Perhaps I can answer in a general way the questions the hon. gentleman has in mind. I believe he is raising three points now, though I did not see the questions he asked yesterday, and I am sorry I was not here at the time. In reference to the present financial position of the Newfoundland railway, the information we have at the moment is that it operates on a fiscal year basis, and that for the year 1948 there is a deficit of something in the neighbourhood of $2,200,000; and that if the Canadian National Railways were to take it over under the terms of section 31, because of the increased cost of
TMr. Nicholson.]
materials, the increased wages and other incidentals in connection with the Newfoundland railway, the deficit would be in the neighbourhood of $3 million, perhaps $2,800,000 odd.
Then the hon. gentleman asked about the matter of wages. Unquestionably the wages of the employees of the Newfoundland railway will be brought up to the level of those of the Canadian National Railways.
He also asked some questions in reference to rates. I am unable to go into the detailed rate structure, which would be a matter of some length and would require a great deal of technical knowledge. I can tell him, however, that it is the intention to apply to the new province of Newfoundland the same basic rate structure which now applies to the maritime region. In other words, the basic rate structure which exists today in the three maritime provinces would be made applicable to the province of Newfoundland. That would mean, I should think, a considerable decrease in those rates. What it may be in the way of percentage it is difficult to say, because there are hundreds and even thousands of rates. The Canadian National Railways, were they to take over the Newfoundland railway, would file with the board of transport commissioners the basic rate structure for the island, and thereafter anyone who felt discriminated against could make an application to the board in accordance with the terms of the Railway Act and have his case adjudicated upon. I am informed upon fairly good authority that rates will be substantially lower than they are in Newfoundland at the present time.
I think I have covered the main points raised by my hon. friend.


Alexander Malcolm Nicholson: I wonder if the $3 million deficit mentioned by the minister included the proposed expenditure of $1 million a year for ten years on improving the road. I believe the expenditure of $10 million over a ten-year period is mentioned in order to put the line in better shape.


Lionel Chevrier: No; this is an operating
deficit only.


Alexander Malcolm Nicholson: On the basis of the lower
rates or on the basis of the prevailing rates?


Lionel Chevrier: I would think it would be
on the basis of the rates that will be made applicable after union. When my hon. friend refers to the expenditure over a period of some years, there is provision for capital expenditure in 1949 by the Canadian National Railways of $925,000 for equipment already ordered by the Newfoundland railway, and $500,000 for additions and betterments.


Alexander Malcolm Nicholson: Two other items were not
mentioned by the Minister of Finance in his estimate of expenditures. The first was unemployment benefits. On page 63 of the report and documents I notice this provision:
Residents of Newfoundland in insurable employment who lose their employment within six months prior to the date of union and are still unemployed at that date, or who lose their employment within a six months' period after that date, will be entitled for a period of six months from the date of union or six months from the date of unemployment, whichever is the later, to assistance on the same scale and under the same conditions as unemployment insurance benefits. The rates of payment will be based on the individual's wage record for the three months preceding his loss of employment. The cost of this assistance will be borne directly out of moneys appropriated by parliament for the purpose and not out of the unemployment insurance fund.


Douglas Charles Abbott: If the hon. gentleman had
listened to my statement, in the figures I gave a little earlier this afternoon I mentioned a figure of $2 million for unemployment assistance.


Alexander Malcolm Nicholson: A further question was asked by the hon. member for Eglinton as to the estimated cost of national defence. I notice according to the press that while in Washington the Prime Minister plans to discuss the taking over of the United States bases in Newfoundland. At a meeting I heard the Minister of Finance address in Wolfville, I remember he said that the cost of defence is going up, and that every time we take three hundred men into the service we have an additional expenditure of around $1 million a year. I wonder if the Minister of Finance or the Prime Minister would indicate the estimated expenditures for defence.


Douglas Charles Abbott: I cannot give any separate item for defence. The additional expenditures for defence in Newfoundland are included under the heading of departmental expenditures of $22 million which I gave a moment ago.


Mr. Raymond (Beauharnois-Laprairie):: should like to have some information about a loan made to Newfoundland in 1931 or 1932 and guaranteed by the government of Canada. If my memory is correct, in 1931 or 1932, under the administration of Mr. Bennett, the government of Newfoundland arranged a loan of $625,000 from four banks, the Bank of Montreal, the Royal Bank of Canada, the Canadian Bank of Commerce, and the Bank of Nova Scotia, which loan was guaranteed by Canada. Is that loan still outstanding, or what has happened to it?


Douglas Charles Abbott: I shall have to verify this, but I do not think it is still in existence; I believe it has been paid off. If such a loan were in existence, of course it would be a dollar loan and would be taken over by the province of
Newfoundland
Newfoundland; but I think I am correct in saying it has been paid off. Yes; it is no longer in existence.


Maxime Raymond: Then in a letter addressed to the governor of Newfoundland by Mr. Mackenzie King, then Prime Minister, on October 29, I read this:
I feel I must emphasize that as far as the financial aspects of the proposed arrangements for union are concerned, the government of Canada believes that the arrangements go as far as the government can go under the circumstances. The government could not readily contemplate any change in these arrangements which would impose larger financial burdens on Canada.
Would the Minister of Finance be kind enough to tell me what is the difference between the offer made prior to October 29 and the burden we are assuming at the present time.


Douglas Charles Abbott: To answer my hon. friend briefly, the difference is the increase in the transitional grant by approximately $3,500,000 in the first year and on a descending scale. There is a total over-all increase of $16,500,000 spread over twelve years and disappearing at the end of the twelfth year.


Maxime Raymond: That is the only difference?


Douglas Charles Abbott: Yes; that is the only difference.


Mr. Low:: A fairly substantial aggregate of United States dollars must each year be spent in Newfoundland. The payrolls at the United States bases themselves would be fairly large, I would think. To whom is the United States dollar exchange now going? Is it going to the Newfoundland commission of government or to the government of Great Britain?


Douglas Charles Abbott: It is now and always has been available to Canada. As my hon. friend is probably aware, the banking systems of Newfoundland and Canada are interlocked. The commercial banks in Newfoundland are Canadian banks. Our foreign exchange control board is operative in Newfoundland. Canada has provided Newfoundland with its requirements of United States dollars out of the common pool.


Mr. Stephenson:: Has the government made any rough estimate of the total cost to Canada of taking over all the public service works and property and establishing the necessary governmental offices in Newfoundland?


Douglas Charles Abbott: A little earlier this afternoon I gave to the hon. member for Rosedale the best estimate we can make of the dominion governmental expenditures in Newfoundland. With the reservation which I made, we have set this for the initial period at some

Newfoundland
$50 million. The regular departmental expenditures for post offices, customs, administration of family allowances, trade and commerce and other governmental activities are included in those figures. I am unable to give my hon. friend any detailed information now; but as 1 indicated yesterday, detailed supplementary estimates, setting out what is expected will be required for the provision of dominion government services in Newfoundland, will be tabled probably on or about March 31.


Mr. MacNicol:: I want to make an observation arising out of the remarks made by the Minister of Transport. I do not do so by way of criticism, because I feel that the Newfoundland railway must be accepted as it is. Acting through the minister's department, which will be directing the railway company that operates the road for Canada, our duty will be to make an accurate survey, as speedily as possible, of what must be done on the road from St. John's to Port aux Basques to put it into better shape for operating speedier and better trains. For a year or two we would not be able to say much about the railway. I would hope the minister would ask the Canadian National Railways, when they become the authority for operating the road, to follow up that problem in a businesslike way, and make a thorough survey of all that is required to give the railway a chance to exist and to make some returns. It cannot do so today because it is in a run-down condition.


Lionel Chevrier: I can tell my hon. friend that a preliminary survey has been made by two of the outstanding engineers of the Canadian National Railways who went down there and made a report. I have that report. It gives a general idea of the present position. It was from that report that I was able to give some of the information to the hon. member for Mackenzie. I agree, however, that a more complete report might be required after the railway is taken over. The report I have was one that was obtained for the purpose of ascertaining what the position of the railway was, the condition of the equipment, the stations, the line, and so on. My hon. friend knows that it is a smaller-gauge railway than the Canadian National railways. But he can rest assured that a more exhaustive report will be obtained of necessity.


[Stage Direction]
Section agreed to.
Mr. Bentley:: May I have your permission, Mr. Chairman, to revert to section 17 for a moment? It would save my making observations on the third reading of the bill if I were permitted to do so now.


Some hon. Members:: Agreed.


Thomas John Bentley: I mentioned this matter before when we were on the section, and I pointed out that I was not satisfied with certain parts of it. Since then I have studied the replies the Prime Minister gave at that time. The Prime Minister pointed out that it was the wish of the Newfoundland delegates that the educational system of the new province be left in the hands of the denominational churches. As I pointed out at that time, this system is quite different from that in the other provinces. It was emphasized also by the Prime Minister

and I notice in the bulletin put out by the Department of External Affairs that it is their interpretation of it-that it cannot be changed by any future legislature unless the denominations themselves request it. That being so, it seems to me that Canada is being a party to an agreement which might become abhorrent to some future legislative body of that province, which body will be unable to deal with it. I do not want it to be taken that I have any disrespect for the clergy or the churches. I do not want anyone to think that I am protesting against any one church. I do not have any disrespect for them. On the contrary, I have a great deal of respect for a great many of them. I am heartily in support of everything that has been said about freedom of worship for the people, and all that. But I also want to point out that there have been times in the history of the world when narrow and bigoted churchmen have attempted, successfully for long periods of time, interference with educational processes, particularly where their ideas came into conflict with new scientific discoveries or pronouncements.
A report written by an investigator from Britain indicates that 60 per cent of the people engaged in some industries are unable to sign the payroll. This is not a flattering record for the people in charge of education to look back on. The statutory protection which under this agreement the denominations have against anything that might be displeasing to any future legislation is extremely powerful. It is practically impossible to change it unless by recourse to the courts. What I want to point out is this. As nearly as I can find out from the answers to the questions that I and others have asked, the legislature will have practically no control over education. What department or division of some department is to have control over education there? Who is to have the authority to lay down a curriculum for the schools? If some such body has that authority, is it to have the right to enforce the curriculum in all the schools? Will there be

compulsory attendance at the schools, as we have in the other provinces, of children of certain ages to be taught under that curriculum? If these things are not to be done, it is possible that much latent talent in Newfoundland will not be developed to the point where the people concerned may make their full contribution to Canadian life.
Again I come back to the position I took before. It does not seem to me that Canada should be a party to an agreement which will sew things up in statute law for all time. I do not oppose the entry of Newfoundland into the confederation, because I believe it is a necessary thing; but I do believe that our government, the future government of Newfoundland, and the British government, all of whom are concerned or should be concerned, should be consulted with a view to changing this section so that the children of Newfoundland will have the same educational opportunities that are available in the other provinces of Canada.


Louis Stephen St-Laurent: So that there may be no misunderstanding abroad I think I should correct the misapprehension under which the hon. member seems to be labouring. If he will read section 17 he will find that there are none of the dangers that he seemed to be deploring. The control over education is left completely in the hands of the legislature of Newfoundland, the legislature which exists at the present time and the legislatures which may come into being in the future. The only restriction on their power to legislate is that their legislation shall not discriminate against the denominational schools. At the present time the curricula for the schools in Newfoundland are prescribed by their department of education. I do not know whether that is its exact name, but they have a department of the commission of government, and before that they had a department of government responsible to the legislature, which has the administration of the schools. The system in Newfoundland differs from that existing in the older Canadian provinces, inasmuch as there is very little municipal organization. The schools are directly administered by the central government. The restriction provided here is not that that government, or the legislature to which it will be responsible, could not set up other schools. Under this provision it would have the right to set up any other kinds of schools that it saw fit to set up. The only provision is that if that happens the grants made for education will be distributed in such a way as not to discriminate against the denominational schools.


Thomas John Bentley: If other schools were set up by the legislature, would the denominational 29087-28
Newfoundland
schools have to follow the same curriculum as that laid down for those other schools?


Louis Stephen St-Laurent: I think that would depend upon the laws and regulations made by the department of education. At the present time the department of government which has control of the schools prescribes the curricula for all schools. I see nothing in this section which would prevent that from being done, unless they attempted to prescribe a curriculum that would exclude religious instruction. If they did that, they would probably be doing something prejudicial to the denominational schools as they exist at the present time; because if they are denominational schools I would imagine, though I have not examined the curricula, that there would be some provision for religious instruction.


Thomas John Bentley: The Prime Minister says that the legislature should not do anything that would prevent religious education from being given in any school. Suppose in a community in which there Was a particular religious denomination a school was in operation, and within that community a child or a few children of some other denomination would have to attend that school because it was the only one in the community; must they be subjected to religious education that might be abhorrent to their fathers and mothers, and eventually to themselves?


Jean-Paul Stephen St-Laurent: I do not know what happens at the present time. We were informed that no trouble whatsoever is being experienced at the present time. I do not know whether under the regulations all the children attending the school are compelled to take all the courses or lessons which are given in that school. The information we have is that they have never had any trouble in that regard, and that they merely wished to continue to have the right to have denominational schools and to get their fair share of any moneys that were distributed for the maintenance of schools; but the legislature should have the right to set up other schools if it was felt by the members of the legislature that it was desirable to do so.
The hon. member referred to compulsory attendance. There is nothing in this section which to my mind can be considered as prejudicing the rights of any religious denomination to see that all children must attend school. It may very well be that in Newfoundland such a provision would be difficult to apply. I understand that outside of St. John's and Corner Brook, where there is concentrated a substantial proportion of the population, the population is distributed in more than 1,300 small hamlets. They have schools, as many as the government felt it

Newfoundland
could afford. They are schools established under this government system whereby the cost is provided by the central government.


Thomas John Bentley: I thank the Prime Minister
for his reply. I still think that the situation should be carefully watched and reviewed again. I believe the Prime Minister has been honest, honourable and sincere in his reply. I still do not think the system is as good a system as the Canadian provinces have.


Louis Stephen St-Laurent: That will be a matter for the people of Newfoundland to settle themselves according to their views.


Thomas John Bentley: But to this extent we are
becoming a party to the agreement.


Louis Stephen St-Laurent: The only thing to which
we are becoming a party is the writing into the constitution of a guarantee that the rights of denominational schools not to be discriminated against will be preserved.


The Deputy Chairman:: Shall section 24
carry?


Mr. Macdonnell (Muskoka-Ontario):: No.
I should like to ask a question on paragraph (a) of subsection 2 of section 24. As I understand it, the basis of this paragraph is that one-third of the surplus is set aside and is to be used to supplement income over the eight-year period.


Douglas Charles Abbott: That was put in at the request of the Newfoundland delegation. According to last estimates, the surplus expressed in terms of Canadian dollars, will be $26,243,035.06. That is being retained by the province of Newfoundland. In view of the difficulty of accurately estimating provincial revenues and provincial finances generally, the Newfoundland delegation felt it would be wise to insert in the terms of union a provision that one-third of the surplus should be kept during the period available for possible deficits in current operations. The remaining two-thirds is available for capital expenditure or development, or whatever may be desired. The representatives of Newfoundland themselves suggested that that condition should be inserted in the terms of union.


James MacKerras Macdonnell: Am I
right in assuming that a calculation was made, and that figures were available showing at what rate it would likely be used up?


Douglas Charles Abbott: No; the figure would not indicate the rate at which it would be used up. It was contemplated that certainly in the early years there would be deficits, and it was believed that this sum at any rate should be held available for that purpose.
[Mr. St. Laurent.)


James MacKerras Macdonnell: I do
not wish to be persistent. Perhaps I might change my question somewhat. Were there or were there not figures, produced perhaps by the Newfoundland people themselves, which would have suggested that that amount would be in fact used up before the termination of the eight-year period?


Douglas Charles Abbott: The figures submitted by the Newfoundland delegation during the course -of the discussions did indicate that probably there would be deficits in the early years. I would not be prepared to say however that this one-third would be exhausted at a particular time; and I do not think the estimates submitted by the Newfoundland delegation would necessarily indicate that.


James MacKerras Macdonnell: Again, if in fact-and this was my understanding- figures were produced showing that this would be used up in anticipated deficits before the end of the eight-year period, what would happen then?


Douglas Charles Abbott: After all, two-thirds of the surplus is available for any purpose, including the taking care of deficits. It does not have to be used for capital expansion, or any other purpose. But it was felt by the Newfoundlanders themselves that, perhaps as a safeguard against a too rapid expenditure of this $26 million surplus, at least one-third of it should be set aside for the purposes I have indicated.


Mr. Hazen:: I suppose the public services referred to are those which would come within the jurisdiction of the provinces, under section 92 of the British North America Act. It would not include wharves or lighthouses?


Douglas Charles Abbott: No; my hon. friend is correct in his assumption. What is contemplated here is a possible deficit in the early stages in provincial budgets, from the provision of services falling within the constitutional responsibility of the new province. It would not relate to services which have to be taken care of out of federal votes.


Harry Rutherford Jackman: I do not quite understand this provision. I presume, in the first instance, it is placed in the agreement at the request of the delegation from Newfoundland. No doubt there are different points of view in Newfoundland, and also different points of view in the delegation itself. Newfoundland finds itself in possession of $26 million; and there is a fear on the part of some that whatever group formed the first government in the province might be tempted to spend the money all at one time.
What do these various provisions mean by way of restriction upon that possibility, if I am correct in my assumption? Does it mean

that one-third of the money will be available to the first provincial government in Newfoundland, at the rate of one-eighth per year, or can they draw it all in one year for expenditures on current account, to facilitate the maintenance and improvement of Newfoundland public services? Then, paragraph (b) states that they may draw two-thirds for either capital or current expenditures. I do not understand exactly what paragraph (a) means. Is there a restriction that they can draw only one-eighth of one-third of this surplus each year, or what is the meaning? How does the restriction work out?


Douglas Charles Abbott: There is no limitation such as the hon. member has suggested. The only limitation, and the only effect of subsection (2) (a), is that the one-third of the surplus to which I have referred can be used only during the eight-year period for the purpose of meeting possible current deficits. It could all be used in the first year, if that were desired by the provincial government. There is no requirement that it be spread over that period.
As my hon. friend will realize, this was not a section in which Canada was primarily interested. We had no objection to it, of course; but we had no special interest in it.


Harry Rutherford Jackman: The only restriction is that one-third of the money must not be used on capital account during the first eight years.


Douglas Charles Abbott: I think that is a correct statement of the fact.


[Stage Direction]
Section agreed to.
Sections 25 and 26 agreed to.
On section 27-Tax agreement.
George Alexander Drew: Mr. Chairman, I again earnestly seek to impress upon the Prime Minister the desirability of giving consideration to the effect of the last part of section 27 (2). As he pointed out, the limitation on the review of a tax agreement would relate to the exercise by Newfoundland of the option to have its tax payments cover a period of eight years.
To simplify the explanation given by the Prime Minister, it would seem to me that what he suggested was that, if Newfoundland was to have the advantage of this longer period of subsidy payments, it should not be open to them to have a reconsideration. I believe that argument might conceivably have some validity, if the payments over the eight-year period were on a higher level than in the shorter period. But the fact is that the subsidy payments are at the same level for either period.
That being so, it does not seem to me that Newfoundland gains anything more or gets anything less by extending the period. It seems to me Newfoundland should be in pre-
Newfoundland
cisely the same position as any other province, at the time these tax agreements would ordinarily terminate, to have their position reviewed along with the others. I would think that, although at the present time they might take the eight-year option, the inclusion of such a limitation might well cause difficulties at the end of three years.
I would remind hon. members that in spite of the repeated suggestions outside, and the suggestion made not so often in the house since I have been here, that it was only the province of Ontario, with a certain amount of support from the province of Quebec, that objected to the tax proposals, the fact is that the premier of Nova Scotia, at the time the Nova Scotia legislature was finally called upon to accept these terms, made it perfectly clear that the government of that province would not renew the present tax agreement. He made it perfectly clear that there must be a review of taxation, or there would be no continuance; and that he was doing it only as a temporary measure. I believe the premier of Alberta has been equally clear in the matter, stating that the present arrangement is not satisfactory from their point of view. To use the exact words of the premier of Nova Scotia: The government has not seen the last of my bonnets and me.
That being so, I think it is only inviting unnecessary dispute and discussion at the end of the three-year period the agreements will have to run for those provinces which have signed them if, in the terms given to a tenth province, there is a limitation which would apply to their acceptance of a longer period. I would point out to hon. members that it is unlikely such an option would have been included, unless there had been a suggestion that it was desired. Obviously there must have been something to suggest this different arrangement with Newfoundland, and there would seem to be some likelihood that this option will be exercised. If it is exercised and if we are to take the word of Premier Macdonald and Premier Manning of Alberta, to say nothing of the fact that at the time there was such a discussion the other provinces would be considered, then I think it is most important that the province of Newfoundland should be free at that time to discuss without restraint or restriction the revision of their relationship with the dominion government in regard to the adjustment of taxes.


Louis Stephen St-Laurent: The leader of the opposition suggests that Newfoundland should be in the same position as the other provinces. They can be in that position if they so wish. It was represented to us that three years was not a very long period and that the transi-
29087-28J

Newfoundland
tional requirements would not have been covered. It was thought that for greater security they might want to be sure that for at least eight years they could have the terms of the tax agreement. We told them that, if they wished to have that, they would have the option of taking it; but if they took the security, if they made a bargain for eight years, it would be a firm bargain. We did not think that we should give them the right to have it extended for a period of eight years and also give them the benefit of having it revised if we were making any other kind of agreement with any of the other provinces.
We said:	If you want a firm deal for a
period of eight years we will not ask you to take an option, but after you have a government with a legislature to which it is responsible and that government and that legislature wish to have a deal made in a firm fashion for eight years, we will not object. If, however, you make a deal for eight years, you should realize that you will not be entitled to a review. They said:	Does that mean that
there will not be any possibility of making a revision? We told them:	There will not
be any right to require a revision to be made, but if it is felt at that time that one is in order it can be made, provided the government of the day takes the responsibility of recommending the modification to parliament.
The leader of the opposition knows that, under the present tax agreement with the seven provinces, if something is granted to one as a right it is acquired by the other six. That is the thing against which we provided by this option. We said:	If you want to
make a firm agreement it will be the kind of agreement that will not automatically give you what any other province may get under a new bargain. It may very well be that if my hon. friends are over here or if we are still here, another arrangement might be made with the provinces which would also extend to Newfoundland, and the government of the day would take the responsibility of recommending to parliament the consequential appropriation. It seems to us that if the new government of Newfoundland, responsible to its legislature, wanted to make a firm contract for a period, it should be a firm contract.
The Depuiy Chairman:	Shall the section
carry?


Louis Stephen St-Laurent: May I supplement the
information that I gave about schools. I have been informed that, under the legislation as it exists in Newfoundland, compulsory attendance is required by children of school age, but if a child is not of the same denom-
ination as the school he does not have to remain in the school while religious instruction is being given.


Stanley Howard Knowles: What are you carrying, the whole section or just the subsection?


William Henry Golding: Section 27, tax
agreement.


Douglas Charles Abbott: We have completed the purely financial sections and I had hoped that it might be possible to conclude those and pass on to some others in order that I might attend a meeting of treasury board which I arranged for this afternoon. I think there is another section under which the railroad could be discussed. If that meets the convenience of the committee, it would be an accommodation to myself.


Stanley Howard Knowles: That is quite satisfactory to me provided you do a good job at treasury board, particularly on behalf of the superannuated civil servants. I would be glad to ask what I want to ask under section 31 or section 37.


Mrs. Strum:: If the existing schools cannot accommodate the pupils and new schools are required on the island, what provision will there be for needed educational facilities?


Jean-Paul Stephen St-Laurent: Nothing in this provision would hamper in any way the legislature of Newfoundland in establishing as many new schools as the condition of the province would require.


Mr. Castleden:: Subsection 1 of section 27 reads:
The government of Canada will forthwith after the date of union take an offer to the government of the province of Newfoundland to enter into a tax agreement for the rental to the government of Canada of the income, corporation income, and corporation tax fields, and the succession duties tax field.
Subsection 4 reads:
The government of the province of Newfoundland shall not by any agreement entered into pursuant to this term be required to impose on any person or corporation taxation repugnant to the provisions of any contract entered into with such person or corporation before the date of the agreement and subsisting at the date of the agreement.
Does that mean that, if the federal government wished to enter into an agreement with the province with regard to income or corporation taxes, they would be prevented from doing so if no corporation or income tax were imposed at the present time?


Douglas Charles Abbott: I answered that question
yesterday in indicating that when Newfoundland becomes a province of Canada its residents will be subject to Canadian law, including the taxation law.


George Hugh Castleden: That seems contrary to the provisions of subsection 4.


Douglas Charles Abbott: The Prime Minister explained a little earlier this afternoon, when perhaps the hon. member was not present, that that was inserted in order to provide that the new provincial government of Newfoundland would not be obliged to breach any contracts which might have been entered into by the colonial or dominion government with respect to the matters referred to in that section. My hon. friend will recall that, under the agreements with the seven provinces in connection with income and corporation taxes, those provinces are required to impose a five per cent corporation tax on corporations within the provinces. In view of this section, that provision would not be applicable to Newfoundland.


Major James William Coldwell: That would not preclude Newfoundland from doing anything of its own volition?


Douglas Charles Abbott: No.


Major James William Coldwell: This simply provides that the dominion government will not require Newfoundland to do something. There are certain contracts that were made in Newfoundland some years ago under which great concessions were given to certain corporations that pay hardly any taxes at all. This would not prevent Newfoundland dealing with that situation?


Douglas Charles Abbott: No, not at all. I think I said yesterday that the effect of this agreement would be to preserve the legal rights between contracting parties. The dominion government is not requiring the government of Newfoundland to do anything which would be a breach of a statute or of an agreement entered into with that government.


Major James William Coldwell: But Newfoundland itself?


Douglas Charles Abbott: Newfoundland is perfectly free to do as it pleases.


Major James William Coldwell: If the courts hold it cannot do it, that is a different matter. As far as we are concerned, we are not forcing them to do anything, but they can of their own volition try to do what seems best to them?


Douglas Charles Abbott: Right.


George Hugh Castleden: Canada reserves the right to carry on corporation taxes after the agreement?


Douglas Charles Abbott: Right.


George Alexander Drew: Is it not correct that under the agreements that have now been signed with seven of the provinces they are required to impose certain taxation as a part of the terms?


Douglas Charles Abbott: Correct, yes.
Newfoundland


George Alexander Drew: As I understand it, a provision to that effect was incorporated to avoid any possibility of a constitutional dispute as to whether the tax was being imposed within the provincial or the federal field. The provinces actually collect it, but it does not affect the total that is received by the dominion government before the subsidy payments are returned to the provinces. As I read this section it would mean that, although the dominion government undertakes to pay subsidies in accordance with the same terms that have been signed by certain provinces, the provincial government in this case might not be in a position to carry out the same undertaking other provinces are called upon to give in regard to the imposition of certain taxes.


Douglas Charles Abbott: That is possible. Of course, as my hon. friend appreciates, that provision was inserted in the agreements with the seven provinces in order to assure that as far as possible corporation taxpayers in non-agreeing provinces would not be prejudiced. That was the sole purpose of including that provision in the agreements with the seven provinces. The agreements contain a provision that the dominion may at any time require those provinces to repeal the five per cent corporation tax. My hon. friend is quite right in saying that the net effect is that the provinces do not retain any more money. In fact, the dominion government gets the 35 per cent rate as a result of the combined effect of the federal tax and the provincial tax.


George Alexander Drew: Does the minister know what the actual effect of this is?


Douglas Charles Abbott: The actual effect of this provision?


George Alexander Drew: Of subsection 4.


Douglas Charles Abbott: The actual effect of subsection 4 would be-


George Alexander Drew: I am talking about the practical effect.


Douglas Charles Abbott: The practical effect is that the dominion government imposes at present rates a 30 per cent tax on corporations, but in the case of Newfoundland, if the province so requested, we would not impose upon them an obligation to collect a corporation tax, let us say of five per cent, as in the case of the seven other provinces, which would involve a breach of covenants that predecessor governments may have entered into with corporations or others in that field. As the hon. member for Rosetown-Biggar has pointed out, no restriction is placed upon what the new Newfoundland government does in this connection. But, to put it rather colloquially, we would not impose, as a condition of getting

Newfoundland
a tax agreement with the dominion, that they ment to impose a five per cent corporation must breach a contract which they may have tax on corporations in the province that do entered into prior to union.	not have such a contract?


George Alexander Drew: When I spoke of the practical effect, I meant, does the minister know whether there are cases where this will have a definite result? After all, the type of companies that would be affected must be fairly well known.


Douglas Charles Abbott: Yes. Although we have not examined them in great detail we know that there are outstanding agreements, some of them confirmed by statute, whereby income tax exemptions are granted to certain corporations in consideration of a fixed annual payment. We know that there are agreements, some of them confirmed by statute, which give customs duty exemptions. The effects of this clause is that if the government of the new province of Newfoundland came to the dominion government and said, "We wish to have a tax agreement along the lines indicated in this section, but because of arrangements which we have entered into with certain corporations we do not wish to be obliged to impose the five per cent corporation tax on them", they would not be obliged to do so. To that extent the dominion government might lose the five per cent in respect of the corporations with which Newfoundland has entered into contracts.


Major James William Coldwell: Suppose at some time we required the seven provinces, or any one of them, to discontinue the five per cent tax, and we increased our own tax from 30 to 35 per cent; then the tax would apply to Newfoundland as well as to the other provinces?


Douglas Charles Abbott: Quite so.


Major James William Coldwell: It would be uniform throughout?


Douglas Charles Abbott: That is right.


Major James William Coldwell: In no way would it vary that?


Douglas Charles Abbott: No way whatever. I want to make it perfectly clear that the dominion government under the arrangement retains complete freedom with respect to its fiscal policies as they will apply to any resident of Newfoundland who becomes a Canadian citizen.


John Oliver Probe: Without exception?


Douglas Charles Abbott: I make that statement without any qualification whatever.


Stanley Howard Knowles: Is it likely that the agreement with Newfoundland, in the same way as the agreements that have been made with the other provinces, may include a require-


Douglas Charles Abbott: I prefer not to answer a hypothetical question of that kind at this time. As my hon. friend appreciates, it involves a question of fiscal policy. I hope I have made the legal position clear. I think it is a fair and proper stand for the dominion government to take. When I say that we retain complete freedom to determine our federal taxation policy with respect to residents of Newfoundland, as with every other province, I think that should be assurance to the committee that parliament will be perfectly free to decide these questions in whatever way it thinks proper.


Stanley Howard Knowles: Does the minister know whether the Quebec, North Shore and Labrador Railway Company has that kind of contract with Newfoundland?


Douglas Charles Abbott: Certainly the Quebec, North Shore and Labrador Railway Company has no such contract with respect to income tax. It may have some special arrangement with respect to customs duties. Incidentally, that will become much less valuable after union because substantial importations, which were subject to customs duties, were made from Canada, and after union they will be free of duty.


Stanley Howard Knowles: That would be true of the customs provisions, but respecting corporation taxes, in the case of a company operating into the Ungava iron-ore field, the amount involved might be quite substantial.


Douglas Charles Abbott: There is, I repeat, absolutely no limitation on the government under the terms of agreement with respect to the rate of corporation tax which it charges anywhere in the Dominion of Canada, including Newfoundland, if it becomes a province.


Stanley Howard Knowles: It is very hard to discuss this matter without getting into the questions I have in mind about the Quebec, North Shore and Labrador Railway Company, but I will try at this time to stick to the taxation aspect of it. This parliament, over our vote, passed chapter 80 of the statutes of 1947 incorporating the Quebec, North Shore and Labrador Railway, and enabling it to go up into the north country to the border of Labrador. If, on the basis of the rights and privileges this parliament gave to it, that railway company has in turn secured a special contract with Newfoundland which becomes of particular value when Newfoundland becomes a province of Canada, under subsection 4 it does seem to me it is a matter of importance.


Douglas Charles Abbott: The dominion government is not bound by the terms of any contracts entered into between the government of Newfoundland and the railway company to which my hon. friend has referred, although it may have secured its charter from this house.


Louis Stephen St-Laurent: I think I might add that the Newfoundland delegation gave us a list of all companies that had any such privileges. The railway company referred to by the hon. member is not in that list. There are in the list the Labrador Mining Company and the Labrador Railway Company, but only with respect to exemption from duties on articles imported for the construction of their physical plants.


Stanley Howard Knowles: Can we be supplied with those lists? Can they be placed on Hansard tomorrow?


Jean-Paul Stephen St-Laurent: The list of the companies that were mentioned to us as having obtained certain concessions in the past?


Stanley Howard Knowles: Right.


Louis Stephen St-Laurent: I will have a list made.


Major James William Coldwell: And what those concessions were, because the point I have in my mind is that Newfoundland is a country which will require some assistance from Canada. That is obvious from this agreement. It is also obvious from the agreement that its recovery may be somewhat prolonged. If a very large number of corporations are relieved of a portion of the corporation income tax, which is not to be levied by Newfoundland, of course that is a matter of concern to this parliament, and I think we should know what we are doing in this regard. If my information is correct, some corporations have made agreements with previous Newfoundland governments under which they pay practically no taxes whatever. That brings up two points: first, the aid they will have to get from this parliament, and second the position it places them vis-a-vis our own similar corporations, if there are any in Canada. That is the point.


Douglas Charles Abbott: I repeat that we are perfectly free to collect from the corporations to which my hon. friend refers exactly the same amount of taxes we collect from any other corporations; and if Newfoundland makes a tax agreement it will receive exactly the same amount. As my hon. friend himself indicated, if we saw fit we could ask the seven provinces to repeal this five per cent tax, and I may say there would be some advantages in doing that. It was put on solely and for no other reason than to prevent taxpayers in other provinces being prejudiced as a result of the arrangements
Newfoundland
made with seven provinces in which there would be no provincial corporation tax; and in the two presently non-concurring provinces we allow a deduction from corporation taxes of up to five per cent. It is beyond the bounds of possibility that in a rearrangement of the position it might be desirable to have uniformity, but that is a matter which would have to be considered in due course. This provision cannot prejudice in any way either the province of Newfoundland or the Dominion of Canada unless this parliament should see fit to do so.


[Stage Direction]
Section agreed to.
Sections 28 to 30 inclusive agreed to.
On section 31-Public services, works and property.
Stanley Howard Knowles: It was suggested that I might ask my questions in reference to the Quebec, North Shore and Labrador Railway Company under section 31, since it mentions the Newfoundland railway and other undertakings similar thereto. I should like to ask what is the effect, both legal and practical, of the adoption of these terms of union on the provisions of chapter 80 of the statutes of 1947. That was the act which incorporated the Quebec, North Shore and Labrador Railway Company. That act gave the company pretty wide powers, rights and privileges. It can build a railway right up to the border of Labrador and, if it secured permission from Newfoundland, could go on into Labrador. In addition to the right to build a railway it was given certain other associated rights, such as the right to develop electric and other kinds of power; the right to set up a telegraph and telephone system, to operate steamships, wharves, docks, hotels, parks, motorcars, pipe lines for the transportation of oil, gas and so on. All told, the powers given that company in 1947 are quite extensive. In addition, when one realizes that the purpose of this railway is to tap an area extremely rich in a great natural resource, namely iron, it becomes readily apparent that the interests connected with this railway are given quite an entree into the development and exploitation of that wealth.
In the act we passed in 1947 there was this concluding section:
20. The works and undertakings of the company are hereby declared to be for the general advantage of Canada.
That would seem to make the whole operation of that company, at least as far as Canada stood then, a federal matter. It seems to me that, when Newfoundland becomes a part of Canada, that section overrides any necessity on the part of the company to secure permission from Newfoundland to extend its

Newfoundland
operations into Labrador; and it would seem that the rights and privileges given this company in 1947 in the Canada of that day will now apply to Newfoundland as well. I should like an opinion from the government as to the effect the terms of union will have upon the provisions of chapter 80 of the statutes of 1947.


Mr.   Si. Laureni@: Well, Mr. Chairman, I do not know that I should or could give an opinion as to what effect the terms of union might have on the exercise by this company of the powers it obtained by its charter. It would seem to me that they would have no effect. This company was incorporated as a railway company, and by virtue of that incorporation acquired the rights and privileges expressed in the charter, and also the right to exercise the powers granted to a railway company by the Railway Act within the territory that was then Canada. It may be that the company, if it wished to be governed by the provisions of the Railway Act for the whole of its operation, that is to say the portion in the former territory of Canada and the portion which might extend into Newfoundland, would have to get an amendment to its charter. There the law speaks all the time; but the powers under the Railway Act which were exercisable were powers only over lands in Canada; and whether the addition to the territory of Canada would extend the operation of the Railway Act to the new territory is a question about which there might be some serious argument.
I do not think it would make any change. There was no intent in parliament at that time to give them rights outside Canadian territory. They were merely given the capacity to acquire rights outside Canadian territory, and I should imagine they would have to acquire those rights as provided in the express terms of the charter.


Stanley Howard Knowles: Since this does seem to be
a matter of opinion I shall not prolong the discussion, except to say that as I read the act we passed in 1947 we gave that company rights in Canada. After the adoption of these terms of union Newfoundland is part of Canada. If I were counsel for the company I would claim that those rights thereby extended to Newfoundland, which would mean that the objectionable features of the bill we passed in 1947 would become that much more objectionable now.


Mr.   Si. Laureni@: Or that much more desirable now, according to the point of view of the person considering it. The majority in this house considered that it was not objectionable but desirable; and if this measure extends it, then to those members who considered it desirable it would be that much

more desirable, though to the hon. member who considered it objectionable it would have the opposite effect.


Stanley Howard Knowles: Then I think the Prime Minister has answered my question, and this bill does extend the rights and privileges of this company into Newfoundland.


Brooke Claxton: No; I think the point is this. Under the terms of the charter of the company, as provided in chapter 80 of the statutes of 1947, the company was given the capacity of a railway company. Then it was given the right to operate a railway line in that part of the territory which then formed part of Canada. But this was subject to its obtaining the authority to operate the railway over that part of the territory which was in Newfoundland. That authority was obtained from the Newfoundland government, I am informed, so that the company now is fully clothed with the authority to carry on its operations. The province of Newfoundland will succeed the dominion of Newfoundland; so that, unless there is some development that one could not foresee, it looks as if the situation is as it was, as regards the operations of the company. It has no additional rights, but it has the rights it was given by a combination of Newfoundland and Canada.


Stanley Howard Knowles: It worked out nicely for
the company.


Mr. Timmins:: When the matter was before the railway committee, as I remember, the group who were asking for the incorporation of the company stated that the company already had an agreement with Newfoundland with respect to the development of that part of the iron deposits which was in Labrador. Would it be appropriate at this time for the Prime Minister to tell us something about that agreement, whether it is binding upon Canada and what its effect will be in respect of the union we are putting through?


Louis Stephen St-Laurent: I would imagine that this union would have no effect upon it whatsoever; because under the terms of this agreement the province of Labrador retains all its natural resources. The agreement, whether it was made by the commission of government or by the responsible government of Newfoundland before the commission of government, would continue to be binding upon the government of the province of Newfoundland. But the natural resources remain vested in the government of the province.


John Ritchie MacNicol: As I remember it, what we did in passing that bill in 1947 was to give the railway power to run a railway to the border of Labrador and Quebec, and we were

Informed that they had authority to run the railway on north from the border of Labrador and Quebec to develop the mines in the western part of Labrador. I do not understand the questions asked by the hon. member for Winnipeg North Centre. I do not believe that power applied to the whole of Newfoundland or to anything else than what the bill called for. As the province of Quebec has given the company the authority they require to operate in that part of Canada which is in the province of Quebec, that is their business. If Newfoundland gave them authority in connection with a few miles into Labrador not over fifty or sixty, I do not see where we are in much jeopardy in respect of this particular clause.


Alexander Malcolm Nicholson: Section 31 states:
At the date of union, or as soon thereafter as practicable, Canada will take over the following services and will as from the date of union relieve the province of Newfoundland of the public costs incurred in respect of each service taken over, namely . . .
(f) defence.
As I mentioned previously, the newspapers indicate that while the Prime Minister is in Washington he is to have some discussions there with regard to the bases upon which the Americans have ninety-nine year leases. Would either the Prime Minister or the Minister of National Defence care to make some statement with regard to discussions which have taken place between Canada and Great Britain, or between Canada and the delegation, on the question of taking over these bases? The Americans have made large expenditures. If the newspaper reports are correct, that there is a disposition to take over those bases from the Americans, it will be necessary for either Canada or some other country to spend large sums of money in Newfoundland to maintain the present standard of living there as a result of these American expenditures. I think it would be helpful if the committee had some information with regard to the discussions which have taken place on this question.


Louis Stephen St-Laurent: There have been no discussions whatsoever with the delegation about this matter, because it was felt that it was one over which neither the Newfoundland delegation nor the Canadian delegation could make any decision. Real rights had been created by the granting of ninety-nine year leases on certain sections of land. If and when Newfoundland becomes a part of Canada, those leases will still be valid leases affecting the lands described in them. They contain provisions which go beyond the provisions to which the Canadian government has agreed with respect to anything done by the United States government in the terri-
Newfoundland,
tory of Canada, and we hope that it will be possible to get the government of the United States to agree that it will not exercise those rights in a manner that would offend against our rights of sovereignty in Newfoundland. But that is something that will have to be brought about by negotiation and agreement with the government of the United States. The situation is the same as if the hon. member, having a farm, leased a building lot on it for ninety-nine years and then sold his farm. The acquirer would have to take the farm and respect the agreement the hon. member had made with regard to the building lot. But he could go to the man who had the lease on the building lot and try to make a new deal with him. That is what we intend to try to do with the government of the United States. But if they are not disposed to make any change in the arrangement, we shall be obliged to respect the rights that exist there, just as we shall be obliged to respect as a fact the existing situation in the territory of Newfoundland.
We have had preliminary negotiations with the state department, but we have not been in a position to do anything final in that regard because Newfoundland is still territory over which we have no control. Nothing definite can be determined unless and until we acquire control over the territory of Newfoundland.


Major James William Coldwell: Paragraph (g) of section 31 refers to protection and encouragement of fisheries and operation of bait services. How do these bait services differ from what we have in the maritime provinces? As far as I can remember, there are no federal bait services for the maritime fishermen. I may be wrong in that respect, but I do not think I am. What are those bait services that are referred to? Are they convenient services which the fishermen find valuable both economically and socially? Is this service the Newfoundland fisherman enjoys the kind of service that might be extended to the fishermen of the maritime coasts where, I believe, the provision of bait is, at some seasons of the year, extremely difficult? I have an idea that in Newfoundland there is being done something different from what is being done by the federal Department of Fisheries in the mari-times or in British Columbia. I should like to know just what this paragraph means.


Jean-Paul Stephen St-Laurent: If the hon. member will read the statement that was made by the Minister of Fisheries yesterday, I think he will find the answer to that question.


Major James William Coldwell: I did not find the answer. That is why I asked the question.

Newfoundland


Louis Stephen St-Laurent: As I understand it, there is in Newfoundland a system for the conservation of bait under cold storage conditions, which is more effective than anything we have in the maritime provinces. The question arose, and I think it is covered in the statement of the questions answered.
Mr. Cold well: I heard the minister yesterday but I did not quite get the explanation I am now seeking.


Louis Stephen St-Laurent: In the statement of questions raised by the Newfoundland delegation, one of the questions was whether or not in taking over the bait service it would be used exclusively for the Newfoundland fishermen, or would be made available to the fishermen of the maritimes. The answer to that question is given on page 9 of the questions raised by the Newfoundland delegation and reads as follows:
The Canadian government will seek legislation or take such other steps as may be necessary to provide that the Newfoundland bait service will be taken over and operated without fundamental change by the Department of Fisheries. If, after the date of the union, changes are made for the benefit of Canada as a whole, the question of payment will be discussed between federal and provincial authorities.
This was going to be a federal service. If it was a federal service which had been provided out of moneys of Newfoundland, and if it was going to become a federal service for the benefit of the whole of Canada they should get some compensation for what they had invested in it. It was not possible to reach any final conclusion in that regard, but they were told that it would be the policy of this government to ask parliament to provide by legislation or otherwise, if under existing legislation it could be done, to continue to operate the bait service without any fundamental change, and that if in operating it we found that it could be of use to other Canadians then the question of a fair compensation to Newfoundland would be discussed.


Major James William Coldwell: Yes, that is the interpretation I wanted to get. It is not intended that this would be charged back to the province or provinces if it is extended to the various provinces. It is the other way around.


Louis Stephen St-Laurent: It is the other way around. If we use for the benefit of the other provinces something that they operate, then the question will arise as to whether we should not make some compensation to them because of the benefit that the other provinces will get.


Major James William Coldwell: That is the point I wanted to clear up.


Brooke Claxton: May I supplement that from the remarks which the Minister of Fisheries

made yesterday and which appear on page 399 of Hansard. The minister said:
There is in Newfoundland a bait-freezing service which I think is a better one than we have in Canada. We shall have to do something to improve ours so that it will be equal to Newfoundland's.
That is the point the hon. member had in mind.


Major James William Coldwell: That is the point.


John Ritchie MacNicol: May I suggest, Mr. Chairman, that you call each paragraph of section 31. I wanted to ask a few questions under some of these paragraphs.
Section 31 (a) agreed to.
On section 31 (b) and (c).


John Ritchie MacNicol: How does paragraph (b)
of section 31 connect with paragraph (c) of section 33? If we pass paragraph (b) of section 31 as it is, will we then not have to do something with paragraph (c) of section 33?


Louis Stephen St-Laurent: Section 33, paragraph (c) reads:
The following public works and property of Newfoundland shall become the property of Canada when the service concerned is taken over by Canada, . . .
If the Newfoundland hotel is not taken over by Canada it will never become the property of Canada.


Mr. Knight:: In section 31, paragraph (b), the Newfoundland hotel is the only item in which the arrangement is not definite. Will the minister explain the limitation of time?


Louis Stephen St-Laurent: We do not propose to
make any payment whatsoever for it. The government of Newfoundland will say whether they want to charge us with the burden of operating it or whether they think it is worth something and prefer to get it.


Stanley Howard Knowles: Where is it?


Louis Stephen St-Laurent: In St. John's. The information we had from the Canadian National Railways was that they would prefer not to have it, so that we were not willing to make any payment for it. But if the people of Newfoundland felt that they wanted us to have the responsibility of operating it as a railway hotel we would not refuse to accept it.


John Ritchie MacNicol: Paragraph (c) of section 31 refers to postal and publicly-owned telecommunication services. Are these services -the telephone, telegraphs and postal services-in the one building everywhere throughout the island?


Jean-Paul Stephen St-Laurent: Not everywhere, but in
a general way they are operated as one service. They are not entirely separate. Publicly-owned telecommunication services was the expression used to cover publicly-owned telegraphs and publicly-owned telephones; and at some points there are even, I understand, radio communications which are also publicly-owned.


Major James William Coldwell: Is this similar to the British system under which the post office operates the telegraphs?


Jean-Paul Stephen St-Laurent: Yes.


John Ritchie MacNicol: In places such as Corner
Brook, which is a substantial community, or Grand Falls, or Curling and other substantial communities, would the telephone and telegraph offices be in the same building? It is good sense to me if they are, because it cuts down extra rent. In the towns where there are railways, are the railway offices in the same building?


Jean-Paul Stephen St-Laurent: I am not in a position to supply accurate information on that. I have not had the good fortune the hon. member has had of visiting these places on the island, but I understand that all these communication systems were operated by the government, and wherever it was possible to have one public servant take care of the various aspects of the communications system that was the practice. There may be other places where one official would be charged with a special portion of the responsibility and another with the other portion, but they were operated as one public utility.


Major James William Coldwell: The point I had in mind is this. This is under the British system. In Britain the telegraphs and telephones are all operated by the post office. When we take over the post office and we take over the postal telegraphs and telephones, which differs from what is done in other parts of Canada, is it the intention of the government to recommend that we continue to operate them as one service? It seems to me that that is the proper way to operate these communications. I have never been able to see why it is that in our country we have the telephones operated in one province by a provincial company and in other provinces by the Bell Telephone Company, and the telegraphs operated by railway companies and so on. It would be much more economical to have the whole thing under one heading. It has worked out very well where it has been done, as it has been done in most countries. What is the intention of the government in this regard?
Newfoundland


Lionel Chevrier: Perhaps I can help the hon. member, if I may. As the hon. gentleman says, the position in Newfoundland with reference to telecommunications is entirely different from that in Canada. The radio service is divided into two parts, the first part having to do with telephone and wireless and the other part having to do with ship-to-shore installations. That latter part will be taken over by the Department of Transport and operated as such. The former part, the part to which my hon. friend addresses his question, will be taken over by the government. So far it has not been determined whether the Canadian National Telegraphs will operate it but I presume it will. If it does, the Canadian National will move in and operate telephones, telegraphs and radio having to do with telecommunications.


Major James William Coldwell: It will take over both telephones and telegraphs? Is that the idea?


Lionel Chevrier: Yes, it is the intention that the Canadian National Telegraphs will operate the whole telecommunications services as they now exist on the island.


George Randolph Pearkes: It is not the intention of the government to operate government telephones in the same way as they are operating government telephones in several parts of British Columbia at the present time?


Lionel Chevrier: There is a distinction in certain parts of eastern Canada and western Canada with respect to telephones. I do not know what my hon. friend has in mind. In certain parts of Canada the government has entered into contracts with associations or companies to operate telephone services. That is not the intention thus far in Newfoundland. But it will not be possible to reach a conclusion until the officers of the Canadian National have made a complete investigation. On the basis of the information we have before us, the intention is as I related a moment ago.


George Randolph Pearkes: Does not the government operate certain telephone lines on the west coast of Vancouver island, for instance? Is it not the intention to operate in the same way in Newfoundland?


Lionel Chevrier: No.


Major James William Coldwell: Is that not placing a further burden upon the Canadian National Railways? As the hon. member has said, on the west coast of Vancouver island there is a government telephone line, because the distances are so great and the usage so infrequent that the cost of operation is high. It is a public service rendered by the parliament of Canada to a sparsely scattered

Newfoundland
population. That would be the condition in N e wf oundland.
It seems to me that if the telephone and telegraph lines are placed under the Canadian National Railways in certain areas of the country, we would be inflicting a further burden upon the railways. Surely when we took over the railways we inflicted burden enough upon them, to a point where they have found it difficult to make a decent showing.


Lionel Chevrier: From surveys which the Canadian National Railways have made through their subsidiary, the Canadian National Telegraphs, it would appear that it would be much less costly to the government if those three services were operated through one agency, rather than to divide the service as between the government on the one hand and the Canadian National Telegraphs on the other.


Major James William Coldwell: You would have to pay some subsidy to the Canadian National Railways. When we have before us the story of deficits of the Canadian National Railways we always hear arguments; and I do not think we should knowingly and willingly do something to increase that deficit, or to raise arguments of the description we heard before the war.


Stanley Howard Knowles: The Canadian Pacific is not asking for this privilege.


John Ritchie MacNicol: I have one question to ask with respect to paragraph (d), "civil aviation, including Gander airport". Gander is a most excellent airport. Daily-indeed several times each day-people meet at that point from all parts of the world. It is rapidly becoming one of the great airports of the world. I should like to ask about the position with respect to Goose Bay in Labrador.


Mr.   Si. Laureni@: Goose Bay in Labrador is already a Canadian airport.


Gordon Knapman Fraser: Torbay is also a Canadian airport.


Jean-Paul Stephen St-Laurent: Yes.


Gordon Knapman Fraser: What about the United States base at Argentia?


Mr.   Si. Laureni@: Argentia is one of the three bases covered by the leases entered into between the governments of the United Kingdom and the United States, and which we must respect as made unless and until we can get some variation in those leases through negotiation with the government of the United States.


Gordon Knapman Fraser: I was wondering if in the event of fog our aircraft would be allowed to use the airport at Argentia, or take off from that point?


Mr.   Si. Laureni@: Only in cases of emergency. They are not allowed to make regular use of that field; but under the agreement there would be permission for emergency landing or take-off purposes.


Gordon Knapman Fraser: Would they be able to refuel, too? When I was over there we had difficulty getting enough fuel for our aircraft.


Mr.   Si. Laureni@: It would be only on occasions when emergency landings would be necessary that the use would be permissible.


Harry Rutherford Jackman: Arising out of the question asked by the hon. member for Rosetown-Biggar, may I ask if the railway in Newfoundland will be acquired by the Canadian National, or will it be merely operated by the Canadian National as an agent for the Canadian government? In that event it would be in the same position as the Hudson Bay Railway and would not be included in the accounts of the Canadian National.


Lionel Chevrier: The railway will become the property of the government of Canada, and will be operated by the Canadian National as agent for the government, in the same way as applies to the Intercolonial.


Harry Rutherford Jackman: In other words any deficit or profits arising from the operation of the Newfoundland railway will not enter directly or indirectly into the accounts of the Canadian National.


Lionel Chevrier: That is a matter of accounting.


Harry Rutherford Jackman: No, it is a matter of operation.


Lionel Chevrier: I do not know what proposal the Canadian National will bring forward. However, the Intercolonial is now an integral part of the Canadian National, whereas the Hudson Bay Railway is not. A separate item is put in the estimates to cover the Hudson Bay Railway.


Harry Rutherford Jackman: The government has not yet made up its mind.


Lionel Chevrier: I would presume from what I have said already the position would be that the Newfoundland railway would be integrated with the Canadian National system.


Arthur Leroy Smith: I have only one suggestion to make, and that is that the government should do nothing which could possibly give us a telephone system such as they have in England.
Section 31 (b) and (c) agreed to.

On section 31 (d).


Harold Aberdeen Watson Timmins: Having regard to the international feature of Gander airport, may I ask if it is on a self-sustaining basis, or whether we are letting ourselves in for any amount of expense in that connection?


Lionel Chevrier: Without going into detail, the best information I have is that Gander is a tremendous project, and that it is not self-supporting. If oilers great advantages, from an international standpoint. When we take it over perhaps we may have to operate it at a loss; but what the figures will be, I am not in a position to say at the present time.
Section 31 (d) agreed to.
On section 31 (e).


John Ritchie MacNicol: Mr. Chairman, a few days ago I read in a newspaper an item advising that the only shoe factory in Newfoundland is going to close its doors-or has closed, I have forgotten which. In any event the article pointed out that sixty employees would be thrown out of employment. I would suggest to the minister who has the required authority that he should try to keep that shoe factory in operation. I fully realize that with the duties removed they will find it difficult to compete with the big shoe factories of Quebec and Ontario. I believe however that something should be done to protect those employees who own their own homes and who have families.
I am not sure what procedure would be taken. However, in time other business will develop which undoubtedly would take care of those who may be laid off. In the present instance however criticism is appearing in the press because of the laying off of these people, and I would draw the attention of the government particularly to this shoe business in Newfoundland. If necessary some effort should be made to give them orders for boots and shoes for the troops in order that they may continue in operation until the necessary adjustment takes place.


Clarence Decatur Howe: I am familiar with the situation, as I looked into it when I was in Newfoundland last week. There are two shoe factories there. Three or four weeks ago one of them announced that they were going to close, but I am told that it is a matter of history that this factory closes every winter about this time. The other shoe factory has announced that it is going to specialize in a certain grade of footwear and expects to expand its operations.
I met both gentlemen. I congratulated the one upon his outlook and said that was the kind of industry Canada wanted to help. The other man came to see me and wanted
Newfoundland
to know if I had any proposal to make. I said I had none and that I had no use for a man who closed his plant before anything had happened. We can help those who want to help themselves. If others wish to close up and take their profits, that is all right. In this case the plant was fully depreciated and I hope someone else will decide to pick up that business and go ahead with it.


John Ritchie MacNicol: That was not what I had in mind. What I had in mind was what I have read. The article said there was one plant; the minister says there are two. I do not know what plant the article referred to. This apparently comes under the right hon. gentleman and I would urge whoever has to do with this to keep the present plant in operation.


Clarence Decatur Howe: We are going to do that.


John Ritchie MacNicol: If a plant is closed, that is another matter. This plant should be kept in operation until adjustments take place all along the line. Perhaps they will get more orders in Canada; we do not know.


Major James William Coldwell: I understand that 75 per cent of the revenue in Newfoundland was obtained from customs duties; two and a half per cent from liquor; seven and a half per cent from income taxes; a total of 85 per cent from these three sources. I think it would be well to put on Hansard just what is really involved in the loss of this revenue. I suppose some liquor taxes will be retained, but I presume most of them were in the form of excise duties and therefore would be of national interest to them. It should be indicated whether the island will have to raise revenue from other sources or whether financial returns are being made for their entry into confederation. When people are trying to follow a debate right through in Hansard, that sort of thing should be on the record rather than hidden away among some documents. The Minister of Finance is not in his seat and it may be that this cannot be done at the moment, but I think it should be given possibly in the form of a table at some later date.


Jean-Paul Stephen St-Laurent: I shall draw my hon. friend's observations to the attention of the Minister of Finance, who has been specially concerned with that aspect of the negotiations, and see if a short table cannot be prepared to be put on Hansard.
Section 31 (e) agreed to.
On section 31 (f)-Defence.


Douglas King Hazen: Why is defence included in here when it is covered in section 91 of the British North America Act?

Newfoundland


Brooke Claxton: I ask my hon. friend to note the opening words of section 33 which are as follows:
The following public works and property of Newfoundland shall become the property of Canada.
The purpose of this section is to transfer property and we felt that it should be provided for expressly.	*


Douglas King Hazen: I notice that there is nothing in connection with the printing of money as provided for by section 91 of the British North America Act.


Louis Stephen St-Laurent: No property connected with the exercise of that power had to be transferred.
Section 31 (f) agreed to.
Section 31 (g) agreed to.
On section (h)-Geological, topographical, geodetic, and hydrographic surveys.


Major James William Coldwell: Something should be done in connection with soil surveys which might be carried out in co-operation with the new government of Newfoundland. I know that in the west soil surveys have been of great value. While Newfoundland in large part may not have much soil, as I said the other day, the reports indicate the possibility of some agricultural development in western Newfoundland which might provide supplies of milk, vegetables and other products which are now imported. I would think that wherever possible soil surveys should be made. You cannot tell just by looking at soil what it will produce; the necessary surveys must be made.


Louis Stephen St-Laurent: I think that is covered by the statement of questions and answers.


Major James William Coldwell: Is that inferred?


Louis Stephen St-Laurent: Not in the express terms used by the hon. member, but it was stated that it would be the policy of the government to put at the disposal of the government of the island its technical advisers for the purpose of making such economic surveys or investigations as might be required.


Major James William Coldwell: I wanted to mention that particularly.
Section 31 (h) agreed to.
Section 31 (i), (j), (k) and (1) agreed to.


[Stage Direction]
Section agreed to.
On section 32.
Mr. Dickey:: This is a general clause dealing with transportation. One of the basic considerations in bringing about union was the economic development of Newfoundland for the benefit of the people of Newfoundland as well as for the general benefit of Canada. This

development can take place only when proper facilities are provided and it can be carried on only to the extent which those facilities will permit.
Trade between Newfoundland and Canada, particularly in the winter months, has depended particularly upon the transportation system of the maritime provinces. During the winter a heavy volume of freight passes through Halifax and North Sydney destined for Newfoundland, and the passenger traffic between Canada and Newfoundland passes almost exclusively through maritime ports.
Section 32 contains certain guarantees with respect to the operation and maintenance of transportation services within Newfoundland, and I should like to draw the attention of the committee and the government to the fact that the operation of this transportation system will depend upon the efficiency of the transportation system in the maritime provinces. The hoped-for increase in trade between Canada and Newfoundland will throw an additional burden upon a transportation system which is long overdue for improvement. In this regard I should like to quote briefly from the report of the Nova Scotia royal commission on development and rehabilitation of 1944, known as the Dawson report. I may say to the committee that I do not do so to frighten the people of Newfoundland. I think most of them have personal knowledge of the conditions which are described. Speaking of the railway line between Truro and Sydney, the report reads:
This section of the Canadian National is incredibly bad and will discourage the most hardened traveller, to say nothing of the tourist, who Is supposed to travel for pleasure. The roadbed is rough; the delays are frequent and prolonged; the rolling stock is shabby and run down; the meals are poor. The Sydney-Halifax train does 289 miles in the stirring time of twelve and a half to fourteen and three-quarter hours, including stoppages, or from nineteen and a half to twenty-three miles an hour. In spring and winter trains commonly run from one to six hours late. Cape Bretoners may read about their good fortune in being born in an age of luxurious and rapid transportation, but so far as their own experience goes, these tales are purely legendary and bear no relation to everyday life.
With special reference to the handling of freight traffic, a matter which will be of extreme importance in the future, the report goes on to say:
The handling of freight is carried out on the same plane of efficiency. The curves are sharp and the grades are heavy, and the train must be broken up and ferried across the strait of Canso, with the inevitable result that freight charges are very high. The largest trainload a single locomotive can haul out of Sydney to Mulgrave is eighteen loaded cars, across the ferry eighteen cars loaded or light, from Mulgrave to Stellarton twenty cars loaded, from Stellarton to Truro twenty-five loaded cars, and the same number from Truro to Moncton. This compares with sixty-five to 100 loaded cars from Moncton west on the transcontinental, depending on the type of locomotive. Freight trains crossing the

strait in either direction lose between five and twelve hours, an average of a full working day. On the basis of 1943 traffic the delay here for freight crossings alone represents a loss in unnecessary wages of $202,000 a year.
If we are to hope for any reasonable expansion and development of trade between Canada and the new province of Newfoundland something must be done to improve the conditions described in the quotations from the Dawson report which I have just read. The fact is that the line between Truro and Sydney, including the crossing of the strait of Canso, has a capacity which is fully taken up at present by the business using that line of railway and the crossing of the strait. What the railway will do with any further traffic is more or less of a mystery. The Minister of Transport knows how the members from Nova Scotia have urged him to consider improving the system, and particularly improving the crossing over the strait of Canso. The entry of Newfoundland into Canada, with the additional burden which will be placed upon the transportation system, although a burden we hope for and which is one of our objects, is only another reason added on top of the very valid arguments and reasons which have existed for years for properly considering improvement of the crossing of the strait of Canso.
In section 32 there is also mentioned a proposal to complete the motor road in Newfoundland which in a few years' time should make possible reasonable highway travel in the new province. The provision of a proper crossing for the strait of Canso is important from that point of view as well. No one will feel that the prospective traffic will be properly served unless a suitable crossing is provided. The province of Nova Scotia has co-operated with the dominion government in what we understand was a thorough engineering survey of the crossing of the strait of Canso, the report on which we are anxiously awaiting from the minister. I think that indicates that the province of Nova Scotia is prepared to do its share in providing for a part of the expense of a highway crossing of the strait. I hope the dominion government is prepared to do its part with respect to the provision of a reasonable and proper crossing from a railway point of view. I want to emphasize to the committee that the entry of Newfoundland is only one further but very important consideration which must be kept in mind.


Mr. Gillis:: Mr. Chairman, I have no intention of quoting the Dawson report, the Disney report, or the report of the reconstruction committee. That is merely a historical survey, and you have heard it so often in the house that I would be ashamed to repeat it. The report in which we are now interested is that of the engineering commission which has
Newfoundland
been dealing with the matter for some considerable time. I concur in everything the junior member for Halifax has just said, but there is one point I should like to stress. I hope that before this section carries the Minister of Transport will be able to stand up in his place and tell us that he is ready to table the report of the engineering commission tomorrow or the next day.


Lionel Chevrier: Nemo dat quod non habet.


Clarence Gillis: Bringing Newfoundland into confederation is merely an additional argument for the improvement of transportation facilities on the railway line east of Moncton. Transportation difficulties in that region are referred to in the press from day to day. I noticed that the old ferry that crosses the strait is tied up because there is ice there, and they have to shift her to new moorings, and all that kind of thing. I have seen that in the press every day for the last week. The point I should like to drive home to the government is that practically everyone who has ever discussed the improvement of transportation facilities in eastern Canada is agreed that it should be done. There is no difference of opinion. The reconstruction committee said it should be done; in the Dawson report-and these are all government agencies-it was stressed very strongly. The Disney report, the report of a railway engineer, said it could be done, that it was within reason as far as cost is concerned, and that there was no engineering problem. No one has disagreed with the necessity for it.
Bringing Newfoundland within confederation is going to mean a tremendous increase in traffic on that end of the line. My information is that seventy-five per cent of the imports of Newfoundland previous to this agreement came from the United States by water. When Newfoundland finally hooks up with us and these agreements are ratified I believe those imports which were being brought in from the United States will come from Canada, which means they will have to be shipped down from Ontario and Quebec, dragged over that old, twisted, crooked one-track line, held up at the strait of Canso and then transferred to that inadequate ferry service now operating between North Sydney and Newfoundland. I think there must be an improvement right along the line. If we are to properly service that tenth province I think the government should get a report from the engineering commission as soon as possible and begin the necessary improvements down there. Unless that is done, because of the inadequacy of the transportation facilities, Newfoundland will have to continue to bring in her imports by water from the United States. We have long delays at that end of the line now, with our ordinary

Newfoundland
traffic; and if Newfoundland is to get all her imports from us it will make the position that much worse.
The question I want to ask the Prime Minister is this. When seven members are elected and six gentlemen are appointed to the other place from Newfoundland, will the pass on the railways in Canada also be good on the boat from Newfoundland to North Sydney, where they hit the Canadian National railways? If it is not, it should be. I am informed that in many ridings where a boat has to be used the pass on the railway is not good on the boat; and I think that is something which should be given consideration.
I hope the Minister of Transport now is able to tell us when he expects that engineering report on the improvement of transportation facilities in and around the strait of Canso might be available, because it is tied in very definitely with section 32.


Lionel Chevrier: I am sorry I was* not here when the junior member for Halifax began his remarks, but from what he said afterward I gathered he was interested in the transportation facilities in that area, and I think mainland of Cape Breton and Newfoundland but also in the whole area extending from the strait of Canso to North Sydney. The hon. member for Cape Breton South also interjected some remarks to which perhaps I should reply.
I had not expected, and I am sure the committee did not interpret, section 32 of the terms of union with Newfoundland to be a section upon which something should be said about Canso. However, I am quite prepared at this time to tell my hon. friends, particularly the junior member for Halifax, who dealt with it at the beginning of his remarks, that it is rather difficult to deal with a matter which is still in the hands of a board of engineers. I am sure the hon. member for Cape Breton South is most anxious to draw me out. I would not think the junior member for Halifax would want to do that; but much as I would like to be drawn oui I can only repeat what I said before, which is that the board of engineers is still studying the project. There are four methods of transportation across the straits: the tunnel, the bridge, the causeway and improved facilities. In the last conversation I had with the board of engineers they indicated to me that they could come to no conclusion as to which of these methods of transportation would be most suitable and most practicable having regard to all the circumstances, but that before they could carefully consider the question of a bridge they would have to get authorization to put a test pier down in the strait in order to get certain data. The COn-lAr. Gillis.]
versations I had with the board indicated that a report would be forthcoming along those lines. That report has not yet been forthcoming, and when it is I can assure the committee it will be dealt with as rapidly as possible.
Another point raised by the junior member for Halifax was in connection with the transportation facilities not only to and from the I can deal with this rather quickly. The preliminary survey made by the officers of the Canadian National Railways indicated that after union there would be a considerable increase in transportation to and from Newfoundland. The report indicated an increase of thirty per cent for coastal steamships, a thirty per cent increase in rail traffic, and a twenty-five per cent increase in traffic across Cabot strait; and, as has been brought out already, I think it will be necessary to improve the facilities at North Sydney. That is being given careful consideration at the moment, and when the matter has been brought to a definite position it will be possible for me to take it up with my colleagues. Beyond that I am afraid I can say no more at this time.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
William Henry Golding: When the committee rose at six o'clock, I believe they were dealing with section 32. Shall the section carry?


[Stage Direction]
Section agreed to.
Sections 33 to 36 inclusive agreed to.
On section 37-Natural resources.
John Ritchie MacNicol: I should like to know if the . water powers on the Humber, the Gander and the Exploits rivers have been allocated to any company producing power; and if so, do they belong to the province or to private interests?


Louis Stephen St-Laurent: All the natural resources of the territory included in the island, and that part of the Labrador coast which forms part of Newfoundland, remain with the provincial government.


John Ritchie MacNicol: Is the Prime Minister able to tell us whether any arrangements have been made in reference to the development of Grand Falls on the Hamilton river in Labrador? It is about 100 or 150 miles east of where the iron is being developed. At the time the bill was passing through the house,

some reference was made to that power. Was that power given away to the iron people? That is something I should like to know. It is a big power resource.


Louis Stephen St-Laurent: I am sorry to say that I have no information about that. It was an asset that was not being affected in any way by the arrangement entered into between Newfoundland and Canada, and we did not go into that question. It is, however, one of great interest and it may be that others have information about it. But as it was to remain under the exclusive control of the provincial authorities, in our discussions no inquiry was made as to what the position was.


John Ritchie MacNicol: They have control of it?


Jean-Paul Stephen St-Laurent: They have control of it themselves.


Solon Earl Low: If the government of Newfoundland are to be expected to render their people the services they require, it seems to me that the resources will play an important part. If the provincial government finds, however, that it has control of only a small portion of the resources, then their chances of rendering to the people a high type of social services, and so on, will be much less than would otherwise be the case. In so many provinces, it was found after confederation that a large percentage of the resources had been alienated from the crown. I do not know what the situation is in Newfoundland, but it seems to me that the people of the rest of Canada should know just what it is. Can the Prime Minister give us some idea as to what portion of the resources has already been alienated from the crown so that they would not be under the effective control of the new provincial government? Perhaps, if it is possible for him to do so, he would supply the house with a list of the concessions that have been granted, together with the names of the holders of timber areas, land grants, or any other part of the natural resources of Newfoundland, and give us some idea of the extent of these particular concessions. I think this information should be on the record.


Louis Stephen St-Laurent: I am sorry, but I have not that information here. I know that a large area of timber lands was made available to the company now known, I believe, as the Bowater's Paper Company. It belonged at one time to the International Paper Company, I believe. I think they have obtained a concession of large timbered areas, from which they expect to be able to get their pulpwood supplies for a long period. With respect to the other resources, especially those in the Labrador coast territory, my impression is that the water powers are still under
Newfoundland
the control of the provincial government and will remain under their control. There have been a few mineral leases in that area, but my understanding is that the greater portion of those resources are still for the people of Newfoundland in the same fortunate position that most of the resources of Alberta are in for the people of that province.


Solon Earl Low: 
Louis Stephen St-Laurent: I am sorry, but I have not that information.


Clarence Gillis: Can the Prime Minister give us any indication as to how the Labrador iron ore deposits are situated at the present time? Has the Newfoundland government granted the exploration rights in that area to a United States exploration company?


Clarence Decatur Howe: I understand that the rights have been granted to a company that is owned in Canada, with a minority interest in the United States. It is the same company that is exploring for minerals on the Canadian side which has rights in Newfoundland. It is the Labrador Exploration Company.


Clarence Gillis: I heard the accusation made from the other side of the house that the only reason Canada was now interested in bringing Newfoundland into confederation was that we were after the Labrador deposits. That answer given by the Prime Minister explodes that particular argument because Canada, through that exploration company, with a tie-in in the United States, now has the leases and the right to exploit those resources for the next ten years. I wanted that answer for the purpose of exploding that particular argument.


[Stage Direction]
Section agreed to.
[Stage Direction]
Newfoundland
On section 38-Veterans.
Mr. Brooks:: I assume that the minister will explain this section. Certain parts are not clear, and certain questions might be answered. Reference is made to hospitalization. The committee would like to know, for instance, what hospitals there are in Newfoundland at the present time for the accommodation of veterans; the number of pensioners in the island; and the probable number of those who might be eligible for the war veterans allowance. The section says that the Veterans' Land Act, the Unemployment Insurance Act, the Veterans Business and Professional Loans Act, and the Veterans Insurance Act will be extended to Newfoundland veterans who served in the second world war. As to the Veterans' Land Act, of course, I do not think there is any time limit within which veterans need to make application, but I am not sure about that. Under the Veterans Business and Professional Loans Act application in Canada must be made within live years. If we use the same act, I think it will have to be amended in some way so that the veterans in Newfoundland can make application within the necessary time. Section 38 says:
A re-establishment credit will be made available to Newfoundland veterans who served in the second world war . . .
That does not present much of a problem because under our act any veteran can apply for his re-establishment credit within ten years from the date of his discharge from the army. Since there are a number of years to run, the veterans of Newfoundland will have an opportunity to make application for this credit. I come next to the War Service Grants Act. I believe there is a time limit in which application must be made for the benefits under that act. Perhaps the minister will tell us what amendments will be necessary there. The committee might be interested in knowing what benefits were given to the Newfoundland veterans under the different veterans acts in that island.
Paragraph (e) of section 38 says:
Canada will assume, as from the date of union, the cost of vocational and educational training of Newfoundland veterans of the second world war on the same basis as if they had served in His Majesty's Canadian forces.
Canadian veterans made application for their educational and vocational grants within a certain period after they were discharged from the army. I believe the act states definitely that the applications must be made within fifteen months after the veteran is discharged. This of course is 1949 and the time in which the Newfoundland veteran could apply has expired. If the Newfoundland veteran is to be given the same advantages,
tMr. Gillis.]
an amendment will have to be made to the act. I have no doubt that there are in Newfoundland many young veterans who have not taken advantage of any educational or vocational possibilities in their own country. Possibly there were none. There may be young men there who wish to go to university or wish to take vocational training. Is it the intention to give these men a full four or five years' educational or vocational training, as our veterans are receiving? I do not think there are any other matters on which I require explanation.
The Veterans Insurance Act will allow a veteran to apply for insurance at any time. There is no limit in that act. What arrangements are to be made to allow the Newfoundland veterans to apply for these different benefits?-because a time limit was placed in the different acts in Canada.


Milton Fowler Gregg: If I miss answering any questions which my hon. friend asked, perhaps he will remind me of them. When the delegation was here last fall and met with myself and officers of my department, on a number of occasions they had with them, though not as part of the delegation, two representatives of the veterans organizations in Newfoundland. These men were brought to the meetings with the Department of Veterans Affairs. All matters were thoroughly and fully discussed. I think I can say that the main part of section 38 covers in a general way all the situations raised by my hon. friend. The section reads:
Canada will make available to Newfoundland veterans the following benefits, on the same basis as they are from time to time available to Canadian veterans, as if the Newfoundland veterans had served in His Majesty's Canadian forces, namely...
For the purpose of clarity the various items are detailed in paragraphs (a), (b), (c), (d), (e), and (f). With regard to hospitalization, paragraph (vi) in the statement of questions raised by the Newfoundland delegation states:
The responsibility for hospitalization of veterans rests with the Canadian government. If it becomes apparent that a need for extra beds for veterans exists in Newfoundland, these will be provided through extension of existing facilities or new hospitals. The final decision in this respect will depend upon on-the-spot investigation.
We have received a good deal of information on existing facilities. We have not a clear-cut report on it yet. Therefore the key point is an on-the-spot investigation which will be carried out just as soon as this agreement is completed; but the principle involved is set out in the paragraph that I have read.
With regard to pensions, as hon. members know, in the first world war Newfoundland had in the main its own force or forces. There were some men who served in the

Canadian forces and in allied forces. In the second world war, in the main, those who served from Newfoundland were enlisted in British units, mostly artillery, in the R.C.A.F. and in the Royal Navy. Of the veterans of world war I, those now living in Newfoundland and those who served on behalf of Newfoundland and who may now be living in other parts of the world, 1,103 are in receipt of pensions. That includes dependents. Of world war II, in the same category there is a total of 642 in receipt of pension at the present time. I might add that in world war II the pensions are paid by the British ministry of pensions. In both cases, however, it is the intention to bring these pensions up to the Canadian scale. It also appears that there may be others who may not be eligible under their present arrangements but who may qualify under our pension scheme. It is not yet possible to estimate how many that will be.


Alfred Johnson Brooks: Will any back pension be paid, or will the Canadian pension be paid as of the date of union?


Milton Fowler Gregg: As of the date of union.


Alfred Johnson Brooks: The difference between the British pension and the Canadian pension will not be paid back?


Milton Fowler Gregg: That is right. In the past Newfoundland has not had anything comparable to our war veterans allowances, and it has not been possible to make anything like an accurate estimate of how many applications there will be. It is presumed it might be about the same ratio as the maritime provinces, but that is only an estimate.
The next point is the Veterans Land Act. Those with whom we discussed the matter felt that under that act there would not be many applications for full-time farming. My hon. friend is right in saying that no cut-off date has yet been set under that act. It was expected that there would be some applications for small holdings, but that the main interest would be in commercial fishing. These applications will be received and considered, and it was undertaken that, in commercial fishing, those who had been assisted by the Newfoundland government to a lesser amount than that for which our act provides might be brought up to the full terms under our act.


Alfred Johnson Brooks: Were any representations made to have the three acres of land, as I believe the provision stands in the present act, reduced to one acre? I ask this question because we know that in the little fishing villages of Newfoundland land is scarce. In order for these veterans to come under the Veterans Land Act it would seem to me it
Newfoundland
would be necessary to reduce the amount, as was done with respect to the Yukon last year?


Milton Fowler Gregg: No. During the discussion that point was not raised either by the delegation or any of those who were advising them.


Alfred Johnson Brooks: I do not think the minister answered my question. In the present act there is a limit on the time in which students may make application. I presume it is the intention of the government to amend the act by changing the time limit to permit Newfoundlanders to come in. How much time are they to be given at college? Is a man to start his college course now, and have the five or six years necessary; or will he just finish out the college course which possibly some of the veterans have already undertaken at their own expense?


Milton Fowler Gregg: As indicated in section 38, those benefits in existence on April 1, and from there on, will apply. So that with regard to all veterans under rehabilitation, including university and vocational training, veterans of world war II in Newfoundland would, after April 1, be in exactly the same position as veterans in Canada.
So far as vocational training is concerned, that is pretty well completed in Canada, with the exception of those veterans who may have been in hospital continuously. To take one example, there are veterans who have been in hospital continuously since the end of the war, but who have now finished treatment and are able to get out on their own. In such cases there is authority to approve entry into a vocational training school, or to approve university training. That of course will hold true in Newfoundland. So that, in vocational training, it was not expected there would be many who would qualify.
With respect to university training, Newfoundland has had a scheme of its own somewhat similar to ours. It is the intention that those who are in under that scheme as of April 1 might be picked up and carried on by the Canadian government under exactly the same terms as our own student veterans.


Thomas Langton Church: I am wondering if these provisions in paragraphs (a) (b) (c) (d) (e) (f) include the men of the merchant marine who advanced the supplies of food in the battle of the Atlantic. For example, I am thinking of the admiral of parliament hill, Admiral Duff -now in another place. He was born in Newfoundland. Those men of the merchant marine who were out night and day in the battle of the Atlantic were brave men, and they should be included. I believe some survey should be made to see how many there are.
There was a time when some of my friends to my left spoke about the other place being

Newfoundland moved to Hull. I think it was Disraeli who coined the phrase Hull, Hell and Halifax. I would like to know how many of these members of the merchant marine are affected.


Milton Fowler Gregg: I am sorry I have not the figures showing how many there are. I can answer the hon. member in this way, however, that after April 1 the merchant marine of Newfoundland will receive exactly the same benefits as the merchant marine in Canada at that time, and will receive the benefit of any changes which may be made with regard to them in the future.


Clarence Gillis: The hon. member for Royal asked the minister a moment ago if any representations had been made for the lowering of the land requirements under the small holdings section of the Veterans' Land Act. Let me remind him that the house passed a bill, as recommended by the last committee on veterans affairs, in which the land requirement was fixed at one acre. After that was done the provision was rescinded, and the land requirement was stepped up to three acres, a procedure which turned out a lot of veterans in Canada. I thought the hon. member might have forgotten, and I am reminding him, as well as the minister.
This section is giving to the veterans of Newfoundland exactly what our veterans are getting. There is something however I should like to bring to the minister's attention, and that is the provision whereby the Canadian government will bring up to Canadian standards the rates received by veterans who were taken care of under United Kingdom or allied-countries veterans legislation. That is all to the good, so far as Newfoundland is concerned.
However, it also poses a problem which has been before us for many years, with respect to imperial veterans who have been resident in Canada for twenty-five or thirty years. We are now going to extend to Newfoundland veterans all the benefits Canadian veterans have fought for and have received over the years-and I am all for it. It will benefit those who are becoming Canadian citizens on March 31 of this year. But we have in Canada a large number of imperial veterans who came here after the first war. They have been residents of this country; they have been producers and they have been taxpayers. But we have never seen fit to extend to them the rights of Canadian citizenship, so far as veterans legislation is concerned. I suggest the house should give serious consideration to that condition, because it was one of the chief problems before the veterans affairs committee.
Now that we have become generous enough to extend those privileges to people who just now are about to become citizens of this

country, I think the house should give serious consideration to extending the same privilege to residents of this country who were imperial veterans and who, as I stated earlier, during all those years have been taxpayers and producers. Many of them served in the second war with the Canadian army, either in the veterans guard or in other units.
By accepting pensioners who served in the imperial service and whose pensions were paid by the British government, we are now setting a precedent which should be extended to those imperial veterans who for the last twenty years have been fighting for those things now being written into this agreement.


George Randolph Pearkes: Tribute has already been paid to the glorious record of the men of Newfoundland in two world wars. However, I wish to call attention particularly to the application of the war veterans allowance to the men of Newfoundland. What I shall say will tie in with the remarks just made by the hon. member for Cape Breton South. The provision of the War Veterans Allowance Act, in so far as men who served with what is commonly called the imperial forces are concerned, applies in two respects.
In the first instance it applies to those men who were domiciled in Canada some time prior to the outbreak of world war I but who before the outbreak of that war moved from Canada and went to live elsewhere, perhaps in the old country, perhaps in the United States, perhaps in Newfoundland, and then joined the imperial forces. They had left Canada perhaps twelve months before, but they served with the imperial forces and then came back. Those men were Canadians.
Many men from Newfoundland served with the unit which eventually became known as the Royal Newfoundland regiment, but there were also many others who served with the Royal Navy, the Royal Air Force and the Imperial Army. I presume that if they had left Newfoundland to serve in the Royal Navy they would be in the same position as men who had left Canada to serve in the Royal Navy; they would be eligible for war veterans allowance.
Now what happens to the Newfoundlander who left Canada under the conditions prescribed last night by the hon. member for Cape Breton South? The hon. member pointed out that many Newfoundlanders come to Canada at certain seasons of the year to find temporary employment. Is the Newfoundlander who was living in Canada six or twelve months-the actual time does not make any difference-and who went from Canada to join the imperial forces, entitled to a war veterans allowance?


Mr. Mutch:: He is now.


George Randolph Pearkes: What is the position of a Canadian who may have been living in Newfoundland for twelve months but who up to now has not been entitled to a war veterans allowance? Is he going to be entitled to a war veterans allowance now that Newfoundland has been brought into confederation? Surely it must be a reciprocal agreement.
What about the Newfoundlander who instead of going to Nova Scotia went to the United States, worked there for a year and then left the United States to join the Royal Navy? He could not join a Royal Newfoundland navy, because there was no such thing. Are you going to draw a distinction? Are you going to say that the Newfoundlander or the Canadian who left Newfoundland or Canada to go to live in the United States or the United Kingdom twelve months before the outbreak of the war is not to be entitled to a war veterans allowance until perhaps some time when we see fit to ask the United Kingdom if they would like to join confederation?
I think we are going to ridiculous extremes. It is time for us to say that any man who was domiciled in Canada and who served in any force of His Majesty should be entitled to the benefits of the War Veterans Allowance Act, whether or not he had lived in Canada or in Newfoundland for the six or twelve months immediately before the outbreak of the war. This applies particularly to those Newfoundlanders who had left Newfoundland for a period of time, as has been pointed out already, in order to take temporary employment somewhere else, who served with the imperial forces, and who came back to live in Newfoundland or in Canada.
Here is a grand opportunity for the government to bring in an amendment to the War Veterans Allowance Act, which has been long overdue, to provide that any man who was domiciled in Canada and who served in the forces of His Majesty shall be entitled to war veterans allowance. That is one class.
The hon. member for Cape Breton South has referred to the man who served with the imperial forces. Many men of the Royal Navy, the Royal Air Force or other imperial units, who served side by side with Newfoundlanders or Canadians and heard of the advantages of Newfoundland or Canada, decided to move to Newfoundland or Canada after the war. For the past twenty years or more those men have been residing either in Newfoundland or Canada. I have pleaded the case of these imperial veterans many times in this house and I hope the opportunity will now be taken to include them in the benefits which accrue under the War Veterans Allowance Act.
There is another comment I should like to make with regard to the application of the
Newfoundland
War Veterans Allowance Act to the men of Newfoundland. I am told that to a large extent the veterans in Newfoundland own their own homes. A veteran, be it in Canada or in Newfoundland, is entitled to own property valued up to $4,000 and still be eligible for a war veterans allowance. But if for any reason that man should sell his property and put the $4,000 into an annuity or government bonds, he is immediately deprived of that benefit. Quite frequently because of changed circumstances, perhaps the death of a wife or something like that, a man may decide to sell his home and place the money in bonds for the time being in the hope that at some future time he will be able to purchase a new home. That man finds himself cut oil from the war veterans allowance. The officials who administer the War Veterans Allowance Act are governed by the regulations and they must tell that man that he cannot draw a war veterans allowance until his liquid assets have been reduced to $1,000.
That man must live on his meagre capital derived from the sale of his house until it has been reduced to $1,000. When he reaches that point he loses all possible hope of ever being able to purchase a home of his own. The recipient of a war veterans allowance is permitted to have casual earnings or independent income up to $125 per year, but if the man who sells his home puts the $4,000 into bonds the interest would be less than that.
This is another amendment which is urgently needed in view of the fact that many veterans in Newfoundland own their own homes. Having disposed of their home it may be that they want to put the money into some form of government bond. They will be told: "You cannot draw the war veterans allowance now; you have got to wait until you have used your capital, until your liquid assets are reduced to $1,000". I ask the minister to give the most serious consideration to those three points. The first point is to make the benefits of the war veterans allowance available to every man who has been domiciled at any time in Canada or in Newfoundland, who has served in any of His Majesty's forces and has returned either to Newfoundland or to Canada. Secondly, I would ask him to take the opportunity now of including all our comrades who served in the imperial forces, and who have lived in Canada or Newfoundland for a period of twenty years or more. The third point I wish him to give consideration to is the heartbreaking regulation which forces a recipient of the war veterans allowance to live on his capital until it has been reduced to $1,000.


Milton Fowler Gregg: I am sure the hon. members for Nanaimo and Cape * Breton South will not

Newfoundland
expect me to cover fully points 2 and 3. Point 2 was made by both of them. They are larger questions, and I shall be glad to discuss them at some later date. I should like to say with regard to point 2, however, that there are a number of old veterans in Canada who cannot be quite properly defined as imperials, and who served in either the commonwealth forces or the allied forces. The third point made by the hon. member for Nanaimo was not made by those who discussed very thoroughly how the war veterans allowance would be reflected amongst the older veterans of Newfoundland, but I assure him we will keep that in mind as we enter upon the administrative stage after the first of April.
On the first point made by the hon. member for Nanaimo, as we stand now in Canada, a man domiciled in Canada before he enlisted in the first world war is eligible to apply for veterans allowance regardless of whether he served in the commonwealth forces or in the allied forces. Therefore, when this agreement is signed, those Newfoundland veterans of world war I who served on behalf of Canada, as it will be then, wherever it may have been, and who had pre-war domicile in Canada, as it will be then, will be eligible to apply for war veterans allowance.


George Randolph Pearkes: I am very pleased to hear the minister say that those men who were domiciled in Canada, and who served in the imperial forces, will now be eligible for war veterans allowance. I know they have been allowed to apply for war veterans allowance, but they have not in all cases received it. I have referred individual cases to the minister and to his department, and the answer has always been that these men were not domiciled immediately before their enlistment. I can tell the names of men who were living in Canada prior to the outbreak of world war I, had been living here for a number of years, and for some reason had left Canada and gone to the United Kingdom. Sometimes it was for educational purposes, and in some cases to adjust private matters. In other cases they had gone to the United States. Because they had left Canada for a period of twelve months prior to the outbreak of war, although they had been domiciled in Canada for four, five or more years, they have been refused the war veterans allowance. If a man was domiciled in Canada immediately before he enlisted in the imperial forces I know he is eligible for the allowance, but those who were not domiciled here immediately prior to the outbreak of war have had their applications refused. I am pleased to note, however, that the minister has now said that they will be eligible.


Milton Fowler Gregg: I should like to comment briefly. There has been no change. The present act,

and the interpretation of it, makes eligible those men who were domiciled in Canada immediately before the outbreak of war.


George Randolph Pearkes: Immediately, yes.


Milton Fowler Gregg: That has been the interpretation, and until any change is made that will apply to those in Newfoundland.


Leslie Alexander Mutch: There is one question with respect to immediate domicile. The war veterans allowance board has consistently ruled that those people are eligible who, having been domiciled in Canada, left Canada for purposes of education. I think I can quite safely challenge anyone to find an authentic case of a man being declared ineligible if he left Canada for educational purposes, even if he was in the middle of two years at Oxford, or something of that sort. If he came originally from England, and his parents came with him and established domicile here, the board has consistently held that his domicile was here. In such a case he would be treated as though he had enlisted from an immediate domicile even though he joined the forces while he was at Oxford, let us say. If I understood the hon. member for Nanaimo a few moments ago when he was talking about this matter, he kept repeating the fact that Canadians, who left Canada and went to the United States or some other place, and who subsequently joined the British navy or some other force, have not been eligible in the past under the War Veterans Allowance Act. If that is what he did say, then the hon. gentleman will realize, of course, that he is in error, because there is no question of domicile for a Canadian. It follows that when a Newfoundlander becomes a Canadian, as he will do, the question of domicile does not exist. The question of domicile exists for those who came as immigrants to this country, who were here for a time and then returned home, joined the allied forces, and subsequently returned. As to the interpretation of the question whether or not they are domiciled, the period is not fixed except by practice. The whole entitlement hinges on the question of domicile, and the interpretation is in the hands of the board itself. It will be the same situation when we extend these benefits to our new Canadian cousins in the province of Newfoundland.


Arthur Leroy Smith: Is the parliamentary assistant to the Minister of Veterans Affairs not confusing domicile with residence? It is very obvious that is what he is doing, because it is being interpreted that a man must have been living in Canada immediately prior. As far as domicile is concerned, it does not matter where he is living.

If he has gone away somewhere he retains his Canadian domicile until he acquires a new one. The hon. member's interpretation is that he must have been living here, which is not at all what the act and the regulations say. He has not changed his domicile in the circumstances related by the hon. member for Nanaimo, and yet that man, retaining his Canadian domicile, is today, and has been, refused by the department.


Leslie Alexander Mutch: Very rarely.


Mr. Ferguson:: If a United States citizen enlisted in the Canadian navy, fought for this country, and after the war made his residence in Canada, would he be entitled to it?


Some hon. Members:: Louder.


Julian Harcourt Ferguson: Mr. Chairman, may I ask you to again take up with the Speaker the matter of amplifiers for this chamber, since certain hon. members find it difficult to hear even me. Either their hearing is defective or amplifiers are absolutely necessary.


Milton Fowler Gregg: The answer is, no, he would not be.


Julian Harcourt Ferguson: A soldier or a sailor of United States birth who had served this country for four years in the first war, and who comes here and takes up residence, would not have his service to this country recognized and would not be helped if he were in need? I think it is a shame.


Milton Fowler Gregg: Not unless he was domiciled in Canada immediately before the war.


Mr. Harkness:: I understand from what the minister has said that, say, an Englishman, who served in His Majesty's forces during the first great war and went to Newfoundland in 1921, where he has been living ever since, would not be eligible for the war veterans allowance, and so on, as the minister interprets this matter. Is that correct?


Milton Fowler Gregg: That is correct.


Douglas Scott Harkness: If that is the case I suggest that the wording of paragraph (a) is incorrect. I feel quite sure that such men in Newfoundland by this time would look upon themselves as Newfoundlanders; and since this paragraph states that these benefits are to be extended to Newfoundland veterans who served in either the first or the second war, or both, they are being definitely misled. They will consider themselves Newfoundlanders, as I think any man who has lived in this country since 1920 or 1921 would consider himself a Canadian; and they will be expecting to receive these benefits. If
Newfoundland
they are not going to get them I would suggest that the wording of this paragraph be changed, to make it quite clear that such men are being excluded.


Milton Fowler Gregg: As I said in the beginning, the main paragraph of section 38 governs, and it refers to such benefits as may from time to time be available to Canadian veterans. The person in the instance quoted by my hon. friend would not be eligible if he were in Canada; and I can assure the hon. gentleman that the terms of the War Veterans Allowance Act, and in particular the Pension Act, have been very carefully studied during the past months by the veterans of Newfoundland.


George Randolph Pearkes: The parliamentary assistant made reference to the fact that if they were not Canadians they would not be eligible for the war veterans allowance. I do not know what he is talking about, because it does not matter whether a man was born in Canada or whether he emigrated to this country four or five years prior to the outbreak of the first world war. To my knowledge there is nothing in the act which draws any distinction between a person born in Canada and a person who acquired Canadian citizenship through residence here.


Leslie Alexander Mutch: My hon. friend and I are in exactly the same predicament. He professes not to have understood what I meant, and I rose because I could not understand what he meant. By accident, perhaps-because I am quite certain the hon. gentleman knows the difference-in his remarks a few moments ago he referred to the Canadian who had gone to the United States or somewhere else, and in what he said he implied that this Canadian would have lost his domicile. I simply said that had never been the situation, that the only applicant for the war veterans allowance who is concerned with the question of domicile is one coming from outside Canada who had established his domicile in Canada previous to enlistment. I do not think my hon. friend meant to confuse the Canadian, either in Canada now or the new Canadians as they will be after March 31, with one who had to establish domicile. If a man is in fact a Canadian the question of domicile would not arise, even though he had been gone from Canada for twenty years before he enlisted in an allied service, if he had maintained his Canadian domicile. That is an entirely different matter.


George Randolph Pearkes: I am sorry to be so persistent about this, but a Canadian who left Canada for a period of twelve months and then, either from the United States or the United Kingdom, joined the imperial forces, is not entitled to the war veterans allowance.

Newfoundland	.


John Ritchie MacNicol: I want to ask two questions on this section. First, what will be the position of the South African war veteran in Newfoundland after confederation? Will it be the same as that of the South African veteran in Canada? Second, what about the widows of deceased non-pensioned soldiers? Will their position be the same in Newfoundland as in Canada?


Milton Fowler Gregg: The situation in regard to the war veterans allowance and pensions as they affect South African veterans will be exactly the same in Newfoundland as in the rest of Canada.


[Stage Direction]
Section agreed to.
On section 39-Public servants.
Thomas Langton Church: According to this section the employees of the government of Newfoundland in the services taken over by Canada under this agreement will be offered employment in these or similar Canadian services, and they are to have all pension rights, and so on, to which otherwise they would be entitled. If these officials are to be appointed in the same ratio to population as the six persons who are to be called to another place, sometimes known as the place of the saints' everlasting rest, I am afraid they will reach four deep from here to Lansdowne park, judging by the way we have been increasing officials.


[Stage Direction]
Section agreed to.
On section 40-Welfare and other public services.
Stanley Howard Knowles: This is an omnibus section, which covers a number of matters, and to begin with I should like to ask one or two questions in reference to old age pensions. I am sorry the Minister of National Health and Welfare is not in his seat, but I see his parliamentary assistant is here. One situation obtains in connection with old age pensions which is somewhat analogous to the problem that has just been discussed with respect to the war veterans allowance. I refer to the residence qualifications. If I understand the terms aright, once Newfoundland becomes part of Canada it will mean-and I would say rightly so-that a person who has lived in Newfoundland for the required qualifying period, which is twenty years as defined in the regulations, will qualify for the old age pension. This means that before long we are going to have this situation. We will have people who have lived in Newfoundland for a period of eighteen years, during which time Newfoundland was not part of Canada, qualifying after two years' residence in Canada for the old age pension. On the

other hand we have people who have lived in the United Kingdom for ten or fifteen or eighteen years of the qualifying period coming to Canada for the last two or three years before reaching the age of seventy, and they will not qualify.


Mr. Gibson (Comox-Alberni):: Why not?


Stanley Howard Knowles: The hon. member for
Comox-Alberni asks why not. That is the way the law reads, the law brought in by the government my hon. friend usually supports. If by his question my hon. friend is deploring this fact, I quite agree with him. I want to make clear what I said a moment ago, that I feel it is perfectly right that this provision should apply in the case of people in Newfoundland. But it does seem to me to highlight, as did the veterans problem, the need for a reciprocal arrangement in matters of social security and old age pensions in particular. I wonder if consideration has been given or will be given, as a result of this situation, to a reciprocal arrangement at least between this country and the United Kingdom, and I think we should go further and have such arrangements between Canada and all the other countries of the commonwealth.


Mr. Reid:: As the hon. member will readily understand, I am not in a position to say whether or not the matter has been given consideration. All I can do is to assure him that the matter laid before the committee a moment ago will be brought to the attention of the minister.


Angus MacInnis: I am not sure whether ox not there is an old age pension scheme in effect in Newfoundland at the present time; or if there is, I do not know what the amount of the pension is. If there is not, the people of Newfoundland cannot, I assume, take advantage of the dominion government's contribution to old age pensions until an old age pensions act is passed by the provincial government that will take office. Will this government wait until that time or will it pay its share of the contribution to old age pensioners who qualify in Newfoundland after March 31, 1949, pending the time the legislature puts an old age pensions act into effect? That would mean, of course, that under present conditions persons in Newfoundland over the age of seventy, and qualifying for the old age pension, would receive a pension of $22.50 a month. Has that phase of the question been discussed?
I have in mind that it will take a considerable time for the provincial government to be elected and to get its affairs in order. In the meantime there are old people who

perhaps ought to be assisted with the amount that the federal government is giving toward old age pensions.


Jean-Paul Stephen St-Laurent: That matter was carefully considered for a considerable period of time, but it was not found possible to devise any way in which the old age pension could be paid before there was in existence in Newfoundland a provincial government responsible to a legislature. The act requires the making by a provincial government of a contract with the federal government, in order to recoup three-quarters of what it pays out for old age pensions, under its provincial law, up to a maximum of $30 a month. Suggestions were made that, if the legislature elected in Newfoundland passed a law of that kind, it might be made retroactive. It was desired to give the people of Newfoundland treatment as good as that which was given to Canadians of the other provinces. As the hon. member knows, in my province it was a matter of several years, after the dominion old age pension legislation was passed, before the provincial government passed its statute and took advantage of it; and there were no retroactive payments to the old people of my province at that time. It was felt that it would not do to be treating the people of Newfoundland in a manner different from that in which Canadians of the other provinces had been treated. The delegation from Newfoundland, therefore, finally but most reluctantly came to the conclusion that the best thing to do would be to proceed as expeditiously as possible to elect their legislature, enact their old age pension legislation, and make their contract which would become effective as soon as it was made.


Angus MacInnis: I appreciate all the difficulties that the Prime Minister has pointed out. With the best intentions in the world, perhaps it would prove impossible to devise a scheme that could accomplish what I mentioned. But I do not believe that at the present moment Newfoundland is in the same position as were the other provinces before they took advantage of the Old Age Pensions Act. The act was there for them to take advantage of it; and if they did not do so, that was the fault of the provinces. But here we have coming into confederation a new province that did not have that opportunity. I had hoped there might be some way by which the dominion could make the payments, pending the time that a provincial act was passed.


Stanley Howard Knowles: I should like to ask a further question in connection with the point emphasized by the hon. member for Vancouver East. It seems to me that it highlights the need for old age pensions being put on a
Newfoundland
federal basis. We are all annoyed and disturbed by the fact that there must be this long delay before old age pensions become effective in Newfoundland. My question is this. If the dominion-provincial conference of 1945 had succeeded, and the plan to pay $30 a month to every Canadian over the age of seventy, without a means test, had been put into effect, would that $30 a month go to the people of Newfoundland as at April 1?


Louis Stephen St-Laurent: In the hypothesis just mentioned by the hon. member, it would. Just as soon as a resident of Newfoundland became a Canadian citizen, with the required period of residence in Newfoundland, he would have been entitled to the old age pension under that scheme. But that is not the scheme that exists at the present time. Under the present scheme, any province can pay old age pensions under a provincial law, and recover three-quarters of what it pays up to a maximum of $30 a month. The hon. member says that it highlights the desirability of having the matter on a federal basis. There are people who will agree with the hon. member, but there are a great many who will not.


Stanley Howard Knowles: That was the government's proposal to the provinces in 1945.


Jean-Paul Stephen St-Laurent: Yes. That was the proposal at the time, because there was to be a pension payable to everyone without a means test.


Stanley Howard Knowles: Hear, hear.


Louis Stephen St-Laurent: But this is a pension which is payable to those who require it, according to the standards set by the legislation. The pensions are administered by the provincial governments and it is they who determine whether or not an individual comes within the category determined by the means test. The responsibility of the federal government under the federal legislation is to reimburse to the province three-quarters of the amount it has in fact paid out, up to a maximum of $30 a month for each pensioner.


John Ritchie MacNicol: A considerable number of Newfoundlanders live in Toronto, many of them in Davenport riding. Many of them are quite old. For some time two Newfoundlanders came to me to see whether I could assist them to get old age pensions. One was eighty-four years old. He has since died. The other was seventy-eight, and he too has died. I know quite a number of others. The one who was eighty-four years old had lived in Toronto for nineteen years. The other had lived in Toronto for eighteen years. They were both away over the age limit. Of course the Ontario government could do nothing for them. I am wondering
450

Newjoundland
what would have been the position of these men had they lived until the time that Newfoundland had joined Canada.


Louis Stephen St-Laurent: My understanding of the legislation is that as soon as they became Canadians they would not have to wait until the government of Newfoundland had passed a pension act. They would have twenty years of Canadian residence and could receive from the government of the province where they were then residing the pension provided by the laws of that province.


George Alexander Drew: In view of the fact that there have been put on the record some statements which were doubtless a matter of interest not only to hon. members but also to people in Newfoundland who are interested in this subject, I think it would be well if I clarified one point in regard to the proposals in respect of old age pensions which were put forward by the dominion government in 1945 and in an amended form in the spring of 1946. I might say on behalf of the province which I then represented that I had put forward proposals in regard to old age pensions without a means test. But I would remind hon. nembers that the proposals put forward by he dominion government in regard to old age pensions were part of a combined set of proposals which were described by the then Prime Minister as an integrated whole, and that it was necessary so to regard them. These were to be paid-not only old age pensions but other provisions-with the understanding that special taxes were to be imposed to take care of these payments. Two of the special taxes which were included in the proposals of the dominion government should not be forgotten. One was a special income tax estimated at 5 per cent of all incomes without exemption over and above any other taxes now paid. The other was a poll tax estiniated at that time in the case of Ontario at $12 a head on every man, woman and child of sixteen and over, whether employed or not.
I would ask hon. members to recall these two special taxes as part of the dominion proposals when they are informed that there were certain suggestions as to certain benefits to be received.


Stanley Howard Knowles: It does not fall on me to defend the dominion proposals to the provinces back in 1945. I just wish to make this comment on behalf of the government, if I may, but I am really speaking on behalf of the people of Canada who suffered a great loss because that conference broke up in 1945. I just wish to say on behalf of the government that the $30 a month old age pension to all Canadians of seventy and over without a means test was not the only one

of the things offered as against any additional taxes that were to be collected to pay for them.
As I have already intimated in what I said, I asked my question a moment ago for two reasons. Perhaps one of them has already been met but the other one has not. The one thing I was anxious to draw attention to was what Canadians in nine provinces have lost and what Canadians in the ten provinces will lose because of the impossibility of the dominion and all the provinces getting together. The other hope that I had in raising the matter was that the Prime Minister would indicate, as his predecessor did a number of times, and as the Minister of National Health and Welfare did all during the debate on old age pensions two years ago, that that basic idea of a minimum pension of $30 a month at age seventy to all Canadians without a means test was still part of the government's aim and policy. The Minister of National Health and Welfare told us so a good many times when he referred to these proposals, and he said that still constituted the basic plan. I am disappointed tonight that the Prime Minister did not take the opportunity to say that so far as the government which he heads is concerned that is still the aim.
Everyone in this house, and everyone in the country knows where the C.C.F. stands- knows of our interest, our concern and our definite pledge to the people of Canada. It is that there will be security for our old people in the form of old age pensions payable to all at a respectable age without the means test. But tonight I am asking-and I hope now that I am affording him the opportunity to give it to us in terms a little more clear-cut he will do so-that the Prime Minister state the position of his party on this important question.


Louis Stephen St-Laurent: The position of this party on this question has always been well known to the country. It has involved a pension of $30 a month without a means test but on a contributory basis. In order to have a contributory basis it is necessary that there be an understanding with all the provinces to enable the raising of the contribution by a compulsory contribution in the form of taxes earmarked for that special purpose. That requires an understanding with all the provinces, because, under the taxing powers that the federal government has under section 91 of the British North America Act, it cannot impose taxes for these social services as such.


Mr. Graydon:: I have been interested in
the discussion which has taken place with respect to the time when old age pensions will

be available to the senior citizens of Newfoundland. These older people are in the evening of life, and the government of Canada ought to realize, as no doubt it has, that delay in the payment of old age pensions is a serious matter. The time element is now more important than ever to these people. It could easily happen, and this has been the experience of nearly everybody who has had anything to do with this work, that they might go for months before the machinery is set up and all of the qualifications met.
From March 31 to when the first cheque is issued may be quite a long time, particularly in the minds of many older citizens in the new province. Has the Prime Minister given any consideration to this? If the provincial legislature of Newfoundland were to enact at the earliest opportunity a'piece of legislation which would have the effect of bringing in old age pensions, and were to make it retroactive to March 31, is there anything to hinder this government from recognizing that retroactive provision and making these payments in bulk when the first payment is made?


Louis Stephen St-Laurent: There is, in the present act. The present act merely provides for operation in the future, and it would require special legislation to implement my hon. friend's suggestion. The matter was given very careful consideration by the delegation when it was here. There were members of the delegation who were most anxious to find some way by which old age pensions could become payable at the earliest possible moment. They even gave consideration to the possibility of the commission of government enacting, while still in office, a system of old age pensions, and providing for the payment of the old age pensions in the budget that it will make for provincial purposes. But we were informed that, after giving the matter serious consideration, the members of the commission of government felt it was something that it would not be proper for them to do. It was something of very great consequence, and it was felt that the responsibility for doing it should be taken by a legislature elected by the people of Newfoundland.
I may say quite frankly they were told that, if there could be found any way that would make it possible to have that done, without creating the obvious situation that the people of Newfoundland were being treated better than Canadians had been treated in that regard, we would be happy to give it very sympathetic consideration. But they came to the conclusion that their commission of government would not take the responsibility of introducing a system of old age pensions in their dying hours, and that they would have to leave that responsibility -	29087-29 J
Newfoundland
to a legislature elected by the people of Newfoundland.


George Alexander Drew: Of course, I think it would be appropriate to explain at that point that this is one of the reasons why some objections are being raised in Newfoundland to the procedure being followed. If there had been a legislature, then it would have been possible for that legislature to set up the social service organizations which could have handled payments of this kind, which called for certain provisions of supervision under the dominion act covering this and similar payments. Through the fact that no legislative authority exists, it is at the present time impossible to set up that supervisory organization. And I think perhaps it is well that we do realize that this is one of the reasons why in Newfoundland there is some objection to the procedure. While that is not a responsibility of ours within this House of Commons, it does explain one of the grounds of criticism of the procedure which has been followed.


Louis Stephen St-Laurent: But I think the delay would have been even longer had there been resort to the establishment of responsible government. To make this thing work conveniently, it has to come into effect on April 1, or thereabouts, of the year. A delay of two or three months might have meant a delay of a year in bringing union with Newfoundland into workable operation.
The members of the delegation were quite disappointed they were not able to find some way whereby they could bring that into operation immediately. It would have been, I understand, within the legal power of the commission of government to do it, because they do enact statutes; but they felt it was a matter they were not prepared to undertake. At least that was what we were told at the time. Even if now there were enacted legislation providing for a Newfoundland system of pensions within the terms of our legislation, it might possibly be given effect to. But, as we were told, the commission of government would not contemplate assuming that responsibility.


Gordon Graydon: It seems to me that these two governments-or one government, and the representatives of the province about to come in-could surely have worked out some arrangement. Surely this obstacle which, at it has been explained by the Prime Minister, does not seem formidable, is not so great that the red tape could not have been cut in this instance. Surely the two governments could have got together to give the old age pensioners of Newfoundland their pensions on March 31. Many times, in this chamber and in others, red tape much more involved than this has been cut without any difficulty, to give relief where it was needed. I do not

Newfoundland
know why in respect of old age pensioners we should find the obstacle so great that two legislative bodies, both supposed to have great powers, could not have managed somehow to give the old age pensioners of Newfoundland their payments on March 31.


Angus MacInnis: I should like to say one further word. While I have not the legal training of those who have preceded me in the discussion, I think the main obstacle to the payment of the dominion's share of old age pensions as of April 1 is largely a matter of will. I have seen lawyers get around situations of that kind simply by adding the words, "Notwithstanding anything in this act". Once lawyers get at it with a will, there is always a way.
However, there may be some difficulty. I do not see that it would be unfair to any other province in Canada if, for the period from April 1 until the Newfoundland legislature reached a point where it could pass old age pensions legislation, we paid the dominion's share.
I was somewhat concerned with the remarks of the Prime Minister which, if I understood them correctly, indicated that the government had shifted its position from that laid down in the green book proposals of August 1945. The federal government at that time made the proposal to the governments of the provinces that it was prepared to assume pensions for all persons over seventy years of age without a means test at $30 a month, and for those between 65 and 69 on a fifty-fifty basis with the provinces at $30 a month, with a means test. Does that offer still stand, so far as the federal government is concerned, or is there some new offer now based upon contributory old age pensions? If that is so, there will have to be a tremendous amount of work done before a contributory basis can be worked out. Indeed, if we are going to work out a contributory basis for old age pensions we will have to go much further than that and work out a contributory basis for an integrated over-all scheme of social security. Has the government given up the idea of old age pensions as set out in the green book of 1945?


Mr.   Sf. Laureni@: The government has not given up the idea of the proposal made in the green book of 1945. But there never was any proposal in the green book of 1945 for the payment of old age pensions to all, without means test and without contributions. That does not mean that no one would get a pension until he had contributed enough to provide the capital out of which it would be paid. Because it was shown that, if contributions were established, the amount of contributions being received would suffice to IMr. Graydon.]
take care of the amount of pensions being currently paid. And, provided the scheme went on forever, no one would be prejudiced. Those who would receive old age pensions at the age of seventy without having made any contribution at all, or having made only one or two contributions, would get something more as the net benefit than those who would have contributed from the age of sixty to the age of seventy, for example, to be entitled to their old age pension. The calculations show that the contributions being received yearly would take care of the expenditures being made yearly.


Stanley Howard Knowles: Will there be any delay in the payment of family allowances in Newfoundland?


Mr.   Si. Laureni@: Every effort has been made for the pre-registration of all children in Newfoundland, and family allowances will be paid to those who have been registered at the time union becomes effective. If there are any who do not receive them immediately union becomes effective it will be because their children were not registered in the preunion period.
The hon. member will realize that at this time we have no right to require anyone to register. We are making the facilities for registration available, but as Newfoundland is not a part of Canada we cannot make any regulations applicable to Newfoundland. We merely make the facilities available and say: If you wish to register, these are the forms to use, and if you are registered when union comes into effect you will immediately receive the family allowances; if you are not registered you will receive them after you do register and from the effective date of union. They cannot be paid until the registration has been received and duly checked.


Stanley Howard Knowles: It is possible that those who registered in advance may receive their family allowance cheques in April?


Louis Stephen St-Laurent: Yes.


Stanley Howard Knowles: Those who are late in registering may not get their cheques until May, but I understand they will be retroactive to April 1?


Louis Stephen St-Laurent: They will be retroactive if the registration shows that there was entitlement as of April 1.


Stanley Howard Knowles: It is too bad that we could not find the will to do the same for the old age pensioners.


Louis Stephen St-Laurent: It is too bad, but family allowances are administered by the federal government and old age pensions are not. The province of Newfoundland will have to set up its machinery, As soon as that is done

it can enter into a contract and will be entitled to reimbursement of three-quarters of its expenditure from the date of the contract.


Brooke Claxton: With regard to the incidence of certain health insurance taxation, the leader of the opposition made an assertion which I think I should answer. He suggested that it was part of the federal government's plan, as proposed at the 1945 conference, that there should be a poll tax of $12 to meet the cost of health insurance. The government's plan with regard to health insurance was explained fully in the green book proposals and was amplified right through the conference.
There was never any suggestion of a poll tax of $12 or $10 or any other figure. What was indicated as one of the conditions for the introduction of health insurance was that there should be a registration fee, but the way in which the provinces met their share of the cost of health insurance was left to the provinces to be worked out. There was never at any stage of the proceedings, either in public or in private, any suggestion of a poll tax of $10 or $12.


George Alexander Drew: Mr. Chairman, I find it difficult to understand the extraordinarily faulty memory of the minister who has just spoken. If he will examine the Hansard record of the proceedings which took place in May-


Brooke Claxton: I have just done so.


George Alexander Drew: -1946, he will find that it was discussed then as it was on other occasions. I am pleased to have the opportunity to make clear exactly the kind of misunderstanding that has been created about the nature of the proposals that were put forward by the dominion government. Certainly it was called a registration fee, but the fact that the dominion government happened to call it a registration fee did not make it any less a poll tax. That registration fee was to be paid by every man, woman and child for the purpose of meeting these payments. As the minister who has just spoken will remember, I checked him up on the same inaccuracies at the conference and-


Brooke Claxton: I replied in the same sense that I have tonight.


George Alexander Drew: -it was pointed out that he was just as inaccurate then as he has been now.


Brooke Claxton: The record does not bear that out for a second.


George Alexander Drew: I think hon. members should know that there were amusing as well as other aspects to this discussion and there was one particularly amusing aspect. One of the things that I noticed while I was premier of
Newfoundland
Ontario was the number of statements in regard to the dominion-provincial conference and similar matters with which the provinces were concerned that appeared in the press under words such as "A well informed government source says". Then the statement would go on with no name attached.
The conference was sitting here in Ottawa, and on the previous day, speaking on behalf of Ontario, I had pointed out that while we were discussing this it would be well if we examined exactly what the whole picture was. I pointed out that this registration fee was a poll tax; call it any other name, it was a poll tax. I pointed out also that the minister who has just spoken, and who was then Minister of National Health and Welfare had written to the minister of health in Alberta explaining that this special income tax over and above all other income taxes would be five per cent.
We got the $12 poll tax in the case of Ontario from the meetings of the dominion-provincial economic committee which had been studying the figures and which had found the original dominion figures to be hopelessly inaccurate. That committee had brought forward the exact figures to which the dominion as well as the provincial officials agreed, and those were the figures we had before us.
Then the minister who has just spoken, following the practice to which I have just referred, gave a statement to the press. That statement was not intended to refer to his own name. It was intended to be like all other statements that went out-I am not quoting the exact words-to the effect that a high government source had said that there was absolutely nothing in the suggestion of a poll tax or special income tax.
Unfortunately the reporter of the Toronto Daily Star, who had very close access to the minister in question, did not realize that that reservation should have been imposed and he gave the minister full publicity. The report in the Toronto Daily Star said that Mr. Claxton had said that there was nothing in this. As the record will show, I pointed out to Mr. Claxton-I am using the name that appears in the record-exactly what the facts were. There was an ensuing discussion and the facts were just as I have stated.
The five per cent was based upon his letter to the minister of health in Alberta, and the $12 poll tax in the case of Ontario was the result of an accurate computation, and the officials of the dominion government ana the Ontario government both agreed to that computation as being the correct figure. The $12 poll tax was to be paid and, in addition, a five per cent special income tax over and above all other payments.

Newfoundland
All I am saying is that, when we are told about the proposals that were made, we should remember that along with them went these contributions; and when you say, "let us have these payments", let us also be quite sure that the people of Canada want to make them, because they are part and parcel of the same proposal. Since this matter has come up, and the difficulties of dealing with it at a conference have been mentioned, may I repeat that there is absolutely no place where the responsibility lies for the conference not meeting again except at the doorstep of the dominion government which has refused to call it.


Brooke Claxton: Mr. Chairman, there is one
statement of the hon. leader of the opposition with which I can agree, and I think only one. That is that these things have to be paid for. That is the fact. They have to be paid for out of taxes-


An hon. Member:: Why?


Brooke Claxton: -or out of levies on the Canadian people in one way or another. With that one point of agreement, I leave the hon. gentleman to his remarks. I remember the incident.


George Alexander Drew: That was the occasion when I referred to it as a babbling brook of inaccuracy.


Brooke Claxton: I remember the occasion. I
remember the hon. leader of the opposition had made a fine speech at the beginning. He referred to well-informed government sources as having been the source of this story. There were no well-informed government sources from which his story was produced.


George Alexander Drew: That was quite right.


Brooke Claxton: Because everyone who knew anything about the subject knew what the government's proposals were. They were contained in the green book, and we had been working over that with the provinces from the beginning of August 1945 until the first week of May 1946. All through that period I do not thirds there were many people concerned with this business who did not know what the proposals were. Then the present leader of the opposition made the statement about the $10 or $12 poll tax at the beginning of one of our meetings in the final week. I rose and denied it, and referred to the record. The record stands, and I deny the statement again. I also deny everything except the concluding remark that he made to which I have just referred, that social security payments of this kind must be met by somebody. It was understood right from the beginning

that if we were to have health insurance it must be on a dominion-provincial basis, achieved through co-operation of the provinces, and met by contributions in part by the provinces, in part through the provinces by the individuals, and in part by the federal treasury. The amounts of those contributions were indicated in the green book proposals, and there was never at any moment any suggestion of a poll tax. That is an invention or appellation given by the leader of the opposition then and now. There was also every indication that, in the interest of the people concerned, and because of the way in which health insurance has worked all over the world, the people should contribute. Who in this house disagrees with the idea that the people should contribute to health insurance? Who in this house?


Mr. Ashby:: I do.


Brooke Claxton: The hon. member for Edmonton East. That is one. Who else? The leader of the opposition has made a great parade of this business, but the fact is that his party in their social security proposals advanced the same idea as the Liberal party did in then-social security proposals, and as the government did in their green book, but they did it about a year and half later.


Stanley Howard Knowles: You started in 1919.


Brooke Claxton: Yes.


John Ritchie MacNicol: Thirty years ago.


Brooke Claxton: And the fact is we all know, except perhaps some hon. members from the far left corner of the house, that social security payments, whether they be for old age pensions or for health insurance, must be met by the people themselves. We are cheating the people unless we declare that, and unless we are willing to face the responsibilities of that kind of thing. With regard to the contretemps between the hon. leader of the opposition and myself, I think that if he locates the right page in the green book, for which he is now looking, and if he reads the whole passage, he will find that the point I have made tonight was made then, that it is completely in accord with the record, and that any other account is completely out of accord with it.
With regard to Newfoundland, which we are supposed to be discussing tonight, and which I regard as a matter of supreme importance to the people of Canada and of Newfoundland, it is obvious from the remarks of the Prime Minister that if we introduced any plan by which old age pensions might be arrived at before there was a provincial government to make an arrangement, it

would be quite different from the old age pensions plan that was put on the statute books of Canada in 1927, and which has since been worked out by agreement with the provinces. It would require something quite different. Were we to make that different kind of arrangement, I believe there would be more people complaining about it than there are complaining about failure tonight, because we hope that after all Newfoundland will be the tenth province.
There are nine provinces which have made provision for old age pensions, and the plan is that the provinces shall administer them. The plan is that the provinces shall make agreements with the dominion. When there was no province it would surely have been quite wrong for us to have made an agreement with a commission of government, or any other agency which would have provided for those payments. Our hope is, however, that a province will be set up. That is why we are meeting here, and why we are discussing this matter. Our hope is that just as soon as that province is set up they will make an old age pension agreement along the lines of the agreements made by the nine other provinces of Canada. As we discussed this with the representatives of Newfoundland it seemed to us to be evident to them, as well as to us, that this was the only fair and right way to do it in accord with the will of parliament as expressed in 1927.
I feel that the union of Canada with Newfoundland is a matter of supreme importance. I believe everyone in this house does; but I must say that as this discussion has proceeded it has become clear that, while every group in this house is keenly in favour of that union, somehow they would like to see it worked out to their own advantage, and they are making one suggestion or another. Our feeling is that the agreement made with the representatives of Newfoundland can be supported on the basis of what is good for Canada and what their needs are in Newfoundland, and that it is an agreement which would commend itself as containing fair and equitable terms as the basis of union.


George Alexander Drew: Since the incoming province of Newfoundland undoubtedly will be interested in the whole relationship of the provinces to the dominion government, and since it is very likely that they will join with the other provinces in the hope that they may have opportunities of meeting the dominion government in general conferences, I think it might be well to place on record now what was actually said at the conference on the occasion to which I referred, so the people of Newfoundland as well as others may know the way in
Newfoundland
which statements emanate from this government from time to time. This very subject of the poll tax was discussed over and over again. It was discussed in the meetings of the economic committee and in the meetings of the co-ordinating committee, and I brought up the matter on April 30, 1946. Just for the purpose of letting the people of Newfoundland know that they should find out who make these statements, and that it would be well to make sure they are in fact official government statements, I should like to read this into the record. I rose on the morning of April 30, 1946, and said:
Mr. Chairman, before we proceed I think the correct practice would be for me to rise to a question of privilege on a matter that does affect this conference. I find that in this morning's press, as well as in the press of late yesterday afternoon, direct issue is taken with a statement that I made to the conference yesterday-
You see, it was mentioned the day before, as well as on a great many other occasions. -and I would add that that direct issue is taken in a statement made outside this conference. That statement is carried generally in the press throughout Canada. It starts on the front page of the Ottawa Citizen of this morning and I would like to read briefly from it because it has a very direct bearing on the public understanding of what is taking place at this conference. I quote from today's Ottawa Citizen:
"A source close to federal social security plans said the dominion has always planned to impose a tax to cover some of the cost of health insurance, pensions to the aged and other welfare measures, but so far it has not been possible to work out a definite tax rate.
The source was commenting on a statement by Premier George Drew of Ontario to the dominion-provincial conference. Mr. Drew said the dominion had suggested to the provinces a plan under which health measures and old age pensions would be financed by an additional tax of from three to five per cent on all incomes and a poll tax of perhaps ,$10 to be paid by all persons sixteen years and over."
I might interpolate here that in the later figures it was worked out at $12.
"No poll tax was ever proposed by the federal authorities, said the source, and no definite rate of taxation was set because the rate would depend on how much of the social security program was brought into force."
If the "source" alone were the person to whom I feel called upon to pay attention, even this would be very objectionable because it is the very sort of thing that led me to move the motion in the coordinating committee last Thursday that we should go into open conference. As you will recall, I said at that time that amongst the reasons why I thought we should go into open conference was to prevent this very sort of thing.
But the "source" is not left in doubt because here is the Toronto Daily Star of last night, with this headline: "Plan No Poll Tax-Claxton."-


Brooke Claxton: That is right.


George Alexander Drew: -and the Toronto Daily Star does not merely describe him as the source but mentions him by name.

Newfoundland
Now whether the source be Mr. Claxton or any other bubbling spring of misinformation-
They have that wrong, because I said "babbling brook of misinformation."


Brooke Claxton: There is a good deal of misinformation about it.


George Alexander Drew: -I for one tell this conference that it will move very much closer to success if those who are attending it-
He was attending it.
-make their comments at the conference table and do not attempt to convey the impression outside that statements made here were incorrect.
The report goes on to give the discussion that took place. No remark I have made tonight in any way varies what took place at that time. The minister's memory is short, and perhaps that can be forgiven because of course he has been in another department since then, where health is not the main concern. He seems to forget that at the time we were discussing this the dominion government had put forward very substantial amendments and that when we met in April the then Prime Minister of Canada put forward a whole series of new proposals which he said must be regarded as an integrated whole.
I am not now arguing the merit of one tax or another. I do say, however, that when the suggestion is made that the dominion government made proposals for contributions of one kind or another the public should bear in mind that the way they were proposing to take care of it was by an income tax over and above the existing heavy income taxes, on an even level on all people, without exemption, and by what the present Minister of National Defence chooses to call a registration fee but what any child knows is in fact a poll tax.


Patrick Harvey Ashby: Riding along here in the
caboose it is almost impossible to accurately follow anything being said at the other end of the chamber, except the words uttered by the leader of the Progressive Conservative party. I do not know whether I correctly understood the minister when he spoke a short time ago, but I thought he asked whether anyone in this house believed social services could be rendered to the people by other than contributory means. If that was what he asked, let me say that I certainly know of other methods. If people are asked to contribute part of their earnings toward any social services whatever, it means they will have to go without something. In the case of workingmen it means they will have to go without a good roast of beef and eat 
bologna, for example. Let me give you an instance, Mr. Chairman.


Mr. Irvine:: Of "baloney"?


Patrick Harvey Ashby: I will give you an example of pure, unadulterated "baloney". In Industry, the official organ of the Canadian manufacturers association, I find a statement made by a university-trained man, who was chairman of an educational committee, in an address to an association or society. These are his words:
The only place the government can get the money-
-to render social services-
-is by taxing the people.
I would like hon. members to keep those words in mind. I am going to make another statement so similar to that one that I am merely going to alter the words: The only place the Imperial Oil Company can obtain gasoline is by draining it out of the gas tanks of automobiles. I do not know how many of the hon. members of this house will believe the statement that I have just made. I will guarantee, however, that if that statement is repeated often enough beginning with little children, we can get university presidents, presidents of great manufacturing companies, many preachers and teachers to believe it, and then finally the people themselves. It is not true that the only source of money is from the pockets of the people, and it never has been true. Yet people actually believe that statement to be true. It is a general assumption, even right here in this house, that the only source of money is from the people. I have mentioned before that people do not make money. People may earn it, but they do not make it. If the Imperial Oil Company want gasoline, they go to the source for it. They are drilling now half a mile from our farm in the hope of striking the source of gasoline. If we want money for any purpose, it matters not what that purpose may be, it is our duty to go to the source for money, not to impoverish the people.


William Ross Macdonald: May I remind the hon. members at this time that discussion in committee should be directly relevant to the clause under discussion. If hon. members will refer to standing order 58 (2), they will find it:
Speeches in committee of the whole house must be strictly relevant to the item or clause under consideration.


Howard Charles Green: May I suggest to the Prime Minister that there seems to be one way in which the Canadian parliament could deal properly with this question of old age pensions to be paid in Newfoundland. Why could

not an amendment be made to the Old Age Pensions Act under this Bill No. 12, which we have been handed today, to the effect that if the new legislature of Newfoundland passes an old age pensions act at its first session, and provides that payment shall be retroactive to March 31 of this year, then Canada will pay three-quarters of that pension disbursement from the same date. I would point out to the Prime Minister that in Bill No. 12 there are amendments of a type similar to many of the Canadian statutes. I do not see why we could not make an amendment of that type to the Old Age Pensions Act. As a matter of fact, Bill No. 12 already contains one amendment to the Old Age Pensions Act.
The Prime Minister has said that both the Canadian delegates and the delegates from Newfoundland were anxious to do anything that could be done in order that the applicants for old age pensions in Newfoundland could be paid from March 31. That being the intent, and I think it is the will of every member of this house tonight, I suggest that such an amendment should be placed in the new Bill No. 12.
The Minister of Finance compares the situation in Newfoundland with that in the other provinces. But there really is no comparison at all. When the Old Age Pensions Act was passed by the dominion, each of the provincial governments was in existence. It was well known what the legislation was to be, and those governments had the choice of either accepting the legislation or not acting under it. Here the trouble is that Newfoundland has not a government. That is the only reason why the people there cannot get this pension as from March 31. I suggest therefore that the situations are not at all parallel. I would ask the Prime Minister why it is not possible to bring in an amendment to the Old Age Pensions Act under this Bill No. 12, providing that, when the pension is authorized in Newfoundland, Canada will pay three-quarters of it as from March 31, 1949.


Louis Stephen St-Laurent: It is not impossible. It has been considered that it would not be fair to the Canadians of the other provinces, but there is nothing impossible about it. It could be done if it were considered to be the fair thing to do. But the matter was examined, and it was felt that it would not be fair to the other Canadians to make special provisions granting to the new Canadians who would come in from Newfoundland a privilege that had not been granted to anybody else.


Howard Charles Green: The Prime Minister has taken the stand this session, I believe, and in other
Newfoundland
sessions, that the members who come here from the various provinces of Canada speak for the people of those provinces, and that it is not necessary to have an expression of opinion from the various provincial governments. Here is an instance where that belief which he holds could be put to practical advantage. There are here tonight members from every province of Canada, and not one of them has risen to object to making these old age pensions retroactive or to providing that Canada pay her share from March 31. There is not one member here who has objected to that, and I venture to say that every single member in the house right now would be favourable to action of that kind being taken. Surely on this point we can speak for the people of Canada.


Mr. Grant:: Speak for yourself.


Howard Charles Green: I would hate to be obliged to speak for the hon. member. Surely we can say that our people, the people of the nine provinces of Canada, will be quite agreeable to having the old people of Newfoundland get their pensions as from March 31.


Mr. Bertrand (Prescott):: Provided the province pays its share.


Brooke Claxton: If the hon. member's suggestion were to be carried out, would we not be in this position, that any applicant who applied to the old age pension administration of a province for an old age pension would then feel that he or she had not been justly treated if the application was not received and the payment was not granted right back to the date on which the person attained the age of seventy? Are we not in that position, not only with regard to our contractual arrangements with the provinces but with regard to the individuals in every part of Canada? Having had something to do with this administration for some time, I really think that is the position. A person qualifies for old age pension not merely by reason of attaining the age of seventy, but by reason of having attained the age of seventy, of having qualified under the provisions existing, of having made an application, of having the province make an inspection and then making an award which subsequently results in the federal government making its contribution of 75 per cent.
I suggest to the hon. member that any other arrangements would be breaking faith with the other provinces, because, as you know, some of them took a number of years to come into the arrangement. It would be very difficult, once that were done, to provide for the administration under the existing arrangements with the provinces which administer the plans.

Newfoundland
Since two hon. members have intervened I must reply to the leader of the opposition. I do not want to start reading the record again but I wish to ask him once and for all where, in all the record of dominion-provincial proceedings, from beginning to end in this green book, or in any other record, he can find any support whatever for his assertion that there would be a poll tax of $10 or $12.


George Alexander Drew: This is exactly a sample of the problem that the provinces faced when they were trying to deal with some of the ministers of the government at the time the conference still met before it was stopped by the dominion government. The minister knows perfectly well that there was a co-ordinating committee, that there was an economic committee, that they prepared accurate computations and that these computations were a matter of record; and he had this record in front of him when this was under discussion. These records were prepared and they showed that at that time the figure in the case of Ontario would be $12 for every man, woman and child in the province. The way in which it would work out was this. An estimate was made of the amount which it would be necessary for each province to raise under the plans put forward by the dominion government. Then in relation to that amount the economic experts worked out how much it would be necessary to raise in each province by this so-called registration fee, but which I described then, as on all earlier occasions that we discussed it, as a poll tax. For that was and is the correct expression.
This goes back to a letter written by the minister to Dr. Somerville, the deputy minister of the department of health in Edmonton. In his letter to Dr. Somerville the minister said:-


Brooke Claxton: What page?


George Alexander Drew: I am reading from page 433 of the record of the proceedings of the conference.
The proposals of the federal government provide for compulsory registration and a registration fee but deliberately left open the question of the appropriate amount of the fee.


Brooke Claxton: That is right. That is what I said.


George Alexander Drew: Certainly. They deliberately left open the appropriate amount of the fee. It was a poll tax and is a poll tax. The financial experts worked it out. In the case of Ontario that figure was $12. That figure was before the minister and all those attending the conference.


Brooke Claxton: Mr. Chairman, I must be allowed just one word in reply. The leader of the opposition has referred to the economic committee. It happens that I was chairman of that committee.


George Alexander Drew: Exactly.


Brooke Claxton: I can assure him, and I think that the hundreds of officials who took part in the very constructive work of that committee will bear me out, that there was no suggestion of a poll tax, there was no suggestion of a $10 fee or a $12 fee from beginning to end. What the leader of the opposition is talking about is the possible contribution that would be made by the provincial governments toward health insurance. How much of that would be paid out of the provincial treasury and how much would be paid by the individual was never decided because we never got far enough along to do that owing to the failure of the conference.


Gordon Graydon: You adjourned it.


Brooke Claxton: We adjourned it, yes, because it had been broken down by actions taken by the representatives of the other provinces. That is the fact. In the economic committee no figure was agreed on; no figure was worked out; but it was generally understood from the dominion proposals that 60 per cent would be paid by the federal government and 40 per cent would be met out of provincial sources. Some part of the amount to be met out of the provincial sources would be met by a registration fee-what part was never decided upon because we never got that far. To call an insurance plan, an ordinary person's contribution to meet a premium for health, a poll tax is a way of endeavouring to condemn the thing right from the start.


George Alexander Drew: Mr. Chairman,-


Some hon. Members:: Oh, oh.


George Alexander Drew: The more you do of that the better. Mr. Chairman, now that I am in this chamber I do not intend to permit the continued misrepresentation of what took place at the conference. When the suggestion is made that this was not discussed, let me read from the record of the proceedings the statement that was made at the conference, with the minister who has just taken his seat sitting at the table; and the fact that this discussion took place in accordance with my statement was not questioned because it could not be questioned. He knows it now as he knew it then. This is what the record says. Fortunately there is a record, because if there were no record these misrepresentations could go on indefinitely. You have been told that this was not discussed earlier.


Thomas Vincent Grant: Read what it says about a poll tax.


George Alexander Drew: I am quite prepared to wait.


Thomas Vincent Grant: Read what it says about a poll tax.


Brooke Claxton: I rise to a question of
privilege. I never said that the question of a contribution was not discussed, because it was implicit and it was stated right from the start. The question of a poll tax was never discussed.


Thomas Vincent Grant: Read about the poll tax.


George Alexander Drew: This is what I said in the presence of the minister on the occasion we are discussing.
But the fact is that $12 is the figure that was discussed-
Remember that this was at the April-May meeting. I continue:
But the fact is that $12 is the figure that was discussed at the January meeting and at the November meeting in the case of Ontario because it was pointed out then by the government of Ontario that the dominion's proposals would impose upon Ontario an added expense of $50 million outside of what the dominion was going to pay for these new health and social insurance proposals. If the poll tax was to take care of that-and that was suggested on page 32 of the dominion government's proposals as something to be incorporated in the agreement-in the case of Ontario the poll tax would have to be $12.
That was the statement then. It was not challenged, and it cannot be challenged now.


Brooke Claxton: Mr. Chairman, I must say that at page 435 of the proceedings it was challenged then and it is challenged now. What the leader of the opposition did was to divide the province's share of a contribution that would be needed to pay for health insurance, in the case of Ontario, by the population of Ontario and say that the individuals of Ontario had to pay it and it was a poll tax.


George Alexander Drew: Certainly it was.


Brooke Claxton: Every other province figured that the provinces should make some contribution as well.


George Alexander Drew: The same babbling brook of misinformation.


Stanley Howard Knowles: Could we come down to date and discuss old age pensions and other matters in which the people of Newfoundland and the people of Canada are interested now. Following the discussion that has taken place, there is just one question I should like to ask. I have asked questions of the government and I have not been satisfied with the answers. I now want to ask one question of the leader 29087-30 i
Newfoundland,
of the opposition. Does he not think that the people of Canada would welcome the opportunity to pay contributions, even up to the figures he has suggested, if in return for them we could have old age pensions at seventy without a means test, health insurance and over-all social security?


George Alexander Drew: I am very glad to answer that. If the hon. member who has just spoken had been present at the conference, as the minister was, he would have known that we recommended old age pensions at sixty-five, without a means test, and that our present recommendation is $40 a month.


Brooke Claxton: And a reduction of taxation at the same time.


Stanley Howard Knowles: Mr. Chairman, the leader of the opposition-


William Ross Macdonald: Order.


Thomas Reid: He is ducking that question.


Stanley Howard Knowles: The leader of the opposition is no better than the ministers on the other side at answering questions. I did not ask what is in the Tory platform now, any more than I have taken time now to tell what is in the C.C.F. platform. I asked him this question: Does he not think that the people of Canada would welcome an opportunity to make contributions towards a proper over-all social security plan?


George Alexander Drew: Mr. Chairman, I had not
intended to deal with this on the political level put forward by the hon. member for Winnipeg North Centre.


Stanley Howard Knowles: On a point of order-


Some hon. Members:: Sit down.


George Alexander Drew: But the hon. member probably misunderstood what was said. I was referring to the proposal of the Ontario government put before the conference that met in 1945. That was when we put the proposal forward in regard to old age pensions. This is not something new.


Stanley Howard Knowles: Apparently I cannot expect an answer from the leader of the opposition. He is not prepared to stand in this house and say that he knows the people of Canada would welcome an opportunity to make such contributions, apparently because he played his part in scuttling that kind of a program in 1945.


George Alexander Drew: I will deal with this now,
because I regret to say that this is the first time this particular hon. member has used the technique of the socialist party of making unfounded charges of that kind.

Newfoundland


Stanley Howard Knowles: What unfounded charges, may I ask?


Some hon. Members:: Sit down.


Stanley Howard Knowles: On a point of privilege, the leader of the opposition has referred to my making unfounded charges. What is the unfounded charge?


George Alexander Drew: That I was unwilling to indicate what our position was, when we put forward the proposal. Now, control yourselves for a moment and you will hear the answer.


An hon. Member:: Stop the mudslinging and answer the question.


Some hon. Members:: Order.


William Ross Macdonald: Order.


George Alexander Drew: They are working together nicely.


An hon. Member:: The same as Bloc Populate.


Douglas Charles Abbott: Give us your answer, after plenty of time to think it over.


George Alexander Drew: Yes, and I have something to say to you.
The proposals put forward at the conference have been supplemented since then by various further suggestions which were under consideration at the conference. The proposal was for contributory old age pensions. I have indicated quite clearly that I believe that the people of this country are willing and anxious to contribute to satisfactory social security plans. And I am satisfied the people of this country do not want to pay a poll tax, because that form of tax has always been regarded as a very unsatisfactory form of tax in this country.


Mr. Harris (Danforlh):: On a point of order, I submit that this entire discussion is out of order. The opposition is not charged with the responsibility of government. Hon. members of the socialist party should address their questions through you, Mr. Chairman, as you are charged with the responsibility of control of the house. In like manner, all hon. members should address their questions through you.


William Ross Macdonald: I must thank the hon. member for Danforth for his remarks, and I would ask all hon. members to address the Chair in future.


Alexander Malcolm Nicholson: Mr. Chairman, may I address my remarks to section 40 of the schedule. Perhaps the Minister of Trade and Commerce would answer, as the Minister of Reconstruction and Supply is not in his seat. This afternoon the large amount of $20 million was mentioned, including quite a

number of services. Would the Minister of Trade and Commerce give some information regarding the discussion which took place in connection with housing?
I find that at page 108 of the report of June 25 to September 29, 1947, there is mention of the St. John's housing corporation, which was set up under the Newfoundland commission of government four or five years ago. This statement is made:
As a result of historical conditions, St. John's is about 70 per cent substandard houses and the problem is beyond the means of the city to finance. Since the corporation began its work it has spent some three or four millions of Newfoundland money. The corporation has acquired 800 acres of land, has constructed a tunnel to the seashore for the purpose of disposal of sewage, laid sewers and water and sewer mains, set up its own factory for sewer pipe and block, and by the end of the present building season will have constructed 350 dwellings. It will be in a solvent position when these are all sold or let.
. I understand now that Newfoundland will not be eligible for this type of financial assistance after confederation. I note on the next page, however, the following:
The foregoing describes the situation which exists under present legislation.
There was some discussion of legislation which does exist in Canada in respect of housing. Then it states:
This legislation is subject to adjustment from time to time to meet changing conditions and the government is always prepared to take into consideration any particular circumstances which might warrant adjustment in the legislation.
I wonder if the Minister of Trade and Commerce could report on the discussion which took place with the delegates from Newfoundland, and what machinery will now exist to make it possible to continue the practice in Newfoundland that was undertaken by the St. John's housing corporation?


Clarence Decatur Howe: It was understood that the
facilities of Central Mortgage and Housing Corporation would be available in Newfoundland, just as they are available in other parts of Canada. The building project in question differs from any plan we have in Canada in that the houses are built to be sold. The expenses in developing the land were considerably more than anticipated. The fund is not in good shape at the present time, and the work is being retarded. Mr. Mansur, president of the corporation, visited Newfoundland some three weeks ago and had a discussion with those responsible for the fund. I visited Newfoundland last week end, and I was told that the discussions were very satisfactory. As it was not my responsibility at the present time, I did not go into detail in the matter; but I know it will be the purpose of the corporation to see that houses

are built in St. John's, just as it is the duty of the corporation to see that houses are built in other parts of Canada. What arrangements will be made I cannot say, but I feel sure that some plan will be worked out so that houses can be built in Newfoundland as they are in other parts of Canada.


Alexander Malcolm Nicholson: Can the minister indicate
what share of the $20 million which he mentioned this afternoon will be allocated to this item?


Douglas Charles Abbott: The operations of Central Mortgage and Housing Corporation, so far as the construction of housing is concerned, are made possible by loans made to the corporation. I cannot say at the moment whether any amount has been specially earmarked for Newfoundland in their requests this year which are now under consideration.


[Stage Direction]
Section agreed to.
Sections 41 to 45 inclusive agreed to.
On section 46-Oleomargarine.
George Alexander Drew: Mr. Chairman, when we were discussing the motion I suggested to the Prime Minister that consideration should be given to the possible effect of the provisions of section 46. In his reply the Prime Minister stated that the difficulty I suggested in regard to this clause was perhaps not quite consistent with the situation and gave, as evidence of the fact that there could be barriers against interprovincial trade, the restrictions that are placed upon the movement between provinces of liquor under certain conditions.
I repeat my suggestion in regard to this section in the very real belief that there is inherent in this section a dangerous constitutional difficulty. What I have to say has nothing whatever to do with the desirability or otherwise of permitting the manufacture and sale of margarine; it has to do with the constitutional question as to whether or not it is competent under the British North America Act for the dominion government to impose any restriction, by agreement or otherwise, on international trade. My reference to that difficulty relates to section 121 of the British North America Act which reads:
All articles of the growth, produce, or manufacture of any one of the provinces shall, from and after the union, be admitted free into each of the other provinces.
That provision in the British North America Act was regarded as one of the important provisions which would bring to an end any restraint upon the movement between prov-
Newjoundland
inces of the ordinary products or goods which were traded in in different parts of the country.
The Prime Minister in referring to the restriction upon the movement of liquor is referring to the provision in the Canada Temperance Act, but I would point out that there is a very definite distinction between restraint on the movement of liquor between provinces and on the movement of ordinary commodities and products. That distinction was clearly drawn in a case having to do with the Natural Products Marketing Act of 1934 and the amending act of 1935. At page 420 of the Supreme Court Reports, 1936, in the judgment of the then Chief Justice of Canada a clear distinction is drawn between the restraint placed upon the movement of liquor between provinces and of other, ordinary, articles of trade.
The chief justice pointed out that the Canada Temperance Act imposed those restrictions in order that assistance might be given to the penal provisions of the provinces which had placed some prohibition on the use of alcoholic beverages within their own areas. The basis of that restraint is not the basis which could be used for the purpose of passing legislation to restrain other kinds of trade. I think the words of the judgment clearly indicate the difference and show that the suggestion put forward by the minister is not a correct parallel. I quote from the judgment at page 420 as follows:
The application of the principle implicit in this passage must always be a delicate and difficult task. That is shown by reference to the history of the Canada Temperance Act. The prohibitory clauses of the legislation undoubtedly do affect civil rights directly but, in Russell v. The Queen (1), the board took the view that the real subject matter of the legislation was not property and civil rights, but matter connected with public order and having a close relation to the criminal law. It was likened to "laws which place restrictions on the sale or custody of poisonous drugs, or of dangerously explosive substances ... on the ground that the free sale or use of them is dangerous to public safety, and making it a criminal offence ... to violate these restrictions . . It was described as "legislation . . . relating to public order and safety," and belonging to the class of "Laws . . . for the promotion of publle order, safety, or morals, and which subject those who contravene them to criminal procedure and punishment . . ."
In the words of the judgment in that case, a distinction is drawn between the subject matter of the restrictive provisions in the Canada Temperance Act and such a substance as margarine. While many people object most strongly to the manufacture and sale of margarine, I do not think anyone will suggest that it comes within such a definition as that put forward by the chief justice as being an explosive or dangerous article. It was because of those inherent qualities in

Newfoundland
alcoholic beverages that the dominion government felt it was entitled to place certain restrictions on their movement between provinces where the provinces had themselves prohibited the use of alcoholic beverages in their own areas. Because the penalties imposed were something in the nature of penal provisions, they came under the broad reference in the British North America Act to peace, order and good government and have been sustained by the privy council on that basis.
I shall not labour the point beyond suggesting again to the Prime Minister that these restrictions dealing with a commodity such as margarine do not bear any direct relationship to the subject of the judgment to which I have referred, and to the material considered in that judgment, and that it is not competent for the dominion government to place such a restriction upon the use of margarine under the broad provisions of peace, order, and good government. If that is so, then such a provision would contravene section 121 of the British North America Act, and difficulties might arise in connection with this provision. It might be suggested that in subsection 2 of section 46 of the agreement there is a loophole which might make this restriction unimportant in any event, but I should like to point out to the Prime Minister that the situation in which we now find ourselves is that this restriction has become effective. Section 46, subsection 2, of the agreement reads:
Unless the parliament of Canada otherwise provides or unless the sale and manufacture in, and the interprovincial movement between, all provinces of Canada other than Newfoundland, of oleomargarine and margarine, is lawful under the laws of Canada, oleomargarine or margarine shall not be sent, shipped, brought, or carried from the province of Newfoundland into any other province of Canada.
Unless the Prime Minister contends that this restraint can be put in legislative form under the broad provision of peace, order and good government, then I would submit that the parliament of Canada cannot otherwise provide in view of the recent judgment of the Supreme Court of Canada in the stated case which was placed before them.
As to the second provision, that the restraint would operate unless "the sale and manufacture in, and the interprovincial movement between all provinces of Canada other than Newfoundland, of oleomargarine" is permitted, that alternative has already been swept aside by virtue of the fact that one province has already taken steps to prevent the use of margarine therein. I refer to the province of Prince Edward Island. Consequently, as to this reference to all provinces, that loophole is not open, and we come back to the point that this restriction is effective.

If the dominion government have the right to permit the manufacture of oleomargarine, they also have the right to deny the manufacture of it. That seems an obvious proposition. If they have the right either to permit or to deny the manufacture, and also the right to place a prohibition upon the movement of the product, out of a province, then they must be asserting a right on some other ground than that which was put before the Supreme Court of Canada at the time this argument was being heard. The Supreme Court of Canada has found in its judgment on the stated case that it is not competent for the parliament of Canada to place a restriction on the manufacture and sale of margarine. If that is so, then I do not know how the dominion government is exercising that authority now, by agreement or otherwise, because the agreement becomes part of an act of this legislative body, and ultimately, if approved, of the parliament of Canada. It seems to me that in this matter the government is on the horns of a dilemma. If they are going to assert the right to permit the manufacture and restrain the movement, then they are asserting a right to deal with this subject. If they have the right to deal with this subject, then it is no use saying to the provinces that they no longer have the right to deal with it. They should exercise that right if in fact they feel that the law which was in force should have been continued in force. If they now assert that they have the right to deal with this under the provision of peace, order and good government, then that right should have been asserted at the time this argument was being dealt with by the Supreme Court of Canada.
I repeat that the question under consideration is not the desirability or otherwise of permitting the manufacture and sale of oleomargarine. It is a question of whether or not any step is to be taken which challenges the provision, in section 121 of our constitution, that all articles of the growth, produce, or manufacture of any one of the provinces shall, from and after the union, be admitted free into each of the other provinces. In a particular case some variation or evasion of the constitution may seem desirable; but where any attempt is made to disregard the provisions of the constitution, then I think we should remember that, no matter how desirable it may seem to the government in a particular case, they are establishing a precedent for similar action in regard to any other commodity or product at some other time.
As I said in my earlier remarks, this is not a case where we can move to delete a passage; it is not a case where we can move to amend. It is an agreement which we must

accept as a whole in view of the fact that it is to be approved by another government as a basis of union. I again urge the Prime Minister to consider the effect of this provision from a constitutional point of view, and, if he feels there is any reason for concern about the restraint imposed by this provision, to take up with the government of Newfoundland an appropriate amendment which would meet the approval of both governments.


Louis Stephen St-Laurent: With some of the premises mentioned by the hon. leader of the opposition I am in full agreement, but of course I do not agree with the conclusion that he draws. First of all I should like to call the attention of hon. members to the language of section 121. This section was drawn up by a gentleman who knew the rules of English grammar. It does not say that all articles of the growth, produce, or manufacture of any one of the provinces shall, from and after the union, be admitted "freely" into each of the other provinces. It says they shall be admitted "free" into each of the other provinces. That section has already been under consideration by the courts, and the courts have held that it meant that these articles of the growth, produce or manufacture of any one of the provinces shall, from and after the union, be admitted free of customs duties into any other province.
The other premise cited by the hon. leader pf the opposition is a paraphrase by the then chief justice of the Supreme Court of Canada of language used in the decision in the case of Russell and the Queen. The hon. leader of the opposition probably remembers the late Lord Haldane, who perhaps argued more of the constitutional cases before the privy council than any other man of our generation, and who afterwards became Lord Chancellor and sat on a great many of the constitutional cases. He stated with reference to Russell and the Queen that it was a tacit convention among lawyers who appeared before the privy council that they did not refer to Russell and the Queen, although in one instance, having had to refer to it, he said that the only ground upon which the decision of the privy council in Russell and the Queen could be justified was on the assumption that must have been made by their lordships in the privy council at that time, that the evil of drunkenness was so prevalent in Canada when the legislation was passed that it could be regarded as war or pestilence.
No doubt there is a substantial difference between oleomargarine and the explosive qualities of intoxicants; but in the cases where the jurisdiction of the provinces to
Newfoundland
deal with the control of intoxicants was established, the jurisdiction was placed within the provinces to deal with everything that was local and private within their territory, everything that applied to the maintenance of peace, order and good government within their territory. I may say to the leader of the opposition that all possible arguments to support the jurisdiction of the federal parliament with respect to oleomargarine were urged and were dismissed by a majority of the judges of the supreme court; and the decision there was that it was an undue interference with property and civil rights, in a matter which was local and private within the province, for the federal parliament to attempt to prohibit the manufacture and sale of oleomargarine. So they did put it back in the same sphere, the same zone, that justified the actions of the provincial legislatures in dealing with the liquor problem; something which related to order and good government privately and locally within the confines of the province. The parliament of Canada, exercising-as was said by the chief justice-such jurisdiction as it may have in respect of the criminal law, imposed penalties against those who violated, by interprovincial operations, the prohibitions contained in provincial laws.
I think that without violating any other principle the same could be done if the provinces prohibited the manufacture and sale within their confines of oleomargarine, because since those decisions there has been the decision-I think it was in the pharmaceutical case, by the privy council-that criminal law did not involve any ethical or moral concept, and wherever the legislator, rightly or wrongly, felt that the public interest required a thing to be forbidden under penalties, he was the one to judge whether or not that was criminal. Some of us were surprised that the judgment went that far, but that was the ground upon which one of these constitutional cases was decided.
Here one might possibly have hesitated to make that kind of provision in anything but an agreement that was being subjected to both ratification by the parliament of Canada and confirmation by the parliament of the United Kingdom, and it will not come into force until it has received both ratification by this parliament and confirmation by the parliament of the United Kingdom. When it has received that, it will have force of law to the same extent and to as great solidity as the British North America Act itself, even though it might, as it does, in the procedure depart from what would otherwise be in the British North America Act. It will not come into operation until both this parliament and the parliament of the United Kingdom will have

Newfoundland
given it force of law; and even if it did imply that something was being done which could not normally be done under the British North America Act, that would not enlarge the British North America Act and would not serve as a precedent for doing it in any other manner than by going back again to the parliament of the United Kingdom. I am not conceding that it is beyond the purview of the British North America Act, but I am saying that, even if it was, by virtue of the confirmation of the terms by the parliament of the United Kingdom it would get the same legislative authority the British North America Act itself has. If the British North America Act does not allow a thing like this to be done normally, the fact that it was in the agreement with Newfoundland would not enlarge, for other cases, the terms of the British North America Act.
So I do not think we are in any way creating anything that is apt to be embarrassing in the future in any other respect than as an impediment to the trade in oleomargarine.


[Stage Direction]
Section agreed to.
On section 47-Income taxes.
Harry Rutherford Jackman: I think we should call it eleven o'clock, because I hardly believe we can finish tonight. Is it the intention to try to finish the bill this evening?


Jean-Paul Stephen St-Laurent: If it were convenient it would suit the requirements of another place, where they proceed more expeditiously than we do and where they are awaiting something from us in order to be able to continue their labours. If it could get through committee tonight it could be given third reading tomorrow and be available to the other place at the beginning of next week. However, I do not want to urge it too strongly. The clock is against me, and unless all hon. members felt that we should go on I would not like to ask that we do so.


Harry Rutherford Jackman: I should like to know the interpretation of clause (d), where it refers to earned income and investment income. In this paragraph is there any special treatment in regard to investment income? .


Douglas Charles Abbott: No. The purpose of this clause is to place the taxpayers of Newfoundland in exactly the same position the taxpayers of Canada were in when the pay-as-you-go plan was introduced in 1945, of course on the assumption that Newfoundland forgives its citizens the taxes for the first three months of this current year. Canada forgives them for the second three months, and the income tax commences July 1. There was no forgiveness, my hon. friend will recall, with respect to investment income of over $3,000.


Harry Rutherford Jackman: It does not mean that investment income accruing in the first six months of the year will be taxed any more than earned income will be taxed?


Douglas Charles Abbott: My understanding is that investment income over $3,000 will be taxed for nine months of the year.


Harry Rutherford Jackman: And earned income for six months?


Douglas Charles Abbott: Yes.


Harry Rutherford Jackman: With the permission of the committee I should like to ask a simple question in regard to section 41.


Douglas Charles Abbott: That is, if it is not more than $2,250, as the section indicates.


Harry Rutherford Jackman: If it is more than $2,250, investment income will be taxed on the basis of twelve months or nine months?


Douglas Charles Abbott: Nine months.


Harry Rutherford Jackman: In regard to section 41-


Stanley Howard Knowles: On a point of order, Mr. Chairman, the hon. gentleman asks permission to go back to section 41, and another hon. member near me wants to go back to another section.


Douglas Charles Abbott: We are on section 47.


Stanley Howard Knowles: But the hon. member for Rosedale is asking permission to go back to section 41, and another hon. member is asking permission to go back to section 45. We might go on if we could finish in two or three minutes, but if it is going to take fifteen minutes or more I think we should call it eleven o'clock.


Harry Rutherford Jackman: Section 41 deals with payments to people in Newfoundland who may be unemployed, under the same conditions as unemployment insurance benefits. The actual payments will not be a charge on the unemployment insurance funds, I take it, because I am interested in the attempt to have actuarial solvency in connection with those funds.


Douglas Charles Abbott: My hon. friend is quite correct. I explained this afternoon that we are including in the estimates a special item to take care of possible liability in that respect.


Harry Rutherford Jackman: When is it expected that the cost of servicing unemployment insurance will become an actual charge against the unemployment insurance fund directly, without any special recompense from the dominion?


Douglas Charles Abbott: I am afraid I could not answer that question offhand.


[Stage Direction]
Section agreed to.

Sections 48 to 50 inclusive agreed to. Schedule agreed to.
Title agreed to.
William Henry Golding: Shall the bill carry?


Some hon. Members:: On division.


William Henry Golding: Shall I report the biU?


Some hon. Members:: On division.
Bill reported.


Louis Stephen St-Laurent: Mr. Speaker, may I be allowed to table the statement of the informa-
Newfoundland
tion asked for by the hon. member for Rosetown-Biggar in respect of the declarations that have been made to us about tax concessions existing in Newfoundland; and may I have added to Hansard, so that it may be available to everyone, the table showing for the last nine years the income in Newfoundland that would be cancelled by virtue of union with Canada.


Some hon. Members:: Agreed.


Jean-Paul Stephen St-Laurent: The table is as follows:
Revenue from import
and export duties,	Profits surrendered	Total Revenueexcise duties and	by Board of Liquor	Inland revenue	collected and paidFiscal	excise licences,	Control plus war	stamps	into exchequer underyear	less refunds and	emergency levy	all heads ofrepayments	departments$	$	$	$1939-40 	.. 8,662,194	432,121	36,403	12,571,0141940-41 	.. 11,177,337	556,475	37,220	16,196,4321941-42 	... 16,602,529	809,208	42,256	23,313,7411942-43 	... 14,297,044	758,021	39,313	19,539,9491943-44 	.. 14,846,201	2,260,000	52,396	28,600,9471944-45 	... 17,758,527	2,265,000	59,521	33,342,1911945-46 	.. . 18,086,456	1,702,926	64,533	33,426,9871946-47 	,.. 20,021,554	2,000,000	75,164	37,246,7901947-48 	... 22,651,157	1,400,000	86,842	40,682,214
Source: Public Accounts of Newfoundland.
Revenue from import and export duties, excise duties and excise licences and from inland revenue stamps will not accrue to the province of Newfoundland after union. Profits from the Board of Liquor Control will continue to accrue to the province.



BUSINESS OF THE HOUSE

Mr. Blackmore:: What is the business for tomorrow?


Louis Stephen St-Laurent: The business for tomorrow would be third reading of the bill which has just been dealt with in committee; after that, the resolution, which is on the order paper for today, for an address to His Majesty to place before the parliament of the United Kingdom a confirming statute; then the resolution dealing with the Agricultural Products Act, which is No. 4 on the order
paper today; then continuation of the debate on the measure for the continuation of certain orders and regulations during the national emergency arising out of the war, which is No. 6 on today's order paper.


Stanley Howard Knowles: In that order?


Jean-Paul Stephen St-Laurent: Not necessarily in that order as to the last two items I have mentioned.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Friday, February 11, 1949