1949-03-18

NORTH ATLANTIC TREATY


Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, I have the honour to lay on the table of the house the text, in French and English, of a document which I trust will become of historic importance. It is the proposal for a North Atlantic treaty which is to be considered and, if found acceptable, signed in Washington during the first week of April. Copies are available for hon. members, but for greater convenience I would ask that it be printed also as an appendix to Hansard of today so that it may be available to all those who receive Hansard and get their documentary information from its pages.
At the same time I would call attention to notice of a resolution appearing on page iii of the Votes and Proceedings of yesterday. Hon. members will see from the recitals of that resolution that a conference is to be held in Washington early in April for the purpose of completing such a treaty among the states named; and it is hoped that the situation in parliament will permit a brief discussion of this resolution before the date fixed for this meeting in Washington, so that the sense of the house may be obtained. I should hope it would be the sense of the house that Canada should be represented at this conference in Washington and continue to put forth its best endeavours to bring about the signature of the pact along the lines of this proposal.
(For text of proposed North Atlantic treaty, see Appendix, page 1671.)



CANADIAN NATIONAL RAILWAYS


Hon. Lionel Chevrier (Minister of Transport):: I desire to lay on the table the following reports in English and in French:
Annual report of the Canadian National Railway System for the year ended December 31, 1948.
Annual report of the Canadian National (West Indies) Steamships Limited for the year ended December 31, 1948.
Auditor's report to parliament for the year ended December 31, 1948, in respect to the Canadian National Railway System and Canadian National (West Indies) Steamships Limited.
All these reports are being distributed today.



PRIVATE BILL


[Stage Direction]
Bill No. 84, respecting the pension fund society of the Bank of Montreal.-Mr. Rinfret.


[Stage Direction]
On the orders of the day:
Mr. F. D. Shaw (Red Deer):: Mr. Speaker,
I rise on a question of personal privilege. I have before me the issue of the Financial Times of March 18, in which appears a column under the name "Tempus." That column seals the fate of sixteen of the seventeen members of parliament from Alberta. I alone am left to suffer suspense, uncertainty and agitation. This, I contend, warrants a bill of rights to prohibit discrimination against politicians.



REFERENCE TO STANDING ORDER 43

[Stage Direction]
On the orders of the day:
Mr. A. L. Smith (Calgary West):: I rise on a question of privilege which I think affects hon. members of this house, including myself, though I am not putting it on personal grounds. I want to call attention, with a view to guidance in future debates, to standing order 43, which reads:
(1)	No member may speak twice to a question except in explanation of a material part of his speech which may have been misquoted or misunderstood, but then he is not to introduce any new matter, and no debate shall be allowed upon such explanation.
(2)	A reply shall be allowed to a member who has moved a substantive motion, but not to the mover of an amendment, the previous question, or an instruction to a committee.
The next paragraph is important:
(3)	In all cases Mr. Speaker shall inform the house that the reply of the mover of the original motion closes the debate.
Yesterday's incident is completely closed, but I am calling to your attention, Mr. Speaker, for the future guidance of the house
1B06	HOUSE OF
Inquiries of the Ministry in debate, that this latter rule must be complied with before a member may be refused the privilege of speaking.



TRANS-CANADA AIR LINES REMOVAL OF EMPLOYEES FROM WINNIPEG

[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Has the Prime Minister received a telegram from the Winnipeg chamber of commerce asking that notices of removal to certain Trans-Canada Air Lines employees in Winnipeg be suspended pending consideration of the matter by a committee of this house? If so, can the Prime Minister say what action he has taken in response to that telegram?


Louis Stephen St-Laurent: I shall look into it. I do not remember that any such telegram has been brought to my personal attention. However, I shall inquire and be in a position to answer the hon. member's question at the next sitting of the house.


Stanley Howard Knowles: Possibly later today? EXECUTIVE CLEMENCY



STANLEY D. MCLAREN    QUESTION AS TO COMMUTATION OF DEATH SENTENCE

[Stage Direction]
On the orders of the day:
Mr. E. G. Hansell (Madeod):: I should like to direct a question to the Solicitor General. Has the government received any request from counsel or other responsible persons for remission of sentence or executive clemency in the case of Stanley D. McLaren, of Calgary, who has been sentenced to hang on March 30? If so, has any decision been reached?


Hon. Joseph Jean (Solicitor General of Canada):: The hon. member was kind enough to send me notice of his question. A few applications for commutation of the death sentence in this case have been received, but no decision has been reached. May I say that in such cases a decision is seldom announced before the last few days preceding the date set for execution, which in this instance is March 30.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver South):: I intended to direct a question to the Minister of National Defence, but perhaps his parliamentary assistant can answer it. It is not clear, from the statement the minister made yesterday about Pacific pay for the Hong IMr. Smith (.Calgary West).]

Kong veterans, whether the payment will begin as of the 1st of June, 1945, or whether it will apply for the whole period of service in the Pacific. Could the parliamentary assistant say which of these courses is to be followed?


Mr. L. E. Baker (Parliamentary Assistant to Minister of National Defence):: Payments will begin as of June 1, 1945. They cannot begin prior to the date of the order in council.



FOREIGN EXCHANGE CONTROL ACT


[Stage Direction]
The house resumed from Thursday, March 17, consideration of the motion of Mr. Abbott that the house go into committee on the following resolution:
That it is expedient to present a measure to provide for the continuance in force of the Foreign Exchange Control Act until sixty days after the commencement of the first session of parliament commencing in the year 1951.
Motion agreed to, and the house went into committee, Mr. Macdonald (Brantford City) in the chair.
Mr. Drew:: Mr. Chairman, it will be possible to deal with the various sections of this bill at a later stage in the procedure, but in the meantime it is important to consider some of the principles involved and some of the points that have been made in connection with this proposal.
The bill before the committee is to replace a bill introduced some time ago to meet special circumstances. It is interesting to note the extent to which a bill of this kind, once it is on the statute books, is accepted by people who forget the considerations that were in their minds at the time the bill first came to their attention.
Since this law was originally placed on the statute book, many circumstances have changed and many things have served to emphasize the need for careful consideration of what has taken place. The Minister of Finance (Mr. Abbott) discussed this bill yesterday but made little reference to some of the most important considerations which have arisen since the first bill became law. The theory of foreign exchange control was one which the Minister of Finance himself indicated he accepted reluctantly at the time that step was taken. At that time, however, he contended that in view of the Bretton Woods agreement and our position in relation to the international arrangements then assumed, it was essential that we have this measure of control. Time passed and it was

necessary to review the circumstances in the light of what had happened.
In the foreign exchange control bill as it was originally introduced in this house there was an extremely important provision, under which pounds sterling were to be convertible with the dollar. For Canada that was a vital consideration at that time. Our difficulties in international trading are not with the United States, from the point of view of our monetary unit; our problem is to be able to sell in the sterling areas where in the past we have found our main export markets.
When the Minister of Finance speaks of exchange as being something which it is difficult to determine in realistic figures, he well knows that in the past the value of the Canadian dollar in relation to the monetary units of other countries was determined by the trade which Canada carried on in both dollar and sterling areas. The day by day value of our dollar was related to the possibility of converting our pound position into a dollar position in the ordinary exchange markets of the world. It is doubtful whether Canada would have entered into the Bretton Woods agreement and would have carried forward her undertakings without a further arrangement of some kind, had there not been reliance on the provision for convertibility between the pound sterling and the dollar of the United States.
When circumstances arose which led to the abandonment of the convertibility factor in the Bretton Woods agreement, immediately there was a reason for a review of the whole situation. As the Minister of Agriculture said in London not so long ago, and in forceful and vigorous terms, it is the duty of government to find some way in which the products of this country can be sold into markets which cannot buy unless there is some arrangement in regard to the sterling exchange. The whole situation has changed. Today we see a loss, and a threatened still greater loss in the future, in those sterling areas unless some mechanism can be devised for selling our products to countries to which we have sold them for so many years and which have been our largest export consumers. It is therefore essential that when the bill based on this resolution comes before us we understand that we are going forward without any indication by the government of any new steps which would assist the situation in which we find ourselves.
After all, the parliament of Canada must accept the responsibility of deciding whether we shall simply submit to a situation which exists or whether we shall take the initiative in seeking a solution to the problem posed by the Minister of Agriculture, who has felt 29087-102
Foreign Exchange Control the direct effects of this situation in dealing with the basic agricultural commodities of this country. When we are asked to carry forward the Foreign Exchange Control Act by the bill now before the committee, it is important to realize how necessary it is that the members of this house know perfectly clearly what the government intends to do, how these problems are to be solved, and how this country is to find an opportunity to extend its business in those markets which are now made difficult for us by the steps which have been taken under this act and through the failure of the convertibility factor in the Bretton Woods agreement. There is a special reason why this house should insist upon knowing what hope the government offer of some solution of that problem, and how they propose to deal with it.
We know what occurred after this act was originally passed. In the first place it was not intended that it should operate as a control over the exchange of goods between Canada and other countries. It was intended that this act should deal only with foreign exchange. When it was pointed out that this act went a great deal further than to deal only with foreign exchange, a reassurance was given that there was no intention of dealing with anything else. That is evident not only from the answers given by the minister, but also from answers given before the standing committee on banking and commerce by one of the representatives of the foreign exchange control board, who was put before that committee to explain the effects of this act.
In the reports of the standing committee on banking and commerce on Bill No. 195, foreign exchange control, as reported at page 40 of the proceedings of July 11, 1946, Mr. Rasminsky was answering certain questions in regard to the effect of this act and what the foreign exchange control board would do. These are Mr. Rasminsky's words as they are found in that report:
The foreign exchange control board has nothing whatever to do with the types or quantities of goods which are imported into Canada or exported from Canada.
On July 15, at page 53 of the report, Mr. Rasminsky was again being asked certain questions in regard to the effect of this act and the powers of the foreign exchange control board. These were his words:
The answer is that if circumstances arose in which for one reason or another it seems desirable to place restrictions on the import of goods into Canada then it is evidently the opinion of the government in this measure that the power to place those restrictions should not be conferred upon an administrative body such as the foreign exchange control board.
That is a clear and definite statement which, put forward in the way in which it
1608	HOUSE OF COMMONS
Foreign Exchange Control was, the members of this house have a right to accept as a guide in their understanding of the effect of this act and the operation of the foreign exchange control board.
On July 15 also, at page 57 of the report, we find that Mr. Rasminsky was asked this question:
Q. In other words, the suggestion there is no regulatory power vested in the board with reference to imports at the expense of any power parliament now has in that regard, Mr. Rasminsky, was referring to the export and import of goods rather than securities and currency? A. That is right.
On the basis of this statement it is quite clear that the impression was left that this was strictly a foreign exchange control bill and in no way dealt with the import or export of goods; yet we find that very situation has arisen.
Of course there were also the explanations given at the time that this matter was under discussion in the house. The then Minister of Finance is reported, at page 2547 of Hansard of Monday, June 17, 1946, to have made the following statements:
We have no intention of using this exchange control legislation to restrict anything but certain types of capital movement.
And later the same day, as reported on the same page, he said:
It is for this reason that it is necessary to maintain our over-all machinery of control, even though our intention is to place no restrictions on current account transactions.
The house had a right to rely on that assurance. I repeat the words:
We have no intention of using this exchange control legislation to restrict anything but certain types of capital movement.
Again we find that the present Minister of Finance said, as recorded on page 4530 of Hansard of August 9, 1946:
I repeat that the whole purpose of the measure is to provide for the efficient handling and conservation of our essential foreign exchange resources.
The word "whole" is not subject to any misunderstanding. It meant that the whole purpose, the only purpose, of this act was to provide for the efficient handling and conservation of our foreign exchange resources. It was at a later date that the announcement of a budget by radio, as described by the hon. member for Quebec South (Mr. Power), changed the whole situation. At that time the present Minister of Finance made the naive statement that until they had been informed by the officials of the department they had no idea that the act contained the powers to do the things he was then announcing they were going to do. For a minister of the crown to say to the people of Canada: We had no idea that this act contained the powers we now exercise, but our officials have

informed us that we have these powers and therefore we shall use them, is simply a declaration by that minister that if any act is passed by this house containing powers that will enable them to do anything which in their use of arbitrary powers they want to do, they will do it, even though they had told the house they did not intend to do it. That, Mr. Chairman, goes much deeper than merely the accuracy of the statement of a minister of the crown; it goes to the question of good faith on the part of the government. It is inherent in our theory of responsible government that, when a minister of the crown gives an assurance with respect to government policy affecting the way in which the government will use an act that it asks the house and parliament to pass, the government will respect the undertaking which was given at that time.
Just think of what the effect of a disregard of that principle would be in relation to the other control measures which are now before the house, but which are not put forward by statute. If the assurance of the members of the government means nothing, as it meant nothing in this case, then assurances given that the government has no thought of using those powers in any particular way will also mean nothing. There is no other interpretation of the statement which was made by the Minister of Finance at that time.
But the minister went even further. He not only used the act to carry out the control over the import and export of goods, which he had said they did not intend to do, but he announced certain measures which could come into effect only when legislation was passed, and he gave instructions to the appropriate officials that they were to act on orders which had never received the authority or the power of parliament. That is simply government by dictatorship and not government by the parliamentary system. In the first place he repudiated the undertaking which had been given, and in the second place, having then used powers which they stated they were not going to use, he gave orders to departmental officials to carry out certain operations which were not even yet made possible by any act of this house.
When the Minister of Finance now treats in such a cavalier manner any criticism of the purpose or the operation of this act, it simply indicates how much he has forgotten the nature of the criticism which emanated from supporters of this government when this was done. Certain illuminating comments in regard to the effect of this act were made in the Senate, by men who had always been very close to this government. For instance, there was the comment of Senator McGeer

on August 13, 1946, as reported on page 680 of Hansard of that day. Amongst other things, he said-


The Chairman:: Order. Is the hon. member referring to debates in the Senate? I think it would be in order to refer to proceedings in committees of the Senate, but it is not usual in the House of Commons to refer to the debates of the Senate.


George Alexander Drew: Having regard to the practice in the house, Mr. Chairman, and having Hansard in front of me, probably I should have referred to "the other place". I would remind you, sir, that I am not referring to a debate in the current session, but to a debate which took place some years ago. I understood that these records of debates could be discussed from the point of view of interpreting the effect of a document.


William Ross Macdonald: I do not think that the House of Commons has ever referred to debates in the Senate, whether they are debates of the current session or of previous sessions. The house has referred to other records of the Senate, but I do not recall the debates in the Senate having been referred to in this house.


Mr. Black (Yukon):: What rule is the chairman quoting? What is to prevent it?


George Alexander Drew: For my enlightenment, Mr. Chairman, I should like to know what rule prevents a reference in this house to a statement made in the Senate in relation to a bill which has become the law of Canada by the completed action of both the house and the Senate?


Mr. Irvine:: The only reason why the Senate was not quoted in this house before is that nobody over there had said anything.


William Ross Macdonald: I have not the rule at hand, but my recollection is that if the house desires to know what the Senate has done, it passes an order to search the records of the Senate. I do not think any hon. member recalls a reference to the debates of the Senate, either of the current session or of a previous session, having been made in the House of Commons. The rule I had in mind was standing order 32:
This house doth consent that its journals may be searched by the Senate, in like manner as this house may, according to parliamentary usage, search the journals of the Senate.


Mr. Maclnnis:: Mr. Chairman, on a point of order, I do not think the standing order just read has anything to do with the question at issue. Surely what the leader of the opposition was reading from is now an historical fact, and these debates are open to quotation or otherwise in the house if members 29087-102J
Foreign Exchange Control see fit. There is nothing sacred about what happens in the Senate. It would not be proper for an hon. member to cast reflection upon what the present Senate is doing- although it may be a proper subject to reflect upon. I am sure, however, that in my time in the house a reference such as that which the leader of the opposition now seeks to make has not been forbidden by the rules of the house.


Mr. Hacketi:: I have been in and about the house a long time-about it more than in it,
I admit-but never until the last few days have I heard a chairman or a Speaker interrupt the leader of the government or the leader of the opposition.


Some hon. Members:: Oh, oh.


John Thomas Hackett: I am stating a fact. It is open to any hon. member to rise to a point of order. But until these last few days it has never come within my knowledge or observation that a Speaker or a chairman, of his own volition, has called a prime minister or a leader of the opposition to order. I should be interested to know whether this is a departure from the tradition that has been observed in the house.


Mr. Abbott:: It is not my custom to interrupt when questions of procedure are under discussion, but I do see in Beauchesne's Parliamentary Rules and Forms, second edition, at page 95, citation 293 which reads as follows:
Besides the prohibitions contained in this standing order,-
That is, standing order 41.
-it has been sanctioned by usage both in England and in Canada, that a member, while speaking, must not:
(a)	refer to any debate of the same session on any question not then under discussion; nor
(b)	refer to any debate in the Senate, but he may refer to the official printed records of the upper house though they have not been formally communicated to the lower house.
The official printed record of the upper house is the minutes of the proceedings of the Senate, not Senate Hansard. I should be delighted, however, to hear what my late friend Gerry McGeer said at that time. I am not taking issue on that point at all.


William Ross Macdonald: Order. I must agree that I was impressed by the remarks of the hon. member for Stanstead. It is only with the greatest of hesitancy that I would interrupt the leader of the opposition or any minister of the crown, and it has not been my custom to do so-although I think it has been done from time to time. The interruption I did make was in connection with referring to the debates of the Senate. As I had never heard it done in the house during the time I

Foreign Exchange Control
have been here, I thought it only proper that I should bring the matter to the attention of the committee. If it is to be the custom to refer to the debates of the Senate, then we should know. It would be an innovation, I am sure, so far as the House of Commons is concerned.
Standing order 41, to which the Minister of Finance referred, was the one to which I was about to refer. Citation 293 (b), in connection with standing order 41, states, as the minister has pointed out, that-
Besides the prohibitions contained in this standing order, it has been sanctioned by usage both in England and in Canada, that a member, while speaking, must not ...
(b) refer to any debate-
And I draw attention to the word "any".
-in the Senate.
It does not say, any debate of the present session or some other session; it is simply any debate. I take it to mean any debate of any session.
The rule to which I referred a moment ago was standing order 32. That is the one under which the House of Commons may ascertain what has been done in the Senate. I shall read it again:
This house doth consent that its journals may be searched by the Senate, in like manner as this house may, according to parliamentary usage, search the journals of the Senate.
That is the method the House of Commons has adopted of ascertaining what has been done in the Senate.


George Alexander Drew: Mr. Chairman, I have no desire to _ press the matter, particularly from the point of view of considering, what was said. A question, however, has been raised which I believe should be settled with some clarity, now that it is before the committee of the whole house.
When you referred, sir, to citation 293, you read only as far as the words, "refer to any debate in the Senate". But the words which follow immediately after those words are these:
. . . but he may refer to the official printed records of the upper house though they have not been formally communicated to the lower house.


Mr. Sinclair:: That is not Hansard.


Douglas Charles Abbott: That refers to the minutes of proceedings of the Senate.
^ Mr. Drew: I know of the dispute which has taken place for some time in connection with the word "official" in that respect. The word "official" appears, of course, on Hansard, both of the House of Commons and of the other place. That is a matter which I suggest should be understood. I have another way of dealing with it, Mr. Chairman; I could [The Chairman.]
avoid asking for a ruling at the present time, if you would prefer to give it later.


Stanley Howard Knowles: On the point of order, may I call the attention of the committee to citation 252 in the second edition of Beauchesne, which states:
The journals are the official records of the house.
It is a lengthy paragraph, but that is the gist of it. I confess when the point of order was first raised I was inclined to feel that it was being pressed too hard against the leader of the opposition. As I have been reading the citation, however, it has seemed to me that the chairman is right.


John Ewen Sinclair: To what citation is the hon. member referring?


Stanley Howard Knowles: Citation 252 in the second edition, at page 76, which defines what are official records, and it states that "the journals are the official records of the house". Hansard is not an official record.
While I am on my feet may I draw your attention, sir, to another citation in connection with the point raised by the hon. member for Stanstead. The hon. member objected to the chairman of committees and the Speaker of the house raising points of order in the midst of speeches by the Prime Minister and the Leader of the Opposition. May I quote in this connection citation 108 at page 33 of Beauchesne, second edition:
The Speaker decides the questions of order only when they actually arise and not in anticipation. He is bound to call attention immediately to any irregularity in debate or procedure and not to wait for the interposition of a member.
Surely the Leader of the Opposition and the Prime Minister are members of the House of Commons, with the rest of us, and subject to the same rules. I appeal to you, Mr. Chairman, not to have any reluctance to intervene in the speeches of the Prime Minister and the Leader of the Opposition when, in your opinion, they are out of order.
One other point, lest the hon. member for Stanstead suggest that citation 108 refers only to the Speaker and not to the chairman. May I call his attention to citation 534 in Beau-chesne's third edition, which says, in effect, that committees of the whole house are, in actual fact, the house, and that therefore the same rules apply.


William Ross Macdonald: May I say in reply to the hon. member for Winnipeg North Centre that I was not pressing any ruling against the leader of the opposition. I was simply drawing attention to the fact that the quoting of the debates of the Senate was a departure from the usual custom of this house. The question has come up whether Hansard is the official record of the house. I happen to have

before me a copy of the Hansard of the British house, dated February 16, 1949, where Mr. Speaker in making a ruling stated:
I think the right hon. and gallant gentleman said that it was a mistake in the official report. Hansard is not an official report.


John Thomas Hackett: I rose merely to point out that interrupting of the Prime Minister or the Leader of the Opposition by the Speaker or the chairman of the committee of the whole is a departure from tradition.


Some hon. Members:: No.


Mr. Case:: Mr. Chairman, I am not going to debate the point that Hansard is not the official record, but I would point out that I have a copy of the official Senate Hansard, and it says "official report."


An hon. Member:: Record.


Stanley Howard Knowles: I have seen the hon. member's official letters in the Owen Sound Sun-Times, but that would not make them official.


Wilfrid Garfield Case: Don't worry too much about that.


William Ross Macdonald: I shall read the whole statement by Mr. Speaker as appearing in the British Hansard:
I think the right hon. and gallant gentleman said that it was a mistake in the official report. Hansard is not an official report. It is, I hope, as accurate an account of our proceedings as possible. The official report is one which it is my duty, the house remembers, by resolution passed at the beginning of every session, to peruse daily. I did peruse the official report, which is the accurate one, and it says "another amendment made", which is the correct wording. Therefore, officially the amendment is correct and in order, and I hope that what I have said, and what the right hon. and gallant gentleman has said, will ensure that the matter is put right in Hansard.


John Thomas Hackett: May I draw to your attention the fact that Hansard bears on its first page the words "official report." It is published under the control of the house.


An hon. Member:: Report, not record.


William Ross Macdonald: Official report of the
speeches.


Ernest George Hansell: I am happy, sir, at your ruling, because the way is now open for you to inform the page boys not to clutter up my desk with Senate documents. It is most untidy, and besides they hurt my knees.


George Alexander Drew: Perhaps we can discuss this subject at some other time before the rules committee, because there is no way in which I can raise the point I wish to raise.
In view of the fact that yesterday the Minister of Finance quoted with such approval an editorial from the Toronto Globe and Mail at the time these proceedings were under consideration, I shall quote another editorial published during that same period:
Foreign Exchange Control it deals with this particular point, and I am sure the Chairman will not find it to be contrary to the rules of the house. This editorial, which appeared on August 15,	1946, is
headed: "Liberalism revolts", and reads:
The government's bill to put in statute form the extraordinary powers of the foreign exchange control board received the reception it deserved when presented in the Senate. The senators' approach to what is beyond all doubt the most offensive and dangerous legislation sent over to them this session offers hope they will insist on retaining for parliament authority which a Liberal majority in the commons would have so meekly abdicated in favour of a bureaucracy of civil servants.
In preliminary examination the senators pounced on the objectionable features against which the opposition fought in the commons and unearthed further details of the bureaucrats' grasp for power. They, too, found alarming the government proposal granting the board authority to remake the laws of parliament to suit its own purposes; to discriminate in favour of groups or individuals at the expense of others; declare a resident of Canada, as defined by statute, a non-resident, or vice versa; "make a man a woman", as a member of the house put it. Senator McGeer discovered that disregard for the rights of the individual does not end there. The board could strip its new "creature" naked.
This had to do with the provision requiring that "no person shall, except in accordance with a permit, export any property from Canada." Senator McGeer commented:
This is what I was going to quote:
"You cannot move your own valise out of this country without a permit. They have the power to prevent anyone leaving . . . unless they walk out naked." Coupled with this is the power given the board's agents to search persons suspected of violating the Foreign Exchange Control Act. The Customs Act contains restrictive safeguards so that the traveler, whether he be entering or leaving the country, is left with some dignity. Such consideration of the human being is totally disregarded in the bill before the Senate.
Likewise, as Senator McGeer pointed out, the tourist who wants to come into the country "with his clothes on" must first write to the board for permission. Importation of any property without a permit is banned. Nor is there any recourse to the courts for the individual who might suffer from this abuse of arbitrary authority. No matter what the indignity inflicted, the board's agent has only to plead that he was acting on its instructions, either written or verbal.
Most significant about the Senate's attack was its leadership. It was led by men who were brought up in the same school of political philosophy as those government benchers who bowed their servile heads to the .will of the cabinet. Even Senator Hayden, who was assigned the task of piloting the bill through the upper chamber, proved to be an unenthusiastic sponsor. He confessed that, to his way of thinking, the bill was "unusual" and in some respects "extraordinary."
Senator Lambert doubted whether it would aid in the development of Canada or improve relations with the United States. Senator Bench didn't like it and proposed that life of the legislation be at least limited, the minimum for which the commons opposition fought. Senator Campbell thought that the board should continue to operate for the time being under order in council, where it would be at least subjected to some control by parliament. Senator McGeer, most forthright of all. would have killed it outright.
1612	HOUSE OF COMMONS
Foreign Exchange Control
With this display of acute sensibilities, it is obvious that the bill has few friends in the Senate. It is not what might be regarded as liberal legislation in the proper sense of the word. This being the case, the senators have no choice but drastically to restrict the authority of the board or tell it to carry on under order in council. The Senate cannot possibly sanction the handing over to a group of individuals not responsible to the people "the control over the whole trade and commerce of the nation." As Senator Hayden reminded his colleagues, if the senators approve the bill without putting a limitation on it, they will have parted with their right to deal with it again.
I quoted that editorial because yesterday the Minister of Finance quoted an editorial from the Globe and Mail with such evidence of confidence in the wisdom of their judgment in discussing this matter.


Mr. Bradetle:: What did the Senate do in that instance?


George Alexander Drew: It limited the life of the bill.


Mr. Jackman:: Which the Commons would not do.


Joseph-Arthur Bradette: But it passed the bill.


George Alexander Drew: That is exactly what happened; it limited the life of the bill, which the Commons would not do. That is why this bill is now before the house, and why this house should remember what was before parliament at that time.
Now, because I find that the Minister of Finance does believe that editorial comment is useful in interpreting his bill, and also because of certain restrictions on the use of the Senate Hansard, I shall quote another editorial which appeared in the Ottawa Journal on August 21, 1946. The heading is, "A disturbed Liberal." I read this editorial because it also dealt with this subject and because the Senate recognized that certain features of this bill were entirely contrary to every principle of Liberalism. The editorial reads:
Senator T. A. Crerar is receiving no end of praise for a speech which he delivered in the Senate last week. Oddly enough, it was a speech in defence of liberalism-against Liberals. Senator Crerar was dealing with a completely totalitarian measure which a Liberal majority in the Commons had sent over to the Senate.
The bill which disturbed Senator Crerar, which made him long for the old liberalism, was one conferring wide powers upon the foreign exchange control board. Said he:
I am still quoting from the editorial.
"This is one of the most extraordinary bills ever to come before the house of parliament. In principle it proposes to confer upon a board of civil servants absolute power over the import and export trade of the country and over the movement of funds across our borders, a power unlimited as to time, and unrestricted as to scope and sweep of operations."
Senator Crerar went on to show, as we in these columns tried to show recently, the extraordinary changes that have come in the political philosophy of this country, with their whittling away all our old ideas of a free economy. Thus:-

I quote again from Senator Crerar:
"I first became a member of parliament thirty years ago and the functions of the government of that day as contrasted with those of the administration of today represent a complete transformation. The government of Canada today is in the wheat business up past its ears. The government is in the housing business to a most extensive degree. It is in the transportation business, by land, sea and air. It is operating a transcontinental air service, ships on the sea and the national railways. The government is in the broadcasting business. The government is in the motion picture business. It is also operating crown companies. It is in the business of dispensing public information. All these activities have completely or at any rate largely changed the functions of government."
That is the end of that quotation from Senator Crerar. It does not say whether or not it was from Hansard.
The picture is not distorted; to an amazing degree Canada has passed from a country of free capitalist effort into one where totalitarianism is steadily on the march. The strange thing, and the pity, is that this transformation has come and continues to come without public discussion, largely without public awareness. The stranger thing, and the greater pity, is that it has been brought about by people who profess to be against totalitarianism, who talk sometimes as if they held the title deeds of liberalism, and. also that many who profess to be the enemies of totalitarianism daily cry out for more of it. We have people, at this moment, calling upon the government to settle strikes by "making the unions work". It does not occur to them that if any government in this -country ever uses force to make the unions work it will not be to make them work for private industry but for the government- the state: that work compelled by force will put us precisely where Russia is and where Germany was.
That is the trouble with too many of us: we have no clear understanding of where all this government intervention, and all this government planning, and all this totalitarian legislation, are carrying us. Well might more of us, whether we belong to labour or to capital, heed the wise words of Senator Crerar.
Again I quote his words, and not from Hansard.


William Ross Macdonald: Order. I think it is just as much out of order to quote from a newspaper what has been said in debate in the other place as it is to quote from Senate Hansard direct. An hon. member may not do indirectly that which he may not do directly.


Mr. Fournier (Hull):: I wanted to let the
hon. gentleman finish his quotations, but I would refer the committee to citation 307 of Beauchesne:
Allusion to debates in the other house are out of order, and there are few orders more important than this for the conduct of debate and for observing courtesy between the houses.
That rule has always been observed; the chairman is quite right. We have never debated a debate in the other place. I did not interfere; I thought it would be a short quotation, but apparently most of the hon. gentleman's speech is to be taken up with these quotations. That is a rule of the house which has been continuously applied.


Some hon. Members:: During the current session.


Alphonse Fournier: No; there is no mention of any particular session.


Mr. Fulton:: On this point I would refer the committee to the ruling in May, twelfth edition, which I submit clearly establishes that the restriction is confined to debates of the current session. The rule is referred to at page 291. The text then follows along for several lines, and there are a number of citations and quotations at the bottom of the page in support of it. Citation No. 5 at the bottom of page 291 reads:
See also the Speaker's rulings concerning the power of quotation from a speech in the House of Lords . . . and his declaration that it was a very wholesome rule of the house not to allude to statements or debates of the current session in the other house, as to do so might bring the two houses into collision.
That is a citation in support of the rule as found in May, and I suggest that it clearly establishes that the rule is confined to debates of the current session.


Mr. MacNaughl:: On the point of order I would like to draw attention to citation 264 in Beauchesne, third edition:
It is out of order to read extracts in a debate if they (e) allude to debates in the other house of parliament.


George Alexander Drew: The context clearly indicates no reference to the records of the other place, and a completely new principle is asserted in the suggestion that what has been reported in a newspaper is in itself not subject to comment here, though there is no suggestion that what is quoted is taken from Hansard instead of being merely the ordinary record made by the newspaper reporters who were present at the time.


William Ross Macdonald: I understood the hon. member was reading a direct quotation from Hansard which had been inserted in the editorial.


George Alexander Drew: No, Mr. Chairman; that is why I said "not from Hansard".


William Ross Macdonald: My point is that the hon. member cannot do indirectly what he cannot do directly. I thought I should put myself on record in regard to this matter.


George Alexander Drew: Then is the ruling that a newspaper reference to something which has taken place in the other house in an earlier session is not admissible in the debates of this house?


Douglas Charles Abbott: That is correct, and that is as it should be.
Foreign Exchange Control


George Alexander Drew: I am referring to a quotation from the press.


William Ross Macdonald: If it quotes the direct words, the exact words, and is a quotation from Hansard, in my opinion it would not be in order.


George Alexander Drew: Then, Mr. Chairman, I appeal your ruling.


George Black: I should like to ask the chairman to direct his attention to the House of Commons Debates, on the title page of which appear the words "Official Report". The same thing is true of the Senate debates. The chairman has ruled that these are not official reports, and therefore if a person is quoting from them he is not violating the rules of the house because there is no official report from which to quote. Either these are official reports or they are not. The chairman suggests they are not; therefore, the leader of the opposition in quoting from these documents is not quoting from official reports.


Mr. Lesage:: On a point of order, I understand there has been a ruling and an appeal from that ruling. No further discussion is allowed.


Donald MacInnis: Mr. Chairman, I would ask you to take into consideration the ridiculous position in which we would be placed if we said we could not discuss anything that was ever said in the Senate. We would be in exactly that position if what was said last year or the year before could not be repeated in this house. If nothing that had ever been said in the Senate since confederation could be repeated, how ridiculous it would be! Surely what these rules have in mind is that we should not create a controversy between the house and the Senate concerning matters currently under discussion; that is the only logical conclusion to which one can come.


William Ross Macdonald: I must say I was impressed by the reference from May which was read by the member for Kamloops (Mr. Fulton) and which I have not been able to obtain. I did not give a ruling on this matter. I stated it was my opinion that it was irregular to refer to the debates of the Senate, either by having a copy of Hansard in the hands of the member who was speaking or by having the quotation from Hansard which appeared in the press. I expressed that as an opinion.
I said in the first place that I rose because this was a departure from the custom in this house. I think hon. members will recall that I stated that. I was not calling the leader of the opposition to order. With respect to whether or not the standing order applies

Foreign Exchange Control only to the debates of any one session, standing order 41, citation 293 (b), reads as follows:
Besides the prohibitions contained in this standing order, it has been sanctioned by usage both in England and in Canada, that a member, while speaking, must not . . .
(b) refer to any debate in the Senate-
It does not say, "of the current session". One cannot refer to any debate of the same session on any question not then under discussion, and the rule in this regard definitely says, "debate of the same session".
With respect to the question raised by the member for Yukon (Mr. Black), I have read citation 293 (b), in which the words are "refer to any debate in the Senate". Then it continues:
But he may refer to the official printed records of the upper house-
Which are different from the debates.
-though they have not been formally communicated to the lower house.


Edmund Davie Fulton: I believe you will find, Mr. Chairman, that the citation in Beauchesne's second edition is based on the authority of May, and May sets forth the rule in greater detail in the quotation to which I have referred. The citation at the bottom of page 16 seems to me to limit the rule set forth in May to debates of the present session, and that, in turn, would limit the citation in Beauchesne's second edition, which is based on May, also to debates in the present session.


Alphonse Fournier: It is difficult to come to a definite conclusion by reading the rules. I note that the leader of the opposition was in order in reading extracts from newspapers to support his argument; that is stated in citation 262. According to citation 264 a speaker may not "allude to debates in the other house of parliament". I think some restraint should be placed on the practice of reading clippings. I have no objection to the leader of the opposition reading some clippings, but he should not make a whole speech by reading newspaper clippings.


George Alexander Drew: The point is not one that can be dropped at this juncture, because, as the discussion has indicated, the practice in the past is not perfectly clear. Even though the rules have not stated the situation as positively as they might, their purpose is to prevent the very thing the member for Vancouver East (Mr. Maclnnis) has referred to as an embarrassing misunderstanding between this house and the other place while some matter is under active discussion. I think hon. members might well consider what the effect of such a decision would be.
Many members have been urging that the other place initiate more legislation than it
[The Chairman.]
has in earlier years. Certain legislation is initiated in the other place, after which it comes to this house. This practice is in accordance with established practice in Westminster, and, although the procedure in Canada and the United States are not the same, it is an extremely common practice in Washington. The upper house takes the responsibility of piloting through some measures in connection with which an extensive examination of the details is called for. If at some future time, in order to explain his reason for coming to certain conclusions, it should be impossible for a member of the house to quote in this chamber what had been said in the other place, the house would be deprived of extremely valuable information. No reasonable justification could be put forward for establishing such a rule.
What has happened in this case is that certain discussions did take place three years ago in the other place. Those discussions were referred to by the press of this country over an extremely wide area. In order that all hon. members may better understand what was actually under consideration, I am placing the editorial comment before the house. In doing so I am following the same practice as the Minister of Finance followed yesterday in explaining the effect of a bill which had been introduced, although the contents were different. In this case the newspaper editorials actually quote from statements made by members in the other place. Whether or not those statements appeared in Hansard is in no way indicated by the editorial. In fact in the ordinary course of events one might expect that the editorial would be based upon a report of the particular newspaper in which the editorial appeared. I have not finished the editorial in question. There is a quotation from another member in the other place, and I ask for your ruling, Mr. Chairman, on whether I may proceed to read it.


Mr. Adamson:: Just before you give your ruling, Mr. Chairman, may I say that some years ago I found myself in exactly the same situation. At that time Mr. Ilsley was the minister of finance. I was quoting an hon. senator and the deputy minister of finance both in a debate in the other place and in a committee of the other place. The then minister of finance requested a ruling on the matter, and the ruling given at that time was that I could proceed, since it aided the argument I was putting forward. I submit there is a precedent, sir, for allowing the quotation to be given.


Mr. Golding:: I think the point which has been raised is an important one, and a snap judgment on it should not be given. I suggest that the debate be allowed to go on, that

the hon. member be allowed to quote from the editorial to which he was referring, and that consideration be given to a ruling in the matter. It is important that we should have a proper ruling in a case of this kind. I should not want to see the debate restricted to any greater extent than may be necessary; yet I should like to see the rules observed. My suggestion is that the leader of the opposition continue his discussion, and that the matter be taken into consideration and a ruling given later.


Alphonse Fournier: When I stood up, Mr. Chairman, I thought the leader of the opposition had concluded his reading of the extract.
I waited for that moment in order to cite the rule. If he has not completed the reading of it, I see no objection to his continuing.


Some hon. Members:: Agreed.


Mr. Macdonnell (Muskoka-Ontario):: I want to say just one thing. It seems to me that the general sense of this committee was that what the hon. member for Vancouver East said was sensible. I suggest that the body of the rules of this house is the result of two things. One of these is the precedents. But it is not altogether a matter of precedents. After all, new decisions have been made on hundreds of occasions. When this matter is being considered I suggest that we have regard to what the hon. member for Vancouver East said, and to what a former leader of my party called "the immortal ground of common sense."


George Alexander Drew: I think the suggestion made by the hon. member for Huron-Perth is a sound one. Obviously the point is one upon which members on both sides of this house have some doubts. I am simply asking that it be clarified one way or another; and if the suggestion he has made is acceptable to the committee, I shall proceed.


Some hon. Members:: Go on.


George Alexander Drew: I will start at the last paragraph, Mr. Chairman, because I am not just sure at what word I stopped:
That is the trouble with too many of us; we have no clear understanding of where all this government intervention, and all this government planning, and all this totalitarian legislation, are carrying us. Well might more of us, whether we belong to labour or to capital, heed the wise words of Senator Crerar;
"Liberalism down the ages has been the great liberating force in every worthwhile achievement of our civilization. When I speak of liberalism it is not in the sense of something that distinguishes the Liberal party from the Conservative party; for today those party labels have little, if any, significance when you probe deep down into the very fundamentals upon which our civilization is based and has developed. It is because I am opposed to anything that undermines the spirit of liberalism.
Foreign Exchange Control
the love of freedom and liberty which is the divine heritage of the individual citizen, that I am opposed to this measure."
The editorial goes on:
Canada would be a better country, had we more of the heart and mood here so finely spoken.
That was the sentiment expressed at the time this bill was under consideration, and that was the sentiment expressed in a great many publications, with different points of view, in different parts of the country.
The operation of the foreign exchange legislation was limited as to time, not in this house but in the other house. As a result, the measure we are now considering comes before this house for decision on the part of hon. members whether it shall again impose 'no restraint upon those things which have been done in the past, and which the Minister of Finance said would not be done.
There will be an opportunity to discuss this matter still further; but, in dealing with a motion of the kind now before us, hon. members must consider whether they should not receive some assurance from the government, first as to the things that have arisen in connection with the foreign exchange measure; second, as to the real necessity for the legislation, and third, as to what this government is doing to meet the situation which was so vigorously and so ably put forward by the Minister of Agriculture in London a short time ago.
As has been pointed out, one of the difficulties involved in this bill is that it places in the hands of civil servants wide and sweeping powers over the whole economy of this country. Let no members of the government get up and suggest that this is a reflection on the civil servants, as they are prone to do whenever any statement is made to the effect that the future of this country should not be entrusted to civil servants. Civil servants are the servants of the public; it is their duty to carry on their daily work under statutes approved by legislative bodies and under the administrative direction of ministers of the crown answerable to parliament and to the people of Canada. When you sidetrack the responsibility of the executive, and of parliament which is in control over the executive, you set up something that approximates a totalitarian state, as was pointed out by those prominent Liberals whose words were referred to in the editorials I have quoted.
This legislation can have a profound and decisive effect upon the whole future of this country. Under it our economy could be undermined and destroyed if a dangerous and unwise course were pursued too far. Canada could find its trading relationship with other countries interfered with by the limiting provisions of the act relating to export and

Foreign Exchange Control import, and its whole trading position in the world could be seriously impaired and seriously threatened if steps were taken which excluded us from markets which are the natural ones for the products of this country, and which have been the natural markets for many years.
It is not expedient to carry forward a measure which by men who believe in the Liberal tradition has been properly described as a totalitarian measure. This house has the opportunity to say that if there is to be an operation of this kind in relation to exchange, it shall be an operation that is under the responsibility of a minister answerable to the house, and that the acts by civil servants be brbught to an end. After all, civil servants can do only what they are told to do by the ministers to whom they are responsible under the acts which have been passed. A great many things are being done about which neither parliament nor the people of this country have any information. When the Minister of Finance yesterday talked at some length about a realistic value for the dollar, implying that it was impossible to arrive at some realistic value of the dollar-


Douglas Charles Abbott: I did not imply that.


George Alexander Drew: -on the basis of open transactions, he of course implied that when the foreign exchange control board is approving some of these transactions, it is not the standard by which to test the propriety of the figure at which that exchange operation is fixed. Unless these exchange operations, which are reported in the financial press, do bear some relation to reality, then it is indeed a strange thing for the foreign exchange control board to be approving large transactions, involving in single cases many millions of dollars, at the very figures which are being quoted in the press from day to day. Apparently it is realistic enough for the foreign exchange control board to conduct business in this way.
So many things are done in such a casual and secretive manner that they are left to be discovered by the public by indirect methods. Tourist trade between Canada and the United States is a matter of considerable importance, as was pointed out by the Minister of Finance in his own remarks. It is a two-way operation. If we encourage tourist trade here, we must also recognize that there are certain reciprocal obligations-and every sensible person recognizes that. When certain exemptions are extended to United States citizens coming into Canada, under which they may take certain goods back to the United States, naturally Canadians are interested in any arrangements we make to encourage Canadians to travel and to see that we are recip-

rocating as far as we can. Possibly it is not important in the total figure, but it does indicate the way in which people are left to find out for themselves what has been done. In the Foreign Commerce Weekly of February 4, 1949, a publication of the Department of Commerce of the United States, an interesting item appears on page 13. It reads as follows: "Canadian tourist credit purchases liberalized." I do not recall any announcement in the Canadian press that Canadian tourist purchases in the United States had been liberalized at about that time, and I should be glad if the Minister of Finance would indicate that any such statement was then given to the press.


Douglas Charles Abbott: A press statement was issued at that time.


George Alexander Drew: In regard to the method that was employed?


Douglas Charles Abbott: In regard to the $100.


George Alexander Drew: But not in regard to these credit arrangements?


Douglas Charles Abbott: No; I do not know anything about the credit.


George Alexander Drew: The minister does not know anything about the credit arrangement?


Douglas Charles Abbott: The credit arrangement is one which has always existed ever since foreign exchange control was established. There is nothing new about it. There was no change.


George Alexander Drew: The announcement on February 14 of a change may be wrong?


Douglas Charles Abbott: There was no change. It had always existed.


George Alexander Drew: The provision by which people could buy on credit and then come back here?


Douglas Charles Abbott: That is correct.


George Alexander Drew: Then apparently the Foreign Commerce Weekly is incorrect in its information.


Douglas Charles Abbott: That may be so; yes.


An hon. Member:: What publication is the hon. member referring to?


George Alexander Drew: If the hon. member had been listening-not the Minister of Finance-he would have heard me say that I am referring to an official publication of the government of the United States.
This particular provision is one of the many that can be made in regard to credit arrangements between two countries. Evidently an official publication of the United States government was in error when it said that there had been a change. We are now

informed that such a change did not take place. Naturally I accept the statement of the minister to that effect.


Douglas Charles Abbott: I want to keep the record clear. The tourist imports were completely cut off, whether for cash or for credit, and naturally at that time the credit arrangement was suspended with the cash arrangement; but once the cash provision of $100 was restored, the credit arrangement was restored as well.


George Alexander Drew: Of course this was hailed, and not unnaturally, in the United States as a broad liberalization of Canadian policy, which would permit an increase of the amount of money; and it was obvious that the thing was not generally understood, because apparently they regarded it as a considerable extension of the facilities available to them, and that is what they point out.
In connection with the control of exchange between the two countries, as distinct from the control over the actual movement of goods one way and the other, to hear the Minister of Finance argue one would think that the ordinary operation of exchange is something that is very undesirable, when as a matter of fact he himself indicated at the time this bill originally came forward that the present course was not one which appealed to him very much at that time, but that he felt it had become necessary under the circumstances.
So far as one could discern a clear argument yesterday by the Minister of Finance in the speech which he read to the house, it was to the effect that far from our dollar having a normal level below par, it has a level which justifies the fixing of it at 100 cents on the dollar. If it really is so, then these crutches which are now being given the dollar are unnecessary; but the fact is, and the Minister of Finance is well aware of it, that because of perfectly normal and traditional results from the kind of trade that is carried on at the present time between Canada and the United States, our dollar is not at parity with that of the United States.


Douglas Charles Abbott: Why is that?


George Alexander Drew: Because for the whole period covered by the history of international exchange, the value of the money unit of one country in relation to the money unit of another country moves up and down in relation to the balance of trade and other credit considerations between the two countries. And because the convertibility factor was removed from the Bretton Woods agreement we are in the position of dealing alone with the United States, and our excessive purchases in the United States as compared with our exports, naturally, as
Foreign Exchange Control the Minister of Finance well knows, produce a result that does for the time being place our dollar below 100 cents in United States funds.
Probably the unfortunate fact is that our dollar is called a dollar. If it were not called a dollar, then we would not be so sensitive about the normal movement of our unit of exchange. The movement of the unit of exchange is the thing that has controlled and actually brought to a balance the trade between countries, and that is a sound way for our dollar to get back to some measure of parity.
This country need not be so much concerned about the value of its money unit so long as appropriate efforts are made by this government to bring about normal international trading. It is not enough for the Minister of Finance or for any member of this government to say that this is the Bretton Woods agreement; the pound is no longer convertible, and we have just got to go along as we have done in the past. This is a sovereign state. This is a nation which boasts of its great growth and strength in the international sphere. It is the duty of the government of Canada to take steps which will be in keeping with the ultimate needs of this country as one of the greatest trading nations in the world-and it is not only that, but it is one of the greatest per capita trading nations in the world, if not the greatest. Consequently if there is one country which should initiate steps to change this situation and to break the log-jam which has stopped trading in many directions, it is this country, the future of which is so seriously threatened by its inability to sell in markets which would normally be ours.
The Minister of Finance yesterday in the speech which he read-and which obviously he had read over before he presented it here -referred to a statement which I had made on behalf of the province of Ontario in regard to a provision under which the external obligations of provincial governments would be met in such a way as to make it possible for those provinces to pay their obligations at parity in the United States. Not one word of what I put forward, or in what was put forward by anyone else, had to do with this subject of the level of foreign exchange, either then or at any other time. The quotation of the minister yesterday is one of those typical introductions of something which in some way indirectly relates to the subject, and the putting of a coloration upon it to suit his own purpose. He did put a coloration upon it which was improper and which was entirely contrary to the facts, as he well knows.
1618	HOUSE OF
Foreign Exchange Control


Douglas Charles Abbott: In what way? Will the hon. member allow a question? What coloration did I put upon it, and in what way was it improper?


George Alexander Drew: I was coming to that. What he said was that this had been put forward in the special interests of Ontario.


Douglas Charles Abbott: No, I did not. I said in my . statement of yesterday I was sure it was put forward on grounds of high principle, not to give additional revenue to Ontario. I was very careful to emphasize that.


George Alexander Drew: The proposition that was made by him was a proposition put forward as a basis of over-all agreement among all the governments of Canada, and it could have been accepted only if it was acceptable and could have become a part of the general agreement among all the governments of Canada.


Douglas Charles Abbott: Nobody else suggested it.


George Alexander Drew: The minister of course was not present at the discussions at that time.


Douglas Charles Abbott: According to the record,
nobody else suggested it.


George Alexander Drew: The minister is well aware of the fact that he was seeking to leave an impression which was quite clear. The fact is that when he made that proposition to which I referred, and to which he referred, he was putting forward something before the provinces, the provincial governments, which had voluntarily given up their taxing powers during the war and had been denied the return of taxing powers which the dominion government had promised them, and suggesting that they should be in some way provided with the necessary arrangements to meet their external obligations and thus compensate them to some extent for what they had done during the war.
I mention this only to dispose of an attempt that was made in some way to create confusion as to what had actually been discussed at that time.
Now, Mr. Chairman,-


Some hon. Members:: Oh, oh.


George Alexander Drew: I am extremely interested in these comments, which show an impatience on the part of hon. members in regard to a measure which has to do with the economic future of this country, and which will determine the course this country will follow for years to come. I only wish there were, somewhere within the ranks of those opposite, men who recalled the liberal principles put forward by those Liberals whose statements I have quoted here this morning.


Mr. Garson:: Will the hon. member permit a question? Does he agree with the monetary principles of the late Mr. McGeer?


George Alexander Drew: That is exactly the kind of question I would expect from the present Minister of Justice.


An hon. Member:: Answer.


Stuart Sinclair Garson: Whether it is the kind of question which my hon. friend would expect from the Minister of Justice or not, I should be very glad if he would answer it.


Mr.   Boss@Souris: The old slot machine.


George Alexander Drew: The Minister of Justice is perfectly well aware that I can quote from newspaper editorials which deal with statements that were made at that time in regard to foreign exchange control, and that they were not in any way limited to the late Senator McGeer. They included Senator Campbell, who is still, I believe, in the favour of his party; and Senator Bench, who unhappily no longer is there, and Senator Crerar, who at that time and in the past has been respected as an exponent of Liberal policies.


Stuart Sinclair Garson: The hon. member has not answered the question. If he does not wish to answer it, all right.


George Alexander Drew: I am not going to answer silly questions. I will answer every sensible question that is put to me during this discussion.


Some hon. Members:: Oh, oh.


William Ross Macdonald: Order.


An hon. Member:: Read the speech.


George Alexander Drew: No; I do not find it necessary to read my speeches. I am quite capable of making my own speech-unlike some ministers of the crown. I am not going to read, except from the words of another Liberal who has stated sound Liberal policies, and who has happily expressed some of them here -because they do relate to the matters we are now considering.
I notice that the Minister of Finance was very sensitive in regard to the suggestion that he gave this country a budget by radio.


Douglas Charles Abbott: I am not sensitive to anything.


George Alexander Drew: I have quoted these words before, and I do not hesitate to quote them again, because they have application to what the minister has put forward:
Without the existence of an almost all-powerful bureaucracy, it is unlikely that we would have had budget by radio, restraint of trade by embargoes and prohibitions, bungling of freight rates, and a snarling of interprovincial relations.
Those are the positive words of the hon. member for Quebec South (Mr. Power). He

said in the same speech-and I might add that this of course was not yet made in the Senate:
Ministers of the crown must abandon the practice of abdicating their functions, their duties, and shouldering their responsibilities on irresponsible boards, committees or commissions.
Mr. Chairman, that is as cogent an argument as could be put forward against the adoption of a resolution stating that it is expedient that we proceed to deal with this measure. Because that is exactly what has happened in these cases.


An hon. Member:: Time.


Douglas Charles Abbott: He does not know it.


William Ross Macdonald: Order.


George Alexander Drew: We are now dealing with the extension of the foreign exchange control measure, and I come to statements made yesterday by the Prime Minister which had to do with the very type of thing that is now under consideration here. The Prime Minister yesterday waxed indignant about the time that had been taken in the discussion of certain matters in the house. The Prime Minister put on a well-staged show, which had been carefully planned in advance. Of course we had the advantage of knowing from the press that it had been planned and was going to take place.


An hon. Member:: How did you like it?


George Alexander Drew: I liked it very well as a perfect demonstration of the mind of a dictator.


Some hon. Members:: Oh, oh.


George Alexander Drew: I will repeat that until Hansard gets my answer: I liked it very well-


Some hon. Members:: Oh, oh.


William Ross Macdonald: Order.


Some hon. Members:: Order.


George Alexander Drew: I liked it very well as a clear demonstration to this committee-


Stanley Howard Knowles: On a point of order-


George Alexander Drew: I liked it very well-


Stanley Howard Knowles: On a point of order; is the leader of the opposition not now referring to subjects that have been discussed and things that have happened in another debate?


George Alexander Drew: I liked it very well as a demonstration-


Some hon. Members:: Order.


George Alexander Drew: -of the action of a man who believes in dictatorial authority. It was a clear indication of a servile government group following a man in trying to suppress the ordinary rights of this House of Commons in the way he has.
Foreign Exchange Control


Stuart Sinclair Garson: On a point of order, I was wondering if my hon. friend could tell me whether it was the right of free speech that was being dealt with.


George Alexander Drew: If the minister has a question of privilege or a point of order to raise, he has a right to the floor; but I have no intention of paying any attention to his silly questions.


Douglas Charles Abbott: The only questions the leader of the opposition answers are his own.


George Alexander Drew: It was not without reason that the minister was nicknamed "gargon" at the dominion-provincial conference.


Douglas Charles Abbott: What brilliant wit!


William Ross Macdonald: Order.


Mr. Grant:: Back to the scene of the crime.


George Alexander Drew: Mr. Chairman-


Thomas Vincent Grant: Back to the scene of the crime.


George Alexander Drew: This is a fine demonstration-


Some hon. Members:: Order.


George Alexander Drew: This is a fine demonstration of the recognition by members on the other side of this house of the importance of the measure that is now before us and its effect on the future of Canada.


Mr. Howe:: Filibuster.


George Alexander Drew: When the Prime Minister-


An hon. Member:: The leader of the
opposition.


George Alexander Drew: -and the leader of the house, who also has some responsibilities in that respect, makes the statement that a filibuster is taking place he is merely indicating how little he likes legitimate debate in the house on the arbitrary measures which he puts forward. His whole conduct demonstrates how unsafe it is to place arbitrary powers of this kind in his hands.


Stanley Howard Knowles: I ask for a ruling on my point of order. The rule is clear that it is not in order to revive a debate that has already been concluded. The debate to which reference is now made was concluded yesterday when the motion of the Prime Minister was agreed to unanimously, and I submit it should not be revived now.


William Ross Macdonald: I think the point taken by the hon. member for Winnipeg North Centre is well taken, on the ground that he has indicated-hon. members may not refer to a debate on another subject in the same session. Standing order 58, subsection 2, reads:
Speeches in committee of the whole house must be strictly relevant to the item or clause under consideration.
1620	HOUSE OF
Foreign Exchange Control
When a resolution is before the house, considerable scope is given to the debate, but when it is referred to the committee of the whole the discussion must be strictly relevant to the resolution under consideration. May I emphasize the words "strictly relevant"-not only in connection with the present resolution but in connection with all other matters which will come before the committee. I am sure all hon. members are anxious to abide by the rules, and I think it is only necessary for me to call their attention to the words "strictly relevant".


George Alexander Drew: Mr. Chairman, I conclude-


An hon. Member:: One o'clock.


William Ross Macdonald: The chairman will declare when it is one o'clock.


George Alexander Drew: I was dealing with the observations made in regard to the extension of this debate. I have heard that observation. I am certainly not, in the circumstances, limiting the extent of my remarks when I believe the freedom of this country is at stake in an issue such as this. I shall conclude in a moment by reading these words-


An hon. Member:: One o'clock.


George Alexander Drew: I quote:
I may be leading a forlorn hope, but I am leading it up to the very battlements of autocracy, complacency and inertia.


Stuart Sinclair Garson: I rise to a point of order. When a hon. member of this house announces that he does not intend to abide by its rules, he should be named.


Some hon. Members:: Hear, hear.


Clarence Decatur Howe: One o'clock.


George Alexander Drew: Mr. Chairman, that was another silly statement by the Minister of Justice.


Stuart Sinclair Garson: I rise on a question of privilege. I demand that my hon. friend retract the word "silly". It is unparliamentary.


George Alexander Drew: I will not retract the word "silly", except under your ruling, sir; because that word is quite proper. It has been used several times by hon. members opposite.


An hon. Member:: Withdraw.


William Ross Macdonald: I understood the leader of the opposition to state that the question was silly, not that the minister was silly.


An hon. Member:: One o'clock. _


Stuart Sinclair Garson: No question was asked at all. A point of order was raised, and I should like to have your ruling, Mr. Chairman, on the point of order.


William Ross Macdonald: I think the word "silly"-
[The Chairman.]


Stuart Sinclair Garson: I am not asking-


William Ross Macdonald: What was the point?


Stuart Sinclair Garson: The point of order was this: when an hon. member rises in his place and informs the chairman and the members of the committee that he will not abide by its rules-


An hon. Member:: He did no such thing.


William Ross Macdonald: With respect to the word "silly", it has been used a great many times during the present session-	.


Donald MacInnis: It ought to be.


William Ross Macdonald: -but I do not think the word should be used, and I would ask hon. members not to use it. With regard to the point of order raised by the Minister of Justice, I did not understand the leader of the opposition to say that he would not abide by the rules.


Some hon. Members:: Oh, oh.


William Ross Macdonald: The chairman must be allowed to give his ruling without interruption. I did not understand the leader of the opposition to say he would not abide by the rules of the house. I do not remember his exact words, but they were to the effect that if freedom of speech was being interfered with, he would not hesitate to speak in this house. He did not say he would not hesitate to speak irrespective of the rules, and I was about to rise and say, "as long as the hon. member is speaking in accordance with the rules."
At one o'clock the committee took recess.
The committee resumed at three o'clock.



PROCEDURE FOR ORGANIZATION OF STANDING COMMITTEES

Louis Stephen St-Laurent: With the permission of hon. members I might put on record the information I received from the clerk of the house as to the procedure followed in the organization of the standing committees. It is as follows: As soon as standing committees have been set up it is the duty of the chief of the committee branch of the house to call a meeting of each of them for the purpose of electing its chairman. In doing so he endeavours to suit the conveniences of the members of the house and he consults the chief government whip as to the day on which they will be free to attend.
As some members belong to two or three committees, it is the usual practice to have all of the committees choose their chairmen on the same day. A few days elapse before this first meeting because some consultation has to take place prior to the choice of the chairmen.

Alter committees have been fully organized by the appointment of their chairmen, they enjoy complete autonomy within the orders of reference sent to them by the house. They are free to settle the dates of their meetings and to regulate their own proceedings. Interference of members or even ministers of the crown with their proceedings would be considered a breach of privilege.
They are responsible to the house alone, and in no way subservient to the government.
Arthur Beauchesne,
Clerk of the House of Commons


Mr. W. G. Weir (Macdonald):: In fairness to the chief of the committee branch perhaps I should add a word to what the Prime Minister has said. Hon. members will recall that the committees were announced last Monday. The following day I received this note from the acting chief of the branch, as I presume the opposition whip did also:
When you have decided on the date on which the standing committees are to be organized by the appointment of their respective chairmen, it would be appreciated if I could have a few days advance notice in order to have notices to members printed.
I conferred with the chief of the branch during the week as to a date suitable to most hon. members, and yesterday advised him to call these committees together on Tuesday morning next.



FOREIGN EXCHANGE CONTROL ACT


[Stage Direction]
The house resumed consideration in committee of the following resolution-Mr. Abbott-Mr. Macdonald (Brantford City) in the chair:
That it is expedient to present a measure to provide for the continuance in force of the Foreign Exchange Control Act until sixty days after the commencement of the first session of parliament commencing in the year 1951.
Howard Charles Green: In the province of British Columbia we are faced with the problem of having to sell a great deal of our lumber, our canned salmon, our apples, our base metals and other commodities to Great Britain and other commonwealth countries. As everyone knows there is great difficulty at present in connection with that trade. The apple trade, and I think also the trade in canned salmon, have been cut off completely, though there is still some lumber going to Britain.
From time to time the suggestion has been advanced that an arrangement could be made under which we would bring in steel from Great Britain in exchange for our lumber, for example. I realize that there are obstacles to the setting up of this kind of trade, but in reading the report of the foreign exchange control board I gathered the idea that the board is not very keen about arrangements
Foreign Exchange Control of the kind. At page 7, for example, we And reference to two types of arrangements which could be made to promote trade between dollar and non-dollar countries. The first suggestion is that the exporting country, which in my case would be Canada, should advance credits to the importing country, in my case Great Britain. The other suggestion is that arrangements be made for special deals in which the exporting country, which would be Canada, agreed to use the proceeds of its exports to take more goods from its dollar-short customer even though those goods were higher in price than if bought elsewhere. That would mean bringing steel from Great Britain for use in British Columbia.
I would like the Minister of Finance to explain the attitude of the board and of the government toward transactions of that kind, because it does seem to me we are in a corner as far as this trade is concerned. We are like the dog that had to climb a tree; we have to do something. I should like to know why it is not possible for Canada to work out some special arrangement under which we could exchange British Columbia timber, for example, for steel from Great Britain.


Douglas Charles Abbott: Well, Mr. Chairman, of course that involves a very large question of trade policy. Arrangements of that kind, if carried on to any great extent, essentially would involve what are commonly known as barter deals; that is to say, one country arranges to swap a certain quantity of wheat, let us say, or bacon, for a certain quantity of steel or manufactured goods. That sort of thing involves a substantial degree of import control on the part of both countries. It involves, if it is to be carried through to any substantial extent, a considerable degree of state trading, that is purchases by the state. But perhaps the most difficult feature of an arrangement of that kind is that the price of the steel, as my hon. friend has indicated, may be higher than the price at which that steel could be obtained from our domestic producers, let us say, or from producers in the United States. Someone would have to pay that higher cost, either the purchaser or the taxpayers as a whole.
Many other difficulties are involved in arrangements of that kind. Incidentally I understand that the board of trade in Great Britain has arranged for a substantial increase in exports of steel to this country, through representations made by my colleague the Minister of Trade and Commerce. I do not know the price, but I assume the steel is coming in at reasonably competitive prices.


Clarence Decatur Howe: Higher prices.


Douglas Charles Abbott: The demand for steel is such that Canadian consumers are prepared to

Foreign Exchange Control pay those higher prices. But let me say to my hon. friend that we in Canada are not only ready but anxious to take any sort of commodity, capital or consumer goods, that the United Kingdom is able to export to us at competitive prices. We are not only ready; we are extremely anxious to do that, and we have gone to quite considerable lengths, as I shall attempt to indicate in the course of my budget speech in dealing with trade questions, to encourage that type of export, and we hope and believe the steps we have taken and that are being taken by western European countries will result in an increased flow of trade to this country.
In direct answer to my hon. friend's question, I do not believe that a system of barter deals is in the interests of Canada if it can possibly be avoided, if for no other reason than that such a tremendous volume of both our imports and our exports come from and go to the United States. We cannot make barter deals with the United States; they do not operate on that basis. We have to operate on a price basis there, and naturally that introduces very serious complications in the matter of barter deals with other coun-' tries, which in my judgment are most undesirable in the interests of Canada as a whole.


Howard Charles Green: Surely the minister does not mean these deals necessarily would have to be made between governments. Suppose a lumber-producing firm in British Columbia exchanged lumber for steel, and then disposed of that steel in British Columbia.


Douglas Charles Abbott: There is nothing to prevent that. It would be splendid.


Howard Charles Green: That is a private transaction.


Douglas Charles Abbott: That is right.


Howard Charles Green: But as I read the report of the foreign exchange control board, that board is not favourable to deals of that kind. I am not an expert on this question, but it does seem to me there is a method there of getting our trade with Great Britain back to something approaching normal. It does seem the foreign exchange control board is not working very hard to bring about deals such as the one I have mentioned.


Douglas Charles Abbott: On the contrary, Mr. Speaker,
I do not think there is any objection, let us say, to a British Columbia producer of lumber entering into an arrangement with a British steel manufacturer to swap lumber for steel. The British Columbia producer would then be faced with the problem of selling steel in Canada at competitive prices. He may be unwilling to take that risk and, as to that, I do not know
[Mr. Abbott 1

Generally speaking, the foreign exchange control board would put no obstacle in the way of an arrangement of that type. Far from doing anything to discourage imports from sterling area countries, the foreign exchange control board and every other agency of government is doing everything in its power to encourage such imports. It is tremendously in the interests of the Canadian people as a whole to do that because of the volume of our export trade. We should try to get our customers in a position where they can pay for our goods. It was for that reason we extended these large credits, so these countries would be able to restore their productive machinery and export goods and services to us. This is the only real way in which our exports can be paid for. They cannot be paid for in pieces of paper; they have to be paid for in something tangible. When these importing countries are able to restore their economies to the position which enables them to export goods and services to us and to other countries at prices which our people are willing to pay, then our trading accounts can be balanced.


Howard Charles Green: Is there any agency or department of government which is actively promoting such transactions, such as helping the exchange of steel from Great Britain for lumber from Canada?


Douglas Charles Abbott: I shall ask my hon. friend to answer that question.


Clarence Decatur Howe: Mr. Chairman, if I may answer that question, the Department of Trade and Commerce encourages barter deals where they are helpful. The barter deal which my friend proposes would not be helpful. He proposes that a producer of lumber in British Columbia exchange that lumber for steel from Great Britain. May I point out that we are taking now all the steel Britain can send us and we are exporting all the lumber Britain will take from us.
The trade is just as badly unbalanced if you take $50 million worth of lumber on one side and $50 million worth of steel on the other side out of our reciprocal trade accounts; your unbalance continues unchanged. True, one individual transaction is balanced, but since you have a large movement of each of the two commodities, the unbalance is continued just as if your barter deal never took place.
Last year our department helped to work out a barter deal with Brazil in which apples were exchanged for oranges. This was a helpful transaction because the oranges would not have moved to Canada otherwise and we would not have had that market for our apples. It is the latter type of barter

deal that we encourage because it develops new trade. The department has attempted to develop other barter deals, but some have not worked out. Such a transaction usually has to be developed at somewhat higher prices than competitive prices in one of the countries concerned. We do everything possible to encourage the type of deal I have mentioned whenever it develops new trade between countries and I may say the foreign exchange control board has put no obstacles in the way of such transactions.


Howard Charles Green: Is that the type of barter deal that is taking place between Great Britain and the other countries in the sterling area?


Clarence Decatur Howe: I do not know; it is difficult to say. 1 believe those transactions are not true barter deals. It is really an agreement to buy so much wheat from Russia, we will say, as against so much machinery from England. To the best of my information the settlements have been made partly in pounds sterling or in dollars. In other words, the transactions are not barter deals as I understand that term. These transactions seem to be mutual trade deals in that the settlement is not strictly goods for goods.


James MacKerras Macdonnell: This word "barter" is being used a great deal now and I do not understand exactly what is meant by it. Will the minister explain what he meant by calling this deal with Brazil a barter deal?


Clarence Decatur Howe: It is a direct exchange of commodities for commodities, without any exchange of dollars or currency.


James MacKerras Macdonnell: Arranged by whom?


Clarence Decatur Howe: This particular deal was
arranged by the British Columbia Fruit Growers Association with the help of the trade commissioner in Brazil.


John Thomas Hackett: It was not between the two governments?


Clarence Decatur Howe: No, we do not make such arrangements between governments.


James MacKerras Macdonnell: If it
was an exchange of goods for goods, there would have to be some means of arriving at the value. In what sense do you mean it was barter; is it not an exchange of currencies but a straight barter deal? I am asking that from the point of view of barter as understood some centuries ago. I would go into a shop and ask a man for a shirt in exchange for which I would sweep out his shop. I may have to try quite a few shops before I find someone who wants his shop swept out. In what sense are we returning to real barter?
Foreign Exchange Control


Clarence Decatur Howe: In the barter deal to which I referred, the people in British Columbia said they would exchange so many boxes of apples for so many boxes of oranges. It was simply an exchange of goods for goods.


Mr. Quelch:: The Minister of Finance, I think, will agree that one of the reasons Britain has to charge high prices for some exports is that under the special agreements which she has with European nations she is able to get those high prices. If we want these goods to come to Canada we will have to compete and pay those prices. I should like to refer the minister to a statement I quoted last night appearing in the foreign exchange control board report near the bottom of page 6:
If efforts on the part of the sterling area and ERP countries in the direction of greater exports to dollar countries are inadequate or fail to solve their dollar problem, then it may be expected that these countries will continue to place special restrictions on imports from dollar countries. The countries whose exports are affected by these restrictions will be confronted with the choice of finding some alternative use, at home or in other foreign markets, for the goods previously exported to the dollar-short countries or making special arrangements in an effort to retain these markets. These arrangements could involve the provision of the exports without payment in foreign exchange, through the extension of grants or credits,-
This is the point I wish to emphasize.
-or special deals in which the exporting country agreed to use the proceeds of its exports to take more goods from its dollar-short customers even though these goods were higher in price than had to be paid elsewhere. To make room for these relatively high-priced imports it would be necessary to impose discriminatory import restrictions.
I wonder if the minister could explain just what kind of deals the board had in mind when they said:
-or special deals in which the exporting country agreed to use the proceeds of its exports to take more goods from its dollar-short customers even though these goods were higher in price than had to be paid elsewhere.
This would mean we would be importing goods into this country at higher prices than prevailed within Canada. No doubt that would mean we would have to subsidize those imports. We did not hesitate to subsidize imports into this country during the war in order to maintain the price ceiling. Surely, if it is a question of maintaining our markets in Europe, we would be justified in going to the length of subsidizing imports. If we are not prepared to compete with other nations for British goods because the prices are higher, we must lose that market and we may have a great deal of difficulty in getting it back.
Surely, as a short-time expedient, it might be well worth our while to subsidize imports into this country, thus making it possible for the importer to sell them at existing price

Foreign Exchange Control levels. This foreign exchange control board report says:
To make room for these relatively high-priced imports it would be necessary to impose discriminatory import restrictions.
Would that not come into conflict with the Geneva trade agreements?


Douglas Charles Abbott: Unquestionably.


Victor Quelch: In principle, yes. On the other hand there are escape clauses in the Geneva trade agreement which would appear to permit action of that type. I know the minister spoke last year about these escape clauses and the advantage taken of them in trading. They were going to live up to the principle. What is the use of having an escape clause in an agreement if you are not going to utilize it? Surely when we are faced with a situation that is as serious as the situation today, where our markets to Britain are in danger of shrinking, we would be justified in utilizing a clause that was put in there for the very purpose for which we may need it in this case.
In view of the serious situation in regard to our exports to Britain, I should like to ask the minister whether he would not consider the advisability of accepting sterling in payment for our exports; then using the sterling in the purchase of British goods, even if the prices of those British goods were higher than the price level in this country; and then placing a subsidy on the prices of those goods so that importers could sell them at the existing price level in this country. The minister himself will admit that that procedure would not be a violation of the Geneva trade agreements, if it were done under the escape clauses.


Douglas Charles Abbott: First, the hon. member for Acadia has raised a difficult and serious question, namely, the extent to which this country is going into the business of subsidizing high-cost imports into Canada which are in competition in this market, subsidizing wage levels of this country or that country which are lower or higher than ours.
I cannot agree with the dark picture that he has painted as to the trade prospects in the sterling area market. It is true those countries are going through a difficult period at this time. We knew they would be going through a difficult period. That is why we extended substantial credits. That is why the United States government is extending these substantial credits under ERP. It may well be that, when the period of the European recovery plan expires, the western European countries will not have achieved the degree of self-sufficiency or restoration of their economy they now anticipate.


Victor Quelch: That is evident.


Douglas Charles Abbott: Although we must recognize- and I have said so on a number of occasions -that we must look forward to some diminution of our exports to those particular countries, I do not take the dark view that others appear to take when they say they will be drastically curtailed. So far as our main primary products are concerned, I believe they will be maintained. But I think we must face the fact that in a number of fields, and particularly in the field of manufactured goods, we must look to greater access to other markets, particularly the United States market. But let me say this. Until the situation becomes much worse than it is now, or much worse than I expect it will be, I would be strongly opposed to any system of subsidizing high-cost imports.


Victor Quelch: I would point out that the cost of that procedure might be much less than the cost to this country of losing markets for our primary products.


Douglas Charles Abbott: Let us settle that question, but let us not settle it on a hypothetical basis. A moment ago I made the statement that we have not lost these markets. We have not lost them by any means. Our exports to the markets to which my hon. friend was referring were much higher last year, I think, than they were in any year preceding the war.


Victor Quelch: What about food contracts?


Douglas Charles Abbott: As we all know, future prospects are that there will be, and must be, some curtailment of these markets; but in my judgment the time has not arrived to attempt to pull ourselves up by our bootstraps by subsidizing imports.


Mr. Thatcher:: I should like to ask the minister two questions. In the first place, I did not understand that this parliament had yet ratified the Geneva trade agreements. I should therefore like to know to what extent we are bound by them. In the second place, I wonder what our position would be in the coming year. We want to increase British imports. If we found it advisable, would it be possible under this act to switch to the British markets imports which we are now getting in the United States? Would that be possible under this Foreign Exchange Control Act?


Douglas Charles Abbott: It would not be possible under the Foreign Exchange Control Act. To deal with my hon. friend's first question, the Geneva agreements have been given provisional application in accordance with the terms of those agreements, and I think they will be coming before the house at a later stage this session for formal consideration and ratification.


Wilbert Ross Thatcher: Are we bound by them before parliament ratifies them?


Douglas Charles Abbott: We are provisionally bound, yes; and they are operative at the present time. If parliament refuses to approve and ratify them, they will cease to be operative from the time that parliament takes that action. That has been done by I do not know how many countries.


An hon. Member:: Twenty-three.


Douglas Charles Abbott: Twenty-three countries which signed the agreement. What was the second question?


Wilbert Ross Thatcher: If, because of that particular situation in the coming year, Canada should find it advisable to decrease its imports from the United States and switch its imports to the British market, I wanted to know whether that would be possible under this act.


Douglas Charles Abbott: As a result largely of the import restrictions which we imposed a year ago last November, we have sharply reduced our imports from the United States and we have substantially expanded our imports from the United Kingdom. We are taking every pound's worth of goods we can get from the United Kingdom that will come here at prices that our people are prepared to pay.


John Thomas Hackett: Imports from the United Kingdom were subsidized, were they not?


Douglas Charles Abbott: No. We are not subsidizing imports from the United Kingdom. We suspended the duties on certain types of goods.


John Thomas Hackett: Suspended the duty and
furnished a certain amount of currency or funds with which to make the purchases.


Douglas Charles Abbott: We have extended credits, yes.


James MacKerras Macdonnell: I tried to make clear yesterday that I attached great importance as well, notwithstanding its comparative ineffectiveness up until now, to the international monetary fund and to its operation. I tried to emphasize the fact that I regretted certain aspects of its administration and operation up until now. I want to ask the Minister of Finance certain questions with regard to our relationship to that fund. I want to know just how we keep in touch with it. I understand we have a representative there. I want to ask just what our method of contact is, or how closely we keep in touch. Then I should like to ask the minister to indicate to us whether we are consulted with regard to the various things that arise, and how we deal
Foreign Exchange Control with the questions that arise. In particular I should like to ask him to indicate whether there is any indication that the various governments which are members of the agreement are prepared for forward action. Rumours come out from time to time-and I stress the fact that they are rumours- that the officials themselves at the headquarters of the fund are anxious for more flexibility and are anxious to move forward but that as yet they have not been supported by the people back home. As I say, it is rumour; I do not put it forward as anything more than that.
I want to read one sentence from the report of the international monetary fund. It is found on page 1 of the report of 1948 and is as follows:
The restoration of international balance, however, still requires important and difficult adjustments in many national economies and for most of these adjustments the national authorities now have the main responsibility.
I take it that in a broad way that means that the officials of the fund are indicating in this statement that I have read, that they are only instruments, or agents, and that the principals are the various countries. I have indicated a rather broad range of questions, but I wish the minister would tell us, in what detail he can, just what our means of contact is, just what relationship we have to the fund, and just what reason there is, if any, to suggest that the fund is trying to think its way forward, or whether it is going to remain static. In the latter case it seems to me that the prospects of its doing the tremendous task which it was set up to do are not at all bright.


Douglas Charles Abbott: I do not know just how much territory my hon. friend expects me to cover.


James MacKerras Macdonnell: I
should like the minister to cover a wide area.


Douglas Charles Abbott: I will do the best I can. As the hon. member is probably aware, the international monetary fund is set up under the terms of the Bretton Woods Agreements Act, which was adopted by this house in 1945. The organization of the fund consists of governors who are the finance ministers for the time being of the respective countries which are members of the fund. For the time being I am the governor of the fund representing Canada, and as such I have attended the annual meetings of the fund, which take place once a year. In 1947 the annual meeting took place in London. In 1948, in September, it took place in Washington. The executive of the fund consists of a body known as the executive directors, and these executive directors are selected by vote of members of

Foreign Exchange Control the fund. The system of votes is rather complicated. I have not got it in my head, and I shall not attempt to explain it here, but broadly speaking the bigger countries, the United Kingdom, France, the United States, China-I am not sure whether it includes anybody else-have enough votes of their own to elect an executive director of the fund. Other countries must combine to select an executive director. At the present time Canada has an executive director on the fund in the person of Mr. Rasminsky of the Bank of Canada who, as my hon. friend knows, is the alternative chairman of the foreign exchange control board. Mr. Rasminsky attends the meetings of the executive directors of the fund in Washington at pretty regular intervals. It partly depends upon the business which is before the fund. He does not go there for all the meetings, but the constitution of the fund provides for alternate directors.


James MacKerras Macdonnell: Do we
have a representative there permanently?


Douglas Charles Abbott: I am coming to that. Each of the executive directors has what is known as an alternate, and Canada's alternate is Mr. J. F. Parkinson, who is the financial attache at our embassy in Washington. At meetings at which it is not possible for Mr. Rasminsky to be present, Mr. Parkinson attends. He has constant contact with the executive of the fund itself. As my hon. friend is aware, the chairman is Mr. Camille Gutt, a former minister of finance of Belgium. He is the executive head of the fund. In addition to the executive directors, the fund has quite a large, and in my judgment quite a competent, executive staff; that is to say, a staff of experts on currency matters and monetary matters, research people and the like. I understand that they are constantly studying these international currency and exchange problems. When specific questions come up, which the fund agreement requires to be dealt with by the fund, they are submitted by the countries concerned. An instance is the action which Canada took a little over a year ago last November to introduce our system of assistance to the gold mining industry. The original plan which we had was considered by the fund as a possible infringement of the fund agreement. I do not know that we were in complete accord with that view, but at any rate the proposals were modified, submitted to the fund, and approved.
The fund will sometimes take action on its own initiative. My hon. friend will recall that it did so recently in the case of the sale by South Africa of 100,000 ounces of gold, ostensibly for commercial purposes, at a price 
some $6.50 above the $35 United States, which is the price established by the United States treasury.


James MacKerras Macdonnell: What was the action?


Douglas Charles Abbott: I have not the data here. It first made an inquiry of the government of South Africa, expressing grave doubts as to the desirability, and perhaps even the propriety, of the arrangement under the fund agreement, and after receiving certain explanations from the government of South Africa, issued a further statement in which it again indicated that it felt there were serious grounds for believing that this gold would not go into the regular commercial or industrial channels, but would be going into channels which were prohibited under the fund.


Mr.   Haclteii@: Who was the purchaser of the gold?


Douglas Charles Abbott: I have forgotten the name; I believe it was some firm of gold brokers in London.


John Thomas Hackett: Johannesburg?


Douglas Charles Abbott: They may have had an office in Johannesburg, but they have connections elsewhere. Generally, I think this is the way in which the fund operates. I cannot pretend to be an expert on these international monetary fund matters. When questions come before the fund which involve matters of policy, Canada's executive director on the fund consults me, and if it is a matter which requires cabinet consideration I report to my colleagues; but generally speaking that is the way in which the fund operates.


James MacKerras Macdonnell: Can
the minister say whether in fact there has been any consideration by the executive officers of the fund with their governmental principals as to the modifications in the original arrangement with a view to what I, at any rate, would regard as desirable elasticity, or were they just content to ride along as is?


Douglas Charles Abbott: So far as I am aware, the executive directors of the fund do not consider that the provisions of the fund agreement, with the latitude which these provisions allow for change of exchange rates, are as yet inadequate, and with that view I am in agreement.


James MacKerras Macdonnell: Just one final question. Am I correct in assuming that, so far as the minister is aware, the present situation which has led us into something near an impasse with regard to our relation with the sterling area is apparently

contemplated with equanimity by the directors of the fund and the various governments, and that there is no move on foot to try to meet the situation which the Minister of Agriculture so eloquently described in accurate terms. I want to know whether that is true. In other words, if this fund, which was set up with such high hope three years ago, has really stalled and, if I understand the minister correctly, no consideration is being given to the introduction of any further element of elasticity in a situation with the dangers and difficulties which not only the Minister of Agriculture but the Minister of Finance himself will admit, then the situation is indeed a serious one.


Douglas Charles Abbott: The difficulties which the United Kingdom or other western European countries may be involved in, in connection with their trade, are not due to any exchange difficulties created by the international monetary fund. The international monetary fund has no power to impose upon any of its members a particular exchange rate. It has the right to approve changes; it has the right to make recommendations; but it has no power to impose upon any one of its members any particular exchange rate.
As I say, the difficulties of the United Kingdom and others in exporting their goods are not due to exchange difficulties as such. They are due to the fact that these areas are not as yet producing enough goods and services to pay for what they have to buy from this particular area of the world. That is the fundamental underlying cause. It may be-I am not suggesting that it is-that some of these European currencies are overvalued. It is not for me to say whether they are or not. If they are overvalued, then it is perfectly clear that that is a bar to their export trade; but that is not something which Canada can solve for itself, and it is certainly not something that the international monetary fund can solve.


James MacKerras Macdonnell: First of all the minister said that currency had nothing to do with these trade difficulties. Later on he said much more correctly that if in fact currencies were overvalued they did have something to do with it. In the last statement he was right. But when he says that Canada cannot do anything about it, may I say this. We have talked pretty big about ourselves. The government have talked pretty big about the wonderful things they have done, which I prefer to say that we have done, and we have done pretty well. We are not going to take the position that we are a nonentity and that it is not possible for us to have thoughts of our own, and that if we have those thoughts they would not be listened to
Foreign Exchange Control if they were presented to the fund. Whether I am right or not is not the point. I should like to know whether the minister is taking the position that there is nothing that Canada can do; in other words, that if Canada had views that she wished to have carried out there is nothing we can do to have them accepted by the fund. If that is right, then I think we should seriously consider withdrawing from the fund. But I do not think it is right.


Douglas Charles Abbott: I know that my hon. friend wants to be constructive. I am going to ask him a question after I make a statement. As a nation, Canada has no right to change the exchange rate of any other nation; and believe me, we would resent it pretty strongly if any other nation attempted to tell us what we should do in that regard. As Minister of Finance I would consider such advice from any other country as purely gratuitous and impertinent. I would not presume to offer any advice to any other country as to what exchange rate it should place on its currency. My question to my hon. friend is this-


John Thomas Hackett: Isn't the result that we cannot buy from them?


Douglas Charles Abbott: Now, this is a technical subject, and I should be pleased if the hon. member would allow me to complete my thoughts. I said to my hon. friend from Muskoka-Ontario that the international monetary fund has no right to impose an exchange rate on any other country. It has the right to endeavour to persuade, but it has not the right to impose its will-and rightly so-because I do not think that any body of that kind should supersede the sovereignty of any particular nation. Now, my question to the hon. member is this, and I know he wants to be constructive. I would ask him what positive measure he suggests Canada should take in the situation he has outlined?


James MacKerras Macdonnell: One of
the greatest advantages held out-and correctly so-in the international monetary fund was that it provided a forum where people could sit around a table and discuss their difficulties. That was one of the great points made-and rightly so-when we had evidence before the committee on banking and commerce three years ago. What I am suggesting is that at the very least we can get that body together. Secondly-and I am not going into details nor am I going to repeat what I said yesterday-I suggest for what it is worth that what we are considering now is whether we are condemned to what I still call a kind of paralysing inaction. Because how we can sit here contemplating the shrinkage of our markets is beyond me.

Foreign Exchange Control I am not so optimistic as the minister permits himself to be with regard to the situation in western Europe, if this situation continues. The minister made a statement about not wanting advice from other countries as to how we should value our dollar. Now, if the minister will not take advice from us I am sure he will not take it from anybody.


Douglas Charles Abbott: There are others I would sooner take advice from.


James MacKerras Macdonnell: But I
am coming back to this-and this is my point. The Minister of Finance keeps on saying that we are not going to do anything about this, that there is no suggestion we are going to make. I suggest to him that monetary things are not going well; they are going badly. And I say again, page the Minister of Agriculture. Because while the Minister of Agriculture was not able, and while no one is able, in an offhand way, to suggest how it is going to be done, in the meantime the minister sits here, stares in the face of something which is of immense importance to the western plains, and says there is nothing he can do about it.


Douglas Charles Abbott: No, I am not saying there is nothing I can do about it. But I am saying that we cannot cure it by currency manipulation, either of the Canadian currency or of some other.


James MacKerras Macdonnell: I am
not suggesting currency manipulation.


Douglas Charles Abbott: What are you suggesting?


James MacKerras Macdonnell: In one
of his more accurate moments, the minister said a moment ago that, if there was any overvaluation of the exchange, that was what would injure trade. There is a widespread feeling-and I pointed this out yesterday in my remarks-that some of the European exchanges are overvalued. Read the report of the governor of the Bank of Canada. It says that you now have the sterling area up in a kind of ivory tower. What will the effect be? The effect of it will be that trade with the sterling area will become more and more difficult and you are not doing anything about it.


Douglas Charles Abbott: On the question of the overvaluation of currency, my hon. friend says with confidence that some European currencies are overvalued. I confess to him with respect that it is something I cannot consider myself competent to say.


James MacKerras Macdonnell: I am
not asking the minister to say it. All I say is that we are deeply interested in it.


Douglas Charles Abbott: So am I.


James MacKerras Macdonnell: And
one of the points of the monetary fund was to get the various parties interested to come together to consider if anything that may be done has not been done.


Douglas Charles Abbott: They are doing it continuously. The executive directors meet two or three times a week.


Donald MacInnis: It would appear, to an
unobservant person, that we were not making any progress. But when we find the hon. member for Muskoka-Ontario and the Minister of Finance both agreeing that they do not know what to do about this situation, I think that is an indication that we are moving. The reason they do not know what to do about it is that they are not operating in old familiar grooves or old patterns. Trade patterns are not what they were twenty-five or thirty years ago, or perhaps even less than that. A new situation has developed. Two world wars have perhaps permanently affected our economy.
What we have to do is to try and reconstruct trade and business on a basis that fits in with the present-day conditions. The hon. member for Muskoka-Ontario looks with longing eyes on what was, and the Minister of Finance, who is orthodox in the extreme, is also looking back to things as they once were, and as he would like them again to be.


James MacKerras Macdonnell: No, we
are Progressive Conservatives.


Donald MacInnis: But things are not as they once were, and it is unlikely they will ever be again. I believe that in this discussion one of the best suggestions has come from the hon. member for Acadia and also from the hon. member for Vancouver South, who finds himself in the very difficult position of the dog who had to climb a tree.


Howard Charles Green: I did not say I was in that position.


Donald MacInnis: We are all in that position. So I say the government, which is the administrative factor in this instance, must try other means outside the old methods which no longer work. It is because those old methods do not work that the British government have had to apply new methods with which to meet the conditions with which they were confronted.


John Thomas Hackett: I should like to ask the Minister of Finance a very few questions.
I have not found in the report of the foreign exchange control board any statement of the sum of United States investments in Canada. In case I have overlooked

those figures, would the minister be good enough to tell me roughly what they are?


Douglas Charles Abbott: I cannot recall having seen that figure myself, although of course I have gone through the report, but it may be there. But the figure is roughly some $5 billion, I am informed.


John Thomas Hackett: Will the minister say what proportion of that $5 billion is affected in its mobility by the legislation governing the foreign exchange control board?


Douglas Charles Abbott: I am afraid I shall have to get that information and give it to the hon. member when we are in committee on the bill.


John Thomas Hackett: I am not going to be exacting. The minister knows roughly what it is, and I would accept his approximation.


Douglas Charles Abbott: I would not care to hazard a guess. I try to keep a good many figures in my head these days, but there are a good many of them; and that is not one which I remember or which I have on tap.


John Thomas Hackett: Would the minister admit it is half of the $5 billion?


Douglas Charles Abbott: No, I cannot admit anything, but I shall try to get the information for my hon. friend.


John Thomas Hackett: I will accept the minister's word. But I am disappointed as I have always considered him so well informed about the details of his department.


Douglas Charles Abbott: It is the exception that proves the rule.


John Thomas Hackett: For the purposes of my question I assume that half of this investment- I have reason to believe that it is probably more than half-is immobilized in Canada by foreign exchange control legislation. I ask the minister what effect in his opinion that immobilization of United States investment has upon the Canadian dollar?


Douglas Charles Abbott: I do not know that I would care to express any opinion on that. Of course, the current earnings on that investment can be taken freely to the United States at the official rate. That has always been the case, and it was the case even during the war. We never attempted to restrict the current earnings of foreign investment. The opinion of my hon. friend is probably as good as mine as to what the effect is.


John Thomas Hackett: On that point the minister and I are in perfect agreement. I suggest to him that the fact of a large proportion of the United States investment in Canada having
Foreign Exchange Control escaped from the control of the owner must result in the depreciation of the Canadian dollar in the markets of the world, particularly the United States. Will the minister agree with that?


Douglas Charles Abbott: I do not think I would agree with that.


John Thomas Hackett: Does not the hon. gentleman think that a dollar invested in Canada which is subject to the complete control of and recall by the owner is more desirable from the point of view of the United States owner than a dollar which cannot be withdrawn from Canada?


Douglas Charles Abbott: I suppose it depends upon the return that is obtained on the investment, and a lot of other things.


John Thomas Hackett: Is that the best answer the hon. gentleman can give?


Douglas Charles Abbott: It is an answer.


John Thomas Hackett: Yes, possibly a good answer, as somebody once said, for an anser.


Douglas Charles Abbott: A question for a question.


John Thomas Hackett: I should like to ask the hon. gentleman if it is not a fact that the Canadian dollar has depreciated in the United States market because, owing to this legislation, it has escaped from the control of its American owners?


Douglas Charles Abbott: I would not put it in just that way. It is true that in the limited financial market in the United States in which Canadian dollars are traded to other non-residents it is under a price discount of some six to seven per cent, but I do not think that that truly reflects the value of the Canadian dollar.


John Thomas Hackett: Does not the hon. gentleman think that, were these restrictions to disappear and the owners of a United States dollar invested here were to become free to take it home at any time, the change would have an immediate effect upon the Canadian dollar, and that it might soon go to par?


Douglas Charles Abbott: There again is involved a question of opinion based on hypothetical conditions which have not yet arisen. What the effect would be on the Canadian dollar of taking off all exchange controls I do not propose to guess, but I do say that in view of the fact that Canada is such a large debtor nation the removal of all exchange restrictions at this time would result in a temporary situation which would be most injurious to the Canadian people. It was principally for that reason that this measure, which I have described as a measure of national defence, was introduced two years ago, and we are
1630	HOUSE OF
Foreign Exchange Control asking to have it continued for a further period.


John Thomas Hackett: I thank the minister for the answer he has given me. I should like to ask a few questions with regard to trade with Great Britain, and about the volume of that trade concerning which the minister does not like to speculate. Will he not admit that trade would have been severely diminished had it not been for the credits established by Canada for Britain and for the use of the credits established by the United States in Britain for Canada's benefit. '


Douglas Charles Abbott: I would agree with that.


Mr. Hodgson:: A few minutes ago we were discussing the export of hardwood lumber to the United States. Up until three weeks ago there was practically an embargo on this lumber, but now we have a five per cent quota. Why is that, when United States dollars are needed here? There is a market in the United States for our hardwood lumber, especially flooring.


An hon. Member:: What about housing?


Clarence Decatur Howe: Perhaps I can answer that as it comes under the Department of Trade and Commerce. The reason we have not allowed the free export of hardwood flooring is that we need hardwood flooring with which to build houses in Canada.


Clayton Wesley Hodgson: That is quite all right; I knew that that would be the answer. At the same time, every flooring company in Ontario is backed up with hardwood flooring that they cannot sell in Canada. More than that, there is a backlog of two and three common lumber in the yards that they want to sell to the flooring people. The flooring people can easily take care of the local market and have a lot for export. I know this as a fact because I am in the business. I sold some hardwood lumber last week at an average of $44 per M for three common and better because of the embargo on flooring going to the United States. Will the minister consider giving us more than five per cent? Will he give us 50 per cent?


Clarence Decatur Howe: The timber controller keeps the export situation under review from time to time and so far as I know we have been successful in keeping lumber moving. I know of no great accumulation. It is something new for Ontario to have a surplus of hardwood flooring. I may say that we have been shipping flooring into this province ever since the war ended, in fact long before.


John Thomas Hackett: My right hon. friend has not
a very good opinion of my knowledge of 

wheat and he may not think that I know very much about lumber.


Clarence Decatur Howe: Do you?


John Thomas Hackett: Keeping lumber moving is one thing and keeping it moving at a loss is another. I cannot imagine that there is much profit in selling the type of lumber mentioned by my hon. friend at the price he mentioned, and if that price is the result of the policy of the government the policy should be changed.


Clarence Decatur Howe: He has sold hardwood lumber at a lot lower price than that.


Clayton Wesley Hodgson: Not in the last ten years. That was not just three common, it was three common and better.


Clarence Decatur Howe: Think back to the last time the Conservative government was in power.


John Thomas Hackett: That is not an answer. That is not a fair answer either.


Mr. Archibald:: We have had considerable discussion about the barter method of trading and I think we must recognize that method. Personally I support it. Has the department any idea as to how much of the world trade is now being carried on by barter as compared with multilateral methods? Is it one-third or what?


Douglas Charles Abbott: I have no idea. Perhaps when the estimates of the Department of Trade and Commerce are before us something in that connection might be brought out. Of course, what should be remembered is that in certain countries, particularly communist countries, price does not enter into it at all. It is all state trading. They ship out their lumber or wheat or whatever it is at any price they like to charge. They take it over from the people in those countries and ship it to the United Kingdom or anywhere else. There is no competitive factor in those countries, and they can jockey it any way they please. So when you get into a system of state trading, which is almost inevitable in any widespread barter system, it becomes pretty difficult to know what you are really paying for the goods you are getting.


Clayton Wesley Hodgson: I would like to ask the Minister of Trade and Commerce if he will take up the matter of hardwood lumber with his timber controller, who is a very nice chap but who has not had very much experience as far as logging is concerned. When we have to sell hardwood lumber stock at less than it costs to produce it, there is something wrong with our export trade. Would not the minister consider taking the Canadian Lumber-

men's Association into his confidence, to see if he cannot work out something which would allow us to export more hardwood flooring to the United States?


Clarence Decatur Howe: The timber controller is constantly in consultation with all the lumber associations, and as I say the supply situation is watched very carefully, not only the supply situation at the moment but the situation three or four months hence. I can assure my hon. friend it is the purpose of the department to release for export anything that promises to be surplus.


Mr. Herridge:: In view of the need for United States exchange I want to ask the Minister of Trade and Commerce why there is a quota on cedar poles, telephone and light poles, exported to the United States, since the greater market for these poles has always been in that country. Would the minister consider having the question of the export of cedar poles from the interior of British Columbia to the United States looked into?


Clarence Decatur Howe: Yes, I shall do so.


Mr. Mclvor:: This resolution reads:
That it is expedient to present a measure to provide for the continuance in force of the Foreign Exchange Control Act . . .
Is this not the same act that was passed last year?


Douglas Charles Abbott: No; it was passed three years ago, in 1946.


Daniel (Dan) McIvor: I looked up the Hansard record of that debate, and I find that none of the calamities which were forecast at that time ever hit the country.


John Ewen Sinclair: Except George Drew.


Daniel (Dan) McIvor: And I am sure the majority of the members of this house do not believe any calamity will hit this country if this bill is passed again this year. I believe we should pass it and get on with our business. The majority of the members of this house are not quite foolish. We think this is wise legislation, and the sooner we bring it into force the better.


Wilfrid Garfield Case: It seems that the more discussion we have the less we are informed. It was my understanding that when the international monetary fund, the international bank, foreign exchange control and all these other agencies were set up, the purpose was to assist in promoting multilateral trade. Now we have the Minister of Trade and Commerce referring to a barter deal which took place between British Columbia and Brazil, apples for oranges; and he said there was 29087-103
Foreign Exchange Control no value to it. They exchanged so many boxes of apples for so many crates of oranges, and it seems to me eventually some value must be placed on those goods for the purposes of the record. You could not just put in so many boxes of apples and so many crates of oranges.


Clarence Decatur Howe: Why not?


Wilfrid Garfield Case: It is an interesting fact that when the charter for Bretton Woods was prepared it specifically mentioned that those joining would be admitted with their currency at the rate of exchange it enjoyed at the time of their admission. When that discussion was going on in this house our dollar was at 90 cents as compared with the United States dollar. They made the further proviso that the currency of a country could not be depreciated more than 10 per cent without the consent of the fund.
My point is that they recognized the trading advantage of a depreciated currency; otherwise they never would have put in that proviso and placed a limit on the extent to which your currency could be depressed. Having regard to the fact that the traders of the world and men versed in finance paid great attention to that provision, it did seem to me most unusual that Canada should move out of the preferred position she enjoyed at that time, by placing our dollar at par when we were in a position to join Bretton Woods with a 90-cent dollar which could have fluctuated from that pivot point either backward or forward, within the regulations laid down by the fund.
Having recited these facts, since these various trading agencies were brought into being to promote multilateral trade though practically all we have today is bilateral trade, I want to ask the minister whether it was not intended that you could trade in a circle, and that this international monetary fund would adjust your trading balance so we would avoid the very thing we have been hearing about, that is barter trade. In other words, we completed our deal with Brazil, and Brazil completed a deal with somebody else. Eventually through this bank, in which we made a substantial deposit in gold or in kind which was recognized as acceptable, our balance should be adjusted there, and we should have been able to use our trading organizations, the industry of our people, and business and commerce generally in order to go out and seek markets throughout the world. As long as the United States dollar remained the standard of value, it would take a great deal to convince me that we did not enjoy a trading advantage over the United States in connection with the
1632	HOUSE OF
Foreign Exchange Control goods we were capable of producing in great quantities, because our productive capacity was so large in relation to the demand of the home market. We could have had these advantages in the world market if we had taken full advantage of the trading organizations that have been set up.
So I ask what progress if any has been made along the line of making it possible to engage in multilateral trade or even trading within a circle, in which we could expect to have our currency exchanged for the currency we use at the international bank.


Douglas Charles Abbott: Well, as I indicated in my remarks yesterday, the change in value of the Canadian dollar in July, 1946, was made because of inflationary forces at work in the United States at that time, and to prevent a further price rise in Canada. In my judgment, as I said yesterday, Canada could have derived no trading advantage by continuing its dollar at a ten per cent discount in relation to the United States dollar. During the last three years we have sold every bit of the produce of this country we had to sell, in quantities greater than we ever sold before, and at competitive prices. So, as I demonstrated yesterday, I do not think anyone can accurately assert that the Canadian dollar is overvalued and that we need to depreciate it in terms of United States currency. Our problem has been that our customers have not been able to get the wherewithal to pay us.
On my hon. friend's second question, as to what progress has been made with respect to restoring multilateral trade, I can only answer him by saying that I am afraid there has been lamentably little progress. It was recognized, of course, when the international monetary fund was first considered and when it was brought into existence, that during the period immediately following the war, which was referred to as the transition period, for which special provision was made, it could play only a perhaps relatively minor role in helping to even out these currency distortions. It was never contemplated that it could correct an unbalance arising out of substantial capital expenditures, for instance. That is what has been taking place in western European countries in recent years. A great deal of the imports which those countries have had to make from Canada and the United States have been to restore their factories, their houses, their machinery and other things which were destroyed as a result of the war. It was never contemplated that an organization such as the international monetary fund could possibly do more than help to even out the temporary unbalances in current account transactions. It can never, consequently, ful-


fil its full role until western Europe and these other countries have been restored to their full productive capacity.


Wilfrid Garfield Case: The minister has answered the question in part, and he has expressed an opinion that I am sure is not shared by everyone. However, we are all entitled to our opinion.


Mr. Blackmore:: Will the hon. member speak more loudly?


Wilfrid Garfield Case: I want to make this observation. The minister said we have sold everything we have for export. Let us consider how this was accomplished.
First of all, we lent a great deal of the money with which to purchase these goods and we relied largely upon ERP to take up the balance. It was quite evident from the minister's remarks on the radio in November of last year that we did lack United States currency. There is no question about that. It was also very evident that we were storing up a large volume of United States currency when we had the ninety-cent dollar. Many United States tourists came to this country, and for my part, their trade is very valuable. Up in Georgian bay we spend a great deal of money to attract these people to that part of the country. If those people could come here and get a dollar and ten cents' worth of goods for their dollar, it was worth encouraging them because the goods were produced here.
Conversely, we have restrictions upon our own people traveling to the United States. With the ninety-cent dollar, if our people wanted to sacrifice a dollar and ten cents to go to the United States and wanted to pay a dollar and ten cents for goods worth a dollar, that was up to them. This ninety-cent dollar, however, tended to restrict those imports which have played havoc with our internal economy. In the final analysis the funds upon which we depend to provide us with the means whereby we can trade multilaterally have failed. The government has been lax in its efforts in promoting the better interests of the trade of Canada. The government has leaned upon ERP and when ERP is finished- well, probably this government will be finished before then and there will be an opportunity for us to do something on our own behalf. The government has become a leaner on the United States and has tied our dollar to the United States dollar, failing to see that our great advantages are in the sterling area.


Wilbert Ross Thatcher: I am going to support this resolution, but there are one or two points upon which I am not clear. The minister said the Geneva agreement, in effect, is with us now. Would these resolutions, if they

were passed, be contrary to the spirit of the Geneva agreement?


Douglas Charles Abbott: I do not think so.


Wilbert Ross Thatcher: Are we using an escape clause to get around it or has the United States agreed to let us go ahead?


Douglas Charles Abbott: I cannot quote my hon. friend the exact clause, but my understanding is that the Geneva agreement recognizes that every trading country in the world, with the exception of the United States, is exercising a form of exchange control. It recognizes that we are entitled to do so for a continuing period. I did not contemplate discussing the Geneva agreement and I have not the data here, but I know that to be the case.


Wilbert Ross Thatcher: If we can bring in these resolutions, possibly we can bring in something in the form suggested by the member for Acadia (Mr. Quelch). I wonder what the United States had to say about the extension of these restrictions for another two years. Has the United States made any official protest to the minister?


Douglas Charles Abbott: No objection has been made by the United States and they would have no right to do so.


Mr. Timmins:: There are some figures appearing in a return from the Department of Trade and Commerce which I should like to quote to the Minister of Finance in respect to the United Kingdom. The United Kingdom's imports from Canada in 1948 amounted to $688 million, whereas Canada's imports from the United Kingdom amounted to only $274 million. When we come to South Africa we find they exported to Canada $3,522,000 worth of goods, whereas Canada sold to South Africa $83 million worth of goods. Turning to another sterling area country, Jamaica, they purchased from Canada, in 1948, $12,371,000 worth of goods, whereas we purchased from that country only $9 million worth of goods. Trinidad and Tobago purchased from Canada $17 million worth of goods, whereas we purchased from them only $8,990,000 worth of goods. Australia imported from Canada $38 million worth of goods, whereas in 1948 we purchased from Australia only $22 million. New Zealand purchased from Canada $18 million in goods whereas we purchased from that country only $11 million in goods.
My suggestion to the minister is this. Is it not a fact that the Canadian dollar is depreciated to such an extent in the eyes of the sterling area countries that they are not willing to sell to us?


Douglas Charles Abbott: We are extremely anxious to import from these various countries as much 29087-103i
Foreign Exchange Control as we can. We have done all kinds of things to encourage those imports, and I shall have occasion to say a good deal about that later on a more appropriate occasion. World trading accounts between two different countries have never exactly balanced, and that goes back, I was going to say, to the prehistoric days mentioned by the hon. member for Mus-koka-Ontario (Mr. Macdonnell) when he spoke of barter. The whole system of world trading presupposes that you use your surplus from one area to offset your balance in another area. That has been the traditional pattern of Canadian trade. We have always purchased twice as much from the United States as we sold to that country. We have been using our surplus accumulated from other areas to restore the balance. We have been going to great lengths to encourage imports from those countries to which my hon. friend has referred. It is very much in our interest to do so.
May I say that the imports must be things which our people are willing to use, and they must be at a price which is somewhere near what our people are prepared to pay. That is the fundamental reason why we are not importing more. I suppose we could buy a lot of New Zealand butter.
I do not know how the population would react to that, but we might do it. We used to sell a great many motor cars to New Zealand, but I do not know whether or not we do today. Perhaps the Minister of Trade and Commerce (Mr. Howe) would know. In any event, the failure of those countries to export to Canada, let me assert again, is not the fault of Canada.


Howard Charles Green: The Minister of Finance has just emphasized the government's determination to encourage imports from the sterling countries. I would suggest to him one very good way he could encourage at least some imports from the sterling countries would be to take the sterling area out of the provisions of schedule I of the Emergency Exchange Conservation Act.
Under that act, which was passed last year, a total prohibition was placed on the importation of certain goods from all countries, including the sterling area. We all knew, and the government knew, that the real problem to be met then was that our purchases in the United States were too high. It was United States imports that should have been prohibited; but the government prohibited imports from all countries, including the sterling area. Surely the time has now come when the sterling area can be lifted out of schedule I of the Emergency Exchange Conservation Act. I notice in the annual report

Foreign Exchange Control of the operations under that act, for the calendar year 1948, that there were a good many million dollars involved in these goods which were prohibited from the non-schedule countries, which in effect means from the sterling area. I would ask the minister why he cannot remove the sterling area now from the provisions of that schedule I.


Douglas Charles Abbott: The short answer, Mr. Chairman is, of course-as has been pointed out several times before when we were discussing these import restrictions-that it would be a breach of our obligations under the Geneva agreements. However, as I have had cause to state in this house on numerous occasions before, the import restrictions, both in the prohibitions in schedule I and in the quotas in schedule II, were carefully tailored to give a real advantage to the sterling area countries; in fact, to highly discriminate against hard-currency countries. That is the fact. I asserted that fact in this house when those measures were under consideration, and the event has proved that I was right; because the imports from the sterling area countries, in spite of higher : prices-particularly in textiles-have substantially increased and imports of course from hard-currency countries have substantially decreased.


John Thomas Hackett: Will the minister permit a question?


Douglas Charles Abbott: Yes, now that I am finished
with my sentence. I hate to be interrupted in the middle of a sentence.


John Thomas Hackett: I apologize. But I find that if I do not ask my question promptly, the opportunity disappears. Is it not a fact that these purchases in sterling-area countries have been considerably enhanced and . to a considerable extent made possible by the establishment of credits by Canada and by the attribution of American credits to Canada?


Douglas Charles Abbott: At the moment I am talking about purchases from sterling-area countries, not sales to those countries.


John Thomas Hackett: It goes to the matter of trade.


Douglas Charles Abbott: The more they sell to us, the less they have to use ERP credits or any other kind.


John Thomas Hackett: A few moments ago the minister said that we cannot have trade unless services or commodities are interchanged.


Howard Charles Green: The minister amuses me when he tries to argue that these sterling-area countries have benefited by the prohibition against the importing of certain things.


Douglas Charles Abbott: You ask them. They will agree with me.


Howard Charles Green: I have the figures here under the act. Schedules I and II of the act are under the minister's own department. The figures show that for the non-schedule countries, for the first eleven months of 1948 the value of those prohibited goods that were allowed into Canada was cut almost in half from the value in the year 1947.


Douglas Charles Abbott: They are relatively small figures, though.


Howard Charles Green: The figures are relatively small. There is only $6 million worth of those goods.


Douglas Charles Abbott: Six million as against about $150 million in the other schedule.


Howard Charles Green: When you are dealing with the sterling area-


Douglas Charles Abbott: I am talking about the sterling area.


Howard Charles Green: -there was only $6 million and it was only allowed in under permit. I suggest that the time has come when this prohibition should be lifted so far as the sterling area is concerned. The minister has said that the reason it has not been lifted is the existence of the Geneva treaties. I suggest to you, Mr. Chairman, that the reason it is not lifted is that the government is afraid of annoying the United States; in other words, it is kowtowing to the United States on this question. I suggest that it is now perfectly obvious that, in the interests of Canada, the importation of goods from the sterling area should be encouraged in every possible way; and one of the main practical ways to encourage that importation is to lift this prohibition against goods from the sterling area.


Douglas Charles Abbott: My hon. friend is making exactly the same argument that he made one and a half years ago-


Howard Charles Green: And it is as good now as it was then.


Douglas Charles Abbott: -and the same assertion that we are kowtowing to the United States. We are not kowtowing to the United States. The United States is our best customer and we are their best customer. In these restrictions we have imposed prohibitions and quotas against the United States which for that reason have been strongly resented by traditional exporters to this country. But they have accepted them very well. I said a moment ago that the arrangement of this quota was rather highly discriminatory against the United States. They accepted that fact. They recognized that it was necessary for us to so frame our restrictions that although in form non-discriminatory they

would be in fact discriminating in favour of sterling-area countries; and that is what was done.
This has been an extremely interesting discussion, Mr. Chairman, but may I say that the quotas under the Emergency Exchange Conservation Act have little or nothing to do with the extension of the Foreign Exchange Control Act. If my hon. friends are suggesting that a change in the exchange rate of the Canadian dollar by devaluation to ninety cents or less will help exports to Canada from the sterling area, then I say, as I did yesterday, that that remedy will have exactly the opposite result. They may have some other remedy to suggest, but I have not heard it yet.


Mr. MacNicol:: I shall try to make a suggestion that will be helpful to the Minister of Finance.


James MacKerras Macdonnell: That is what we have all been doing.


John Ritchie MacNicol: I am not saying that anyone has been doing otherwise. But I am going to make a suggestion along a different line from that taken by anyone else.


Mr.   Hackell@: He is beginning to be nervous.


John Ritchie MacNicol: No, I am not nervous.


John Thomas Hackett: No; I meant the minister.


John Ritchie MacNicol: The minister need not be nervous. He has sitting beside him another capable minister in the person of the Minister of Trade and Commerce, who will listen to the remarks I intend to make. Between the two of them perhaps they may work out some plan whereby what I say may make the lot of both ministers easier and in addition may make things much better for Canada. Last year, in 1948, I believe we imported from the United States approximately five million tons of hard coal. It was a little bit more than that, but I will use round figures. For that coal we paid $54 million. That sum had to be paid in good United States currency. If there was any premium on their dollar, we of course had to pay that extra. To bring that coal from the United States mines to our border cost us approximately $13 million. I know that we must deal with the United States; I shall not try to put up an argument as to whether we should not buy coal from them. But I argue that a great deal of that coal should be purchased here in Canada. Recently in the Albertan, published in Calgary-it is an excellent paper; it is always right up to date-there was an editorial, in which was quoted an exchange between the Minister of Trade and Commerce and myself a short time ago when I asked a question as to whether it would be possible for the minis-
Foreign Exchange Control ter to assure hard coal users in Ontario that a spur line could be built in from Okotoks, Alberta, to the hard-coal mine on the Sheep river fifty miles west of Okotoks. The editorial makes a significant statement. It is all significant but I shall quote only one statement, which is as follows:
Still very much in question, however, is the economic problem of getting a railway constructed to the mine, and the political question of what effect the large-scale operation of this coal property would have on existing coal operations.
Previously I had given no thought to the political effect. I am not interested in what the political effect is on any party in Canada, not even this party. I am interested in creating trade in Canada. I spent much of my life trying to create trade in Canada, internal trade as well as foreign trade. I should like to see the Minister of Trade and Commerce help the Minister of Finance to ease his problem of foreign exchange by taking some action whereby people in Ontario, who use so much hard coal, five million tons a year, could buy at least half of it in Canada.
On my desk I have a lump of Alberta hard coal which came down from the mine I went to see last fall. It is as fine a piece of hard coal as I have ever seen in my lifetime from any mine anywhere, and compares with anything that can be produced in Pennsylvania. I know something about coal. You cannot beat this coal anywhere. I am trying to be constructive.


Mr. Williams:: May I see it?


Mr. Gibson (Comox-Alberni):: How does it compare with Welsh anthracite?


Arthur Henry Williams: That is why I asked to see it.


John Ritchie MacNicol: Welsh anthracite is another grade altogether. There is Pennsylvania anthracite and then there is Welsh anthracite. They are both called anthracite, but they are not of the same texture. This is Alberta anthracite, which is a different texture again. It is a high grade hard coal. I am not personally interested in coal in any shape, manner or form. As a Canadian I am interested only in doing two or three things: firstly, providing employment for Canadians to mine the coal; secondly, providing freight for our railways; and thirdly, cutting down exchange.
The minister has a difficult problem on his hands, and it is up to us to ease the burden if we can. In using Alberta hard coal we could save millions of dollars in exchange which the minister has to find to bring in United States hard coal. I am not an authority on coal, but I have discussed this with the very best engineers who are themselves

Foreign Exchange Control authorities on the properties of this coal. I have read the report of the coal board, but I have not much faith in it, I am sorry to say. I am not going to condemn it, but it does not seem to me to be a report designed to encourage the development of coal in Canada. That is what I want to do. I want to encourage the development of coal in Canada. The report is tinged with arguments against this hard coal, and I do not know whether any of the people who wrote the report were ever there. I was there. I did not go at government expense. I went to the mine that this lump of coal came from. If I remember rightly, this lump of coal came from 1,400 feet in the tunnel. It was just knocked off the wall and came down to me here.
I want to make my argument as short as I can. If we can mine hard coal in Canada- I know of nowhere else in Canada where we can mine hard coal-it would look to me that every effort should be made by Canadians to do it and thus ease the burden of the Minister of Finance.
Last year we purchased five million tons of hard coal in the United States. We should try within five or ten years' time to produce two and a half million tons of hard coal in Canada. That would be a target to aim at. At the rate we paid for the coal last year, that would mean a saving of $27 million in United States money. Added to that would *be approximately $13 million in United States freight. I am aware that we have a problem, Mr. Chairman. The cars which would come down here full of coal would have to go back to Alberta empty; but we have to do that with our wheat cars, our cattle cars and everything else. In any event it would be our own money; it would not be outside money that we would have to pay to send the cars back empty. I believe we can put our teeth into this problem. If we expanded the soft coal market, too, we would save much more. We buy twenty-five million tons of soft coal a year from outside of Canada. For both hard coal and soft coal we sent out of Canada last year $181 million. That was United States dollars that the minister had to buy, and to bring the coal into Canada the minister had to find approximately $70 million of United States exchange for freight. Therefore for every ton of coal, either hard or soft, that we produce in Canada, we would be saving exchange money. I am speaking particularly of hard coal because in Toronto we want to use Alberta hard coal.
I am not interested in this company in any shape, manner or form; I cannot give the right name of it. The mine I am thinking of is called the Burns mine in Alberta. I wish the hon. member for Calgary West were


here. If he were he could handle this much better than I can. He made a magnificent speech last night and I had hoped that he would deal with this question too. I had intended to get him up on his feet today to speak on it; but since he is not in at the moment I shall try to do the best I can. Since I am an Ontario man my heart is in the effort to try to use Alberta hard coal. I think the company is called the Alberta Hard Coal Company. They brought down about fifteen cars of coal during the last few months. It has been thoroughly tested in a hundred homes in Toronto. I went to see it in operation. The users of it are loud in their praise of its quality. It is good hard coal. It burns to an ash and throws off much heat. I asked the users how it compared with Pennsylvania hard coal, and they gave the edge to the Alberta hard coal. I would ask the Minister of Trade and Commerce to use his best endeavours to try to have a spur line put in to that coal mine. What does it mean? At the moment they are selling this coal in Toronto, good hard coal, at $17 a ton. That means that the users in Toronto have $3.75 left in their pocket for every ton of coal used. The producers of the coal have to pay $4 a ton to have it trucked from the mine to Okotoks or wherever they load it on to the railways. I do not think it is Okotoks; it is another station ten miles nearer Calgary, at a place called Midnapore. The trucking to Midnapore costs them $4 a ton. If we had a spur line in there it would mean $4 less a ton to the Toronto coal users, which would mean that the price would be approximately $14 or less a ton.
I have participated in this debate to try to throw out some suggestions whereby the burdens of the Minister of Finance could be eased. There are two billion tons of hard coal we can have from Alberta, which would make the minister's burden much lighter. I would have to persuade the Minister of Transport to use his best endeavours with the railway company to put that spur in. It would be paid for in one year's time through the savings in amounts paid for coal by Canadian coal users, and it would take off the shoulders of the Minister of Finance a portion of the heavy burden he now carries in providing United States dollars for United States coal.
I thank you, Mr. Chairman, and hon. members for the patience you have shown in listening to me. I have made my suggestions honestly and earnestly, after much travel and endeavour; and I am going to keep it up until Canadians are enabled to use Canadian hard coal, thus saving themselves $4 or $5 on every ton they use.


Wilbert Ross Thatcher: I should like to ask the
minister a question arising out of an answer he made a moment ago. The minister made the statement that he was very anxious to do anything which would increase imports.
I then asked him: Are you anxious enough to lower tariffs? He said, "I will have an opportunity to say about that on a later occasion." Does he mean the budget? If he does, I want to tell him that everybody in the west would welcome lower tariffs. Today we have talked a good deal about trade. Surely one of the first things we should do, if we wish to keep up this multilateral trade everyone is talking about, is to bring down the tariffs on British goods and thus increase British imports.


John Ewen Sinclair: What is the question?


Douglas Charles Abbott: It did seem to me that this was not really the proper occasion upon which to discuss tariffs or to make any tariff prognostications.


Wilbert Ross Thatcher: The minister did not mean the budget?


Wilfrid Garfield Case: I wish to ask another question. How much has it cost the Canadian taxpayer to maintain the Canadian dollar at par with the United States dollar?


Douglas Charles Abbott: I would think that not only did it not cost the Canadian taxpayer anything, but that the Canadian taxpayer had got great advantage from it.


Wilfrid Garfield Case: But was there not taken from the reserves about $372 million for the foreign exchange control board? What was that for?


Douglas Charles Abbott: That was the bookkeeping entry, of course.


Some hon. Members:: Oh, oh.


James MacKerras Macdonnell: It was
not a bookkeeping entry for the Canadian taxpayer.


Douglas Charles Abbott: The Canadian taxpayer suffered no loss.


James MacKerras Macdonnell: The
minister has said that $372 million is just a bookkeeping entry.


Douglas Charles Abbott: I said that was the bookkeeping entry.


James MacKerras Macdonnell: The
taxpayer did not think of it in that way. I would like to ask a further question about barter. I am interested in the question of barter, because it seems to me we are falling into the use of that word; and my feeling is that it is a dangerous one. I take it that barter is now being used in a rough way as the
Foreign Exchange Control equivalent of bilateral trade. My question is this: Going back to that Brazilian deal, does the minister seriously suggest that certain quantities of Brazilian goods were handed over in exchange for certain quantities of British Columbia goods, using no yardstick of any kind? Did they just take a quantity of one thing, and hand it over in exchange for a quantity of another? Was there no regard for value?
I cannot believe the minister intended to say that. Then, in the same connection, may I ask this: If that happened, did it happen entirely without the cognizance of the foreign exchange control board? Did they have nothing to do with it? If they did not, can you defeat the board by making barter deals on the side, and outside the purview of the board? It is a question which the minister can answer, I am sure.


Clarence Decatur Howe: I understand no money passed at all in the apples-for-oranges deal.


James MacKerras Macdonnell: I did not ask whether money passed. I asked how they made up their quantities involved- whether it was with relation to money value.


Clarence Decatur Howe: I did not say the quantity of each was not without regard to money value. I would suppose that the Brazil co-operative, or whatever the agency was, wanted perhaps five or ten thousand boxes of apples. The value of those apples laid down in Brazil, at a reasonable selling price, would be so much. That value could then be converted into oranges-the value of oranges laid down in Canada at a price that would permit the sale of the oranges in Canada.


James MacKerras Macdonnell: Then why do you call it barter?


Clarence Decatur Howe: Because no money was involved.


James MacKerras Macdonnell: No
money is involved in any case when you have a sale where the amounts are equal.


Clarence Decatur Howe: But the point is to get the amounts equal. If no money passes, and no money is involved, call it barter.


James MacKerras Macdonnell: No,
no.


Clarence Decatur Howe: Where you have reasonably balanced trade, and when payments are made on receipt of goods, you may call it bilateral trade. My hon. friend may call it what he likes.


James MacKerras Macdonnell: What about the foreign exchange control board? Do they not come into the picture?


Clarence Decatur Howe: Any dealings of that kind must be reported to the foreign exchange control
1S38	HOUSE Or'
Foreign Exchange Control board, and approval must be obtained, because the foreign exchange control board does not permit goods to be shipped out of this country unless value is returned to this country. For that reason transactions are cleared through the foreign exchange control board. I have never known the board to object to an exchange of goods representing value for value.


Mr. Pearkes:: Earlier in the afternoon the minister intimated that he was not concerned with the loss of British markets. I rather gathered from him that the British markets were not being lost. I was not able to catch the eye of the chairman, but if that was correct I may say that that sort of talk is not understood in British Columbia.


Douglas Charles Abbott: My hon. friend misunderstood me. I made no such statement-that we were not concerned about the loss of sterling-area markets. Of course we are concerned about it. What I said was that, as realists, we had to recognize the fact that, because of conditions, those markets were being restricted. I did not say that we were not concerned about it; it is just the reverse.


George Randolph Pearkes: It is the fact that the markets are being lost.


Douglas Charles Abbott: The markets are being curtailed, because the British are not able to produce the goods and services to pay for our goods and services. That is the reason. That is the essential reason. There is no other reason. It is not done with mirrors; it is not done with pieces of paper; it is done by the exchange of goods and services.
We are doing our best to encourage the exportation of goods from that area, and we have gone to the length of giving credit to the extent of a billion and a quarter dollars to get that area on its feet-because we thought it was in our interests to do so. If that is not some evidence of concern at the loss of a market in Great Britain, then I do not know what it is.


George Randolph Pearkes: The British are exporting to other countries certain things which are urgently required in this country.


Douglas Charles Abbott: That is not our fault.


George Randolph Pearkes: And they are taking from those countries things which we produce here. Surely there is some concern about that. For instance, in 1947-48 Britain exported something over $596,000 worth of iron and steel manufactures to Hungary. At the same time she imported hundreds of thousands of hundredweight of poultry from Hungary. We have poultry to sell to Great Britain, and we want steel products from Great Britain.

Is that not a case where one cannot help thinking that something more might have been done to have found a market for our poultry in Great Britain, and to have obtained manufactured articles from there, some of which would go right into the poultry business itself?


Douglas Charles Abbott: As I have said so many times, we do not control the trade policy of Great Britain or any other country. We do not control it. And if Great Britain sees fit to buy poultry from Hungary, or bacon from Denmark, or crabmeat from Russia, while we may not like it very much we are not in a position to say, "You must not do it."


Victor Quelch: The minister has stressed the fact that exports from the sterling area to Canada have increased, and he has also stressed the fact that our exports to that area are at a high level. I think the minister will have to agree that the reduction in our trading surplus in that area is due more to a contraction of our exports to that area than to an expansion of exports from that country to this.


Douglas Charles Abbott: That is correct. The contraction is due to a reduction in manufactured goods, not in our more primary products such as base metals, lumber and other things. Unfortunately the reduction is largely in manufactured products, such as automobiles and other articles of that nature. That is where they are curtailing their imports and up to the present time that is what has had the most effect on our exports.


Victor Quelch: On the other hand, it is making it difficult for us to get certain food contracts signed at the former level.


Douglas Charles Abbott: I think the Minister of Agriculture will have to speak about that.


Mr. Gardiner:: I have been listening on a number of occasions, not only during this debate but during one or two others, to the references that have been made to Great Britain. I want to agree with what the Minister of Finance has said, namely, that so far as the main agricultural products for which we expect to have a market in Great Britain are concerned, we have made arrangements which are satisfactory. To suggest from that that we are always going to have a satisfactory arrangement with Great Britain is a question that seems to be in the minds of hon. members.
I say that the arrangements are satisfactory. What we did was to sit down with the British and estimate the amount of our farm products, other than wheat, which they would be required to take in order to leave us without surpluses. Fortunately the position
[Mr Howe.J

at the moment is that we have been able to sell our beef cattle; up until very recently we could have sold our pork products, if necessary; we could have sold most of our dairy products up until very recently in another market, particularly the United States market, at prices which were a little better than we could obtain from the British. But we estimated that on balance throughout the year we would probably be able to sell for about the same price to Britain under the agreements which we made.
Having figured the quantities which we had, and having determined that we could sell certain quantities in other countries, we made agreements with Britain which are taking all the surplus products that we have for sale to Britain. In the case of bacon, we have not been able up to now to fill the contract with Britain. They are taking all the cheese that we can supply, but we have not been able to fill the contract up to the present time. They have been taking all our dried and frozen eggs and we have been selling our fresh eggs in the United States market.
In other words, the negotiations with regard to these products have resulted in the sale of our surpluses. As has been said so often, I do not think that we could improve our position in the British market by going there and saying, "Unless you buy all our surpluses, unless you take them off our hands, in spite of the fact that we can sell some of it elsewhere, we are not going to play with you". That is not the way to establish yourself in a good market.
The British have their difficulties in balancing trade at the present time, as we have ours. What we said to them in effect on our last meeting was: "We are prepared to co-operate with you; we would like to see you putting forth an effort, and we would like to see our friends in the United States putting forth some effort; we would like to see some others who have not had the same difficulties we have had in reaching a balance put forth some effort to assist. We have not ourselves been able to see our way through". I know the suggestion is made that nobody has done anything about it, but the fact is that the products which the British have bought are products that they would have preferred not to have bought at all in order to make their trade balances complete at as early a date as possible.
In spite of the fact that they would have preferred to do that, they have bought our products. I may say to hon. members that they are still negotiating with us to buy our farm products over a long period on a basis similar to that on which they are buying from 29087-104.
Foreign Exchange Control other countries. At no time has Great Britain bought from any other country in the world, so far as I know, on a basis similar to that on which she has bought products in this country.


Some hon. Members:: Oh, oh.


James Garfield Gardiner: The less my hon. friends over in the Conservative corner say about it, the less I will say about their responsibility for the position. The British have been buying our products on a different basis from that on which they are buying other countries' products. They have been agreeing with us year by year down until the last two years to put into the contract a figure which would induce our people to produce more. They have agreed with us to pay a set price for the product and to make the determination of that price official in the agreement from the beginning. Their agreements with other countries have been quite different. They have had a maximum amount that they were prepared to take from those countries, and they have had a minimum amount that those countries were required to deliver. Then in addition they had a provision in the contract whereby they could renegotiate the price from time to time. When there was a possibility of their being able to buy a product in some other country at some other price they were permitted to renegotiate the price downward with the country with which they had the contract.
The difficulties that we have had with the British have not been difficulties of the type that have been in the minds of hon. members who have been talking here. There have been discussions as to whether we should follow the same practice that has been followed with other countries. I have been wondering all through this debate why my hon. friends in the opposition have been making so many inquiries about barter trade. I recall when the chief exponent of barter trade in the Dominion of Canada in 1939 was the last leader of the Progressive Conservative party while he was premier of the province of Manitoba. I am quite satisfied that he could tell them about the negotiations between that province and a certain European country with regard to barter trade.


Mr. Bryce:: Which country?


James Garfield Gardiner: I will leave it to the hon. gentleman to say.


William Scottie Bryce: You tell us.


James Garfield Gardiner: My hon. friend knows the country; he can tell us what country it was. In any case we have had fairly satisfactory dealings, I would say very satisfactory dealings, with the British. Although we had signed a contract with them to take our surplus beef, when we could get a higher

Foreign Exchange Control price for it in the United States they agreed to our closing out the contract in the middle of the season and selling our beef in the United States. We have had other negotiations from time to time and we have met them in their attempts to balance their own trading with this and other countries by cutting down on the amounts that we expected them to take at any time when we could sell the remainder of the surplus to someone else or at any time our own people were able to consume all or the greater part of what we had. Someone said, what about apples?


Mr. Knight:: Honey.


James Garfield Gardiner: I dealt with apples on two previous occasions, and I cannot improve upon the reason I gave for the position in Great Britain. My hon. friend, who comes from a country where we used to grow a lot of apples, shakes his head; but if he will look at the records that were quoted the other day he will find that in spite of the fact that an increase in purchases from Australia can be shown, or an increase in the purchases from somewhere else, the British are importing very much less in the way of apples than they were in the early periods that were mentioned. That is due to the fact that they are producing more apples in their own country.
My hon. friends opposite speak of the necessity of getting back to the law of supply and demand. That has been one of their main arguments today, that we should get back to the point where we would be governed by the law of supply and demand, and they say that then the value of our money would take care of itself. Well, the first people in this country to depart from the law of supply and demand were the official opposition when they formed a government under the late Eight Hon. R. B. Bennett. That was back in 1932. The only free trade country in the world, the best market we had for food products, was compelled by them to abandon that policy. Now when these gentlemen come along and say we ought to get back to the law of supply and demand I say to them that the only way we will ever get back to it is to get a Liberal government in Great Britain, as they have in the United States and we have in Canada. Then we will all get back to it.


Harry Rutherford Jackman: The minister answered that part of the queries raised on this side of the house having to do with Britain taking goods from Canada, which I presume was his particular assignment. Many of us here are concerned about why Britain is not sending more goods of a kind we can use here, instead of sending them to other countries, so that in turn Britain would have more Canadian dollars with which to buy more of the particular products with which the minister was 
concerned. Does he have any information to convey to the committee in that regard?


James Garfield Gardiner: Well, Mr. Chairman, I am sorry the hon. member does not listen to my speeches; and I am afraid that even if I break the rules of the house and repeat my speech, he still will not listen to it.


Mr. Harkness:: One of your political
speeches.


James Garfield Gardiner: My speeches are all political; that is why they are all good. I have never made any excuses for being in politics. I think it is the best job the country offers.


James MacKerras Macdonnell: We all
know you are in politics.


James Garfield Gardiner: The question is why the
British find it necessary or advisable to take certain commodities from Poland, Denmark and perhaps some other European countries, with which we could supply them if we were to either ask our own people to eat less or ship them products for which we already have a market elsewhere. Why do they prefer to take those products from some other country and send to that country some things we might like to have? Well, the minister has given the fundamental reason for the present position; the costs in different places. The real basis of the reason, in fact, is that which I gave the house previously, namely that Britain over a period extending back to 1932 has been under contract to take these products from other countries. She was forced into that contract when she was forced off the system of free trade which had been in effect up to that time. She was forced off that policy in 1932 as the result of two elections in Britain in which the people who were in favour of continuing that policy were defeated. Though she was not able to carry out the policy under quotas during the war years, immediately the war was over she resumed it. While Denmark has not been able up to the present to supply the quantity of bacon or the eggs that Britain agreed to take, and while Poland has not been able to supply the amount of bacon Britain agreed to take, I have no doubt that Britain will continue to follow the policy she has always followed, that once she enters into an agreement with anyone that agreement is carried out until a new agreement is made.
The great difficulty in making new agreements at present is the idea which was expressed here today by one hon. member, and which was also expressed back at that time; that is, that for thirty years there have not been any markets of the kind we used to talk about. That statement always sounds rather silly to me, though I was told not to use that word in the house. It does sound

silly, nevertheless, in view of the fact that we have three times the trade now that we had when that statement was made. Our trade has gone up every year since then, so that today it is at least three times what it was when it was said there were no markets to be had in the world.


An hon. Member:: They were low to start with.


James Garfield Gardiner: Yes, because there had been a Conservative government for five years, and from that time on it has increased. If I went back to that time it would be five times as great now. These people who try to indicate that there is no possibility of trading our products are wrong. I am inclined to agree with some of the statements that have been made from the other side of the house to the effect that something ought to be done about the convertibility of exchange between all countries who are trying to co-operate in doing the same thing in the world. I am inclined to agree with that; but in spite of the fact that some people have credited me with stating the position very forcefully over in London, I still say that the best way to get a final result is to listen to what the other people have to say, to put forward our own views from time to time with regard to the matter and, since we are all friends, to co-operate with them in trying to get the results as quickly as possible not only in our own country but in all countries.
As far as I am concerned, I think Britain has had the greatest battle of any country in the world, and I think she has made the best job of handling it of any country in the world.


An hon. Member:: Under a socialist government.


James Garfield Gardiner: My hon. friend says it was under a socialist government. If the socialist government had not had the plans all laid down previously by a good government, before they came into power, I doubt very much whether within their own ranks they had sufficient strength to evolve the policies which are being put into effect. The British people entered into the war at the peak of their influence among the nations of the world, financially and otherwise. They did not ask help from anybody. They said, "We think we are right, and we are proceeding to demonstrate that we think we are right."
This is not the first time Britain has done that. Britain has done that five times in the last three centuries. The only reason that Britain has been supported by ourselves and other countries is the fact that we, too, were convinced she was right. She carried on on that basis for at least one-third of this war and for the greater period of the first war
29087-104J
Foreign Exchange Control without very much assistance from any country outside the empire. Some people were willing to give aid but were denied the right to do so because their countries were overrun.
Britain went through both of these wars and we went through with her. It is not more than eighteen months ago when everyone I met who came back from Great Britain was saying, "Britain is through." I used to turn on the radio night after night and hear messages broadcast from the other side of the line to the effect that Britain was on the way out. I want to say, to those who are talking so much about communism now, that those were communistic messages. Britain was not on the way out. I took in my hands my own position as a possible prophet and declared that within five years Britain would be restored to her financial position among the nations of the world; that she would be trading with the other countries in much the same way as she traded before.
So far as I am concerned, I am prepared to do everything and to assist the government in doing everything possible in order to put Britain back into that position. I do not care what country you are talking about, there is no country in the world-I do not exempt any country from that statement-that has done more to establish world peace than Great Britain. She has done so by creating in the world the commonwealth of nations to which we belong. I think our first duty in Canada is to see to it that when we are all through with this scrap about money-I am not going to try to lay the blame for it-the one nation that has done more to maintain peace than any other nation, no matter what political party she has been under, ought to be supported.
If by selling her less food for a year or two. and selling the rest of our surplus somewhere else, or even persuading our own people to eat it, we are going to help her resume her position, then, Mr. Chairman, I think we ought to do it. Someone mentioned honey. The honey producers were in to see me yesterday. We have been advertising honey in Canada to get the people to eat it, and they are eating it. If the Canadian people continue to eat it in the quantities they naturally should, we will not have any problem in getting rid of our honey. It may do us a lot of good to eat it.
Some of our other problems are in a similar position. In the house there has been an overemphasis on the problem of getting rid of our food products. Our food products are going out at fairly good returns and we are hopeful we may be able to maintain that position.
1642	HOUSE OF
Foreign Exchange Control Mr. Skey: The Minister of Agriculture just mentioned the possibility of being through with this scrap about money at some time.
I should like to ask him if he will resume his role of prophet and tell us when we may be through with it.


James Garfield Gardiner: I probably should have said that I agree with my friend the member for Muskoka-Ontario that the scrap has been continuing for a long time. Some of the opinions that have been expressed by members opposite are exactly the same in principle as that which the Spartans had in mind when they made their money out of iron so that nobody could carry it out of the country. Undoubtedly there are some people who think we ought to have money that makes it impossible for it to be used. The government is not composed of people who think that way; the government wants a currency that will enable us to trade.


Mr. Merrill:: The Minister of Agriculture has made two speeches and one remark. The last remark I did not like. The first speech I did not like, but X thought the second speech was excellent and if he continued in that vein he could come over and sit with us. He expressed a regard for Great Britain, a regard for the convertibility of currencies; and those are two very wholesome things. '
I rose to say that at the opening of his first speech, in which he once more criticized the Ottawa agreements of 1932, thereby showing a complete ignorance of the trading position of British Columbia-


Douglas Charles Abbott: I had to ask my colleague, the Minister of Agriculture, to answer questions which were raised about these agricultural contracts, Mr. Chairman, but I think we are going rather far afield from this resolution concerning the extension of the foreign exchange control board for a year. The statements concerning those agricultural contracts could not be allowed to go unchallenged and the Minister of Agriculture was the one to deal with them. Could we not now return to the subject matter of the resolution?


Charles Cecil Ingersoll Merritt: Mr. Chairman, I do not remember straying from the subject matter of the resolution very often and I do not think I have now. The economy of British Columbia has been based upon trade with the sterling area. This trade was put on a firm foundation by the Ottawa agreements. The Minister of Agriculture said that our agricultural products have been satisfactorily sold.
Just before the Minister of Agriculture made that speech, the Minister of Finance said that the drop in our exports to the sterling area was in manufactured goods.


Douglas Charles Abbott: Primarily, I said.


Charles Cecil Ingersoll Merritt: Primarily in manufactured goods. I just want to inform both ministers, who seem to be completely ignorant of the economy of British Columbia, of the kind of things we have for sale to the sterling areas. I wish to tell them something about the facts. I should like to refer to the report of the foreign exchange control board for 1948, page 15, and I am reading from the top of the page:
Most of the decline in our exports was concentrated in a relatively few items. Shipments of wheat were lower because of the comparatively small crop in 1947.
Now the next is one of the sentences to which I want to make particular reference.
Exports of other food items were, on the whole, maintained although there was a substantial drop in shipments of apples, poultry, and some kinds of fish.
Apples, poultry, and some kinds of fish, three of the principal exports of British Columbia to the sterling area. I shall skip one sentence concerning the shipment of beef and continue reading from the report.
With the important exception of lumber, which dropped sharply, exports of non-food raw materials were substantially maintained.
Mr. Chairman, lumber is British Columbia's greatest source of wealth.


Douglas Charles Abbott: Previous to that, it had been at an abnormally high level.


Charles Cecil Ingersoll Merritt: The minister asserts that but he knows very little about the economy of British Columbia, judging from what he has said in the house.


Douglas Charles Abbott: I know a great deal, if my hon. friend will forgive me.


Charles Cecil Ingersoll Merritt: I should like to give some figures concerning the export of lumber from British Columbia which will show the minister what I have in mind. The water-borne exports of lumber from British Columbia fell off twenty-four per cent during the last year. To the sterling area, they fell off forty-four per cent. The difference between twenty-four and forty-four per cent was the export of lumber by water to the United States.


Douglas Charles Abbott: As compared with what year?


Charles Cecil Ingersoll Merritt: As compared with the year before.


Douglas Charles Abbott: That is my point; compare it with 1939.


Charles Cecil Ingersoll Merritt: I cannot, because you have inflated the currency too much.


James Garfield Gardiner: The year 1947 was the first year there was no control of consumption here.


Charles Cecil Ingersoll Merritt: A forty-four per cent decline in the export of lumber to the sterling area is a very serious thing for British Columbia. The absolute cessation of apple shipments to Great Britain and a drop in eggs and canned fish are also something that the ministers might take into consideration when they are giving these nice views with regard to our trade position.
I now want to come to another point.


Douglas Charles Abbott: Does it relate to the resolution, Mr. Chairman? Really we should not be discussing anything that we have been discussing. Perhaps it is unfair to raise the matter at this point, but we should not be discussing general trade problems under each of these resolutions. This is not the place to do so.


Charles Cecil Ingersoll Merritt: I am not talking about general trade problems but rather of particular trade problems.


Douglas Charles Abbott: That makes the situation all the worse.


Mr, Merrill:: Trade problems are inseparably connected with exchange problems. That is the point the Minister of Finance does not seem to understand. That is the only reason anyone ever talks about money: money reflects trade. If there were not trade, we would not talk about money at all. We would not have it.
I shall continue, Mr. Chairman, and I assure you that I will relate my trade remarks particularly to this resolution. I outlined the general situation of the reduction in the particular exports of British Columbia products to the sterling area. I should now like to call to the attention of the Minister of Finance this further fact. In the year 1948 we had with South Africa a favourable balance of trade of $80 million. The products which South Africa buys from Canada have largely been lumber, fish and, I think, fruits such as apples.


Douglas Charles Abbott: Automobiles, manufactured
goods.


Charles Cecil Ingersoll Merritt: But lumber, fish and fruit have been extremely important items in that trade. In the month of December South Africa was forced to put on import restrictions because of her exchange position. If $80 million of our trade with the sterling area was with one country with a smaller population than ours, which had not exchange restrictions in the year 1948-


Douglas Charles Abbott: It sure has them now.


Charles Cecil Ingersoll Merritt: -then in the year 1949, under restrictions, that favourable balance in our trade and that outlet for a substantial part of British Columbia's trade will be seriously endangered.
Foreign Exchange Control
I have listened to this debate in committee all afternoon. I have found the minister to be always talking about the position up to date. The reason that members on this side of the house are raising this subject at all is that we fear for the future unless we get to the Minister of Agriculture's principle, namely, convertibility of exchange.


Douglas Charles Abbott: We all want that.


Charles Cecil Ingersoll Merritt: Since we in British Columbia know that the British would buy our lumber if they could get Canadian dollars and that the South Africans, the Australians and the New Zealanders would buy our produce if they could get Canadian dollars, we want to hear from the minister how that trade can be maintained unless he does something to bring about more realistic exchange rates. The minister must not talk about over-all balances of trade with the whole world. We are concerned with these very exports that are mentioned in the report. The government's rigid exchange policy has hurt British Columbia and British Columbia's chief exports more than it has hurt any other part of Canada. If the government goes on like this, then we face, not the danger of going down hill without our brakes on, as was said the other night, I think, by the hon. member for Macleod, rather we face going over a precipice without our brakes on. I think it is about time that the minister stopped trying to criticize the policies we in this party put forward, and himself started to tell us how he proposes to handle these extremely serious matters that are facing us.


Douglas Charles Abbott: I do not know how many times I must say this, Mr. Chairman. I have stated what the remedy is. It is, of course, greater production in these countries at competitive prices. But I do not know how many times I must reiterate that devaluation of the Canadian dollar, which is what my hon. friends opposite or some of them are suggesting-


Charles Cecil Ingersoll Merritt: No. It is not.


Douglas Charles Abbott: Or change in the exchange rate.


Charles Cecil Ingersoll Merritt: Move towards convertibility.


Douglas Charles Abbott: One cannot create convertibility of currencies alone. That requires the participation of others.


James MacKerras Macdonnell: That is what we want.


Douglas Charles Abbott: All I want to say is this. The remedy suggested by the leader of the opposition and some of his supporters, namely, the devaluation of the Canadian dollar to what he suggested might be a realistic level, a ten per cent discount, would hurt and hinder

Foreign Exchange Control the exportation of goods from the sterling area to this country. If this is the only remedy my hon. friends have to suggest, then I say it is no remedy at all. It is just the reverse. If I have said that once, I have said it a dozen times; and I am not going to repeat it.


Charles Cecil Ingersoll Merritt: Having no defence himself, the minister is simply trying to attack our position.


Douglas Charles Abbott: He does not need to have a defence. He has nothing to defend.


Charles Cecil Ingersoll Merritt: I think the minister has said that the only way in which we can approach convertibility is by the European countries increasing their production and their exportation. He also stated that the European countries are pricing themselves out of our markets. There is no one in this house who does not know that the way in which a country which is pricing itself out of a market gets back into that market at a competitive price is by a change in its exchange rate. Nor is there anyone in this house who expects that the European countries will be able to balance their trade with Canada for an extremely long time. I do not suppose that Great Britain ever in this century had a favourable balance of trade with Canada.


Douglas Charles Abbott: She never has had.


Charles Cecil Ingersoll Merritt: No, she never has had. How the minister expects that Great Britain, with her foreign investments gone, is to be able to balance her trade with Canada or to find other sources of income to balance her payments, is something I cannot understand. I think he knows as well as we over here do that the only way to get back to convertibility is to place the exchange rates-not of Canada alone but of all countries-in a satisfactory relation to the trade between those countries. We over here are not talking devaluation of the Canadian currency. The minister should listen more carefully to what is being said.


Douglas Charles Abbott: Some of the hon. gentlemen opposite are talking that. I am not saying that my hon. friend is.


Charles Cecil Ingersoll Merritt: The hon. member for York West stated the matter quite succinctly, as the minister would know if he had listened.


Douglas Charles Abbott: Yes, but the leader of the opposition stated another principle.


Charles Cecil Ingersoll Merritt: He stated that the problem was not devaluation but rather convertibility.
I do not know why the minister does not take the house into his confidence frankly on the real point at issue. It is his responsibility, as Canada's Minister of Finance, to seek to make the Canadian dollar exchangeable with the


currency of other countries in the world so that we can get trade flowing without an iron curtain.


Douglas Charles Abbott: Will my hon. friend permit a question? Does he really think that any single country such as Canada, or any single Minister of Finance, can achieve this most desirable result of free convertibility of currencies? He cannot honestly be suggesting that. If he is, then-I do not want to be offensive-I suggest that he confine his criticism to military matters and not to this question of international exchange.


Charles Cecil Ingersoll Merritt: The minister seems to think that I know very little about this matter.


Douglas Charles Abbott: I did not say that.


Charles Cecil Ingersoll Merritt: I have not claimed a great knowledge of money matters. I do not pose as an expert on exchange. I suggest to you, Mr. Chairman, that the minister is a lawyer and not an economist. I believe that the minister knows not a great deal more about currencies himself than do most hon. members. Perhaps he has had a little more intensive education in the last two or three years but that is about all. On this side of the house some of us think that the minister is too much in the hands of people who know more about economic and money matters than he does, and that some of us who are not subject to that influence may be able to bring points of view to him which will clarify his own mind on the subject. I did not come into this House of Commons representing myself as having any special knowledge. I do not claim particularly good military knowledge. There are a hundred members in this house who served in one of Canada's wars. None of us claims any special knowledge of that subject. We are here as members of parliament. The minister suggests that I should not rise and express a view because I am not an expert.


Douglas Charles Abbott: I did not say that. I asked my hon. friend a question. It was a simple question. I asked how he thought any single country, whether Canada or any other, could create conditions of free convertibility of currencies, which depend upon the trading nations of the world being in a position to pay their bills in goods or services. I asked him the question how he thought Canada could do that. We have been doing our best. We have been supporting the principle of multilateral trade which, in my judgment, is one of the greatest factors to facilitate free convertibility of currencies. We have been sticking strongly to that. We have been trying to hold off from what I consider to be this dangerous and vicious system of barter

agreements. That is the thing we have been trying to do in order to ensure convertibility.
I asked my hon. friend how he thought that a single country could do that, and I inferred that he thought we could.


Charles Cecil Ingersoll Merritt: Then you made personal
remarks.


Douglas Charles Abbott: I said I did not want to be offensive. If I was, I gladly withdraw. It was somewhat humorous, because I said that, if he was really suggesting that, which I do not think he was for a moment, then he should confine himself to criticism of some other topics. That is all I said. I cannot believe that he meant what he appeared to mean. That is what struck me.


Charles Cecil Ingersoll Merritt: I think that is just the reason why this bill should not pass the house and why the government should be defeated. I say that because I do seriously mean that the Minister of Finance has a duty upon him to take the lead in bringing the countries of the world, which are signatories to the Bretton Woods agreement, to a basis of exchange which more truly represents the terms of trade in the world. I believe that unless some country takes that step, unless some country gives a lead to a body which is, I do not say it invidiously, almost a bureaucratic body, an administrative body instead of an organization designed to make policy, it will never be done.
Only this morning I read in the paper that they are again thinking that wheat may be declared surplus in the United States. I referred to our situation in British Columbia. If ERP fails us under fixed exchanges, then there will not be any other possible course open to the minister than the one we are recommending to him from this side of the house.


Douglas Charles Abbott: What is it?


Charles Cecil Ingersoll Merritt: If he does it too late it will be worse. The course I am suggesting to him is to take a lead in bringing about a revaluation, not a devaluation, of all the currencies of the signatories to the Bretton Woods agreement. Somebody has to take that lead, and it might as well be Canada, because Canada has such a very big stake in this problem.
We have heard the minister try to ridicule and try to draw red herrings across policies of ours on this side of the house. We have not heard a thing from him which is going to stop us from sliding over this precipice which many of us see in front of us. The fact is that the course we are suggesting to him, and which he thinks himself incapable of achieving-that is apparently why he will not do it-is the only possible way out of this impasse which faces our export trade. In
Foreign Exchange Control my view it is high time that the government stopped trying to stay in power by ridiculing other people's policies and developed a policy itself.


Harry Grenfell Archibald: I have listened to the hon. member for Vancouver-Burrard bat the minister around and tell him that he does not know anything about the problem in British Columbia, and I have to admire the minister's patience. I might disagree with the minister in all his economic policies, but when I hear an hon. member tell him that he should become a second Moses in the wilderness and lead the whole world into multilateral trade, to me it begins to sound rather ridiculous when I think of the brains which Europe can produce and has produced, and yet the hon. member for Vancouver-Burrard can only dream up a solution to the Canadian problem by asking the minister to go over to Europe and tell them how to do their business. That is Tory politics-meddle in the other guy's business but do not attend to our own business.
If the hon. member for Vancouver-Burrard is interested in jobs and meal tickets on the Pacific coast and wants to see the workers out there working on export goods, then let us adapt ourselves to the policies which are becoming prevalent in the international field, namely, barter agreements. Whether we believe in it or not, let us eat regularly. That is the problem.


Charles Cecil Ingersoll Merritt: I am with you on that.


Harry Grenfell Archibald: I should like to see something more constructive come out of British Columbia than this mugging about with something which the hon. member does not know anything about. He did not advance one idea in his whole speech.


Harry Rutherford Jackman: Some time ago I tried to get some information from the Minister of Agriculture, but I am afraid I did not get quite what I wanted. I did get a note from one of my colleagues which said that the qualification of a cabinet minister is to be able to reply to a question without answering it. The minister did not answer my question. I am not going to ask it again because the minister is much smarter in debate than I am or ever hope to be. I am just an average, ordinary member, like my colleague the hon. member for Vancouver-Burrard. Therefore I shall address my question to the Minister of Finance. Some time ago some figures were given in this house

I think from this side-which showed that the total imports of Great Britain from Canada were $688 million and the total exports from Great Britain to Canada were $374 million, or 40 per cent of the amount they took from us. What I

Foreign Exchange Control should like to know from the Minister of Finance is this, and it is purely factual; there is nothing else behind it. What efforts have been made to have Britain send more goods such as iron and perhaps textiles? I know that we altered tariffs on one particular point. But a good salesman not only tries to sell his own goods when he goes over to Great Britain; he shows them the way oy which they can purchase goods from us. I should like to know if the Minister of Finance can throw any light upon these matters. What has been done to try to get more of Britain's goods into Canada, to offset the goods we are sending to Britain? Because only this month we have read in the press that Great Britain's over-all balance is now about equal. The only shortage is in hard currencies-Canadian dollars and American dollars.
I think it is true to say generally that there have been many things produced in Great Britain and exported to soft currency countries which could have been sent to Canada. Can the Minister of Finance throw any light upon that-before I ask further questions?


Douglas Charles Abbott: I had intended at another time, and still intend, to deal in somewhat greater detail with the question the hon. member has raised. Generally speaking, however, I can say this-


Harry Rutherford Jackman: Would the minister prefer to answer it at another time?


Douglas Charles Abbott: I would, because I do not have figures with me. However, perhaps I could give a general answer at this time-and I am sure this will be concurred in by my colleague the Minister of Trade and Commerce.
When the chancellor was here last September we urged upon him strongly the desirability of endeavouring to persuade British exporters to direct as much of their production as possible to the Canadian market. As members of the committee are aware, we have been particularly interested in textiles because, prior to the war, British textiles were exported in substantial quantities to this country. As a result of the war that market was largely taken over by American exports-Canadian imports from the United States.
As a result of the severe import restrictions against the United States there was a great opportunity for British textile manufacturers to export to this country, and they have been doing so in fairly substantial volume. When Sir Raymond Streit, chairman of the textile group, was out here-he has been here on several occasions-great stress was laid upon the desirability of directing

as many exports as possible to Canada. Substantial success has been achieved along those lines, although not as great as we would have wished.
I am not familiar with all the details; but I do know that my colleague the Minister of Trade and Commerce, as a result of discussions with board of trade people in the United Kingdom, was able to arrange for a substantial divergence of steel to Canada. The joint committee which was set up following the chancellor's visit met in London a month or so ago; and again at those meetings we impressed upon the British government-at official levels, it is true-our anxiety that everything should be done to encourage exports of this type from the United Kingdom. I propose to deal with some aspects of the matter at greater length, perhaps in my budget speech. I have no doubt that the Minister of Trade and Commerce will be doing so, too.


Harry Rutherford Jackman: The annual report of the foreign exchange control board points out that official holdings of gold and United States dollars increased by $496 million. May I ask the minister if the amount of United States currency which Canada would have received through the purchase of a minority interest in the International Petroleum Company by Standard Oil of New Jersey would be reflected in the 1948 account, or would it be reflected in the 1949 account; and approximately how much in millions of dollars would it be?


Douglas Charles Abbott: I would have to check on that. I should, think it would likely be reflected in the 1948 accounts. I am afraid, however, that I could not give an accurate answer, but I shall get the information and give it to the hon. member at the next stage.


Harry Rutherford Jackman: May I ask how this $496 million of very valuable assets now held by the Bank of Canada is paid for? I presume it is with Canadian dollars. It would make a difference in the budget surplus as shown in cash surplus, when the minister gives us the nation's accounts next Tuesday night. However, I do not wish to anticipate his statement to be made at that time. What will be the government's policy in regard to allowing Canadians to reinstate to some extent their capital position with regard to American securities? The minister will recall how valuable it was for Canada to be able to put our hands on American securities in the possession of Canadian individuals and companies. Some of those securities were not at that time taken over by the government; but in many cases individuals and companies sold part or all of their American securities, and the money went to provide very necessary

funds to purchase munitions in the United States before that country came into the war.
Would it be against the policy of the government to allow Canadian individuals to repurchase American securities? Those securities of course would be under the jurisdiction of the foreign exchange control board. This would allow Canadians a certain amount of freedom which they would not have otherwise.


Douglas Charles Abbott: So far no consideration has been given to changing the existing policy which, generally speaking, does not allow Canadians to obtain United States dollars for the purpose of investing in American securities.


Harry Rutherford Jackman: May I ask if there is any reason for continuing that policy, or is it just like so many things which have found their way to the statute books? They are never removed because the bureaucrats have not found it necessary to remove them, and the public do not make a big enough fuss.


Douglas Charles Abbott: The reason is that the government does not consider our reserve position is as yet sufficient to permit us to allow our store of United States dollars to be used to purchase American securities, which would naturally be subject to market fluctuations- to which currency and gold are not subject.


Agar Rodney Adamson: With regard to what was so clearly and ably said by the hon. member for Vancouver-Burrard, the minister should keep in mind that at the time of the Bretton Woods agreement, after the impasse between the British proposals and those made by Mr. White on behalf of the United States, it was Canada that took the lead, and it was the Canadian compromise proposal which was finally accepted.
Canada took the lead at that time, and I submit she could now take the lead again in asking that the international monetary fund go into the matter we are now discussing, to see if the regulations could not be altered so that the greatly desirable quality of convertibility might be returned to the currencies of the world.
No one realizes more than I what a stupendous task it would be. But I wish to tell the committee and the minister that Canada did take the lead in overcoming the impasse between the United States and Great Britain at the time of the Bretton Woods agreement; it was our proposal which was finally accepted. I believe we could again take the lead.
I suggested last night, as I have done repeatedly, that an initial step would be the establishment of a free gold market so that we could have some common denominator to
Foreign Exchange Control which we could relate our currencies. I shall not labour the point now. I did mention however that there is a considerable body of support for that contention in both the United States and Canada. I believe it should be explored a good deal further. The minister said-and in error I suggest-that the United States dollar was the only currency not subject to exchange control.


Douglas Charles Abbott: I should have included the Swiss.


Agar Rodney Adamson: The Swiss is the only currency that is really not subject to exchange control. The United States dollar is subject to the most rigid exchange control in that the holders are not allowed to convert into gold. The gold exchange act of the United States specifically prohibits the purchase of gold with United States dollars. Unless that quality is returned to a currency you cannot say that that currency is free of exchange control.
I should like to quote one thing in connection with this matter of purchases in Great Britain. What the Minister of Agriculture said about this was most interesting. He, like myself, believes that convertibility is essential, that we must do everything we can to strive for that. We owe to the United Kingdom, in fact all civilization owes, a debt that probably can never be repaid. Without the United Kingdom we would probably still be engaged in hostilities or be a vassal state. This is what Mr. Elliott M. Little had to say, as reported in a Reuters dispatch from London in today's Ottawa Journal:
"We are not satisfied that everything possible is being done by you or by ourselves to overcome this dollar problem". Little declared in a speech at the annual dinner of the Paper Makers Association of Great Britain and Ireland.
"It is not only Canada's pulp and paper trade with Britain which has been affected by the exchange problem", Little asserted.
"In the past year one traditional market after another has been reduced or has disappeared and old customers for Canadian pulp and paper products have turned to other countries at much higher prices or have gone without supplies they wished to have."
Granted that the bulk of our newsprint goes to the United States, the fact is that the United Kingdom has been a traditional market for a major part of our production of wood pulp and newsprint. But we find United Kingdom buyers of wood pulp and newsprint paying higher prices for an inferior newsprint in other soft currency countries. Everything should be done to overcome that problem. For the Minister of Finance to stand up and say that it is an impossible problem is not taking a realistic view of the situation.
1648	HOUSE OF
Transitional Measures Act


Douglas Charles Abbott: I have not said that it is impossible.


Agar Rodney Adamson: Pretty nearly. We have to be prepared to take a chance; we have to be prepared to take courageous action. If we do not, there will be more and more articles such as this appearing in the press.
Despite the fact that our export trade last year was at a record level, the situation is so ominous that I believe the government has no time to lose in taking steps. I have suggested that the thing to do is to go to the international monetary fund and see if some new arrangement cannot be made to allow- perhaps only in small quantities to start with, perhaps only in a minor scale-these currencies to be given the essential quality of free convertibility.
Resolution reported, read the second time and concurred in, on division. Mr. Abbott thereupon moved for leave to introduce Bill No. 85, to amend the Foreign Exchange Control Act.
Motion agreed to and bill read the first time.



BUSINESS OF THE HOUSE

Alphonse Fournier: At seven-thirty we will proceed in committee with the resolution in the name of the Minister of Justice dealing with emergency powers.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at seven-thirty o'clock.

[Stage Direction]
The house resumed from Wednesday, March 16, consideration in committee of the following resolution-Mr. Garson-Mr. Golding in the chair:
That it is expedient to introduce a measure to provide for the continuation of certain orders and regulations of the governor in council for a limited period during the national emergency arising out of the war.
Mr. Fleming:: Mr. Chairman, I think the committee requires a good deal of information before this resolution can be reported back to the house. It is also information the house should have before it undertakes to debate the principle of the bill that may follow, when second reading is moved. It is with a view to eliciting that essential information that I should like to put a number of questions to the Minister of Justice. I think I have made it clear that I regard this as


essential information, and that the purpose of these questions is to ascertain facts which are highly important both in regard to the validity of the measure that will follow and also as to particular aspects of it. The minister did furnish certain information when he spoke in the house on March 15, but there is still quite an area in which I do not think the information before the house is adequate.
We have been told that certain orders, twelve in all, will be continued by this bill. Enough has been said by the minister, I think, to indicate that the bill will contemplate continuation of the orders in their present form. In the first place I wish the minister would be good enough to tell us something further about the orders. When he spoke last Wednesday he enumerated the twelve orders, of which I find six were amended by the statute itself in 1947. The legislation of 1947 actually contained amendments to those six orders, and section 4 of that statute does not permit the governor in council to do anything but revoke orders in whole or in part; there is no power of amendment. However, intimations have been given by members of the government at one time or another that certain amendments are being made, and I wonder if the minister would indicate just how that is being done.
Let me illustrate. When the Minister of Finance spoke on this subject on February 7, I am afraid altogether too briefly, he indicated that the bill would confine the effect of price control to some dozen or so commodities which he listed. That list is on pages 316 and 317 of Hansard. That would involve some provision in the statute, I should think, and I wonder if the minister would indicate just how that would be brought about. Another change was also intimated by the Minister of Finance on another occasion, when he said it would be the purpose to amend the general order in relation to the powers of the wartime prices and trade board so that, without indicating just how it would be done, the effect would be to amend section 8 of that general order by eliminating the "reasonable and just" provision in relation to price control.
That is one subject of inquiry, namely how these changes have been brought about. Perhaps I might stop here and give the minister an opportunity to reply.


Stuart Sinclair Garson: Section 4 of the 1947 act enables the governor in council only to revoke but not to amend the orders in council, and my hon. friend's first question is how those orders may be amended in view of that provision. I apprehend that they will be amended as part of the schedule of the bill we are now seeking to amend by the

legislation which will be found on the resolution now before us. I regret that I did not have the opportunity of being in the house or in charge of this measure at the time the 1947 act was passed, but I think I am right in saying that the amendments on that occasion were part of the bill itself. In view of the fact that the governor in council has no power to amend, the only way an amendment could be made would be by means of the present bill in its passage through the house.


Donald Methuen Fleming: Does the bill now make that provision?


Stuart Sinclair Garson: No; it does not. We went on the assumption that these orders in council having been considered item by item and oi'der by order in 1947, when the Continuation of Transitional Measures Act was passed and, as I am informed, having been considered order by order in 1948, when that amendment was passed-


Donald Methuen Fleming: Not in 1948.


Stuart Sinclair Garson: That is my information from the gentleman who attended the committee. It may be that my hon. friend's recollection is different; however, nothing turns on that. But having been considered in 1947 and, as I contend, again in 1948, our thought was that the orders in council would be regarded as acceptable in their present form by a majority of the members. If they are not so regarded, then I imagine it would be open to the house to further amend them in much the same way that this was done in the Continuation of Transitional Measures Act, 1947. Speaking from recollection, I do not think there is any provision in this bill for the amendment of the orders in council in the schedule.
I believe they are indicated there as having been amended by the 1947 act. However, I do not think any difficulty would arise in that regard if it were the desire of a majority of hon. members to have an amendment; I think the only problem would be one of draftsmanship.
With regard to my hon. friend's second question, I am rather in a predicament in trying to answer it without referring to one of the sections of the bill. Exception was taken in the house the other day when I did this, but perhaps hon. members will not object if I read section 2 of the bill we will be introducing if this resolution carries:
Notwithstanding anything in the said act or in any order or regulation set out in the schedule thereto, the wartime prices and trade board shall not,
(b) -
This is the point my hon. friend was inquiring about.
-grant leave to prosecute any person for violation of subsection one of section eight of the wartime
Transitional Measures Act prices and trade board regulations with respect to any goods or services other than the goods and services with respect to which an order of the board was made under that paragraph and is In force at the commencement of this act.
By the way, my hon. friend, I think, will recognize subsection one of section eight of the regulations-


William Henry Golding: I do not believe it would be in order to deal with those sections of the bill at the present time.


Donald Methuen Fleming: The minister could state the effect of the section without actually giving a verbatim rendering.


Stuart Sinclair Garson: I have already offended the rule and given a verbatim report of the section which will answer my hon. friend's question. I am now referring not to the bill which is being introduced, but to subsection 1 of section 8 of the actual regulations which are in force under the old statute. This is the subsection which provides that:
No person shall sell or offer for sale or supply goods or services at a price that is higher than reasonable and just-


Donald Methuen Fleming: My next question has to do with the emergency which must exist if this legislation is to have any validity. I think the house will wish to be assured it is not passing legislation that is likely to be challenged and upset in the courts. Having regard to the fact, as was pointed out in the house on Tuesday, that there is a great deal of breadth to these orders, more than is required now in relation to the field in which the orders are to operate as compared with the original field, I think the minister will appreciate that if we legislate more broadly than is required to cover the field within which a national emergency is said to exist we are simply laying the legislation open to attack as being ultra vires. We will have to keep our legislation within the ambit of a national emergency. I should like the minister, if he will, to indicate in what respect the emergency may today be said to exist with regard to some matters that are covered by the general order which one might well call the mother order, P.C. 8528. This is the order that clothes the wartime prices and trade board with its broadest powers.
For instance, this order not only gives power to the wartime prices and trade board to fix prices, but it also gives the board power to fix the return on services. If you look at the definition of services you will see that, if this order is continued, the wartime prices and trade board will have the power to determine the remuneration-


Stuart Sinclair Garson: To what page is my hon. friend referring?
1650	HOUSE OF
Transitional Measures Act


Donald Methuen Fleming: I am referring to P.C. 8528, page 20 of the consolidation that was used in 1947. You will see that services include the following specific services and any activities or undertakings associated therewith or ancillary thereto, and also any activities or undertakings that may hereafter be designated by the board as services for the purposes of these regulations. The first service mentioned is the transportation of goods.
Now, I think the minister must tell the house wherein a national emergency exists in Canada today with respect to the transportation of goods, warehousing and storage.
I think he must tell us the same thing with regard to laundering and cleaning; tailoring and dressmaking; hairdressing and beauty parlour services; the supplying of meals; refreshments and beverages; the renting and and exhibiting of moving pictures; manufacturing processes performed on a custom or commission basis; the dyeing of furs; the dressing of furs; the slaughtering or dressing of animals or poultry on a custom or commission basis; the breaking and separating of eggs on a custom or commission basis; the pasteurizing of honey on a custom or commission basis; the drying of any goods on a custom or commission basis; the packing or packaging of any goods on a custom or commission basis.
Then further powers are given to the board with respect to putting a price on services, quite apart from goods. Now that is not the only feature in which the proposed extent of the order or, for that matter, the full extent of the order today has not been exercised; that power is not being exercised today by the board. The board's orders do not extend to the fixing of a price for services of that kind any more than they extend to the fixing of the price of goods other than those dozen commodities which appear at page 316 of Hansard.


Clarence Decatur Howe: This discussion is entirely concerned with the contents of the bill and has nothing to do with the resolution. Surely we cannot discuss the bill when the bill is not before us.


Donald Methuen Fleming: If the minister will wait, he will see the point to which this question is directed.


Clarence Decatur Howe: I have waited quite a while.


Donald Methuen Fleming: I do not care whether or not the minister is getting itchy. At the moment,
I am trying to get some information which the house ought to have before it gives second reading to the bill. The house will not have that information unless it gets it here, at this stage. This is the purpose of the resolution stage in committee, in order that members
'Mr. Garson.]

may secure information which would enable them to use their intelligence in deciding how they should vote when the bill is presented.
I pointed out that there is a particular provision in the order in council to which I have referred, and there are others to which I could refer as well which are outside the scope of the regulations now being enforced by the board. I am not asking the minister to disclose the contents of the bill, but I wish he would state clearly how it is proposed to deal with this question so that the house may be sure that what is to follow is not going to have the effect of keeping alive a power with respect to matters on which the board has power today by these orders, but concerning which there surely cannot be said to be a national emergency today.


Stuart Sinclair Garson: Mr. Chairman, I must disagree with my hon. friend in his proposition that, in order to found a jurisdiction of this parliament to pass a law such as the bill we are seeking in this resolution, it must be founded upon an emergency in respect of, we will say, the transportation of goods, or warehouse and storage. I apprehend that, once a national emergency has been established, then, on the basis of that national emergency, parliament can legislate with regard to any of those matters if it so chooses. My hon. friend's objection is not, therefore, well taken in so far as the question of jurisdiction is concerned.
It is perhaps well taken, although I did not understand him to address himself to that point, to the matter that under the present conditions, he might argue there is no longer the necessity to regulate these particular matters. Now, I do not think he can anticipate the bill by making that assumption, even though I have disclosed to him part of the contents of section 2 of the bill. I would suggest that by far the most practical way of dealing with the difficulty which is bothering my hon. friend is to proceed with this present stage; then when the bill is in the committee stage, we can have those who are charged with its administration before the committee of the house. Then we can explain to my hon. friend, I hope to his satisfaction, just wherein arises the necessity for these particular provisions that he has been reading.
As to the jurisdiction aspect of the matter, in drafting the bill our law officers have satisfied themselves upon that score; and with all deference I think that the problem to which my hon. friend alludes does not arise.


John Thomas Hackett: Does the hon. gentleman suggest that this bill is going to a private committee and is not to be dealt with in the house?


Stuart Sinclair Garson: No. We shall bring it into the committee of the whole.


Mr.   Hackell@: But we are not going to hear witnesses in the committee of the whole, are we? It is not the practice to hear witnesses before this committee of the whole.


Stuart Sinclair Garson: No, I understand not. I am somewhat at a disadvantage, in this respect, I must admit, because this is the first session in which I have been in this chamber. But I understand that the practice is that the various ministers may have officials of their departments attend with them in this house, and that, when a question is asked of the minister, he informs himself from his officials and relays the information to the house.


John Thomas Hackett: The minister is quite right as regards matters of detail, I was going to say. The Minister of Trade and Commerce, for instance, has a number of gentlemen come at different times to give him figures about trade and such matters. But we are now dealing with a question of principle. I was going to ask the minister if he could inform the house what are the elements that constitute the national emergency upon which he relies.


Stuart Sinclair Garson: I certainly have never held myself out to be an expert upon national emergencies, and I would question if even an expert could give a comprehensive and completely satisfactory definition. But I do not think that is necessary in the case before us because, as I said the other day in my remarks when I was speaking on the motion to go into committee, the economic emergency with which this country has been continuously faced since the cessation of hostilities is one which I think the members of this house were quite right in affirming as existing, by a vote of some 141 to 53. For the purpose we have here, that of making a foundation for our jurisdiction to pass this bill, I think that all we have to do is to satisfy a majority of the members of this parliament. Then you have an emergency which is sufficient for the purposes of founding jurisdiction to pass the bill. I am not raising this as any point of order at all. That is a matter that has already been determined.


John Thomas Hackett: With great deference, may I say that the question of emergency is one of fact.


Stuart Sinclair Garson: Yes.


John Thomas Hackett: It is not a question of what I or somebody else might think about it. At this juncture I think this question becomes a matter of grave importance, because the mere declaration of an emergency does not create
Transitional Measures Act one. If there be enacted legislation founded upon an assumption which the facts contradict, the minister will agree with me that great hardship may ensue; because we are a law-abiding people and we shall observe the law even while resisting it.
Without being too specific, the minister coming from Manitoba will know what I mean when I say that a high authority, confirmed by still higher authority, after hearing witnesses who testified on a broad range of topics, has said that not only is there no national emergency but that there never has been a time when we were more remote from an emergency than we are today. In fact, should I by chance, good or ill, find myself on the other side of the house, I might be inclined to welcome that document as a testimonial to the efficiency of the government in power. But the fact remains that, by a body before whom we as law-abiding people incline, it has been held that there is no national emergency. As prudent and careful men who seek to protect the interests of the country at large, I think there should be some reluctance on the part of parliament to enact legislation which in all probability-and I say "in all probability" because of the. elements that point that way-will be ill founded in fact. I ask the hon. gentleman this question. What has happened since last Thursday or a week ago yesterday which prompts him to say that today a national emergency exists, when a week ago it was declared by a high authority that there was no such emergency?


Stuart Sinclair Garson: I think that my friend's argument is founded upon a fallacy, if I may say so; and the fallacy is this. Merely because the Manitoba court of appeal, as some of a group of five men in Canada, finds as a matter of fact that there is no national emergency does not extinguish the fact, if the fact exists. So far as I am personally concerned, notwithstanding the testimonial aspect of their findings, I am myself in the most profound disagreement with this finding of facts. My hon. friend says, and rightly so, that this is a question of fact. But facts, for the purpose of founding jurisdiction in a case of this sort, are something that groups of people must find. They must find them to be facts. Human error being what it is, it is inevitable that some groups will find a thing to be a fact and another group will find that it is not a fact. I might say with just as much force as has my hon. friend that-I think it was yesterday or the day before-this parliament by a vote of 141 to 53, found that there was an emergency in Canada. I claim for the finding of this highest court in the land at least as much validity as my hon. friend can claim for certain members of the Manitoba

Transitional Measures Act court of appeal. Without attempting to discuss a matter which is, I think, for all practical purposes sub judice, I may tell him that we do not agree at all with the judgment of the Manitoba court of appeal either with regard to some of its findings of fact or with regard to some of the legal principles that it has invoked. We intend to appeal that case. The case is by no means ended. There as yet has not been in that case a final and ultimate finding which will carry the force of law, because we can appeal it, and we intend to appeal it. Not until after that appeal has been disposed of will my hon. friend be in a position to inVoke it in support of his contention that there is no emergency existing in Canada today.
I do not want to repeat the argument which I made in the house, when I moved that the Speaker do leave the chair for the house to resolve itself into committee of the whole to consider this resolution, as to the reason which I stated for there being an emergency in Canada at the present time, because I do not think it is fair to bore hon. members by quoting from one's own speeches. I am sure that what I said is fresh in the minds of those who paid any attention to it in the first place. But even if my hon. friend objects to my remarks as not being correct statements of fact-and I think he would have great difficulty in doing so, because they were all so self-evident as to be platitudinous-I would ask him to look about him if he wishes to see proof of there being an emergency in Canada and listen to the remarks of his colleagues, the hon. member for Danforth, the hon. member for Davenport, the hon. member for Rose-dale, the hon. member for York West and the hon. member for York South, who, during the last two days, have given the most excellent statements in great detail of various aspects of this emergency.
The leader of the opposition himself says that, although his party voted against the resolution which would lead to the introduction of rent control, neither he nor his party have declared themselves to be not in favour of rent control. They are in favour of rent control-for what reason? Because there is an emergency. If there is no emergency there is no need for rent control.


Charles Cecil Ingersoll Merritt: Will the minister permit a question? Is it not a fact that the leader of the opposition pointed to specific rather than general emergencies? Is the minister not suggesting that there is a general emergency?


Stuart Sinclair Garson: Indeed I am, sir. I do not know how the idea got about that specific emergencies are necessary as the foundation of the jurisdiction of this parliament.
fMr. Garson.]


John Thomas Hackett: I doubt very much whether anybody alleges that.


Stuart Sinclair Garson: I agree with my hon. friend that no person alleges it, but many people alluded to it. The hon. member for Nanaimo himself seems to be under that illusion.


John Thomas Hackett: I do not think so.


George Randolph Pearkes: No.


Stuart Sinclair Garson: Let us be perfectly fair. Are my hon. friends of the Progressive Conservative party and I in agreement that all that is necessary is a general emergency for the foundation of our jurisdiction to pass the proposed bill?


George Randolph Pearkes: On a question of privilege, I have never referred to anything which would lead the minister to make such a statement.


Stuart Sinclair Garson: I beg the hon. gentleman's pardon. He is quite right in the point he has raised. I meant to refer to the hon. member for Vancouver-Burrard, who has just made that statement. My hon. friend from Nanaimo is quite right.


Wilbert Ross Thatcher: Will the minister permit a question from this corner of the house? If he says that there is a general emergency, as he is arguing, why are we dropping so many controls as he proposes to do?


Stuart Sinclair Garson: That is a very easy question to answer, Mr. Chairman. While the general emergency is the foundation for the jurisdiction that we propose to exercise here, it is a matter of judgment in dealing with the general emergency as to how we should carry on controls or dispense with them.


Wilbert Ross Thatcher: The judgment has not been very good in the past.


Stuart Sinclair Garson: While my hon. friend may not agree with the judgment we have exercised, yet we happen to be in charge of the affairs of the government and that is what we thought to be the proper course to follow. Probably I have dealt with the points raised.


John Thomas Hackett: 
Stuart Sinclair Garson: It was not their parliament.


Mr.   Hackell@: It was a parliament which enacted legislation which was binding upon them, and it was against those enactments that they rebelled.


Stuart Sinclair Garson: Because they had no representation.


Mr.   Hackell@: I am not going to deal with side issues. I say that the American colonies rebelled against an omnipotent parliament; and there grew up on this continent a new form of government, a form of government which, instead of being an omnipotent government, depended for its efficacy and its operation upon a system of checks and balances. In the United States there was the legislative power.


Stuart Sinclair Garson: May I ask my hon. friend if he is now dealing with the United States constitution?


Mr.   Hackell@: I am dealing with ours. For the moment I am referring to the United States constitution but I am coming to ours. I was going to say that in the United States the powers were divided into three: the legislative, the executive and the judicial. The supreme court of the United States was given the power to determine whether or not the laws enacted by Congress were constitutional, were binding; that is, whether or not legislation passed by the legislative body was effective, and could be applied to an individual. Some ninety years later another group of North American colonies set up another union which again refuted the doctrine of an omnipotent parliament; Canada, in a way all her own, devised a method of checks and balances. It was different from the United States system because Canada still retained the king. But our system followed the United States system to the extent that we had a constitution, although it happened to be a statute enacted by the British parliament. Any law enacted by the Canadian parliament or by a legislature of a Canadian province is valid only in so far as the lawmaker can point to the chapter and verse in the constitution which gives him authority to enact that law. And the arbiter upon whom was placed the duty of determining whether or not a law is constitutional and binding is the judiciary, the courts of the land-the trial courts, the courts of appeal and, in the early days, the privy council, because there was no supreme court
Transitional Measures Act until 1875, and after that date the Supreme Court of Canada and the privy council.
I think my hon. friend will admit that there is a presumption that a judgment is right. There are courts of appeal for the purpose of correcting error. But my hon. friend will admit also, I am sure, that in ordinary cases a judgment of a court, especially a court presided over by an able and experienced judge, which has been unanimously confirmed by the highest court of a province-and when, be it remarked, the confirmation deals with a fact-permits of no successful appeal. I am not saying that in this instance an appeal may not succeed. But in the ordinary instance, in the ordinary case, I am sure my hon. friend will admit there is but scant hope for the success of an appeal from a case on which there have been two concurrent findings of fact.
In the case about which we are talking, the question was this: Is there an emergency? Because it is only if and when there is an emergency that the powers which give vigour and force and life to the order in council, and to the statute under which it is passed, exist. It has been held by a trial court, it has been held by a court of appeal in respect of this simple question of fact, that there is no national emergency, and that in consequence-


Joseph Arthur Lesage: Would the hon. member permit a question?


Mr.   Hackell@: Certainly.


Joseph Arthur Lesage: Do I understand that the hon. member for Stanstead contends it was the unanimous finding of the court of appeal of Manitoba, in the judgment to which he referred, that there was no national emergency? If he answers yes to that question, then I would ask him if he has read the judgment. I have it here. He should be careful.


Mr.   Hackell@: I was saying that there has been a finding of fact.


Joseph Arthur Lesage: By one judge out of five.


Mr.   Hackell@: I was saying there had been a finding of fact in the trial court, and that the court of appeal has confirmed that judgment and has confirmed it on the facts. I submit to the minister that while I believe most of us would be loath in an ordinary case-and this is not an ordinary case-to advise an appeal to a higher tribunal where there has been a concurrent finding of fact, there may be reason to appeal here. In fact, I would expect there would be an appeal in a matter of this importance.

Transitional Measures Act
But, all that being so, does it not impose upon the government at this juncture, before enacting more legislation which is subject to challenge and which, if successfully challenged, may cause great damage and hardship to a number of people, the duty of giving most careful study to the basis of the alleged emergency.
As the minister knows, there have been several other judgments in which it has been held that no national emergency exists, and the law has in consequence not been susceptible of enforcement. I suggest to the ministry that it is only prudent to state carefully what, in the view of the administration, constitutes a national emergency, and endeavour to ascertain if the facts, which are probably known to most of us, are such that it can be safely declared that a national emergency exists.
I do not wish to be facetious; and in matters of this kind which create great perplexities, I do not wish to be unduly partisan. I feel there is too much at stake to attempt to secure any political advantage or party advantage in a matter of this kind. But where are we going to find evidence of an emergency? I will admit-and I hope my hon. friend will not take it amiss-that there is a political crisis. I will admit that a government which, in its everyday activities, is relatively strong but which, in fact, compared to the entire opposition, is not so, finds itself in a difficult position. And I believe in a matter of this kind and of this importance parliament should go slowly. We should inquire with care and with the utmost scru'iny into the elements upon which the government relies to constitute this a national emergency.
To most of us a national emergency means national peril. It means the type of thing which arises when the enemy is at the gate. But anything in the way of an inconvenience, anything in the way of a local disturbance or turbulence, does not, I submit, according to the authorities and according to popular understanding, constitute a national emergency.
Then I say to the hon. member for Mont-magny-L'Islet that I too have the judgment of the court of appeal of Manitoba. And while I do not take the same view of it that he does, let me assure him that I too have read it carefully, and I hope my powers of comprehension have not abandoned me.


Joseph Arthur Lesage: I should like to quote from the judgment of Mr. Justice Dysart, and ask' the hon. member for Stanstead if he can find anything that even resembles a declaration
IMr Haekett.l
in those reasons for judgment that there is no national emergency. The judgment states:
The act-
And he was speaking about the transitional powers act-
-clearly invades the field of ''property and civil rights" which, by the British North America Act, section 92(13) are committed to the provincial legislatures. But the parliament of the dominion in a sufficiently great emergency, such as that arising out of war, has power to deal adequately with that emergency for the safety of the dominion as a whole.
The interests of the dominion are to be protected, and it rests with the parliament of the dominion to protect them. What those interests are the parliament of the dominion must be left with considerable freedom to judge; per Lord Wright, in Co-operative Committee on Japanese Canadians v. Attorney General for Canada, 1947 A.C. 87 at 101.


John Thomas Hackett: Will the hon. member permit a question?


Joseph Arthur Lesage: I am reading the judgment.


John Thomas Hackett: The hon. gentleman knows that Mr. Justice Dysart did not dissent from the judgment which confirmed the judgment of the chief justice.


Joseph Arthur Lesage: I am about to read his reasons.


John Thomas Hackett: His conclusion was that the appeal should be dismissed.


Joseph Arthur Lesage: Of course, and I am about to read the reason he gave for concluding that. A little later on in his notes he says: Parliament has declared that the emergency is still continuing. That declaration is peculiarly within the rights of parliament to make. And although the judiciary has the right, in a proper case, to review parliament's decision, and has a duty, upon sufficient evidence, to reverse that decision, still the courts ought not to venture upon such a review or reversal unless the need of doing so is clear. The courts have always exercised that right "with reluctance"; per Lord Haldane in In re the Board of Commerce Act, 1919, and the Combines and Fair Prices Act, 1919, reported in 1922, 1 A.C. 191 at 200.
That is the very question we have before us, whether there is an emergency or not. The judgment goes on:
In my view, P.C. 1292 goes beyond the act, and to the extent of that excess is invalid. That view renders it unnecessary-and I think inadvisable-for me to deal with the validity or invalidity of the transitional act.
Was there concurrence in the expressed opinion of one judge who said that there was no emergency? There is an emergency in Canada at the present time arising out of the last war that is still continuing.


Harry Rutherford Jackman: The first war or the second?


Joseph Arthur Lesage: Of course the emergency following the first war was of a special kind due to the policies of the Torv government that

we had from 1914 to 1918. The policies of the government during the last war-


An hon. Member:: This time?


William Henry Golding: I would ask hon. members to refrain from interrupting the speaker, no matter on what side of the house he may sit.


Joseph Arthur Lesage: I like it.


William Henry Golding: Order. Every hon. member should have the opportunity to present his views without interruption. I appeal to hon. members to support the rules by trying to keep proper order and decorum.


Joseph Arthur Lesage: What is an emergency? According to the Oxford dictionary an emergency is a sudden juncture demanding immediate action. Will any hon. member on the other side of the house say that the situation in regard to rents is such that we should do away with it?


An hon. Member:: Who wants to?


Joseph Arthur Lesage: Is there a disturbance or peculiar situation amounting to an emergency in connection with housing? Is that emergency continuing owing to the fact that we were not able to build houses during the war? Is there not an emergency that we should deal with? The leader of the opposition has said that there is. If there is such an emergency why do hon. members on the other side rise in their places from time to time and ask that they be given an example of the emergency? Who will say that the situation with regard to housing is not a national emergency? Will any hon. member rise in his place and say that because of the shortage of certain commodities it is not necessary to keep certain prices down by price control, at least for some time?
If the Tories want to take the responsibility of disrupting the Canadian economy by doing away with all controls at this time let them do so. They must accept that responsibility before the people at the next election and I am mighty glad that they are doing it.


Mr. Ferguson:: The hon. member has been emphasizing rent control but I ask him to name quickly three other emergencies. Will he stop harping on rent control and name three others? Go ahead. He cannot do it.


Joseph Arthur Lesage: The hon. member has only to
read-


Julian Harcourt Ferguson: Answer the question.


Joseph Arthur Lesage: -the list of twelve orders in council which will be mentioned in the bill and he will have his answer. There are not only three; there are twelve.


Julian Harcourt Ferguson: Mention them
Transitional Measures Act


Joseph Arthur Lesage: For example, steel and distribution of building materials which are in short supply. As I say, if the members of the opposition want to disturb the Canadian economy at this time, let them do so; but they will be responsible to the Canadian people.
I am glad they are taking this stand because it is going to help us and there will be fewer members on the other side after the next election.


Stanley Howard Knowles: I have listened for hours on end to the legal aspects of this argument and I resolved long ago that I would not get into it. After all, it is the sort of situation into which only lawyers would jump. I received through the mail today a copy of the judgment which has been referred to so often during the course of this debate. I also received many other letters in today's mail, to one of which I wish to make reference in a few minutes. This made me decide to say a few words on this legal point. I must admit that the hon. member for Montmagny-L'lslet has said much of what I intended to say, but perhaps not being a lawyer I can express myself in a layman's terms.
I have read to the best of my non-legal ability the judgments of Mr. Justice McPherson, Mr. Justice Coyne, Mr. Justice Dysart and Mr. Justice Adamson of the Manitoba court of appeal. As I read those judgments it seemed to me that there was one thing on which the four justices were agreed, namely, that they were ruling on the validity of order in council P.C. 1292 under the terms of the Transitional Measures Act. They did not rule that the Transitional Measures Act was ultra vires of this parliament, but they did rule that P.C. 1292 was ultra vires of the Transitional Measures Act. I may say by way of digression that I cannot follow their views on that matter. They speak about this 28J cents per bushel that was taken from this man Nolan who held this barley as though he had created that value. As a matter of fact that 28J cents was a fortuitous profit created by the action of the government in removing the ceilings, so to me their argument is very dubious on that point. But that is not the issue now. The issue is clear, and all the legal gentlemen of the official opposition should not keep dragging out these four judgments together with the previous judgment of Mr. Justice Williams as a proof, somehow, that we are doing something here that we have no right to do. The judgments either do not discuss it at all or they admit the validity of the Continuation of Transitional Measures Act itself. The only thing they say is that the act did not give the government power to pass P.C. 1292, because
1G56	HOUSE OF
Transitional Measures Act there was no emergency with respect to barley.


John Thomas Hackett: No general emergency.


Stanley Howard Knowles: That may be their view, but most farmers in western Canada, who lost heavily and saw others making fortuitous profits because of what happened, do think there was an emergency as far as they were concerned.
I want to leave it at that because, as I said,
I have tried to put it in layman's language, and if I went on I would make it as confusing as most of the lawyers have made it. I said there was another letter I had received. As a matter of fact it was brought to my desk only half an hour ago, and this is what made me decide to take part in the debate. The judges say there is no emergency with respect to barley. The hon. member for Stanstead enlarges on that and insists that there is no general emergency. Other hon. members do not like a reference to one subject; but here it is, and this comes to me from a correspondent in Winnipeg:
Dear Mr. Knowles,
Please do your best to keep controls on the rents. There will be a lot of us widows on the street if the control is taken off.
Then there is a compliment to me about something else, which I need not read.


Some hon. Members:: Read it.


Stanley Howard Knowles: Well, since my friends in all parties are asking for it, all right:
You did wonderful work for our pensions. Please help us now. Wishing you luck in the coming election . . .
Since you wanted the whole letter I have given it to you.


Some hon. Members:: Whom is it from?


Stanley Howard Knowles: It is not necessary to give the name.


Some hon. Members:: Yes, it is.


Stanley Howard Knowles: It is not necessary to give the name of the writer of the letter. I am not going to make public the name of a widow who is receiving a small allowance, and who is afraid now that her rent may be raised.
I received this letter in the mail today, and I received as well this document of many pages, in which their lordships say something which makes it possible for the hon. member for Stanstead and others to argue that there is no emergency. I keep receiving letters like this from people telling of the emergency they will face a week from Monday if rent controls go off; so I say we should pass this legislation.


Mr. Poulioi:: I do not intend to speak for very long, and I have not read any of the judgments referred to; I have only listened 

to my hon. and learned friend from Stanstead, who spoke of the judgments that had been given in respect to the emergency powers. The hon. member for Montmagny-L'Islet mentioned the definition of an emergency. It includes an immediate element not imputable only to war, as the hon. member for Stanstead has said, but arising from unforeseen circumstances. The hon. gentleman spoke at great length about the various acts. He is against controls; he considers them a poison, and the action of the courts as the antidote. Well, the more he insists upon it the less dangerous become the controls, because as long as there is an antidote-I mean the courts-to correct the so-called wrong effect of the controls, how can he complain so much about it? That is all I want to ask him.


Donald Methuen Fleming: I think one or two aspects of this subject need to be clarified. There has been a good deal of discussion, but it seems the further it goes the greater is the attempt on the other side to becloud the issue as we on this side have stated it. That issue was stated in crystal-clear terms by my leader on Wednesday last with regard to this subject of emergency. He pointed out the dangers of the course the government is pursuing, dangers which are revived by the reasons assigned by the Minister of Justice in what he has said tonight.
What my leader said, and what others speaking from this part of the house have said, is that with respect to the housing situation in Canada emergent conditions do exist, and that is the source of the relationship of rent control to this question. We have emergent conditions with respect to housing; we have a crisis in housing. But, Mr. Chairman, to justify a measure which will deal with rent and several other subjects that have been mentioned, the government proposes that this parliament go on record as asserting the existence of a national emergency.
See where that leads us. The minister has said that parliament-I think he means this house-by its vote on Wednesday last asserted the existence of a national emergency. I entirely take issue with that statement. All the house did last Wednesday was to pass a motion that on this particular resolution the house should resolve itself into committee of the whole. It still remains for parliament, and even for this house, to say in binding terms that a national emergency exists. I point out to the Minister of Justice that the measure of 1947 did not put parliament on record in specific terms as asserting the existence of a national emergency. That was in 1947, when we were asked to say that a national emergency required the statutory enactment of fifty-seven orders in council.

All that was done in the act of 1947, which is chapter 16, was to make a reference to it in the preamble. Parliament has not yet asserted in categorical terms, and did not assert in 1947, that there was a national emergency.
For the sake of argument, however, let us say that the recital in the preamble is equivalent to such an assertion.


Stuart Sinclair Garson: How much more categorically could parliament make a statement of the emergency in the act of 1947 than to recite that as the fact upon which the exercise of their jurisdiction was based?


Donald Methuen Fleming: The answer is obvious. Parliament can set out a declaration that the emergency does exist. All parliament did in the preamble to the 1947 act was to say that in view of the continuation of the national emergency, and whereas the national emergency in certain respects is continuing, and so on.


Stuart Sinclair Garson: And is still continuing.


Donald Methuen Fleming: All right; that is a preamble. Even if we were to accept the contention of the minister that a reference of that kind in the preamble is equivalent to the assertion of the existence of a national emergency, I point out that this was in 1947, and parliament has not yet said anything in 1949 by way of a final declaration on this subject.
That leads me to make a comment on the grounds on which the minister proposes to invite parliament, at some stage or other, to assert the existence of a national emergency. He was invited to indicate the evidence by which he says a national emergency exists of a general character. At the moment we are not arguing whether an emergent condition on a national scale exists with respect to housing. Let us not spend any more time threshing old straw there. The minister is asserting the existence of a national emergency. Mr. Chairman, in his remarks on Tuesday last he put it on the basis, and I read his speech very carefully, first of all of inflation. He says there is inflation arising out of the war just as there is out of every war. Then, his second piece of evidence was the quotation of certain remarks made by members on this side of the house with respect to housing conditions.
What has been said, Mr. Chairman, with respect to housing conditions, shows it is a fact that emergent conditions on a national scale do exist in regard to this matter. That is no ground, however, for the assertion that there is a general national emergency. Look where that leads us. The minister himself, in reply to a question by the member for Moose Jaw (Mr. Thatcher), has said that the
Transitional Measures Act existence of this national emergency does create this result, that it does transfer to parliament the power, not simply to do what we are being asked to do in the present resolution, but to do much more. Parliament can then do anything by way of invading the normal jurisdiction of the provinces over property and civil rights.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: Yes, that is what it amounts to, because if a national emergency exists then parliament has a right to do anything that is required to meet that national emergency.


Stuart Sinclair Garson: Will the hon. member permit a question? If a national emergency does not exist, in my hon. friend's judgment has this house the right to deal with rental control?


Donald Methuen Fleming: Mr. Chairman, I have already made it clear, following the plain statement of my leader in this house on Wednesday, that an emergency does exist with respect to housing. A measure with respect to rent control is, therefore, one of the steps arising out of that national emergency with respect to housing. It would not, however, be competent for parliament or the minister to say that, since there is a national emergency with respect to housing, that gives parliament the right further to invade the normal jurisdiction of the provinces over property and civil rights.
May I remind the house that the provinces pass most of their statutes in the exercise of their jurisdiction over property and civil rights. It is the main source of jurisdiction in all provincial legislatures. The proposition the Minister of Justice has put before the house tonight is tantamount to this: By reason of the existence of a national emergency there exists in parliament today the right to trespass upon the provincial field of property and civil rights when parliament, by a majority of one if you please, deems necessary. Now, proclaim that broad principle throughout this country. The member for Montmagny-L'Islet (Mr. Lesage), instead of proclaiming his idle threats and threshing straw that was threshed out in this house three days ago, should go down to his constituency and proclaim the stand of the Minister of Justice in support of the proposition that there exists in this country such a national emergency as vests in the parliament of Canada the right to trespass completely on the provincial field of property and civil rights.


Joseph Arthur Lesage: I have just received a challenge, and I will answer it. I will answer the member for Eglinton (Mr. Fleming) by

Transitional Measures Act quoting the words of Viscount Haldane. In so doing, I shall be in much better legal company than my friend the member for Eglinton with his imagination.
Their lordships, therefore, entertain no doubt that however the wording of sections 91 and 92 may have laid down a framework under which, as a general principle, the dominion parliament is to be excluded from trenching on property and civil rights in the provinces of Canada, yet in a sufficiently great emergency such as that arising out of war, there is implied the power to deal adequately with that emergency for the safety of the dominion as a whole.
That is quite different from what the member for Eglinton said.


John Thomas Hackett: Is that the Fort Frances case?


Joseph Arthur Lesage: Yes, it is the Fort Frances Pulp and Power Company Limited case. Parliament has the power to deal with the emergency. It has to be a national emergency in order that the dominion may invade the field of property and civil rights. The extent of that emergency determines the extent to which the dominion can invade the field of property and civil rights. When the bill comes before the house, the extent to which we may, under the present emergency, invade the field of property and civil rights will be decided by this house. I understand that is the procedure. It seems to me we are wasting a lot of time discussing things that do not matter at this stage.


An hon. Member:: We do not know yet what the bill will be.


Mr.   Hackeil@: Will the hon. member permit a question? I think the hon. gentleman will admit that the validity of the legislation must depend upon the emergency being a national emergency.


Joseph Arthur Lesage: Oh, definitely, and I contended a few moments ago that there was a national emergency. The lack of housing is felt from Halifax to Vancouver, and that is a national emergency.


Mr. Cole (Malapedia-Malane):: I was
involved in a debate such as this when this matter was brought before the house on an earlier occasion.


Some hon. Members:: Louder.


Mr. Cote (Matapedia-Malane):: I expressed my views at the time the omnibus bill came before this house. I should like to put myself on record in this session concerning the manner in which this proposal has been brought before the house. I have not changed my mind on the principle involved, but I have changed my mind concerning the procedure.
I am glad to see a new Minister of Justice, who is a real Canadian, dealing with these matters. He is not asking us to do this for

Britain as the former Minister of Justice did. I would say that, after the 27th of this month-


An hon. Member:: Ha, ha.


Alcide Côté: Do not
laugh, my friends, because I would say this to you. If you continue your filibuster, you will have to take the responsibility if these emergency powers lapse. I know what the leader of the opposition (Mr. Drew), "gorgeous George", said in Ontario last June, "Make Ontario Strong," and what Duplessis said in July, "Make a country of our province." If hon. members opposite go back to their ridings and say they would like to Balkanize this country instead of doing what we propose to do, namely, to make this country just as big and strong as the United States, I would say that some of them will never show up again.
When we come to this matter of emergency [DOT] powers, I would say that, if the Tory party wishes to take the responsibility of filibustering this emergency power legislation out of existence, thus bringing about the possibility of tenants-who constitute seventy-seven per cent of the people in Canada in the large cities-being thrown into the streets or with the prospect maybe of having an increase of two hundred or three hundred per cent in their rent, that is their responsibility. But I do not think it is a proper thing for the government to swing an election on this item. It would be the responsibility of the Tory party if all the tenants in this country were put on the sidewalks unless they accepted an increase of two hundred or three hundred per cent in their rents.
Then there is the question of margarine in certain places. We have these emergency powers to do certain things about agriculture. If the Tory party wishes to take the responsibility for increasing the price of butter and doing away with subsidies I would say, all right. I think it is about time that the Tory party showed its colours.
The new leader of the opposition conducted a sort of campaign against which I participated with the leader of the Liberal party in Ontario.


An hon. Member:: The Grit campaign.


Charles Delmar Coyle: Yes, the
Grit campaign; and I am not ashamed of it because it is the greatest thing a Canadian can do now.
Since the leader of the opposition has been here, he has been asking for provincial rights.
I should like to know why this man, with all his ostentation, has admitted that he would step down from being premier of a

province to become leader of the opposition at Ottawa; because if the provinces are on the top, why should he come down here?


Julian Harcourt Ferguson: You will find out in a month or two.


Alcide Côté: If these
emergency powers do not go through by March 27 by reason of the filibuster of the opposition, they will have to take the responsibility; the Tory party will have to take the responsibility. The Tory party will have put on the sidewalks all the beds of the tenants, who will have no more consideration because Ottawa will no longer protect them. Neither will Mr. Duplessis nor Mr. Kennedy any longer protect the small people. I say to hon. members opposite, if they want that, let them go to the people of Canada and say: What do you think? If we cannot go through with these emergency powers on account of the filibustering of the Tory organization, it is about time that this House of Commons was dissolved. We are in a position to say, "gentlemen, we are not afraid".


William Henry Golding: Shall I report the resolution?


Mr. Stewart (Winnipeg North):: I have been up on my feet several times trying to catch the eye of the Chairman. I am glad I have it because it gives me a chance to say briefly that this debate seems to me to be a tremendous waste of time. All that we see happening is the same old shadow-boxing. Any member who cares to go back to the 1935 debates, when the Tories were in power, will find that they were putting up the same arguments then as the Liberals are putting up now and that the Liberals are putting up now the same arguments which the Tories were putting up then. There is very little reality in this entire debate.
As far as the Tories are concerned, their motto should be autre temps, autre moeurs, because I have here on page 4186 of Hansard of 1935 a statement by my friend the hon. member for Stanstead. A little while ago I think he said that the only emergency which really could arise was when the enemy was at the gate. He has changed his mind radically since 1935, for then he was of opinion that when the world was in a state of dislocation it might conceivably cause a national emergency. I do not like to be unfair to him but I shall quote him here when he was answering Mr. Rinfret, who was then the member for St. James. The member for St. James objected to the artificial methods which were being used by the Tory government, and the now hon. member for Stan-
Transitional Measures Act stead said in part-and 1 am trying to be completely fair in this quotation-as follows:
. . . but I believe the hon. member will admit that the whole world is in a state of dislocation.
The hon. member for Stanstead was then defending the Natural Products Marketing Act which the Liberals were attacking, of course, most savagely. The hon. gentleman went on to say:
There come times in the health of the individual as in that of a nation, when it is necessary that he have recourse to extraordinary means. Stimulants in times of crises are admitted by all to be not only wise but necessary.
Perhaps the hon. gentleman will admit that this is a time of crisis. Perhaps he will admit there is some international dislocation today and that therefore these measures we have in front of us, poor and attenuated as they may be, may within limits be wise and are certainly necessary. Then he went on later to say:
It has been necessary to resort during a period of disequilibrium to extraordinary methods.
That to some extent is precisely what is happening today, and I hope he will ask his colleagues to refer to those words which he spoke in 1935 and let us get on with the business of the house.


Julian Harcourt Ferguson: We have been listening to a battery of legal experts on this question. They have been exceedingly interesting. The hon. member for Stanstead made one of the greatest addresses on this subject that we have heard in this house for some time. He pointed out very strongly that this parliament should pass many of its final decisions by guidance of the judiciary of this country. When I was a little boy my father used to say to me: "We have an appointed judiciary which is far superior to the courts of the United States, where many of them are elected." From time to time we hear people remarking that our courts are for the rich and not for the poor. It little behooves this government to set any example by not seriously considering the decisions of the Canadian courts, particularly the courts of appeal, when a court of appeal holds that there is no state of emergency.


Stuart Sinclair Garson: They all did not hold that.


Julian Harcourt Ferguson: Not as a member of parliament, but as a member of this house, and a representative of the people as well as the members of the legal profession, the labouring man, the grocer, the merchant or people of any other walk of life, I say that before we put a steam roller through the laws of this country, or a rubber stamp on those laws, simply because we belong to a party, we should reflect on what we do. As members of parliament and representatives of the

Transitional Measures Act people, we should reflect on the fact that an appeal court of Canada, comprised of men of substance and men whom we all hold in the highest regard, have stated that in their opinion there is no state of emergency. Let us not for one moment say that because we are the parliament of Canada we have a right over all the people, including appeal courts.
So far as getting on with the business of this country is concerned, let me say to the members of the C.C.F. party, who say that we have been holding a filibuster, that as long as I am in this House of Commons and I have an opinion I will voice it on behalf of the people whom I represent. Irrespective of flippant laughter I shall argue whether or not legislation going through the House of Commons is beneficial to all. At no time shall I try to stir up one class of people against another, as they do. I shall fight for the workingman, but I shall also fight for the other classes in this country. It is pretty near time they did a little of that instead of trying to antagonize and advocate class legislation as they do on almost every occasion when they rise to their feet in this House of Commons. They say that the poor workingman is going to be on the street because he cannot pay more rent. What about the landlord who owns a $10,000 house and is not getting more than $12 a month for it? Let us be a little fair about this question. There is no national emergency. The C.C.F. know that, but they want this parliament to rule as they rule in Russia. That is the true story. I hope I never bring my mentality to the low ebb that they do.


Mr. Jaenicke:: I do not propose to follow the speaker who has just taken his seat. There seems to be an accepted opinion in this house that a national emergency is the only reason why this parliament can legislate in such a way as to encroach upon section 92 of the British North America Act. I do not agree with that. A national emergency may be one reason; but according to the decision of the privy council in the Canada Temperance Act case, this parliament has also power to legislate upon any matter which, as the court says, by its inherent nature is of national importance, even though the matter legislated upon may touch upon the subjects contained in section 92 of the British North America Act. I think that is the situation here at least with some of these controls that we have under consideration.
There is the matter of price controls. I maintain that this parliament has power to legislate upon price control, whether there is an emergency or not. I think we agreed with that, and I think the hon. member for Stan-stead a few moments ago agreed that we in
Canada have power to legislate upon anything we want to. However, our legislative powers are divided between the dominion and the provinces.


John Thomas Hackett: Within the constitution.


Frank Eric Jaenicke: Yes, that is right. Either we in this parliament, or the provincial legislatures, have power to legislate on price control. I do not think there is any doubt about that. Then evidence would be brought forward as to whether or not price control is a matter of provincial concern or national concern. I maintain, Mr. Chairman, that price control would be a matter of national concern because price control is unthinkable within the provinces themselves. Price control can only be enforced in an economic entity, and the whole of Canada, all the nine provinces, and ten after a week or so, are the economic entity. It is only within that economic entity that price control can be enforced. Therefore this parliament would have power to legislate upon it. Let me give an example. Recently, the supreme court held that the dairy act was ultra vires. With great respect to the majority of that court, I think the decision is wrong in law, and I think the chief justice was right in his decision, because later developments have proved it. If the decision were made now perhaps it would be made the other way.
The dairy act was enacted in order to give protection to the dairy farmers. It was a matter of price control, was it not? It was held to be ultra vires. The province of Quebec has now passed a similar law, and a very strict law I understand, in order to protect the dairy farmers of Quebec, in order to protect the price of butter in Quebec. Did it have that effect? No. The price of butter has gone down in Montreal, just as it has in Toronto and in Ottawa. Therefore, there is plain proof that the matter of price control of dairy products, the matter of price control of any other products, must rest within this dominion because the dominion as a whole is an economic entity. I suggest to you, Mr. Chairman, that as far as the law is concerned the Minister of Justice does not need to worry. I agree with him that this bill is clearly within the jurisdiction of this parliament.


Donald Methuen Fleming: There is another question on which the house will wish to have some further information. The legislation of itself does not and cannot validly create a national emergency. The committee must be concerned as well about what steps are being taken to deal with the conditions which the government asserts constitute the condition of national emergency. I do not think enough time has been spent in this debate considering that aspect of the matter.

As things now stand the government is quite prepared to ask parliament for the vesting of these special and extraordinary powers, which normally repose in the provinces, so long as any case can be made out, to satisfy the majority across the way who support the government, that a national emergency exists.
It has been very hard to get out of the government any clear definition of what these national conditions are which constitute a national emergency. I mentioned earlier that we got from the Minister of Justice just two indications; one was inflation and the other was a shortage of houses. It is quite clear that we have inflation; it is equally clear that we have a grave shortage of housing. We apparently differ as to the powers that arise in that event. But I should like to know now, Mr. Chairman, just what the government is going to do to try to cure these conditions.
Let us concern ourselves for the moment with the conditions. Tonight we have had a legal argument. I should like the government now to make quite clear what it is going to do to bring to an end the national emergency which they say exists with respect to inflation and housing. It may be opportune to give the Minister of Justice a little rest for a while this evening, and to invite the Minister of Reconstruction and Supply to give the house some enlightenment with regard to this problem. It is obvious that housing conditions have entered largely into the thinking of the government-certainly they have entered largely into the reasons they have put forward tonight in arguing for the existence of a national emergency.
Will the Minister of Reconstruction and Supply give an indication to the house as to how far the government considers the emergency in housing extends today? We know that the president of Central Mortgage and Housing Corporation said not long ago that there was an emergent shortage today to the extent of 150,000 houses. That was the purely emergent shortage. I want to know what the government is going to do with regard to that emergent shortage, whether when the 150,000 houses are built the emergency will be ended, and-


Stuart Sinclair Garson: I rise to a point of order. We are considering a resolution preceding a bill to continue certain controls which for some years now have been on the statute books. What is concerned now is the administration of these controls and not, I suggest, any of the matters to which the hon. member has been referring.


Donald Methuen Fleming: I cannot imagine anything more far-fetched than the minister's argument. Surely the only valid argument that can be put forward in support of maintaining
Transitional Measures Act rent control is that there is a shortage of housing, one which has reached critical, emergent and national proportions.
I want to know, and I think every member in the house wants to know, how long the emergency will be permitted to extend. Surely we are not going to be content simply to let the emergent condition continue, and to say that because of the existence of an emergent condition we will vest special powers in the government, or government boards. Surely it is the duty of every intelligent member of the House of Commons to seek to eliminate those conditions of shortage, and the condition of inflation. Surely that is our principal responsibility.
Before I am called upon on second reading of the bill to subscribe to giving the government special powers, I want to know what the government are going to do to cure and to eliminate the condition which they say has given rise to the existence of a condition of national emergency with respect to housing.


William Ross Macdonald: On the point of order raised by the Minister of Justice, I am of the opinion that the hon. member could ask the government how long they think the emergency is likely to last. But at this time to raise the question as to what the government is going to do about these emergencies is, I think, beyond the powers of this committee. If that were done the government would have to give its plan with respect to housing, and whatever else may come up. The question of housing comes within another department entirely.


Donald Methuen Fleming: Surely, Mr. Chairman, it is not a question of departments, simply because the Minister of Justice has introduced this bill. Surely to goodness the whole basis of the continuance of rental control is the shortage of housing. You say it is proper to discuss the question as to how long the national emergency will continue? Very well; I am very much interested in the question as *o how long the national emergency will continue. I think it is perfectly fair to ask what we are doing and what we are going to do to try to speed up the elimination of the emergency. What are we going to do? What is the government going to do? What is it going to ask parliament to do with a view to shortening the time during which the emergent condition will be permitted to continue to prevail in Canada? That is a matter of prime importance, when we are in committee of the whole on a measure of this kind.


Stuart Sinclair Garson: Speaking to the point of order -which I presume my hon. friend has been speaking to; otherwise he would be out of order-may I say it is one thing to allege a national emergency as the foundation for

Transitional Measures Act jurisdiction to pass this bill, as we are doing here, and it is another thing to take steps to cure it. When the bill comes down and the terms of it are seen, the period of time during which we are seeking these controls will be apparent. But surely, sir, we should not, certainly not at this stage, discuss the matter of housing, steel, poultry, butter, lettuce or citrus fruits-because, if we do, we will be here until Christmas.
What this measure is concerned with is the continuance, for a further period as yet undetermined but which will be disclosed when the bill is brought down, of the controls which we have had for the past several years. All of these matters to which the hon. member has referred might properly be the topic of discussion when departmental estimates are being considered. But certainly they are not properly discussed on the present occasion.


John Thomas Hackett: I think the minister will admit-


Arthur Henry Williams: Can anyone else, except a Tory, have a go in this House of Commons?


John Thomas Hackett: I think the hon. member will admit-


Arthur Henry Williams: Who has the floor?


William Ross Macdonald: I understand the hon.
member for Stanstead is about to speak to the point of order.


John Thomas Hackett: No, I was not.


William Ross Macdonald: Then I would rule that the matter of going into the question of the general policy of housing, and all the details with respect to housing, and the Central Mortgage Corporation, would not be in order at this time.


Donald Methuen Fleming: Mr. Chairman, there has been a complete misapprehension of what I was trying to do. I was not going into details with respect to the administration of Central Mortgage and Housing Corporation.
I did mention a statement by the chairman of that corporation in which he indicated the extent of the emergency which exists in housing in Canada today.
Now the minister says that when the bill comes down we will know exactly the period during which the government is asking for continuance of control. We have been told that already, with respect to rent control. They want to continue it for a year. But that is not an answer to my question. If it is said that there is a national emergency today, then I want to know what the government is doing to cure it. What is the government doing with respect to this question
[Mr. Garson. 3

of emergent conditions, and critical conditions with respect to housing?


Clarence Decatur Howe: Order.


Donald Methuen Fleming: I want to know if it is going to go on for a year. I want to know what is going to happen after that. It is perfectly proper to ask how long the emergency will last, and I am asking that question.


Some hon. Members:: Order.


Donald Methuen Fleming: "Order" -what do you mean?


Clarence Decatur Howe: The Chairman has given his ruling.


Donald Methuen Fleming: You said earlier, Mr. Chairman, it was perfectly proper to ask how long the emergency was going to last.


James Garfield Gardiner: You will find it in the bill.


Donald Methuen Fleming: I want the government to say how long the emergency will last. I am asking them, further, to tell the committee what they are doing to shorten that period of time.


Stuart Sinclair Garson: The hon. member has asked the government to say how long the emergency will last. We are legislators; we are not prophets. There is an emergency, and this is one of the means of dealing with it. I submit, as I did before, that all my hon. friend's remarks at the present time are out of order; and I would ask for a ruling to that effect.


William Ross Macdonald: I would rule that the hon. member was in order when he asked the government how long the emergency would last. Whether or not the government can answer it, or desire to answer it, is another question. I would also rule that the question as to the details of what the government is doing in respect of the emergency is not in order at this time.


Donald Methuen Fleming: I am content to leave it, Mr. Chairman, as the Minister of Justice has put it-if that is his answer-because he has said he is not prepared to hazard any conjecture whatsoever, or to give any statement to the house as to how long this emergency will last. As to my second question, which was what the government was doing about it, the minister's answer is nil. I am quite prepared to agree with that answer, that the government is doing nothing about it.


Stuart Sinclair Garson: My hon. friend knows quite well when he makes that statement that it is not a correct one because I have never said that we were doing nothing. What I did say was that my hon. friend's question was out of order.


Donald Methuen Fleming: If the government have anything to say as to just what they are doing or propose to do to eliminate or shorten this period of emergency, let them say so now. If they have nothing to say, I say to them that they are doing nothing about these emergency conditions.


Arthur Henry Williams: I have sat here all this week and listened to a torrent of words about nothing. I am about sick of all this stalling and fooling around.


An hon. Member:: By whom?


Arthur Henry Williams: Somebody across the way asks "by whom"? I do not think there is any doubt as to who is doing the fooling and the stalling. During, this week some forty hon. members have spoken on these particular questions, and thirty of them have been Tories. I do not think there is any doubt as to who is doing the stalling.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: We are the only ones who are doing any work in the house.


Arthur Henry Williams: I can understand why the members of the opposition applaud, because they are doing a most successful job of holding up the business of the house. That is just what they want to do. There has been a lot of talk about a national emergency and then somebody else would come along and split hairs about a specific emergency. If hon. members would listen even to what their own members are saying they would not stand up and make such-is it parliamentary to say "fools of themselves", Mr. Chairman?


An hon. Member:: Yes.


William Ross Macdonald: Of course that is not parliamentary.


Arthur Henry Williams: I was not quite sure, so I gladly withdraw the remark.


An hon. Member:: Let it stay.


Arthur Henry Williams: If it is not parliamentary, I am willing to withdraw it, but even here the members of the opposition want to rule differently. I am ready to obey you and withdraw it if necessary, but members of the opposition do not want that. They want it left on the record. They cannot please two groups even though they talk in that way. They like to make out that they are representing the ordinary people of this country, but you cannot serve God and mammon. Is there an emergency?


James MacKerras Macdonnell: Let us
have your contribution.


Arthur Henry Williams: I am going to quote from the contributions by their own speakers in the debate.
Transitional Measures Act


Mr. Lennard:: Now who is filibustering?


Arthur Henry Williams: Is not that senseless, to say that I am filibustering? This is the first time I have spoken this week and I have been on my feet only about four minutes.


Frank Exton Lennard: Say something then.


Donald MacInnis: Why should he? The hon. member did not.


Arthur Henry Williams: It is difficult to say anything after having listened so long to so little, in fact to nothing. There is a tendency to follow the same habits.


Mr. Murphy:: If you cannot read it, spell it.


Arthur Henry Williams: Is there an emergency? Let us listen to the words of the hon. member for Davenport uttered on March 14 and reported on page 1463 of Hansard. I quote: Now I want to say a word about our own mayor of Toronto, who has done a good job and wants to help all he can. I am sure if the minister made contact with him he would find that Mayor Hiram McCallum would be happy to help in any way possible. He is in despair today because he is right up against it. I used to go home every week end, but now I can only stand to go home every three weeks. When I get home there is too much pressure of all sorts, especially in connection with housing.


William Ross Macdonald: Do I understand that the hon. member is reading from another debate?


Stanley Howard Knowles: This debate.


Mr. Coldwell:: When the Speaker was in the chair.


William Ross Macdonald: If it was during the present debate, it is in order.


An hon. Member:: Go on.


Stanley Howard Knowles: Does it not sound relevant?


William Ross Macdonald: The hon. member should continue.


Harold Aberdeen Watson Timmins: These remarks were made yesterday when we were dealing with another matter.


An hon. Member:: Go on.


William Ross Macdonald: Is the hon. member quoting from the debate of yesterday?


An hon. Member:: No.


Arthur Henry Williams: They know that I am not.


An hon. Member:: Proceed.


An hon. Member:: Do not listen to them.


Arthur Henry Williams: The hon. member for Davenport went on to say:
I am too soft-hearted: I cannot stand the tears of the women when they ask me to help them out.
The hon. member then went on to quote the Toronto Evening Telegram. Here is an hon. member who is so disturbed about hous-
16P4

Transitional Measures Act ing that, in his own words, he does not like to go home as frequently as perhaps he should because of the pressure that is put on him. And the hon. member for Eglinton asks if there is a national emergency. If that is not sufficient, perhaps I should read from the statement of the hon. member for Rosedale, as reported on page 1535 of Hansard. I quote:
The reason that we have this housing shortage, in this peculiarly acute form, is that hundreds of thousands of our young men were overseas at a time when they might have been acquiring some sort of a house in this country. When they came back no houses were available. They had all been taken by people who had moved into the cities, or by the natural growth of the population. There were no houses for them, and we have not yet begun to fill up that gap; therefore we have a national emergency-


Mr.   Chairman-Mr. Hazen@: Finish the sentence.


Arthur Henry Williams: The concluding words are:
-arising out of the war, and it is housing.
That is the complete sentence. The hon. member for Rosedale says we have a national emergency arising out of the war, and it is in connection with housing. Then the hon. member for Eglinton gets up and asks, is there a national emergency? Why don't they get together and decide what they are going to say in the house? Actually they are not in the house just now to promote the wellbeing of any particular section except one which they particularly like to represent, namely big interests; and they are determined to put every obstacle in the way of all other hon. members trying to do business. Even after all their filibustering-


Harry Rutherford Jackman: I rise on a question of privilege, Mr. Chairman, of which I think you are as well aware as I am. I believe the hon. gentleman made some reference to the fact that the hon. member for Eglinton and myself were interested in protecting certain specific interests, which was a reflection upon us. Would you kindly ask him to withdraw the remark?


William Ross Macdonald: I understood the hon. member for Ontario to refer to hon. members generally in that part of the house. I do not think he referred to anyone specifically.


Harry Rutherford Jackman: Yes, he did.


Arthur Henry Williams: I quoted from Hansard what was said in this house by the hon. member for Eglinton and his colleague the hon. member for Rosedale. My concluding remark was to the effect that these Tories in the house-[DOT] not any particular two or one-should get together and decide what they want to say.


Harry Rutherford Jackman: There is no question at all about what the hon. gentleman said. He 
stated that my colleague and myself represented only big interests, I think the term was, or something like that. He was very specific in regard to the two members and also in regard to the interests they represent. I would ask you to request him to withdraw the remark.


William Ross Macdonald: The hon. member for
Ontario has stated definitely that he did not say what has been alleged by the hon. member for Rosedale. His last remark was that his statement applied to a certain party in the house; and I am not asking him to withdraw.


Harry Rutherford Jackman: In that case we will have to let it go until tomorrow, when Hansard will be available; but my recollection is very clear.


John Thomas Hackett: Mr. Chairman, we have had some question-


Some hon. Members:: Order.


William Ross Macdonald: I understood the hon. member for Ontario had concluded his remarks.


Arthur Henry Williams: No, not quite.


Donald Methuen Fleming: Carry on the filibuster a while longer.


Arthur Henry Williams: The only other observation I want to make in this debate is that I am as interested as any hon. member of this house in finding out what the bill contains. I am not prepared to indulge in a lot of shadowboxing at this stage. All that is asked in the resolution now before us is that we permit the introduction of that bill. When we come to second reading, if things are not in it that we think should be in it or things are in it that we thin]; should not be there, I believe that is the appropriate time to really criticize. But until we have the bill before us we are simply flogging a dead horse in carrying on this debate, which is precisely what my hon. friends to my right have been doing all week. Though we have only another hour to sit this week I do hope we may conduct ourselves as the people of the country expect this parliament to be conducted, and permit the bill to be introduced.


John Thomas Hackett: I do not think the Minister of Justice questions the fact that we are dealing with a matter which affects the constitution. He has stated in clear terms that the validity of the legislation to be founded upon this resolution depends upon the existence of an emergency. Here may I say that I was not speaking about an emergency in the interesting passage read to the committee a short time ago by the hon. member for Winnipeg North. He read from a speech I made in this house some years ago, when possibly my hair was more abundant and possibly not quite as white as it is

today. As the record shows, I was talking about the Natural Products Marketing Act, which was based not upon an emergency but, as the minister well knows, upon concurrent legislation in all the provinces, and upon the theory that this legislation of the nine provinces empowered this parliament to enact legislation it might not otherwise enact. On that issue, which was as remote from the question of an emergency as a camp meeting is from a beer garden, I expressed certain views, not one word of which I desire to retract at this time. What I said had no bearing upon the question of an emergency. As a distinguished member of the legal profession, Mr. Chairman, you will recollect that this matter of the constitutionality of the Natural Products Marketing Act went first to the Supreme Court of Canada and then to the privy council. There the legislation was held to be unfounded, not because there was no emergency-because emergency was not invoked as its basis-but because the provinces had not the power to enact legislation giving jurisdiction to this parliament.
I think it well to bring these matters to the attention of the committee, and even to the attention of the hon. member for Ontario. May I remind him that we have a constitution. We pride ourselves upon respecting it. We know that our liberties and the very essence of our well-being depend upon respect for the constitution. If there be no emergency, as the Minister of Justice admits, this parliament has no competency to pass the anticipated legislation.
Now I want to say just one word about the attitude of hon. gentlemen to my left and across the way who are sometimes pleased to call us Tories. What people are called does not matter very much. If the name be disrespectful, it may reflect upon the upbringing and good taste of them who use the language; but I have no complaint on that score. This is a serious question which goes to the very wellsprings of our national existence. If it be competent to this parliament to enact legislation of this kind in the absence of a national emergency, then Canada ceases to be a confederation and becomes a unitary state. I think we will all concede that the provinces would not have come into confederation, we would not have come into existence as a nation, otherwise than on the basis of confederation, with distinct rights, privileges and powers reserved to the separate entities, the provinces, that went to make it up. I hope I can discuss this matter quite dispassionately. I am willing to assume that every hon. gentleman in this house is interested in arriving at a conclusion which will respect the constitution.
Transitional Measures Act
There are a number of gentlemen on this side of the house, some of whom have spent a life that is beginning to be long, in the pursuit of the law. They are not infallible; but some people think they know something about their profession. They are putting forward a point of view that the Minister of Justice, although opposed to it, does not consider either futile or time-wasting. I think we shall make better progress and arrive at a saner and safer conclusion if gentlemen are permitted to express their views amid that attention which is characteristic of a deliberative legislative body.
The question is one of major importance. To style this discussion a waste of time is an expression of petulance or possibly, if one wished to be extremely kind, is a failure to understand all that is at issue. There has been criticism of those who have but put forward a point of view which has found repeated expression in the courts. Some people talk very lightly of the courts. Under the Canadian system of government, which is the system of the rule of law, Canadians depend upon the courts as the final arbiter, as the great check upon the legislative and administrative branches of government. The case in which the legislation was enacted, on which I was speaking when I uttered the passage quoted by the member for Winnipeg North (Mr. Stewart), referred in no way to a national emergency. Consequently, the passage that he read has no bearing upon this present issue. I have asked the hon. minister to point to those conditions which create the national emergency which will justify the legislation.
The hon. member for Montmagny-L'Islet (Mr. Lesage) has discussed the question in a very interesting way. Nevertheless, all of the judges of the court of appeal of Manitoba arrived at a unanimous decision that the law based upon an emergency was defective for lack of power. It is quite true that at least one of them did not find it necessary to pass upon the question of an emergency because the law was found invalid for other reasons. Nevertheless, it was not said that there was no emergency. At least two of the judges found in terms most categorical that there was no national emergency. We have the finding of the trial judge and we have the unanimous finding of the court of appeal confirming that judgment, with at least two, if not three, of the members of that bench finding that there was no emergency. That being the case, it seems to me-


James Garfield Gardiner: May I ask a question?


John Thomas Hackett: Certainly.


James Garfield Gardiner: Would my hon. friend agree that there was no feed grain emergency in the
1686	HOUSE OF
Transitional Measures Act area of the province of Quebec from which he comes or in the province of Ontario in 1946?


John Thomas Hackett: I am stating that there was no national emergency. We find, Mr. Chairman, that there crop up every now and then difficulties in the life of a nation, as there are difficulties in the life of an individual; but we are asked-


Mr. Mitchell:: Could I ask my hon. friend a question?


John Thomas Hackett: Just a moment. We are now asked to suspend the constitution. The constitution is the agreement under which the provinces came together and under which we undertook to work out our difficulties and destiny; under which we undertook to colonize, civilize and redeem from the wilderness the vast areas of the northern sectors of this continent. I submit that a local difficulty is not sufficient to suspend that agreement-not sufficient to suspend the operation of the constitution.
Now, my friend may ask his question, and I thank him for waiting.


Humphrey Mitchell: My friend has given a very Seamed dissertation on the constitution. I want to ask him this simple question-one of the questioners requested a prophecy and I believe the Minister of Justice said he was not a prophet-


Donald Methuen Fleming: It was the Minister of Agriculture who said that.


Humphrey Mitchell: Just you keep quiet. I want to say this to my hon. friend. If wind could solve problems, there would not be any problems at all. I should like to ask this very simple question: Does the hon. member not think there would be an emergency if rent control fell by the wayside at the end of this month?


John Thomas Hackett: If my hon. friend asks for a personal opinion, I am willing to give it, but I say that at the present time that is not the question before us.


Some hon. Members:: What is the question?


John Thomas Hackett: If we are asked to declare that there is a national emergency which warrants the suspension of the constitution, my opinion for what it is worth, based upon such examination as I have been able to make of the facts and of the case law, is that there is not such an emergency.


Humphrey Mitchell: I should like to tell the hon. member that this government is charged with the safety of the state. No doubt my learned friend is in the very fortunate position of owning a home and all the things necessary 

to make that home possible. I think he will agree with me that he would shudder to think what would happen in his home city of Montreal if rent control fell by the wayside. This is a practical problem and, in my judgment in simple English, it is a grave emergency facing this country.


John Thomas Hackett: The hon. gentleman has put his question fairly. My answer is this. If he feels there is something of such a nature so definite and dire that it requires the suspension of the constitution, then let him introduce ah act setting forth the situation and we will weigh it carefully and deal with it in consequence. It could then be debated here. Instead of that the government is offering an omnibus bill empowering it to carry on under arbitrary powers with a suspended constitution. It is attempting to perpetuate a type of administration which is a denial of the constitution and a denial of all the rights that are reserved both to individuals and to provinces.


Stuart Sinclair Garson: I wonder if the hon. gentleman will permit a question?


John Thomas Hackett: Certainly.


Stuart Sinclair Garson: Would the hon. member agree with his own leader that the judgment in the Manitoba case to which he has been referring does not go so far as to declare that the transitional powers act is ultra vires?


John Thomas Hackett: I do not think that judgment had to go as far as that. I am suggesting here that the judgment said, among other things, that there was no power under the emergency transitional powers act to pass a certain order in council which permitted the government to take over Nolan's grain. That is the holding of the court. The court furthermore held that, there being no emergency, there was no power in the government to do what it had done. I am not at the moment going to argue, and I am not obliged to argue, that the act itself is invalid. But the order in council was invalid. I reiterate this suggestion. If hon. gentlemen feel that there is a certain condition which requires remedial legislation, let us deal with that situation. But do not ask us to pass an act which empowers the federal cabinet to occupy the whole field of legislation without regard to provincial and civil rights.


Ernest George Hansell: I too am one of those members who have sat in the house for some considerable time listening to this debate.


Stanley Howard Knowles: How are your knees?


Ernest George Hansell: With these Senate documents under my desk, my knees get sore. Before I say what I intend to say, I want to set the

minds of hon. members at rest with respect to the way in which I shall vote. I intend to vote for the measure, because I do not oppose the measure itself at this particular time of the country's history. I rise, however, in protest against those who are expressing themselves as desirous of getting on with the business of this house. That statement may sound rather paradoxical. I listened to one gentleman on the government side of the house tonight while he spent ten or fifteen minutes talking about a filibuster. I heard another gentleman on this side of the house quote from Hansard; and he was obliged to brush the dust from its pages when he turned away back so many years to pit the Tories against the Liberals and the Liberals against the Tories. I heard another gentleman who followed him give quite a dissertation, the theme of which was: let us get on with the business of the house. I suggest that the person who makes the remark "let us get on with the business of the house" is always in favour of the motion.
What is the business of the house? It is just as much the business of this house to prevent legislation from going through as it is to put it through. If a member or a party is vigorously and conscientiously opposed to a measure, and likewise if the government is as vigorous and conscientious in its desire for a measure to be passed, will you please tell me what conceivable method there is at the disposal of those who oppose the measure to prevent it from being passed? What conceivable method is there? I am not surprised at filibusters. Perhaps we should have more of them. I say that it is perfectly within the right of members of parliament to talk to their hearts' content on any measure that comes before us. I say that members of parliament are elected to this House of Commons to talk. There are only two things you can do when you sit in the chamber. You can either talk or keep silent. That is all there is to do. If you were not sent here to talk, what on earth were you sent here to do?


An hon. Member:: Listen.


Ernest George Hansell: I would say this to hon. members. Just go back to your constituencies, bid for the votes of your people, tell them, "If you vote for me I will go into the House of Commons; I will sit in my chair and I will never say a word." Tell them that, and see how far you will get.
With that in mind I simply say this. Every member in this house has a right to unburden his soul with respect to any measure that places a burden on it. Having said that, I am prepared to vote right now. But if anybody
Transitional Measures Act wants to talk, I am not prepared to say that he should not do so.


Donald MacInnis: For the last little while the debate, in my opinion, has not had much to do with the subject matter which is before us; and I hope that you will pardon me, Mr. Chairman, if I just continue in that strain for a moment. I do not agree with the hon. member for Macleod that members are sent to this house just to talk. Members are sent to this house to express their views on certain questions-as a matter of fact, on any question that may arise. But after they have presented their views, in my opinion they should not undertake to present the same views half a dozen times. The house has heard them once. We are sent here to enact legislation which may be beneficial to the people who sent us here. We may differ as to what the legislation is. When I rose to speak I was going to say that there is no man in this house to whom I like to listen more than I do to the hon. member for Stanstead. He was out of the chamber when I rose to speak, but I see that he is back now. I like to listen to his reasoned statements, whether I can agree with them or not.
I do not agree with what he said tonight that this is merely a matter of law. The law is important, but there can be no law until this parliament acts first. This parliament must pass the law. Then if some person is not satisfied with it, he can take it to the courts, and the courts will deal with it. But if this parliament is prevented from doing anything-and it very well may be prevented -there will be no use going to the courts after March 27 to find out if rent control is legal or illegal, because there will be no rent control. That is the question with which we are confronted at the moment.
Let me put it this way. The House of Commons is composed of a government and an opposition. The government, because it has the majority, is charged with the administration of the affairs of this country:	That
being the case, we have no right as an opposition, after we have stated our case, to prevent the government from doing what it considers right to do. We have a right to present our case as vigorously as we can. Then we should leave the matter to a vote of the house. But we have no moral right, in my opinion, to stand up here day after day and hold up the work that we were sent here to do for the people of Canada. We often in this house refer to the mother of parliaments. If this bill came before the house at Westminster, so many days would be allotted to debating it. After that was over, a vote would be taken.
I maintain that in a certain traditional and legal sense the opposition has the right to

Transitional Measures Act hold up the business of the house as long as we are foolish enough to hold it up. But in the rules of the house there is a provision to shut off debate. In the nineteen years I have been here I have never seen it invoked except on one occasion. The reason for that is that governments do not want to be put in the position where they have to choke off debate. However, a time will come when one of two things must be done. Either the government will have to apply closure or it will have to allow its legislation to lapse because it cannot get it through the house. If that is what my hon. friends want, it is their business of course, and they can settle it with the country.


William Ross Macdonald: Shall I report the resolution?


John Thomas Hackett: On division.


William Ross Macdonald: At this time I should like to make a statement with respect to the discussion that took place earlier today. I have looked into the question of quoting Senate debates on the floor of the House of Commons and I am now prepared to make a statement.
It is forbidden in the United Kingdom parliament to refer to debates in the House of Lords, which in turn does not allow reference to the debates of the House of Commons. We have no standing order on this rule of debate but the decisions of our Speakers and Deputy Speakers are unanimous in accepting the practice followed in the United Kingdom. The main object of this practice seems to be to prevent members of one house from answering members of the other house, thus bringing about a joint debate between the Senate and the House of Commons.
Is the rule so rigid that it prevents members from quoting under any circumstances extracts from debates which took place in the distant past or does it apply only to speeches recently delivered in the Senate? A reasonable view has to be taken in this matter. Our authorities make no distinction between the dates on which the speeches were delivered, but in the United Kingdom the rule applies only to recent speeches. On December 16, 1902, when Sir William Har-court attempted to quote a speech delivered by a minister in the House of Lords, he was stopped by Mr. Speaker Court-Gully, who said:
Order, order! The right honourable gentleman began oy saying he would read a speech made in the House of Lords. I must remind him that it is not in order to quote from recent debates in the house. I have no doubt that the right honourable gentleman will be able to state what he understands to be the views of the government as expressed in the House of Lords without quoting the speeches.


I suggest that we ought to follow the same practice as at Westminster.
The great difficulty is to decide what may be called a recent debate in the Senate. As to the current session there can be no doubt; but how far back must a speech have been delivered for it to be considered old enough to be allowed to be quoted in the House of Commons? This ought to be decided according to circumstances.
If the House of Commons is considering a measure passed in the Senate a few years ago and likely to come up again during the current session, it seems to me that, in such a case, if members of this house quoted the debates of the Senate, they might start an unpleasant controversy between the two houses. But I see no reason to debar members from quoting parts of speeches delivered in the Senate many years ago on questions which do not then call for an immediate decision of the house. What we want to avoid is a discussion between the two houses of parliament. There is nothing better calculated to bring a conflict between the Senate and the Commons than having members of the one attacking the members of the other on the floors of their respective chambers.
Resolution reported, read the second time and concurred in. Mr. Garson thereupon moved for leave to introduce Bill No. 86, to amend the Continuation of Transitional Measures Act, 1947.
Motion agreed to and bill read the first time.



AGRICULTURAL PRODUCTS ACT


[Stage Direction]
The house resumed from Friday, February 11, consideration of the motion of Mr. Gardiner that the house go into committee to consider the following resolution:
That it is expedient to present a bill to amend the Agricultural Products Act to extend the operation of the act for a period of one year.
George Randolph Pearkes: 
James Garfield Gardiner: I do not want to interrupt the hon. member because it is getting near to closing time, but a few moments ago he said that we had lost our egg market to Hungary. I think he intended to say our market for poultry products because our egg market in Britain is still forty-six times as high as it was in the year before the war.


George Randolph Pearkes: I meant our poultry market;
I may have made a slip there. I was pointing out that the poultrymen of British Columbia are questioning whether a continuation of this legislation will give them the security that they need. They feel that this type of legislation leaves everything in the hands of the Minister of Agriculture. They have repeatedly asked that a marketing board be set up upon which those closely in touch with the producer side of things would be largely represented, instead of leaving it all in the hands of some official who is acting as selling agent but who perhaps would not give the same consideration to the maintenance of markets as would be given by those actively engaged in the production of poultry products.

We have heard that the loss of markets is due to the shortage of dollars, but I have heard many farmers on Vancouver island ask whether it is a shortage of dollars or a shortage of foresight. They feel that no one man could possibly take such a broad view of things as would a group of men who were active producers.


James Garfield Gardiner: We have a committee of sixteen that advises on these matters, nine members of which are recommended by the Canadian Federation of Agriculture.


George Randolph Pearkes: I am simply saying that the feeling is prevalent among the farmers on Vancouver island, even though half of the members of that committee are producers, that they have not authority to control their own marketing. This brings me to a close. I simply wanted to place before the minister the feeling of uncertainty which I know does exist among the poultrymen of Vancouver island. They are perturbed about the loss of markets and the threat which they feel exists to the continuity of their business.
On motion of Mr. Bentley the debate was adjourned.



BUSINESS OF THE HOUSE

Mr. Harris (Danforih):: Will the Prime Minister indicate the business for Monday?


Louis Stephen St-Laurent: We will proceed with the second reading of the bill to amend the Foreign Exchange Control Act and the bill to extend the emergency powers. We will then return to a discussion of the resolution standing in the name of the Minister of Agriculture. If we dispose of those three items, the next will be the resolution standing in the name of the Minister of Trade and Commerce with respect to the Canadian Commercial Corporation.


Stanley Howard Knowles: The foreign exchange control bill will be the first?


Louis Stephen St-Laurent: The present intention is
to proceed first with that bill because it was the first one to receive first reading.
At ten-thirty the house adjourned, without question put, pursuant to the order of the house passed on March 14, 1949.

North Atlantic Treaty



APPENDIX

[Stage Direction]
(See page 1605 this issue)
North Atlantic Treaty Proposed for Signature During the First Week in April, 1949
Preamble
The parties to this treaty reaffirm their faith in the purposes and principles of the charter of the United Nations and their desire to live in peace with all peoples and all governments.
They are determined to safeguard the freedom, common heritage and civilization of their peoples, founded on the principles of democracy, individual liberty and the rule of law.
They seek to promote stability and wellbeing in the north Atlantic area.
They are resolved to unite their efforts for collective defence and for the preservation of peace and security.
They therefore agree to this North Atlantic treaty:
Article 1
The parties undertake, as set forth in the charter of the United Nations, to settle any international disputes in which they may be involved by peaceful means in such a manner that international peace and security, and justice, are not endangered, and to refrain in their international relations from the threat or use of force in any manner inconsistent with the purposes of the United Nations.
Article 2
The parties will contribute toward the further development of peaceful and friendly international relations by strengthening their free institutions, by bringing about a better understanding of the principles upon which these institutions are founded, and by promoting conditions of stability and well-being. They will seek to eliminate conflict in their international economic policies and will encourage economic collaboration between any or all of them.
Article 3
In order more effectively to achieve the objectives of this treaty, the parties, separately and jointly, by means of continuous and effective self-help and mutual aid, will
maintain and develop their individual and collective capacity to resist armed attack.
Article 4
The parties will consult together whenever, in the opinion of any of them, the territorial integrity, political independence or security of any of the parties is threatened.
Article 5
The parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all; and consequently they agree that, if such an armed attack occurs, each of them, in exercise of the right of individual or collective self-defence recognized by article 51 of the charter of the United Nations, will assist the party or parties so attacked by taking forthwith, individually and in concert with the other parties, such action as it deems necessary, including the use of armed force, to restore and maintain the security of the north Atlantic area.
Any such armed attack and all measures taken as a result thereof shall immediately be reported to the security council. Such measures shall be terminated when the security council has taken the measures necessary to restore and maintain international peace and security.
Article 6
For the purpose of article 5 an armed attack on one or more of the parties is deemed to include an armed attack on the territory of any of the parties in Europe or North America, on the Algerian departments of France, on the occupation forces of any party in Europe, on the islands under the jurisdiction of any party in the north Atlantic area north of the Tropic of Cancer or on the vessels or aircraft in this area of any of the parties.
Article 7
This treaty does not affect, and shall not be interpreted as affecting, in any way the rights and obligations under the charter of
[Stage Direction]
North Atlantic Treaty
the parties which are members of the United Nations, or the primary responsibility of the security council for the maintenance of international peace and security.
Article 8
Each party declares that none of the international engagements now in force between it and any other of the parties or any third state is in conflict with the provisions of this treaty, and undertakes not to enter into any international engagement in conflict with this treaty.
Article 9
The parties hereby establish a council, on which each of them shall be represented, to consider matters concerning the implementation of this treaty. The council shall be so organized as to be able to meet promptly at any time. The council shall set up such subsidiary bodies as may be necessary; in particular it shall establish immediately a defence committee which shall recommend measures for the implementation of articles 3 and 5.
Article 10
The parties may, by unanimous agreement, invite any other European state in a position to further the principles of this treaty and to contribute to the security of the north Atlantic area to accede to this treaty. Any state so invited may become a party to the treaty by depositing its instrument of accession with the government of the United States of America. The government of the United States of America will inform each of the parties of the deposit of each such instrument of accession.
Article 11
This treaty shall be ratified and its provisions carried out by the parties in accordance with their respective constitutional processes. The instruments of ratification shall be
deposited as soon as possible with the government of the United States of America, which will notify all the other signatories of each deposit. The treaty shall enter into force between the states which have ratified it as soon as the ratifications of the majority of the signatories, including the ratifications of Belgium, Canada, France, Luxembourg, The Netherlands, the United Kingdom and the United States, have been deposited and shall come into effect with respect to other states on the date of the deposit of their ratifications.
Article 12
After the treaty has been in force for ten years, or at any time thereafter, the parties shall, if any of them so requests, consult together for the purpose of reviewing the treaty, having regard for the factors then affecting peace and security in the north Atlantic area, including the development of universal as well as regional arrangements under the charter of the United Nations for the maintenance of international peace and security.
Article 13
After the treaty has been in force for twenty years, any party may cease to be a party one year after its notice of denunciation has been given to the government of the United States of America, which will inform the governments of the other parties of the deposit of each notice of denunciation.
Article 14
This treaty, of which the English and French texts are equally authentic, shall be deposited in the archives of the government of the United States of America. Duly certified copies thereof will be transmitted by that government to the governments of the other signatories.
In witness whereof, the undersigned plenipotentiaries have signed this treaty. Done at Washington, the	day of April, 1949.
[Stage Direction]
Monday, March 21, 1949