1949-12-06

Mr. James Sinclair (Coasl-Capilano):: Mr. Speaker, I rise to say a few words on a question of privilege. Hon. members will have read in the newspapers of the extensive floods in British Columbia last week, mainly in my riding in the districts of West and North Vancouver. Now that these floods have more or less subsided I know those people would want me to express in parliament their appreciation of the great work which was done by the army, both reserve and permanent forces, in British Columbia at that time. The 6th field company of the reserve army responded immediately, and were soon followed by the engineers from the permanent force camp at Chilliwack, who built three Bailey bridges and restored communications. As at the time of the Fraser valley floods, the people of British Columbia again are appreciative of the great value of such a body of trained and skilled men in a time of local disaster.



INTERNATIONAL LIVESTOCK SHOW


Mr. H. O. White (Middlesex East):: Saturday's issue of the London Free Press carried the story of the winning of championships in the sheep classes by Charles J. Shore, a neighbour of mine at Glanworth, in Middlesex county. Two Holstein breeders, Archie Rath and R. M. Berry, also from the county of Middlesex, have set world records in milk production; and fifty-six other Canadians won top honours at the show in Chicago. These men have brought great honour to Canada and to the areas in which they reside.



POTATOES


Mr. Daniel Mclvor (Fort William):: Mr. Speaker, I should like to announce to the house and to all prospective potato growers that a farmer in the Fort William district
raised 733 bushels of potatoes to the acre. So we have more than bush and rock in Fort William.



SUPPLEMENTARY ESTIMATES, 1949-50

[Stage Direction]
A message from His Excellency the Governor General transmitting further supplementary estimates for the financial year ending March 31, 1950, was presented by Hon. Douglas Abbott (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.


[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver-Quadra):: Press dispatches indicate that a statement has been made before an investigating committee in the United States to the effect that Canada had supplied uranium to the Soviet. Is the Secretary of State for External Affairs in a position to make a statement with respect to these dispatches?


Hon. L. B. Pearson (Secretary of Slate for External Affairs):: Mr. Speaker, I have seen these somewhat sensational stories from which equally sensational and, I am sure, unfounded implications have been drawn in certain quarters. The matters with which these stories deal are more particularly the concern and within the knowledge of my colleague the Minister of Trade and Commerce (Mr. Howe), who dealt with them during the war when the incident is supposed to have occurred. I would prefer to say nothing more now; I shall consult the Minister of Trade and Commerce on his return tomorrow, and possibly a statement could be made at that time.


Mr. J. G. Diefenbaker (Lake Centre):: should like to direct a supplementary question to the Minister of Trade and Commerce. Two years ago the Minister of Trade and Commerce undertook to table the investigator's report in the Eldorado investigation. I would suggest that that be brought to the minister's attention, with a view to having it tabled because of its particular interest at the moment, having regard to the evidence that is being given in Washington.

Inquiries of the Ministry TRADE WITH BRITAIN



QUESTION AS TO FUTURE MARKET FOR CANADIAN WHEAT

[Stage Direction]
On the orders of the day:
Mr. P. E. Wrighi (Melforl):: In view of the optimistic report to parliament given by the Minister of Trade and Commerce with respect to our trade, and in view of the statement of the Minister of Agriculture at a board of trade banquet in Brantford yesterday, as reported this morning in the Globe and Mail, does the Minister of Trade and Commerce agree that an attempt is being made to drive Canadian wheat from the British market, and that upon the termination of our present contracts the British market will be lost?


Right Hon. J. G. Gardiner (Minister of Agriculture):: I suggest to the hon. gentleman that he read the Canadian Press report in the Citizen instead of the one in the Globe and Mail. The former is more nearly correct.


Percy Ellis Wright: I have seen the statement in the Citizen, and it checks closely with the one in the Globe and Mail. Did the Minister of Agriculture clear his speech with the Minister of Trade and Commerce before he made it?


James Garfield Gardiner: I suggest to my hon. friend that he read both reports again, because they do not check even closely. I read both of them this morning, and you would not think they were from the same reporter at all; but 1 happen to know they are, because I handed him the document.



QUESTION AS TO BRITISH PREFERENTIAL TARIFF

Mr. T. L. Church (Broadview):: I should like to ask the Prime Minister a question. Does the speech of the Minister of Agriculture represent government policy, in view of what preferential trade with Britain has meant to the people of this country?


Right Hon. L. S. St. Laurent (Prime Minister):: I do not know what speech of the Minister of Agriculture the hon. member for Broadview is referring to.



STEAMSHIP SERVICES


[Stage Direction]
On the orders of the day:
Mr. H. H. Hatfield (Victoria-Carleton):: Will
the Minister of Transport state whether Canadian National Railways or the federal government is considering the inauguration of a car ferry service between Yarmouth, Nova Scotia, and Rockland, Maine, or Boston?
[Mr. Diefenbaker.l


Hon. Lionel Chevrier (Minister of Transport):: This matter has been under active consideration by the government, and a statement will be made in the course of the next few days. I believe I should say that the decision is in favour of the operation of a car ferry from Yarmouth, in the province of Nova Scotia, to a point in the state of Maine.



CUSTOMS TARIFF


Hon. J. J. McCann (for the Minister of Finance) moved: the second reading of Bill No. 221, an act to amend the Customs Tariff.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Dion in the chair.
On section 1-Schedule C amended.
Mr. Fleming:: I should like to ask why it is not possible to enumerate the particular classes to which the amendment is applied, instead of putting it in the form in which we have it in tariff items 1215 and 1216, namely, an exemption from the provisions of these items by regulation of the governor in council in any particular case or class of cases.
The explanatory note gives a number of examples to which the proposed amendment is intended to apply, such as automobiles acquired by Canadians returning to Canada, and so forth. If this purports to be a complete enumeration of the classes of cases to which it is intended the amendment shall apply, why could we not have the classes set out in items 1215 and 1216 instead of clothing the governor in council with the power to make exemptions?


James Joseph McCann: There is no great uniformity in the cases that will come up for consideration with reference to import into Canada of used cars or used aircraft. There are now 170 applications before the customs department, including 129 passenger cars, 24 trucks, 4 buses, a motorcycle and an ambulance. The reasons for the applications are many and varied. Some of them might be called distress cases, others compassionate cases, still others are for business reasons.
The applications as to 48 of the cars and trucks indicate that they were for gifts to Canadians from friends or relatives in the United States. Thirty-eight were from relatives, and of these, thirty-five were from immediate relatives-that is, father, mother, brother, son or daughter. Gifts of used cars by friends totalled 10; of these, three were donations to religious workers in

Canada-gifts from religious groups or orders to Canadian evangelistic or religious orders, the parent body of which was in the United States.
There are also a number of cases of gifts from immediate relatives where the prohibition is particularly harsh. For instance, an American girl whose health has been poor married a Canadian. Her father wishes to give her one of the two family cars to facilitate her transportation and that of her family. Another case concerns a brother whose sister and her husband operate a small store. The brother is a successful businessman in the United States, and he wishes to donate a small truck.
A number of cases which should receive favourable consideration have to do with students. Twenty-three of the applications were from students who are taking postgraduate or specialized courses, and who resided in a foreign country for one to three years. Several of them were operating on D.V.A. subsidies, and they wish to have the car to save travelling expenses in moving their families, and to keep it for use in Canada.
Some real cases of hardship were created by the prohibition. The department's only alternative was to permit temporary entry into Canada which would be on a six months' permit. This meant that at the end of that time the car had to be exported and sold, causing great inconvenience and financial loss.
With regard to workers, nineteen workers who had obtained employment in the United States bought cars to transport them back and forth to work. They wished to bring them into Canada for reasons similar to those given by the students. The difference between these two classes is largely in the length of time the person was in the foreign country, the student being bound to at least one year, while the worker may stay for a period of only one month.
There is also the problem of tourists. Eight Canadian tourists who had acquired cars while visiting other countries wish to bring the cars back with them. The practice of buying a car in England for the purpose of touring the United Kingdom and Europe has been growing, and will probably become a greater attraction because of the devaluation of the pound. A problem arises when a Canadian purchases a car abroad and returns to Canada the next year. Such a car, having been manufactured prior to the year of importation, is therefore prohibited entry.
Customs Tariff
I could go on and enumerate many cases of distress. Take the matter of school busses. Every hon. member knows that the consolidation of schools necessitates the use of busses in a large number of rural areas. Some of these communities are not in a financial position to purchase new busses, but they can get used busses in the United States at a reasonable price, and thus give service to the community and to the school section at considerably less cost.
With reference to the importation of used aircraft and cars, it should be understood that the normal rate of duty still applies, and an appraisal value is put upon the used vehicle by the appraisers of the customs department.
One cannot set up a standard or uniform basis on which these vehicles will be allowed entry into this country; the cases must be considered on their individual merits. It is for this reason that we ask the house to give the minister and his officials the power to make application to the governor in council to permit entry of such vehicles in particular cases.


Donald Methuen Fleming: Undoubtedly the minister has made out a case for entry of the vehicles of the kinds he has mentioned and in the circumstances to which he has referred. The concern of the committee must be with the way in which it is proposed to meet the situation, namely, by giving power to the governor in council to promulgate regulations in particular cases or classes of cases. From the concluding remarks of the minister I gather that the department has given consideration to the possibility of enumerating the classes of cases in items 1215 and 1216, and has found it impossible to make an effective or exhaustive enumeration. This leads one to the conclusion that most of the cases are to be handled by individual orders in council rather than by regulations applying to classes of cases. To the end that there may be some measure of parliamentary control, I think we should ask the minister whether reports will be made to the house on the cases in which the power conferred by this bill is exercised.


Louis Stephen St-Laurent: The hon. member will recall that the government has undertaken to file summaries of all the orders in council. That undertaking was accompanied by the statement that after the summary was filed, if more of these orders were requested, they would be tabled. Therefore in the statements tabled from time to time there will be a summary of all the orders in council, including such as may be passed under this act. If any of these are requested, they can be tabled.
2762

Customs Tariff


Donald Methuen Fleming: I thank the Prime Minister for his explanation. Will the regulations promulgated under this legislation be segregated in such a way that they can be identified in the list of the orders in council the Prime Minister may be submitting to the house? .


Louis Stephen St-Laurent: Yes. In the summary there is an indication of what the order refers to.


James Joseph McCann: During the war years this provision was in effect under the War Measures Act. When the War Measures Act lapsed, we no longer had the authority. Since then there have been so many requests with respect to cases to be dealt with that it was thought advisable to give that authority again to the governor in council.


Mr. Fraser:: Where citizens of the United States have tourist camps or summer businesses in Canada, most of them come in with their cars under tourist's permit; but I understand that if they bring a car, a station wagon or a truck, they cannot use it in connection with their business in Canada. If they use the vehicle for the purpose of trucking supplies or transporting passengers or guests from the station to their hotel, then they are supposed to pay duty on it. Very few of the tourist camp owners or others who come to Canada and do business here in the summer understand that. The Minister of National Revenue should have indicated on the permit that a car so brought in must not be used for business purposes in Canada-the tourist business, hotel business or otherwise. People who come to Canada under these circumstances have the idea that they can keep the car here for six months; they do not know that it can be seized at any time by the minister's department. Something should be done to inform all those who come in under these circumstances that they may not bring these vehicles in and use them for business purposes.


James Joseph McCann: We will take the matter into consideration. I can assure the hon. member that our enforcement officers check up fairly well on United States cars that are in here on permit, in order to see to it that they are not in business in competition with our own citizens engaged in trucking or carrying passengers. Such vehicles are admitted under permit for six months, for the personal use only of the owner. If he wants to bring it in when this legislation comes into effect he will have to pay the duty on it, and then he can do what business he likes with it.


Gordon Knapman Fraser: Not only in my own riding but in others across Canada I could name at least fifty American tourist resort operators, both

men and women, who brought cars in and used them in that way and do not know that their cars could be seized. I have had letters from them.


Mr. Cruickshank:: Tell them not to do it
again.


Gordon Knapman Fraser: I believe the hon. member for Fraser Valley himself does not know the regulations.


Thomas Langton Church: I am afraid that items 1215 and 1216 are going to have a most serious effect. The minister may shake his head, but they are going to have an injurious effect on Canadian industry. What are you getting in exchange for these concessions? You are going to repeal two items in the Customs Tariff, and substitute for them items 1215 and 1216. What will be the effect? We used to have a large trade in automobiles with Australia, New Zealand and other places. At the present time trade and commerce and industry are not getting as many orders, with the result that a large number of people are out of work. In this country we used to have what is called preferential trade with Britain and the dominions. We had trade with the old country on these items. Now you have lost your best customer in many products to which I will not refer today.
This provision applies to used or secondhand automobiles and motor vehicles of all kinds manufactured prior to the calendar year in which importation into Canada is sought to be made. Then there is reference to automobiles given to religious institutions or clergy engaged in religious or welfare work; trucks and aircraft imported as part of the equipment of United States firms engaged in exploratory or development work in the Alberta oil fields. Something might be said in favour of that, but this type of aircraft is not available in Canada for use in prospecting or in the transportation of supplies to remote areas. I fail to see how it is going to aid Canadian industry, because if there ever was a time when the small wholesale or retail man and the small manufacturer wanted help it is now, when taxation is at the peak. We used to spend $36 million on the whole civil government; now we are spending almost that much a day. We have got away up in the clouds-in the billions. I fail to see how this is going to help the manufacturer, small or large, who goes in for this type of work. If you ask me, it is going to have a very serious effect on industry generally throughout Canada.


James Joseph McCann: As a competitive factor with Canadian industry, either in the automobile or in the aircraft business, the effect will be

practically negligible. We have had no protests from either the automobile industry or the aircraft industry against this type of legislation.


[Stage Direction]
Section agreed to.
Title agreed to.
Bill reported.
Mr. Speaker:: When shall the bill be read a third time?


Some hon. Members:: Now.


James Joseph McCann: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



INCOME TAX


[Stage Direction]
The house resumed, from Monday, December 5, consideration in committee of Bill No. 176, to amend the Income Tax Act and the Income War Tax Act-Mr. Abbott -Mr. Dion in the chair.
On section 7-Depreciation.
Hon. Douglas Abbott (Minister of Finance):: Mr. Chairman, if I may, I should like to revert to section 7, on which we had a long and interesting discussion yesterday evening, and which contains certain statutory provisions relating to the proposed new system of depreciation allowance. I want to refer particularly to that portion of the debate which related to the agricultural taxpayer, the farmer, who is taking depreciation on his machinery, equipment and other assets on the former basis. A great many hon. members spoke, some of them farmers, others representing farming constituencies. I think the unanimous view expressed was one of some apprehension that this new basis would not be as advantageous to the farmers as the old basis. I may say without any hesitation that I do not share that view; but curiously enough the representations made in the committee yesterday evening were the first which we have received concerning that particular group in the community. There has been a good deal of discussion with the accountants association, with industry, and so on. Representations have been made, but so far as I am aware, and so far as my officials are aware, no spokesman for the agricultural community has come forward to discuss or to criticize the proposed new basis. That is perhaps owing to the fact that it was not fully appreciated or fully understood;
Income Tax Act
but be that as it may, I am not criticizing anyone for failing to do so; I am simply stating it as a fact.


Mr. Macdonnell (Greenwood):: That shows what parliament can do.


Douglas Charles Abbott: This bill has been before the house and available to hon. members for some three weeks, and the announcement has been before the public for some six months. I find that in most other groups, long before parliament attempts to discuss any proposed measure the people who are interested come to the department for information, or put in briefs, or make suggestions as to changes which should be made. It greatly facilitates the work of parliament if they do that sort of thing. I am not criticizing anyone for failing to do it. I am simply stating as a fact that the only representations that were made that this new system would adversely affect the farming group were made in the committee last night. I do not believe that it will. I think that when the farming community understand the basis on which it operates; when they understand that if they overdepreciate, it must be put back, but that, conversely, if they underdepreciate they can get the benefit of the law as a result of underdepreciation, they will come to the conclusion that the new system is better than the old one.
Be that as it may, there is no desire to force the system on the farming community. I can see that it might be difficult for farmers who have not complete records to keep track of the diminishing value, the diminishing balance basis; but bigger farmers would have no difficulty at all. Perhaps the smaller ones who keep their books less carefully would have some difficulty, and, having become accustomed to the straight-line basis, would prefer to keep it. I am not prepared to accept the view that the farmer as such is any more obtuse than any other member of the community; but in any event so far as the department is concerned there is no objection to the farming community continuing for the time being to operate their depreciation on the straight-line basis. It may be that after they have seen how it works for others they will prefer to have a new basis. Be that as it may, I have no objection to farmers and fishermen, who are both given special treatment under the act, as the committee knows, by being allowed to average over five years, continuing to depreciate on the same basis as that which has been followed in the past. To this end I have a simple amendment to section 7 which provides that subsection 1, which relates to

Income Tax Act
the so-called recapture provision, shall not apply to farmers and fishermen. Under the regulations the basis for depreciation in the case of farmers will be the base period, as in the past, namely, the straight-line basis.


Mr. Fournier (Hull):: I move:
That section 20, appearing in subclause 1 of clause 7 of Bill 176, be amended by adding the following thereto:
"(6) Subsection (1) does not apply in determining income from farming or fishing."


Percy Ellis Wright: I have just one comment to make on the minister's statement. I think that farm organizations should have been consulted, and should now be consulted with respect to this. From a reading of the bill it is difficult to determine the effect that it will have in particular cases. Unless the matter is studied further I suggest that the minister consult with the Canadian Federation of Agriculture and other farm organizations with respect to these amendments.


Douglas Charles Abbott: I would be happy to consult with the federation of agriculture, as with any other organized group or individual. In the past I have found that I do not usually have to seek them out when they are as well organized as the federation of agriculture. For instance, in normal matters they seek me out rather than my having to go and look for them. I suggest it is perhaps adding unduly to the responsibilities of the Minister of Finance that he should have to go about the country submitting proposed legislation to separate groups. I believe he has discharged his duty when he gives reasonable notice of it, and invites, as he always does, representations from interested parties. I should be happy to discuss this matter with any group that is interested.


Mr. Stuart (Charlotte):: During the last eight or ten years there has been quite a lot of criticism about the write-off of engines for fishermen's boats. The engines that are being largely used today in fishing boats are converted automobile engines, the life of which in many instances would be two years, sometimes less. I have had complaints from fishermen that before they can write off the cost of the first engine, they would perhaps be using a third one. Does the regulation take care of that situation?


Douglas Charles Abbott: The new one would, but I do not believe the old one does.


[Stage Direction]
Amendment agreed to.
Section 7 as amended agreed to.
On section 26-Municipal or provincial corporations.
Douglas Charles Abbott: I have another technical
amendment to this section.


Alphonse Fournier: I move:
That subclause 3 of clause 26 of Bill 176 be amended by deleting the word "deriving" in the fourth line thereof and substituting therefor the words "substantially all of which derived"; and that the following subclause be added to the said clause 26;
"(5) In determining whether the income in the years 1947 and 1948 of a corporation or association incorporated or organized as a credit union or cooperative society is not liable to taxation by virtue of paragraph (q) of subsection 1 of section 4 of the Income War Tax Act, that paragraph shall be construed as if it were enacted in the same form as paragraph (i) of subsection 1 of section 57 of the Income Tax Act."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 27, 28 and 29 agreed to.
On section 30-Dividends declared.
Douglas Charles Abbott: I have an amendment to this section, to correct a typographical error.


Alphonse Fournier: I move that section 30 of the bill be amended as follows:
That the figure "1949" in the eighth line of subsection 2 of section 30 of Bill 176 be deleted and that the figure "1950" be substituted therefor.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 31 agreed to.
On section 32-Nonresident-owned investment corporation.
Donald Methuen Fleming: Representations have been made by the Toronto board of trade in connection with subsection 3 which deals with nonresident owned investment corporations The board states:
The board has interpreted the provisions of the Income War Tax Act as extending the dividend exemption of section 4(n) to nonresident-owned investment corporations. The proposed legislation appears to be a retroactive change denying the exemption referred to. The board has on many occasions urged that retroactive tax legislation be not resorted to, and again points out that in the opinion of the board this is a highly undesirable practice and should be avoided.


Douglas Charles Abbott: As my hon. friend knows, this section relates to a relatively small number of companies owned by nonresidents who have investments in Canada. In 1946 they were given a special basis of tax treatment. They are taxed on the earnings of the company, not at the full corporation rate but at a special rate. Prior to 1946 it used to be 22J- per cent, with a deduction of 7J per cent on income received from dividends on Canadian taxpaying corporations. In 1946 that technical difference was eliminated and the straight rate was made 15 per cent. However by inadvertence the provision of the corresponding tax credit section was not amended. If this section were not put in, the

nonresident would in fact be getting a tax credit to which he was not entitled, which has never been allowed by the department, and for which I do not think there is any justification, in equity or otherwise.
Technically it is true that the effect of this section is to take the amendment back to 1946 when the change from 22J per cent to 15 per cent was made, as I have indicated. I do not think any real objection can be taken to it.


Donald Methuen Fleming: Would there be any serious loss if the section were made effective from the date of the minister's budgetary pronouncement? This would obviate any suggestion of unfairness resulting from the retroactivity of taxing legislation.


Douglas Charles Abbott: I do not think so. I have before me the text of the resolution introduced in April 1946, which states:
That the special rates provided for nonresident-owned investment corporations be reduced for the 1947 and subsequent taxation years from 221 per cent to 15 per cent, but that such corporations be taxable on all income received in Canada subject to deductions from the said income in respect of interest and dividends received from other such corporations and foreign taxes paid by the corporation.
In other words, the rate having been reduced from 22J per cent to 15 per cent, there should not have been and there was never intended to be a tax credit to offset that 7J per cent. The old system was 22J per cent and a tax credit of 7i per cent, coming from a certain type of investment. Having consolidated the two and taken the straight 15 per cent rate, as indicated in the resolution, the tax credit was to be eliminated. Through some oversight the tax credit section was not amended. But no nonresident-owned investment corporation has ever asserted that it should in fairness get the tax credit. They have never been allowed it. This is simply to cover the oversight in the drafting of the law. There is no justifiable claim for this tax credit.


Donald Methuen Fleming: How many taxpayers are there within this group?


Douglas Charles Abbott: The number has been substantially reduced in recent years. When I was in practice I formed a number of these companies, but since the change in the taxing law in the United States and elsewhere the number of the companies has been reduced. I have not any up-to-date figure.


[Stage Direction]
Section agreed to.
Sections 33 to 44 inclusive agreed to.
On section 45-"Corporation" and "corporation incorporated in Canada".
Douglas Charles Abbott: I have a technical amendment here.
Income Tax Act


Alphonse Fournier: I move:
That subclause 2 of clause 45 of Bill 176 be deleted and the following substituted therefor:
"(2) Paragraph (j) of the said subsection 1 is repealed and the following substituted therefor:
'(j) "dividend" includes stock dividend except where the stock dividend has been declared by a nonresident corporation, more than 50 per cent of the share capital of which (having full voting rights under all circumstances) belongs to nonresident persons';"


Donald Methuen Fleming: Is there nothing more involved in this amendment than the elimination from paragraph (j) of subsection 1, and combining with the opening words in paragraph (j) the words now appearing in clause (j) Cii)?


Douglas Charles Abbott: That is right. It is consequential upon a change made in section 3.


Donald Methuen Fleming: I wish the minister would change the expression "corporation director" so that it would read "director of a corporation".


Douglas Charles Abbott: I must express my admiration of my hon. friend's ability as a grammarian.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 46 agreed to.
On section 47-Foreign tax deduction under
I.W.T. and E.P.T. acts.
Douglas Charles Abbott: I have a more important amendment to suggest to this section. The section as it stands refers to several classes of nonresident companies, and representations have been made as to the retroactive effect of the proposed section. While it is felt that the proposal is essentially fair in its terms, perhaps it would not stand in its present form. The section as amended will relate solely to what are known as 4 (r) companies.


James Joseph McCann: I move:
That clause 47 of Bill 176 be deleted and the following substituted therefor:
"(47). No taxpayer shall be deemed ever to have been entitled, by virtue of section 8 of the Income War Tax Act or section 9 of the Excess Profits Tax Act, 1940, to deduct from taxes otherwise payable under either or both of those acts for a taxation year any amount in respect of taxes paid or deemed to have been paid to a government other than Canada on income which was exempt from tax under those acts."


Douglas Charles Abbott: The only prohibition here is against taking a tax credit on Canada on tax-exempt income.


Donald Methuen Fleming: This is an important amendment, and it is difficult to follow without a copy before one.


Douglas Charles Abbott: I think I know some of the points my hon. friend will want to raise* because I received a good many representations with respect to this section pointing

Income Tax Act
out that if it were adopted in its original form it would change the rules of the game after the game had started; that it would have a retroactive effect. I recognize the validity of those submissions; consequently the proposed amendment to this section relates entirely to what are colloquially known as 4(r) companies, which receive income from abroad not subject to tax when included in their Canadian income tax. Therefore it is manifestly proper that they should not be allowed to take the tax credit of fifteen per cent which is allowed now on income which they receive free of tax.


Donald Methuen Fleming: Perhaps this section could stand for a moment.
Section stands.
On section 48-Newfoundland.


Mr. Ashbourne:: I received a letter, dated November 29, 1949, from the Newfoundland board of trade, which reads:
I have been directed to bring to your attention that part of the income tax bill at present before the federal house which has reference to Newfoundland's special position under the terms of union.
It seems clear from clause 48, subclause 3, that business losses prior to confederation will not be allowable as deductions from profits made after union when computing taxable income. In other words, section 28, paragraph (d), of the Canadian Income Tax Act will not apply to Newfoundland taxpayers before April 1, 1949. Clause 48, subclause 3, of the bill reads as follows:
Clause 48, subclause 3, of the bill now under consideration is then quoted, and the letter continues:
On the other hand there appears to be no provision in the bill which will relieve Newfoundland taxpayers from income tax and surtax upon dividends paid out of profits earned before union with Canada.
Further, there seems to be no provision in the bill which will prevent section 9, subsection 6, of the Canadian act being applied to individual shareholders. This subsection provides that if the undivided profits of a corporation exceed what is reasonably required for the purposes of the business, a dividend equal to the amount specified by the minister shall be deemed to have been received by the shareholders. This may result in substantial taxes becoming payable upon pre-confederation profits.
A refusal to allow the carrying forward of preconfederation losses on the one hand and to impose tax upon dividends from profits before union on the other hand seems grossly inequitable.
Yours faithfully,
H. T. Renouf,
Secretary.
Perhaps the minister could make a statement with regard to the taxation picture as it affects Newfoundland and clear up some of the points brought out in this letter.


Douglas Charles Abbott: The hon. member will recall that under the terms of union with Newfoundland, or the supplementary agreement,
[Mr. Abbott.!
it was a condition that taxes would not be imposed with respect to either personal or corporation income tax in Newfoundland on earnings prior to the date of union; that in effect they would be given the same treatment as was given in Canada when the pay-as-you-go plan was adopted. The representatives of Newfoundland in the discussions were insistent that we should not look behind the date of union as to the position of a taxpayer in Newfoundland, and may I say at once that I have no quarrel with that position.
My hon. friend has raised two points, the first being with respect to the fact that losses incurred prior to the date of union would not be taken into account in subsequent years when the Newfoundland taxpayer is taxed in Canada. That is correct. Obviously when one is not entitled to look at profits in previous years, one cannot very well look at losses; the one must go with the other. So far as the income tax payer in Canada is concerned, I suppose the Newfoundland taxpayer can be looked upon as a newborn babe. We do not inquire into his tax status before he became a Canadian citizen.
As to undistributed surpluses on hand at the date of union, the same treatment is accorded here as was accorded to the Canadian taxpayer who first became liable for income tax in 1917. Under the law as it stands, pre-1917 surpluses can be distributed on liquidation free of income tax. Dividends are taxable income by definition under the law, and we do not look to see where a dividend comes from. That is true of dividends declared by any Canadian corporation. A pre-confederation surplus of a Newfoundland corporate taxpayer can be carried on its books and when distributed on winding up, or by any other method other than dividend payments, can be so distributed free of tax.


[Stage Direction]
Section agreed to.
On section 47-Foreign tax deduction under I.W.T. and E.P.T. acts.
Donald Methuen Fleming: The minister has said that a desire has been expressed that section 47 should not have any retroactive operation.


Douglas Charles Abbott: Except in the one case.


Donald Methuen Fleming: Except in the case of 4(r) companies.


Douglas Charles Abbott: Except in the case of companies that are not taxed on income they bring into Canada which is in the form of tax-exempt income.


Donald Methuen Fleming: The section is a difficult one, and the amendment is not an easy one to construe in the time available. I am bound

to say that if the amendment is intended to eliminate any possibility of retroactive operation, it is not very clear. The observations of the Toronto board of trade on this point, which I understand is the principal point of the minister's amendment, indicated that they desired a wider change than the minister's amendment. The board of trade says:
This amendment appears to be a retroactive change in the interpretation of the above-mentioned sections of the Income War Tax Act and the Excess Profits Tax Act,-
May I interject here that this reference is to section 8, subsections (1) and (8) (2) (A) of the Income War Tax Act, and section 9 of the Excess Profits Tax Act. The brief continues, speaking of section 47 of the bill:
-and has the effect of limiting the tax credit allowed in respect of foreign taxes paid by a foreign subsidiary to an amount equal to the average rate that would otherwise have been payable under the acts.


Douglas Charles Abbott: That has all been eliminated, of course.


Donald Methuen Fleming: The letter goes on:
The board understands that the sections referred to had the effect of granting tax credit at the marginal rate of tax that would otherwise have been payable on the income in question, and that the sections were so interpreted by the income tax division of the Department of National Revenue, and that in many cases assessments were issued on that basis. A retroactive change of this nature-


Douglas Charles Abbott: That has all gone by the board as a result of the amendment that has just been moved.


Donald Methuen Fleming: That is what I want to get at. I have been doing my best to absorb the effect of this amendment-


Douglas Charles Abbott: Perhaps I might elaborate on my explanation before my hon. friend continues.


Donald Methuen Fleming: I wish to make just this one observation. If the minister will give the assurance that the purpose of the amendment is to meet this objection in, its entirety, and that in operation the section will not have that retroactive effect which is strongly objected to in this brief from the board of trade, I have no further comment to make.


Douglas Charles Abbott: It meets the case my hon. friend was referring to. There are perhaps six companies in Canada who come under what was known as the old section 4 (r); I think they are nearly all distilling companies. Under that section they are entitled to bring in dividends from foreign subsidiaries, include them in their Canadian income, and pay no income tax on them. Technically, under the law as it stands, though they pay no income tax with respect to that income, they might be able to claim fifteen per cent or some other tax credit deducted from those
Income Tax Act
dividends at the source in the United States. I think I have only to state that position to demonstrate that it is hardly equitable. In fact they have never been given that credit, and that provision was included in the wider measure originally proposed in section 47. It is true that in form that can be urged as having some retroactive effect, but that is one provision which frankly I am not prepared to relinquish. As to the other provisions, in view of the representations which have been made by the board of trade and others I am quite satisfied to remove them. This, however, is one I feel I must retain.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 48 and 49 agreed to.
Douglas Charles Abbott: I have an amendment that should be moved at this point, inserting a new clause in order to make provision for various international agreements which may exist in connection with Newfoundland fisheries treaties and the like. The section will be inserted immediately after the present section 49; and the amendment is as follows:
That Bill 176 be amended by renumbering sections 50 to 52, inclusive, as sections 51, 52 and 53, and inserting after section 49 the following section as section 50:
"50. Notwithstanding anything contained in this or any other act, an exemption from taxation provided for in an international treaty or international agreement binding on Newfoundland before the union of Newfoundland with Canada may be extended by regulation of the governor in council to taxation by or under any act of the parliament of Canada."


Alphonse Fournier: I move accordingly.


James MacKerras Macdonnell: I should like to ask what is the meaning of the word "extended", and also if the minister would tell us what are these treaties and agreements.


Douglas Charles Abbott: The section is based on the legal view, if you like, that technically international agreements, fisheries agreements or the bases agreements and that sort of thing in Newfoundland, are not automatically subject to Canadian legislation, but that we must extend our legislation to those agreements. This provision is inserted for that purpose. Probably my hon. friend knows that there are fishing agreements and fishing rights in connection with the old colony of Newfoundland that go back a great many years, and this section is inserted in order to make sure that we can take appropriate action to continue the international effect of those agreements and their adoption by Canada. This provision is broad enough to cover all agreements of the kind.


James MacKerras Macdonnell: These have nothing to do with exemption agreements with corporations in Newfoundland?

Income Tax Act


Douglas Charles Abbott: No; those would not be international agreements.


James MacKerras Macdonnell: When we say "extended" does that mean that they are continued as far as they affect Newfoundland, or that they are given an extended operation to affect the rest of Canada, let us say?


Douglas Charles Abbott: They are not given an extended operation. I used the words "adoption by Canada", meaning they would become binding on the whole of the Canadian people. Previously they were binding on the government of Newfoundland as a colony or as a dominion or under commission of government, whatever may have been their legal status. Now we can declare that those agreements are extended to Canada.


Donald Methuen Fleming: Would the minister be a little more specific as to the nature of these agreements? Normally one does not expect to find under international treaties or agreements the exemption of specific taxpayers or specific classes of taxpayers from taxation. In what way have these exemptions from taxation arisen in connection with these agreements?


Douglas Charles Abbott: My hon. friend may recall that under the United States bases agreements with Newfoundland, which I am told were confirmed by statute of the commission of government, certain special privileges were extended to United States forces at those bases. They were exempted from customs duties on cigarettes and other things they brought in; they were exempted from income tax and other taxes. I am not familiar with the details, but they were given special privileges. I am not acquainted with the terms of those agreements, but I know they are and have been the subject of discussion between our government and that of the United States. In addition there are those old fisheries treaties to which I referred, which give France, I believe, and perhaps other countries, the right to land on the shores of Newfoundland, to get bait and perhaps to bring in gear to refit their ships. I am not familiar with the details, but we felt it desirable to have an enabling clause here to preserve any such rights that may exist.


James MacKerras Macdonnell: I am still a little bothered by this word "extended". Is the minister satisfied there is no implication here that the privileges he has described as existing in Newfoundland might be asserted elsewhere by reason of this amendment?


Douglas Charles Abbott: I can only say there is an interesting legal point involved. This clause was drafted by the deputy minister of justice. The point was raised, I may say, by the Department of External Affairs, which wanted

to be sure that these bases agreements, fisheries agreements and so on could be recognized by Canada, and that it would be clear from the legal point of view that they were adopted by Canada or that they would extend to Canada. I have not given the word "extended" the critical analysis my hon. friend has.


James MacKerras Macdonnell: Does the minister agree with that?


Douglas Charles Abbott: Perhaps I might put it this way. The section says that under international treaty or international agreement there are certain exemptions or special privileges which the general law of Canada might take away. This enabling provision says that those exemptions or privileges can be extended to Canada, notwithstanding the application of the general law, such as our customs law or our income tax law, or any of our other laws. The provisions contained in these pre-confederation agreements will be extended to Newfoundland, now that it is part of Canada, and what would otherwise be the general law of Canada will not apply with respect to those concessions.


James MacKerras Macdonnell: As the
minister has stated it, I think I understand it, and it is satisfactory. I find it difficult, however, to understand it from the wording of the section. If the section were framed in the minister's words, I would be happier.


Douglas Charles Abbott: I shall not quarrel with my hon. friend on that, but I do rely for the drafting of these sections on the law officers of the crown who are charged with that responsibility. After careful consideration, the Department of Justice has submitted this language to me as being the appropriate language.


Donald Methuen Fleming: I should like to revert to the minister's reply to my last question. Would I be correctly summarizing the position with respect to tifese international treaties and international agreements if I said that any exemption from taxation which they create is created for the benefit of aliens only?


Douglas Charles Abbott: That is correct.


Donald Methuen Fleming: The other point I should like to raise, Mr. Chairman, concerns the concluding words of the proposed new section 50, upon which the member for Greenwood has raised a question as to the meaning of the word "extended". This section provides that these exemptions "may be extended by regulations of the governor in council to taxation by or under any act of the parliament of Canada." We are dealing here with the bill concerning the Income War Tax Act

and the Income Tax Act. We are not including within the scope of this committee's review questions of exemption or taxability under other acts of parliament. On the face of it, this amendment seems to me to clothe the governor in council with power to continue exemptions provided by international treaty or international agreement binding on Newfoundland before union from taxation by or under any act of the parliament of Canada. I think before proceeding to the full extent of a provision of this kind, the members must be given an opportunity of considering all the taxing statutes enacted by the parliament of Canada which are in effect today. Surely this is not a proper amendment to be introduced at this stage of a bill the purpose of which is amendment of the Income Tax Act only. Surely the house is not going to be asked to go that far without careful consideration of the possible effect of such provision on other taxing acts of this parliament.


Douglas Charles Abbott: I would think that the house would approve the principle that where pre-confedefetion international agreements have been entered into granting immunities or tax concessions, or whatever it may be, to aliens, the Canadian taxation laws should recognize them as binding upon us. My hon. friend has a point, perhaps, from the technical drafting point of view,-that we should include a similar section in all statutes which may purport to impose taxation of any kind. In this bill, however, there are a number of essentially transitional provisions with respect to Newfoundland, and it did seem an appropriate place to give statutory authority to recognize those various agreements. We do not know yet what all of them may be. I did not think there would be any serious objection to the principle.
Any order in council, of course, which would grant this recognition would be included in the summary to be tabled, to which reference was made a short time ago. The house will be aware of actions which are taken to recognize these international agreements.


James MacKerras Macdonnell: If I thought it would be of any use, I might ask the minister to reconsider the wording of this section, because he has indicated that he is not too happy about it. The minister made it clear that this is merely the adoption by Canada of the effect of these existing treaties so far as they relate to Newfoundland; is that correct?


Douglas Charles Abbott: I believe, in effect, this gives us authority to adopt-if my hon. friend will include that word. This section is enabling;
Income Tax Act
and it gives us authority to adopt international agreements entered into by Newfoundland prior to confederation.


James MacKerras Macdonnell: In so far as
they affect Newfoundland.


Douglas Charles Abbott: In so far as they affect Newfoundland.


Donald Methuen Fleming: And also on the basis that the exemptions thereby created are created only for the benefit of aliens, not for Canadians.


Douglas Charles Abbott: Oh, absolutely.


[Stage Direction]
Amendment agreed to,
Section 50 agreed to.
Sections 51 and 52 agreed to.
On section 53-Deductions from income of corporations in petroleum business.
Douglas Charles Abbott: I am sorry to say that there has been a rewrite of this clause. It is essentially a drafting amendment, and is a reenactment of the whole clause. It is lengthy but I shall give an explanation of it. The amended clause reads as follows:
That subclauses 1, 2 and 3 of clause 53 of the bill be deleted and the following substituted therefor:
53 (1) A corporation whose principal business is the production, refining or marketing of petroleum or petroleum products or the exploring and drilling for oil and natural gas, may deduct, in computing its income for the purposes of the Income Tax Act,
(a)	the aggregate of the drilling and exploration costs, including all general geological and geophysical expenses incurred by it, directly or indirectly, on or in respect of exploring or drilling for oil and natural gas in Canada
(i)	during the taxation year, and
(ii)	during the previous taxation years, to the extent that they were not deductible in computing income for a previous taxation year, or
(b)	of that aggregate an amount equal to its income for the taxation year
(1)	if no deduction were allowed under paragraph (b) of subsection (1) of section 11 of the said act. and
(ii) if no deduction were allowed under this subsection minus the deduction allowed by section 27 of the said act.
(2)	For the purpose of the Income Tax Act there may be deducted in computing income from the business of an association, partnership or syndicate formed for the purpose of exploring or drilling for oil or natural gas, the lesser of
(a)	the aggregate of the drilling and exploration costs including all general geological and geophysical expenses incurred by it, directly or indirectly, on or in respect of exploring or drilling for oil or natural gas in Canada
(i)	during the taxation year,
(ii)	during previous taxation years, to the extent that they were not deductible in computing income therefrom for a previous taxation year, or
(b)	of that aggregate, an amount equal to the income therefrom if no deduction were made under this subsection.

Income Tax Act
(3)	Subsections (1) and (2) are applicable in respect ol expenditures incurred in the calendar years 1949 to 1952 inclusive.
and that the following subclause be added to the said clause 53:
"(9) subsections 1, 2 and 3 of section 16 of chapter 53 of the statutes of 1948 are repealed."


Alphonse Fournier: I move accordingly.


Douglas Charles Abbott: Perhaps I might give a brief explanation of this section before we discuss it, Mr. Chairman. It merely renews for a three-year period the special write-offs allowed to the oil and mining industries. The amendment I have proposed, while impressive in appearance, is merely a rewriting and consolidation of the provisions mainly to recognize technical changes in the oil and gas industries. I think I can assure the committee that the redrafting is on balance beneficial to the industry, and does not effect any substantial change in the benefits under the clause. Where previously a separate paragraph was devoted to each of the groups, oil producing and marketing companies, oil exploration companies and gas exploration companies, these have now been consolidated into one provision. Furthermore, the associations, syndicates and partnerships in the industry, whether in the field of gas or oil, are now provided for in a separate paragraph. This rearrangement of the provisions is the result of extensive discussions in the income tax division with officials of the district *offices concerned with the administration of this provision of the law.


Mr. Applewhaiie:: I am not familiar with the wording of the amendment, because I have not seen it, and I have not been able to follow it. But the remarks I have to make are based on the old section, and I ask the minister if he will follow me on the old section and then answer my question.
The old section provides for certain deduction privileges for corporations or associations, syndicates and partnerships in connection with drilling for natural gas. The old section then goes on to allow deductions for corporations only in connection with the mineral mining industry. Bearing in mind the fact that in at least some parts of the country a great deal of mineral exploration is done by syndicates and partnerships and not by corporations, I should like to ask the minister whether the same privilege should not be [DOT]extended to syndicates and partnerships that has been extended to corporations.


Douglas Charles Abbott: That is not amended. It has always been the law, I am informed, that the exploration costs incurred by corporations exploring for minerals will be eligible for deduction under this section, but that in the
case of corporations, associations or partnerships, that applies to such associations formed for the purpose of exploring and drilling for natural gas. I was trying to ascertain the reason for the distinction. I have not been able to get an answer from the officials who are in front of me. They tell me that, so far as they are aware, there has been no demand in the mining field for an extension of that principle to them. It must be that in the oil fields they operate in this way and they do not in mining.


Edward Turney Applewhaite: It may happen that by the time a mineral mine becomes producing it will have reached the stage of incorporation, but it does not necessarily follow. I am certainly not going to move an amendment at the present time, not having the wording before me, but I would ask for the minister's assurance that the rights or privileges of corporations, partnerships and syndicates be equally regarded in connection with the mineral mining industry. Should the occasion arise I think it would be only fair to ask that the department have sufficient discretion to treat a syndicate or partnership a%it treats a corporation.


Douglas Charles Abbott: I shall be happy to look into that matter. So far as I am aware, this is the first time it has been brought forward since I have had anything to do with putting these resolutions through the house. I shall be glad to look into the matter.


The Chairman:: Shall section 52 carry?


Douglas Charles Abbott: This is a new section 53.


Donald Methuen Fleming: That is the point I was going to raise. In form, the minister's amendment is really a rewriting of section 52. Has the number been changed to 53 on the original that was given to the chairman?


Douglas Charles Abbott: Yes.


Joseph-Alfred Dion: I understand that copies of the amendment were distributed-the new section 53.


Douglas Charles Abbott: It will be new section 53.


Joseph-Alfred Dion: Shall section 53 as amended carry?
Section as amended agreed to.


[Stage Direction]
Title agreed to.
Bill reported.
Douglas Charles Abbott: the third reading of the bill.


James MacKerras Macdonnell: I want to make just one comment. I repeat what I said last night. With deference to the minister, I want to ask him whether in future he will not try to enable this house

to discharge its duty, or what I conceive to be its duty, namely, to bring whatever judgment it can to the important questions that come before it. The members can do that only when they have the necessary information available to them. I submit to the minister that what happened here last night is proof positive of the fact that the house cannot properly discharge its duties if it has not full information.


Douglas Charles Abbott: I agree that the house should have full information, but I cannot allow my hon. friend's remarks to go completely unchallenged. I have endeavoured to give the fullest possible information. I purposely have allowed this bill to stand for over two or three weeks in order to enable every member of the house who was interested to study its highly technical provisions, and, if they were in doubt as to the sections, to ask me or my department about them. I know my hon. friend is referring to some regulations which the department is empowered to issue under this measure that we are now passing. So far as I know, it has never been the practice to bring before the house regulations adopted pursuant to proposals which have not yet been enacted into law.


James MacKerras Macdonnell: It is because I believe the minister to be a progressive and forward-looking man that I suggest to him that he might improve things for the future.
Motion agreed to and bill read the third time and passed.


Alphonse Fournier: that the house go into committee of supply.


[Stage Direction]
Motion agreed to, and the house went into committee, Mr. Beaudoin in the chair.

[Stage Direction]
101. Departmental administration, $360,900.
Hon. R. W. Mayhew (Minister of Fisheries):: Before the committee proceeds with consideration of the items in the estimates, Mr. Chairman, I should like to give to the committee a statement and a report.
Since coming into this department approximately eighteen months ago I have, with some of the departmental staff, visited each of the ten provinces to discuss fisheries problems, prospects and betterment. These discussions have been held with provincial government officials, processors, fishermen, wholesalers, and cold storage and warehouse interests.
Supply-Fisheries
With each, the conversations were on their own problems, but, where possible, joint discussions also took place. Our visits took us from Bonavista, on the east side of Newfoundland, to Ucluelet, on the west side of Vancouver island.
These trips were for the purpose of gathering information for a composite picture of the whole industry, yet as intimate a picture as possible of the different districts. I therefore feel I should report on what the departmental officers and I have learned about this industry, and to give the committee also some idea of the actions we think we should take on behalf of the industry.
The fishing industry is North America's oldest industry. It is still a growing one, too. In the past thirty years, British Columbia production has doubled, as it has also in western Nova Scotia. In Newfoundland and the other areas around the gulf of St. Lawrence it has grown somewhat less.
In some east coast areas, the industry has been unable to provide good living standards for fishermen, except during the two great wars. Now, following the war, some of the eastern districts are again in a weak position. These weak spots stand in contrast to our great fishing resources. Canada has access to the world's greatest fishery resources on the Atlantic and the Pacific. We have the largest inland fresh-water fishery in the world. But on our east coast we do not fully use the available resources, although many foreign vessels catch fish right up to our coastal limits. On our Pacific coast the industry takes all the salmon, halibut and herring allowable without destroying the stocks. On the east coast, however, apart from a few species, such as lobster and Atlantic salmon, the resource is underdeveloped. The fish are there, and so are the fishermen; yet many fishermen have a poor living. Hon. members will want me to try to explain this condition.
In the first place fish are very perishable, as perishable as milk. But the fishing industry has to sell its products hundreds or even thousands of miles from the sea. Canned fish, it is true, may be shipped to grocery stores all over the world. But fresh, frozen, smoked or salted products suffer rapid spoilage.
Most of the finest things in the world are delicate. "Delicious" and "delicate" are almost the same word. They go together; and that is true of fish.
While fresh and frozen fish are difficult to merchandise, the methods are improving daily. The chain of refrigeration from the coast to the shops and to the housewives'

Supply-Fisheries
kitchens is steadily growing. The fish product in modem packaged form is becoming more and more attractive. As a result, market expansion is possible.
Our fish trade has been held back, particularly on the east coast and in Newfoundland, by continued dependence on the traditional product-salted fish. Likewise it depends on traditional markets in the Mediterranean countries and the West Indies, where salted cod has to be sold to buyers whose capacity to pay is limited. However, some companies have switched away from salted fish to the fresh and frozen forms. These find their market in North America, where consumers' living standards are higher. The fresh and frozen products require more careful handling, but they are likely to yield greater and more stable financial returns in the future.
Processing-filleting, packaging and freezing-calls for larger plants using more up-to-date methods. In British Columbia this development took place readily. In the modern plants of Newfoundland and western Nova Scotia it is already well advanced, and in Gaspe, too-although Gaspe suffers from having only a five-months season.
Elsewhere on the Atlantic coast the future will see the concentration of industry at fewer ports, where modern processing and modern fishing methods will ensure more adequate living for fishermen. I shall return to this problem later.
You see a striking contrast between the development of agriculture and that of fisheries in the past forty years. Behind agriculture's progress goes quite a big national effort. Hon. members know the work of the federal Department of Agriculture in its science services, its production and market services, its experimental farms and demonstration stations. Alongside are the efforts of the provinces, both in research and demonstration, and the work of agricultural colleges. But in fisheries our national effort has been small in all these services. In the federal government our job up to 1938 was mainly the conservation of fish stocks. Only recently work has begun on fish inspection and the like. We still lack demonstration services to fishermen, as we have in agriculture.
For all these reasons some of our fishery resources have been under-used, our domestic and North American markets have not been built up, and we have areas of low standards in many of our fishing communities.
So far I have been talking about our coastal fisheries. Somewhat similar problems face the inland fisheries. Today I want to

outline the future government program for meeting these problems. Some work has been started, and I should like to mention it first.
In British Columbia, which I mention first for no special reason, the fishing industry has expanded near the limit of the available fish resources. On that coast, therefore, the departmental program has a different emphasis from that in the east. In the west the need is partly for adequate protection of the stocks; and since the war we have increased the number of protective officers and boats to help meet this problem. But of more positive value are the steps being taken to expand the stocks of the valuable species. Such expansion calls for new methods of river management, for improvement of lakes through control of predators, for control of pollution, and in some cases for use of fish culture and hatcheries. This work is expanding in a new division of the department, made up of engineers and biologists.
Here, I might add, we intend to do everything necessary to conserve the salmon resource of British Columbia. We are anxious, however, to co-operate with those interested in hydro development. The department believes fish conservation and industrial growth can proceed without undue restraint on either side.
In the inland areas the direct responsibility of the federal government is in the Northwest Territories. Research has begun on the life history and spawning habits of goldeye, Arctic char and the beluga. A research vessel, the Calanus, has been sent to Arctic waters, and exploration at Great Slave lake has in recent years helped establish a new commercial fishery.
To help the fishery in the inland provinces, an inspection system for whitefish was introduced and is being currently expanded. The federal government is working along with the prairie provinces in research into the conditions affecting the fresh-water fisheries.
On the east coast, as in British Columbia, attention has been given to raising the supplies of the valuable species for which there appears to be always a ready market, such as lobster, Atlantic salmon, oysters, and clams. New research work has been undertaken in the scallop, flounder, salmon and shrimp fisheries. To help raise the standards, demonstrations of new fishing techniques are being carried out in flounder dragging, Danish seining, the Larsen floating trawl, and long-lining. This work of the St. Andrews station has already brought changes in fishing methods, and in the regulations issued by the department for conservation needs. On this coast, too, the department has increased its staff of

protective officers, as well as its patrol fleet -as for example the launching of a new 65-foot vessel last month in Shelburne.
Research at Grand river and Halifax stations has expanded in recent years. To help develop the fresh and frozen trade, intensive studies have been made of the problems affecting the keeping qualities of fish, with results that are internationally recognized. New methods of controlling bacteria on boats and in processing have produced striking benefits to the industry. So has the development of salt fish dryers, smokers and machines for washing, cleaning and cutting fish for the expanding frozen fish trade.
Most of the industrial firms in the east are small, and depend for research entirely on the federal government. Only by finding new ways of doing old jobs, or by doing new things, is progress possible. The benefits of this research are evident particularly in southwestern Nova Scotia.
In Newfoundland the terms of union gave the federal government certain responsibilities for the administration of fisheries and the bait service. The integration into the federal government of these services has been completed. In addition, the Newfoundland fisheries board, whose powers now relate to salted fish, is being continued for five years after union. The union of Newfoundland with Canada adds greatly to our stature as a fishing country.
These various steps show what has been done to further the development of Canada's fisheries.
Before outlining our future program I should like to say a few words about the fisheries prices support board. Since its origin in 1947 the board has twice given price support, once in the maritimes and once in the prairie provinces. These two actions were reasonably satisfactory in bringing immediate relief to the fishermen concerned. But the expenditures provided no constructive longterm solution of the basic problems of the fisheries.
Fortunately, despite the loss of many important markets in Europe and in the sterling area, the industry so far has been able to meet most of its difficulties. Serious or widespread price collapse has been avoided. However, some operations have faced and suffered loss.
Prices support legislation alone cannot solve the whole problem. Prices support is a stopgap solution to meet emergencies. It cannot remove all the hindrances to expansion I mentioned earlier. And these cause low income to fishermen. We believe that the support act is necessary as a short-term measure, but a constructive program must be
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found to remove the basic troubles. More fundamental remedies are to be found in better organization and methods in the fishing industry, both in producing and in selling. Future prosperity on a continuing, steady basis depends on marketing better quality products, both at home and abroad.
A proposal along these lines was made last May, and later discussed with the fishing industry at meetings in all the provinces. In September the fisheries council met in Ottawa, and gave the government its views on the proposals. I wish now to present to the committee the program we have drawn up.
This program might better be termed a framework for fishery development. It is aimed at removing the hindrances to expansion. Responsibility for its successful application, however, cannot rest alone on the government. We shall expect from industry a full measure of co-operation. On its part, industry must assume its rightful share of the risks as well as the rewards, and in doing so it will show initiative, and I might even say courage, far greater than at any time in the past.
Broadly speaking, future fisheries development probably lies in two directions: (1) in the expansion of North American and overseas markets; and (2) in the development of backward areas, which are primarily in the east but found also in the inland provinces. I should like to deal first with market expansion.
Hon. members will agree with me, I think, that quality determines quantity; that you cannot build a good turnover unless you have a good product. This is true in any trade, but it is especially true for fish. It is quality that sells. Now, getting good quality is not simply a matter of inspection of the product or the plant. Government inspection is only one of the steps. I want to say here how pleased I am that our fish inspection bill has received such warm support from members on both sides of the house. This bill will give us a chance to build an effective inspection service within the department, whereby inspection can be carried out in boats and plants and through the wholesale and retail trades.
But there must be more than inspection. Quality depends on how fish is handled in boats, in plants, in the selling trades-yes, and in the kitchens of restaurants and homes. From sea to table is a long assembly line; each part must do its own job well, but each has to fit into the other. Any program must cover each of these steps and try to provide for the industry the conditions that will allow it to do each of the jobs better.

Supply-Fisheries
The market expansion should be sought first, I believe, in North America. With us fish consumption is low, and the chances of greatly increasing our sales are excellent. To this end our program will be in three phases. There will be the extension of fish inspection, which will require a new division within the Department of Fisheries. The second part of the program will cover the assembly line I have already mentioned. We propose to establish another division within the present department, a division of technical services. The object here is to provide fishermen, small plants, and the wholesale and retail trade, with technical help in the improvement of their individual operations. This service would be advisory and would require able and qualified technical personnel. We believe it to be basic, and perhaps even more helpful than inspection for the over-all improvement in quality. We believe also that the provision and use of such a service should be prior to any extensive campaigns of advertising fishery products.
Without expanding on this at the moment we hope to add a third smaller division to the department in the form of a consumer services branch to work in the field of consumer education.
These three new services will be available for the Canadian fishing industry as a whole, although of course special emphasis will have to be laid on the technical development of the backward areas.
In market expansion these new services may be expected to operate as follows:
One section of the new technical services division will probably be devoted to the distributive outlets, giving to wholesalers and retailers in the main Canadian cities the knowledge, developed and approved through research, at home and abroad, that is necessary for better fish-handling. While this service will help to overcome some problems, it may not be sufficient to create the desired retail facilities. More direct steps of a financial nature are not being considered, since we hope that the industry and manufacturers of refrigeration equipment will help finance the extended use of low-cost freezing equipment.
Adequate railway transportation, especially on long hauls, is vital to the successful distribution of fish in North America. Our scientists have played a full part in discovering means of improving such facilities. We now intend to make every effort to encourage both railway companies to use and test the new type of refrigerator car that has been provided, and that can be
[Mr. Mayhew.l
used not only for fish but for other perishable foods as well. One of our own staff, Mr. Young, is responsible for this equipment.
I cannot deal with distribution without taking into account the export market. The position of some parts of the industry remains crucial and may even deteriorate further. Newfoundland and British Columbia have always leaned heavely on European and commonwealth markets, while the maritimes, in their salt fish trade, have depended on the markets of the West Indies. It is vitally important, therefore, that any general policies that look forward to the opening of such markets or to reduction in United States tariffs should give fullest consideration to the fish trade, and this the government will endeavour to do.
To round out the first phase of our new program, we plan to extend our work in the field of consumer education, as already mentioned. As some hon. members are aware, we now have available a new experimental kitchen. There, under the direction of trained home economists, fish products will be tested and new recipes created. These home economists will also be assigned to field duties, where they will give demonstrations and lectures on fish cooking to women's groups and to schools.
We intend also to develop relationships with those responsible for institutional feeding, with chefs of railways, hotels and restaurants. Not only shall we endeavour to encourage greater use of fish in mass feeding, but we shall also provide for this purpose as many technical services as possible.
To supplement this work we plan to develop new educational aids that will help consumers to know how to buy, what to buy, and how to cook and how to serve fish. We are planning new cookbooks, new pamphlets, instructional films and exhibitions.
The creation of these new services to the industry and consumers cannot be achieved overnight; we have no large industry, no large fishery schools from which to draw staff. Personnel will have to be trained, and some years will pass before the full benefits are evident to all. The important thing is to launch the program now, and to look for new hope and new progress throughout the industry in the next five years.
I now come to phase two of our program, that which concerns the development of backward areas. The administration of the fisheries in some provinces-the inland provinces and Quebec-is left by arrangement to the provincial governments. In the other provinces the federal government has complete responsibility for fisheries matters.

Because of this the department is considering the advisability of calling a conference with the provinces for review of joint action in the areas experiencing difficulty. Meanwhile the following steps will be taken by the federal government:
Earlier in this statement I referred to the underdevelopment of the east coast fishery resources. Accordingly, to help the industry of the maritimes take greater advantage of the stocks available, and at the same time to help them meet market demands for fresh and frozen fish, we have reviewed our policy in connection with Atlantic coast fishing trawlers.
At present licences for trawlers are issued only to Canadian-built ships. It has now been decided that licences will be granted to new trawlers built in the United Kingdom as well as in Canadian yards. Licences will be issued also to the better types of secondhand trawlers, bought either in the United States or in the United Kingdom, and registered in Canada after the payment of duty. Licences, however, will be granted to companies obtaining a secondhand trawler only when that company has laid down a new keel in Canada. These steps will help the east coast fishing industry modernize their fishing operations at somewhat lower costs than before, and the trawlers themselves will help to stabilize supplies and maintain quality and variety of fish foods.
In the backward areas, as already mentioned, there is a special need for the establishment of technical and demonstration services to fishermen and to small plants, particularly in the maritimes and in Newfoundland. These services are as necessary to fisheries as experimental farms and demonstration stations are to agriculture. We plan, accordingly, to use the new technical services division to demonstrate in each of the main fishing areas the best that is known on fishing and fish handling methods. We propose also to develop an intelligence service to fishermen, one of the most important functions of which would be to advise on the whereabouts of fish schools during the various seasons. Some additional staff will be required by the department carry out this work, and there will be need for the acquisition or chartering of demonstration fishing vessels and gear.
The recovery of the poorer fishery areas in the east may require more than technical guidance.
We know we have to extend greatly our exploration and our surveys of the fish stocks around these coasts, and this too is part of our program. When you go to many of these communities you get the impression that they
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may be submarginal, that there is just not enough fish locally available to give the men a decent living. But you cannot be sure; so many of these communities depend on very small boats that can fish only a few miles from shore. Their equipment is so poor that they have to wait on the fish coming, to them. With better equipment they would fish further afield, and go where the fish happen to be. We are not always sure, however, where fish are to be found, and in what numbers. The survey of the sea is not like making soil surveys. It is more difficult, more expensive, and takes longer to produce results.
I am sure, however, that greater exploration of our fish stocks is necessary-necessary in helping fishermen, and in helping to decide what areas are really submarginal, and what areas merit new investment in the form of harbours, boats, and plants. Much survey work will be necessary to give us the facts on which to reach decisions of value.
There are of course, in some parts of the east, other industrial problems beyond fisheries. The future expansion of the fishery has to be part of a more general program, and the success of such development will depend on the closest liaison between the federal and provincial governments. Each has an important part to play. Likewise the fishing industry itself has a major responsibility. Some parts of the industry may lack the management or the capital necessary for prosperous expansion. This we shall be surveying carefully. But I am convinced that the east has management, and much available capital, too, ready to apply to the expansion. At present there is a hesitation caused by the need to turn to new methods and new products. That hesitation, I am equally convinced, will give place to forceful action as the possibilities within the North American market reveal themselves. After all, if the people of North America each ate one pound of fish more per year, the fishing industry could hardly begin to meet the demand. The future is bright. The resource is there, and if not fully used by Canadians, will be further controlled by other countries.
The program I have outlined can begin now. The new services in inspection, in the technical application of scientific knowledge to fish production and selling, in consumer services, and in the greater exploration of the seas and its valuable species, will all aid market expansion. As it proceeds, the more backward areas can, by federal and provincial action, move in on the new developments.
The estimates now before the committee are of course those prepared a year ago. The new program will begin to be reflected in next year's estimates.

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Mr. McLure:: I want to congratulate the minister on the wonderful address he has given us on our fisheries.
It is one o'clock, Mr. Chairman.
At one o'clock the committee took recess.
The committee resumed at three o'clock.


Mr.  W. Chester S. McLure@Queens: When the committee rose at one o'clock, Mr. Chairman, I had just said grace before luncheon by offering my thanks and congratulations to the Minister of Fisheries. I had in mind making some extended remarks myself, but in view of the minister's address, in which he presented the over-all picture so well, I am going to make my remarks quite brief.
Prior to the election last June, the government, through the Prime Minister and the Minister of Fisheries, announced its policies on several occasions. I might say that those policies, and the way they were announced, did not meet with the approval of the fishermen, the fisheries or even myself. It is understandable that they would not suit me. In announcing their policies, both the Prime Minister and the Minister of Fisheries enumerated them in detail, and they always commenced with these words: "The government should do this," or "the government should do that." What we needed at that time was to have a little "will" put into it. I should have liked to see the announcement read, "The government will do this or that for the benefit of the fishermen." I hope the Minister of Fisheries will put that thought into action, so that instead of hearing him say, "My government should do this," I shall hear him say, "My government will do this in the interests of the fisheries."
Some time ago there was a full day's debate on fisheries in this house. At that time the members from the different provinces across Canada extolled the fisheries of their provinces. If I were to go into that in detail today, I would be only repeating what was said at that time. I might say this, however, that in the province of Prince Edward Island from which I come, we have without doubt, and without making any apologies to anybody, the finest fish that are caught. The fishermen are looking for broader and better markets for their fish. This is one of the most important things we shall have to consider.
For some of our products, such as lobsters, oysters, and a few others, we find a ready market at paying prices. For the canned fish and fresh fish, we have practically no market outside our own province. If the minister will fulfil that one part of his policy, namely,
[Mr. Mayhew.l
the bringing into use of refrigerator cars for transporting fresh fish, and also the establishing of refrigerated stores in some of the large centres, then I believe he will have accomplished something for the fishing industry.
As I said a moment ago, it is not my intention to make extended remarks, but while I am speaking on this vote No. 101, departmental administration, I wish to say that these estimates have been brought down in the usual way. I regret, Mr. Chairman, that the same antiquated ideas prevail, except in the case of the estimates' of the Department of National Defence. The committee is being asked to vote approximately $7,200,000 for the carrying out of the work of the Department of Fisheries. Details are given for about 75 per cent of that amount, and then we are asked to vote a blank cheque for about $1,650,000. There are 47 permanent civil servants listed, the payment for whom amounts to $153,620. Temporary services in the same department cost $146,280. The details are given for the expenditure concerning the permanent civil servants, such as the amount each one receives, the position and grade, and so on. When it comes to temporary employees, we do not know whether there are 50, 60, or 100.
My first question of the minister is to give us some details with respect to this additional blank cheque which he is asking this committee to vote. I may say further in connection with this, that there is always a suspicion in the minds of most of us, although it is not voiced by the members on the government side. What else is covered in this vote of $146,280 in addition to the wages for temporaries?


Mr. MacNaughi:: In answer to the hon. member's question, I might say that the Department of Fisheries has a staff of 300 permanent employees.


Winfield Chester Scott McLure: This is just in the administration branch.


John Watson MacNaught: At headquarters, there are 46 permanent and 59 temporary employees; recommended for permanency, 16; and vacant, 16.


Winfield Chester Scott McLure: The 59 received a higher rate of wages than the permanent civil servants?


John Watson MacNaught: There are 16 who are
temporary now but who have been recommended for permanent employment.


Winfield Chester Scott McLure: They receive that $146,280?


John Watson MacNaught: That is correct.


Mr. Gordon B. Isnor (Halifax):: Mr. Chairman, I am sure that all those interested in

the fishing industry will be pleased by the statement made by the Minister of Fisheries this morning. He dealt with this oldest industry in its various stages, and finished by stating that the industry is still growing. I like that "still growing" because I believe there is plenty of opportunity for this industry to develop to a great extent. He referred to the activities of the agriculture department. We who have followed the agricultural activities as compared with the fisheries believe we understand just what the minister meant. Perhaps the greatest piece of legislation in connection with advancement similar to that made in agriculture was the recent introduction of that bill entitled the "Fish Inspection Act". The members from the maritimes discussed this bill, and we were indeed pleased at the reception it met with from all groups in the house. I was particularly impressed with the able manner in which the hon. member for Queens-Shelbume dealt with this Fish Inspection Act. While I do not propose to go over all the points raised by him, in fairness to our section of the country I felt that I should once again bring to the attention of the maritimes one or two points raised by him.
He paid a deserving tribute to the fisher-folk of his particular part of Nova Scotia, in pointing out that during the years when things were not as good as they are now in Canada and the rest of the world, namely in the thirties, they by their industrious habits and manner of taking care of themselves did not look for relief but rather went out and through their own efforts raised sufficient vegetables and other things for the household-even by the planting of small gardens on the rockbound coast of Nova Scotia-and were thus able to carry on without any help from the so-called relief fund.
He also touched on what I thought was an important development in Nova Scotia, particularly in his part of the province, when he referred to the processing of kelp. He told us how this was not only used in his own province but was exported to Rockland, Maine, where various drugs and compounds were derived from it and were sold all over the United States. I think the picture he painted with regard to the fisheries industry as it applies to the province of Nova Scotia, and particularly to his own constituency, was exceptionally well received, because I have had many letters stating how pleased the writers were that our new member from Queens-Shelburne had taken such an active part and shown such a keen interest in this particular subject. I thought that it was only fair, Mr. Chairman, that I should pay that
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tribute today because of the fine picture painted by the minister in his report to us this morning. The two of them will, I think, be well worth preserving and reading in future.
Perhaps you will wonder, Mr. Chairman, why I departed a little bit from the subject.
I would judge from the nod of your head and the wonderment on your face that you were about to say "Come back to the subject." It is all part of the picture of the fisheries industry. That was perhaps the first chapter. Then the second chapter was as developed by the minister this morning in his remarks. He covered the ground fully and gave us the program or framework as to the future of his department. I was indeed pleased to know that he had taken a broad view of this picture and that he was not going to allow it to stand still as it has done to a certain extent in the past. Perhaps it is because we have a combination of interests in the minister and the parliamentary assistant. In the minister we have one from the extreme west who is looking after the interests of the fishing industry as it pertains to the west and to the rest of Canada; and with him as parliamentary assistant he has an exceedingly able man from the province of Prince Edward Island. We therefore have one of the extreme eastern provinces and one of the extreme western provinces represented in the combination that exists today.
I think I should also pay a compliment to the efficient organization we now have in the Department of Fisheries. Our deputy minister is one whose reputation is known throughout Canada and the United States, and his name is well known overseas also. Hence I say that we are today in a more fortunate position perhaps than ever before having regard to the expansion of this industry which means so much to us not only in the maritimes and in Newfoundland but also to those who fish in inland waters, as mentioned by the minister this morning when he referred to the inland fisheries.
I am now going to come to what I think is an important branch of the development having regard to Nova Scotia. It will be recalled that prior to 1920 fish was distributed in only five forms: canned, salted, smoked, frozen whole and fresh. It was distributed to a large extent in bulk. Commencing at that time around 1920 distributors at the market purchased fish from dealers at the coast largely in the round form and processed it into fillets at the market. The processors at the coast gradually took over packaging and processing. At Halifax and other places we are concerned

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with the development of the fresh and frozen fish industry of the Atlantic seaboard. While I know that figures are not easy to follow, I wish to mention a few to show the marked increases which have taken place since 1932. in that year Canada exported to the United States 671,100 pounds of fresh and frozen codfish. Please note that I said "fresh" and "frozen". There is no suggestion that fillets were frozen and exported in that year. Hence we can assume that the export fillet trade has developed since that time.
In 1946, fourteen years later, Canada exported 39,168,000 pounds of cod fillets. I could also refer to the 1,125,000 pounds of fresh and frozen haddock shipped in 1932 and the increased amount of 3,022,000 haddock fillets shipped in 1946. You will therefore see, Mr. Chairman, the great increase which took place during that fourteen years. This has been a remarkable increase.
The total quantity of cod fillets produced in Nova Scotia in 1932 was 1,760,670 pounds. In 1946-and these are the most recent figures I have-18,509,600 pounds were produced. Of haddock fillets, in 1932 there were produced 3,882,860 pounds; in 1946, 3,194,000 pounds. These figures forcefully indicate the trend of change in the industry. It will be noticed that there is little change in the volume of haddock, but codfish, once despised, has come into popular demand.
Meanwhile, other countries have more than kept pace with Canadian efforts, both in the increase in volume and in the development of other species, both of which factors have created intense competition for the Canadian producer. I am therefore suggesting that the entire face of the fishing industry has undergone a complete change, and the policies inaugurated around 1929 or just prior to 1932, still being in existence, probably do not meet current requirements.
I pause here, Mr. Chairman, again to compliment the minister on his expanded policy. From the policy inaugurated and announced this morning I believe we in the maritimes shall profit to a very great extent, and I particularly have Nova Scotia in mind.
It would appear that the major problem facing the fishing industry, or at least the operator, is the shortage of raw material, which problem arises out of the lack of modern production vehicles, as well as a diversion of edible sea foods to bait services. Lack of raw materials creates certain major problems in the conduct of production and merchandising. I think the minister is familiar with that problem, and I am going to suggest a few subheadings, which read as follows:	one, increasing overhead costs
become excessive when applied to the small 
volumes available; two, difficulty is found in recruiting, retaining and satisfying suitable plant personnel; three, because of the first two factors, irregular employment is created; and, four, plant personnel cannot become proficient in exercise of skill.


Mr. Harris (Danforlh):: I want to ask a question. Has it now got to the point that hon. members must rise in their places and read essays on certain subjects? What is your view, Mr. Chairman?


Gordon Benjamin Isnor: When I have been speaking in the past the hon. member has risen and raised the same objection. I have listened to hon. gentlemen talk at random quite often. I am trying to be as specific as possible in placing before the Minister of Fisheries constructive criticism, and in doing so I naturally have to refer to notes.


Gordon Knapman Fraser: The hon. member talks at random once in a while.


Gordon Benjamin Isnor: The next point I should like to emphasize is that lack of continuity of supply engenders inefficient plant organization. As a businessman the hon. member should appreciate the definite manner in which I am placing these suggestions before the committee.


Joseph Henry Harris: Mr. Chairman-
The Depuiy Chairman: The rule is clear that speeches must not be read. I understand that the hon. member for Halifax is about to conclude his remarks, and is following his notes.


Gordon Benjamin Isnor: Mr. Chairman, I would not want you to think that I am going to conclude my remarks immediately. I definitely want to make some constructive suggestions to the minister.


Joseph Henry Harris: Read on.


Gordon Benjamin Isnor: My fifth point is that markets are lost to foreign competitors and other food products because of shortages. If I were asked, Mr. Chairman, to name which of these factors were the most important I would perhaps say lack of continuity of supply and losses sustained to foreign competition. These are the two outstanding factors that we must contend with, and I am sure that the minister and his parliamentary assistant will take note of them. To these factors must be added the expense of maintaining a sales force and sustaining advertising campaigns with inadequate market coverage. The minister brought that out this morning in his statement when he referred to the need of advertising and making known the good quality of fish so that

it could be brought from the sea to the table in such a state that it would be well received by those at the table. That can be done only by proper marketing and by making known to the consuming public the benefits of eating more and more good fish.
I desire to point out that the growth and expansion which I have outlined have been accomplished with a minimum advertising effort and merchandising. It is claimed by certain operators that because of restrictions pertaining to the industry, arising largely through the opposition to modernization, we are not in a position to meet foreign competition, and unless a change of policy is forthcoming we shall lose the markets we now have. Again I say to the minister that he has recognized that fact and has made a change. Because of that change I believe we shall not have the difficulty we have had in the past with regard to modern foreign competition. I well recall not so many years ago, Mr. Chairman, the opposition to the introduction of steel boats. As far as I can ascertain this opposition no longer exists. At that time the inshore fishermen felt that they could not find outlets for -their production. Credit for the improved condition of the inshore fishermen, it is believed, is due to the government's action in assisting these fishermen in the diversion of their efforts and in more profitable operations. Perhaps I could mention in particular government assistance rendered the lobster fishermen toward the improvement in the transportation of their product, and assistance in improving methods of curing, packing and grading salt and pickled fish, and in making modern transportation available in the expansion of highway systems to isolated villages. I think that has been a great help in providing collection services in the different provinces. That has been brought about largely through co-operation with the provincial highway departments, which have made possible the extension of good roads into those isolated fishing villages; thus providing a means of transportation from the fishing villages to the centres where the fish is disposed of.
Then again opposition to modernization was found to be coming from the deep sea fishermen who desired to enhance their earning opportunities by seasonal operations in salt and fresh fishing. To a great extent improved markets have eliminated their concern in that regard. Today I think it can be said the opposition comes primarily from the shipbuilding industry which naturally wishes to sell its services to the fishing industry. I wish I had time to develop this thought. Perhaps I shall do so at some
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future date. I say that because of the policy placed before us this morning by the minister. He said that he would permit certain types of ships to come from the United Kingdom and also from the United States. By that announcement he is going to meet the opposition to the competition which we have had to face in the maritimes in respect to a foreign type of ship which was permitted to fish off our banks at a time when we were unable to compete with that same type of ship. Because of that we were losing much wealth in our own country.
To regard this problem objectively, we must recognize that durability and efficiency of steel are essential to modern industry. I think the action taken by the minister will bring about the results desired, and we shall then be able to improve and operate along economic lines and thus compete with the modern foreign equipment. I feel, Mr. Chairman, that the steps taken this morning will be of real assistance to our fishing industry, and will also aid the shipbuilding activities of our country. As I understood the statement made this morning by the minister, it is to the effect that when one fishing concern brought a ship into this country, either from the United Kingdom or from the United States in particular, that firm would be obliged immediately to lay down a keel for a fishing vessel or a ship of a similar type. If they could not-


Robert Wellington Mayhew: May I just make one correction? It is just the reverse. When they have laid down a keel in Canada then they may bring in a secondhand boat either from England or the United States.


Gordon Benjamin Isnor: Thank you. I will say that as soon as a company shows enterprise by laying down the keel for a new fishing ship, they are then at liberty to bring in one foreign ship of the type mentioned by the minister. I say that should add greatly to our position in the matter of meeting competition from foreign ships.
I should like also to draw the attention of the minister to the need of storage refrigeration facilities along the Atlantic coast, as well as in other sections of Canada. I do not believe the minister touched on this matter this morning. As of August 1, 1949, the very latest figures I was able to procure, cold storages on the Atlantic seaboard were congested with some 5,860,000 pounds of herring and 3,110,000 pounds of mackerel, a large proportion of which will be used in bait services. This was mentioned in a speech made recently by the hon. member for Antigonish-Guysborough (Mr. Kirk). He enlarged upon the matter to some extent, and I suggest his remarks should be kept in

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mind by the minister, his parliamentary assistant and his officials when we are dealing with this matter of enlarged storage facilities.
Total holdings of frozen fish on the Atlantic seaboard as of August 1 were 19,070,000 pounds; hence, approximately 47 per cent of the total cost of storage constitutes a dead burden on the industry. This is an uneconomical method of conducting business. The industry now finds it necessary to use this fish as bait, and carry this burden of services. It is suggested that this burden could be converted to an asset by diverting this large volume of edible food into human food channels.
It is felt that this factor is a real argument in favour of modernization of fishing vessels, or the shipping to which I have referred. Reference was made earlier to the development of other species of fish for the human-food market. In particular it is desired to mention the rosefish industry developed in the United States, which commenced in 1934 when 539,000 pounds of fish were sold.
In the port of Gloucester alone in the year ending December 31, 1948, we find that 178,800,000 pounds of rosefish were landed at a value to the fishermen of $7,405,740. That is the point I had in mind a moment ago when I said there was much wealth being lost to Canada by not using modern fishing equipment.
Except to the extent that Newfoundland processors have recently produced redfish fillets, Canada has not participated in this development, even though 60 per cent of the raw material used in this development was taken off the shores of Nova Scotia. Contemplating the policies governing the expansion of the fishing industry on the Atlantic seaboard, it appears that the department, in view of the announcement this morning, has recognized the value of this type of fish. I am very pleased to note this expansion in policy and, as I said before, it is my view that if this is continued we will certainly add greatly to'the wealth of our fishing industry.
In closing I would say that the increased production of fish processors would have the effect of adding to the numbers employed. In his remarks the minister stated that they were not operating to capacity. One processor told me that he was operating at about 70 per cent of capacity. With the increased catch he would then be able to employ steadily a larger number of employees, and increase his production by 30 per cent, or bring it up to its 100 per cent capacity.
I say the policy the minister announced should add to employment as well as to the improvement of the fishing industry itself.

I would ask the minister to let the committee know what he and his department are doing in regard to oceanography. Two or three weeks ago I received a copy of the magazine Think in which appears an article entitled "Science of the Sea", and the article proceeds to show that the science of the sea is that of oceanography.
Because of this article I placed on the order paper certain questions to which I received full replies. I sent those replies to the fishing interests in Nova Scotia, who were pleased indeed to learn of the steps already taken to carry on studies in this important field of science, so far as the fishing industry is concerned. I hope the minister will be in a position later to enlarge upon the statement he made this morning by telling the committee what the department proposes to do. I am of the opinion that we should have greater study and training in connection with this subject, both on the extreme west and east coasts. At a meeting of Canadian universities last June this question was studied and a resolution was passed favouring the inauguration of studies on both coasts.
In closing I would ask the minister or his parliamentary assistant to comment on the following matters:
Will the increased use of steel fishing boats assist our fishing industry, and to what extent? I believe the answer can be given in the affirmative, but I should like to know the extent. I am referring to the minister's suggestion this morning concerning the use of a larger type of boat.
Will consideration be given to the production and processing of the rosefish so as to cater to additional markets?
Would the minister advise the committee as to what steps are being taken in respect to oceanography?


Mr. G. F. Higgins (St. John's East):: Mr. Chairman, it was a pleasure to listen to the minister this morning deliver an excellent speech in which he outlined the policy of his department. I have already offered to him my congratulations on other occasions; today he has shown the obvious interest he has in his work and the attention he has paid to his department since he assumed leadership of it.
The minister's statement was all-embracing, and indicated clearly the amount of work that has been done by him and by his staff. It was particularly encouraging to the fish-eries-minded persons from the new province. Hon. members may not realize it, but the fishing industry of Canada is a $200 million industry. As the Prime Minister said in September when addressing the fisheries council of Canada, a long time ago two fishes fed a large crowd; today the fishing industry

of Canada can indeed feed a large crowd if it is properly encouraged and if the proper care is taken of it, as the minister indicated today.
The minister made one statement this morning which rather made me sit up and wonder whether I understood it correctly. He referred to the new trawlers which it was proposed to build, and said that many foreign vessels were catching fish right up to our coastal limits. Advocating the building of new trawlers, he said that licences will be issued also to the better types of secondhand trawlers, bought either in the United States or in the United Kingdom, and registered in Canada after the payment of duty. To me that statement was a startling one, knowing, as I do, something about the fisheries on the Grand Banks. On a fine day there it looks like a gathering of the United Nations, because you see ships flying the flags of Portugal, Spain, Iceland, Norway, France, the United States and Canada. I think we all know what has happened to the United States fishing grounds. Through the use of trawlers they have been cleaned out, and now they are coming up to the Canadian grounds to fish.


Mr. Winters:: Is the hon. member referring to the use of a trawler in the sense of a fishing schooner, or to the newer method of trawling or dragging?


Gordon Francis Higgins: I have no practical knowledge of the fishing industry, certainly nothing like the knowledge of the hon. member for Grand Falls-White Bay, but, as I understand it, trawling of any kind is dangerous to the future of our fishing industry. The minister will be able to deal with this much better than I, but I am told that by the use of trawlers many of the small fish are killed in the bringing up of the general haul. Because of the pressure, many of the small fish cannot get out and are killed.
The point I am trying to make is that the United States banks have been cleaned out and United States trawlers are now a dime a dozen. They now come down to the Grand Banks and the banks outside Halifax in order to fish. The use of trawlers may or may not be bad, but I think members such as the hon. member for Halifax should be worried about how our fishing industry will be affected. What is going to happen to our inshore fishing, the small man who works out from his home with his motorboat and dories? If trawlers are to fish right up to his front door, what is to become of him and his family? He will have no livelihood. I may be voicing the views of an amateur, but I submit that this is a serious matter for the industry. The little experience I have had would lead me to
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believe that there is a real danger to the Canadian fisheries. We know what has happened to the European fisheries, and we know what has happened to the United States fisheries. Is it to happen to our fisheries as well?
I do not believe the minister will allow it to happen.
The same thing is happening to our seal fishing. During the past few years more foreign fishing boats have been fishing in Newfoundland waters. Last year some six or seven Norwegian seal fishers came to our waters. Some regulations will have to be prepared to cover this matter as well. After all, these fisheries are ours

and I speak in the national rather than the provincial sense. They offer great future possibilities, and they should not be destroyed.
As I say, consideration will have to be given to the effect of trawler operations upon the inshore fisheries of Canada. I shall not say anything more on this matter at the moment, because I am quite certain some of my colleagues from Newfoundland will wish to speak on this subject, and will be able to do so with more authority.
I was glad to hear the minister say that more would be done in the way of fish conservation. I was glad to hear that a kitchen has been set up in his department to demonstrate the proper cooking of fish. I understand that the per capita consumption of fish in Canada is ten pounds per year as compared with the European consumption of about forty-five to fifty pounds per year. If we can get the Canadian people to eat another five pounds per year, which is not very much to ask, I doubt if the fishing industry will be able to catch sufficient fish to meet the domestic demand.
When hon. members go home to their constituencies they should advocate the eating of fish. They should not forget that fish is a great brain food. From this point of view there may be hon. members who would not want to have their constituents eating too much fish; but it is worth thinking about.


Mr. Riley:: On what does the hon. member base his assertion that fish is a brain food?


Gordon Francis Higgins: All I have to say is, look at the Newfoundland members.
The minister also referred to the salmon and lobster fisheries. In Newfoundland we are particularly interested in salmon fishing, which is extremely valuable. The British Columbia members, I assume, are also keenly interested in salmon fishing, but there is some difference between the Pacific and the Atlantic salmon. Pacific salmon

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make their runs up the rivers once a year The minister also referred to the fisheries
and die, whereas the Atlantic salmon spawn a number of times.
The Atlantic salmon are being fished with cod nets much too close to the rivers. I have no doubt this is happening in the Nova Scotia rivers as well. I know definitely that our salmon catch is steadily dropping, and unless serious measures are taken to conserve our salmon fisheries in the not too distant years there is going to be a very poor outlook for salmon. I do not know whether this matter comes under the minister, or whether it is in the jurisdiction of the province, but I suggest that it might be advisable in certain of our rivers, where the fishermen now are catching the salmon as they enter, to take on those fishermen as wardens or something of the kind. In other words they might be paid the amount they would ordinarily obtain by fishing, and have these rivers kept free for the fish coming in.
Do I make my point clear? In each of these little bays where the rivers enter there tire probably ten or twelve fishermen catching salmon. They take large quantities of fish, for which they receive very low prices. If these people could be subsidized, by the amount of their average earnings over a two or three year period, and not put their nets in those rivers, I think it would be well worth while. The hon. member for Halifax is aware of the great salmon fisheries that existed in Nova Scotia in the early days, and he knows the conditions there now. You have to be a pretty smart fisherman to catch a fish in some of those rivers in the mari-times these days, and we do not want that to happen in Newfoundland. In all sincerity I offer that suggestion to the minister, from my experience as an amateur fisherman, as something which might well help solve the problem in our province.
The minister mentioned canned fish, and this brings to mind a very interesting development, of which no doubt the minister is aware. In the Financial Post of November 5 there was an article describing the shipping of live lobsters in tins. This is an unusual development and the article states:
The project was originated by J. E. MacDonald, a Boston seafoods packer, who has established an operation in Prince Edward Island, believed to be the first of its kind in the world.
If this is feasible, as apparently it is, we might create a market for lobsters in many parts of the world where they cannot be sold at the present time. As I say, the minister is probably aware of this development, and I merely mention it for the information of the committee.
prices support board. In Saturday Night of October 25 I saw this item in that connection:
The fisheries prices support board spent more than one million dollars buying a variety of fish to support prices, but managed to sell less than $12,000 worth. It marked off more than $500,000 as total loss and still has an inventory of about $634,000 worth of fish products at the end of the fish year, March 31, 1949.
I do not know whether that is correct, but if it is, I believe something should be done about it. It is all very well to support the industry; I agree with that in every way, but would it not be very much better to give those fish products to some of the countries that need food at the present time instead of holding them in stock? Otherwise they will go bad and be of no use to anyone. I think all hon. members will agree that when our warehouses are stocked with butter, fish and other commodities, as they are today, and when people in other parts of the world are hungry-


Robert Wellington Mayhew: That is exactly what we did with the fish we bought; we gave it away to needy people.


Gordon Francis Higgins: Thank you; I did not know that. You may count on my active support in a program of that kind; I believe it is a splendid idea, and I think all hon. members will agree with it. I wonder if the Minister of Agriculture is going to give away his butter.
I thoroughly agree with the proposed packaging of fish and the general program envisaged by the minister in connection with fish inspection.
I have no comment to offer on the fine statement he made today, with which I entirely agree, except with respect to these trawlers; and on that note I should like to close my remarks. I believe serious difficulties may be avoided by proper precautions and proper protection with respect to trawlers. We have to think of the ordinary little man who is carrying on as a fisherman, and what is to become of him. If the hook-and-line man who depends upon his dory and his motorboat to get a few fish is to be put out of business by trawlers operating right on his doorstep, then I am afraid a great number of people may be on the dole in the not too distant future. It is something we must guard against. I should like to feel sure that we are not going to have any United Nations gathering out on our fishing banks, which I believe should be recognized as Canadian banks and preserved for Canadian fishermen.

The minister was kind enough to tell me he was going to answer a number of questions I submitted to him earlier. I do not know whether he would be prepared to give those answers now, but I believe he has the questions before him; therefore I need not repeat them. If he is prepared to answer them, I should be glad to get the information.


Gordon Benjamin Isnor: I did not wish to interrupt the hon. member, but would he be good enough to tell us when any inshore fishermen ever took his dory to the Grand Banks?


Gordon Francis Higgins: Not in a dory, of course; I did not say that.


Gordon Benjamin Isnor: That is what the hon. member implied.


Gordon Francis Higgins: I say the trawlers are going beyond the Grand Banks, and will soon be . fishing on the very doorsteps of these men. That is what is going to happen. I do not know whether the hon. member advocates the unlimited use of trawlers. He comes from the maritimes; surely he would not.


Gordon Benjamin Isnor: Is the hon. member aware that at the present time there are restrictions in regard to the distance within which trawlers may be used?


Gordon Francis Higgins: I see the hon. member for Grand Falls-White Bay in his place, and he would be much more competent to answer those questions than I am. All I know is that I am very much concerned about the use of trawlers, and I made that remark because I feel that definite restrictions will have to be imposed upon their use.


Gordon Benjamin Isnor: Apparently you do not know.


Daniel (Dan) McIvor: I come from a constituency that is outstanding for its fresh-water fishermen and fish. If the lake Superior trout is properly cooked, it will compare favourably with any other fish to be found anywhere.
I have sat in this house in past years and listened to the battles that were fought by members from the Pacific and Atlantic coasts for various reforms in connection with our fisheries, and now those reforms are being brought about. I am sure if the former hon. member for New Westminster were in the house now he would be happy to see so many of his suggestions put into effect.
I have a request to make of the minister.
I know at one time the department issued a cookbook showing how to cook fish. I wonder if the department has another, or if it has an improved edition of the original cookbook. My suggestion, which I think would help him carry out his policy, is that he send perhaps
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a hundred of these recipe books to each member of the house and each member of the other place, so that they could put them in the envelopes with their Christmas greetings. It would not cost a great deal, and even if each hon. member had to contribute the cost I think it would be well worth while.
When I think of the minister and the way he speaks in the house, and when I consider the results he has achieved, I think of a man whose accomplishments speak louder than his words. We hope he may be long spared to continue to bring about these reforms.


Mr. C. T. Richard (Gloucester):: I do not
agree with the remarks made by the hon. member for Queens when he says that when the fisheries department announced a policy, he would like to hear the minister say "I will do such a thing," instead of "I should". I believe the minister can say "I have done those things," because I believe much credit is due to him for the improvement that has taken place in the fishing industry in the last few years. It is my opinion that more has been done to promote the interests of the fishermen during the last fifteen years than was done in all the years previous to that.
Let me give you an instance. In my county, until a few years ago, deep-sea fishing was carried out in schooners valued at about $2,500. They were powered by a gasoline motor, and the method of fishing was by a hand line or set line. Through the assistance given by this government, today we have sixteen draggers each of which cost in the vicinity of from $25,000 to $30,000. Some of these boats have brought in over one million pounds of fish in the last season; that is a lot of fish, Mr. Chairman. The whole system of the fishing industry on the north shore of New Brunswick has been revolutionized.
I do not believe too much praise can be given the minister for the businesslike way in which he has tackled these problems, and the policies which he has inaugurated. By talking to the fisherman themselves, the shippers and the packers, he has created a better spirit. They appreciate that they must throw their efforts behind the program of the fishing industry. I believe that by bringing these people together, the minister has promoted a better spirit between the fishermen in the province and the buyers. I hope that the new policies the minister mentioned this morning will be adopted promptly, for I am sure they will mean a great expansion in the production of fish, especially in the maritime provinces. I believe the total production of fish in the

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maritime provinces is approximately 100 million pounds. I can safely say that it would be easy to double this amount.
We are finding new markets for our fish. The trend today is towards fresh fish. In my county, most of the fish produced a few years ago was processed by the sun-cure method, and shipped to the European market. Today that same fish is being turned into fresh fillets, and is finding a ready market in the nation to the south of us. This has meant a much higher standard of living for the fisherman, for he is getting better prices than he was formerly. During the depression years, I recall fishermen selling dried codfish for as low as $3.50 or $3.75 a quintal which is about 112 pounds, and it took 220 pounds to make a quintal. Today, a fisherman is receiving 2\ cents for round fish, which means that these draggers I have mentioned produce about $25,000 worth of fish in a short season of five months. This means a great development for the fishing industry.
I may say that the fisherman has enjoyed a good season, and the fishing industry is the one thing in New Brunswick that has not shown any disturbing signs. In lumbering and other industries, there are signs of a recession, but the fishing industry has bright prospects. I hope that with assistance, such as was given by the government in the past, the fishermen will continue to prosper, for they have seen too many difficult years.


Andrew Wesley Stuart: First, I should like to congratulate the minister on the statement he made today. I am convinced in my own mind that, some time in the near future, we may expect the fisheries department to become a major department instead of the minor department it has been since confederation. It would be impossible to place too much importance on the fishing industry in this country. Many people are dependent upon it for their livelihood and, with proper management, it could be greatly improved. The welfare of our fishermen could be improved, also.
This great improvement, which I expect to see some time in the future, can be brought about when the fishermen of this country are taught to produce a better article. I have stated repeatedly that the Department of Fisheries, instead of trying to educate the fisherman to produce a better article, regimented the fishermen too much. They were told what they must do, and they were never given any assistance. Today I believe the department is teaching young men in their employ to be of assistance to the IMr. Richard (Gloucester).]
fishermen. When you find the employees of the fisheries department making friends with the fishermen, advising them, and helping them with their problems, you will find the industry will improve.
Speaking of the loss of markets in Canada, I believe that the fish-canning industry of this country has been hit harder than any other industry from the Atlantic ocean to the Pacific. Very little is said about it, however. During the war no trouble was experienced in marketing anything that could be put into a can. I often wondered why, when shipping space was so valuable, Britain could take any quantity of canned fish we were able to produce. In many cases, that fish was a gift from this country to Britain. When the war was over, after the fishing industry had gone a long way in assisting that country, we found they had no more use for Canadian fish.
Some people will say that the British have not the exchange. A little over a year ago I was in Britain and I was disturbed on being informed that Russian salmon was appearing on the British market. It was not bought with sterling, but the British had bartered tin plate for this Russian salmon. At that time all the warehouses in British Columbia were filled with salmon. I know that many of the delegates who were there tried to buy the B.C. salmon to take back to their country, not just a few cases, but carloads. They had to take this Russian salmon. It has not been explained to me why the tin plate could not have been bartered for Canadian fish.
The statement made by the Minister of Agriculture which was quoted in today's press is in line with what I have thought since the war ended in 1945. I do not believe Britain has treated this country the way it should have been treated; that is my personal opinion, but I do not hesitate in expressing it. We did everything we could to help Britain. We made gifts and loans of over $5 billion, yet today when we want to sell fish or anything that is produced in this country, the British turn it down. No reasonable explanation has been given to me for this state of affairs.
Previous to the war, the little county from which I come was shipping canned fish to one hundred different countries in the world, many of them within the commonwealth. Today this market has been lost to a great extent. In former years, we had no trouble disposing of all we had to offer. The quality is the same today or better, but it is utterly impossible to get into that British market and sell anything we produce down in the maritime provinces.

From following the discussions I have learned that one should not refer to previous debates in the house, but we have heard it said, and we have been warned, that we should watch carefully our neighbours down to the south of us. For just a few minutes I want to tell hon. members what those neighbours down to the south of us mean to the people of the maritime provinces. We will take the lobster industry, for instance, which is a big industry in the maritime provinces. In the four maritime provinces and the state of Maine we produce practically all the lobster that are produced on the North American continent.


Mr. Stick:: What is that?


Andrew Wesley Stuart: I said that in the maritime provinces and in the state of Maine we produce practically all the lobsters that are produced on the North American continent.


Leonard T. Stick: I thought you said on the North American continent.


Andrew Wesley Stuart: That is what I said, on the North American continent, and I think that statement is correct. More than 95 per cent of those lobsters produced in the maritime provinces are sold in the United States. Those figures are correct. About 60 per cent of the sardines that are caught in the section of the country in which I live are sold in the United States. Ninety per cent of the scallops dragged in the bay of Fundy are sold in the United States. About 80 per cent of the groundfish caught in that section of the country are sold in the United States. We have another industry that few people know anything about. That is the herring scale industry. It may sound trivial to hon. members but the herring scale industry in my part of the country means hundreds of thousands of dollars to the fishermen. They are sold 100 per cent in the United States of America.
When we speak of the balance of trade, I often wonder if the people of Ontario and Quebec realize just exactly the position we are in down in the maritimes. There is nothing that we have to offer that they want in central Canada. We are obliged to go to our neighbours to the south of us in order to sell our products. But when we bring that money back into Canada, if there is anything that we might want for our homes we have to go to Ontario and pay two prices for it. Those are actual facts. There is nothing they want to buy from us but they are always ready to sell.
I have told this story on many occasions. Down where I live there are many hundred of articles that I can buy in the United
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States for fifty per cent of what is charged for them in Canada. That is no exaggeration. 1 can give you the price tag if you want it.


An hon. Member:: Give us some.


Andrew Wesley Stuart: Very well. I saw a refrigerator in Calais, Maine, one month ago for $165.


The Deputy Chairman:: Order. I would ask the hon. member to confine his remarks to the item under discussion.


Andrew Wesley Stuart: If the hon. member wants a reply, he is welcome to it. The same article sells for $340 in Canada, made by the same company.
When you speak of balance of trade I wonder why we down there are obliged to find markets somewhere else, but when it comes time to buy something we need for our own homes-and these are not luxuries today, we would all like to get them for our homes-we have to come up here and pay the people in Ontario two prices for them. I might mention here the austerity program that was put into effect a short time ago and which to my mind was necessary at that time. The manufacturers of this province took full advantage of it, and when the. time comes for all restrictions to be removed, you will see the price of the article I have mentioned decrease 33 per cent overnight. They are taking full advantage of conditions.
To show you that these people to the south of us, who many of our friends think are selfish, are not as selfish as they might be, 1 want to read a very short piece from the Maine Coast Fisherman, which in my estimation is one of the best fishing magazines published anywhere on the North American continent. The editorial is headed "Lobster Tariff" and it reads as follows:
"Why don't they put a tariff on Canadian lobsters?" lobstermen frequently ask. It doesn't look to us as though there is much chance of such a tariff ever being put into effect.
Our government, expressing the will of the majority, has adopted a free trade policy. We Americans have told the world we believe in lower tariffs everywhere to encourage greater interchange of goods. We believe the trade thus created leads to better economic conditions. We believe this helps world peace.
Even if a tariff were set up, it is questionable whether it would help the Maine lobsterman in the long run.
This is the state of Maine. To continue:
It is an artificial way of forcing the consumer to pay a higher price for lobster. Furthermore, Maine cannot possibly supply the whole market. There would be fewer people eating lobster and paying a good deal more for it. The market would contract, the consumer would rebel, and sooner or later we'd be worse off than we were before.

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That is the attitude of the Fisherman in the state of Maine, with whom we are competing today. That magazine is read by every fisherman in the state of Maine and that is the opinion expressed by the editor. If they should put a prohibitive tariff on fish that are caught in the maritime provinces, you could buy the maritime provinces for $1.50 an acre and you would take a big loss. We are wholly dependent on that market.
I am not going into the confederation issue. But many times, when people tell me that I am an American, I wonder whether, if at the time of confederation we in the maritime provinces had decided that we should like to go on the other side of the border, we would not be better off today. Again, as I say, I never hesitate in expressing my personal opinion; and that is my opinion at the present time. Under the set-up in this country I believe that if we were part of the United States there would be a great deal more prosperity in the maritime provinces than we are enjoying at the present time. There is nothing that we can sell in central Canada. The only thing we can do is to buy there and to pay two prices for what we buy.
I intended to be brief when I rose to my feet, and I think I shall stick to that idea. If we wish to help the fishing industry, it can be done with quality only. The one thing that will assist the industry is to produce better quality. I know the minister has that in mind, and I believe the department is behind him 100 per cent. You might market fish products marked "C.S." Canada standard, but that is not going to sell it. It is the quality that is in the can that is going to sell it. To a great extent I believe the trade mark is the thing that catches the eye of the purchaser. In order to produce better quality an educational program must be encouraged by the fisheries department. I have this statement to make before I sit down. Rather than go out among the fishermen and tell them that they cannot do this, that they cannot do that, hale them into court, fine them and do everything you can to make it disagreeable for them to get along, if the members of the fisheries department forget all about that idea and consider the fishermen their friends and act as their advisers, the fishing industry can go a long way.


Mr. Donald Smiih (Queens-Shelburne):: had not intended to say much at this time, Mr. Chairman, but the minister's statement this morning has aroused my interest in this discussion. It was without doubt a most comprehensive statement of government policy. It was the most comprehensive one I have ever heard of government policy with regard to the fisheries in this country; and I

am firmly convinced that it is the beginning of a big national plan in the great fishing industry.
I do not want to keep the house too long and I shall therefore be as brief as I can. I might ask the indulgence of hon. members, bearing in mind the fact that I have occupied so little of the time of the house up until this time; if I should delay them for five minutes or so I hope I shall not lose any friends.
I do not want to spend any time talking about quality. That is something that was discussed at great length in the house some time ago. The department and everyone else in the country is now well aware that the success of the fishing industry depends to a large extent on the quality of the product.
I was glad to note in the statement made by the minister this morning that some emphasis is to be put on the establishment of consumer services. That is an excellent idea. In that regard I have just one thing to say, namely, that it does appear to me, and to many others in the east at least, that when the fishery cookbooks were sent to the publisher they came off the presses with complicated recipes for the preparation of fish. They contained substances to put into the cooking of fish which were hard to obtain. I should like to emphasize that the more simply fish is cooked the better it is. There are three or four changes that are most important. The fish must be bought in fresh condition. It may be cooked simply or otherwise but it must be cooked quickly, and certainly it must not be cooked too much. The fourth part of the change so far as the consumer is concerned is that as soon as it is cooked it must be served. Many of us from the maritimes have noticed that in the best hotels and the best restaurants of this country it is most difficult to get fish such as we would have served every day, if we like it that often, in our own homes.
I also regret to say that even in the best hotels and the best restaurants in Nova Scotia they have not yet arrived at a point where they can serve fish of a quality equal to that served in most of the homes along the fishing shore of the province.
I want to say just a word about the institution of technical services. The objectives outlined in the statement made by the minister were certainly sound, and I was glad to note that the department realized the necessity of able and qualified personnel in regard to the advisory services of a technical nature. In this regard I think it will be generally realized that qualified personnel is not easily available. 1 hope that the department will recognize that this kind of service will not

oe helpful to the fishermen and to the fish processors unless it is staffed by qualified personnel. In my dealings with the Department of Fisheries I have found that they are always open to suggestions. I would hope that they would be open to the varied suggestions that are made in this discussion today.
The second point in the statement made by the minister, apart from quality, was the reference to the quantity. That reference to quantity concerned itself with something about trawlers. Some years ago on certain parts of the east coast there was quite a lot of opposition to the establishment of trawlers to any great number. There was a movement on foot which would have resulted in the banning of all licences for trawlers; but I do not think that the fishermen and those concerned with the fishing industry are as prejudiced today as they were some years ago. I think it is realized by all that there is need for trawler fish to ensure continuity of supply, even though a great deal of the trawler fish is very inferior in quality to that which is obtained by fishing from small boats. I am not quite clear on the reasons for the proposed encouragement of the operation of more trawlers. Is it that present market demands are not being met by the present methods of fishing? If that is so I think all progress should be made in modernizing fishing methods to secure all the fish that can be sold. But if market demands at the present time are met I should think that restricted action with regard to the issuing of licences for trawlers would be advisable. It would be advisable until the expansion of the market has demonstrated the absolute necessity of going into the larger productive method. I am quite sure that the farmer would not expand his farm without some knowledge of the future market. I do not think that many manufacturers would increase the capacity of their plants unless they were fairly certain that there was a market that they could supply at a profit. If this market does not exist at the present time, or if the market which we now have shrinks-that is a factor which is feared by a great many people in the fish business-
I am wondering what the effect of more licences will be on these small boat owners of our province. In the constituency which I have the honour to represent there are actually thousands of those small boats, and these people are really the backbone of our economy. They are the backbone of our national effort in peace or in war, as has been very well demonstrated in the past.
I should like to point out that these small boats are getting larger. I do not mean they are getting soaked in the water, but the
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Supply-Fisheries fishermen are gradually moving from smaller sized boats to larger sized boats. There was a time not very many years ago when fishing from so-called small boats was done close to the shore; but now there is a large number of these boats of a size which permits them to go quite a number of miles out to sea to fish on the banks. They go on two-day trips or longer. They are going to be worried, and I am going to be worried about the economy down there in connection with the questionable injury and the possible destruction of those grounds which are reached by these medium-sized boats. The western Nova Scotia fishermen will have great fears of the effect of any large increase in trawler licences. I have no doubt that the department is also aware of all these angles and will not grant licences to the detriment of the small-boat fishermen.


Mr. W. J. Browne (Si. John's West):: Mr. Chairman, although I did not have the pleasure of hearing the minister's speech this morning I have had the opportunity of reading it since. I would like to congratulate him on the manner in which he delivered his speech. I am sure he has taken a great interest m the fisheries of the maritimes, of Newfoundland and of the west coast as well. Since Newfoundland is very much concerned with fisheries I feel I would be recreant in my duty today if I did not make some observations on some of the statements which are to be found in the minister's speech.
The fisheries of Newfoundland are the most important industry in that province. Although the value of pulp and paper may exceed the gross value of the fisheries, nevertheless in the distribution of the returns the fisheries take first place. The fisheries concern more people. There are 30,000 fishermen, and they are scattered all over the island, all around its six thousand miles of coast line. Observations have been made in regard to the trawlers. As everyone knows, trawlers are boats that carry around twenty or thirty men. I know how they operate out of St. John's. When they were introduced into St. John's just a few years ago these boats operated in this way. They would come in with a load of 200,000, 250,000 or 300,000 pounds of fish, unload them and off they would go again, once a week, regularly just like a train on a schedule. I know the people who have brought these trawlers in and financed them are doing very good work. They have two or three very modern plants in St. John's. A number of people are employed at these plants when the fish come in, but I do not think, Mr. Chairman, that that fishery is to be compared with the salt, cod fishery-that is, with the fishery that the people engage in around the Newfoundland!
27S8

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coast. Take any of the little settlements around Newfoundland where the men are engaged in hook-and-line fishing or in trawling or in trapping, and in curing their fish. Such fishing is important to the fisherman because it is his vocation, his livelihood. He does not have to leave his home and go to St. John's, living away from his family. It is a way of living for him. It is a better thing economically for our country than an intensification of fishing through the use of trawlers.
The minister said, in effect, that the department is reversing the policy of former years by giving more licences. What is the limit of the number of trawlers going to be? How many are going to engage in this enterprise?
At the present time we have the French, who are supposed to have forty new trawlers this year. We have the Spanish, and we have the Portuguese. I think the Portuguese are the best of them, because they fish from small boats. But these big draggers which go over the banks are doing the simplest kind of thing; they put out a big dragnet astern and steam across the banks. Then they turn around and go back, raking up everything from halibut to flounders and dogfish-they get everything in their nets. What they do not want they throw away. Many small fish are thrown away, and in that respect it is uneconomical.
We have all those different nationalities fishing out there, presenting a serious international problem, I would say. The minister spoke somewhat disparagingly about the backward areas. I believe he included in that statement areas in Newfoundland. Then he referred to the traditional markets in Europe and in the West Indies for Newfoundland and other maritime provinces in connection with the marketing of cod. What are we going to do with our traditional markets? Portugal and Spain have been buying and catching Newfoundland fish for over four hundred years.


Leonard T. Stick: I should like to correct that statement. Spain has hot bought any fish from Newfoundland for some years.


William Joseph Browne: Well, if Spain has not bought any fish for some years, the fact is that Spain throughout the centuries has bought millions of quintals from us, and that country has been one of our principal markets. There may be a reason for the present condition, but it would not be in order to enter into a discussion of that today.
Portugal is the chief consumer of codfish, and salt cod is their principal article of diet. We do not need to give any lessons in cooking to the Portuguese, or any encouragement to
[Mr. Browne (St. John's West).)
the consumer in Portugal to have him eat our codfish. Why, therefore, should we speak disparagingly about them? But what do we buy from Portugal? It has been a matter of great regret that we have not been buying enough from Portugal, or from Spain or Italy or Greece or any of those countries which in the past have bought large quantities of our fish. We have not bought anything in comparison with the value of the fish they have bought from us. It is true that from the West Indies we do take molasses and some rum. But the value of the fish we export to the West Indies is greater than the value of the goods we buy in return.


Robert Wellington Mayhew: My understanding is that at the present time we have a favourable balance of trade with both Spain and Portugal. In other words, we buy more from them than they buy from us.


William Joseph Browne: The minister means that Canada as a whole is doing that?


Robert Wellington Mayhew: Yes. And another thing: Portugal is now getting sixty per cent of her own requirements.


William Joseph Browne: Of her own
requirements?


Robert Wellington Mayhew: Yes.


William Joseph Browne: The Portuguese, Spaniards and French have been catching fish on the banks for hundreds of years, just the same as the British, the Newfoundlanders and the Canadians.
In regard to the marketing of fresh fish, let me say that the commission of government in Newfoundland tried to develop this industry within the last few years. They encouraged the marketing of fresh fish to a great extent. They advanced hundreds of thousands of dollars in modern plant equipment to merchants who bought fresh fish from the fishermen. But, sir, is it not dangerous, as the hon. member for Charlotte has said, when by a stroke of the pen the government of the United States could put an embargo on fish so that all that business would be wrecked? Therefore we should not pay too much attention to the fresh fish market to the detriment or neglect of the salt fish market. What we want is to try to have a proper balance.
I am certainly glad to learn that the minister is going to establish an extensive technical service. We have had technical research at various periods throughout the last seventy or eighty years in Newfoundland. From time to time the Newfoundland government has experienced a wave of that sort of thing. During the past ten or twelve years, under the commission of government, in

accordance with the recommendations of the Amulree report the government carried out certain investigations along scientific lines. I believe that policy could be expanded.
There is one thing that can be beneficial to the fishermen-and the fishermen are the backbone of this industry. We must consider the fishermen in the first instance-and I am referring to the fishermen around the coast. What is their problem? It seems to me that the first problem of the fishermen is the purchase of supplies. I believe the provincial government is going to remedy that, because it has set up a new department of fisheries and co-operatives. They are not leaving everything to the federal government. The provincial government is going to do its share to assist in the promotion of the welfare of the fishermen. The co-operatives are going to encourage the co-operative purchasing of supplies, and this procedure will be helpful. The next question which arises in connection with fishing is the matter of bait. When the fishery is going well the two things that worry many fishermen are, first, a shortage of salt, and, second, a shortage of bait. Of these two the shortage of bait is the more serious as it is more frequent.
I have had correspondence with the minister in connection with the erection of bait depots, and I have suggested to him, as I now suggest to the committee, the advisability and feasibility of research being carried on with a view to setting up small bait depots instead of having large ones at central points. While those points may be accessible, still it would be more advantageous to the fisherman if he could have smaller bait depots in as many of the villages as possible. The fisherman will get up at two or three o'clock in the morning, and it is difficult for him to go, either by motorcar or by boat, back to" a bait depot fifteen or twenty miles away to get his bait, and then come back and go out fishing again. In fact it is impossible for him to do that and operate successfully. If there were smaller bait depots in the settlements it would become a comparatively simple matter for him to get his bait supplies.
There are three principal methods used by Newfoundlanders in the catching of codfish. One is by traps-and I do not think the minister could do much about that. Another is by trawl line-that is where the bait comes in; and another is by jigging. Then we have the big banker. These banking vessels operate off the south coast ports of Newfoundland with dories. The men go off in the dories to fish on the fishing banks with trawls, and catch the fish in that way.
As the minister knows, the complaint is sometimes made that the great draggers interfere with the work being done by the banking
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vessels. I was glad to learn that the minister favours an interprovincial conference with the representatives of the federal government. I believe these problems should be considered at that time, particularly the matter of the establishment of bait freezers, and the undesirability of giving too many licences to trawlers. Too many of these trawlers would be bad for the economy of our country, particularly those sections of it in the maritime provinces and Newfoundland from which they would be operating.


Mr. T. H. Goode (Burnaby-Richmond):: Mr. Chairman, I shall speak briefly, because no one has spoken today from the west. I believe someone from the west coast should speak on these estimates. We are proud of the minister who comes from our province. This is one example where a businessman is doing a good job. With an industry controlling the large amount of money represented by the fishermen on the east and west coasts, we believe it is highly satisfactory to have a businessman at the head of the department, and that he is likely to do a more satisfactory job than could be done by a theorist. I think we all recognize that the minister has done a wonderful job in running his department. I think his accomplishments have been marvellous for a comparatively new minister.
The fishing industry which I represent on the west coast is happy over the progress that has been made. Some years ago they had not a great deal of confidence in the department. There are in my constituency some 2,000 fishermen who are centred around one of the largest canning factories in the world. These men now leave for the fishing grounds with the feeling that they are being looked after by the department. I go along with the hon. member for Newfoundland in saying that if the minister and the department are given time they will solve the difficulties of the industry in that province.


Mr. Clarence Gillis (Cape Breton South):: Mr. Chairman, there is a large fishing industry in the riding I represent and therefore I am interested in the minister's statement. This is the first time since I came to this house that a Minister of Fisheries has made a statement similar to the one we had today. This would seem to indicate that the department is taking hold of the industry in a realistic way. The minister has announced a program. Whether we agree with it in its entirety or not, the fact remains that there is a program. I am sorry that that program is not to be started until the estimates of next year provide the necessary finances. We should be doing something right away about the matters discussed by the minister in his statement.

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The minister has said that he has two things in mind. First, there is the development of a market. That is necessary because there is not much use catching fish unless you can sell them. He tells us about the experimental kitchen that has been set up, and that is a good thing. The trouble with getting a larger consumption of fish in the past has been the fact that in many cases it was poorly prepared. Then the next thing is getting the fish from the source of supply to the market of consumption, and the minister indicates that steps are being taken along these lines.
I notice that some $80,000 is being provided in the estimates for co-operative education. For a long time I have been convinced that the only way to properly rehabilitate this industry is along these lines. You must get the people interested in the industry working on their own problems and accepting some responsibility, not only in connection with production and processing but in marketing as well. You cannot expect to make much progress working only from Ottawa or through some large fish company which is interested only in profits. There must be organization of those engaged in the industry on a co-operative basis. Ever since I have been a member I have noticed that from year to year, particularly in the minister's department, increasing amounts have been made available for co-operative work. The amount provided in the estimates this year is substantial and, as I say, that is the only way this industry can be made to work.
I should like to say a few words about the trawlers. I have gone to meetings of fishermen and have been in their halls when they have discussed this trawler question. As the senior member for Halifax indicated, foreign trawlers are not allowed to come closer than three miles and as such they do not affect the shore fishermen very much. The minister has indicated that licences are going to be granted to Canadian trawlers and to secondhand trawlers that have been built in the United Kingdom or the United States providing the company purchasing them lays down a new keel in Canada. I assume that is to stimulate shipbuilding, but it does not alter the fact that the shore fisherman takes a serious view of the trawler.
In my view the trawler is simply the mechanization of the industry. It is another technological advance that has to be reckoned with and if one is thinking ahead he cannot oppose it very well. The man with the small boat who must ggt up at four o'clock in the morning to go out and fish to earn an income of about $300 per year may lose his job, but he will not be losing very much.

The serious part of the trawler operation is the concentration of production. At the present time in Nova Scotia the whole industry is controlled by one company, the National Fish Company. The trawlers are going to fish for that company. That company also has a concentration of bait freezing and storage facilities at the different places along the shore. The shore fisherman will be placed in the position where he will have to work for that company on that company's terms; he will have to sell his fish to that company for whatever they want to pay. That is an angle the federal and provincial governments will have to consider. The shore fisherman is going to lose a not very good job through this process but will likely obtain a means of livelihood of some kind.
Another angle of the trawler question that is discussed by the fishermen with some heat is the charge that the trawler destroys the fishing grounds. I have heard this charged right along the whole coast of Nova Scotia. As the hon. member for St. John's West has said, a trawler will go out, put down its drag and then pull up anything that happens to come in contact with the drag. It keeps only a certain type of fish and perhaps fifty per cent of what is brought up by the drag is thrown back. After this goes on for some time there may be two or three feet of dead fish on the bottom and the live fish simply will not come in and feed. The result is a backing up of the fishing grounds. The shore fisherman cannot go out too far and in a few years' time there may be a complete destruction of the fishing grounds because of this practice.
I do not claim that I know all about this matter but I have heard men who make their living at fishing state that this is the case. In carrying out his new program the minister will have to give some regard to this claim. The perpetuation of the industry is something that should be guaranteed if at all possible.
I think the hon. member for St. John's West put his finger on a vital point when he referred to the bait freezing plants. I do not think it is an answer to the problem to concentrate the bait-freezing facilities at one or two points on the east coast. All along the coast are communities which have been built up around certain fishing grounds and I submit that a decentralization of the bait freezing facilities is necessary. I believe we should have smaller plants scattered along the shore and made available to the shore fishermen. I think that step is absolutely necessary; and I believe this also applies to storage facilities. You generally find the plant that has the bait also has the storage facilities, and unless you get the bait on that

company's terms you do not fish. Then when you come in with a load of fish, unless you sell it to that company on its own terms there is no space for your fish, so you throw them back into the water. Fishermen have told me that has actually happened. They brought in a catch; there was no storage space, so they threw the fish back.
The minister has made a survey, and he knows the situation. He has competent men in his department; I believe his deputy minister is one of the best men on the continent in that field. I have known of his work for a long time, and I believe he has the confidence of the people who fish. I hope he will just keep in mind that possibility of making bait and storage facilities available along the coast, instead of being concentrated at one point.
That is all I have to say, but I do want to compliment the minister on what he has done. This is the first time I have seen a Minister of Fisheries bring in his estimates and indicate to the house that he has surveyed the industry and drawn up plans for the future. I believe he is making a realistic approach to the whole problem, and I only hope he remains in the department until he has been able to complete this program.


Mr. T. A. M. Kirk (Digby-Yarmouth):: want to bring just one matter to the attention of the minister, concerning which there has been a great deal of correspondence and as to which I have had a great many complaints. I feel that it should be brought directly to the attention of the minister so he may answer the question in the house, and in that way the people in the area to which I am going to refer will learn just what is going on.
I refer to the area off the county of Digby in the bay of Fundy. My understanding of the situation is that under our regulations Canadian draggers are permitted to operate up to within twelve miles of the coast, but that under international regulations United States draggers are permitted to operate up to within three miles of the coast. In addition we are continually receiving complaints to the effect that United States draggers are operating even within the three-mile limit. In this connection I have had a great deal of correspondence and many interviews with various officials of the department. I have found them most co-operative; they have sent in their patrol boats, but still the complaints come in that at night, after the patrol boats leave the grounds, these United States draggers operate within the three-mile limit.
With that brief background I want to ask the minister, when he replies to the various questions that have been asked, to explain
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to hon. members and those engaged in fishing in that area what steps have been taken or are being taken or are proposed to be taken to rectify this situation. Here we are endeavouring to protect the fishing grounds by keeping our own draggers away, yet at the same time United States draggers are alleged to operate within three miles of the shore.


Robert Wellington Mayhew: In reply to the hon. member who has just resumed his seat, only ten days ago we had a new boat come off the ways at Shelburne. That boat is either in that area now or will be there within a day or two. Last year and again this year we had complaints that United States boats were coming within the three-mile limit, but this new boat is in there now, and another, the Cygnus, the largest in our fleet, will be able to go around there again in about a week.
Before I answer the other questions which have been put to me I should like the privilege of placing on Hansard the answers to a number of questions asked a few days ago by the hon. member for St. John's East. I could read them, but that would take some time and with the permission of the committee I would place them on Hansard.


Joseph-Alfred Dion: Is that the pleasure of the committee?


Some hon. Members:: Agreed.


Robert Wellington Mayhew: The questions and answers are as follows:
Statements on questions raised by the Newfoundland delegation during the negotiations for the union of Newfoundland with Canada:
1.	Trawling.
"Newfoundland trawlers will be permitted to fish (as they have been doing) to the three-mile limit off the coasts of Newfoundland, and an amendment to the Fisheries Act, 1932, will be introduced for this purpose.
It is understood that the policy as to trawlei licensing in Newfoundland will be based on securing the maximum efficiency for the province's fishing industry and welfare for its shore communities.
With respect to the establishment of territorial waters it is our understanding that the 'headland to headland' rule, as it now applies to Newfoundland, will continue to apply."
Comment:
An amendment to the Fisheries Act, 1932, has been passed which will permit Newfoundland trawlers to fish to the three-mile limit off the coasts of Newfoundland when the act is proclaimed in Newfoundland.
2.	Prohibition of export of bait fishes.
"At present the Customs and Fisheries Protection Act prohibits the sale of bait to foreign fishing vessels in Canadian territorial waters, except by special treaty or convention. An amendment to this act will be introduced in order to continue the practice now followed by Newfoundland in this matter."

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Comment:
An amendment to the Customs and Fisheries Protection Act has been passed by the federal parliament which will permit this practice under the act when it is proclaimed in Newfoundland. Consultations have already been initiated with the province with a view to bringing this act in force.
3.	Licensing of premises to pack fish (including
filleting and freezing plants).
"It is understood that, while these matters will come under federal jurisdiction at the date of union, the Newfoundland fisheries board, during the time that it continues to operate, will be the medium through which application for licences will be made and the relevant regulations brought into effect." Comment:
The Newfoundland fisheries board continues to be the medium through which application for licences are made and the relative regulations brought into effect.
4.	Power of Newfoundland fisheries board to set
quotas for fish for export.
"This power, which is involved in the marketing operations of the Newfoundland fisheries board, will be retained as a marketing function during the life of the board."
Comment:
"This power, which is involved in the marketing function of the Newfoundland fisheries board.
5.	Market representatives.
" (a) The fish trade representatives of the Newfoundland fisheries board abroad (for which six positions exist and of which five are filled at present) will be continued as board officials, and be paid out of funds voted for the board during such time as the board remains in operation.
(b) The Department of Trade and Commerce will absorb into the Canadian trade commissioner service the two trade commissioners in London and New York, at present responsible to the Newfoundland department of natural resources."
Comment:
(a)	Trade representatives of the Newfoundland fisheries board are being continued as board officials. Six positions exist, of which four are filled at the present time, i.e., Jamaica, Puerto Rico, Portugal and Italy. Consideration is being given to the appointments of representatives to Brazil and one other market, possibly Cuba.
(b)	The Department of Trade and Commerce have absorbed into the Canadian trade commissioner service the two Newfoundland trade commissioners, who were stationed in London and New York.
6.	Newfoundland fish export tax.
"The export tax of five cents per quintal on the volume of fish exported from Newfoundland will be abolished at the date of union."
Comment:
This export tax no longer applies and was abolished at the date of union.
7.	Power of Newfoundland fisheries board to negotiate contracts.
"The Newfoundland fisheries board will not be required to deal through the Canadian Commercial Corporation, and may in its discretion continue to charge a fee or commission for its services in negotiating contracts, subject only to such export and import controls as may exist."
Comment:
The Newfoundland fisheries board is not required to deal through the Canadian Commercial Corporation in negotiating contracts and may continue to

charge a fee or commission for its services in negotiating contracts. The revised fish inspection bill will not affect this arrangement.
8.	Fish wrappers and packages.
"Wrappers provided by purchasers in the United States for their suppliers in Newfoundland will be dutiable after the date of union but will also be eligible for the ninety-nine per cent drawback on re-export as containers of fresh frozen fish.
Efforts are being made to arrange for the continued use for export of the present stock of wrappers marked 'Product of Newfoundland.'
Importation of printed wrappers of all kinds made from paper for domestic use is prohibited at the present time but permits may be granted by the Department of Finance in cases where the United States importer insists on supplying his own wrapper for the goods purchased by him in Canada. There is no restriction, however, on the importation of transparent wrappers or types of cardboard cartons or boxes usually used in the fish trade. These wrappers and containers are also eligible for the ninety-nine per cent drawback on re-export as containers of fresh frozen fish."
Comment:
Wrappers provided by purchasers in the United States for their suppliers in Newfoundland became dutiable after the date of union but at the same time became eligible for the ninety-nine per cent drawback on re-export as containers of fresh frozen fish.
Arrangements were made with the United States authorities for the continued use for export from Newfoundland of wrappers marked "Product of Newfoundland." The arrangement covered wrappers so marked as were on hand in Newfoundland at date of union.
9.	Inspection fees on export.
"The present policy is to make no charge for inspection services."
Comment:
No charge for inspection services has been made by the Newfoundland fisheries board since date of union. This is in line with policy covering the inspection of fish and fishery products throughout the rest of Canada.
10.	Tariff agreements.
"The position after union of the agreement between Newfoundland and the Dominican republic providing for a low rate of duty on imports of Newfoundland codfish into the latter country is being examined. If necessary the Canadian government will initiate discussions on this matter." Comment:
Under the Annecy trade negotiations of 1949 the Dominican republic kept dry salted codfish under the existing M.F.N. rate, thereby ensuring the continuation of the preferential rates originally established under the Newfoundland-Dominican agreement of 1940.
11.	Bait service.
"The Canadian government will seek legislation or take such other steps as may be necessary to provide that the Newfoundland bait service will be taken over and operated without fundamental change by the Department of Fisheries. If, after the date of union, changes are made for the benefit of Canada as a whole, the question of payment will be discussed between federal and provincial authorities."
Comment:
Since union the Newfoundland bait service has been operated by the Department of Fisheries without fundamental change.


Gordon Francis Higgins: Has the minister tabled the answers to all the questions, or has he an answer to my suggestion with respect to the Prairie Farm Rehabilitation Act?


Robert Wellington Mayhew: The Minister of Agriculture, of course, is the authority on the P.F.R.A., but I think I am correct in saying that it is a program that was worked out to meet the effects of drought in the low rainfall areas of Saskatchewan and Alberta. The construction of dams, development of community pastures, introduction of new tillage methods, and so on, are all constructive solutions to the problems of the area.
The program I have just presented to this house outlines, I think, a constructive answer to the basic problems of the underdeveloped fishing areas of the Atlantic coast, including Newfoundland. The details of the fisheries program will be very different from the details of the P.F.R.A., of course, but the objectives will be somewhat the same. I have indicated that we propose to establish a technical service to provide fishermen, small plants and the wholesale and retail trade with technical help on the improvement of their individual operations. We propose to discover what are the best methods of fishing in the different areas and to carry out demonstrations for the benefit of the fishermen. What we have in mind is a constructive long-term solution for the low income areas where the resources and manpower are available, but where new methods of catching and processing fish are necessary to meet the demands of the modern world.
I do not wish to enter into any argument with respect to the trawler situation, but most certainly we would not have advocated a change of policy if there had not been a demand for more fish. Most processors, particularly in Nova Scotia, have not been able to supply that demand; in fact one community appears to be quite wrought up over the fact that we have been delayed so long in getting a boat to them. I am satisfied that in the over-all picture there will be more employment and that the standard of living of the fishermen and those on shore will be improved under this plan.
I want to leave just three thoughts with hon. members. At the present time in the maritime provinces we have the advantage of being closer to the grounds than the Americans; but the only way we can retain that advantage is by having equally good equipment, boats of the same speed and adequate gear. If we do not keep up our standard of boats and gear we will lose the advantage we have at the present time, and also lose the fish. The hon. member for St. John's East said Grand Banks was an international
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shoal. That is true; but the trouble is that there are not enough Canadian boats on that shoal to get our share of the fish, and that will be the position until we have more boats. So I think by granting additional licences to trawlers we will increase the earning power of the fishermen of the maritimes, and put them in a very much better position.
The senior member for Halifax asked if we thought our proposal concerning draggers would increase the productivity of that area. We most certainly think it will. He also spoke about the rosefish, which is new to the New England states. We have some, though not very many, on the Atlantic coast. The bottom is rough where these fish are obtained, and we do not allow our trawlers or draggers close to the shore, so we really have no means of taking them except in very small quantities. They are not a fish that will take any kind of lure or bait.
The hon. member also asked concerning the advisability of oceanographic studies. I would certainly agree with what he said and would hope that at least one university in the maritime provinces and perhaps the university of British Columbia would take this matter into consideration, and also that they would establish classes in fish engineering.
Those are two things that are sadly lacking, and we expect to get these trained men for our services. The hon. member for Charlotte said that this industry would become a major industry. It all depends on the way you think about it, I suppose, because it is a major industry now, if the hours of work mean anything. It is all worth while, however, and I have the greatest confidence in it.
The hon. member for Fort William asked about cookbooks, and suggested that we send 100 to each of the members. He did not suggest them as Christmas cards; but with an autograph on them, they ought to make good advertising for the Department of Fisheries.


Leonard T. Stick: Some concern has been shown about the extensive fishing on the Grand Banks. I understand that the latest scientific survey shows no depletion. Will the minister corroborate that?


Robert Wellington Mayhew: I am advised that up to the present time there is no indication of depletion of the Grand Banks. I might also say that last fall there was a meeting of some nine countries in Washington to consider the North Atlantic treaty on fishing, that is for survey purposes. There will be another meeting shortly, I expect, and that will
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enable us to keep a close watch on what is happening, and regulate our own actions accordingly.


Mr. Blackmore:: In presenting these estimates, the minister has impressed me as being a man with a purpose. I am glad to see that a man with a purpose is in charge of this department. We Social Credit members are from areas where fishing is not a major industry, but we like those who come from the fishing constituencies to know they have our hearty support. We have not said much, but we have felt a great deal. We are desirous of giving them our hearty co-operation, just as we know they have been desirous of giving us co-operation when we wrestle with the great problems which confront us, as we all work together to build a better Canada.


[Stage Direction]
Item agreed to.
102. Fisheries inspection, including fishery officers and guardians, fisheries patrol and protection services, $2,983,000.
James Sinclair: I should like to say a few words on this item. Before I do so, however, as the second member from British Columbia to take part in this fisheries debate, I should like to compliment the minister on the new program he has outlined, and to tell the members of the house that we members from British Columbia bask a little in the reflected glory which has come to us now because the minister has inaugurated so sensible a program for the development of our fisheries resources. The only thought, of course, which occurs to us is that if the governments of Canada had not waited eighty years to appoint their first British Columbian as minister of fisheries, progress might have been speeded up considerably.
The attitude of the minister reflects the extremely progressive outlook of the British Columbia fishing industry and the British Columbia fishermen. If the minister can imbue that spirit in the east, in those places to which the hon. member for St. John's West referred as the backward areas, I think the whole industry will benefit.
Great emphasis has been placed on conservation in the fishing industry. Effective conservation depends in large measure upon effective enforcement of the fishing laws. It is for this reason I am on my feet today. I have received a brief from the fishermen of the principal fishing town of my riding, protesting against the continuation of the practice of illegal sunken-net fishing for codfish. We in British Columbia speak so much about our salmon industry that there may be a tendency for people to forget our other fish. We catch halibut, tuna, cod and several species of ground fish in large quantities. The cod
[Mr. Mayhew.l
is the blue ling cod. It represents quite a source of income to fishermen generally. It is caught by hand lines, using small fish as bait.
There are several other means of catching these fish, which are ground fish, one of which is the use of a sunken net. This means a net hanging along the floor of the sea like a curtain, to intercept all types of ground fish. This method of fishing is illegal, except that in various parts of the province it is permitted for catching dogfish, which are a scavenger fish of no value except for the oil from their livers. This is a very easy method of catching all ground fish, including codfish, but the use of the sunken net to catch cod has always been illegal. Sunken nets are not allowed because they destroy so much of the fish. They catch not only the mature fish, but the immature fish which could have been thrown back if they were caught on a hand line. Moreover, the poacher who breaks the law in season is not too much concerned about fishing out of season either, and fishes when the greatest harm can be done, which is during the spawning season.
The fishermen in my riding are protesting about the slackness of enforcement of the law against sunken-net fishing for cod, and the small penalties imposed upon these fishermen when they are caught. I appreciate the fact that normally imposition of the penalty is not within the prerogative of a minister. But on the west coast of British Columbia, as I have said before, there are so many instances in which the department of Fisheries is policeman, prosecutor and judge, that it has a greater measure of control over penalties than any other department. Strict enforcement should not be difficult.
It is easy to recognize a sunken net, because it is so different from the ordinary net used to catch salmon. Salmon gill nets hang from wooden floats, like a curtain from the surface of the water, and they are kept vertical by light lead weights along the bottom edge. A sunken cod net is made up of long narrow strips of old salmon net. Large weights are placed along the bottom and small floats are used so that it sinks to the bottom but remains upright. A fisherman who has in his possession one of these long narrow nets, heavily weighted, is obviously in possession of a sunken net. The standard excuse of a man who is found in possession of a sunken net is that he had been using it in an authorized area. When a fisherman returns from an authorized area it would not be very difficult for him to report to the nearest patrol officer and get his sunken net registered. The patrol officers would know where these sunken nets were, and could easily check on their use.

The next thing to which I should like to refer is the use of otter trawls in the gulf of Georgia. These trawls are most destructive to all types of ground fish, because they are not selective. They catch the mature fish, the immature fish and the spawning fish. They also damage and destroy fish in the process of catching them. The fishermen in my riding, in the interests of conservation, urge the minister not to permit the further use of these otter trawls.


Mr. Gibson (Comox-Alberni):: I should like to commend the minister on his statement today, and I join with the other British Columbia members in saying that we are not at all surprised at the capacity he has shown in this post. It is merely indicative of his success in other fields before he came to the House of Commons.
There is one matter I should like to bring to the attention of the house; I have already taken it up with the department. I should like to read to the minister an article that appeared in the press and was sent to me from my riding. It refers to this law-enforcement problem. The headline is, "Heavy penalties are imposed." It reads as follows:
Edward Joseph, John Manson and Felix Thomas were sentenced to pay a fine of $200 each or to spend sixty days in jail by Magistrate T. Patterson last week.
The case was the outcome of charges laid by the fisheries department against the three for having fish in their possession illegally, and obstructing a fisheries guardian in the performance of this duties. The latter charge was not pressed.
Incidentally the article also states that one of the prisoners has arranged to pay his fine, and the other two have left for the sunny vale of Oakalla prison farm. It is getting close to the Christmas season, and the harshness of these penalties has amazed me. I do not know what the fishermen of the maritime provinces would have to do before they would have a penalty such as that imposed upon them. As the minister well knows, the west coast of Vancouver island has been closed to seining this fall, in the interests of conservation, and with that course I have no quarrel. It seems to me, however, that this is an unnecessarily harsh sentence to impose upon native people where their only means of livelihood has been taken away from them. Only $41 worth of fish were involved in this seizure. As a matter of fact, their conviction depended almost entirely on circumstantial evidence.
It was maintained by the departmental officers out there that you could not catch cohoe salmon with a spoon, that they would have to be netted at this time of the year. That may or may not be true. I am not 45781-178j
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trying to argue the merits of the case as to whether the men were guilty or not; but it seems to me that under the circumstances the penalty that was imposed on them is unnecessarily harsh and severe. If the minister would be kind enough to do so, I should like him to take this matter up with his officials and look into all the circumstances surrounding the case. Then if he feels as I do, that an unduly severe penalty has been imposed, I would hope that he would take it up with the attorney general of the province of British Columbia and see if some part of this fine cannot be remitted. The least we can do is to see that these two native Indians out there do not spend their Christmas in prison.


Andrew Wesley Stuart: The statement
made by the hon. member for Comox-Alberni (Mr. Gibson) reminds me of something that I should like to bring to the attention of the Department of Fisheries. Nearly every year in Charlotte county at the opening, on November 15, of the lobster season, which is the fall season, the fishermen will find the day of the 14th to be a fine day. At that time of the year it is hard to depend on the weather. If their traps are ready, along in the late part of the afternoon and early in the evening, they will try-as they have done in the past and as they will do in the future-to get these traps on the fishing grounds in order to start on the 15th. On many occasions I have known fisheries patrol boats to go out late in the afternoon or early evening of the 14th and find these traps on the fishing grounds. I have a bit of criticism to offer here.
Quite a long statement appeared in the Montreal Standard just recently saying that the fisheries department destroy the gear that belongs to the fishermen of the province of New Brunswick. I think perhaps that if some other way were found of disposing of fishermen's nets, traps or whatever gear it might, be, instead of destroying them, it would leave a much better feeling with the people who are engaged in that industry. As to a fisherman who is overanxious and puts his traps out on the 14th, and they are found by an employee of the fisheries department, I would suggest that if a heavy fine were imposed rather than the destruction of his gear it would be a great deal better for all concerned. My reason for making that statement is this. A man may have 100 or 150 traps. He puts them out on the 14th. If an employee of the fisheries department destroys those traps, that man is not going to operate during that season. He may have a wife and four or five children. We do not know his circumstances. I

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believe it is entirely wrong for any department to destroy property. In other words, if something were seized by the customs department-we will say a car or whatever it might be-it is not taken out and burned; it is offered for sale. When traps are found that are being fished illegally, even though it is just a few hours before the legal season would open, I believe there could be found some other way of penalizing that fisherman than by destroying what he has to make a living with.
There is one other thing I want to bring to the minister's attention while I am on my feet, and it has been pointed out to him on previous occasions. The hon. member for Comox-Alberni mentioned illegal fishing out in his district. The crew of patrol boats on the Pacific coast in many cases are paid a living allowance while on board those boats. It may be that there is a good deal of patrolling and they have to work seven days a week; I do not know. But that same situation does not prevail in the maritime provinces. I have repeatedly asked for an explanation as to why patrol boats on the Pacific coast should provide living accommodation and food for the crew of the boat when the same thing does not apply on the Atlantic coast boats. I know of one particular patrol boat in my riding whose crew will be away two and three weeks ait a time; they have to pay their own living expenses while on board the boat and keep a family at home. I think that is unfair. I believe the rule that applies on the Pacific coast should also apply on the Atlantic coast. I do not believe any line should be drawn between them. I believe that any crew of a patrol boat that is obliged to be away from home should be given the cost of living while on board that boat.


Mr. Brooks:: I just wanted to ask the minister a question, but before doing so I also want to express my appreciation, as a maritimer, of what is being done in connection with the fisheries. I rather hesitate to say anything about it after listening to such men as the hon. member for Charlotte, who has been connected with fishing all his life and certainly is an expert in that matter. Listening to the discussion here this afternoon, however, one would think that the fishing industry was in splendid condition. But I have heard that the markets for fish are not the best. We know that you can sell lobster and other specialized varieties, but in general I think that the markets are not good, and I think it would be wrong to give the country the impression that, so far as the fishermen are concerned, the markets are in the best of condition. I think the minister

is to be commended for trying to improve the markets, and I certainly hope that he succeeds.
The question I wished to ask was in connection with the difficulties that have arisen -in the Northumberland strait between the fishermen and the law enforcement officers: what is the situation down there now? Are there more patrol boats or is there still a sort of civil war going on in that section of the country?


Robert Wellington Mayhew: We have provided or are providing for three extra patrol boats for that district and we hope we will catch up with it. There has been a good deal of poaching going on this year both on the east and west coasts. To be perfectly honest, I have not much sympathy with those who have been doing it.


Andrew Wesley Stuart: May I ask the
minister a question?


Robert Wellington Mayhew: Yes.


Andrew Wesley Stuart: Has poaching been carried on extensively in the bay of Fundy, or on the west side of the bay of Fundy?


Robert Wellington Mayhew: No, it has not. But it seems as though every time a man who has been poaching or illegally fishing is caught, he seems to get quite a host of friends right away, and they come along and use all their influence. To hear some hon. members talking about the accused, they all seem to have large families; and I would not be surprised if they had three or four wives and that all the neighbours were depending on what they bring in from the sea. Where we have this illegal fishing, if we are going to stop it I think we must at some point be quite drastic about it. I do not think one needs to be drastic very often in order to make it effective. I do not want to be the judge. I am not the judge. As the Minister of Justice said the other day, we intend to make a change next year in our act so that the magistrate will have complete authority. He has complete authority now but the boats are confiscated and are turned over to us. He does not know whether we are going to turn them back, or going to sell them or what we are going to do. The result is that the magistrate will probably give a small fine, thinking that the balance of the punishment is going to come in the loss of the man's gear. Personally, I do not think that is right. The gear is his living and I think that if he is worth anything, it should go back to him and that the magistrate should be in a position to impose a maximum fine for the offence, whether it is a first, second or third one. I hope we shall be able to do that next year, and it will save us all a great

Supply-Fisheries
deal of worry. I hope by that means we shall be able to stamp out some of this illicit fishing. I shall look up the report immediately in respect to what the hon. member said and see what can be done with it. In that case the fine seems to be fairly heavy. I understand that there are several offences in addition to the offence of illegal fishing.


Alfred Johnson Brooks: Are these three boats to remain in the area permanently or are they temporary?


Robert Wellington Mayhew: They will be there permanently.


Andrew Wesley Stuart: Again I should like to ask the minister to indicate whether he believes it is right to destroy fisherman's gear when he is found to be fishing out of season? Has the minister any sympathy with the destruction of fisherman's gear?


Robert Wellington Mayhew: The situation there is that our inspectors are out in rather small boats. They pick up a number of lobster traps. The boat can only hold a certain number of lobster traps. If they were not destroyed they would have to come in, land the traps and go out again. In a good many instances the lobster traps are destroyed at sea where they are seized. It is done because the boats are not large enough to bring them in.


Andrew Wesley Stuart: The boats that are on patrol in Charlotte county are sufficiently large to take care of forty or fifty lobster traps. When these traps are found the night before the legal season is to open, the rope, the traps and everything are destroyed. I believe that is a condition which the fisheries department should look into very carefully. As I said before, the owner of those traps may have a wife and four or five children. Lobster fishing is his only means of making a living during that season. Winter is coming on. Before the gear that belongs to him is destroyed, very careful consideration should be given to taking it ashore and at least giving him a chance to buy it back, or impose a fine which would perhaps convince him that he should not do it again.


Winfield Chester Scott McLure: With respect to the appointment of these guardians or fishery patrolmen, are the Royal Canadian Mounted Police employed in this work on Prince Edward Island as well as the ordinary people?


John Watson MacNaught: No.


Winfield Chester Scott McLure: No Royal Canadian Mounted Police are employed?


John Watson MacNaught: No.


Winfield Chester Scott McLure: Are they employed by the provincial government in fish protection?


John Watson MacNaught: I cannot answer that question with any degree of authority, but in some instances I believe members of the Royal Canadian Mounted Police are engaged by the provincial authorities for some of their protection work.


Winfield Chester Scott McLure: I should like to give the hon. member for Charlotte a little information. In May or July of last year in one part of the country fishermen were fishing a little before the opening of the season or a little after, I do not know which it was now, and they were fined around $20 by the Royal Canadian Mounted Police. They caught them in the act. They took their gear from them, but since it was election time in that locality the fine was returned and all their expenses.


John Lambert Gibson: I was afraid of that.


[Stage Direction]
Item agreed to.
105.	Oyster and clam culture, $73,700.
Winfield Chester Scott McLure: I want to find out something about the tariff on clams going into the United States. On the Pacific coast they ship into the United States a clam called the razor clam. That clam goes into that country under a 10 per cent duty on the Canadian selling price. But when you come to the Atlantic coast, where we have an abundance of clams, you run up against practically an embargo when you ship clams into the United States. There is a tariff of 35 per cent on the United States selling price. Can the minister give me any information on that, or can he find out whether there is a difference of from 10 per cent to 35 per cent on the valuation, which makes it almost impossible for a shipper in the maritime provinces to establish a sales price in the United States because he has to pay a duty on whatever the customs of the United States say their selling price is? On top of that 35 per cent is added.


Robert Wellington Mayhew: I have not all the answers to the tariff. I do not know what the items are or what the rate is, but we shall look into it and see what we can do about it. What the hon. member referred to applies to a number of items in the United States tariff.


Mr. Black (Cumberland):: I should like to get some information on the progress being made by the department in the culture of oysters. In the Northumberland strait around Prince Edward Island we have perhaps as good oyster waters as can be found anywhere in the world. The information I have is that the oyster industry has not increased in recent years as it should have. From time to time the department has sent out reports of the great possibilities in the culture of oysters and of the large number

Supply-Fisheries
of barrels of oysters that could be produced on each acre if it were properly cultivated.
I should like a report from the minister as to the progress that is being made. The estimate for this service has been increased by $22,000. The appropriation in the main estimates is $73,700.


John Watson MacNaught: In reply to the hon. member for Cumberland I might point out that the department, through its biological board, is doing everything possible to stimulate production of oysters. At the present time the greatest problem is the production of seed for the growth of oysters. I may say that the department and the board are doing their very utmost to carry on experiments and generally improve oyster development in the maritime provinces.


Percy Chapman Black: Can the parliamentary assistant inform the committee what progress has been made in the county of Cumberland, in the Malagash district and the Wallace district which have excellent natural oyster waters? I understand that artificial beds have been established there, which have been looked after for a number of years. I should like to know what progress has been made and what production has been obtained from some of these artificially cultivated waters.


John Watson MacNaught: Mr. Chairman, I am sorry to inform the hon. member for Cumberland that although we have established a station in his constituency I have not before me a copy of the report. The production for Northumberland strait in 1946 was 3,100 barrels, in 1947 it was 2,400 and in 1948 it was 3,500.


Percy Chapman Black: These figures indicate no great progress is being made.


John Watson MacNaught: There is an increase of 400 barrels over 1946.


[Stage Direction]
Item agreed to.
Fisheries research board of Canada-
106.	Operation and maintenance, $1,132,040.
Mr. Caiherwood:: The minister said this morning he was going to give some consideration to research into conditions in the fresh water fisheries. Would he enlarge upon that?


Robert Wellington Mayhew: We have made arrangements with the prairie provinces to have investigations so far as whitefish are concerned, and also with respect to the beluga whale and the Arctic char. These are the chief ones. Then, in the Northwest Territories, we have put a boat in there this year, and we are now putting up a station for research work.


[Stage Direction]
Item agreed to.
[Mr. Black (Cumberland).!
Fisheries research board of Canada-
107.	Construction and improvements, $181,800.
James Sinclair: This is the item upon which, since I have been here, I have made a speech each year asking for the construction of a small dam near the mouth of Sakinaw lake. Looking back on my speeches it seems that they have gone in cycles-a long speech and then a short speech. Last year, fortunately for the house, was my year of the long speech.
Let me say that I was gratified to have enlisted the interest of the hon. member for Lethbridge. The same thing happens this year as had occurred before. Members of fishing ridings have their day in court on the last day, or the day before the last, in the session. Everyone is very anxious to get home. The wheat farmers spent two or three months discussing wheat problems, but now everyone wants us to be quiet so that they may go home.
The hon. member for Lethbridge has given me encouragement to go ahead and speak again. However I shall be brief, particularly if the minister will give me the assurance that in this item 107, for which no details are given, but in which there is an increase o' about $28,000, there is provision for this small dam concerning which so many assurances have been given, and which unfortunately I have passed on to the fishermen in my riding.


Robert Wellington Mayhew: The hon. member spoke about the Sakinaw dam and Sakinaw creek last year. We promised to have it investigated, and have spent some time in making that investigation. This is a marginal case, the decision being as to whether we should go ahead or not. We have decided to recommend the building of a dam oh the creek, and we are now awaiting instructions or an agreement with the Indian affairs branch as to whether we can have access to the creek. I believe there will be no difficulty as soon as that permission has been obtained. At that time we will go ahead.


[Stage Direction]
Item agreed to.
109. To provide for Canadian share of expenses of the international Pacific salmon fisheries commission appointed under treaty dated May 26, 1930, between Canada and the United States for the protection, preservation and extension of the sockeye salmon fisheries of the Fraser river system, $169,500.
Mr. Murray (Cariboo):: I should like to refer to the excellent work being done by the international commission on the Fraser river. I would refer particularly to the good work of a member of that commission, Mr. Olof Hanson, a former member of the House of Commons from Skeena.


[Stage Direction]
Item agreed to.

111.	To provide for transportation, dressing and dyeing and other expenses incidental to receiving and disposing of fur seal skins accruing to Canada pursuant to provisional fur seal agreement between Canada and the United States by exchange of notes dated December 26, 1947, $550,000.
Winfield Chester Scott McLure: How many skins have there been from the Pribilofs for 1949? What was Canada's share? The take in general was smaller, I understand.


John Watson MacNaught: Our share last year was 14,178. Of that number 65 per cent went to St. Louis, 25 per cent to London and 10 per cent to Toronto. A London firm is opening a curing factory in Toronto. We are giving them 10 per cent of the sealskins we had this year so that they may get started and see what success they can have in the curing of sealskins in this country.


Winfield Chester Scott McLure: What are the costs of dyeing and processing of skins sent to England, those sent to the United States, and also to Canada?


John Watson MacNaught: There is very little difference in the actual cost of dyeing and curing the skins in either St. Louis or in England. There has been a difference in the price received for skins from England and those from St. Louis. Speaking generally, the St. Louis skins have brought a higher price.


[Stage Direction]
Item agreed to.
112.	To provide for the destruction of harbour seals, $30,000.
Gordon Francis Higgins: Is this by way of bounty?


John Watson MacNaught: This is for the destruction of harbour seals. Originally harbour seals were destroyed because they destroyed fishermen's nets. It has been found recently however that they act as host to the worm in codfish. That is the chief reason for their destruction today.


Gordon Francis Higgins: And that is a bounty?


John Watson MacNaught: Yes.


Gordon Francis Higgins: Why has it not been increased? I notice it is for the same amount.


John Watson MacNaught: It is proposed that it be increased in future years, but for the present year the bounty is the same.


Gordon Francis Higgins: I should think an increase would be required in the future, because there is a much greater area to take in now. We have great difficulty with these harbour seals.


Percy Chapman Black: What proportion is paid out in the different provinces, particularly Nova Scotia, New Brunswick and Prince Edward Island? Is this all for the east coast, or is it partly for the west coast?
Supply-Fisheries


John Watson MacNaught: This table will give the information for the fiscal year 1945-46:
No.
Province	Unit	of seals
Nova Scotia
Unit A, Inverness	 1
Unit B, Richmond	 36
Unit C, Pictou, Antigonish and Guysborough 111
Halifax	 108
Lunenburg-Queens	 173
Shelburne-Yarmouth	 62
Cumberland-Colchester	 78
Prince Edward Island
Queens county	 141
New Brunswick
Saint John-Charlotte	 226
Restigouche-Gloucester	 21
Northumberland	 43
Albert-Westmorland	 3
1,003
British Columbia	1,078
2,081


Percy Chapman Black: The bonus paid
was ?5 per seal?


John Watson MacNaught: Yes.


Winfield Chester Scott McLure: Is there any hope of having the bonus to fishermen increased?


John Watson MacNaught: That would not come under this item.


[Stage Direction]
Item agreed to.
Special-
113.	To provide for the extension of educational work in co-operative producing and selling among fishermen, $80,000.
Mr. Bryce:: Where was the money voted under this item spent last year, and where is it intended to be spent this coming year? Could not some of this money be spent in Manitoba? The fishermen there need education in the co-operative movement just as much as those anywhere else. I had the good fortune to visit Nova Scotia and had the opportunity of seeing what has been done there.


Robert Wellington Mayhew: Manitoba operates its own fisheries, and, as we are not responsible, the question would be better directed to the Manitoba government.


William Scottie Bryce: That is what is said year after year. This is a federal vote to cover educational work for which the Department of Fisheries is responsible, and I think all fishermen should be entitled to participate in the benefits. I make this appeal again. The minister's predecessor made the same answer, but I think some of this money should be expended for educational work in Manitoba.


Andrew Wesley Stuart: What amount is expended on fresh-water fish propagation and salt-water fish propagation?

Supply-Fisheries


John Watson MacNaught: We have no such statistical information as is asked for by the hon. member. Many fish hatcheries are operated in the maritime provinces to assist in the development of fresh-water fisheries, including salmon and trout. In connection with salt-water fishing, expenditures are made for inspectors, biological boards, and so on.


Andrew Wesley Stuart: Are any salt-water fish hatcheries operated in Canada?


John Watson MacNaught: The only hatchery for fish going into salt water would be the salmon hatchery.


William Joseph Browne: Are the
benefits under this vote being extended to Newfoundland?


Robert Wellington Mayhew: The expenditures are as follows:
St. Francis Xavier university	 $46,000
Social economic service, Quebec	 24,000
University of British Columbia	 10,000


[Stage Direction]
Item agreed to.
114.	To provide for the administration expenses of the Fisheries Prices Support Act, 1944, $170,000.
Percy Chapman Black: This is a rather large amount for administration. I should like to know how much has been spent in the support of fish prices.


Robert Wellington Mayhew: This is the administration item, and then there is an item of $538,989 to cover fish purchased by the board.


Percy Chapman Black: Is it costing
$170,000 to expend $500,000? Are no expenditures being made on the east coast?


Robert Wellington Mayhew: This is all for the east coast, and this item is a little more than half of what was actually spent. The balance will not show up until next year's estimates. The total spent in the maritime provinces was in the neighbourhood of $1,250,000.


Percy Chapman Black: Something over $1 million was spent to support prices in the maritime provinces?


Robert Wellington Mayhew: Yes.


Percy Chapman Black: Where is that fish stored?


Robert Wellington Mayhew: It has all been disposed of. Some of it went to UNRRA, some of it went to the Far East, and some to hospitals in Canada.


Percy Ellis Wright: I think all members are agreed * as to the principle behind the Fisheries Prices Support Act, but many of us are worried about when it may terminate. I believe the present legislation terminates on March 31, 1950. We have on the order paper a resolution, which apparently we are not going to reach this session, providing for an extension
[Mr. Stuart (Charlotte) .1
of the act and stating that it shall expire on the dissolution of the twenty-first parliament. That means that the price support in connection with both fisheries and agricultural products will terminate whenever the Prime Minister may see fit to dissolve parliament, which appears to be a very poor basis on which to support these products.
I wanted to ask the minister why, in this case, to administer a $25 million fund the cost should be $170,000 while in connection with the support of agricultural products, where the board is administering a $200 million fund, the cost is only $60,000. There seems to be quite a discrepancy. I understand the amount that may be expended is $25 million though only a small portion of that sum has been spent as yet.


Robert Wellington Mayhew: I cannot be responsible for what other departments do, but thus far our administration costs are higher than those in connection with the agricultural prices support program. This arises because the Department of Fisheries lacks the machinery of investigation and administration that the Department of Agriculture has in its dairy products board, meat board and so on. In other words we had to set up and organize a whole department and had to cover practically the whole of Canada. These figures do not tell the whole story, which cannot be made known until the whole job is completed. Then we will be able to see what it has cost.
As far as the legislation is concerned, there is no date of termination in our act. I hope there will be, because I look forward to getting on a better basis for assisting the fishermen than the basis we have now. Out of the million and a quarter we spent in the maritime provinces the fishermen would not get more than fifteen per cent, and I think there are many other ways in which we can help the fishermen so they will get a greater proportion of the money actually spent.


Percy Chapman Black: I do not want to hold up the minister; he has given us a great deal of information and has been very good in answering questions, so I think the committee would like to see his estimates go through. However, I should like to know how much of the fish purchased was actually dumped; and I should like to know also if this board is still in existence, with the expenses going on, notwithstanding the fact that the minister says there is no fish now in storage.


Robert Wellington Mayhew: No fish was actually dumped. Some cases that came in blew up; they were not properly packed in the first place, and those had to be disposed of, but those were the only cases that were dealt with in that way.


Alfred Johnson Brooks: The fish were given away, I understand; there was no market for them.


Robert Wellington Mayhew: There was no market. We could have disposed of them on the market here, but we would have hurt that market as far as the fishermen were concerned, so we gave the fish away. The International Red Cross committee got $240,000 worth; gifts to Canadian public service institutions totalled $297,000, and $13,708 worth were sold, making a total of $538,989.


Percy Chapman Black: I have another question-


Louis-René Beaudoin: The hon. member for Selkirk.


Percy Chapman Black: I have a question along the line-


Louis-René Beaudoin: The hon. gentleman must realize that other hon. members would like to ask questions also. The hon. member for Selkirk.


William Scottie Bryce: I should like to continue a little further along that line. In reply to the hon. member for St. John's East I believe the minister said most of the fish bought by the support board was given away. I do not want anyone to misunderstand me; I was in favour of that legislation and I am still in favour of it, but I do not like to see the packing companies get good lake Winnipeg whitefish for one and one-fifth cents per pound. I have a return the minister was good enough to furnish, stating that 2,300,000 pounds were sold to packing companies for $28,000, which worked out at about one and one-fifth cents per pound. Nearly a million pounds were sold as fox and mink food, for which they got about one and a half cents a pound, and in the Toronto retail market about a thousand pounds of our good whitefish were sold at around 12 cents a pound. That was really good fish. There was absolutely nothing wrong with it, and I would rather see it given away than sold at those prices. I happened to be in Winnipeg when it was being unloaded at the packing plant, and I should have liked to see it go to needy families, or to UNRRA, or to some of those people I saw a few weeks ago in Britain who were so hungry for good fish. I wonder if the minister would enlarge on that briefly and say whether practically the whole of the Manitoba catch went to the packing plants.


Robert Wellington Mayhew: We could not have given the lake Winnipeg fish to any institutions outside Canada. It was frozen fish, and could not have been shipped. The tullibee was not fit for sale, could not be sold on any market, and that was given for fox feed. We could not dispose of the whitefish in any other way, and the packing companies agreed to
Supply-Fisheries
process it and put it into meal, so it was not sold to the public. There was no possible chance of distributing that fish at that time of the year so people could make use of it.


William Scottie Bryce: Have you any in storage now?


Robert Wellington Mayhew: No, we have nothing left; it is all cleaned out.


Percy Chapman Black: I would like to repeat my question as to whether the staff is still being paid at the rate of $170,000 a year, in view of the statement by the minister that no fish is now held in storage by the department.


Robert Wellington Mayhew: A reorganization of the staff is going on at the present time. Some have been transferred to other branches, and we are cutting down as much as we can.


[Stage Direction]
Item agreed to.
115.	To provide for assistance in the construction of vessels of the dragger and/or long liner type, subject to such terms and conditions as may be approved by the governor in council, $100,000.
Mr. Maclnnis:: I notice that the amount under this item last year was $200,000. If the minister has the information I should like to know how much was expended last year, the construction of how many vessels was assisted, and the names of the firms or individuals who built them.


John Watson MacNaught: I can give the hon. member the names of the vessels,-oh, it was the expenditure that he desired. In the year 1949-50, up to October 21, the expenditure was $44,175. From the beginning of the year 1948 up to date, it is $134,072.


Donald MacInnis: What was the name of the firm, and how many vessels?


John Watson MacNaught: Twenty-two groups of fishermen.


[Stage Direction]
Item agreed to.
At six o'clock the Speaker resumed the chair and the house took recess.
[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock. PRIVATE BILLS


[Stage Direction]
The house in committee on Bills Nos. 150 to 173, 177 to 184, 186 to 193, 196 to 198, and 201 to 209, inclusive, Mr. Beaudoin in the chair.
Bill No. 150, for the relief of Chesna Laing Shapiro.-Mr. Winkler.
Bill No. 151, for the relief of Edith Turcotte. -Mr. Winkler.
[Stage Direction]
Private Bills-Divorce
Bill No. 152, for the relief of Irene Brodwin Miller.-Mr. Winkler.
Bill No. 153, for the relief of Jean Ruth Montgomery Loiselle.-Mr. Winkler.
Bill No. 154, for the relief of Joseph Charles Michel Emery.-Mr. Winkler.
Bill No. 155, for the relief of Lyla Almina Wharry Johnston.-Mr. Weir.
Bill No. 156, for the relief of Marjorie Helen Glass Nixon.-Mr. Winkler.
Bill No. 157, for the relief of Olga Hetman-chuk Dorval.-Mr. Winkler.
Bill No. 158, for the relief of Grace Melina Cotton Crawford.-Mr. Winkler.
Bill No. 159, for the relief of Thomas Gillespie Shields.-Mr. Winkler.
Bill No. 160, for the relief of Czerna Berger Borodow.-Mr. Winkler.
Bill No. 161, for the relief of Freda Tippett Hart.-Mr. Winkler.
Bill No. 162, for the relief of Rebecca Rosa Jacobs Bershadsky.-Mr. Winkler.
Bill No. 163, for the relief of Etta Valerie Sherwin Sperber.-Mr. Winkler.
Bill No. 164, for the relief of Sandy Douglas Carbone.-Mr. Winkler.
Bill No. 165.-for the relief of Hellen Isabel Dawson Parlee.-Mr. Winkler.
Bill No. 166, for the relief of Violet Emma Woodhall Brownridge.-Mr. Winkler.
Bill No. 167, for the relief of James Samuel Hatton.-Mr. Weir.
Bill No. 168, for the relief of Anne Denburg Hershcovich.-Mr. Winkler.
Bill No. 169, for the relief of Ruth Baranoff Clark.-Mr. Winkler.
Bill No. 170, for the relief of Viateur Longpre.-Mr. Winkler.
Bill No. 171, for the relief of Evalina May Carter O'Connell.-Mr. Winkler.
Bill No. 172, for the relief of Borys Zaryn. -Mr. Winkler.
Bill No. 173, for the relief of Alice Dorothy Rolison Cransky.-Mr. Winkler.
Bill No. 177, for the relief of Shirley Patricia Susan Oakes	Rowlands.-Mr. Winkler.
Bill No. 178, for the relief of Margaret Adeline Bodley Cabana.-Mr. Winkler.
Bill No. 179, for the relief of Mary Letinetsky Nemeroff.-Mr. Winkler.
Bill No. 180, for the relief of Norah Helen Jarrett McCaffrey.-Mr. Weir.
Bill No. 181, for the relief of Elizabeth Karaszi Bergeron.-Mr. Winkler.
Bill No. 182, for the relief of John Albert Roberts.-Mr. Winkler.
Bill No. 183, for the relief of Leslie Ernest Tulett.-Mr. Winkler.
Bill No. 184, for the relief of Ernest Tonegawa.-Mr. Winkler.
Bill No. 186, for the relief of Rene Walsh.- Mr. Winkler.
Bill No. 187, for the relief of Sara Tepper Prupas.-Mr. Winkler.
Bill No. 188, for the relief of Joseph Wilfred Melanson.-Mr. Winkler.
Bill No. 189, for the relief of Muriel Johnson Binnie Keates.-Mr. Winkler.
Bill	No.	190,	for	the	relief	of	William
Campbell James Meredith.-Mr. Winkler.
Bill No. 191, for the relief of Lillian Steinberg Heitner.-Mr. Winkler.
Bill	No.	192,	for	the	relief	of	Clayton
George Allison.-Mr. Winkler.
Bill No. 193, for the relief of Louis Kasper. -Mr. Weir.
Bill	No.	196,	for	the	relief	of	Arthur
Colpron.-Mr. Winkler.
Bill No. 197, for the relief of Berengere Pare Fuller.-Mr. Winkler.
Bill No 198, for the relief of Enid Dorothy MacRae Gauley.-Mr. Winkler.
Bill No. 201, for the relief of Guy Merrill Desaulniers.-Mr. Winkler.
Bill No. 202, for the relief of Margaret May Lester Rajotte.-Mr. Winkler.
Bill	No.	203,	for	the relief	of	Odette
Therese Gabard Coupal.-Mr. Winkler.
Bill No. 204, for the relief of Ella Maxine Shover Logan.-Mr. Winkler.
Bill	No.	205,	for	the	relief	of	Bernard
Rivet.-Mr. Winkler.
Bill	No.	206,	for	the	relief	of	Phyllis
Elizabeth Campbell Westover.-Mr. Winkler.
Bill	No.	207,	for	the	relief	of	Mildred
Blanche Tilson Bell.-Mr. Winkler.
Bill No. 208, for the relief of Ruby Anderson Edwards.-Mr. Winkler.
Bill No. 209, for the relief of Vera Marguerite Abraham Allen Richey.-Mr. Winkler.
Thomas Langton Church: I am making my last speech this session on the committee stage of these bills. I hope we shall be able to close by Thursday night. I speak now for many reasons in connection with this work on divorce. I was a member of the private bills committee of the House of Commons for many years past and I wish to object to our being asked to pass these bills. I am a humble member of the Church of England.
I believe that we should have some better and fairer consideration of this great problem. The problem is not ours. It has arisen since confederation. I wish to refer to two or three matters with regard to these bills tonight, and as to the way we do this business.
In the first place I wish to say this with regard to these particular bills. I am going to speak for only a few minutes. I do not wish to talk the bills out; far from it. I wish to raise a great problem in this committee about this question which is causing

such wide differences of opinion among the people of this country. I have sat as a member of the private bills committee for many years past since I entered the house. While I believe it is desirable that we should close up as soon as possible, I wish to direct the attention of the committee for only a few minutes this evening to this question. Divorce is a canker in the state. It follows every great war. The Addington administration faced it away back in 1801 after the Peace of Amiens. Then the two Pitts faced the same problem. In connection with this work I might say that when the Constitutional Act was passed in 1791 we adopted in this country so much of the law as was adapted to our circumstances, with the result that after the Constitutional Act of 1791 we copied the common law of England in this country.
Divorce, I repeat, is a canker in the state. There is no doubt about that. The church to which I belong does not believe in it. I am only a humble member. While I am a Protestant I have great respect for the other Christian churches which labour so hard for the good of the people of this country.
In the first place, the principle is all wrong. Why should I be asked to pass all these bills in the manner indicated? I doubt if any other hon. members who had sat as long as I have as a member of the private bills committee would put up with it any longer. Why are we asked to pass these bills without any evidence before us? I wish to point out this fact. I was a member of the committee for a great many years. At the Lambeth conference in England a commission was appointed to study this question in the old country. The members of the Church of England believe in the injunction, "Those whom God hath joined together, let no man put asunder", and I think it is a matter of practical good sense. The Right Hon. and Most Rev. Bishop Wand, as many hon. members know, succeeded Bishop Winnington-Ingram, who has many relatives in Ontario and throughout Canada. Bishop Ingram was the great bishop of London who worked so hard among the poorer classes in the London district for many years. He was succeeded by Bishop Wand who is the present Bishop of London and a member of the House of Lords. He was appointed only recently, and he made an address in Toronto on this question. As I said in the spring session in this house, he was appointed after a great deal of study of this problem. Who suffers as a result of this procedure? I contend it is the duty of the state to look after the wives and the children. Why should they be left, as the right reverend gentleman said in Toronto
Private Bills-Divorce
in an interview? He also preached on other matters in St. James Anglican cathedral in Toronto. The Bishop of London has found that divorce is a canker in the state, that it results in the state having to look after those who suffer. The women and the children of those who are divorced suffer every year as a consequence of these divorce bills. It follows every war. The present Bishop of London has entered on a tour of America. As I said last spring, he has made a great study of this particular problem. I know that the members of the other Christian churches in this country and many of those who are not members of those churches have also done the same thing.
On October 18, 1949, I said, as reported at page 908 of Hansard:
In the church to which I belong, as a humble member-and that is the Church of England-the belief is this: those whom God has joined together, let no man put asunder. That was the principle of the conference in England for a great many years. Recently a commission appointed by the houses of parliament has been considering this whole problem. It is presided ever by the Right Hon. and Right Reverend William Charles Wand, Bishop of London, who succeeded Bishop Winnington-Ingram. Over there, because of the way the country has been devastated by war, and for other reasons, the desire seems to be to extend the principle of divorce to include a great many things that were not considered before as grounds for it; one of these is desertion, and there are seven or eight other matters connected with it. I was glad to hear some of the members here tonight speak on this matter.
Let me say this one thing further. In my humble opinion the state should do something to look after the wives and the children. Every state has people of this type. After every war it has these people and they are a direct charge on the municipality. I know that because I was head of a municipality. I know that they become a charge on the municipality not only for school purposes but for housing and many other matters like that. I believe that the time is coming when we should have some other system adopted by parliament for this work. When I was on that committee I noticed that we knew nothing about the bills. There is a principle of Roman law to the effect that marriage is a contract. The common law of England has been largely copied from Roman law. That has been the principle which has been adopted in this country also. It seems to me that we should provide a better system accordingly.
In connection with this matter I want to point out that there is in existence a registration system. While I admit that it cannot be so in the province of Quebec, there is a registration system operated by the provinces. For what? For deaths and marriages. They have a register with the town or village clerk to that effect. In a great many of the provinces that law regarding these matters might prevail also; but in Quebec I admit that there is a different principle involved. No one wants to change their law. Far from it. I would never try to change their law because I believe that the majority of the people are entitled to have their say themselves.
In conclusion, may I say that I think we should have a conference of the two houses of parliament, because it has been largely the prerogative of the Senate to hear and examine witnesses and all that

Private Bills-Divorce sort of thing. I do not believe in the system. In the United States, after many wars, divorce is becoming a canker in almost every state. As I say, it follows largely as a result of wars. There is a registration system for deaths and marriages in existence in some of the provinces. I do not see why that system cannot be adopted. No doubt a different system would be required1 in the great province of Quebec. The archbishop who was investigating this question is travelling in the United States at the present time. He succeeded Bishop Winnington-Ingram, the great bishop of London, England. He is visiting the United States at the present moment and is going into all these questions. He recognizes that the divorce laws should be extended to include desertion.
I think there is something to be said in favour of that. I do not wish to occupy the time of the committee any further, Mr. Chairman. On page 224 of the Canada Year Book of last year, under the heading of "Vital Statistics", the following appears:
For many years after confederation, the number of divorces in Canada was very small. It was less than 20 in every year before 1900. There were 23 divorces in 1903, 51 in 1909 and 60 in 1913. These numbers were less than 1 per 1,000 of the yearly number of marriages.
One effect of the first world war was to increase the number of divorces. The generally unsettled conditions and the long separation between men on active service and their wives contributed to this increase. Changes in law and procedure which made it easier to obtain divorce was a further factor. At present, Quebec is the only province in which applicants for divorce must secure a private act of parliament.
There were 114 divorces in Canada in 1918 and 608 in 1926; the number had increased to 700 by 1931, 1,570 by 1936 and 2,369 by 1940. In every year since then the number has been higher than in the year before. The figures for the most part cover only final decrees of dissolution of marriage which alone constitute divorces; annulments and legal separations are excluded.
The statistics of dissolutions of marriage were revised in 1941 with the co-operation of the provincial authorities and the clerk of the divorce committee of the Senate of Canada.
- Dissolutions of Marriage (Divorces), by Provinces, 1944-46, with Five-Year Averages, 1936-45
Item	| Granted by Parliament of Canada	Granted by the Courts	Canada1P.E.I.	Que.	P.E.I.	N.S.	N.B.	Ont.	Man.	Sask.	Alta.	B.C.	Numbers- Average 1936-40	1	56 99	50 92	44 104	723 1,358	194	116	Average 1941-45	2	259	570	2,013305	207	432	937	3,5351944	3	108 177 290 2-8 2-8	93 158 260 2-5 2-6	78 171 382	1,471	316	1945	2	226	484	1,009	3,7881946	2	1,940	405	282	575	1,366	5,076Percentages- Average 1936-40	3	2,639	636	505	962	2,005	7,683Average 1941-45	01	2-2 2-9	35 [DOT] 9	9-6	5-8	12 9	28-3	100-038-4	8-6	5-9	12-2	26-5	100-01944	01 3	2-8 3.5	2-	5 3-	1 3-4	21 3-4 50	38-8	8-3	60	1945	12-8	26-6	100-01946	2	3-8	01	38-2 34-4	8-0	5-6	11-3	26-9	100-08-3	6-6	12-5	26-1	100-0figureHorTgie areThowT" right. ' A	EdWard	in 1945 a"d
In Ontario the high court judges are disgusted with the whole business. They want divorces transferred to the county court judges. The percentages have gone up. There is nothing further I can say. A divorce court was established in Prince Edward Island in 1945, and figures for 1946 are shown in the table I have before me. These figures represent less than one-tenth of one per cent.
In my view the House of Commons in all fairness should adopt separate principles for this work. We should not pass these bills seriatim. We should not pass them in the manner indicated, because we do not know anything about these cases. As I said before, 
it is the wives and children who will suffer, and who will become a charge upon the state accordingly.	[DOT]


Louis-René Beaudoin: Shall section 1 of these bills carry?


An hon. Member:: On division.
Section 1 agreed to, on division.


Louis-René Beaudoin: Shall section 2 of these bills carry?
Section 2 agreed to.


Louis-René Beaudoin: Shall the preambles of these bills carry?


[Stage Direction]
Preambles agreed to.

The Depuly Chairman: Shall the titles of these bills carry?	.
Titles agreed to.
Bills reported, read the third time and passed, on division.

[Stage Direction]
The house resumed from Tuesday, November 29, consideration of the motion of Mr. Benidickson for the second reading of Bill No. 119, to incorporate Prairie Transmission Lines Limited, and the amendment thereto of Mr. Maclnnis.
Mr. R. R. Knight (Saskatoon):: Mr. Speaker, this is the first opportunity I have had to speak on any of these bills. I propose to speak on this one tonight.
In the first place I am in favour of the building of a pipe line. I say "a" pipe line because I believe that only one will be built. If that is so, I do not see any reason for the granting of so many charters for the building of potential pipe lines. We are told that several of these charters are being applied for in order that there may be certain manipulation in regard to financial matters, and that in that respect some of these applications are not what they appear to be on the surface.
I am no judge of that. I am in favour of the building of a pipe line or of pipe lines if, by so doing, there shall be an increase in the public service,-if, for example, it may result in the cheapening of the price of fuel oil and gasoline to those people who require it. The question is: Will the building of this pipe line or any other pipe lines, for that matter, accomplish this object? I have noticed particularly of late in the oil business in western Canada indication of a getting together in the matter of price on the part of the largest oil companies, a procedure which I think is not justified by the ease with which some of the oil is transported.
It is an admitted fact that the building of a pipe line should ease the transportation of fuel. But I wonder whether that will result in a consequent easing of prices and the elimination of what I would call manipulation of prices. In my own city of Saskatoon there are three major oil companies supplying fuel oil to consumers. It was shown that it cost one of those companies eight cents a gallon to transport their oil to a refinery and back to Saskatoon. On the other hand there are two other companies the expenses of which are much different. Yet we find that the final price to the door of the consumer is one and the same.
Prairie Transmission Lines
Furthermore, the city of Regina, which is much farther from Lloydminster, the source of supply, is enjoying a price of 14-6 cents a gallon, while in Saskatoon the consumer is paying 18 cents for fuel oil. I would be more in favour of granting charters to these companies than I am now if I were sure that the easing of the transportation problem would result in lower prices and in less of that sort of price manipulation.
Another thought occurs to me. Will the granting of this charter guarantee that such a pipe line will be built? Again I use as an example my city of Saskatoon, and tell the house about an experience we had. Just before the last war broke out a certain gas company, the name of which I shall not give, received a franchise to transport natural gas to my city of Saskatoon. Some people were so sure they would have this gas that they made arrangements to change their stoves from coal-burning to gas-burning.
The war broke out and, under certain clauses in the franchise, these people were able to get out of their contract during the duration of the war. They had put up a large sum of money with the city as a guarantee. We thought naturally that after the war was over the power granted under the franchise would be exercised. But that has not happened, and since the war Saskatoon has been waiting for its supply of natural gas.
Someone will say, "Is that not a legal matter? These people can be sued and damages collected." I am not learned in legal procedure, but I have learned through my experience that such procedure is somewhat slow and tortuous. Up to the present time Saskatoon has no gas, and so far as I know there is no prospect of getting any.
I give these facts as an example of a franchise which was granted, and nothing done about it. Another feature I should like to mention in regard to pipe lines is that a pipe line, by its very nature, is in itself a transportation system, just the same as is a railway. As such, in my opinion, it should be used by other people in addition to those who have obtained the franchise to construct the pipe line. Therefore one of the first questions I would ask with respect to this or any other pipe line is: Is this pipe line, or is it not, to be a public carrier? We have no guarantee of that.
When we ask such a question we are told that we have to address our question to the board of transport commissioners after the line has been built. I suggest we should address our question in the same manner as we should address the question as to the geographical position of the line-not after it has been built, but before. Another thing

Prairie Transmission Lines I should like to suggest is that as this pipe line is a transportation system, it should be publicly owned. There are certain things about which I am worried in regard to this particular pipe line bill and there are certain questions I should like to ask.
If refineries other than those controlled by the company constructing the pipe line are to have the use of the pipe line, will there be regulations regarding such public service and as to the amount of outside material that may be carried by the pipe line in proportion to the amount of material owned by the company constructing the pipe line? Next, provided the company has or builds refineries along the route of the pipe line sufficient to refine the total capacity of the pipe line, can it then refuse to handle oil transportation for other companies?
Next, if pipe line capacity is allocated on a percentage basis can the company arrange its own chronology as to deliveries? Most hon. members are aware that on the western prairies there is a season of heavy demand for oil and a slack season. Will the company owning a line of this kind be able to use the line for its own purposes during the season of heavy demand and then permit the pipe line to be used by other refineries during the less valuable time?
Can the company insist that the percentage allocated to refineries other than its own shall be delivered on the prairies during the nonagricultural months? Can it be incorporated in the legislation that the percentage delivered to other refineries shall be on a year-round or a day by day or a month by month basis?
The building of this pipe line or of other potential pipe lines is a matter of concern to many organizations in my part of the country. I have the resolution which was sent to me by the trades and labour council of Saskatoon, which reads:
Whereas Canadian natural resources should be exploited for the benefit of all Canadians and Canada should endeavour to become a self-supporting industrial nation having all its resources under its complete control, and
Whereas, it is planned that the proposed pipe line is to be partly built-
This resolution refers to a different pipe line.
-and terminate on American soil making it no longer an all-Canadian enterprise.
Whereas, our dollar has been devaluated and we are spending $200 million annually buying oil from the United States, thus using American dollars, and
Whereas, an all-Canadian route for the proposed pipe line would employ Canadian labour in its construction and maintenance and would largely employ Canadian ships and sailors to transport this oil to the refinery with the prospect of a refinery at the lake-head with all its benefits to Canadian citizens.

As I say, this resolution really refers to another pipe line but I am reading it in order to bring out my point that it is the concern of a great number of Canadian citizens that all of these pipe lines shall be built on Canadian soil. The resolution continues:
Therefore be it resolved, that this Saskatoon trades and labour council urge all its local unions to press the government to make this oil pipe line an all-Canadian route, and
Further be it resolved, that this resolution be forwarded to the Honourable C. D. Howe, Minister of Trade and Commerce, asking him to use his influence with the government to take action to ensure the above undertaking.
They realized that the influence of Mr. Howe with the government is great and perhaps in that regard they are making something of an understatement. To summarize, may I say that I consider these pipe lines should be publicly owned as they concern public transportation. Second, if a pipe line is built it should provide service to companies other than the one building the pipe line. Third, any pipe line should be built on Canadian soil for its entire distance.


Mr. E. D. Fulton (Kamloops):: Mr. Speaker, in the bill before us tonight for consideration we find an opportunity to renew the debate upon the application to incorporate a gas pipe line company by the name of Prairie Transmission Lines Limited. This company proposes to build a pipe line for the transportation of natural gas from Alberta, through the United States of America, with the primary object of serving the Pacific coast United States cities of Seattle, Tacoma and Portland, with any surplus being made available to Vancouver. We have before us for immediate consideration an amendment to the motion for second reading moved by the hon. member for Vancouver East (Mr. Maclnnis). This amendment will be found on page 2103 of Hansard of November 22, 1949, and reads:
That Bill No. 119 be not now read a second time but that it be resolved that in the opinion of this house further consideration of this bill should be deferred until the house has been assured that the route of any pipe line built by the proposed company will be laid out so as to serve Canadian requirements before any such pipe line leaves Canadian soil.
I should like to congratulate the hon. member for Vancouver East upon that amendment because better than any speech or words that could have been used it places the issue squarely before us. At this point may I say that I intend to stop in time for a vote to be taken on the amendment. The issue is whether we shall insist on Canadian resources being used first to serve Canadian development, or whether we shall consent to the exploitation and exportation of our resources for the benefit and extension primarily of other interests. That is the

whole question and it seems to me that the issue raised by the amendment goes far beyond the mere question of whether we shall incorporate a company. The issue involves the control and development of Canada's resources.
Those of us who have spoken in opposition to the incorporation of this particular company are doing more than speak against an individual incorporation. I realize that it has been said that there is a filibuster against a private bill, but I would point out that this is the first opportunity that has been afforded the house to debate the method of handling a tremendous new resource which has been made available to the Canadian people. The two private bills which have been before the house this session seeking the incorporation of companies to handle natural gas afford the first opportunity we have had to consider fully the policy that will govern the development, exploitation and transportation of this huge Canadian resource.
Those who are sponsoring the bill before the house tonight have taken the position that we should not oppose the incorporation of this particular company or of the other company that has been before us. They say that is the only principle involved in the bill, whether or not the house is going to grant incorporation to a company in order that it may subsequently make its application to the board of transport commissioners and the government of Alberta for permission to carry gas.
Far more than that is involved in this and the other bill now before the house. But if that were the only principle I would have no hesitation in saying that I am opposed to that principle, because I am opposed to the incorporation by this parliament of any company for the purpose of transporting and supplying to ultimate consumers elsewhere a Canadian natural resource, when the company through the sponsor of the bill will not give the assurance that the route will be through Canada and will serve Canada first.


Mr. Robinson:: What about the bill last
year?


Edmund Davie Fulton: When the bill went through last year we knew at the time the company was incorporated that the route would be all-Canadian; but the assurance we have asked for with respect to this bill, as to whether this line will follow an all-Canadian route and serve Canada first, to my knowledge has not been given.


William Alfred Robinson: The hon. member speaks of an assurance given in connection with the
Prairie Transmission Lines bill that went through last year. Is it not true that this assurance was given in committee; and is not the hon. member right now preventing this bill from going to committee?


Edmund Davie Fulton: I am coming to that point now, because that assurance, wherever given, was given, and the public statements of the company agreed that it would be an all-Canadian route. On the other hand we have before us a statement by this company which indicates clearly that they do not propose to build their line through Canada. So it does not seem necessary to permit this bill to go to committee in order to establish something which is already established in the advertisements issued by this company.
In his statement in moving second reading the hon. member sponsoring the bill laid before the house the proposition that the route of the company is not involved in this motion. At page 1344 of Hansard for November 1 of this year he said:
I wish to make it clear that the passing of this bill does not in any way establish routes for the transmission lines for this company.
He went on to say:
As I say, as far as federal jurisdiction is concerned, under the direction of this parliament it was ordered in the last session that routes must be decided upon by the board of transport commissioners.
In my submission that statement is not strictly accurate, and I shall deal with it a little later in discussing the general Pipe Lines Act. Then at page 1345 the hon. member went on:
I should like to inform the house that the bill has nothing to do with routes. .
Well, Mr. Speaker, it is perfectly true that the bill before us makes no mention of routes; but the advertising put out by the company does deal with routes, and lays out the route this company proposes to follow. The advertisement appeared in the Calgary Herald of August 11, 1949. I believe it has been read to the house already, so perhaps I need not read it in full, but it sets out that the purpose of the company is to transport or transmit natural and artificial gas and oil in the provinces of Alberta and British Columbia, commencing at a point in the general Calgary area in the province of Alberta and thence to a point in the vicinity of Blairmore in the said province and thence to a point in the vicinity of Kingsgate in the province of British Columbia and thence to the United States of America, leaving Canada at a point at or near Kingsgate in the said province of British Columbia and re-entering Canada in the vicinity of Blaine in the state of Washington. This means that for by far the greater portion of its distance the line would go

Prairie Transmission Lines through the United States; and as we know from other public statements of the company its purpose is primarily to supply those United States Pacific coast cities of which mention has been made already.
So the advertisements and public statements of this company make their object perfectly clear; and it is that object to which I am opposed, for the reasons I have stated. I believe it is our responsibility as members of the Canadian parliament to see to it that Canada's resources are used for Canada's benefit. I do not say we should adopt the selfish attitude of saying, "You cannot have anything of which we have an abundance", but that we should adopt the attitude of saying, "We are going to use our resources for ourselves first, to fulfil our own requirements. Then we shall be willing to export our surplus to you; in fact we shall be willing to co-operate with you in a proper division of our resources". That is not what this bill does. The purpose of this bill is to export the gas to the United States first; then if anything is left over it will be sent back to Vancouver, entirely by-passing the interior areas of British Columbia.
In opposing that principle I should like to lay before the house some words which seem to me to contain a very clear statement of the attitude and sentiments of those who share my opinions in this respect. This statement is contained in the December, 1949, issue of a publication put out by Ross Whittall Limited, of Vancouver. In dealing with natural gas development in this country it says:
Where the railways brought industries during the last half century so should natural gas bring them during the next, for it provides cheap thermal units at a fraction of the cost of transit.
I ask hon. members on all sides, who at least will sympathize with us in the vision we have as to the development of our province and the western half of our nation, to listen to these words:
New towns should grow and, if our province has nearly doubled its population in the last decade, what may be the expectancy of the next? We then foresee the pipe lines providing valuable U.S. dollar exports to central Washington and to the U.S.A. Pacific seaboard and we know that these American populations will not grudge us our contention that first Alberta and then neighbouring Canadian provinces benefit from our newly-found economic stimulant. Geologists are satisfied that there is plenty for all; indeed we believe that one of the largest sources of supply may lie close to recently proved reserves beneath the Peace river block in British Columbia and Alberta. . . . but let us make sure that, wherever we find it, our Canadian natural gas serves and opens up the maximum quantity of our own country before it benefits the neighbouring states of America.
And, Mr. Speaker, the only time and place that responsibility which it is our duty to

exercise here as members of this parliament can be exercised is now, in this House of Commons, in opposing this and other similar bills which seek to export gas first to the United States. If this bill were given approval we would lose control of the gas from here on. It would go to the United States, and from then on would become a United States resource not subject to Canadian control and of no use for the development of Canada.
Some hon. members have said it is not for this parliament to oppose the incorporation of this company, that we should leave it to the Alberta government to decide whether or not the gas will be exported to the United States, that they have the necessary legislation and the necessary machinery. It seems to me, Mr. Speaker, it would be most unfair to impose upon the Alberta government the responsibility of saying whether or not their resources will be exported from Canada. The concern of that government is to make sure there is sufficient of their natural resources left in their province to take care of their own requirements. It is not their concern to prohibit its transportation from that province to the United States. A reading of the Alberta act shows that they are concerned mainly with the preservation of a supply, not the control of where any surplus goes, if there is a surplus, once it leaves the province.
It is said, "Well, leave it to the board of transport commissioners; let them say what the route of the pipe line should be; let that body take the responsibility of saying whether it should be kept in Canada or exported to the United States". I point out to the sponsor of the bill, who made that suggestion, that there is no provision in the Pipe Lines Act which would empower the board of transport commissioners to take that into consideration, in saying whether or not approval shall be given to a company. There is a reference in section 9 of the Pipe Lines Act covering approval of the route, but that act does contemplate the export of gas. It contemplates a gas pipe line going to the international border, and crossing into the United States. It is inherent in the act.
I am sure the sponsor of the bill, who is a lawyer, would agree with me that it would be beyond the powers of the board of transport commissioners to say that, merely because the route contemplates the international transportation of gas, they will not approve the application. The Pipe Lines Act itself contemplates an international gas pipe line. We cannot leave it to the Alberta government; we cannot leave it to the board of transport commissioners to decide whether or not a gas pipe line should serve Canada first before the gas is exported to the United

States. There is only one place where that can be decided under the present set-up, and that is in this parliament. It must be decided, by our insistence as legislators dealing with the matter, that the route should be through Canada. There Is only one way in which we can accomplish that result, and that is by insisting that there be embodied in the act incorporating the company a provision that the route shall pass over Canadian soil, and that the gas shall be used first to supply Canadian needs. Then, the surplus could be exported to the United States.


William Alfred Robinson: Did you insist upon that for the company that was here last year?


Edmund Davie Fulton: I have answered my hon. friend with respect to the company that came last year; it undertook to build a Canadian route.


Some hon. Members:: Oh, no.


Edmund Davie Fulton: As I have stated before, I feel that the issue before the house at this time is the issue contained in the amendment moved by the member for Vancouver East (Mr. Maclnnis). Before any of these bills be allowed to pass, the sponsor of the bill should give assurance and that assurance should be incorporated in the act itself, that the pipe line will be built across Canadian soil, and the gas will be used first to serve Canadian purposes. Then, we shall gladly share the surplus with the United States. That proposition has been laid clearly before the sponsor, and the persons who seek incorporation of this company, and that assurance has not been given. For the reasons I have stated, and because I feel that in this parliament we must adopt a positive policy for the development of our own resources to build up the western area of our country as an economically powerful unit, and because assurances have not been given, I support the amendment moved by the member for Vancouver East and oppose the bill for which second reading is sought tonight.


Joseph Henry Harris: This particular matter, which is now before this house, is starting to grip the imagination of the people. I am of the opinion, sir, that our Canadian people should think of it from the point of view which has been brought to their attention for many years, that is the rather broad view which reminds us that, in so far as these particular resources which Providence has given to this country are concerned, we ought not to be hewers of wood and drawers of water for that great magnet to the south of us. We should have that intestinal fortitude to develop our own resources, within our own country, which befits the strong men of the north, who are going to make this country what Providence designed it to be.
Prairie Transmission Lines
Three years ago this month, it was my high privilege to receive a cable from London to go there immediately. The transport division of this government enabled me, although I received the cable on a Friday, to be in Kingsway house, London, within three days. Whilst there-I am talking, Mr. Speaker, about these gas and oil deposits that are in Alberta-my imagination was gripped by the possibilities provided by the gas and oil in Alberta. At that time I was able, sir, to interest some British concerns in those fields.
I see my hon. friend, who is paired with me in the house, smiling. He has a ten million pounds sterling statement under his hands now, sent to him this afternoon, showing the magnitude of this enterprise.
I say to you, Mr. Speaker, that that same organization is working in Calgary, Alberta, today. They have sunk several hundreds of thousands of dollars into that proposition, and they are using thousands of feet of that natural gas to develop and produce a product which is required in this country of ours. This is only one small example of what might be done, if the hon. members in this chamber would only let imagination grip them, and attempt to develop our country. With the help of the know-how of those in Britain, we could develop our own country, and use all the natural products and the natural fuel tn aid in that development.
Let us not continue for the next hundred years, Mr. Speaker, to be hewers of wood and drawers of water for the 140 million people to the south of us. Let us have the intestinal fortitude to develop our own country for our own people, and take full advantage of the possibilities we have in this country.


Some hon. Members:: You have made it; it is nine o'clock.


Joseph Henry Harris: Before I sit down, I know my time is up, but I want to answer one question that was posed to me today by the senior member for Halifax. I note that he is not in the house at the moment-


Mr. Speaker:: Order. It being nine o'clock, the house will resume the business which was interrupted at six o'clock.

The house in committee of supply, Mr. Beaudoin in the chair.
DEPARTMENT OF NATIONAL REVENUE Customs and excise divisions-
296. General administration, $1,506,165.


Mr. Casselman:: Is the minister going to-make a statement?


Donald Methuen Fleming: In reviewing the details of expenditure, one sees that an increase of some
2810	HOUSE OF
Supply-National Revenue $2,633,000 in the estimates for the customs and excise divisions and an increase of $864,845 in the taxation division are attributable to changes in a number of items which seem to indicate a substantial shifting of staff from one branch to another. The details indicate that apparently a number of new positions have been created in certain branches, and a number of members of staff dispensed with in other branches. Will the minister indicate to the committee just what has been done? Will he also give to the committee information indicating the number of employees in the department, both temporary and permanent, and what trends are evident within the past year in respect of the proportion of permanent and temporary staff members?
There is another aspect of this question which has been of interest in previous sessions, and I think the committee would be obliged if the minister would make some statement on it. It will be recalled that it was this department which took over a large number of former members of the staff of the wartime prices and trade board when that staff was largely demobilized. At that time-


James Joseph McCann: May I interrupt the hon. member?


Donald Methuen Fleming: Yes.


James Joseph McCann: I think the hon. gentleman has a misconception with reference to the estimates as presented. These estimates, while of the Department of National Revenue, constitute really two departments under one head: the department of customs and excise, which is entirely separate and distinct from the department of taxation, the other branch of the Department of National Revenue. Each has its own deputy minister and staff, and each performs a separate function of its own. When the hon. gentleman has concluded his remarks, I shall be glad to answer the questions he has asked.


Donald Methuen Fleming: I can assure the minister that there is no misconception on my part as to the way in which the department functions as between the two principal divisions of it, customs and excise on the one hand and taxation on the other. We might make that clear to begin with. I can direct my remarks more specifically to either branch; but one would have thought it would contribute to the saving of time if in the course of a general discussion on the first item these matters were cleared up, because the inquiries I have for certain information now are applicable to both these divisions.
I was in the course of mentioning that this department was the one which took over a 

number of members of the staff of the wartime prices and trade board when that board was largely demobilized. At that time the salaries payable to the members of the staff of the wartime prices and trade board were [DOT]higher than those payable to members of the staff holding corresponding responsibilities in the Department of National Revenue. Persons holding senior positions in the department were, in consequence of these moves, receiving salaries smaller than those of men who were junior to them on the staff but who had been taken over from the wartime prices and trade board at their same salaries.
The last time this matter was discussed in the house, which was a year ago when the minister's estimates were then under consideration, questions were asked with a view to obtaining from the minister a statement as to how far this anomalous situation had been eliminated. I ask the minister if he would bring the information of the committee up to date on that point as well.


James Joseph McCann: The customs and excise divisions have taken over no former employees from the wartime prices and trade board. Some of them may have gone to the taxation division.


Donald Methuen Fleming: They did. I did not suggest that they were taken over by the customs and excise divisions.


James Joseph McCann: That is the item we are discussing at the present time. The general administration item here has to do with the administration of the customs and excise divisions. There will be an administration item also under the taxation division. As to the number of -employees-and I think that was one of the questions asked by the hon. gentleman-as of October 31, 1949, there were 376 permanent and 192 temporary, a total of 568 in the general administration division. In investigation and audit, there are 438 permanent and 125 temporary, a total of 563.


Donald Methuen Fleming: I do not ask for the breakdown by individual branches; it is just the total I want.


James Joseph McCann: We will give you the total.


Donald Methuen Fleming: We are subject to your ruling, Mr. Chairman, but if we are to have the questions broken down as between these two divisions, I think we shall be at this matter a needlessly long time. If the minister has no serious objection, I think it would be much better if we could have some general information about the department without his insisting on breaking the information down as between the two divisions.


Louis-René Beaudoin: Perhaps I may be of some assistance to the hon. member for Eglinton by bringing to his attention the fact that this department, unlike the other departments, is presented in the bluebook in this way: the first item, general administration, refers to customs and excise. It seems to me it might be well if we had a general discussion on customs and excise while the deputy minister of customs and excise is here. Then when we come to item 300, we can have a general discussion on taxation, at which time the deputy minister for taxation will be here. The Minister of National Revenue could certainly reply to the questions put to him by hon. members if we proceeded in that order. If the hon. member for Eglinton looks at the other departments, such as the Department of National Health and Welfare, for instance, he will see that the first item is departmental administration, and then the services; but there is only one deputy minister.


Donald Methuen Fleming: There are two deputy ministers there.


Louis-René Beaudoin: In this case there are two separate departments. If the hon. member would like to make remarks of a general nature as to the department, I think it is quite all right to do so at this time. But as to specific questions which relate to taxation, I think he would be better advised to wait until the deputy minister for taxation is here.


Donald Methuen Fleming: May I make it quite clear, in case I was not heard before, that I have not asked any specific questions about either of these main divisions. My questions have all related to the department in general. If we have to break this down and get information separately with regard to the two divisions, and total them up afterwards, it seems to me we are going to be taking a needlessly long time. You say, sir, that there is only one deputy minister of national health and welfare. With respect, there are two deputies, one of health and one of welfare, and we have always had a general discussion on the first item of the estimates of that department.


Louis-René Beaudoin: I agree with the
hon. member. I certainly wish to permit this general discussion, but for the purpose of expediting business and permitting the minister to reply adequately to the questions which are being put, I think that unless we have the deputy minister for taxation in the committee in front of the minister it will be difficult for the minister to give all the
Supply-National Revenue answers to the questions put by hon members. Usually on this first item we have a general discussion. Hon. members make their presentations and the minister replies at the end. If the discussion takes place in that way, the Minister of National Revenue can reply to the questions with regard to the customs and excise branch, with the help of the deputy minister for customs and excise. As soon as the deputy minister for taxation takes his place in front of the minister, the minister could then proceed to answer the questions relating to taxation.


Donald Methuen Fleming: I am waiting for some information. I again make it clear I have not asked these questions-


Some hon. Members:: Sit down.


Louis-René Beaudoin: Order.


Donald Methuen Fleming: -in relation to either division specifically. I asked for information with regard to the department in general. May I have that information, please?


Louis-René Beaudoin: The hon. gentleman will admit that it is the practice to have a general discussion and for the minister to reply at the end of the general discussion Is not that the practice?


An hon. Member:: Not always.


Donald Methuen Fleming: I did not think I was entering into that discussion. I was simply asking for certain information. I asked some questions.


James Joseph McCann: Mr. Chairman, since the inception of the department and of the two divisions over thirty years ago-and the customs department is as old as confederation -it has been the custom and the time-honoured tradition to handle the estimates in the way that they are being handled at this time, namely, as of two divisions, and that is the way that I propose to give answers to questions that hon. gentlemen ask. The hon. member for Eglinton can add them together just as easily as I can.
I shall now answer his question with reference to the number of employees. The total number of permanent employees as of the 31st of March, 1949, in the customs and excise divisions was 4,579; temporary employees 1,414; seasonal employees, 237, making a total of 6,230. The largest number of employees is at the different ports-that is, in every town and city where we have a customs and excise tax office. There are 3,765 permanent employees in the ports and 1,097 temporary employees. Within the last year, 1948-49, these people have collected $1,064,937,347.81.

Supply-National Revenue
With reference to the first item, the increased expenditure of $177,000 is made up principally by the increase in salaries over a year ago. That amounts to $173,999. Office stationery and supplies amount to $5,000, and travelling $5,000 additional.


Donald Methuen Fleming: I asked the minister whether reclassifications were being made this year. My question was in general; it was not specifically on the first item. Can the minister indicate whether there are reclassifications proceeding in the customs and excise divisions of the department? From the details given in the estimates, a substantial change in the numbers is indicated. One would think that a revision of various classifications was pending.


James Joseph McCann: Not in this department. There is no far-reaching revision or reclassification. Occasionally employees are being made permanent. Our quota of permanent employees is eighty-five per cent, and we are fairly close to the maximum of that quota. The reclassifications go on practically the whole year round, depending upon the length of time an employee has been in the department. No one can be made permanent until he is in the employ of the department for a year. One person might come in in June and another in December, so that from month to month some reclassifications and permanencies are being effected.


Robert Ross (Roy) Knight: Mr. Chairman, I want to ask the minister a set of questions in regard to censorship, particularly censorship of books.
I asked certain questions of the Secretary of State, and at that time the Minister of National Revenue was good enough to say that I should ask them on his estimates and that he would be pleased to answer them.
I have certain ideas in regard to censorship which I shall not inflict upon the committee at this moment, but I shall preface my remarks by saying that I have always had a great deal of difficulty in rending the curtain which has been hung around the censorship branch in this country.
I think, sir, that the idea of censorship is more efficiently applied to the working of the department than it is to the material to which it is supposed to be applied. I opened this inquiry a year or two ago by addressing to the minister or to his department certain questions on the order paper. At that time there was a lack of information which astounded me, and encouraged me to pursue my inquiry. I have not yet received the answers to my questions, and I am going to ask one or two of the minister tonight so 
that he may have an opportunity to answer them, and I may be allowed to comment as we go along.
When I broached the matter first my concern was to find who was the one man in this country responsible for the final adjudication upon a borderline case-that is to say, who has the final say in whether a book shall be admitted to the country or not. I did not expect to get the name. That is not the point. I want to know what official it is in the department. I instituted my inquiry a couple of years ago, and for personal reasons I was not able to pursue it at that time. I insisted that that man should be a person who by education, background, experience and knowledge of literature would be competent to censor books coming into the country or books which are produced in this country.
I do not want to give the impression that I am in favour of censorship. On the whole I am not, except in the cases which were covered by the bill of the hon. member for Kamloops, to which I gave my heartiest support. Now we are talking about a different thing. We are talking about the censorship of adult reading, and the keeping out of this country of books which perhaps should be admitted, and the allowing of books into this country which perhaps should be kept out.
I have maintained, and I challenge contradiction-I can do this because the statement has never been denied-that this condition of affairs means that the men who in the past have been responsible for this censorship were not efficient, in the respects which I have outlined, to do that particular job. That is my general charge. The minister has the facts, and I shall listen with interest to what he has to say in that particular.
To go into the circumstances of this matter, let me say that the department and the officials in charge of censorship looked upon my inquiries, as I see it, in altogether too affable and casual a manner. They looked upon them as, after all, a matter of not much importance-"after all, any customs officer can censor a book." I have that, sir in the actual words of the gentleman in charge of that particular job, astounding as it may sound to many.
I shall not mention anyone's name, because I have no purpose of that sort. I am only anxious that if we are going to have censorship in this country we shall have efficient censorship, and done by people who understand what they are doing.
I d i not think for one moment that people can be agreed upon this matter. One man's meat is another man's poison. I know censorship is a tremendously difficult operation, and

that is the reason I want people with the necessary background to make wise decisions in the matter. That, I claim, has not been done.
In regard to this particular inquiry, I asked certain questions of the department. I said, "Who is this man? What are his qualifications? What is his education? What is his background?" The answers I received were so ludicrous that I blush to mention them to the house. I heard, for instance, that he had some twenty or thirty years' experience in the customs and excise branch-as if that would make him a literary critic. That is the first one.
The gentleman himself said at that time that he was only a temporary employee substituting for an elderly gentleman who was on leave of absence preliminary to his retiring from the service. That in itself was a peculiar situation-a temporary employee. He said he was going to be replaced, he hoped, by a permanent employee.
Perhaps I might say a word or two before I ask my question. I had intended to do this later, but I might as well give the house the rest of the story. This gentleman was interviewed by a member of the press and asked how he regarded this particular occupation of censor of Canadian literature? The pressman said this gentleman was an affable person who confessed that a daily diet of certain types of literature was not at all to his taste. He said he was filling in until the regular appointment was made.
One of my questions is as to whether that regular appointment has been made of a permanent person, and whether that person has the qualifications to which I have referred. This gentleman went on to say further, "It does not require any particular training to tell a bad book." I do not know whether the gentleman was suggesting that perhaps he could smell it. He said, "You do not need a lot of education to spot a bad book." That was his point of view in regard to censorship, a Mrs. Grundy point of view-nothing at all about the quality of the literature, nothing at all about the necessary realism that perhaps should appear in a novel to make it realistic, as distinct from the typical pornographic thing written with a deliberate purpose of creating a best seller. He had no conception whatever of those things.
He said-and I am quoting his words to the newspaper reporter of the Regina Leader-Post; and that reporter may be in the gallery tonight for all I know-
You do not need a great deal of education to know whether a book is bad or not when you read it.
Supply-National Revenue
Then he goes on to discuss certain readers. May I for the information of the committee state-and perhaps I shall anticipate the minister-that there is a certain group of readers who are supposed to read these particular pieces of literature and then hand them on to this final mogul, whoever he is. He makes the final decision.
These readers, by the way, are not all men; I understand, and the minister will correct me if I am wrong, that the chief censor in this country is really a lady. However he said this:
They had no special training for their work- That is interesting.
-but have had years of experience in the job. When appointed they had no special recommendations qualifying them for the position. They were appointed by the civil service commission.
That might help them. The gentleman went on to say, when pressed in regard to making a decision, and to what extent he was influenced by the decision of these particular readers, that he usually concurred in the findings of the readers. With his qualifications I suggest that that perhaps is quite probable.
And either bans or approves importation of the bock in question ... If our appraiser is doubtful about certain passages you can pretty well depend upon it that they are bad.
Well, sir, to me this whole thing is astounding, in this day and age, when Canada is growing up and when Canada is more and more asserting herself as a nation, when Canada is more and more trying to encourage the development of her own writers in this country.
I could go on, because I made an investigation into this matter. I have a thick file upon it. I have statements from people and I have communicated with authors and with some persons bearing very famous names which would be recognized at once if I mentioned them in this chamber tonight. I have their opinions in the matter.
Then the matter of foreign language books comes up. How is a decision made as to whether foreign language books are to be admitted to this country? I remember asking a young mountie who was looking for seditious literature if the Ladies Home Journal was all right. He said he did not know, that he would have to look up the list and let me know later.
That is exactly the type of thing one would expect from the average customs officer, when it comes to censoring literature. The thing is just foolish. Literature is being handled like liquor, tobacco, sugar or something being brought across the line. How do we expect these men to become competent in the matter

Supply-National Revenue of handling foreign languages? As a matter of fact we did have several translators after the war. But now I understand from the Secretary of State, as I elicited by questioning him the other night, that these translators are practically all men who translate the two official languages of the country, English and French.
I have not received any satisfactory answer as to the number or the capabilities of the foreign language translators. A book is presented to a customs officer, I presume. I simply say this, that I do not think a customs officer is competent to handle that situation. The easiest thing for him to do is to admit the book and be done with it. The alternative is to be doubtful about it and send it up to the readers at Ottawa. The readers look around and find some passage in it which may be doubtful. They submit it to this final person, whoever he is, and he makes the final decision. And so some customs and excise officer in this country is telling me what I shall read and shall not read. I object to that.
Perhaps there is no use getting upset about all this. X could tell the committee a good deal more about it, and it is a sad story. You see, we have only one or two foreign language translators to handle the literature of all other languages, except French and English. I appeal to hon. members: What efficiency can one expect under the system I have described?
The minister may say that I make false accusations and these things are not true. All right; let the minister say so. I have been asking his department to say so for two or three years. One of the faults I find with the genial minister is that he does not trouble about these things; he seems to think that it is not of any importance. May I suggest to him that this is something which is perhaps a little over the head of this particular departmental official. This man is not a competent judge as to what I shall or shall not read.
These foreign books come in, and I am sure that some of them are all right and some of them are all wrong, but nobody knows. I have bought books that were on the banned list-and by the way I should like to ask the minister whether that list has been revised in the last forty years. I should like to ask hirfi if Bellamy's "Looking Backward" is still on the list. I thought they took it off, but if they have not, it will indicate the kind of-censorship we have had in this country.
I have some constructive as well as destructive criticism to make. I do not think that any one man, particularly the ordinary customs officer, should have the responsibility

of making the final decision in borderline cases. I have recommended that a committee be appointed to help in this matter. Let the official have the name of being the censor, but he could be assisted by this committee made up of people who know something about the matter.
I think I have said enough, but there are some questions I should like to get in before the clock overtakes me. First of all, I should like to ask the minister whether the gentleman-I have not named him-who has been described as an affable, middle-aged man who was on a temporary basis, has been replaced by a permanent official who is capable of doing this work.


James Joseph McCann: Ever since confederation there has been a law on the statute book that literature that is immoral, indecent and seditious shall be prohibited from entry into the country. I shall not keep the hon. gentleman in suspense any longer; I will tell him that the duty of enforcing that law devolves upon the minister in charge of the department. If there is a mystery man at all in connection with censorship, I plead guilty to that indictment. So far as Mr. Merriam goes, who has given him information with reference to censorship-


Robert Ross (Roy) Knight: On a question of privilege, I have never seen Mr. Merriam in my life, nor have I ever communicated with him, nor have I ever received any information from him. the last time I asked the minister that question he did not give me the information that he was responsible. He said that a certain man in his department gave the final decision. In fact the last time I asked the minister that question he said: "Of course I do not do the work; the hon. member for Saskatoon city must know that we have a staff". I can turn that up in Hansard. I am glad to know-or am I?-that the minister is now the official responsible.


James Joseph McCann: The hon. member asked me a question with reference to the former censor, whether he was still doing it and whether he was in the employ of the department. I was going to say no; that Mr. Merriam, who for some time did that work, is no longer in the employ of the department.


Robert Ross (Roy) Knight: The minister said that I had received information from Mr. Merriam, a man whom I have never seen in my life. I can give the minister the man's name as I have it here. I shall send it over, because I do not like mentioning civil servants in the committee; but apparently the minister has no such scruples.


James Joseph McCann: As I say, the responsibility belongs to the minister, but the minister

cannot personally censor the books, and he depends upon his officials. The general executive assistant of the department is the one who has that responsibility, and he has persons to assist him with the reading and censorship of these books. If translations are required, and there are translators available in the Department of the Secretary of State, their services are obtained. If they cannot meet the requirements, then people outside the department are used.
I suggest that it would be folly for the department to have full-time officials who would have as little work to do as they would have to do in censoring books written in other languages for which entry into this country might be sought. I suggest that you do not have to be a great literary critic to tell the difference between decency and filth. I have looked at a number of these books, and without reading them very far I could see that they were not the type of literature that should be let loose in this country where everybody can read it. Just the other day a ban was placed on crime comics, and it is now a criminal offence for them to be sold in this country. Much of the literature that seeks admission to this country is so filthy and so immoral, and some of it so seditious, that the department would be doing a great disservice to Canada to allow such trash to come into the country.


Robert Ross (Roy) Knight: I have no disagreement with the minister as to crime comics; I thought that would be understood by the minister. I think my actions will back up what I say, because I supported the bill against crime comics. Secondly, I do not think there is any need to have a lot of people skilled in literature on full-time pay in the department. It would be possible to have committees to read this literature without having people on fulltime pay.
I have not been told yet whether there is a man definitely in charge of this particular work, and who is responsible for it. I should like to know also how many readers are reading this type of literature at the moment. I am not talking about crime comics or the other filthy things that were dealt with by the bill. sponsored by the hon. member for Kamloops.


James Joseph McCann: I simply gave that as an example.


Robert Ross (Roy) Knight: I am referring to what might be termed legitimate novels. I admit that some of them should be kept out of the country, and I want them kept out, but I do not want those that should be let in to be kept out. Such books should not be kept out because of the attitude of a censor who
Supply-National Revenue does not know his business and who, in the case of doubt, refuses to admit a book. I think that has been the attitude of the department up until the present time. When I started my inquiry there were three readers in the department; is that the position at the moment?


James Joseph McCann: There is not a single person whose sole duty is censorship. There is a sufficient staff to meet the requirements with reference to reading and censorship of these books, but this need varies from time to time. The responsibility is in no way put upon the collectors of customs at the ports of entry. If there is reason to suspect that any literature coming over the border at any of the ports is indecent, immoral or seditious, such books are sent to the head office in Ottawa for determination as to whether or not they should be allowed entry.


Robert Ross (Roy) Knight: The question I asked the minister was perfectly straight and plain, but perhaps he did not understand it. I did not ask whether these people were full-time employees, whether they were customs officers or anything else. I asked how many people are engaged at times in reading these books -that is, both ladies and gentlemen-to decide whether or not they are proper reading matter for the people of Canada. That was my question. It is easy to answer. How many; one, two, three, or what number?


James Joseph McCann: The number is three or more, depending upon the requirements.


Robert Ross (Roy) Knight: Then I want to ask a further question. I think we are pretty clear that a book published in the United States is subject to examination by customs officers at the border. If the customs officer is in doubt he sends the book to Ottawa. Here it is scrutinized by the reader, who submits it to somebody for a final decision, and that decision is made. There have been instances, of course, where ten thousand or more copies of these books have been distributed throughout the country before the decision was made. I have known of books which were refused admittance at one customs port but which could be bought at the next town, where they had been allowed in; but that is just by the way.
Now we have the number of readers; there are three. I take it these are the same three who were in charge a couple of years ago, one of whom is the lady I mentioned, who I was given to understand was the main censor in Canada. This gentleman who was so long in charge has already stated that he accepted without reserve the advice of these readers, and that is my point. It was

Supply-National Revenue the reader who was making the final decision; the higher official was simply a customs officer who said, "Well, all right, if that is your choice." Now we have had the procedure in connection with books coming from outside Canada. Let us get at what is done in connection with books published within Canada. I take it that no books published in Canada are censored at all, unless information is laid by some individual or by an official in a provincial government who, after a book has been in circulation, discovers it and submits it to Ottawa for adjudication. Would I be correct in that?


James Joseph McCann: We have absolutely nothing to do with books published in Canada. These customs regulations have to do entirely with the entry of books from foreign countries. As head of the department I take full responsibility for the final say as to whether these books enter or are prohibited, and I intend to do that until some better system of censorship is set up, if that is required, by the Canadian parliament.


Robert Ross (Roy) Knight: That is exactly what I am advocating, that some better system of censorship should be set up by the Canadian government. That is why I am criticizing the system we have now. The minister says he is the final adjudicator, that he is the man who decides with respect to a borderline book. With all due respect to the minister-let it be understood that there is nothing personal in this, because the minister knows I have all respect for him and his ability-I suggest I would rather have censorship, that is to say the final adjudication, in the hands of a committee chosen to do that particular work, not necessarily on a permanent basis. Further I would ask the minister how many books are on the banned list at the moment. I am not talking about love story magazines or crime comics, or that sort of thing. What is the approximate number of books on that list?


James Joseph McCann: I cannot give the figure accurately, but I am told it is in the neighbourhood of three or four hundred.


Robert Ross (Roy) Knight: Perhaps the minister could tell me how many books have been banned during the past year, if he has that information.


James Joseph McCann: During the period from
April 1, 1949, to November 30, 1949, some eighty books and seventeen publications, in English and French, were prohibited. No foreign language books or publications have been prohibited during that period.


Some hon. Members:: Carried.
CMr. Knight.]


Robert Ross (Roy) Knight: It is not carried. If my hon. friend would like to take up where I leave off I should be delighted. This is something I believe should be ventilated, and I propose to ventilate it. If my hon. friend desires to assist I should be glad to hear his opinion on the matter; otherwise I suggest he leave this matter to me. Now I ask the minister how often this list of banned books is revised. You know, as time goes by we get more modern ideas, shall we say, and there comes a time when Bellamy's "Looking Backward" may be read without objection. Who decides when books should be taken off this list? If the minister wants a definite question, how many have been taken off this year, if any, or in the last forty years?


James Joseph McCann: The list is revised from time to time. I cannot say how many books have been taken off, but that revision is kept up sufficiently, we believe, to meet the need.


Mr. Carroll:: I would not suppose that a publication declared immoral forty years ago, twenty years ago or even ten years ago would be declared moral today or tomorrow?


James Joseph McCann: Certainly not.


Robert Ross (Roy) Knight: A few years ago there was a good deal of controversy over "Bernard Clare" by James Farrell. I wonder if that book is still on the censored list? I merely use it as an example.


James Joseph McCann: Yes, it is. I took the trouble to read it myself, and it is as filthy a thing as was ever printed.


Robert Ross (Roy) Knight: I make no issue of that. I have never read it. I am well aware that the majority of hon. members are not interested in this subject, so I shall bring my remarks to a close. I might ask the minister one or two further questions which he can answer with yes or no. What is the system of examination of United States or for that matter any motion pictures coming from outside the country. Is that a provincial set-up?


James Joseph McCann: That is a censorship which is undertaken by the different provinces.


Robert Ross (Roy) Knight: And I assume the censorship of what goes over our public radio is a matter for the C.B.C.?


James Joseph McCann: Yes; but I can say to the hon. gentleman that it is so pure it scarcely needs any censorship.


Robert Ross (Roy) Knight: I think some of the hon. members to my right would not agree with that. Well, Mr. Chairman, I shall conclude my remarks by simply repeating what I said at first, that there is a sort of smugness about

this department of censorship which I do not like. In the first place I think the whole thing should be publicly aired; I think the department should take the public into its confidence. I believe the public should know the criteria by which books are judged. As far as I can see the minister has only two words, one of which is "good" and the other "bad". I do not think that is good enough for this day and age. I think the public should be taken into the minister's confidence as to the criteria by which these books are judged. I have no purpose in discussing this matter this evening except to obtain information for myself. I could read questions I have addressed to the department, and its replies. I have several returns which say this sort of thing "Answer to question No. 1: No. Answer to question No. 2: See answer to No. 1." I have several returns of that sort but I have never been able to get to the heart of this business of censorship.
I would say that the first step towards reform is a ventilation of the whole subject. In the second place-I should like you to notice this term in what I am about to say- the administration of censorship is beyond the scope and ability of the average customs officer. I believe this is constructive criticism. I do not think it is fair to ask a minister to wade through the books about which he has been talking. I do not believe any minister of the crown has time to do that sort of thing. There should be, in my opinion, a responsible officer with the experience, background, training and education which would make him, in the eyes of the public, a person fit to do that particular work. As his assistants, because I do not think it is fair to make any one official responsible, he should have a committee of people who know something about literature. They could be on a permanent basis if you like, but I would suggest a temporary basis.
The department should take the public into its confidence in this particular matter. The public should know by what criteria these literary works, if I may call them that, are adjudged. The principle must be known. You cannot have any censorship unless you have the support of the public, and without such criteria being known to the public, censorship can only be applied in a haphazard and discriminatory way.


Mr. Hansell:: I have just one observation, Mr. Chairman. Did I understand the minister to say that a book that might be considered immoral ten or twenty years ago would not, perhaps, be considered immoral today?


James Joseph McCann: Not at all; I said the opposite.
Supply-National Revenue


Ernest George Hansell: Oh, I am glad the minister said that; because if that were what he did say, I would suggest that the book does not change. If our attitude towards it changes, that is different. It would mean that the attitude we took would be immoral, not the book.


[Stage Direction]
Item agreed to.
Taxation division-
300. General administration, $1,983,384.
James MacKerras Macdonnell: I should like to ask the minister a question about some remarks he made in the house on November 25. At that time, the minister was speaking about permanent and temporary servants in his department. He indicated that there would be a reduction of some 4,000 in his department after the current fiscal year, because of the fact that the backlog upon which the department had been working would be finished. Will the minister say a word or two more about that?
I notice that this year the figure, presumably for staff, is up nearly $1,400,000. Perhaps the minister would indicate exactly why that was, and would say a word or two more about the impending reduction of these 4,000 people who, according to his statement on November 25, would no longer be needed after the end of this fiscal year.


James Joseph McCann: I think it might be well if I made a short statement with reference to the departmental activity. In that statement, I shall cover the points which the hon. gentleman has made. In submitting the estimates of the taxation division of the Department of National Revenue, there are a few points which I should like to bring to the attention of hon. members.
You will have observed that by far the largest item in the estimates comes under the heading "salaries". The amounts needed to meet these requirements are greater than ever before. There are two main reasons for this: One, a substantial increase in staff; and two, the increases in rates of pay arising from the general over-all salary increases common to the public services as a whole since the war, and also the normal increases arising from promotion, reclassification of positions, and statutory increases within grades.
To deal with the first point requires a brief reference to the position of the department before the war. In the nine years ending in 1939, there were filed 3,590,224 personal returns and 253,903 corporation returns. Collections on all counts, personal and corporation, amounted to $833 million. In wartime, tax rates increased, exemptions decreased, the Excess Profits Tax Act was introduced, and
2818	HOUSE OF
Supply-National Revenue the federal government entered the succession duty field. As a result, there were filed for the nine years 1940 to 1948, 24,863,540 personal returns, 316,725 corporation returns. Collections for that period totalled $11 billion and $69 million on all counts.
Because of the pay-as-you-go system of collection adopted in 1942, a very considerable part of these moneys flowed in freely. But I think it is fair to say that, despite prodigious efforts to simplify procedures, the work of the division increased far beyond the capacity of the available staff. During the war, it was impossible to obtain the numbers of persons, men and women, especially in the skilled classifications, to keep the work on a current basis. In fact, many experienced men and women were lost to the services, and other war activities.
As hon. members know, a very serious backlog of work accumulated. At the end of the war, when staff became available, great efforts were made to recruit. To illustrate what happened, may I give you the following figures: On March 31, 1945, the staff numbered 6,421; it increased in 1946 to 7,097; in 1947, to 7,370; in 1948, to 10,478. The peak period was in March, 1949, when the staff totalled 11,704. Since that time, it has decreased and, as of October 31, 1949, it stood at 10,963.
Recruitment of course is but the beginning. Ours is a complex and difficult task, requiring that new employees be given extensive training, so that the full effects of the additional people were not immediately apparent. I am now happy to be able to advise you that, by the end of the current fiscal year, all returns filed in respect of 1948 and prior years will have been dealt with. To illustrate what has been accomplished, I should like to give you the production of assessments in this year. On October 31, 1948, we had 2,952,555 returns; from November 1, 1948, to October 31,	1949, we received 4,071,870
returns. The total was 7,024,425 returns. From November 1, 1948, to October 31, 1949, we assessed 5,868,677 returns, and the balance to be done between now and the end of March amounts to 1,155,748 returns. I can assure hon. members that the balance will be dealt with within the time limit indicated. I feel I should also add that it is my intention that all tax returns filed with my department will be dealt with without delay and, in any event, within twelve months of receipt.
To accomplish this gigantic task, it has been necessary to develop new procedures and new forms. The vast majority of individual taxpayers use the new form known as T.l short, introduced this year. Our


system now enables us to examine and assess practically all of these shortly after receipt. True, it is necessary to re-examine some returns and, as a result, it may be necessary to issue re-assessments. This is the point to which the hon. member for Eglinton referred last night. In all such cases, the re-assessments will be made within the year. There will be cases, of course, where taxpayers have deliberately falsified their returns. Where such returns are assessed without the true facts coming to light, the assessments will be subject to review at any time. Fortunately, it has been our experience that such returns comprise a small proportion of the total.
Because the work is now well in hand, and because it is at last possible to measure reasonably accurately the volume of future work, I am able to assure the committee that the decrease in staff evident in 1949 will be continued. It is expected that substantial reductions in numbers will be effected without major lay-offs, primarily because there is a large staff turnover and because, as the department is about thirty years old, there are members of the staff who are now reaching retirement age.
Before leaving the first point I should like to mention the amount of work involved in handling refunds. In 1948 the department processed all refundable savings claims for 1942, and in 1949 we processed the claims for 1943 and 1944. I am speaking, of course, of individuals, not of corporations. The following data will convey some idea of the volume
of work involved:
1948	1949
Cheques issued	
1,184,033	3,048,621Changes of address received_________	697,469	1,456,879Letter's received and answered Approx	
50,000	95,000
But, apart from the refundable savings, there are ordinary refunds arising from overpayments of instalments or overdeductions at source. These amounted to:
1948	1949
Refund cheques issued	 1,650,270 1.878,938
On the second point, I should like to draw your attention to the new wording which appears in the printed copy of the estimates. This arises from an important change in staff policy brought about during the past year. Recruiting of the staff has been brought under the civil service commission. I am sure hon. members will agree that this has been a progressive step. It meant, however, a complete analysis and, to a considerable extent, revisions of the department's establishments. In fact, these jobs have not yet been finished but will be shortly.

I should add that the estimates before you were prepared a year ago and do not anticipate those changes effected this year and planned for next year.
As to items other than salaries you will find increases in travel, telephone, telegraph, express and cartage and sundries; and you will find decreases in printing and stationery, postage, advertising and law costs. All of these other items depend to a large extent on the volume of work and the size of staff, subject only to changes in prices of materials or services over which the department has no control. I am glad, however, to report that the total for such items in this year's estimates is down substantially from last year.
I shall be glad to give you any further information you may need to answer whatever questions may arise out of your consideration of these items. I think perhaps that answers the hon. gentleman's question. As I have indicated, the prospect is that the number of staff will gradually go down; and when we have the staff to deal with all the returns and assessments on a current basis, the reduction which I indicated the other night ought to take place.


Donald Methuen Fleming: I think the committee will commend the objective that the minister has set of seeking to assess all returns on a current basis.
May I ask him about two points, one of which I touched on earlier, the other having to do with refunds. On the subject of refunds I should like to ask the minister within what period of time it is expected that refunds will be issued to those from whose earnings deductions were made at the rates in effect prior to the budget speech of last March, which rates were reduced by that budget. I presume that work has been in hand while the budget proposals have been pending and that the department may be in a position, now that the legislation is about to come into effect, to proceed expeditiously with the issuance of the refund cheques. If it is more convenient for the minister to answer that question now, I could leave the other question until he has completed his answer.


James Joseph McCann: The hon. gentleman of course understands that we have been waiting for the authority. As soon as royal assent is given to the bill that was passed today, those who come off the tax rolls, which would be
771,000,	will get their cheques immediately. For those who have refunds coming because of reductions, just as soon as they file their returns, if there is a refund coming to them, it will be made.
45781-179J
Supply-National Revenue


Donald Methuen Fleming: That is the point. I understand that the cheques are all ready and will go out immediately when royal assent is given to the bill.


James Joseph McCann: Yes.


Donald Methuen Fleming: The other point is one I mentioned earlier, and perhaps it has been answered in part by the minister's statement, but he might be a little more specific, if he will. I was referring to the large accession to the staff of this department from the staff of the wartime prices and trade board. I understand there was some difficulty about the adjustment of rates of salary, in view of the fact that the rates of salaries paid by the wartime prices and trade board were higher than those in effect in this department, with the result that after these shifts were made, some who were holding senior positions in the department were actually receiving less in the way of salary than members of the staff who were junior to them. Will the minister indicate whether that situation has been levelled off now and whether those discrepancies have been removed?


James Joseph McCann: I think that situation has been straightened out. The salaries that we pay are, of course, set or at least approved by the civil service commission. We did not really experience any great difficulty in that regard because a great number of people who had been in the wartime prices and trade board were quite aware of the fact that they were in temporary positions and perhaps were receiving salaries at that time over and above the scale that we were prepared to pay. Hence I say we did not experience any great difficulty by reason of that fact.


Gordon Knapman Fraser: I just want to ask a question that I have asked every year. I hope the minister will make plans to put a permanent taxation office in Peterborough. I suggest it at this time because I should like him to ask the Minister of Public Works to make provision for that office in Peterborough when he is making plans.


Louis-René Beaudoin: Shall the item
carry?


Gordon Knapman Fraser: I should like an answer on that point.


James Joseph McCann: I am not prepared to make any such promise. The matter of the location of offices is done largely with an eye to efficiency and an eye to meeting the requirements of a particular district. I will call the hon. gentleman's attention to a report that I tabled two or three years ago.
2820	HOUSE OF
Supply-National Revenue That report was made by experienced businessmen, in conjunction with representatives of the Department of National Revenue, who made a survey of the whole country and then indicated to us where they thought offices could be placed to the best advantage to serve the public.


Gordon Knapman Fraser: The taxpayer in Peterborough is obliged to go seventy-five miles down to Belleville in order to straighten out his various problems. The minister puts a temporary office in Peterborough after the new year. This year I hope that temporary office will start operations there earlier than it did before. Seventy-five miles is a long way to go, and I think something should be done for these people.


James Joseph McCann: We will give the hon. gentleman's inquiry careful consideration.


Mr. Siewart (Winnipeg North):: Can the
minister tell me what are the latest numbers of assessments made of farmers throughout the country, by provinces?


James Joseph McCann: I would draw the hon. member's attention to the book that we get out in the Department of National Revenue called "Taxation Statistics". If he will take the trouble to look at that book he will get pretty nearly all the information he requires. Our office does not keep details as to the number of particular occupations in which they are assessed. That is a question the hon. member asked? How many returns were filed?


Alistair McLeod Stewart: I want to know whether more assessments are made of prairie farmers than of farmers in other parts of the country.


James Joseph McCann: The hon. member will get the information in this book.


Mr. Lennard:: I wish to refer to a matter which I brought up on the defence estimates, and with which the minister is familiar. It had to do with the reserve army and the officers and inspectors of the cadet corps of Canada. As is well known, their pay is taxed. I have referred to the matter for years. I should like to know what progress has been made in the matter of exempting them from this unfair taxation.


James Joseph McCann: Mr. Chairman, I would draw the hon. member's attention to the fact that our department is entirely administrative, and whether the law says this, that or the other thing we try to administer it. The hon. member's protests or his requisition with reference to the matter would be better directed to the Minister of Finance who makes the policy that we carry out. Much as we would like to individually, perhaps,
(Mr. McCann.]

we have no authority to exempt the particular pay that a reservist gets and not call it part of his income.


Mr. Quelch:: Can the minister give us the number of prosecutions of farmers by provinces for failing to pay income tax?


James Joseph McCann: The hon. member's question is, What prosecutions have been made against farmers for failing to pay income tax? The answer is none. We have not prosecuted them for failure to pay.


Winfield Chester Scott McLure: I wish to draw to the minister's attention something that I mentioned to him last year. The vote for the Department of National Revenue is $52,545,233. Tonight the minister has given us all the figures. In the details we have all the civil servants who are employed. The sum of $23,941,500 is allotted for temporary employees. If the department had given us all the details we would have been saved the trouble of digging them out. Some sixteen thousand or eighteen thousand temporary employees draw this $23 million odd. Those details should have been given in the estimates and we would not be voting a blank cheque all the time.


Heber Harold Hatfield: Is a farmer still required to make up a net worth statement?


James Joseph McCann: Only, Mr. Chairman, where he fails to file an income tax return. He has his choice of either the cash basis or the accrual basis; but if he does not file a return of either he is asked to do so. If he still does not file a return then we ask him for a net worth statement, and we try to arrive at a figure which will indicate his yearly income over a period of years for which the net worth statement is filed.


Heber Harold Hatfield: How many years do you go back?


James Joseph McCann: It will vary according to the circumstances.


[Stage Direction]
Item agreed to.
Income tax appeal board-
303. Administration expenses, $50,000.
James MacKerras Macdonnell: I want to ask the minister one question on the item of $50,000 for administration expenses. Will the minister indicate just what is the nature of the administration expenses connected with the tax appeal board? I do not mean in detail; it seems like a substantial amount, more than the salaries themselves.


James Joseph McCann: The item of $50,000 has to do with the income tax appeal board. The salaries are statutory. They are fixed. The other expenses are: printing, stationery and office equipment $3,000; travelling expenses, court reporter's included-it must be understood that this appeal board sits in different

parts of the country, and there are travelling expenses incurred-$30,000; telephones and telegrams, $300; court reporter's fees, $90 average each case, 160 cases a year, $14,000, a total of $47,000, and $700 for contingencies. These amounts added up make $50,000.


[Stage Direction]
Item agreed to.
International short wave broadcasting station-
305. Maintenance and operation, $1,781,850.
Clarence Gillis: Will the minister give us a brief outline of just what particular service this international short wave broadcasting station performs? What wave length in Canada on one's own radio can one pick up on the station? We are spending a lot of money on it, and personally I have never heard just what function it performs.


James Joseph McCann: Items 305 and 304 amount to $2,753,000. It is made up of performers' fees, $500,000; salaries, $628,000; news service, $50,000; postage and excise, $30,000; printing and stationery, $15,000; rental and accommodation, $25,000; telegrams, telephones, et cetera, $40,000; travelling, removal expenses and duty entertainments, $60,000; general operating overhead, $146,000; transmission lines, $31,000; power, $40,000; tubes and maintenance, $37,000; Crescent street, Sackville line, $50,000-that is from Montreal down to Sackville; improvements on leased properties, $5,000 and supervision charges, $84,850. That makes up the $1,781,850.
I think it might be of interest if I gave the committee some information with reference to the international short wave service of the Canadian Broadcasting Corporation. On February 25, 1950, the international service of the C.B.C. will be five years old. In an inaugural broadcast Mr. Mackenzie King, who was then prime minister, said-and he was speaking to our troops overseas-
Tonight, Canada enters the world radio arena. As we undertake this new service, let us resolve that, in peace as in war, we will be true to the ideals you are so valiantly upholding-ideals which have made our country a nation. The unity of Canada belongs not only to Canada, it belongs to mankind. If we are true to ourselves, Canadian unity may well serve as a model for the wider unity of humanity. In the unity of mankind lies the one sure foundation of enduring peace.
The most powerful weapon against misunderstanding is the frank exchange of information among nations. This is a time when curtains of any kind, iron or otherwise, are tragic in the extreme when they exist between large groups of mankind.
The above facts provide the justification for the use by the nations of short wave broadcasting. Canada increasingly for the past forty years has found herself thrust out
Supply-National Revenue into the main current of world affairs. She could not if she wished pursue a policy of isolation. Our history and the traditional ties that result from it, and our geography which places us in a strategic position in the world have settled that for us. Increasingly Canada has been playing her full role in international affairs. It is, therefore, logical that she should have an international radio voice and that is exactly what the international service of the C.B.C. is.


Mr. Drew:: Is this still in the quotation?


James Joseph McCann: No, Mr. Mackenzie King's statement was brief.
Briefly the purpose of the international service of the C.B.C. is to project abroad as factually, honestly and simply as possible information concerning life in Canada which will help listeners in other countries to form a clear and accurate picture of what goes on here. It is a conscious attempt to place Canada before world listeners as a western democratic country. The voice of Canada, as it has come to be called, includes information concerning the simplest as well as the most complicated aspects of Canadian life. Through the co-operation of various departments of the government it speaks as authoritatively as possible of Canada's policies -within the safeguards, of course, of security. We tell our listeners about the way we live in our homes, the way we worship our God, the way we educate our children, the way we amuse ourselves, the way we conduct meetings and large industries, the way we elect political leaders and the way our machinery of government functions. In other words we are trying to present a picture of Canada as a vigorous democracy.
The international service is beamed daily to Europe in English, Norwegian, Swedish, Danish, Dutch, German, Czech, Slovak, French and Italian. It is beamed to Latin America daily in Spanish, Portuguese, French and English. It is beamed once weekly in English to Australia and New Zealand.
The response to the service has amazed even the most optimistic of its friends. Since its inception, between 125,000 and 130,000 letters have been received from individual listeners in various countries. Between January 1 and October 31 of this year 26,996 letters were received. These come from all types of people and all bear witness to a growing, lively interest in everything that is Canadian. They often ask for information concerning business, concerning labour conditions, concerning conditions under which they can emigrate to this country, concerning education and a thousand other aspects of the life and enterprises of Canada.

Supply

National Revenue
I thought it might be interesting if I read you a few excerpts from letters received by the C.B.C. international service. I have here some letters which were received recently from Czechoslovakia. You will understand how much such letters mean if you pause to remember for a moment the risks run by those who continue to correspond with us from that iron-curtain country. Our Czech mail used to be the largest. Since the coup in February, 1948 it has, of course, shrunk very much. We still continue to get a volume of mail, however, which compares most favourably with that received from that area by the B.B.C. and the "Voice of America".
I shall not take the time of the committee to read these letters. However they are from a great many people in these foreign countries who expressed their appreciation of the service rendered by the C.B.C. I have taken time to give some information about the international service, because there are about a hundred new members in the house who know very little about it. I presume they wonder why we spend a couple of million dollars a year to continue the service. It was for that reason that I have taken the time of the committee to give this information respecting a service which is non-revenue-producing, which is owned for all the people of Canada and which is used for the purpose of disseminating news about this country throughout the world in order that it may help those people who are behind the iron curtain, and give them some information with respect to this free democratic country, and to tell them something about the way in which we live. It is a service which I believe throughout the years will pay back big dividends, perhaps not in dollars and cents, but if we can attract to this country people who will become good citizens in future years, the money spent for the international short wave service has been money well spent.


Clarence Gillis: Mr. Chairman, I am glad the minister did make the statement, because unless the older members of the house had served on the radio committee and followed this matter through since its inception, they would not know very much about what had taken place in this field.
I know of course that all hon. members support the international service and are glad to have the information the minister has just given. I do not see any other item in which the C.B.C. as such is provided for. I would say to the minister, and not in a critical way, that the service rendered by C.B.C. stations in the maritime provinces leaves much to be desired-and this is not because of any

inefficiency on the part of the organization as such. In my view it is due to the way the wave lengths are allocated in those provinces.
Only a little more than a year ago a station was established in the city of Sydney. I live within thirteen miles of it, but cannot receive its signals. It is on a wave length that is not found on the average Canadian radio, and its signals are jammed in with those of American stations. While the national programs are carried by the station, you cannot get them when you are within even a few miles of it. The wave length is not found on the average Canadian radio band, situated as it is away over about 1700 kilocycles. That is in among the American stations.
I have received many complaints about it, and I am mentioning it to the minister so that it may be checked up. I do not live far from Sackville, at which point a powerful station is located; but I cannot receive it, either. The signals from the Sydney station cannot be received in Halifax, three hundred miles away. The Cape Breton stations are received only very poorly. On the other hant the privately-owned station in Prince Edward Island can be heard in practically any par: of the province.
It seems to me the officials of the C.B.C. should discuss this matter of how wave lengths in the maritime provinces are arranged. I know that, in Nova Scotia particularly, the privately-operated stations are heard more clearly because of their better situation as to wave lengths.


James Joseph McCann: The situation to which the hon. member has referred has developed because there was no other wave length available when the station was set up. While we are not discussing the C.B.C. execpt as it relates to the international short wave station which is managed by it, I would point out that representations have been made with respect to the whole matter of radio broadcasting to the Massey commission which is now sitting. I presume that some time next summer there will be a report from that commission suggesting changes that should be made for the betterment of the management of C.B.C.


Mr. Coldwell:: Is it not expected that the report will be ready before next summer? I was hoping that it would be earlier because we expect a committee on the C.B.C. next session.


Donald Methuen Fleming: It would have been most helpful to the committee when discussing these items to have had before it the annual report of the Canadian Broadcasting Corporation. The year of the corporation corresponds to

the government fiscal year and that report should have been available long ago. Ii would have shortened the proceedings before the committee and would have obviated the asking of certain questions concerning the work of the corporation. When will that report be available? In the past the report has usually been made available by the summer, but here we are in December and it has not yet been distributed.


James Joseph McCann: I am informed that the report is at the printers.


Donald Methuen Fleming: When was it sent there? Why was it not available long before this?


James Joseph McCann: I cannot answer that question.


Donald Methuen Fleming: I have just one word to say about reports. I think all hon. members are anxious to conserve time in the review of the estimates. It would save a great deal of time and avoid the necessity of asking questions if these reports were available.
We did not have his annual report when we were considering the estimates of the Department of the Secretary of State last week, but the following day or the next day after the estimates had been dealt with the report came to us. Last Saturday we reviewed the estimates of the Department of Labour without having the report of that department before us, and on Monday or Tuesday of this week the report was distributed. There was more than coincidence in that, I am sure.
We are now dealing with the item pertaining to broadcasting and are told that the report of the corporation for the year ended March 31, 1949, a year that closed more than eight months ago, is still at the printers. I should like to ask for any possible explanation for the delay in providing these reports to hon. members. With the house sitting in the fall surely it was the minimum duty of the government to do everything possible to expedite the distribution of these reports. I say it is lamentable that there has been such a sparse and tardy distribution of important reports. Lacking this particular report it has been necessary for some hon. members to ask questions about this international short wave station. That information would have been available in the report.
I should like to say a brief word about the relationship of the house to some features of broadcasting. I do not intend to go into the question at length, but I do want to say that I think it most unfortunate that a committee of the house on radio broadcasting has not been set up for two years. In the 1948 session there seemed to be good reasons for not setting up the committee because at the close of the 1947 session we had just completed an
Supply-National Revenue extended review of all the problems relating to broadcasting in Canada. In the early part of that session we were not aware that certain important moves on the part of the C.B.C. were under way. For instance, had it been known in the 1948 session that a large purchase of property in Montreal was contemplated, a strong request would have been made by the official opposition for the establishment of such a committee in order that that purchase might be considered before any commitment was made.
During the first session this year three requests were made by the official opposition for the appointment of a special committee on radio broadcasting. At first the minister was noncommittal and he simply indicated that the matter would be considered. Then when my leader pressed for the appointment of a committee a resolution was placed on the order paper, but with the summary dissolution that followed the resolution died on the order paper, and the committee was not appointed.
There is a great backlog of work for such a committee to do. This has been a short session and it has not been feasible to appoint a committee to carry on an extended review, but regardless of whether the royal commission headed by the Right Hon. Vincent Massey has completed its work or not, I submit that early in the next session a special committee on radio broadcasting must be appointed.


Frank Exton Lennard: You won't get it.


Donald Methuen Fleming: If for no other reason I think the subject of television should be considered of sufficient importance to require the appointment of such a committee. A study of that subject is urgent and essential. This country is losing valuable time. We should have been acting long before this.
The policy of the Canadian Broadcasting Corporation, to which the government is a party, has been one of dog in the manger. There were Canadian groups prepared to undertake the development of television at their own risk and expense, but through the control it exercises the Canadian Broadcasting Corporation would not permit them to do that. The corporation may not have been responsible for that decision, and it may have been the responsibility of the government. When the government finally did make up its mind about the middle of the first session of this year and announced that they were proposing a loan of $4 million to the C.B.C. to permit that corporation to undertake the development of three television stations, two in Montreal and one in Toronto, I am sure some of us wondered how the Minister of Trade

Supply-National Revenue and Commerce could have given his blessing to that proposal. When this matter was under consideration earlier this year the Minister of Trade and Commerce was one of those who said that such an expenditure would benefit only the residents of the metropolitan areas of Montreal and Toronto. In fact, the minister is reported to have said this:
If private operators think it worthwhile to risk their money, let them go ahead. Some of them, like Canadian Marconi, can hope to get it back by selling television sets. If I were living in my own town of Port Arthur I'd kick like a steer at paying taxes to bring television to Montreal and Toronto.
However, for some reason or other it became the policy of the government about the middle of the first session of this year to lend $4 million to the C.B.C. to develop three stations in the field of television.
I do not believe television in Canada ought to be a government monopoly. In the second place, I do not think it fair that the taxpayers of this country should be burdened with the cost of providing television on a basis which will benefit only the people in the metropolitan areas of Montreal and Toronto. When people who are capable of undertaking such a development are willing to risk their own money in it, without cost to the people of Canada, for the life of me I cannot see any sense or logic in denying them that opportunity, providing always- and there is general agreement on this-that the public interest is protected.
I am not going further tonight into this whole question of whether the C.B.C. ought to be permitted to continue as both competitor and regulator or, as it has been put in this house before, as judge and policeman as well as a party to the cause before it. I hope that very early in the next session an opportunity will be afforded parliament to undertake, by means of a committee, a study of this and of many other questions that have been developing since the last special committee of this house on radio broadcasting sat. It seems to me that is a matter of the highest importance. One might have hoped that the report of the Massey commission would be available early next session. If that should not prove possible, however, I submit that the House of Commons cannot wait. These questions I have referred to, particularly the matter of television, are much too important to be left in abeyance any longer.


Mr. Benidickson:: I do not intend to oppose this item for the international radio service, though I am far removed from the metropolitan areas that have been referred to, which benefit from very lavish expenditures

made through the C.B.C. in respect to such fancy things as television. I do want to remind the minister, however, that northern Ontario has been badly neglected by the C.B.C. with respect to radio service. Vast areas in that part of the country are receiving no benefits whatever from the payment of their licence fees, nor are they getting any service from the C.B.C. or the government. If from its revenues the broadcasting corporation cannot look after those sections which are rather sparsely populated, and which were assured of service in the Aird report which was the basis for the development of the C.B.C., then the time is coming when these more remote areas will have to vigorously insist that no more money be channelled through the C.B.C. for such fancy things as television and an international radio service.
I would hope the minister might be able to give us some assurance that if the C.B.C. cannot find the money to provide this service, some other funds might be provided through his department or the Department of Transport to meet the cost of providing repeater stations in northern Ontario. Practically all the pockets of population in that area are on the transcontinental railway lines. These railway lines have telegraph lines which carry practically all the programs to western Canada, and those programs should be tapped for the benefit of these areas. If the C.B.C. is not prepared to do that, as they say they are not-and they have been resisting our requests for many years-I think a general vote of this house should provide for radio service in that part of the country, as was promised years ago when the conception of public ownership was first developed. At that time it was said that unless there was public ownership alongside private ownership, only in the highly commercial areas would we have adequate service.


Major James William Coldwell: I should like to join with the hon. member for Eglinton in expressing the hope that a radio committee will be established early next year, but perhaps from a different point of view. I know we cannot discuss radio broadcasting under this item, but I do want to say I think the radio committee should be appointed in order that the people of Canada may get a proper perspective regarding the corporation, the work the international broadcasting station is doing, and the work of the C.B.C. in general across the country. When I look back over the years I often look at the members of the official opposition and recall the speeches made by the late Right Hon.

R. B. Bennett. He would not have agreed with the opinions expressed tonight by the hon. member for Eglinton.


Frank Exton Lennard: How do you know that? This is a different day and age.


Major James William Coldwell: I have read his speeches.


Frank Exton Lennard: But that is all on ice now.


Major James William Coldwell: If the hon. member wants to make a speech, let him do so. I am just referring-


Frank Exton Lennard: I am just checking up on you.


Major James William Coldwell: I would prefer that to be done by someone who can check up, rather than merely interrupt. It seems to me this committee should be set up in order that the public may be informed as to the services rendered by the broadcasting corporation and the extent to which that corporation has permitted private stations to contravene the broadcasting act and the regulations as approved both by the corporation and by parliament. As far as the stations in this country are concerned today, I think the people are getting thoroughly tired of the amount of soap and other advertising that goes on hour after hour, and the spot announcements that interrupt the programs every few minutes. I think we should look into the revenues of these private stations again, to see what they are actually making out of the monopoly the country grants them by way of wave length, because the possession of a wave length is the only monopoly there is in connection with radio. No one else can use a wave length that has been granted to a private station; therefore that station is given a monopoly.
It is said that these stations are operating without cost to the public, but in fact the cost is enormous when you consider the amounts people pay the advertisers for their products, against which the cost of broadcast advertising is of course charged. I think, too, the committee should go into the question. of television, because that can be both a benefit and a menace, particularly to the small businessman and the small manufacturer in the country. The cost of television programs will be tremendous, and the propaganda and advertising effect of the programs going into the homes of the people can be tremendous as well. If hon. members would just think it through they would realize the extent to which monopolies could be built up in our country through this great new facility.
As far as the international service is concerned, I believe the station and the expenditures on that station have been justified as
Supply-National Revenue the years have gone by. It is good, I think, that a powerful station in North America, and in one of the smaller countries such as Canada, if I may use that term, should be able to speak to the people of Europe who are not able to get information from the outside world and who can enjoy the programs that are transmitted across the iron curtain from one of the democratic countries which is not a great power, and therefore has no axe to grind, as might be the case with a great power. However, I do not want to go into the question of radio broadcasting tonight. I do think, however, there should be a committee set up to consider broadcasting in general, and particularly to find out why the C.B.C. has departed from the act, for example, in establishing private stations of 50,000 watts power. This was never contemplated by parliament at the time the act was passed. I believe a local community station can perform a local service, but I do not think it should be allowed to obtain a coverage that can blot out many of the other community stations, and interfere with the very basis of our broadcasting act.
I am anxious to look into one or two of these features critically, to ascertain why it is that the regulations and the act have been varied by the broadcasting corporation in cases of that kind.


George Alexander Drew: Are the staff or the performers of the international short wave broadcasting station being screened by the R.C.M.P. at the present time?


James Joseph McCann: Yes, they are.


George Alexander Drew: Can the minister tell us how many of the members of the staff or performers are at present not actively engaged until that screening has been completed?


James Joseph McCann: They are all active.


George Alexander Drew: Is it not correct that the screening which is taking place is being conducted in connection with a suggestion that there has been certain broadcasting conveyed to European countries, which was not in accordance with the purpose of setting up this station?


James Joseph McCann: I am informed that the answer is no.


Alistair McLeod Stewart: Do I understand that one who has been commissioned to read a talk over the short wave broadcasting station is being screened?


James Joseph McCann: The answer to the hon. gentleman's question, Mr. Chairman, is that the topic and the script are screened most carefully. In some instances, the person who is
2826

Supply-National Revenue delivering the talk is screened also; but there would be no reason to screen a musician in the employment of the international short wave station.


Alistair McLeod Stewart: The minister said that the performers are being screened. Those who are taking part in the programs are not in any confidential position. Where is the screening going to stop? Who screens the screeners?


George Matheson Murray: May I ask the minister if a further appropriation will be made for school broadcasts in British Columbia? That service has been doing wonderful work in the rural areas, particularly in northern British Columbia. I understand some money is provided for that?


James Joseph McCann: That question is entirely out of order, Mr. Chairman. We are not dealing with the C.B.C. at all, except in so far as they manage this international short wave station.


Alistair McLeod Stewart: I want to know more about this screening. Who is being screened, and by whom are they being screened? What is the purpose in it? Is a person who sings over the air one who must be screened? Is there some mysterious inflection in the voice, or what is it?


James Joseph McCann: The permanent members of the staff are being screened.


Alistair McLeod Stewart: Not all those who are participating in programs?


James Joseph McCann: No; I would point out that there would be no object in screening somebody who was playing the violin.


Alistair McLeod Stewart: Are the
members of the staff regarded as being in a confidential position? Let us say an engineer; is he in a confidential position?


James Joseph McCann: Except for the head of the division and his assistants, they are not in confidence.


George Alexander Drew: I believe this should be clarified somewhat. It is obvious that there would be no occasion to screen violin players, acting as violin players, or shall we say a piper. But it is quite obvious that the screening was not directed to that. There would be a particular group who would be screened under circumstances of this kind, and I believe the minister is aware there is a particular group being screened. It consists of those who are making broadcasts by voice, and who are in a position to convey information to countries beyond the iron curtain. I do not think the minister will question the fact that there has been screening going on in regard to
[Mr. McCann.l

that for some time. Has the minister received an interim report, or any kind of report in regard to what has been found?


James Joseph McCann: No, I have had no report at all. In any event, the report would not come to me.


George Alexander Drew: There is no mystery about this. The minister has admitted that screening has been going on for some time. Those who are broadcasting by voice are being screened because of the fact they are in a position to communicate messages to areas that are not regarded as areas to which we would want certain messages to go. If the screening has been continuing for some time, as the minister has stated, then it seems that by now there should be some report, unless those who are under examination are not broadcasting.


James Joseph McCann: The report, in the first instance, would be made to the chairman of the board of governors of the C.B.C. and the general manager. To date, there has been no report that would call for any positive action.


[Stage Direction]
Item agreed to.
International short wave broadcasting station-
306. Acquisition and alteration; equipment, land and structures, including supervision, $971,250.
George Alexander Drew: This item deals with the same subject, but I do want to point out why it is essential that a committee on broadcasting be set up at the beginning of the next session. In the earlier session this year, I received an assurance that that would be done. During this session we have not pressed the matter because of a statement that was made that this was regarded, although a session of a new parliament, largely as a continuation of the session that started last spring.
What has just been admitted is an indication of the reason why there should be a committee set up, and set up almost immediately after the next session begins, so that there can be an examination of this whole subject. In this case, $2,700,000 is being spent on this one operation under the direction of the Canadian Broadcasting Corporation. By the very nature of the activities it carries out, it could be a vehicle for the communication of messages which might be dangerous to the security of the state. The screening is being carried out, as has been admitted, with a recognition of that fact. It was only by questioning that this came out, and it was only by questioning at this moment that it was admitted there is some reason for screening in that particular case.
When I press for a report, it is stated that the report would not come to the minister, but would go to the chairman of the Cana-

dian Broadcasting Corporation. It is this uncertainty as to who has the information, when they get it-which was apparent in another case-that emphasizes the need for committees which can go to the root of the matter. A committee can ascertain what is being done in those branches of a department which, as agencies of government, are spending large sums of public money without direct supervision from any minister or deputy minister, but under direction of a public body. I can only repeat that because of what has been admitted now, with the admission on top of that, that the minister does not know what has happened in regard to screening that has been carried on for some time in regard to what could easily be an agency of highly improper activity, we see why it is so necessary that we start a complete examination of the whole activity of the Canadian Broadcasting Corporation as soon as we meet in the next session.


[Stage Direction]
Item agreed to.
Progress reported.

Alphonse Fournier: Tomorrow I understand there will be two small amendments to one bill that has come back from the Senate. That will be the first item.


Major James William Coldwell: What bill is that?


Alphonse Fournier: It is the Fish Inspection Act. There are two minor amendments. Then we shall move to go into committee of supply and take up reconstruction and supply, justice, external affairs, post office, health and welfare, mines and resources, transport and veterans affairs.


Major James William Coldwell: In that order?


Alphonse Fournier: For the first four items, in that order.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[The following items were passed in committee of supply]:

[Stage Direction]
101.	Departmental administration, $360,900.
102.	Fisheries inspection, including fishery officers
and guardians:	fisheries patrol and protection
services, $2,983,000.
103.	Educational extension service, including grant of $3,000 to Lunenburg fisheries exhibition, $190,000.
104.	Fish culture development, $693,400.
105.	Oyster and clam culture, $73,700.
Fisheries research board of Canada-
106.	Operation and maintenance, $1,132,040.
Supply-Fisheries
107.	Construction and improvements, $181,800.
108.	To provide for Canadian share of expenses of the international fisheries commission appointed under treaty dated January 29, 1937, between Canada and the United States for the preservation of the North Pacific halibut fisheries, $35,000.
109.	To provide for Canadian share of expenses of the international Pacific salmon fisheries commission appointed under treaty dated May 26, 1930, between Canada and the United States for the protection, preservation and extension of the sockeye salmon fisheries of the Fraser river system, $169,500.
110.	To provide for Canadian share of expenses of the international Pacific salmon fisheries commission to overcome obstructions to the ascent of sockeye salmon at Hell's gate canyon and for investigating and overcoming obstructions to such salmon at other points on the Fraser river watershed (revote), $150,000.
111.	To provide for transportation, dressing and dyeing and other expenses incidental to receiving and disposing of fur seal skins accruing to Canada pursuant to provisional fur seal agreement between Canada and the United States by exchange of notes dated December 26, 1947, $550,000.
112.	To provide for the destruction of harbour seals, $30,000.
Special-
113.	To provide for the extension of educational work in co-operative producing and selling among fishermen, $80,000.
114.	To provide for the administration expenses of the Fisheries Prices Support Act, 1944, $170,000.
115.	To provide for assistance in the construction of vessels of the dragger and/or long liner type, subject to such terms and conditions as may be approved by the governor in council, $100,000.
116.	To provide for assistance in the construction of bait freezing and storage facilities, subject to the approval of the governor in council, $100,000.
117.	To provide for investigation into transportation and storage facilities in wholesale and retail handling of fish and fish products, $25,000.
674.	Fisheries inspection, including fishery officers and guardians, fisheries patrol and protection services-further amount required, $241,400.
Fisheries research board of Canada-
675.	Operation and maintenance-further amount required, $239,135.
676.	To provide for administration expenses of Newfoundland fisheries board, $353,900.
677.	To provide for maintenance and extension of bait service, $408,400.
786.	Operation and maintenance-further amount required, $27,500.
787. Construction and	improvements-further amount required, $100,000.
788.	To provide for Canadian share of expenses of the international whaling commission, appointed pursuant to the international convention for the regulation of whaling, dated at Washington, December 2, 1946, $500.
Special-
789.	Amount required to recoup the fisheries prices support account, to cover the net operating loss of the fisheries prices support board during the fiscal year 1948-49, $538,989.
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[Stage Direction]
Supply-National Revenue
790.	To provide for assistance in meeting transportation costs on frozen herring purchases in British Columbia by persons, associations or companies, for bait in the 1948-49 winter fishery off Nova Scotia, $25,350.

[Stage Direction]
A-Department-Customs and excise divisions-
296.	General administration, $1,506,165.
297.	Inspection, investigation and audit services, $2,198,195.
298.	Ports, outports and preventive stations, including pay for overtime, notwithstanding anything in the Civil Service Act, and buildings and rentals for temporary purposes, $14,581,241.
299.	To provide for payment of expenses, law costs, refunds and awards arising out of seizures and charges of contravention of customs or excise laws, $300,000.
Taxation division-
300.	General administration, $1,983,384.
301.	Internal inspection and verification, $1,412,260.
302.	District offices, $27,745,888.
Income tax appeal board-
303.	Administration expenses, $50,000.
Miscellaneous-
304.	Amount to be paid to the Department of Justice to be disbursed by and accounted for to it for customs, excise and income tax secret investigation services, $15,000.
Customs and excise divisions-
697.	Ports, outports and preventive stations, including pay for overtime, notwithstanding anything in the Civil Service Act, and buildings and rentals for temporary purposes-further amount required, $115,000.
Taxation division-
698.	District offices-further amount required, $173,680.
B-International shortwave broadcasting station-
305.	Maintenance and operation, $1,781,850.
306.	Acquisition and alterations-equipment, land and structures, including supervision, $971,250.
A-Department-Customs and excise divisions-
844.	Ports, outports and preventive stations, including pay for overtime, notwithstanding anything in the Civil Service Act, and buildings and rentals for temporary purposes-further amount required, $625,000.
B-General-International shortwave broadcasting station-acquisition and alterations-
845.	Equipment, land and structures, including supervision-further amount required, $687,681.
Canadian Broadcasting Corporation-
846.	To provide the Canadian Broadcasting Corporation with funds approximately equal to the sum of the value at Canadian rates of the radio receiving set licences issued by Newfoundland prior to the date of union which were made valid until March 31. 1950, and the value of the reserves established by the Newfoundland Broadcasting Corporation out of previous revenue for the depreciation, obsolescence, replacement and expansion of the physical assets of that corporation taken over by the government of Canada under the terms of union; and further, to provide authority for the transfer to the Canadian Broadcasting Corporation of the title to all assets of the Newfoundland Broadcasting Corporation taken over by the government of Canada, $200,000.
934. Loans to the Canadian Broadcasting Corporation repayable with interest at a rate to be fixed by the governor in council on such terms and conditions as the governor in council may determine and to be applied in payment of expenditures to cover capital costs of television installations and to support the development of the service. Such loans, with interest, shall be a charge on the revenues of the Canadian Broadcasting Corporation next after the charge imposed under the provisions of section 17 of the Canadian Broadcasting Act, 1936, $4,500,000.
[Stage Direction]
Wednesday, December 7, 1949