1949-03-21

Hon. Alphonse Fournier (Minister of Public Works) moved:: That the name of Mr. Isnor be substituted for that of Mr. Winters on the standing committee on railways, canals and telegraph lines.


[Stage Direction]
Motion agreed to.


Right Hon. L. S. St. Laurent (Prime Minister):: I desire to lay on the table copies of two orders in council passed under the Transfer of Duties Act. The first is P.C. 1166, dated March 15, 1949, transferring the industrial defence board from the Department of National Defence to the Department of Trade and Commerce; the other is P.C. 1303, dated March 18, 1949, transferring to the Solicitor General the powers and duties pertaining to the exercise of the royal prerogative of mercy.



QUESTIONS

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

Mr. Coldwell:: 1.	What is the normal rate of depreciation which was allowed industry during each of the years 1937 to 1949?
2.	What is the maximum rate of special or accelerated depreciation which was allowed to any corporation for taxation purposes during each of these years?
3.	What is the minimum rate of special or accelerated depreciation which was allowed to any corporation for taxation purposes during each of these years?
4.	What is the policy of the government on the granting of special and accelerated depreciation?
5.	Has the government policy on special and accelerated depreciation changed since 1937?
6.	If so, what changes have been made?


Mr. McCann:: 1.	There is a variety of normal rates allowed industry, ranging from 2 per cent on reinforced concrete buildings to 50 per cent
29087-106i
on replacements of linen, china, glassware, cutlery, etc. Broadly speaking, however, the following might be considered as the normal rates of depreciation applicable to the general type of asset allowed industry: Buildings: concrete, 2 per cent; stone or brick, 2| per cent; wooden, 5 per cent; Machinery and equipment: 10 per cent. These rates applied in all years from 1937 to 1948. The regulations governing allowances in respect of capital costs for 1949 as provided in section 11 (a) of the Income Tax Act have not yet been published.
2.	Under amendments to the legislation passed in 1940, the war contracts depreciation board authorized special or accelerated depreciation in respect of plant and equipment created for war purposes. Such allowances provided for the write-off of the whole cost in one or more years up to the estimated post-war value.
Also, in the year 1940, the War Exchange Conservation Act was enacted which provided for special depreciation allowances to companies who expanded production facilities primarily for increasing exports to the United States, or would increase the output of domestic resources the product of which would otherwise have been imported from the United States.
In 1944 the Income War Tax Act was amended by adding subparagraph (ii) to section 6 (n) which provided that depreciation at not more than double the rates normally allowed may be allowed.
Regulations under this clause are set out in orders in council P.C. 8640, dated the 10th of November, 1944, P.C. 2487, dated the 24th of June, 1947, and P.C. 3882, dated the 9th of September, 1948.
3.	See No. 2 above.
4.	See No. 2 above.
5.	Yes.
6.	The provisions governing special and accelerated depreciation were introduced in 1940 and in 1944, as stated in No. 2 above. See also the booklet "Encouragement to Industrial Expansion in Canada" issued by the Department of Reconstruction and Supply.


VETERANS AFFAIRS-M. J. CUMMINGS
Mr. Blackmore:: 1.	Is there such a veteran of world war I as veteran M. J. Cummings, Reg. No. 142082?
2.	If so, where is said veteran?

1G74
Questions


Mr. Mulch:: 1.	Yqs.
2.	Recent information on file indicates that the address of the veteran would be "in care of the Public Trustee, province of Ontario."


SPECIAL OR ACCELERATED DEPRECIATION
Mr. Coldwell:: How much special or accelerated depreciation has been granted in each of the years 1939 to date to each of the following companies: (a) Steel Company of Canada Limited; (b) Algoma Steel Corporation; (c) Dominion Steel and Coal Corporation Limited or any of its subsidiaries carrying on steel production?


Mr. McCann:: The following amounts of special depreciation were allowed on the recommendation of the war contracts depreciation board, in accordance with the general practice of the board in respect of taxpayers eligible for special depreciation:
(a)
Steel Company of Canada Ltd.

1939		 Nil
1940		  254,210.23
1941		 2,644,582.35
1942		 2,469,489.19
1943		 2,120,034.14
1944		 265,566.41
1945		 12,545.45
1946		 Nil
1947		 Nil
1948		 Nil
.	(b)
Algoma Steel Corporation Ltd.

1939		 Nil
1940		 Nil
1941		 Nil
1942		 852,967.04
1943		 1,097,696.23
1944		 1,219,809.73
1945		 Nil
1946		 Nil
1947		 Nil
1948		 Nil
(c)
Dominion Steel and Coal Corporation Ltd.

1939		 3,091.71
1940		 142,629.72
1941		 224,341.99
1942		 926,079.10
1943		 815,821.11
1944		 916,639.08
1945		 149,277.06
1946		 13,666.86
1947		 Nil
1948		 Nil
[Mr. Blackmore.l


NIAGARA, ST. CATHARINES AND TORONTO RAILWAY-TORONTO-PORT DALHOUSIE STEAMSHIP SERVICE
Mr. Church:: 1.	What ships are to be in commission this summer between Toronto and Port Dalhousie of the Niagara, St. Catharines and Toronto Railway, a subsidiary of the Canadian National Railways?
2.	Have they been pronounced as seaworthy?
3.	What is being done to give a better service with new ships since the service provided in 1948?
4.	Are any improvements being made in the road bed and bridges of the Niagara, St. Catharines and Toronto railway?
5; If so, what betterments?


Mr. Chevrier:: 1.	Dalhousie City and Northumberland.
2.	Both ships will be dry-docked for biennial inspection by steamboat inspector of the Department of Transport and must be passed as seaworthy before being placed in operation.
3.	No new ships will be in this service in 1949.
4.	The roadbed and bridges of the Niagara, St. Catharines and Toronto Railway are being maintained in accordance with recognized standards to meet traffic needs and safety in operation.
5.	See answer to question No. 4.



TIMBER CONTROL


Mr. Hodgson:: What were the salaries, traveling and other expenses for the timber controller and all persons connected with the office of the timber controller or proceeding under his direction or in pursuance of timber control in each of the years beginning 1940 to date?


Mr. Mcllraiih:: Not available. The records of the Department of Munitions and Supply, the Department of Reconstruction and Supply, and the treasury office have not been maintained in such a way as to make it possible to segregate the cost of timber control.



OATS AND BARLEY


Mr. Bentley:: From what source were funds taken to make the adjustment payments on oats and barley which were marketed by growers during the days from August 1 to October 21, 1947?


Mr. Sinclair:: In so far as the wartime prices and trade board is concerned:
Commodity Prices Stabilization Corporation, Ltd., was authorized and directed to pay a subsidy to producers who sold and delivered oats or barley during the period August 1, 1947 to October 21, 1947. Commodity Prices Stabilization Corporation, Ltd., appointed the Canadian wheat board to act as its agent in this connection.

Payments are made out of funds provided by parliament and are chargeable against vote 88 (1948-49) "Commodity Prices Stabilization Corporation, Ltd.", in the usual way.



R.C.A.F.-PRESENT STRENGTH    DUTIES OF PERSONNEL

Mr. McKay:: 1.	What is the present strength of the R.C.A.F. with regard to (a) officers: (b) N.C.O.'s; (c) airmen?
2.	How many of these men are on (a) actual flying duties; (b) maintenance work; ' (c) administrative duty?


Mr. Baker:: 1.	(a) 2698; (b) 4041; (c) 7568 (aircraftsmen).
2.	(a) 1303, but to these should be added 6148 aero engine, airframe and radio mechanics, photographers, etc., included under (b) below, who are required to fly as crewmen, and 434 officers, included under (c) below who are employed on administrative duties and who are qualified to fly.
(b)	8470.
(c)	4534.



CENTRAL MORTGAGE AND HOUSING CORPORATION- DISPOSAL OF MATERIALS IN ST. CATHARINES AREA

Mr. Fraser:: 1.	Have investigations been made, or are investigations being made, into irregularities in connection with the improper sale and disposal of materials belonging to Central Mortgage and Housing Corporation, or its contractors, in the St. Catharines area projects, numbered 14 and 15?
2.	If so, what action has been taken, or will be taken?


Mr. Winters:: 1.	Yes, by officials of Central Mortgage and Housing Corporation.
2.	Complaints were received from a former employee of a subcontractor engaged on construction projects in St. Catharines that employees of Central Mortgage and Housing Corporation and the prime contractor had improperly sold or disposed of scrap lumber, flooring, aluminum siding, new lumber, and beveled siding belonging to the corporation. Examination by officials of the corporation disclosed that all scrap and surplus materials sold at the St. Catharines projects had been properly reported and paid for and the proceeds of the sale recorded in the corporation's books of account. On an earlier occasion the same complainant had made allegations that materials had been improperly removed from the St. Catharines projects. At that time corporation records were reviewed with the complainant and he was shown the complete and proper recording of each transaction he questioned. The complainant has ben informed that examination by corporation officials has disclosed no shortage
Questions
of materials nor any indication that surplus materials were disposed of without payment being made to the corporation. As corporation records give no indication of the irregular transactions, it is not felt that the corporation has grounds to request an investigation by the Royal Canadian Mounted Police. However, as the complainant considers that there has been irregularities, it has been suggested to him that he should visit the Niagara Falls detachment of the Royal Canadian Mounted Police and lay what charges he considers appropriate.



LAKE LOUISE-FIELD, B.C., HIGHWAY  SNOW PLOWING

Mr. Matthews (Kootenay East):: 1.	Was the road between Lake Louise and Field. British Columbia, plowed out in either January, February or March of this year to facilitate the removal of a park official's goods?
2.	If so, what was the cost of this operation?
3.	Was the road again closed to traffic and is it closed now. If so, for what reason?


Mr. MacKinnon:: 1.	The section of the road from Field to the Monarch mine in Yoho park is kept plowed all winter. The section between the Monarch mine and Lake Louise is not kept open for travel during the winter months. It is a regular feature of maintenance of park highways to do a certain amount of snow plowing to facilitate the early drying of the roadbed which enables the spring maintenance to be carried out at an earlier date. Advantage was taken of this practice and the section between Monarch mine and Lake Louise was plowed early in March. This facilitated the removal of the household effects of the park superintendent, who had been promoted to a more senior position at Jasper park. The removal of the goods by truck actually saved considerable money, because the costs of packing and crating were avoided.
2.	The cost of plowing the section from the Monarch mine to Lake Louise was $204.20.
3.	As no other plowing was done on this section it was again closed and will not be open for travel until the spring maintenance work has been completed, which will probably be some time early in April.



NEEPAWA, MAN., AIRPORT

Mr. Bracken:: Have any plans been made by the Department of Transport or any other department of the government for utilizing the Neepawa airport, and if so, what are they?


Mr. Chevrier:: The department proposes to continue the operation of the airport as a public airport.

Questions



INGLEWOOD, ALTA., BIRD SANCTUARY

Mr. Harkness:: 1.	Is the Inglewood bird sanctuary at Calgary, Alberta, recognized as a dominion bird sanctuary?
2.	What financial assistance does the dominion government provide for other bird sanctuaries?
3.	Will the government provide any financial assistance for the Inglewood bird sanctuary?


Mr. MacKinnon:: 1.	Inglewood bird sanctuary was established by the dominion government on June 6, 1929, under the provisions of the Migratory Birds Convention Act. It is not owned or operated by the dominion government, but is subject to the migratory bird sanctuary regulations promulgated by order in council P.C. 1536 of April 13, 1948.
2.	The dominion government provides no financial assistance for the upkeep of any privately-owned bird sanctuary established under the Migratory Birds Convention Act. Periodical inspections are made by dominion wildlife officers, and posters and advice on management are supplied by the dominion wildlife service when requested, free of charge.
The dominion government has, in special circumstances, paid for grain used in emergency winter feeding of waterfowl. During each of the winters 1947-48 and 1948-49, the dominion government paid $50 for grain fed to waterfowl in Inglewood bird sanctuary.
The dominion government makes an annual grant to the Jack Miner Migratory Bird Foundation Incorporated. At present, the amount of this grant is $5,000 per annum. The property of the Jack Miner bird foundation is not a bird sanctuary under the provisions of the Migratory Birds Convention Act.
3.	This is a matter of government policy.



MUSKRAT RAISING PROJECT-ATHABASKA RIVER, ALTA.

Mr. Dechene:: 1.	What progress has been made in the development of the muskrat raising project in the 200,000 acres in the delta of the Athabaska river, near Fort Chipewyan, Alberta?
2.	Is the provincial government of Alberta contributing any funds to the development of that enterprise?
3.	To what extent is the government proceeding with further development of the project during the current year?


Mr. MacKinnon:: 1.	Preliminary investigation of the provincial lands portion of the Delta was undertaken by the dominion and province jointly and preliminary investigation of the Wood Buffalo park area was carried out by the dominion. Results were disappointing due to abnormal water conditions during the investigation period, the data received in the preliminary

report indicating the necessity of very careful investigation before any construction was undertaken.
2.	The provincial government has cooperated in the investigation of the area but as the project has not reached the development stage it has not contributed any funds for that purpose.
3.	The dominion and province are continuing the investigation jointly j*f the provin-cially-owned section of the delta, while the dominion is continuing its investigation of the Wood Buffalo park area.



MARSHLANDS


Mr. Stanfield:: 1.	What have been the total expenditures (a) in Nova Scotia; (b) in New Brunswick in each of the years 1946, 1947 and 1948 in connection with protection and reclamation of maritime marshlands?
2.	What was expended for (a) salaries; (b) wages; (c) purchase machinery; (d) rental machinery; (e) motor cars; (f) supplies and incidentals?
3.	What projects have cost $10,000 or more, stating amount in each instance?
4.	What projects have been approved and what is the estimated cost to complete?


Mr. McCubbin:: 1946-47	1947-48	1948-49
1. (a) $17,611 15	$25,250 25
(b)	7,250 89	20,729 40	$ 4,738 07
(Feb. 28/49)
Note: This represents dominion share of expenditures only. The works program is the responsibility of the provincial governments and is carried on by the maritime dikelands rehabilitation committee. The original payments are made by the provinces where all detailed records are kept. On presentation of certified accounts the dominion reimburses one-third of total cost. All accounts for the current fiscal year not yet rendered by provinces.
2.	See answer to No. 1.
3.	See answer to No. 1.
4.	See answer to No. 1.



SOLDIER SETTLERS


Mr. Fair:: 1.	What are the names and addresses of veterans of world war I who purchased land through the soldier settlement board with which mineral rights were included?
2.	In how many cases have those rights been transferred to the settlers?


Mr. Mutch:: 1.	The information is not available from the present records of the director of soldier settlement, nor from the titles held or previously held by the director.
2.	None. In 39 cases, rights are in process of being transferred.



DEFENCE ARRANGEMENTS WITH GOVERNMENT OF ONTARIO

Mr. Church:: 1.	What arrangements, if any, have been made with the Ontario government as to defences in case of war?
2.	Who made such a request, how and when?
3.	What was such a request?
4.	At whose expense was it to be (a) federal authority; (b) provincial authority; (c) municipal authority?
5.	Is any grant to be made the municipal authorities of Ontario or mayors' association for their enforcement of all federal law, orders in council and other federal regulations by municipal police forces of Ontario accordingly?


Mr. Baker:: These questions were answered on page 1551, Debates of the House of Commons for Thursday, March 17, 1949.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Gauthier (Portneuf):: What is the total amount collected by the federal government on the sale of alcoholic liquors (a) in Canada; (b) by province?


James Joseph McCann: Return tabled.


DOMINION ELECTIONS-RETURNING OFFICERS
Mr. Casselman:: 1.	In how many electoral districts has there been a change in the returning officer since January 1, 1946?
2.	What is the name of the party (a) who held the office previously to said date; (b) who has held the office since said date?
3.	Why were the changes made?
4.	On whose recommendation?


Mr. Gibson (Hamilton West):: Return tabled.


GROSS AND NET FARM INCOME
Mr. Wright:: What is the gross and net farm income, by provinces, from 1928 to 1948, inclusive?


George James McIlraith: Mr. Speaker, the information requested in this question concerns the gross and net farm income, by provinces, from 1928 to 1948 inclusive. The information for that period of time is not available, but it is available from 1938 to 1947 inclusive. Subject to these considerations, I am prepared to have the question passed as an order for return, and to table the return.


IMPORTS OF STARCH
Mr. Hatfield:: 1.	What quantity of corn, potato, sago and tapioca starch was imported into Canada each year from 1945 to date?
2.	From what country and in what amount was such starch imported?


George James McIlraith: Return tabled.
Orders for Returns


LEGAL SEVICES
Mr. Diefenbaker:: 1.	What barristers and solicitors, by provinces, have been retained by any departments of government in each of the years 1947 and 1948?
2.	How much has been paid to each of such barristers and solicitors as retainers and fees during said years?


PUBLIC WORKS-ASSISTANT CHIEF ARCHITECT
Mr. Hodgson:: 1.	Who is assistant chief architect of the Department of Public Works?
2.	When was he appointed and what salary does he receive?
3.	Was he appointed by order in council or through competitive examination by the civil service commission?
4.	Is he a returned soldier?
5.	If not, was he given preference over other competitors with war services, and for what reason?


LACOLLE, QUE., CUSTOMS BUILDING
Mr. Hodgson:: 1.	Who was awarded the contract on the building for customs purposes at Lacolle (Blackpool) Quebec?
2.	What was the amount of the contract?
3.	How much of that amount has been paid?
4.	Were there any charges for extras? If so, what was the amount of such extra charges?
5.	Is the work now completed?
6.	If not, are additional extra charges anticipated, and what is the estimated cost of such additional extra charges?


PRAIRIE FARM ASSISTANCE-EMPLOYEES IN SASKATCHEWAN
Mr. McCuaig:: . 1. What was the total number of P.F.R.A. employees in Saskatchewan during 1948?
2.	How many weeks or months was each employed?
3.	What was the rate of salary paid to each per month or per day?
4.	How much traveling expenses was paid to each of them in 1948?


OLD AGE PENSIONS
Mr. Knowles:: 1.	What was the total amount of contribution of the federal government to each province for old age pensions for the latest full twelve months period for which such figures are available?
2.	What was the total amount expended by each province toward the basic pension during the same period or during the latest full twelve months period for which such figures are available in each case?
3.	What was the total amount expended by each province in providing supplementary payments during the same period?
4.	What was the total amount expended by each province during the same period in providing health and/or other services or benefits to old age pension recipients?
5.	What is the average monthly amount on account of the basic pension being paid in each province?
6.	What supplementary amounts and/or services are paid and/or provided by each province?

Motions for Papers TRANS-CANADA AIR LINES


REMOVAL OF EMPLOYEES FROM WINNIPEG
Louis Stephen St-Laurent: May I be allowed to answer a question put to me by the member for Winnipeg North Centre (Mr. Knowles) on Friday, concerning the possible removal of T.C.A. personnel from Winnipeg to Montreal? On Friday I received the night letters to which the hon. member referred, and I answered them as follows:
Your telegram re T.C.A. plans to move certain personnel to Montreal: may I call attention to following statement made in parliament on March 3 by Mr. Howe. "I remember distinctly reading a published statement by Mr. McGregor in which he said the move would not take place until October, 1949. That being so I hope we shall have a committee before that time." Notice for the setting up of a committee of the house to deal with accounts, estimates and bills relating to operations of T.C.A. has now been given. Committee expected to get under way almost at once and will have power to send for persons, papers and records and report from time to time. Plans of management and reasons therefor can be gone into and reported upon, and interested parties can appear or be represented to make proper investigation. In the meantime government would not feel justified in issuing directives to management. I trust that this public hearing will make clear what policy in regard to this matter will best serve the general interest of all concerned in the good administration of T.C.A.


Mr. Knowles:: May I just ask this question, so that the record may be complete? That is the telegram which the Prime Minister sent to the mayor of Winnipeg and also to the secretary of the chamber of commerce?


Mr. Si. Laurent:: That is so.



MOTIONS FOR PAPERS


Mr. Maclnnis:: For a copy of all letters, telegrams and other documents received by the minister or any official of the Department of Transport, since January 1, 1946, complaining of the failure of owners and operators of ships operated from ports on the Pacific coast (a) to keep radio equipment in proper working condition; (b) to maintain radio watch keeping.


Angus MacInnis: For a copy of all reports received by the Department of Transport, the Minister of Transport or any official of the department, since January 1, 1946, relating to the efficiency of radio equipment and the adequacy of radio watch keeping on ships operated from Pacific coast ports.


Lionel Chevrier: This motion has to do with any reports received by the Department of Transport, the minister or any official of the department since January 1, 1946, relating to the efficiency of radio equipment and the adequacy of radio watch keeping on ships operated from Pacific coast ports. I understand it has been the practice and

the custom that all interdepartmental reports are privileged; but there may be-I have not had, as I would wish to have, the opportunity of consulting fully the file-a number of reports that were made by outside sources. There can be no objection to producing these, but as to interdepartmental reports, perhaps, in view of the practice in that regard, the hon. member will consent to their not being produced.


Angus MacInnis: At the request of the minister I allowed this motion to stand for several days. Will the minister now be good enough to allow it to stand so that I may have a talk with him about what I want?


Lionel Chevrier: Yes.
Motion stands.



UNEMPLOYMENT INSURANCE ACT


Stanley Howard Knowles: For a copy of all regulations and directives dealing with seasonal workers, seasonal industries, etc., under the Unemployment Insurance Act.



UNEMPLOYMENT INSURANCE COMMISSION-

[Stage Direction]
"suitable employment"
Stanley Howard Knowles: For a copy of all circular letters, directives, etc., having to do with the interpretation of "suitable employment," sent out by the unemployment insurance commission to its various offices across the country, dated since January 1, 1946.



LEASE OF CADOMIN BUILDING, WINNIPEG, MAN.

Mr. Miller:: For a copy of all letters, telegrams, memorandum, correspondence and other documents exchanged between the Department of Public Works, Department of National Revenue or any branches or divisions thereof, and United Realty Company Limited, Aronovitch and Leipsic, Cadomin Building Limited, and other persons or firms, from July 1, 1947 to October 1, 1948, relating to the leasing of the Cadomin Building, Main street, Winnipeg, Manitoba. Also a copy of the said lease.



IMMIGRATION


Mr. Diefenbaker:: For a copy of all letters, telegrams and other documents received by the Department of Mines and Resources leading up to or connected with the issue of order in council P.C. 4233, dated September 13, 1948.


Mr. MacKinnon:: I should like to point out that order in council P.C. 4233 refers to twenty-four individual immigrants. There are included in this number three persons about whom the hon. member for Winnipeg North (Mr. Stewart) has asked for the production of papers. The order for return was passed on February 9, 1949, as appears by Votes and Proceedings No. 11.
The names of the three persons are G. B. Montel, J. G. Labedan and A. C. E. Boussat.

As there has not been any question raised about the twenty-one other persons, I assume it is the three persons I have mentioned in whom the member is interested. I suggest that the hon. member withdraw his motion; there is no need to copy the papers again. I can arrange to have the extra copy of the other return filed, if the hon. member so wishes.
My purpose in making this request is simple. All members of the house are aware of the large amount of work being done by the staff of the immigration branch and the pressure and strain under which they are working. I therefore wish to avoid, whenever possible, asking them to do unnecessary tasks.


Mr. Harris (Danforih):: In view of the
circumstances, perhaps the minister would allow his motion to stand. It is in the name of my colleague who is not in the house at the moment.


James Angus MacKinnon: That is quite satisfactory. Motion stands.



CORRESPONDENCE BETWEEN DEPARTMENT OF LABOUR AND CANADIAN SEAMEN'S UNION, ETC.

Mr. Young:: For a copy of all correspondence and telegrams since the year 1946 exchanged between the Department of Labour and the Canadian seamen's union; between the Canada Steamship Lines and/or their solicitors and the Department of Labour; between the Minister of Labour and the above mentioned companies or the Canadian Seamen's Union, and between the minister or his department and the Colonial and Sarnia Steamships Company Limited.


Mr. Mitchell:: The hon. member asks for a copy of all correspondence and telegrams since the year 1946 exchanged between the Department of Labour and the Canadian Seamen's Union, which of course may cover a wide field. He goes on to include correspondence and telegrams between the Canada Steamship Lines, which is one concern, their solicitors and the Department of Labour; and then in line five of the motion he refers to "the above mentioned companies". I think I know what the hon. member wants, but I suggest that he be a little more specific. If he will be good enough to have the motion redrafted, subject to there being nothing confidential on the files I see no objection to the motion being passed.


Rodney Young: Agreed.


Some hon. Members:: Dropped.


Some hon. Members:: Stand.


Stanley Howard Knowles: Which is it?


Humphrey Mitchell: The motion is to be redrafted. The hon. member has agreed to that.


Mr. Speaker:: Dropped.
Motions for Papers



DEPARTMENT OF LABOUR


Mr. Shaw:: For a copy of all letters, telegrams and other documents exchanged between the Minister of Labour, officials of the labour department, the civil service commission or any official thereof and any person, persons or groups of persons, since July 1, 1948, with respect to the appointment of a manager, employment and claims office, Red Deer, Alberta.


Humphrey Mitchell: Subject to the usual reservations as to confidential correspondence, I have no objection to this motion being passed.



CAROLINE, ALTA., POSTMASTERSHIP

Frederick Davis Shaw: For a copy of all letters, telegrams, petitions and other documents exchanged since January 1, 1948, between the Postmaster General, the Post Office Department and any official thereof, and any person, persons or groups of persons with respect to the appointment of a postmaster at Caroline, Alberta. .



BUSINESS OF THE HOUSE


[Stage Direction]
On the order for government notices of motions:
The Secretary of State for External Affairs- Resolved, that it is expedient that the houses of parliament do approve the convention of the world meteorological organization signed at Washington on October 11, 1947, and that this house do approve the same.
Mr. Pearson:: Stand.


Mr. Graydon:: Is it the intention of the Secretary of State for External Affairs to refer this convention, when it finally reaches the stage of introduction, to the standing committee on external affairs?


Lester Bowles Pearson: That might be a proper way of dealing with the matter, and if the house so desires, it could be done in that way. I had not had that intention, because I thought that it was a fairly simple matter, and that possibly no such reference was necessary. We are not dealing with it now because more urgent matters are before the house.


[Stage Direction]
On the orders of the day:
Major James William Coldwell: Mr. Speaker, I should like to ask a question of the Prime Minister. In view of the importance of the several control measures now before parliament, and the shortage of time for this and the other chamber to consider and approve the legislation, might it not be advisable for the government to consult with the party leaders, and perhaps the party whips, with a

Railways and Shipping view to apportioning the remaining time in order to protect the people, particularly in regard to rent control and against possible speculation in foreign exchange?


Louis Stephen St-Laurent: We did make rather satisfactory progress on Friday with the resolutions, and I hope we shall make satisfactory progress today. However, I shall be glad to consult with the leaders and have the whips confer and endeavour to arrange matters so that there will be time for the other place also to give consideration to these matters before the deadline is reached.



RAILWAYS AND SHIPPING


Lionel Chevrier: That a sessional committee on railways and shipping owned, operated and controlled by the government, be appointed to consider the accounts and estimates and bills relating thereto of the Canadian National Railways, the Canadian National (West Indies) Steamships, and Trans-Canada Air Lines, saving always the powers of the committee of supply in relation to the voting of public moneys; and that the said committee be empowered to send for persons, papers and records and to report from time to time, and that notwithstanding standing order 65, in relation to the limitation of the number of members, the said committee to consist of Messrs. Bourget, Chevrier, Clark, Emmerson, Fulton, Gibson (Comox-Alberni), Hatfield, Hazen, Hlynka, Jackman, LaCroix, Lafontaine, Lockhart, Maybank, McCulloch (Pictou), McLure, Moore, Mutch, Nicholson, Picard, Pouliot, Reid, Warren.
He said: This is the annual motion seeking the establishment of the committee on railways and shipping, to which are referred the various reports of the Canadian National Railways, certain items in the estimates which are withdrawn from the committee of supply, and other matters. It is in the same form as in previous sessions.


Mr. T. L. Church (Broadview):: What is the object of appointing this committee? Last year the committee did not function in relation to this very important work. Moreover, I fail to see many public ownership men on this committee. I fail to see how there is to be any control over this committee, and discussion in the house itself will be prevented. As I see it, before the motion is adopted there should be some discussion in the house about this railway, its ocean and hotel services, etc.
I call the attention of the minister to the fact that we have no maritime commission on the great lakes; we have no life-saving stations. We had a disaster at Port Burwell, and we cannot get any information about it. The house should first spend a day on the affairs of the national railways and their ocean and 
lake services, hotel services and everything else, because we may have some trouble soon. We have no submarines whatever. What is the object of bringing this motion up this morning? Notice was given only on Friday. Before this motion is passed the house should consider these questions.


Lionel Chevrier: The purpose of the motion is, as I have already stated, to consider the affairs of the Canadian National Railways. As in the past, the hon. member will have an opportunity to discuss the business of the Canadian National Railways on many occasions. If he is not a member of this committee, I presume there would be no difficulty in having him appointed to it so that he could, bring forward any questions he has in mind. Furthermore, if he is not a member of the committee, he could appear before it and ask the questions which he has in mind and obtain information. As I said a moment ago, there will be ample opportunity to discuss the affairs of the Canadian National Railways during the session.


Mr. D. King Hazen (Saint John-Alberi):: Has
the minister given consideration to having the report of the maritime commission submitted to this committee? The maritime commission comes under his department, and there does not appear to be any way in which we can find out anything about it-at least no way that I know of, except by putting questions on the order paper. We could have the chairman and some of the members of that commission appear before some committee for the purpose of finding out more about it.


Mr. Speaker:: May I call the attention of the house to the fact that according to the rules an hon. member is not entitled to speak more than once, or a minister of the crown more than twice. If there are any other questions I suggest that they be put now so that the minister can reply.


Lionel Chevrier: I should like to reply to the last question.


Mr. Speaker:: If the minister speaks now, he will close the debate.


Mr. E. D. Fulton (Kamloops):: May I draw attention to the fact that there is no provision for a quorum? Perhaps the minister will say a word about that.


Lionel Chevrier: In select committees the quorum is provided by the meeting which calls the members together. When this is not done, a majority of members constitute a quorum.


Edmund Davie Fulton: On the second page-


Mr. Speaker:: Order.


Mr. Fleming:: Mr. Speaker,-


Mr. Speaker:: Order. I have called the attention of hon. members to the fact that they are not entitled to speak more than once, or the minister more than twice. I said that if the minister spoke again he would close the debate. Is it the pleasure of the house to adopt the motion?


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver South):: I should like to ask a question of the Minister of Transport. Would there be any objection to having the report of the Canadian maritime commission referred to a committee-if not to the committee on railways and shipping, then to another committee? I believe the minister was about to answer the hon. member for Saint John-Albert (Mr. Hazen) a moment ago.


Lionel Chevrier: Yes; I was going to say that the report of the maritime commission has first of all to be tabled in the house on or before a certain date. The report has not yet been tabled, but it will be in due course, in accordance with the act establishing the commission. There will be ample opportunity to discuss that report on at least three occasions I can think of. It has not been the practice in the past to refer the report to the committee on railways and shipping. I would think the committee would have its hands full with the business of the Canadian National Railways.



ANNOUNCEMENT AS TO INTERNATIONAL AGREEMENT

[Stage Direction]
On the orders of the day:
Major James William Coldwell: I should like to direct a question to the Minister of Trade and Commerce. I regret that through an error the notice was sent first to the Minister of Agriculture. Will the minister make a statement on the international wheat agreement which has just been announced, particularly with regard to what effect, if any, it may have on the British-Canadian wheat agreement and future policy; and also what effect, if any, the nonparticipation of Russia and Argentina will, in his opinion, have on the wheat price situation generally? He may not be able to answer it today, but we should like the information as soon as possible.
Inquiries of the Ministry


Right Hon. C. D. Howe (Minister of Trade and Commerce):: I think I can answer it now. As my hon. friend knows, 450 million bushels of wheat are covered by the agreement. In other words, the supplying countries undertake to supply 450 million bushels of wheat, and the deficit countries undertake to purchase 450 million bushels of wheat. The maximum price is $1.80 per bushel for the four-year period. The minimum price drops from $1.50 per bushel by ten cents each year, down to $1.20 for the fourth year.


Major James William Coldwell: Is the minimum price established at seaboard or at Fort William?


Clarence Decatur Howe: At Fort William.


Thomas John Bentley: And the maximum price at Fort William?


Clarence Decatur Howe: Yes. The United Kingdom wheat agreement will not be affected by the terms of the proposed international agreement. In other words, the crop of 1949-50 will be sold to the United Kingdom at $2 a bushel to the extent of 140 million bushels. Another 60 million bushels will be sold within the terms of the international agreement to account for the total of 200 million bushels allocated to Canada. Any wheat over and above that will be sold outside the agreement. There are consuming countries outside the agreement that will continue to buy wheat.
As far as the effect of Russia not participating is concerned, that country was offered 50 million bushels, if she wished to come into the agreement, in which event the consuming countries would have undertaken to purchase 500 million bushels of wheat. In other words, the amount that would have been assigned to Russia is not now assigned under the agreement. Argentina attended as an observer, but has never stated its export intentions. Russia and the Argentine will be able to sell their wheat outside the agreement when they can find markets for it after the consuming countries have purchased their obligations under the agreement. What the effect will be, of course, is difficult to say. I am told Russia has never exported in any year 50 million bushels of wheat; therefore I think the effect will not be great.


Percy Ellis Wright: What machinery is set up for determining the price as between minimum and maximum for the first year of the contract?


Clarence Decatur Howe: The range of prices between the maximum and minimum is the trading area. The law of supply and demand will operate within that area, namely, between $1.80 per bushel and $1.50 per bushel.


Mr. Quelch:: Can the minister say what method of payment is to be permitted? I am

Inquiries of the Ministry asking the question because the press referred to the fact that payment will be made in capital goods.


Clarence Decatur Howe: Under the wheat agreement, payment is in cash. Wheat is always traded on basis cash on delivery.


Mr. Smith (Calgary West):: Is there any allowance made in the agreement as to the quality of Canadian wheat?


Clarence Decatur Howe: Yes; the price is based on No. 1 northern Fort William.


Arthur Leroy Smith: But as between other countries?


Clarence Decatur Howe: Yes.	[DOT]


Arthur Leroy Smith: Perhaps I might ask a supplementary question. I do not think I made my question clear and the minister did not understand me. What I am getting at is this. I would assume this agreement at $1.80 covers the price paid to all exporting or shipping countries. In that price is there any distinction made as between qualities? That is, is there any distinction between Canadian hard wheat and the price, we will say, of Kansas soft wheat, or Australian wheat? Or, so long as it is wheat of the first class from the country of origin is it at $1.80 right through?


Clarence Decatur Howe: There will be a board charged with the duty of determining the details of the agreement. Obviously it will be the duty of the board to see that comparable wheat is shipped for comparable payments. There is a comparable grade of wheat in the United States-I believe it is known as No. 1 red winter, comparable with our No. 1 northern.


Arthur Leroy Smith: In the northern states there is some, but not much.


Clarence Decatur Howe: I dare say when the subject of wheat is considered, the comparative value of soft wheat as compared with Canadian hard wheat will be taken into consideration in setting the price.


Arthur Leroy Smith: There is nothing in the agreement covering it.


Clarence Decatur Howe: I think not. The agreement provides for an administrative board, which would obviously be charged with that duty.



ALLEGED CRUELTY TO ANIMALS EXPORTED FOR SLAUGHTER

[Stage Direction]
On the orders of the day:
Angus MacInnis: should like to ask a question of the Minister of Agriculture, but in his absence I shall ask

his parliamentary assistant. Have representations been made to the Department of Agriculture alleging extreme cruelty to horses exported for slaughter from this country to Europe? Has the government given consideration to prohibiting the export of horses for slaughter?


Robert McCubbin: I will take the question into consideration, and an answer will be given later.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: I should like to ask a question of the Minister of Public Works. In view of the welcome announcement that the wages of women cleaners working for the government in Ottawa are to be increased to sixty-nine cents per hour, retroactive to January 1, can the minister say how soon an announcement will be made as to pay increases for women cleaners in federal government buildings in other cities, such as Winnipeg, where the rate is still only fifty cents per hour?


Alphonse Fournier: Every year in the month of April there is a general review of salary rates. They are investigated by the Department of Labour. Any change which would take place will be announced in due course.


Stanley Howard Knowles: Will it be retroactive to January 1?


Alphonse Fournier: I cannot say.


Mr. MacNicol:: May I follow up the inquiry made by the hon. member for Winnipeg North Centre? I was told this morning by some of the women cleaners in this building that they are not included in the minister's announcement of last Friday. Can he enlighten us in that respect?


Alphonse Fournier: If I understand the situation correctly, the women working here come under the jurisdiction of the House of Commons authorities, and not under the Department of Public Works.


George James McIlraith: They did get a pay increase.


Alphonse Fournier: The hon. member for Ottawa West says they did get a pay increase; therefore I shall not discuss it.



ROYAL CANADIAN MOUNTED POLICE


[Stage Direction]
On the orders of the day:
Mr. G. R. Pearkes (Nanaimo):: I should like to ask a question of the Minister of Justice. Have any instructions been issued to the R.C.M.P. guards at the dockyards at Esquimalt to be relieved of their duties as from March 31? If so, what other personnel will replace the R.C.M.P. there?


Hon. Stuart S. Garson (Minister of Justice):: The hon. member did not give notice of his question. I shall take what he has said as notice and bring down the answer tomorrow.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. R. R. Knight (Saskatoon City):: I should like to ask a question of the Minister of National Defence. In view of the minister's recent statement as to fire prevention being an essential part of national defence, is he prepared to advise his colleague the Minister of Finance to admit fire engines to this country either free of duty or at reduced rates? Is he aware that life and property are often lost in some municipalities because of the high cost of such fire-fighting equipment?


Clarence Decatur Howe: Order paper.


Hon. Brooke Claxton (Minister of National Defence):: I have had no notice of the question. However, I shall draw it to the attention of my colleague the Minister of National Revenue.



FAMILY ALLOWANCES


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North
Centre): I should like to ask a question of the Minister of National Health and Welfare. Is he aware of the fact that blue slips have been enclosed with current family allowance cheques reminding the recipients that family allowances are paid by the federal government? Can the minister say whether there is any reason for those slips other than political propaganda?
John Ritchie MacNicol: None whatever.


Hon. Paul Marfin (Minister of National Health and Welfare):: I know the hon. member would be the last in the house to accuse me of carrying on political propaganda.


Some hon. Members:: Oh, oh.
Inquiries of the Ministry


Stanley Howard Knowles: I can assure the minister he is absolutely wrong.


Gordon Graydon: Arising out of the question asked by the hon. member for Winnipeg North Centre of the Minister of National Health and Welfare, may I ask the Minister of National Revenue if in all the correspondence he is sending out he is saying that the taxes are being collected by the federal government?


Stanley Howard Knowles: Mr. Speaker-


Gordon Graydon: I should like to have an answer, because we ought to have uniformity in this regard.


James Joseph McCann: The hon. gentleman knows the answer.



SEED POTATOES


[Stage Direction]
On the orders of the day:
Mr.  W. Chester S. McLure@Queens: Mr. Speaker, I should like to ask a question of the Minister of Trade and Commerce in connection with seed potatoes. He stated some time ago that he would look into the matter, and would make a statement. Is he now prepared to do so?


Clarence Decatur Howe: Mr. Speaker, I have been waiting for an opportunity to make a statement. A few days ago the hon. member for Queens asked for a statement regarding new permit regulations covering the shipping of Prince Edward Island seed potatoes to the United States.
My department has not issued new regulations in this connection since those which I announced on November 26, 1948. It has recently been found necessary, however, to clarify two of these regulations.
1.	Expiry dates of permits. It has been agreed to issue permits for shipments of seed potatoes to the United States only if the shipments were made within the limits of a schedule which was released at the same time as my statement of November 26. Canadian shippers, however, have been clearing customs at an interior point towards the end of the periods, but the actual shipments in many cases, have not crossed the international border until several days after the termination of the period. We have now clarified this position and have advised exporters that their shipments must cross the border before midnight of the expiry date of the permit.
2.	Assurance from importers that potatoes will not be diverted or reconsigned for table

Inquiries of the Ministry stock purposes. Despite the controls being administered, several United States importers have allegedly diverted Canadian seed into table stock markets. In order to stop this practice, which, if continued, might well jeopardize the whole agreement, it has been found necessary to require a formal statement of each importer in which he undertakes that he will only use or sell Canadian seed potatoes for seed purposes.



OLD AGE PENSIONS

[Stage Direction]
QUESTION AS TO INCREASES On the orders of the day:
Stanley Howard Knowles: I should like to direct another question to the Minister of National Health and Welfare, and I do so in view of the fact that he states he is not a political propagandist. Is the minister yet in position to make the expected announcement with regard to an increase in old age pensions?


Paul Joseph James Martin: My hon. friend asked me that question so recently that any reply I would make now would not be very helpful to him.


Stanley Howard Knowles: The minister's replies never are.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Clayton Wesley Hodgson: I should like to ask the Minister of National Defence a question in connection with the pay or bonus to be granted to the Hong Kong veterans. To whom do they make application for that pay?


Brooke Claxton: From my discussions with the officers of the department my recollection is that there will be no need to make application. The flies will be examined and calculations made and cheques issued just as soon as possible. We have up-to-date addresses of a great majority of the Hong Kong veterans because they are in touch with the Department of Veterans Affairs through the receipt of pension and other assistance. However, if any have moved recently they should let the Department of National Defence know of their change of address so that we can send cheques to them as soon as the calculations are made.


Clayton Wesley Hodgson: Will the minister say whether these cheques will be issued before the next general election?


Brooke Claxton: The cheques will be issued just as soon as they can be prepared.



FOREIGN EXCHANGE CONTROL ACT


Hon. Douglas Abbolt (Minister of Finance) moved: the second reading of Bill No. 85, to amend the Foreign Exchange Control Act.


Mr. J. M. Macdonnell (Muskoka-Ontario):: Mr. Speaker, I am well aware that the Minister of Finance and others would be glad to have this bill passed without any further discussion, and, having spoken last week, I do in a sense hesitate to detain the house. Nevertheless I do so for two reasons. First of all, I think that in some way this may be considered the most important measure that will pass this house this year. It is not a measure that is of tremendous interest to a large section of the public; nevertheless I believe it is of great importance. Furthermore, having had the opportunity of reading the minister's speech since it was delivered the other day I should like to make some comments thereon.
I do this for another reason. I understand that there are some faithful and much-enduring citizens who actually read Hansard, and there are some things I should like to put on the record this morning in connection with this all-important question. I have some material here, quite apart from what I shall say myself, which I believe is of interest and importance to those who are trying to reach a conclusion on this question.
The first thing I should like to say is that the real principle of this bill, really the only one we are discussing, is whether we want to go on in the grip of controls or whether we actually wish to make a move toward freedom. I know the minister will pooh-pooh that; I know he will say that the government have already abandoned a great many controls and that they want to abandon the whole lot and in due course the time will come when they will abandon them. In my opinion that is not good enough, because, as I said the other day, we are being asked in this foreign exchange matter for two years more to stay exactly where we are. There is to be no progress of any kind so far as legislation is concerned. I deprecate that very much.
I think it is wise to remind ourselves of what we sometimes forget: that in a large measure this act which is now on the statute book has in it the aspects of a police state. We all know that foreign exchange control was the invention of Dr. Schacht. It was a German idea and when we adopted it we adopted it holus-bolus. We tend after months to get rather numbed to this kind of thing. I think it is a great pity that these police-state pro-

visions, of which there are a great many, should be allowed to continue. I will say no more about that, because we shall have an opportunity of referring to it in committee.
I just wish to emphasize what I said a moment ago about the importance of foreign exchange control, because it goes to the very root of our foreign trade. As the minister himself pointed out the other day, our prospects with regard to foreign trade are most unsatisfactory. In this whole question of foreign trade the matter of exchange control is to some extent the key log in the jam. That is why I am sorry that we are to have two years more of what I call paralysing inactivity, because we are in a kind of twilight zone and we either have to emerge into the light or draw back still further into the darkness.
I wish to say one or two words about the minister's speech on Friday. The minister spent a good deal of his time making speeches for us on this side of the house. To put it differently, he set up a number of straw men and then proceeded to his own satisfaction to knock them down-a very pleasant form of entertainment. I am going to suggest to him later that many of the straw men at which he aimed his darts really represent his own experts I refer to the governor of the Bank of Canada and the associate governor of the foreign exchange control board. I suggest to the minister that he had better hold a caucus of the Department of Finance so that they can all speak with the one voice.


Douglas Charles Abbott: Neither of those gentlemen is in the Department of Finance.
' Mr. Macdonnell (Muskoka-Ontario): The
minister may say that they are not in the Department of Finance, but I imagine that there is no iron curtain between the Department of Finance and the Bank of Canada.


Douglas Charles Abbott: None whatever.


James MacKerras Macdonnell: Indeed I would point out that no less a person than the governor of the Bank of Canada described himself to me as a civil servant. I do not know whether he was strictly accurate, but he did that. I was interested in the point. As a matter of fact, I was asking him for some information, which he was kind enough to give me, but he said that as a civil servant of course he would have to ask the minister. I take it, therefore, the minister will agree with me that there is at least a friendly relationship between the department and the Bank of Canada.
The minister spent a great deal of his time on Friday defending the rate which had been fixed. He seemed to think that we were going to come out in favour of another fixed
Foreign Exchange Control rate. I wish to make it clear that I am not championing any fixed rate. Indeed my great complaint is that the minister-although I am sure he will say that convertibility is in his mind's eye-seems to have what I can only call a fixation on fixing. His whole speech the other day was designed to prove that they were right in what they had done. My feeling is that we should have as an aim that we should pursue constantly and energetically the convertibility without which-I am sure the minister will agree with this- the prospects for our continuing foreign trade are very dark. What I complain about is that the minister, in paying lip service to convertibility, is like the man who talks about the weather but does nothing about it.
The minister again and again justified the rate which had been fixed. My point is that we want to get it to a much higher court of appeal than the minister or anyone else. As fast as we can we want to get to the court of appeal of real economic conditions, where the rate of our dollar will be decided, not by the judgment of this person or that person, but by the only final judgment-the state of trade throughout the world. Unless this happens we shall just sink deeper and deeper into a mass of controls. Indeed we are in a kind of morass now, and my disappointment is that I see nothing in this measure except two years more of the same thing.
As a matter of fact, to digress for a moment, it seemed to me that the minister overplayed his hand when he was explaining the excellence of this rate which they had fixed; because, if I understood him correctly, he finally said he thought that they had put it too low, or, at any rate that there was a good deal of reason for feeling that it was too low. I am not expressing an opinion on that; I am merely saying that if the minister thinks that, it seems to me it is a great argument against going on with this fixed rate.
It is obvious, of course, that all my arguments are made against the background of the present precarious and uneasy situation. If everything was all right I suppose there would be a disposition to say that we would travel along. It is perhaps difficult for us to deal in principles unless we are brought to it by our own necessities. I suggest that here there is quite enough to indicate that things are serious, and that there is an indication of certain things that need to be done.
I wish to read from what I think is the best statement I have read as to the exact trading position at the moment, particularly having regard to ourselves, Europe and the United Kingdom. It is lengthy, but I believe it is of interest. I want to get it on the record for the sake of those who actually read what we say in this house, and apparently pay


Mr. Irvine:: May I ask a question? I am interested in what the hon. gentleman is saying.


James MacKerras Macdonnell: I hope you are agreeing.


William Irvine: Do I understand that the hon. member is advocating, as an alternative to the present bill, the devaluation of the dollar?


James MacKerras Macdonnell: I have tried to make it clear that what I am advocating is that we try to move forward to a situation of reality. On Thursday I tried to show that what I wanted to see was some measure of flexibility introduced. This objective cannot be reached today or tomorrow; but I suggest to the gentlemen who represent western constituencies that they are more interested than anyone else in achieving this objective. If we do not reach it, our trade with western Europe will disappear, just as surely as the sun rises. I am suggesting that at the present time we are living in what a friend of mine calls a kind of dream world so far as exchanges are concerned. If we do not return to reality, we will suffer more injury. This situation cannot continue. I am trying to suggest an appeal to a power higher than myself or the Minister of Finance, an appeal to reality. I do this because I think the international monetary fund is not moving us forward, and I suggest we should hurry them along.


Stanley Howard Knowles: What you are asking for is a fluctuating rate.


James MacKerras Macdonnell: It will have to fluctuate until it reaches an equilibrium. We did not have a fluctuating rate in the old world, but one cannot suddenly attain the true rate everywhere.
I am maintaining that we are now crystallizing, not making permanent but continuing indefinitely rates which, as I shall try to show later, a great many people believe are unsound. We are doing nothing about it. It is for that reason I object to this bill which carries forward that rigidity for two years more.


Mr. Blackmore:: Will thfe hon. member permit a question?


James MacKerras Macdonnell: Certainly.


John Horne Blackmore: I am sympathetic to what the hon. member has been talking about, and I agree with him that something should be done. Is the hon. gentleman able to suggest anything that could be done, for example, to avoid bilateral deals-


James MacKerras Macdonnell: Will
the hon. member permit me to say that I did make one suggestion, and there will be others? I shall refer to that again. Perhaps if the hon. gentleman will permit me to continue, I shall cover in the course of my remarks, the things he has in mind.


John Horne Blackmore: The hon. member will not mind if I ask him a few questions from time to time?


James MacKerras Macdonnell: No.
I should like to deal with the minister's speech and quote something he said. I should like to quote many of the things he said, but I shall confine myself to this particular remark. I shall quote a good many authorities that I think the minister will respect, including the governor of the Bank of Canada, who think the price situation in the sterling areas and in western Europe has already grown to the point where those countries are pricing themselves out of our market.
Mr. Abb oil: I said that myself.


James MacKerras Macdonnell: I want to read what the minister said at page 1569 of Hansard:
-but the Canadian exporters who are affected by this situation will, I know, agree with me when I say that their difficulties do not arise because their prices are too high-a situation which might be corrected of course by a change in the exchange rate-but because the foreign countries simply will
Foreign Exchange Control not make dollars available for certain goods; and the lowering of the Canadian exchange rate could do nothing to correct that situation. On the contrary it would aggravate it.
The minister pressed that point further; but I want to make the point that I am not attempting to fix the Canadian exchange rate. I am suggesting we should try to move towards a more realistic rate.
Referring to the minister's other point, I wish now to read an extract-I apologize for the reading of these extracts, but I do not think one can avoid them-from the London Economist. This extract covers two or three points to which I shall refer later. The reference is right on the target we are discussing:
In an interview with the Canadian Press Association, Sir Stafford Cripps this week reviewed the prospects for Anglo-Canadian trade and gave a very frank summary of the position as seen from the British angle.


Douglas King Hazen: What is the date of that article?


James MacKerras Macdonnell: February 26, 1949.
He went over the familiar ground of the historic and persistent lack of balance in the two-way flow of Anglo-Canadian trade, and stressed that Britain had made plans to bring its purchases from Canada more into line with its ability to pay for them. The reductions hitherto made have fallen mainly on food and timber. What had been done so far to reduce imports was, however, insufficient, and the United Kingdom might be obliged gradually to limit its imports of bacon, cheese and eggs from Canada, though Sir Stafford added the somewhat comfortless reassurance that this would be done only "after the fullest consultations with the Canadian government". Sir Stafford went on to explain how large a proportion of British imports of certain foods still came from Canada. He also stressed the difficulties that are being met in expanding British exports to Canada, saying that Britain could not sell all the steel Canada needed because it had to reserve certain quantities of scarce materials for use in bilateral negotiations with other countries.
I stress that particularly.
This somewhat gloomy review of Anglo-Canadian trading prospects was perhaps more remarkable for what it left untouched than for what it said. For example, the chancellor seems to have made no reference to the extent to which the problem ^ of payments with Canada might be eased by bringing into play the whole of the trade between Canada and the sterling area.
I would remind the minister at that point that in considering these exchange rates the other day I said we had to consider the broad situation and not merely our exchange rate with this country or that country. I continue the quotation:
If the export drive to Canada could involve all sterling area produce and not only UK manufactures, the problem might be found much more amenable than it appears if seen purely in Anglo-Canadian terms. Nor did the chancellor refer to the delicate subject of prices. There can be no doubt that the main obstacle to the British export drive to Canada is to be found in the fact that British prices are, by and large, too high for the Canadian market.

Foreign Exchange Control Now, that is the opinion of the Economist, for what it is worth. I continue the quotation:
That fact is likely to be increasingly impressed upon all concerned if the trend of prices in the United States continues to be downward.
You will observe that in this quotation there are three points of particular interest to this problem. First of all we have here what I pointed out, the effect of bilateralism. You have the British government which says that because of bilateral negotiations with other countries-this is apart from the question of prices-Britain cannot let us have certain goods. You have a government with ideological views which is making bilateral deals for that purpose. You have the reference to British costs-that is, that they are pricing themselves out of our market. I commend that to the minister.
There is another quotation from page 384 of the Economist which I should like to give to the house:
At the same time, it cannot be said that Canada has chosen the happiest moment, from its or Britain's point of view, to announce the reimposition of the import duties on British textiles which were suspended in 1947.
I take it the minister is going to tell us something about that tomorrow night; so we will leave that point until he has dealt with it. In this connection, I should like to quote from a public address-I checked on it to make sure it was published- delivered by the executive assistant to the governors of the Bank of Canada and alternate chairman of the foreign exchange control board. It contains some interesting comments on this very point. He says:
At the present time many of the ERP countries are discriminating against imports from the western hemisphere in order to economize in their use of dollars.
I skip a portion of the material and continue the quotation-I should have told you earlier that these quotations are from a lecture delivered by Mr. Rasminsky to the National Defence college on December 1, 1948:
But the danger in these policies, which we might as well recognize, is that the countries concerned, as part of a program of economizing dollar outlays, may impair their own capacity to earn dollars. They will do this if they establish special techniques for trading with each other at high prices without having to face the competition of efficient producers in Canada and the United States. Exports by the countries forming this system to each other will be easier than exports to the western hemisphere. In the long run, I think such a system would break down. There are no continuing rewards for high cost production.
There is a remark which might well be borne in mind by people who seem to think that this question of exchanges is one that can be dealt with in an arbitrary manner 
by the wisdom of this or that person. "There are no continuing rewards for high cost production."
Also in this connection I should like to quote one sentence from a report by Mr. Towers. Mr. Rasminsky is a wise man and puts all his statements in a rather conditional form. He says it could have this effect or it could have that effect, but Mr. Towers goes a little further and says it did. I am quoting from page 5 of the report of the foreign exchange control board, at which point Mr. Towers says:
Moreover, the discriminatory restrictions imposed on dollar expenditures keep out competition from the western hemisphere while the special financial arrangements referred to encourage trade within the area. In these circumstances trade within the area takes place in many cases on the basis of higher prices than those prevailing outside the area.
I suggest to the minister that - he read, mark, learn and inwardly digest what those two able assistants of his have said.
I now wish to refer to one point which the minister made in his speech and which I really do not think he should have made. He referred to the possibility of the dollar going to some discount; and he said that might mean an addition of say seven per cent, or even ten per cent, to the cost of some things we have in Canada. It seems to me I remember that, in the decree which the minister made on November 17, 1947, some taxes were put on there that were not just seven per cent or ten per cent but were twenty-five per cent; and I suppose that they added to the cost of living.


Douglas Charles Abbott: They were not on necessities, though.


James MacKerras Macdonnell: I do
not know about that. The hon. member for Rosedale (Mr. Jackman) would tell you that they were on some necessities.


Mr. Jackman:: Yes, sir.


Douglas Charles Abbott: They were not on coal, oil, steel and bread.


Harry Rutherford Jackman: Ask your own colleagues; they will tell you.


James MacKerras Macdonnell: I think that was not one of the minister's better answers.


Douglas Charles Abbott: You find a better one yourself.


James MacKerras Macdonnell: In this connection I want to say a few words about the hon. member for Rosetown-Biggar (Mr. Coldwell), because he also took up the point.
I am going to suggest to him that there is a danger in letting your whole economic thinking be governed by one particular consi-

deration. The hon. member for Rosetown-Biggar seemed to be concentrating so much on the fact that there might be a little addition to the cost of living that, so far as I can see, he was prepared to contemplate a situation which might result in our losing hundreds of millions of dollars from the proceeds of selling our Canadian wheat. I should like to ask a simple question of the hon. member for Rosetown-Biggar-I am sorry he is not here at the moment. Is it better to have some money in your pocket to buy things at a little higher price, or is it better to have prices low and to have no money in your pocket?
Do not let anyone suggest that I think that, if we again run into difficult prices for wheat, the western farmer is to be left to bear the whole burden. I do not suggest that policy at all, because we have learned a great deal since those days. Nevertheless I suggest that if Canada as a whole loses some hundreds of millions of dollars because our European market for food products is destroyed, that loss will hurt us all, including the western farmer-and it will hurt him most of all, because in many cases he will have to choose a different way of life. Such a situation would have far more than an economic effect, because if anything happens which lessens the agricultural population in this country, it is a great loss, not merely economically, but intellectually and spiritually as well.


Mr. Castleden:: We tried the private enterprise system before.


William Irvine: Does my hon. friend think that if we left exchange to its own way of doing things, the result would be a drop in the exchange, or a rise?


Harry Rutherford Jackman: Both.


William Irvine: And if there should be a drop, would that help Europe and Britain to sell more goods to Canada?


James MacKerras Macdonnell: I will
not commit myself. I am not a prophet, or the son of a prophet, but I think I understand a principle when I see one. All I am saying is that you cannot indefinitely fight against the truth. You cannot indefinitely fight against reality. I shall have something more to say on that subject because I think we are coming to the stage when there must be a showdown with regard to these exchange rates. In turn, I should like to ask the hon. member a question; but I will not ask him to answer it now, because I do not want him to make a speech.


William Irvine: I intend to do so after you finish.
Foreign Exchange Control


James MacKerras Macdonnell: I want to ask the hon. member this question. Is he ready to contemplate the situation which is developing now and which, if things are allowed to stand, may be crystallized and stereotyped so that, as the hon. member for Digby-Annapolis-Kings (Mr. Nowlan) said the other day, you will have an iron curtain with the dollar on the one side and the pound on the other? What I read from the Economist a few moments ago indicates that we are on the way to that condition now. I suggest that there are no people in this house so greatly interested in preventing that situation as are those who represent western farming constituencies.


William Irvine: The hon. gentleman did not ask me the question he was going to ask.


James MacKerras Macdonnell: Yes, I did. I asked whether the hon. member was prepared to have the present situation between the sterling and dollar areas become crystallized. He need not answer it now. He can answer it later.


Mr. Deputy Speaker:: Order. It has occurred to me that a large number of questions are being asked, and the house is not in committee.


William Irvine: Nobody has answered.


Mr. Deputy Speaker:: I suggest that questions should not be asked so frequently.


James MacKerras Macdonnell: I
should like to go on now and refer to the question of what can be done. The minister, with a slight sign of petulance which is most unusual in him-


Douglas Charles Abbott: Surely not.


James MacKerras Macdonnell: -kept saying on Thursday, "But what can be done?" First of all, I say that nothing will ever be done unless you have an objective. My point is, as I said earlier, that our objective should be the restoration of reality-the restoration of convertibility. After all, we hoped for that in 1947. If the convertibility of the British pound had come about in 1947, we would have had a different world since. Hon. members will recall that when the United States made their first big loan after the war, that condition was stipulated; it was hoped that it could be done, but it was not done. In the meantime what I am complaining about is that the minister just asks us to continue the present situation. So far as one can see, he has not, for the moment, given us any hope of convertibility. So far as I can see, he is just ready to continue as we are and to ask us to hope for nothing for the next two years.

Foreign Exchange Control Happily, not everybody is taking that same attitude. There are other people-and people in prominent positions today-who seem to think that something can and should be done. I should like to read from the Economist of February 12, at page 272, at which is given an indication as to the views of that great man-as I think he is-Mr. Hoffman, who is in charge of the Marshall plan. After speaking encouragingly of the progress which they are making, he said this:
The real proving period lies ahead-immediately ahead. This is the time to hit hard for European recovery: time for the Europeans to take the drastic and sometimes painful steps necessary for real recovery; time for the United States to back their efforts to the full.
Then the Economist goes on and says:
Mr. Hoffman went on to outline to his listeners the "drastic steps" he has in mind. They follow closely the conclusions reached in the interim report produced by the OEEC-
The organization for European economic co-operation.
-after Christmas-a document which incidentally earned Mr. Harriman's praise for its "rigorous honesty." The first-
One of Mr. Hoffman's points.
-is the demand for an end to inflation and the stabilization of currencies in 1949.
You have Mr. Hoffman taking that attitude. After all, he is in a position of great influence.
You have another man, Mr. Snyder, at that time secretary of the treasury in the United States, taking a similar position. I read now from page 384:
. . . Mr. Snyder remarked that the question of currency devaluation should be "explored with the European countries in receipt of Marshall aid." Mr. Snyder suggested that the overvaluation of European currencies provided a serious obstacle to the restoration of equilibrium in their balances of payments, and added that "it becomes a matter of grave direct concern to us when a European country tends (by overvaluing its currency) to retard its exports or misdirect its trade and increase its western hemisphere deficit, and thus indirectly increase its calls upon the United States for assistance."
That is the end of Mr. Snyder's statement.
I should add that the Economist points out that on a former occasion Mr. Snyder excluded sterling from the countries to which he was giving this advice. Then the Economist goes on:
But the conditions in which a deliberate overvaluation of European currencies was justified are rapidly departing, and the prevailing overvaluation is having a retarding effect on the efforts of the countries concerned to restore equilibrium.
I commend that also to the minister's consideration, because what I am advocating is not that anything can be done today or tomorrow, but we should make a beginning, and that beginning should be the making of the international monetary fund more flexible. The other day I ventured to make one 
suggestion. It is put forward as a suggestion of what might be a beginning: instead of being forced to fix the exchange rate, instead of a country having to come to the international monetary fund and say: We fix our rate at ninety-four cents or ninety-five cents or ninety-eight cents, there should be an area within which they would allow it to fluctuate. That is to say, we might make the floor at ninety cents and allow the dollar to find its own level. I will not pursue that further. We have expert men on the international monetary fund. My own feeling is that provided that we begin to get away from this rigidity, once we make a beginning, further progress may follow-and another thing is that it might be contagious. If we started we might find a lot of other people willing to come in too. I am perfectly sure of one thing: the situation cannot stand where it is. It is going to get better or worse. At the present time there are a good many things to make one feel that it is getting worse. Publicly, these men, Hoffman and Snyder-


Douglas Charles Abbott: J. W. Snyder.


James MacKerras Macdonnell: Former secretary of the treasury in the United States.


Douglas Charles Abbott: He still is.


James MacKerras Macdonnell: These two men, who are in positions of key importance, have strongly taken the view that something should be done; that the present situation should not be left as it is forever. I venture to suggest that what I have read from these valued civil servants would indicate that their minds are moving in that direction. Perhaps what we need is action on the political level. We need an act of courage on this thing politically; it should not be left mired as it is now.
I should like to call another witness to support me. I am sure that this is a witness whom the minister will treat with some respect, because it is the Minister of Agriculture (Mr. Gardiner). The Minister of Agriculture of course has the great advantage of having lived in the west where they know more than others do about foreign trade. He is not a city slicker like the Minister of Finance (Mr. Abbott), or like the Minister of Trade and Commerce (Mr. Howe).


Douglas Charles Abbott: Or the hon. member for Muskoka-Ontario.


James MacKerras Macdonnell: I will have you know that I am from a rural riding.


Douglas Charles Abbott: An absentee member.


James MacKerras Macdonnell: No, I
am not an absentee member. I live there during a large part of the year.
This is a quotation from the Minister of Agriculture which is right down my alley. He says, as reported at page 1641 of Hansard:
I am inclined to agree with some of the statements that have been made from the other side of the house to the effect that something ought to be done about the convertibility of exchange-
That is all I am saying. Let us do something and not just talk about it. I continue: -something ought to be done about the convertibility of exchange between all countries who are trying to co-operate in doing the same thing in the world.


Stanley Howard Knowles: That is something.


James MacKerras Macdonnell: Yes. I have tossed in my half pint; let other people do the same. The minister will not commit himself at all. He just says: As you were! and everything stays as is. I continue with the quotation of the Minister of Agriculture:
I am inclined to agree with that; but in spite of the fact that some people have credited me with stating the position very forcefully over in London, I still say that the best way to get a final result is to listen to what the other people have to say, to put forward our own views from time to time with regard to the matter and, since we are all friends, to co-operate with them in trying to get the results as quickly as possible not only in our own country but in all countries.
When I was speaking on Thursday one of the points I made was that one of the great arguments for this international monetary fund was that it would provide a forum. The minister said that they have a meeting once a year.


Douglas Charles Abbott: Once a week.


James MacKerras Macdonnell: Wait a minute-once a year, to which the minister goes. I want to get the minister in on this. I do not think things will happen until he gets in. He will not do much by going there once a year. He has got to give his mind to it.
I want to read just a sentence from the last report of the international monetary fund. I am ganging up on the minister with a lot of witnesses. Here is another one. What they say is this:
The fund agreement makes It clear that the provisions for the regulation of exchange rates are not intended to impose upon the fund the duty of perpetuating in the name of stability exchange rates which have lost touch with economic realities.
Further on they say:
There are indications, however, that in some countries the exchange rate is becoming a restraining factor on exports and that it is adding to the difficulty of earning convertible currencies.
I am suggesting that here, you might almost say, is a straight appeal to the political people back home who have the
Foreign Exchange Control authority to give these people a chance to get on with it. At least that is the way I construe it.
I should like to read just a sentence from a document which is of great importance, put out by the top-ranking United States economic advisory committee at Washington, called the national advisory council on international monetary and financial problems. I wish to read the following from page 25: Among the objectives of the fund has been the progressive removal of exchange controls.
We have had this present bill for three years; there has been no progressive removal, so far as I can see, and we are asked to have two more years of the same. I do not think it is good enough. I come back to what the minister said: "What can we do?" Well, Mr. Speaker, we practically invented this international monetary fund, as I understand it. We have a tremendous responsibility for it. As I understand it, we had the Keynes plan and the White plan, and it was Mr. Rasminsky who came along and reconciled them. The minister shakes his head. He had better learn more about it.


Douglas Charles Abbott: He was at Bretton Woods.


James MacKerras Macdonnell: Perhaps the minister has been doing good by stealth. Probably some of his officials have been doing more than he knows. At any rate the minister will not disagree when I say that we had quite a lot to do with the invention of it, and no one has a better right to make suggestions.
We have been talking pretty big. I have heard the minister speak in a grandiloquent manner about what the government has done. I do not object to that at times.


Douglas Charles Abbott: And always strictly accurate.


James MacKerras Macdonnell: That is all right; we must expect that, especially when an election is coming along; but speaking seriously, we are not a negligible factor. I should like to go back and ask the minister what would have happened in 1940 if we had said, What can we do? Anything we could do in 1940 because of our geography, and by our own efforts, enabled us to play a very important part in what was going on then, and there is no saying what might happen if a lead were given now. I am saying all this against a background not of favourable but unfavourable prospects. The Minister of Agriculture told us the other night that the agreement had been made for this year; let us not forget that it is because of United States money. Let us not be fooled because of what the Minister of Trade and Commerce told us about our wonderful position. Do not let us overlook the fact that we

Foreign Exchange Control are standing on slippery places and that the thing could change so quickly that you could hardly recognize it. That is the basis on which I am putting this forward.
It might be asked: Well, why should we do it? Why does not the United States take the lead? I have quoted these important United States officials, and I think when the time comes they may take the lead; nevertheless it is likely that they might want to avoid doing anything like shaking the big stick. I think it is quite on the cards that they would be extremely pleased if we came forward. Because of our efforts and exertions during the war and since, we have a rather remarkable place for a small nation. No one doubts that. I think you might almost say that we are a natural for this job, because we would be much less open to jealousy than almost any other nation that I can think of. Why do we have to sit around paralysed for two years?
As a matter of fact I am giving the Minister of Finance a wonderful opportunity. I am giving him the chance to step out and provide the Abbott solution and have his name ring around the world as has Mr. Marshall's rung around the world. If he is going to do it I think it would be fair to have the election before it is done, because we do not want the minister to become world famous before the election.


John Ritchie MacNicol: He will not be here after the election.


Douglas Charles Abbott: Don't be too sure. That was prophesied once before from that same seat.


James MacKerras Macdonnell: Let
me just sum up and poll my witnesses again- the governor of the bank; the associate chairman of the foreign exchange control board; Mr. Hoffman; Mr. Snyder; the international monetary fund; the London Economist. Remember, I do not for one moment hold myself out as an expert as against the Minister of Finance, but I hope he will pay attention to this noble array which I have paraded before him.
In these circumstances I move the following amendment, seconded by the hon. member for Vancouver South (Mr. Green):
That the said bill be not now read the second time but that it be resolved that:
1.	The Canadian dollar should be allowed to seek its true economic level within the limits imposed by the Bretton Woods agreement: and
2.	It is expedient to present a measure to provide for the continuance in force of foreign exchange control with necessary modifications for not more than one year to permit representations to be made to the international monetary fund with a view to obtaining such modifications in its regulations as will permit an orderly revaluation of currencies to bring them to realistic levels and thus make the further continuation of foreign exchange control unnecessary.
[Mr. Macdonnell (Muskoka-Ontario) .1
I wish to say only a few words about the amendment. In the first place, it was my understanding that when the amendment was ruled out before in the committee stage it was mainly on the ground that that was not the proper time to introduce it; that the amendment should have been made on second reading. While I do not wish to put words in the Speaker's mouth, at any rate that was the impression I got.
I sincerely hope that this amendment will be allowed to come to a vote, because it seems to me everyone should be in favour of the substance of it. How can anyone be against it? If it does not produce the results expected, it will be too bad, but how it could do any harm is beyond my understanding.
It will be observed that we have been very reasonable in indicating that if the government accepts this we shall be prepared to go along with some form of foreign exchange control. We do not say it in exactly this form, but we will be very co-operative- as we always are. I cannot see how any reasonable man could object to this proposal.
I close by saying that if Canada, which enjoys a unique reputation in Europe and in the United States, were to step forward and take vigorous action here, the psychological effect might be more than we could realize; it might supply the motive power to take us off the present dead centre which, if left long enough, will be fatal to free institutions.


Douglas Charles Abbott: Mr. Speaker, I should like to say a word at this time, only as to the procedural question raised by the amendment. I am not an expert on procedure, as the house knows, but I do suggest that this amendment is out of order. It is an amendment relating to a money bill. While subsection 1 might conceivably be in order, I do not think a private member is free to introduce an amendment stating that it is expedient to present a measure to provide for the continuance in force of foreign exchange control with necessary modifications for not more than one year to permit representations to be made to the international monetary fund, and so on.
I believe that this part of the amendment should be ruled out of order on second reading, as it was at the resolution stage.


Mr. Deputy Speaker:: Do any other hon. members wish to make representations with respect to the amendment? I shall give it due consideration.


Edmund Davie Fulton: Mr. Speaker, on the point of order, there are certain sections of Beau-chesne's second edition which I believe are relevant to the point raised by the minister. While it will be agreed that no private

member is free to amend a money bill, it is important to know exactly what is meant by the expression "money bill". I submit that the foreign exchange control measure now before the house is in no sense a money bill as intended by the rules. In citation 579 of Beauchesne's second edition he quotes from an authority of the British House of Commons in 1911, where "money bill" is defined. It states:
A money bill means a public bill which in the opinion of the Speaker of the House of Commons contains only provisions dealing with all or any of the following subjects, namely, the imposition, repeal, remission, alteration, or regulation of taxation: the imposition for the payment of debt or other financial purposes of charges on the consolidated fund, or on money provided by parliament-
And so on. Then he quotes a lengthy definition of "money bill", and continues by saying:
The word "only" is very important in the above statutory definition. May, 13th edition, page 436, note, says: "It may therefore be well to notice here that a bill for granting aids or supplies to the crown may fail to secure the Speaker's certificate as a money bill as its provisions are not confined to the objects contained in the statutory definition."
I believe it is clear, and I am sure even the minister will agree, that the objects of this particular bill are by no means confined to the statutory definition to which I have referred, namely, a bill dealing only with matters of taxation or charges upon the revenue. That is the accepted definition of a money bill.
One might call this bill merely a procedural one to continue in force for a further period of time a statute already on the statute book. I submit without hesitation that the bill now before us does not come within the definition of "money bill", and that therefore the amendment is in order.


Stanley Howard Knowles: Mr. Speaker, I rise to participate in the discussion on the point of order, chiefly because of the citation just read by the hon. member for Kamloops. I believe the Minister of Finance has really put his finger on the nub of the question. Frankly, I believe it is possible to word an amendment to the motion for second reading which would be in keeping with citation 657 of Beauchesne's third edition, which would declare a principle such as that in the proposed amendment, and still be in order. Unfortunately the hon. member for Muskoka-Ontario, instead of declaring some principle, has taken the prerogative of a minister to suggest that it is expedient to introduce a measure involving the expenditure of money.
The hon. member for Kamloops has endeavoured to base his case as to the propriety of the amendment on citation 579 of Beauchesne's second edition, on the basis of which he argues
Foreign Exchange Control that this is not a money bill. I must say the hon. member drew my attention privately a few days ago to the citation he has just read, and when I first looked at it I found it perplexing. However it was not very difficult to discover what it was all about. All one has to do, as I would expect the hon. member for Kamloops to do, is to look at citation 579 in its context. It will be noted that citation 579 in Beauchesne's second edition is one of the notes listed following standing order 61. Standing order 61 is the standing order which says in effect that all bills voting money are the sole gift of the House of Commons.
Let me repeat that the purpose of standing order 61 is to say that money bills must originate in the House of Commons only; in other words, they cannot originate in the other place. I believe what has happened is that we have fallen into the practice of calling any bill involving the expenditure of money a money bill. Technically speaking, money bills are those bills which vote money, in other words, the supply bills.
Standing order 61 and citation 579 deal solely with that question. The effect of citation 579 is that a money bill, that is to say a bill voting money, cannot be denied introduction in the Senate if it has something else attached to it. Let me repeat that what this whole section in Beauchesne's second edition deals with is the question of defining a money bill. A money bill is a government bill which does nothing but vote money; and that kind of bill can originate only in the House of Commons. Citation 579 protects the rights of the Senate to this extent: if a money bill asking that mdney be voted has something in it besides the voting of aid or supply, then it could originate in the Senate. Section 53 of the British North America Act reads:
Bills for appropriating any part of the public revenue, or for imposing any tax or impost, shall originate in the House of Commons.
Entirely apart from what are correctly defined as money bills, namely, bills that vote aid or supply and nothing else, are public bills which involve the expenditure of money. Such a bill can be introduced in either house, but when it is presented it must be introduced by a minister who is able to say that His Excellency has seen it and has approved of it. I submit that the citation referred to by the hon. member for Kamloops does not apply to this bill at all. That citation merely defines clearly what is a money bill. He is correct in saying that this is not. a money bill; in other words, it is not a bill for voting aid or supply and nothing else. This is a public bill involving the expenditure of money and therefore it has to be introduced by a minister of the crown,
1694	HOUSE OF
Foreign Exchange Control and so would an amendment of the kind now before us, which I feel is therefore out of order.


Harry Rutherford Jackman: May I point out that, instead of this bill involving the expenditure of money, if the foreign exchange control board continues to go on in the same manner as it has during the last few years it will show considerable revenue for the crown. Last year the profit under the regulations under this bill amounted to $10 million.


Mr. Deputy Speaker:: I thank hon. members for the assistance they have given me in coming to a conclusion. I must say that it seems to me that this is a public bill involving the expenditure of money, and I must rule the amendment out of order.


Harry Rutherford Jackman: Mr. Speaker, when the minister introduced the resolution on March 17 he said that no doubt the house would hear something about the criticism which was leveled at the government in regard to the change which was made in the rate of Canada's currency in July, 1946. That was the time when it was restored to parity with the United States dollar. May I quote one or two of the remarks of the minister, as reported on page 1566 of Hansard:
-that move was hailed with satisfaction by virtually every section of the country-
The minister went on to quote from an editorial which had appeared in the Globe and Mail, as follows:
It was designedly kept at 90 cents for several reasons, not least among them the protection of our future competitive trading position. It is, therefore, somewhat silly for some quarters to attempt to make political capital of the government's action as a "masterstroke" of economic strategy.
I do not know to what political quarters they were referring.


Douglas Charles Abbott: That is the Globe and Mail; it is not my statement.


Harry Rutherford Jackman: I realize that, but they were referring to the attempt to make political capital of this masterstroke. The minister went on to quote the editorial as follows:
The return to parity must be read as an accurate indication of the impact of United States conditions on our economic structure. The change was forced on us by the inflationary trend within the United States.
There was an inflationary trend in the United States where the price level was higher than in Canada. Certainly the foreign exchange control board was never designed to control the cost of living in Canada. The purpose sought to be achieved in July, 1946, was to keep down the price level in Canada, something which had nothing to do with the control of exchange. We found the government at that 

time using the board for a purpose for which they should never have used it, using it for a purpose which was not proper.
If the minister thinks that any kudos is due to his own party for the restoring of the Canadian dollar to so-called parity with the United States dollar on July 5, 1946, may I read to him what I said during the debate on foreign exchange control on July 2, 1946. I think I am usually fair to the government, and here is what I said at that time, as reported on page 3048 of Hansard:
However, I will say this on behalf of the board. It is convenient for traders on international account to know that they can buy foreign exchange at a fixed rate and sell it at a fixed rather than a fluctuating rate.
In other words, there are a number of businessmen in this country who like to make their money without having to work for it. If they can buy exchange at one fixed rate and sell it at another fixed rate, so that they cannot possibly lose, it is a very simple way of making a considerable amount of money in view of the transactions involved. As I pointed out, the rather small percentage which the board takes is sufficient to pay all its operating expenses and the high salaries of the officials of the board and still show a profit of no less than $10 million, but which is still an exaction from the business community of Canada. I went on to say:
But the danger is that if these rates are artificial and are sometimes subjected to severe readjustment -the Canadian dollar is now selling too low in world markets-the readjustment to a proper value if it comes suddenly may cause real hardship, which would be avoided if the readjustment came gradually and the higher level of the dollar was foreshadowed by gradual increases in its value.
There was no reason why the government should expect any particular praise because of the change in the value of the dollar at that time, because that change was foreshadowed by economic events. Had the control board not been in existence we would have found the Canadian dollar to be quite close to parity with the United States dollar. The minister now suggests that we are criticizing the action taken at that time. The armistice had just come about a short time before


Douglas Charles Abbott: A year before.


Harry Rutherford Jackman: A year before, if you like, and the boys were still coming home from overseas. We were still in a chaotic state and no one knew precisely what was going to happen. It was still a period of hush-hush; we were not being told a great deal, there were secrets as to the troops coming home, and so on. At that time we felt that perhaps it might be just as well, the office of price administration in the United States having

expired on July 1, 1946, that some action be taken. We were not in possession of sufficient information at the time to criticize, even if we had desired to criticize.
I should like to point out that one projects these difficult and technical questions with a certain amount of humility, which indeed is becoming I think when one questions policies on foreign exchange or matters having to do with international finance. They are not easy even for those who are privileged to devote all their time to them. In fact, as was pointed out by the hon. member for Muskoka-Ontario (Mr. Macdonnell), we find great differences of opinion among the so-called experts. Our economic and financial system is like Topsy-it just grew. It has grown sufficiently to give the United States and Canada the highest standard of living of any two countries in the world. All countries in which there are great financial centres have a higher standard of living than other countries. These natural economic laws functioned, and it was under them that we achieved a high standard of living. To get away from this natural working and to put ourselves in the hands of helmsmen who are economic experts but who cannot possibly foresee all the reactions to their policies, and all the repercussions which may arise from any particular line of action, is something which we on this side of the house do not favour. It has often happened in the past that a policy, which was a part of a plan that was designed to do good, has had in it the seeds of a much worse condition than existed before. In other words, the cure was worse than the disease. That is the general philosophic reason, if you like, founded on facts in great number, why we do not favour controls unless it can be shown that the controls are getting us somewhere.
In my opinion the minister made not a bad defence of the operations of the foreign exchange control board during the last few years, but it was entirely one-sided. That is something which I regret should come into a discussion of this highly technical subject. I believe that the house is entitled to all the information on both sides. The minister has the advantage of his economic advisers, who, as I say, spend all their time on these matters. They have a great many relevant facts on both sides of the question which might well be put before the house. I cannot help but say, when I recall the cries about filibustering in the house, that if we on this side, and in the Progressive Conservative party in particular, were not eager to see these measures carried through and debated as well as possible and as quickly as possible, we certainly would have asked that this bill go before the banking and commerce 29087-107
Foreign Exchange Control committee as it did a few years ago. There we could have called expert witnesses and businessmen; we could have found out exactly what the pros and cons are, and what would be the best solution to this very pressing problem. As it is we are doing the best we can, within the confines of the formalities of the house and the committee of the house which will follow; but it does not take the place of the banking and commerce committee. The only reason we have not asked for that is that time is fast slipping by, and the end of the month will soon be here when the regulation will expire if not given a further lease of life. Therefore I hope that the house will appreciate that we have done everything we could to expedite the matter, and that if we had wished to filibuster we certainly might have filibustered, to use the word in a very proper sense, and have obtained the information we rightly require.
The minister, with all the eloquence he could command, pointed out what he thought would happen if the value of the Canadian dollar were lowered in relation to other world currencies-which, by the way, is not necessarily a policy that we would advocate. What we want to see is a dollar which is influenced by natural and normal economic trends as they exist today, and not one which is subject to the ukase of the government itself. If the Canadian dollar were cheapened in relation to other world currencies, it is true, as the minister said, that it would be more difficult for the United Kingdom, which no doubt would like to get more Canadian dollars, to sell in this market; but then we must always look at the other side of the shield. By having a cheaper dollar, if that resulted from natural laws, it would be that much easier for the United Kingdom to buy our products, to buy our wheat, our bacon, and whatever else was required.
As I have pointed out, one must always consider both sides of the question, and it is by no means a simple one, to find what the right answer is. As every businessman, farmer, and storekeeper in the house knows, in our economic system there are certain natural laws that operate when one thing gets out of adjustment with another. Certain influences are set in motion which tend to right that condition. Now that we have fixed controls and regulations those natural laws are offset. We go along in definite, arbitrary channels and often end up in the situations where we are much worse off than we were at the beginning. We have cultivated the sore spots rather than allowing them to be cured rapidly through the natural working of economic laws.
At one o'clock the house took recess.

Foreign Exchange Control
The house resumed at three o'clock.


Harry Rutherford Jackman: Mr. Speaker, before the noon recess it had been pointed out that variations in exchange rates followed natural economic causes and brought about the rectification of any lack of balance there might be between the currencies of various countries. I referred to the fact that the Bretton Woods agreement brought about certain rigidities which did not allow exchanges to fluctuate so that these discrepancies between international currencies could be ironed out in the ordinary self-righting process. It was also pointed out that while the move on July 5, 1946, might have been one in which the great majority of the people could have concurred, especially in the direction it took, because there was no doubt at that time that our dollar was worth a great deal more than ninety cents in relation to the United States dollar, it would be foolhardy for anyone to say that the value of the Canadian dollar vis-a-vis the United States dollar since 1946 has, at all times, been as one hundred is to one hundred.
It has not been so because the currency of any country will vary according to conditions and according to the prospects which exist in men's minds from time to time. These variations bring about self-righting devices which are good for any country, and which are even necessary, because if the correction does not take place at the appropriate and natural time, then the correction will very likely have to take place at a subsequent and perhaps much more painful time.
In his remarks the other day the minister built up as strong a case as he could for the policy that the government has pursued through its agency, the foreign exchange control board. If the Canadian dollar were, I will not say devalued, because that is not necessarily the policy of the Progressive Conservative party-our policy is simply aimed at freedom of exchange and an approach to reality as soon as that is possible -but if the Canadian dollar were to go to ninety or ninety-five cents, it would be not only harder for England to sell, as the minister pointed out, but as I pointed out it would be easier for England to buy. It is a question of where the greater benefit to Canada lies.
I might point out further that, if our dollar did find a naturally lower level and England were able to buy more from us but we were not able to buy so much from England because of our cheaper dollar, we would nevertheless, because England bought more from us, have far more sterling and it might be that having more sterling we might be able to buy more goods in the United Kingdom even though the prices were fractionally

higher. There are so many repercussions in the matter of foreign exchange that it is quite beyond the power of any of these so-called experts to say exactly what the reactions and repercussions are going to be.
For generations we have had an entirely free economy whereby exchange found its own level. Under that system we prospered and our country built up one of the highest standards of living the world has ever seen. May I point out to you, sir, that as the minister mentioned the Canadian dollar is fairly strong at the present time. But it might be that in place of the Canadian dollar selling at a discount in relation to the United States dollar, it might sell at a premium. Such a thing is not beyond the bounds of imagination. If the Canadian dollar were to sell at a premium, as it has in the past, in relation to the United States dollar, the contention of the member for Spadina (Mr. Croll), that his people would have to pay more for oranges if our policy were carried out, would be reversed. If by following its natural course the Canadian dollar were to sell at a premium, we could import citrus fruits for the people of this country at cheaper prices than it is possible to have under control.
I should like to mention the recent move of Belgium which was made known last week. This article is taken from the Globe and Mail and is attributed to the New York Times. It is headed "Belgian Monetary Move is Seeking Free Economy." I would think this article was very much to the point at which hon. members on this side of the house are driving. We are attempting to have a free economy and get away from the restrictions which lead to complications one cannot expect, against which one does not know how to guard oneself, and which alter the course of international trade and international liberty. The article reads as follows:
Almost unnoticed, Belgium has just taken two daring steps toward making the Belgian franc a fully convertible currency.
The first former belligerent country receiving Marshall plan aid to tackle the realities of post-war commercial competition, Belgium has become the first country to make good on promises made by all Marshall plan countries to re-establish internal-external monetary stability.
Then farther down the article reads as follows:
The National Bank took a calculated risk. It bet, in effect, that the Belgian economy could stand the shock of being called upon to pay off in goods many millions of dollars in claims represented by Belgian franc notes that had been selling at a discount on free markets against the dollar and the Swiss franc. This is a risk no other European ex-belligerent has taken.
The second significant move toward throwing away the monetary crutches was Thursday's decision to permit United States and Swiss individuals and companies, whose accounts in Belgian banks have

been frozen since the war, to use their money freely for purchases in Belgium.
Both moves are part of a consistently followed economic policy unique in Europe, because it places the establishment of a free economy above economic security. Both steps are risky because they might lead to a serious outflow of capital which Belgium cannot afford. Belgians believe that if every European country retains shackles on commerce until there is no risk in removing them, Europe will be bogged down forever in economic controls.
Authorities plan to unblock other foreign accounts the same as the American and Swiss.
In other words, the great Belgian economists, financiers and statesmen realize that if these controls continue indefinitely Europe will become bogged down in economic controls and there will not be the same freedom in exchange of goods or the same general level of prosperity that there might be if these controls were abandoned. Belgium has taken the bull by the horns and eliminated some of the rigidity which formerly held sway over exchange movements.
Canada has subscribed to the Bretton Woods agreement and, with the exception of a small group in this house, every party enthusiastically endorsed it at the time it was passed in 1945. In the last annual report of Bretton Woods, however, we find that the chairman of the fund states that the board is quite willing to have the various countries come before them, put their problems before the members and re-examine whether or not the rate of their national currencies is sound in view of present conditions. So that it would seem that the international monetary fund governors do not for a moment say that the fixed rates of exchange which the various countries established when they became members of the fund are necessarily the right ones; it would seem that these rates should be examined from time to time, and that perhaps now is one of the times when such an examination should take place.
When Bretton Woods was formed it was hoped first that the various clauses under that agreement would shorten the time during which international currencies could once again find a free convertible level; and, second, that the formation of Bretton Woods would ease the period of readjustment until exchanges became once more freely convertible. We have seen that this purpose has not been possible of fulfilment partly because of the unusual situation in which Europe, Great Britain and some of the other countries found themselves after the war. In place of looking forward with happy expectation to the near future when these various currencies will be convertible, we find that in many of the European countries there are growing up some of the evils which Bretton Woods was formed to prevent. Indeed we find some of these evils are growing up in more exagger-29087- 107i
Foreign Exchange Control ated form than we would have expected to find them if there had not been Bretton Woods itself.
Under the international monetary fund it was hoped that any correction of exchanges that had to take place would be done through an expansion, rather than through a restriction, of trade. Yet my colleague, the hon. member for Muskoka-Ontario (Mr. Macdon-nell), gave to the house this morning various extracts from the report of the foreign exchange control board indicating that there was a tightening of commerce rather than an expansion of it, due to some of the currency restrictions which are today imposed. I point out therefore that there is no use of anyone endeavouring to play the legendary part of King Canute and the sea. You just cannot stop an economic trend. If we endeavour to defeat economic laws through too great rigidities in the operation of a measure like the Foreign Exchange Control Act, we are only storing up trouble for ourselves, and indeed multiplying that trouble.
One has only to refer to page 5 of the report of the foreign exchange control board to realize some of the things that are going on. On that page one finds the following:
The prices at which commodities are exchanged in such bilateral deals are frequently considerably higher than those prevailing for similar goods outside the protected trading area.
That is the type of thing that Bretton Woods was supposed to prevent. To continue:
Moreover, the discriminatory restrictions imposed on dollar expenditures keep out competition from the western hemisphere.
That is, we in the western hemisphere cannot compete there because they have not the necessary dollars and they make it impossible to exchange in their own sterling or whatever currency they are using.
In these circumstances trade within the area takes place in many cases on the basis of higher prices than those prevailing outside the area.
That again is the very type of thing which Bretton Woods sought to obviate.
It is easier for countries within the protected area to buy from each other than from dollar countries because they are better supplied with each other's currencies than with dollars, and it is more profitable for the individual producer in any country within the area to export to another country within the area than to dollar countries because better prices are frequently available.
That is one of the reasons why we have not been getting as much European goods as we might have been getting, and as much as we would have been willing to take. Those exporting countries are getting a higher price in the European circle than they would get if they exported to the dollar area. Indeed I hope that all hon. members will read the report of the board because I think it is

Foreign Exchange Control factual and is objective in many cases. I should like to read this further excerpt:
It is, however, also important to recognize that there is a risk that the special measures taken to maintain and develop trade within this group of countries-*
That is, in the ERP countries.
-may have the effect of reducing their productivity as well as their capacity to earn dollars and so to balance their accounts in this desirable way.
This risk is present because-as will be apparent from what has been said-trade within the group of countries concerned does not move entirely on the basis of competitive price and quality.
In other words, world trade is anything but free under the Bretton Woods agreement. What we are asking for is that there be less rigidity and that, as soon as possible, we get back to the normal state of affairs; because we are breeding certain things which will make conditions more difficult than ever. As I said this morning, the cure may indeed be worse than the disease itself. To quote further from the report:
The tendency for trade within the protected area to take place at a higher level of prices than that prevailing for similar commodities in outside countries cannot fail, as has been noted, to make it more profitable for the individual producer in the countries concerned to sell within the area than in dollar countries.
In other words, keep your goods away from dollar countries and let the dollar countries make donations to you as much as possible.
And a general consequence of the developments outlined is to raise the price and cost structure of the countries inside the area and so reduce their capacity to export to dollar markets.
In other words, what is going on there has the effect of increasing the cost in these European countries so that their level of cost is so high that they cannot sell to Canada. If they had devaluation of their currencies, they would find they could sell to Canada because devaluation of their currencies would mean that, in relation to the Canadian dollar or at least to the American dollar, we could buy their exports notwithstanding the fact that their internal costs were too high for the export market. To continue:
Canadian trade has already been adversely affected by the creation of this protective currency and trading area and it is not possible at this moment to foresee how serious these developments will be from our point of view during the next few years.
Here the board cautions us that the tendencies which are developing in Europe at the present time may become aggravated; and it is impossible even for those great foreseers of our destiny, those in the board, to foresee how serious these developments will be from our point of view during the next few years. Like myself, they admit that they cannot tell what is going to happen, but they want to play the artificial way instead of

allowing natural economic forces to come into operation. A few lines farther down we find this statement:
In this connection encouragement is to be drawn from the recent successful efforts of the United Kingdom to increase their exports to Canada. The performance of other parts of the sterling area and most other ERP countries is less encouraging, and there seems little doubt that competitive offerings would find Canada able to absorb larger quantities of goods from these countries than we are now obtaining.
In other words, in this country we are doing all we can to put Europe on its feet, and yet because of certain exchange fixations, I shall call them, the producers of these countries have been able to make a greater profit in their own currency by sending their goods to some country other than the United States or Canada. We find that while we take all we can, we are not getting from them what we should get because, as the report so well states:
. . . there seems little doubt that competitive offerings would find Canada able to absorb larger quantities of goods from these countries than we are now obtaining.
As I said this morning, if it were not for the fact that we in the Progressive Conservative party are eager to have this measure passed on and put in statute form as soon as possible, we should certainly ask for a hearing before the banking and commerce committee, so that we could find out from the writers of this report exactly what they mean by individual cases which gave rise to putting these words in this published report of the foreign exchange control board.
At the bottom of page 6 the report continues:
The countries whose exports are affected by these restrictions will be confronted with the choice of finding some alternative use, at home or in other foreign markets, for the goods previously exported to the dollar-short countries or making special arrangements in an effort to retain these markets.
The reason I read this paragraph is that the gentlemen who are advising the government on foreign exchange also foresee in the future further difficulties, and nothing is being done under Bretton Woods at the present time to keep down these difficulties and to approximate what would be the natural working of normal economic laws. The report goes on to say that these are the difficulties that we may expect to find under the present arrangements:
These arrangements could involve the provision of the exports without payment in foreign exchange, through the extension of grants or credits, or special deals in which the exporting country agreed to use the proceeds of its exports to take more goods from its dollar-short customers even though these goods were higher in price than had to be paid elsewhere. To make room for these relatively high-priced imports it would be necessary to impose discriminatory import restrictions.

Thus we have to go against our undertakings under Geneva; so that we find that even the foreign exchange control board does not offer us very much hope under the present system of controls. If there is no hope under that system, then surely the least we can do is to go back to the natural working of things where, when one currency gets out of line with another, certain self-righting devices are put into force automatically, and we again come to a normal and natural balance of currency between countries.
If our dollar in Canada were to go to some slight discount-and I do not expect it would be many points in discount in relation to the United States dollar today-we might find that the situation was beneficial to us, because we are primarily a primary-producing country. Let us look at our geography from east to west. In the maritimes we find fish, apples and potatoes, all export commodities. If our dollar were slightly less than a hundred it would give us an advantage in exporting to the United States market or to other markets.
If we go to Quebec and Ontario we find our great storehouse of forest products and minerals, most of which again are exported to the United States. Passing further west to the prairie provinces we find wheat, cattle and bacon, all of which would be easier to export if we had a slight discount on our dollar. When we come to our pacific province we find there forest products and fish, which are export commodities and which would find a readier market in the world today if our dollar were slightly less than one hundred cents. Therefore we have nothing much to fear if our dollar is at a slight discount from the United States dollar.
Another reason why we should go into this matter with the so-called experts to find out exactly how the problem hits them is that when this matter of exchange was before the house earlier we were not only in a period of full employment but there were more jobs than there were applicants available. Today we are beginning to have some spotty unemployment, and in some instances that unemployment is in the export industries, for example, lumber. The policy that a country pursues in relation to its exchange when it has full employment as against a time when there is a shortage of employment is entirely different. We found after the war that when every country was short of goods it wanted to establish its currency at as high a rate as possible because it was a buyer. The more they could get for their pound or their franc, or whatever it might be, the better off they were. Now we are beginning to see at least the possibility of running into a situation
Foreign Exchange Control such as we saw in the thirties, when the whole attempt was to depreciate currency in order to export unemployment, as it was called. In other words, make your goods cheap enough so that other countries will buy them, and keep your population active and busy and give them at least a fair standard of living.


Mr. Speaker:: Order. I am sorry to interrupt the hon. gentleman but he has exhausted his time.


Mr. A. W. Stuart (Charlotte):: I did not
intend to take part in this debate, but recently I received a telegram from a good Progressive Conservative friend of mine in St. Andrews. If it is in order I shall put it on the record. It reads as follows:
How about telling the house how the foreign exchange control act affects your constituency in Charlotte county? Best regards.
Doug Everett
At the outset I wish to say that in the county of Charlotte the foreign exchange control board has been a source of worry to the people because, when the premium they were getting on their United States money was taken from them, they resented the fact that they had lost 10 per cent of their earnings. Another matter which caused great concern to these people was the restrictions which were put on the international border after the foreign exchange control board began to function and after the austerity program was put into effect. As we all know, the people on the international border resented these restrictions to a great extent.
In listening to the debate thus far I have noted that the Progressive Conservatives are basing their arguments on the fact that the Canadian dollar should be permitted to seek its own level. During my lifetime there have been two occasions when the Canadian dollar was permitted to seek its own level. On both these occasions a Progressive Conservative government sat on this side of the house.


James MacKerras Macdonnell: Will the hon. gentleman permit a question? I know he wants to be fair. If he is referring to me I should like to ask him this question. Is he aware that I did not make that suggestion? My suggestion was that there should be a floor of ninety cents so that if there was any tendency to wild fluctuation it could be controlled.


Andrew Wesley Stuart: I do not believe I suggested that the hon. gentleman said that. I said that the Progressive Conservatives have based their argument on the fact that the dollar should be permitted to seek its own level. If the hon. member looks at Hansard
1700	HOUSE OF COMMONS
Foreign Exchange Control I believe he will find those words appearing there one hundred times in the last ten days. As I was saying, during my lifetime I have known two occasions when the Canadian dollar was allowed to seek its own level. Those two periods which I shall mention briefly were both at a time when the Conservative party was sitting on this side of the house.
The first period to which I shall refer was the one between 1915 and 1920. At that time I was a very young man in the fishing industry down along the international border. I do feel that people living on the international border have a much better idea of the effect of discounts and premiums on money than people living farther away. For that reason I feel I am in a position to explain conditions exactly as they existed at that time.
I remember very well on many occasions going to Eastport, Maine, and getting an American cheque for sardines I had sold in the United States. I would bring it home and go to the bank with it. But I would have to take along with me to the bank someone who was well acquainted with the bank manager before I could get the premium I was supposed to get, or before I could get the premium that businessmen, doing a much larger business than I was, were receiving.
There are men sitting on the other side of the house now who may have had experiences at that time, but they were not on the international border. I can assure the house that, from 1915 to 1920, at no time in Charlotte county or in the state of Maine on the international border could you find rates of exchange posted; if you happened to go in with a few fish scales in your hair or a few hayseeds you were given 10 per cent. But if I were making a transaction and if I got a businessman in the town who was well acquainted with the banker and who knew local conditions better than I did, I would get 15 or 18 per cent.
Now the Progressive Conservative party are arguing that we should go back to that type of thing. I can assure you that the people down where I live do not want any part of that at all. There is a story I have told in the house on one other occasion when this matter was up for discussion. I well remember a man and his wife going to the bank in the town where I live-and that banker still lives here in the province of Ontario. He was the manager of the bank at that time. Apparently the larger the amount of money you had in those days, the greater percentage you got. If you had a thousand dollars you got a better premium than if you had $500.

They both had interests in sardine herring weirs. The woman went to the bank with $1,200, and they gave her 12 per cent. When they were ready to go home her husband said to her, "You made a good day's pay today on your American exchange." She said, "Yes, I got 12 per cent." He said, "No, there is some mistake; I had only $800 but I got 15 per cent." They went back to the bank, and after an embarrassing scene the bank manager apparently decided that he should pay her 3 per cent more on the $1,200.
There were many many instances exactly as I have described which took place at that time. I remember another occasion when a good friend of mine, who is still living down there today, had a like experience. He was living on the other side of St. George, a little town in my county. He was going to St. Stephen to buy a car and had an American cheque. He went to the bank manager in St. George and asked what premium they would give, and they said 12 per cent. He came to St. Andrews and they offered 15 per cent. Then he came to St. Stephen and after going to two or three banks he kept trying until he got 18 per cent. That was the condition which prevailed down there. And I could give a hundred examples of conditions which prevailed between 1915 and 1920.
That was a time when the Conservative party sat here in office-the Tories. That was the condition we had down there then, and we had to put up with it.


Gordon Graydon: What year was that?


Mr. Brooks:: Union government.


Andrew Wesley Stuart: That was between 1915 and 1920. And I can remember very well the year 1918 when I went into the sardine industry. I can assure you that is the condition which existed in 1918.


Gordon Graydon: You had Liberals in that government then.


Andrew Wesley Stuart: No; they were Conservatives.


James MacKerras Macdonnell: You
are not discussing the exchange rate; you are discussing dishonesty.


Andrew Wesley Stuart: I did not interrupt you when you spoke. I am addressing my remarks to the Chair, and everything I say is correct. I can substantiate every statement I have made.
Another statement made here today contained the suggestion that, if there were a premium on American money, much more American funds would come into this country for investment in industry. Well, when I hear members speak in that way I just look back to the period between 1930 and 1935,

when the premium went as high as 25 per cent. I would ask some hon. members on the opposite side of the house to tell me where is this enormous amount of money that the Americans poured into Canada during that time for the development of industry in this country. Because, if it did come in, none of it came to the section of the country in which I live; I can assure you of that.
I come to the period between 1930 and 1935. Again I was engaged in the fishing industry. At that time I think a dollar looked about as big as it ever did at any time in the history of Canada. Again the premium on American funds went as high as 24 per cent. That is the highest point I can remember. That premium of 24 per cent was a big help when we were selling our produce for practically nothing.


Some hon. Members:: Hear, hear.


Andrew Wesley Stuart: All right, you may thump your desks; but I want to tell you what happened then. Our American friends who were buying sardines said, "This is too good a thing to lose." They came over into my county and deposited their American dollars in the banks. Those funds were deposited in the banks of Charlotte county. They took the 25 per cent premium themselves, and paid me in Canadian funds.
The member who sat on this side of the house from my county at that time is a very fine man; he is living today. He was well aware that that condition existed, because it was brought to his attention on many occasions. But we were still paid in Canadian funds. Our American friends took the 25 per cent premium, when they brought the cash into Canada. Some of you people who live near the international border would perhaps remember those circumstances; I remember them well. And I tell you today that many people who are arguing that this Canadian dollar should be allowed to seek its own level are showing selfish motives. I believe that at some time or other they themselves have been benefited by that condition. I do not believe that the primary producers who are carrying on in industry, as I was during the two periods I have mentioned, would want to see the Canadian dollar seek its own level and be handled under the same conditions as it was in those times.
I now come to my explanation as to why I have supported and still support the foreign exchange control board. When war broke out in 1939 a Liberal government was sitting on this side of the house. They decided there must be no manipulation of funds, so far as they were concerned, and they pegged the American dollar at a 10 per cent premium. From 1940 until 1946, I believe it was, when the premium was taken off, I could walk into
Foreign Exchange Control the same bank I spoke about earlier, pass in my American cheques and get back exactly the same premium as the Prime Minister of this country or anyone else.
To me that is democracy. That is why I have supported the foreign exchange control board, and that is why I maintain that the board has done a good job. There was no exporter or importer who could take any advantage from the situation, because each and every person was given exactly the same premium.


Mr. Hatfield:: Was not that 10 per cent a help to your fishermen?


Andrew Wesley Stuart: I have not argued that it was not, and I have said they resent the fact that they are not getting it today. And I believe the hon. member for Victoria-Carleton (Mr. Hatfield) will admit he has made plenty from foreign exchange, as others have. I think that is one reason why many of them today are speaking as they do- because they were benefited by it. But, as I said before, they are taking a selfish attitude. You have to look at the general picture, and we should all be working for the benefit of the greatest number.
Another feature I might mention is this. Ninety per cent of the fuel oil and gasoline used in this country is being imported from the United States. If our Canadian dollar went down to 60 or 65 cents-and we do not know where it might go-where would those people be who are obliged to use this necessary commodity which we must import from the United States? There are two sides to the question.
Then, as to coal. We import great quantities of coal into Canada. I believe today that if we were obliged to pay a 20 or 30 per cent discount on the Canadian dollar we would find it difficult to bring in that coal with which to do our manufacturing. I believe that the man who should have been given some consideration is the primary producer, particularly the primary producer who is marketing his own products. That is the man I am fighting for. I have no worry about the man who is buying from him and selling again, but the primary producer who is selling his own product should be given some consideration.


Alfred Johnson Brooks: Would not the fisherman who is selling fish get the ten per cent under these circumstances? If you wish to support him would you not have to vote for that?


Andrew Wesley Stuart: No, I cannot see it. As I have explained, the United States importers can come over and deposit United States money in Canada. We would have no assurance that we would get the premium.

Foreign Exchange Control We did not get it under the Conservative government from 1930 to 1935.


Alfred Johnson Brooks: I understood the hon. member to say that the foreign exchange control board was controlling that at the present time. If it is, the fishermen would get the benefit of the ten per cent.


Andrew Wesley Stuart: That is what the hon. member believes. The hon. member is ready to discard the foreign exchange control board which would bring about the same conditions as those existing between 1930 and 1935. What guarantee would we have that we would get the premium on United States money? I can tell hon. members that I was paid hundreds of dollars for sardines which were sold in the United States, but that it was all paid in Canadian money. There was nothing we could do about it. I can assure hon. members that that statement is correct. As I have said, I support the foreign exchange control board for the reason that since it has come into existence each and every citizen of this country has been treated exactly the same. I for one would not want to see the day come again when one man will get 18 per cent premium for his United States dollar and another only 12 per cent. For that reason I will support this measure and I feel that I have the support of a good many people in Canada in making that statement.


William Irvine: Mr. Speaker, the bill before us for second reading merely provides that the Foreign Exchange Control Act shall remain in force and have effect until sixty days after the commencement of the first session of parliament commencing in the year one thousand nine hundred and fifty-one. I had hoped that the bill would pass its second reading before the noon hour, but after listening to the speech of the hon. member for Muskoka-Ontario (Mr. Macdonnell) I am moved to inflict another speech on this assembly.
That hon. gentleman is one whom we all respect most highly and who usually has something worth while to say. If I should strike fairly strongly at what he said today, I hope he will not regard it as being a personal matter. I assure him that I hold him in the very highest regard indeed-


An hon. Member:: But.


William Irvine: -but I listened-I know these "buts" are bound to come, but this is something human that I am trying to say. I shall try to be human about this. During the hon. member's speech I was reminded of the story that is told about Browning. Some friend quoted a verse of Browning to Browning and then asked Browning if Browning knew what it meant. He thought for a little

while and then he said, "I have no doubt that when I wrote those lines I had something in mind, but what that was now God only knows". No doubt the hon. member for Muskoka-Ontario had something in mind, but what that was I know that most of us do not know; I do not know whether he knows and I shall not speculate as to what other powers may know.
The hon. member seemed rather ill at ease. He appeared to me as having been called upon to spearhead an attack in which he had no heart, which he felt he could not properly defend. He seemed to be performing a task perhaps for reasons of friendship or honour. He did not attempt to give whatever reason there was for objecting to the bill, if indeed there ever was a reason. If there was a reason for his opposition I still do not know what it was. It may have been that what he saw wrong in the bill was really something which he was unable to state. It may have been that he fully intended to say what was wrong, if anything was wrong, but that he failed to say what it was, or what he would do about the thing that was wrong.


Angus MacInnis: If it was wrong.


Mrs. Strum:: Or what it was.


William Irvine: If it was wrong. He said that he was living in a dream world and I think it was hardly necessary for him to assure the house about that because I think he proved that to the hilt. He went on to say that it was so difficult to settle exchange problems that even the wisest man or the wisest group of men might blunder in doing it. Since it was so difficult to solve problems of exchange we were to leave it alone, not to touch it at all, as though there was some inherent, infallible intelligence in exchange itself which would guide it properly in its operations in the nation's business. Therefore, he said, leave it to settle itself.
But there seemed to be a great many differences even about what "settle" means to the official opposition. Some say it means to find its own level-it never had a level. Others say it is to find a realistic position in which it can rest-its position was always realistic. Others say it is to devalue the dollar. It is really not clear what it is that foreign exchange should be left alone to settle, but whatever it is I do not believe it can do it if it is left alone.
The hon. member for Muskoka-Ontario wants to have it crystallized. I have no objection to crystallizing it. He wants a restoration of reality. I will tell him that reality needs no restoration. Reality will always be able to restore itself. He can be absolutely sure about that, and need not worry further about it. Finally, at the close

of his speech, in apparent desperation he said, "Mr. Speaker, let's do something." It seems to me that when he said, "let's do something" what lie really meant was, "let's do nothing", just as when his associates moved that the question be now put they moved that in order that the question should not be now put. Here is a case where he cries out to do something, meaning that they do not want to do anything; and to do something means that you kill the only bill that proposes to do anything.


Stanley Howard Knowles: Explain.


William Irvine: As I saw him in this dream world in which he was living, I had to come to the conclusion that he was unwittingly making a speech in defence of the return of gambling with the exchange problems of the country. As I saw him in that dreamland I saw him with one leg over the bull and another leg over the bear. They were racing together towards the grand horizon of restored reality to do something, but neither the bull nor the bear nor the hon. member for Muskoka-Ontario (Mr. Macdonnell) knew what it was they were going to do.


An hon. Member:: That is a bad dream.


William Irvine: So much for the argument of my hon. friend. I want to come now to the question itself. I ask, why was exchange control instituted in the first place? Those who have been interested in the question know very well that it was brought into being by order in council on September 15, 1939, under the provisions of the War Measures Act. It was brought into force for sufficient reasons, which were stated by the then Minister of Finance. Roughly those reasons were that in the first place there was danger of a shortage of United States dollars which, if such shortage developed during the war, would inevitably interfere with Canada's war effort. One of the things which the Minister of Finance feared at that time was the unloading of securities held by foreign owners in Canada. The United States then as now was a foreign country, and she was not at war at that time. Those individuals who owned securities in Canada might easily have panicked, sold their securities on the Canadian market, and taken out the proceeds in the form of United States dollars, which action would have impaired very greatly the war economy of the country.
The second reason was to prevent fluctuation in exchange, and my hon. friends to the right, the official opposition-speaking for Hansard, "my hon. friends to the right" will mean nothing there, and as my hon. friend, the member for Muskoka-Ontario spoke to Hansard I am, of course, speaking to Hansard
Foreign Exchange Control too-I therefore say the official opposition are now arguing that foreign exchange should be permitted to fluctuate. The Minister of Finance of that day, however, thought that two things would happen if that were permitted. One would be that the cost of living of the Canadian people would be affected by fluctuations in foreign exchange rates, and secondly that ordinary business in a general way would be disrupted by the fluctuations. There can be no doubt as to both of those views. These things happen all the time, and have happened in Canada constantly throughout its history, because we never had control before the birth of this measure. If we kill it now we will go back to lack of control again, and money and exchange should not be left to be gambling instruments for anybody. I think the best thing that can be done with any kind of currency is to maintain it as stable as possible so that the people may be able to depend upon it in doing business, so that it will always buy what it buys now, and so that people can deal with confidence.
The third reason for bringing this measure into effect was that panicky sales of securities, which might easily have happened in wartime, would have greatly hindered the financing of the war.
The second thing I ask, Mr. Speaker, is whether any of these reasons remain today. It has been argued that all the emergencies which were associated with the war have passed. It is true that the war is ended, but there were things begun in the war that will never end. The effects of the war on almost every institution of the country, on the economy of the world, and on the interrelations of nations, may never be ended. These effects go on perhaps forever, and some of the emergent conditions to which the war gave birth are just as strong today as they were then.
Let me deal with one, and this is one of the realities which I want to reconstruct. The fact is that we are now selling more to Great Britain than they can sell to us. That applies equally to Europe. We are buying more from the United States than we are able to sell to them. Those are realities. I need not go into what happened to Great Britain which brought about those conditions. They were caused directly by the war, and the inability of Great Britain now to meet her accounts with us is a post-war emergency of the greatest gravity, not only to Great Britain but to us, and to the United States as well. Everyone knows that before the war Great Britain was able to pay for her extra imports of Canadian goods by her income from her foreign investments. We
1704

Foreign Exchange Control were paid in United States dollars which made up our deficit with the United States of America. Things ran along fairly smoothly then, but now things have changed. Great Britain lost all her foreign investments which, if they existed as they were before the war, at present prices would purchase one and a half billion dollars' worth of goods. Surely the wiping out of that fund is an emergency and one which is not, as I say, confined to Britain. It is one which affects all nations, particularly and directly Canada.
The next question I want to ask is, would the abandonment of exchange controls help Britain or Europe to sell more goods to Canada? Primarily, that is the question. As everyone knows, this is not essentially a financial question; it is the question of exchange of goods. It is true that stupidity in matters of finance can hinder the exchange of goods, but even perfect financial arrangements alone will not solve the problem. I am asking those who wish to kill this bill if they are sure-I do not want any guessing about it-that if we leave the dollar to find its level, if we reduce it by ten per cent, if we allow our exchange to crystallize, if we turn it into a restored reality, or whichever of these proposals they want to adopt, it will help to sell more British goods in this market. I believe that is the issue. We need to be certain that any or all of their proposals will do that. We cannot guess about it.
The next question is, would the devaluation of the Canadian dollar help? Again I say we should be certain about it. I think the real certainty is that it would not. The real certainty is that it would mean ultimately that Britain would sell less to Canada than she is selling today. This question was dealt with by the Minister of Finance and I do not wish to deal with the technicalities involved, but I shall if anyone questions what I am saying. I say that the devaluation of the Canadian dollar at the present time would inevitably mean greater difficulty for the British to find a market for their goods in Canada.
I am supporting this bill, therefore, Mr. Speaker. I notice that those who are opposing it are opposed to all kinds of controls. I am quite sure that, as the days and years go by, more and more controls will be necessary. The member for Rosedale (Mr. Jackman) said something about following the natural economic laws. Sometimes, sir, that means following unnatural economic blunders. In this case, that is exactly what it would be. 1 conclude, sir, by hoping that these few enlightening remarks of mine will convince the member for Muskoka-Ontario (Mr. Macdonnell) and that we shall be unanimous on this bill.


Victor Quelch: I did not intend to speak on this measure again, but after listening to some of the speeches that have been made today I feel like making a few comments. I listened with great interest to the remarks of the last speaker, and I agree wholeheartedly with the latter part of his speech. I tried to follow the first part of his speech through the maze of reasoning of the member for Muskoka-Ontario (Mr. Macdonnell) which seemed to lead to a policy of despair. I was myself beginning to despair, because I also listened with a great deal of interest to the member from Muskoka-Ontario and other members in that party. It does seem to me they are very good at criticizing the government, but they are not prepared to put forward any constructive proposals. They finish by saying, we must do something. If the government is going to do something, we should tell the government what to do; otherwise the thing it does may be the opposite of what we want. I am not prepared, therefore, to follow that type of reasoning.
As I said during the debate on the resolution stage, we in this group are supporting the measure because we believe it is in the interest of the country to have a foreign exchange control board continue in operation. I am satisfied that with the world in the state it is in at the present time, and the state in which it is likely to be for many years, we shall need a foreign exchange control board for more than two years. I quite realize that the import restrictions that were placed in operation last year were not popular. On the other hand, I think any fairminded person, realizing the situation that existed, will agree that some of those restrictions on imports from the United States were essential unless we were to go heavily into debt to that country. Therefore, I do not think any member should try to make political capital out of that situation.
I noticed several members of this house have spoken outside the house from time to time in an attempt to link the Social Credit group with the Conservative party. I would say that the gap between this group and the Conservative party on the question of financial policy is so wide that the greatest engineer in this country could not possibly bridge it.
I have listened to a lot of this talk about letting the dollar find its own value. Put quite frankly, what does it mean? It means that we should make the value of the dollar the subject of speculation. I recall that in 1938 I went over to England. I was only there for two weeks, and yet, in that short time, the value of the pound dropped twenty cents. Why? Because people became frightened of the situation and started to buy United States securities. Consequently, when

I went to the bank to change my balance of sterling back into Canadian dollars, I found that the value of it had dropped twenty cents on the pound owing to speculation.
I have noticed that the Conservative party is very keen about multilateral trade based upon the convertibility of currencies. I would say it is not possible to have multilateral trade based upon the convertibility of currencies so long as you have a situation in which there is a large unbalance of trade in the world. That situation exists today and, according to the report of the organization for European economic co-operation, there will still be a large unbalance even by 1952. It had been hoped that through Marshall-plan aid a balance would be arrived at before that date. Today, even the most optimistic believe there will be an unbalance of at least one billion and probably three billion by 1952.
The nations have therefore been turning to the system of bilateral trade agreements and the imposition of restrictions on imports for the purpose of attempting to establish a greater degree of balance. Under that policy perhaps we shall be able to bring about a greater degree of balance. If international trade were successfully balanced throughout the world, then it would be possible to have multilateral trade based upon the convertibility of currencies. How long would it be possible to remain on that basis? I would say that as soon as we adopted that system, unless the great exporting nations were willing to balance their trade, we would very soon find ourselves in a position of unbalance once more.
Then, once again, the nations would have to return to bilateral trade agreements. For example, if we exported goods to Britain and demanded payment in dollars instead of accepting goods in payment, then naturally Great Britain would have an unbalance with this country unless we accepted the responsibility of finding some alternative dollar market for Britain. There would be an unbalance of trade that would grow from year to year.
It is true that the international monetary fund was supposed to take care of that situation. This fund could only take care of that situation so long as it was a temporary condition of small degree. When the international monetary fund was set up, it was never stated that it could rectify a chronic situation. So far as Europe is concerned, this, unbalance of payments is a chronic one, a condition that has been growing ever since 1913. The quicker we realize that it is a chronic condition and not merely one resulting from the 29087-108J
Foreign Exchange Control war, the quicker we will be in finding some solution to this problem. [DOT]
We never believe in criticizing unless we are prepared to make certain constructive proposals. That is why we have insisted time and again that what the world needs today is multilateral trade on a goods basis instead of a convertibility of currencies basis. In other words, let us accept blocked credits in Europe for our goods, and then trade any surplus blocked credits with other European nations through an international exchange. In that way you could maintain a balance of trade and you would not have to have convertibility of currencies.
When I spoke at the resolution stage, I stressed the fact that the shortage of dollars in Europe was making it almost impossible for Canada to maintain food contracts at the present level. Instead of dealing with that question himself, the Minister of Finance (Mr. Abbott) said that he would let the Minister of Agriculture (Mr. Gardiner) deal with it. I just want to quote what the Minister of Agriculture said, because I want to prove that the statement I made was absolutely correct, and that the statement the Minister of Agriculture made in this house was not in line with the statement he made when he was in England. The Minister of Agriculture, as reported at page 1638 of Hansard, said this:
I want to agree with what the Minister of Finance has said, namely, that so far as the main agricultural products for which we expect to have a market in Great Britain are concerned, we have made arrangements which are satisfactory . . .
Having figured the quantities which we had, and having determined that we could sell certain quantities in other countries, we made agreements with Britain which are taking all the surplus products that we have for sale to Britain.
He suggests there that the agreements are satisfactory. But what did he say when he was speaking to the Canadian chamber of commerce in England after the agreement had been made? I quote-


Mr. Hlynka:: From what?


Victor Quelch: From the speech that he made to the Canadian chamber of commerce on December 17, 1948. I would ask hon. members to bear in mind that in the house here he has just told us that the agreements are satisfactory. This is what he said then:
It is difficult for us to understand why anyone should expect us to be other than disappointed with the 1949 contracts. They provide for 160 million pounds of bacon, for 50 million pounds of cheese, and no cattle or beef.
Then later he goes on:
There are no dollars available in the United Kingdom with which to purchase Canadian apples. Partly because of this we have financed the pulling-out of 240,000 apple trees in Nova Scotia. There are no dollars available with which to purchase Canadian fish.

Foreign Exchange Control
And then later:
All of our discussions on food bulk contracts were proceeding satisfactorily until difficulties arose in adjusting the relationship between dollars and sterling. We were aiming at being able to provide the United Kingdom with 350 million pounds of bacon, 125 million pounds of cheese, 75 million dozens of eggs and having 400,000 head of cattle which we could dispose of either to the United States or the United Kingdom.
Then again:
Our hopes were dashed to the ground when the United Kingdom traders came over one year ago and said they were grieved to find themselves without the dollars to be certain they could buy any of our food excepting wheat.
Then again:
In the light of these circumstances we entered into agreements to deliver to the United Kingdom 87,000 tons, or 195 million pounds, of bacon-
Again remember that he said that we were all set to sell Britain 350 million pounds of bacon. Finally they had to agree to selling them just 195 million pounds of bacon.
-120 million pounds of beef, 80 million dozens of eggs, and 50 million pounds of cheese.
Whereas he stated that they were all ready to make an agreement for selling 125 million pounds of cheese.


Robert Ross (Roy) Knight: We did not fulfil our previous contract.


Victor Quelch: An hon. member interjects that we could not fill the last agreement. But apparently the Minister of Agriculture hoped that under Liberal policies we could expand our production and fill a larger quota. The point I want to make is that, when I made this statement that our contracts had been reduced owing to the fact that Britain lacked dollars with which to take a larger quantity of food from us, I was basing that statement upon the statement made by the Minister of Agriculture himself. He was so concerned about the situation that he suggested drastic action. Further on he stated:
... I am convinced that the world is not in any state of mind where it can be expected to agree that the manipulation of any system or systems of currency is going to be allowed to interfere with getting surplus food to those who have empty stomachs. It might be a good thing for everybody if the United Nations meetings were closed down long enough to permit of the United Kingdom, United States and Canadian experts getting together and settling some basis upon which dollars and sterling can be converted to allow nations like Canada to produce and distribute food to feed the starving millions.
I think that statement fully justifies the remark I made to the effect that we were having difficulties in establishing contracts with Britain at the former level owing to the fact that Britain had a shortage of dollars. Again I suggest that the most logical way in which to deal with that situation would be for us to accept blocked sterling in Britain and then trade any surplus of blocked sterling

we might have in Britain with any other European country that was willing to supply us with goods and take goods from Britain in payment.


Edmund Davie Fulton: We should remember, Mr. Speaker, in dealing with this bill now before the house, that it completes the trio of so-called emergency measures which are being submitted at this session and completes the network of controls over the Canadian economy. The other two measures are the emergency powers act and the Agricultural Products Act. With the addition of the control over foreign exchange, the system of potential control over the whole economy is complete. Under those circumstances it is not surprising to find my hon. friends of the socialist party in this house entirely in agreement with what the government is doing in seeking to continue this measure of foreign exchange control for another two years.
We have heard it said frequently in this debate, particularly this afternoon, that the official opposition does not know what it would do about foreign exchange or about the Canadian exchange. That statement, of course, is not correct. I do not think it is so necessary to justify our position as it is to expose the weaknesses of the government. But since the two are the concomitant stages of the same picture, I would again refer to what we said we would do and what was the core of our amendment which, unfortunately, has been ruled out of order. I must say, Mr. Speaker, that I do not agree with your ruling; but as it has been given, I will not question its merits. Our intention is perfectly clear if one takes the trouble-which I take it my hon. friends criticizing it have not done-to study the amendment offered by this party. What we wanted to do was, first, to insist that the rate of exchange on the Canadian dollar be allowed to seek its own level, whatever that might be, within the terms of the present Bretton Woods agreement. Since, under the Bretton Woods agreement, exchange rates can only be varied by ten per cent, it becomes obvious that it would be necessary to put a floor of ninety cents or a ceiling of $1.10 on the dollar for the time being. That was the first step, to allow the dollar to find its natural level within those limits. Secondly, we felt that exchange control would be necessary for a limited period, which the government would need in order to consult with the international monetary fund with a view to finding some method by which all exchanges could be readjusted to a more realistic level. I do not see that there is any mystery or secret or anything incomprehensible about that. My hon. friends opposite, and of the socialist party, who profess to be such great experts in

exchange matters, should surely not find that a policy difficult to analyse or understand. No, Mr. Speaker; their opposition to our suggestions is not because they do not understand them. Their opposition to our suggestions is pecause we are seeking to restore a measure of freedom to the Canadian economy, and that is not consonant with their policy of seeking complete control over every aspect of the national life.
That being said, it still remains a fact that, nevertheless, the government has refused to accept our suggestion of prolonging the life of this measure for only one year. They insist upon prolonging it in its present form for two years, and they give no indication that they will make any real effort during that time to adjust the facts of the situation which at present make foreign exchange control necessary. Therefore, it would be inconsistent if we did not oppose continuation of this measure on these terms. We want to see those steps taken which will make control of exchange unnecessary. We see no signs that the government propose to take these steps, and we are therefore opposed to allowing them carte blanche to continue exchange control for a further period of two years without any assurance that they will take the steps within that time to make further continuation unnecessary.
I should like to give some reasons why we are opposed to the present system of control of our exchange. In the first place, the controls are arbitrary and absolute, and give opportunity for the irresponsible exercise of power to the detriment of the whole of the Canadian economy and to every one of the Canadian people. They absolutely prevent convertibility of exchange. So long as this act and regulations remain in force in their present form, convertibility of exchange is an impossibility.
I shall just refer to one or two examples of that absolutism and one or two of the sections which prevent convertibility of exchange. Section 15 of the present act, which is sought to be extended into force for two years, turns every customs officer and every postmaster in Canada into agents of the foreign exchange control board, requires them to snoop, and to inquire and to investigate into the activities of ordinary Canadian citizens; and every customs officer and postmaster in Canada is thus drafted into the army of snoopers from which this country already suffers. I suggest it is an improper use to make of these civil servants.
Section 18 gives the governor in council unlimited powers to set exchange rates, and even to vary exchange rates from one specific transaction to another. It places in the hands of the governor in council the most arbitrary,
Foreign Exchange Control irresponsible power to exercise control and to discriminate between one Canadian citizen and another, even from one transaction to another.
Finally, in sections 21, 22, 23 and particularly 25, we find the absolute denial of any right of ownership of money to the individual in the first place; and secondly, an absolute barrier to free convertibility. These are not powers which we are willing to see continued in the hands of any government. This act contains the denial of the principle, and the power to give effect to that denial of the principle, of an individual's ownership of his own money.
Furthermore, as I have said, we believe that the problem confronting the world today with respect to trade is the problem of convertibility of currency, and the Foreign Exchange Control Act makes impossible the convertibility of currency. We are therefore opposed to the continuation of the act in force for another two years.
The second general reason why we are opposed to this measure is because it gives sweeping powers to this government and I have no hesitation in saying that we do not regard this government as a fit custodian of those powers. I shall give one or two concrete examples of why I feel that way, and a reference to an indication of the frame of mind of this government in respect to powers which reinforce that belief. You will remember, Mr. Speaker, that when the foreign exchange bill was before the house in 1946 the Minister of Finance, who sponsored it, stated in clear and categorical terms that it was not intended to use the bill except with respect to exchange and with respect to certain capital transactions. He indicated clearly and unmistakably that it was not intended to use the bill to control the movement of goods, to impose embargoes or any other form of tariff structure. That clear and unmistakable statement was made in 1946, on the strength of which the bill became law. In 1947, about fifteen or sixteen months later, we found, however, that the act was put to the very use which we were assured it would never be put to, in that under the authority of the Foreign Exchange Control Act embargoes and quotas were imposed against the importation of goods into Canada. That was defined then, Mr. Speaker, and it still stands, as a breach of faith by this government. To take an act which they had said would never be used for a specific purpose, and sixteen months later to use it for that purpose, can only be described as a breach of faith.
With respect to this type of control, this type of unusual invasion of the sphere of private rights, we find that when we criticize
1708	HOUSE OF
Foreign Exchange Control these methods, when we criticize, for instance, what are in effect breaches of the constitution, when we point out that what is being done is a denial to the individual of what had previously been accepted as his fundamental liberties, and when, because of the importance of the issue, we take a stand on these matters in the house and criticize the government as it should be criticized, we are told that we are indulging in a futile discussion on procedure. We are told that by the Prime Minister (Mr. St. Laurent). Yet I would remind you, Mr. Speaker, that only seven years ago that right hon. gentleman was one of the leading lawyers in this country. It was his duty to his clients to insist upon proper procedure. The Prime Minister knew then very well the importance of proper procedure. As a constitutional lawyer and as one who appeared before the privy council in matters involving the constitution, no one knew better than he, or represented better than he, the importance of constitutional and procedural propriety, and the importance of following and observing the constitution of the country, or of a corporation which might happen to be his client.
Seven years ago that was the attitude of the Prime Minister. Now, only seven years later, and within only a few short months of his becoming Prime Minister, he characterizes discussions of constitutional procedure as "futile", and works himself up into a high state of indignation. He describes this whole question as "a futile discussion of procedure." Thus we saw another example of how power corrupts, and how absolute power corrupts absolutely.
I give those two examples as only two of the many which could be advanced as to why we should not trust the government with sweeping powers over our economy such as they have had under the Foreign Exchange Control Act, and as a second reason why we should refuse to allow the extension of that act for a further two years.
The third general reason is that the Foreign Exchange Control Act has not worked. It has not given us any freedom of trade. It has, in fact, prevented and continues to prevent the convertibility of currency. Not only does it not in fact gain for Canada new fields of trade, new sources of currency and new sources of American dollars, but this act, along with the foreign exchange control regulations and the import restrictions with which it is coupled, in many instances prevents our earning American dollars.
Let me give the house one example of the ridiculous, far-fetched and almost impossible results which flow from the application of these exchange and trade restrictions. We


have in my constituency a company incorporated for the purpose of operating a number of tourist camps. As the house knows, and as you know, Mr. Speaker, the tourist business is one of the most fruitful sources of American dollars. It will be recalled that under the Foreign Exchange Control Act, and kindred legislation, last year certain restrictions were placed upon imports of goods from the United States, because it was said that we lacked the reserves of American dollars to buy those goods.
It so happens that one of the officials of this company has access to American sources of materials, without the expenditure of a single Canadian dollar, and without in any way depleting our reserves of American dollars.


Clarence Decatur Howe: Do you mean without creating a debt?


Edmund Davie Fulton: I mean without creating a debt. What he wants to do, and what he could do, is to bring into Canada equipment from the United States which would enable him the better to operate and the better to enlarge the facilities of his camp. That, in turn, would enable him to offer greater facilities and thus bring in more American tourists, increasing the supply of United States dollars in Canada.
However, Mr. Speaker, there is now in Canada a regulation which says that no one can import this type of equipment or supply from the United States. We know the purpose for which this regulation is said to have been imposed; but it applies to this individual in the same way that it applies to everyone else.
So we have the ridiculous situation of regulations which, in their inception, were said to be designed to save us United States dollars, operating, in fact, not so as to save us United States dollars but to deny us the possibility of procuring more of them. It is that type of impossible and ridiculous situation which could not be foreseen when these measures were first put into effect, but which we find more and more resulting from them, which gives us concern.
This is only one small example. I mention it because only recently I placed the matter before officials of the department. I did so last year, and they would not change their ruling. I have had it reviewed this year, and in their letter to me of March 17, only four days ago, they again refused to change their ruling, despite the fact that they agree with me that the proposal of this gentleman would not deplete our reserves of American dollars, but in fact would add considerably to our potential supply of those funds.

Because of conditions of that kind, and because we find Canadian trade throughout the world reaching a more difficult state, I say we should not continue this restrictive measure for a further period of two years. There are other examples which make it abundantly clear that, far from helping Canada's trade, the exchange restrictions are in fact hindering it.
One of the clearest examples is found in the speech of the Minister of Finance (Mr. Abbott) himself. Speaking in the house when the resolution was under discussion, the minister first sought to give the impression that the restrictions imposed in the fall of 1947 under the Foreign Exchange Control Act, and applied since, have in fact been largely responsible for the great improvement in our American reserve position.
The minister went on to paint a picture of tremendous improvement. While he stated modestly at one point in his speech that he did not claim that all credit for this condition was due to the government's action, he made it clear that he claimed a large part of the credit as being due to the restrictions imposed and to the policy administered under the Foreign Exchange Control Act. Very shortly after that, however, he concluded his remarks by showing that the position with respect to the reserve of United States dollars is not nearly as satisfactory as at first he would have led us to assume. He told us that in 1939, the first year of the war, when foreign exchange control first came into operation, we had in reserve more than enough American dollars to pay for over half a year's imports from the United States. On the other hand, after ten years of foreign exchange control, and after a year and a half of embargoes, restrictions, and the most stringent measures of exchange conservation, we had hardly enough American reserves on hand to pay for four months' normal imports at the current rate.
Not only has the exchange control policy not enlarged our trade, and not sufficiently increased our reserves of American dollars, but it is the exchange control policy itself, coupled with the government's action in July of 1946 of restoring the dollar to parity, which resulted in the depletion of our official reserves of American dollars. Because if one brings about a situation where no Canadian can obtain an American dollar except through the foreign exchange control board, through its being made available from our official reserves, it means that the government and the board have to stand back of every Canadian who wishes to buy and who receives consent to buy an American dollar. Thus the government entered into the foreign exchange business in a large way. Then when
Foreign Exchange Control you have coupled with that the fact that they restored our dollar to parity, thus making it easier and more attractive for Canadians to buy United States dollars, one can see that a greatly increased demand for United States dollars would be created. That is exactly what the government did. They got into the foreign exchange control business and then made it easier and more desirable-more tempting, if I may use those words-for Canadians to get United States dollars. Naturally they found a tremendously increased demand and they found their reserves of United States exchange rushing down the drain at an alarming rate. As a result they had to put into effect the restrictive policies of November, 1947.
While no one perhaps can go so far as to say that the government's action was entirely to blame, nevertheless the minister cannot laugh it off and say that his policies did not have any effect on that matter. His policies had more effect in creating the difficult exchange reserve position than they had in curing it. His policies will not cure the situation from which Canada suffers. They are restrictive and the situation in which Canadian trade finds itself today will not be cured until we restore the convertibility of exchange. That will not be done so long as this act is maintained on the statute books and is in effect in this country.
Then the minister dealt with the situation with regard to gold. I must say that it is difficult to speak with any degree of reasonableness when one bears in mind the things which have been said, and more than that the things which have been suggested by hon. members opposite and hon. members of the socialist party with respect to the motives of hon. members of the official opposition in saying that the gold mining industry of Canada is entitled to some consideration. When one sees the dangerous situation that is developing for the whole Canadian economy, when one sees one example of that situation in the gold mining industry, and then puts forward the position of that industry as an example of what government policies are doing to the economy of the country, one finds it strange that there should be members irresponsible enough to suggest that we are speaking solely for the gold mining interests.
I find it particularly interesting that the hon. member for Spadina (Mr. Croll) should weep such tears, such readily summoned tears, about the workmen in his riding, who he says benefit from the present policies, and should be completely indifferent to the situation of the workmen in the gold mines of Canada-who far outnumber the workmen in the riding of Spadina. I find it extremely

Foreign Exchange Control interesting to note that the socialist party are so ready to make political capital out of their old policy of saying that the Conservatives represent special interests that they completely disregard the welfare of the workers in the gold mines.


Some hon. Members:: Oh, oh.


Edmund Davie Fulton: My hon. friends laugh, but I am not glad to find that my thought is borne out by their cynical and callous laughter. Apparently many of the hon. members of the socialist party come from the cities and do not know anything about the gold mines. For instance, apparently they do not know that the gold mining industry is virtually the only industry which, since before the war, has not had an increase in the price of what it sells. In fact, it is the only industry which has had a decrease in the price of its product. One result of that situation is that the men in the gold mining industry have not been able to obtain those increases in wages to which they are entitled and which the management of the mines agree they are entitled to.	.
My hon. friends, as I said, come from the cities and they do not know much about these problems. Their remarks and laughter show that they do not know that in British Columbia two of the gold mines which give employment to a substantial number of men have had to cease operations as a result of the present price of gold and the revaluation of the Canadian dollar which had the effect of reducing the price of gold by $3.50 per ounce. I know my hon. friends would like to laugh that off. I know my hon. friends like to pose as the friends of all workingmen, but when one points out that workingmen are suffering, that men are out of work as a result of government policy, one finds that the socialists laugh.
Not only were two mines in British Columbia closed down and men thrown out of work as a result of this situation; I have a list here of fifty-two other gold mines which had reached the development stage to the extent of sinking shafts, which were ready to extend their operations by continuing mining at new levels, thus giving further employment, but which have suspended underground operations since mid-1946 when the Canadian dollar was revalued and placed on a par with the United States dollar.
I do not suggest, any more than the Minister of Finance (Mr. Abbott) suggests, that the whole Canadian economy be drafted to suit the interests of this particular industry even though the welfare of a large number of workers is affected, but I do suggest, and I am glad to find that the minister agreed apparently for the first time last Thursday, that the gold mining industry and the men

whom it employs are entitled to consideration. Their problem, which was created by the restoration of parity in 1946, is a problem which properly concerns the Canadian House of Commons and the Canadian people.
This is not a problem about which hon. members are entitled to take the attitude of saying that other hon. members represent special interests, that they are trying to obtain special advantage or profit to themselves and their friends-


Mr. Williams:: The hon. member's innocence is most touching.


Edmund Davie Fulton: It may be that my innocence is touching but I am sure that the hon. member who makes that remark-


Arthur Henry Williams: I am crying my heart out for you.


Edmund Davie Fulton: I am sure that the hon. member who makes that remark has occasion to differentiate between innocence and guilt. It is also significant that the attitude of the hon. member, and of those who sit around him and of the rest of his party, is one of such complete cynicism that they see nothing but the worst of every situation. They see nothing but sinister motives wherever they look. They see nothing but dark capitalists hiding under the bed. That is all the meaning they are capable of taking out of the speeches of other hon. members. I know that my hon. friends opposite have had occasion to remark in the past how the members of the socialist party take unto themselves the right of being the only ones who are concerned with the welfare of the Canadian people.


An hon. Member:: Hear, hear.


Edmund Davie Fulton: One hears the words of
approval. Such conceit, Mr. Speaker-


Arthur Henry Williams: Listen to who is talking.


Edmund Davie Fulton: Such conceit and such shallow hypocrisy provide their own answer.
I have given three reasons why we cannot support the continuation of this act without some assurance of steps being taken to free exchange. As I have said, the problem is convertibility and not control, but the continuation of controls under the Foreign Exchange Control Act makes it so easy to avoid grappling with the problem of convertibility. Yet until we have grappled with that problem we shall not be able to remove controls from exchange.
As an example of what is happening as a result of lack of convertibility, one should examine the picture in so far as trade with the sterling area is concerned. In discussing this matter the other day, the minister went at some length into figures which he said showed that our trade had expanded under

the control policy of the government. As a matter of fact, however, the report of the foreign exchange control board shows that our over-all balance of trade with the sterling area in fact declined in 1948 as against 1947.
I should like to read from pages 2 and 3 of the report of the foreign exchange control board, as follows:
Canada's current account surplus with countries other than the United States was $873 million in 1948. Although still very large, this surplus was $347 million smaller than in 1947.
Further down the page there is the following:
This general summary of the main factors affecting Canada's foreign exchange position in 1948 would be incomplete without specific reference to the important and helpful part played by the European recovery program . . .
The fact is, Mr. Speaker, that in spite of the tremendous volume of dollars and assistance made available under the European recovery program, Canada's balance with the United Kingdom, with the sterling countries, shrank by $347 million in the year 1948. That is a tremendously significant development. It has been referred to in some detail by speakers who have preceded me, and therefore I will not dwell on it. It does mean, however, that we cannot take that rosy assurance from the minister's speech as to the beneficial results of his policies which he would like us to take, because, while we increased our exports to the United States, our flow of trade with the sterling countries has declined by $347 million.
I have here a clipping which indicates to me that we are not the only ones who are concerned with the shrinking of trade in the sterling area. This report appeared in the Montreal Gazette of the 18th of March and concerns a statement made by a Canadian, Mr. Elliott M. Little, member of the executive board of the Canadian Pulp and Paper Association in London, England, on March 17. Mr. Little was discussing the question of the shrinkage of trade, and he said to his British audience:
We are not. satisfied that everything possible is being done by you or by ourselves to overcome this dollar problem. It is not only Canada's pulp and paper trade with Britain which has been affected by the exchange problem. In the past year one traditional market after another has been reduced or has disappeared, and old customers for Canadian pulp and paper products have turned to other countries at much higher prices, or have gone without supplies they wished to have.
It is difficult to reconcile oneself to the fact that a country like Australia, with a long tradition of trade with North America, particularly in pulp and paper products, must now buy at inflated prices from Italy, Germany, Finland, and even a little from Japan-all of them recent enemies-and from Sweden, which was neutral, and cannot buy from Canada, a sister dominion and old commercial friend, or from the United States.
Foreign Exchange Control
That is a statement of the facts of the situation under which Canadian trade is now being carried on. On account of the lack of convertibility, countries which previously had been free to trade with one another, and which desire to trade with one another because of their economic and political affinity, can no longer trade. They are forced to buy at higher prices from countries with whom they have nothing in common simply because the currency of those countries is available whereas Canadian dollars are not available to sterling countries, and sterling is increasingly less available to dollar countries. Sterling will be less available to dollar countries if trade between the two shrinks much more; because, if we do not sell to the United Kingdom and to sterling countries and get supplies of sterling, not only will they be unable to buy from us but in the long run we shall be less able to buy from them.
The fourth reason why we cannot support the continuation of this act is its great cost to the Canadian people, not only its cost in terms of trade and what it is doing to lose trade, but the cost of administering it. In answer to a question recently as to the cost to Canada of carrying on her foreign exchange transactions, I received figures showing that the excess of expenditure for gold, United States and other currencies over receipts from those currencies has been $981 million since 1939. That is over $100 million a year for the nine-year period up to 1948. There is only one place which that money can come from and that is out of the pockets of the Canadian taxpayers. Nearly $100 million a year has had to be raised in taxes from the Canadian people in order to keep the government in the business of foreign exchange where it should not be, certainly not so long as its policies are restrictive rather than making for expansion.
For that fourth reason, because of the tremendous cost to the Canadian people, a cost which we can ill afford to bear with the present rates of taxation, we can not allow this measure to be continued. It would be different if the government showed any signs of really trying to get out of the business of control, but it does not. It restricts our trade, it taxes us to carry on control measures, and it asks for a continuation of this measure for two years without at any time showing any sign of realism, or any willingness to enter into negotiations which would result in the final elimination of these controls which are so expensive, and which so hamper and thwart the Canadian economy.


Mr. Rodney Adamson (York West):: Mr. Speaker, I am speaking again on this bill because, although the debate on this measure has been a good one, we are placed in this

Foreign Exchange Control position, that the government and the house realize the impasse into which we are getting through the inconvertibility of currencies. We are approaching a trade climacteric. We are moving from a sellers' to a buyers' market. Everything has gone well because a market could be found for everything that has been produced. Further, we have been doing well because of the tremendous volume of Marshall-plan offshore purchases made in Canada. We cannot look for a continuation of this sellers' market, nor can we look for a continuation of the great volume of Marshall-plan offshore purchases.
There is a specific danger with regard to wheat. At any moment, wheat may be declared a surplus commodity in the United States. Such a move would cut off approximately $300 million of the annual offshore purchases made in Canada. Therefore, Mr. Speaker, this problem of exchange control and convertibility is vitally important. I realize that no one appreciates that more than the minister, and no one appreciates it more than the members of this house. It is because we in this house see the lack of any specific action contemplated by the government that I wish to put forward certain suggestions.
An exchange rate cannot be fixed by edict; it can only be fixed by convertibility into gold at a fixed rate of redemption into gold. A fixed rate without redemption into gold is meaningless. A flexible but convertible rate can only be arrived at through the use of a common denominator and that common denominator has always been gold. There is no evidence to indicate that is not now the case.
We have suggested the freeing of the Canadian dollar. There are certain risks in that course, and they are risks which must be considered. The first risk is: would the Canadian dollar, if exchange control were abandoned, sink to a great discount in the United States? I think, Mr. Speaker, we have evidence that it would not in the operation of what is known as the unofficial market for Canadian dollars in New York. While that unofficial market represents only about five or six per cent of our entire trade, nevertheless it does account for, according to the best figures I could get from New York, between $135 million and $300 million. Mr. Speaker, that is no hole-in-the-wall market. It does give an indication of what would happen to our dollar if controls were removed.
When the parity move was made, the unofficial market was around ten per cent. At one time it went down to a little over 
twelve, but today I believe it is around six and a half per cent and seven per cent. This illustrates what has happened to our dollar on this free market on which our currency is sold in terms of United States dollars. It has improved from twelve per cent to about six per cent in approximately a year's time. This shows that the position of the Canadian dollar, vis-a-vis the United States dollar, is strong. I submit that if we had no foreign exchange control, the dollar would not sell at a great discount, and my evidence is the operation of the unofficial market in Canadian dollars.
The second point which we must consider is: would there be a drain of capital from Canada? Here again our fears are groundless because the history of capital shows that capital has always flowed into a country with a free economy. Capital has always been attracted to a country in which it is given the greatest freedom. The removal of exchange control would be giving capital that freedom. I submit that, far from being a drain on capital, there would be a tremendous increase of capital in Canada.
Furthermore, I submit that this capital, by and large, would be what the minister termed desirable capital. He called it the bricks and mortar capital. I believe it would flow into the development of oil, the development of base metals, the development of our potential iron deposits, and for a dozen and one other purposes for which capital is needed. The situation that obtained in 1929 does not apply today, and I will give you the reason for that at a later stage.
The third question is: would our economy be subject to gambling under pressure of what is known as "hot money"? I submit that is not likely because, first of all, there is very little so-called hot money in Canadian currency outstanding. Our savings accounts, the position of our financial institutions, have never been as strong nor as resilient as they are at the present time. The credit situation is very good. There are no extended loans for security purchases. The exchanges have tightened up the margin requirements and have accomplished a lot of other worth-while things which have made practically impossible speculation and gambling of the type that occurred in 1929. Therefore, I think that the existence of "hot money", the existence of gambling in Canadian funds, is not a risk which we have to run.
Would there be an increase in United States investments in Canada? I think the answer to
that question is obvious. We have shown______
and I think it is a matter of some national pride-that despite the restrictions of the FECB we have had an inflow of capital into

Canada. There was a time immediately after the parity action of 1946 when the movement was very much the other way. But today there are literally billions available for investment in the United States and these billions are looking for adequate employment in the development of natural resources. With the possible exception of Brazil, Canada is the only country left in the world that has a stable government and tremendous untapped natural resources. I think we would have a great increase in United States funds coming into Canada for investment purposes, and those purposes would not be for investment in the stock market. If they want to, the Americans can buy or sell Canadian stocks at the present time, particularly interlisted stocks. As I have said, the restrictive operations of the major stock markets make this sort of speculation much more difficult. The volume and the impact of hot money is now tremendously cushioned. This investment money would not be frightened money. It would be money coming in for long-term purposes.
I want to mention briefly two authorities, both of them British, and what they say with regard to what our present situation is doing to our international trade. The first authority is Sir Stafford Cripps, in an interview which is quoted by The Economist of London of February 26:
He also stressed the difficulties that are being met in expanding British exports to Canada, saying that Britain could not sell all the steel Canada needed because it had to reserve certain quantities of scarce materials for use in bilateral negotiations with other countries.
I skip about eight lines, but I am not taking the statement out of its context at all:
There can be no doubt that the main obstacle to the British export drive to Canada is to be found in the fact that British prices are, by and large, too high for the Canadian market. That fact is likely to be increasingly impressed upon all concerned if the trend of prices in the United States continues to be downward. This disparity in dollar and sterling prices is beginning to call into question the basic effect which the Marshall plan may be having on the relative price and cost structures of Europe and the dollar area. The way in which aid is being applied, and the extent to which the countries of Europe are being encouraged to divert their imports from dollar to non-dollar sources even if the latter are more expensive, is creating a disequilibrium which may call for the most drastic remedial measures, involving exchange adjustments, if the dollar solvency of Marshall Europe is to be restored by 1952.
At the same time, it cannot be said that Canada has chosen the happiest moment from its or Britain's point of view to announce the reimposition of the import duties on British textiles which were suspended in 1947. Overtopping all other issues affecting Anglo-Canadian trade is the possibility of wheat being declared a surplus commodity in the United States, a move which would prohibit the economic co-operation administration from allocating Marshall dollars for offshore purchases of wheat in Canada. If any such misfortune were to happen it would
Foreign Exchange Control face both Canada and Great Britain with a problem the urgency of which would relegate the longer term issues to relative insignificance.
That is from The Economist of last month.
I do not think the seriousness of the problem can possibly be overestimated. I want to quote also from The Banker of London, England, an article by C. Gordon Tether, who has been an adviser to some of the big five banks in Great Britain, and what he has to say on what he calls the Canadian dilemma:
There is general concern at the apparent paradox that in the past year or so the Canadian price level has shown a bigger rise than occurred during the preceding eight years of war finance and post-war adjustment . . . the dominion is beginning to suffer from a money-goods gap of the type familiar in European countries during the past few years . . . To begin with, there is no certainty, even in the short run, that the indirect "Marshall" relief for the dominion's United States dollar position will continue on the present scale beyond the middle of 1949.
Then I skip a paragraph and continue:
Mr. Gardiner, dominion Minister of Agriculture, pointed out in a recent speech that the ban on the use of E.C.A. dollars for "offshore" purchases has already made it impossible for Canadian farmers to sell their linseed, beans and other products, although consumers elsewhere are paying prices fifty per cent above those ruling in Canada.
It would seem, therefore, that Canada must resign herself, even during the currency of the Marshall plan, to the need to resume unrequited exports and, in all probability, to a decline in the amount of convertible exchange she can derive from her favourable trade balance with Europe. The postMarshall prospect is even more disturbing . . . Imports from Canada may be small in relation to total United States production, but resistance to them tends to become intense in times of surplus and falling prices. Canada is therefore liable to find this outlet for her produce blocked just when she most needs it.
It is, in short, unfortunately all too clear that the dominion's external economic prospect is, on a short view no less than on the long, as obscure and as fraught with peril as ever. This being so, the present dilemma of the Canadian government is readily apparent. . . Whatever success attends the drive to obtain permanent markets in the United States, however great the expansion in importsaving production within Canada, markets for the bulk of the dominion's primary produce, readily accessible in bad times as well as in good, will remain in Europe. If those markets are lost, Canada's prosperity will inevitably suffer.
There we have two British authorities who, I think, may be considered to have a sympathetic desire for the mutual well-being of the United Kingdom and of Canada; yet they state in definite and specific terms that under the present situation nothing but a chaotic impasse will happen if convertibility cannot in some way be arranged. That is a pretty serious situation. Because we had record exports in 1948, because we had record purchases by the Marshall plan, because our situation last year was so good, let us not fool ourselves into thinking that we are going to live in this paradise with happy exports for everything we produce, either to the United

Foreign Exchange Control States or to Europe-certainly not Europe. Let us not fool ourselves that we are going to be able to export either our raw materials or our manufactured articles when we see that in terms of barter these countries on a barter economy are willing to pay for the goods that we produce 50 per cent more than they can get them for from us. We cannot sit idly by and say that there is nothing we can do; we cannot sit idly by and say, here is a situation which stumps us. There must be something we can do. There has to be something that we can do. It reminds me of a young officer who was training recruits for the first time on the square. He became frightened and the squad started marching off. The sergeant major said to him: "For God's sake say something, even though it is only good-bye". Our export markets are in that position. I suggest to the government that for God's sake they do something, even though it is only to say good-bye. I am sure that they can do something. I am sure that there are measures which they can take which will at least explore the impossible situation into which we have got ourselves.
The problem is one of convertibility. These European countries have imposed the same sort of restrictions as we have. They have imposed them, as they think, in order to safeguard their own economy. They are neither safeguarding their own economy nor assisting world trade. In fact, they are doing absolutely the reverse.
Of course we cannot go to any other sovereign state and say to it, your laws and your exchange control are bad. We want you to change them. The minister was perfectly right when he said that it would be considered as a gratuitous insult for Canada to suggest to the United Kingdom, or to any other country, that their currency was overvalued or undervalued in terms of the United States dollar. But I do suggest that there is a way in which we can start. The problem is that we have two unknowns, two currencies, and the only way to indicate the relationship of a currency is to relate it to something that is known. It is a sample of what we were taught in school. It is the simple simultaneous equation.
The only known thing to which currencies are eventually related is gold; and I suggest again that in order to obtain this denominator, this relationship, we should allow the operation of a free gold market so that we should get a true relationship of one currency to gold and another currency to gold. By so doing we would be able to obtain a relationship between these currencies, and if they could be converted, one or another, into gold through the operation of the free market, 
surely we would be taking the first step toward convertibility of one currency into another. It is going to be difficult. A great deal of opinion in the United States is against it, but I suggest in all sincerity, Mr. Speaker, that they are against it for selfish reasons. Let us see who are opposing it. A most vehement opponent of the operation or the establishment of a free gold market is- and I think he is one authority whom we must consider-a man called Leffingwell. He is the chairman of the board of J. P. Morgan and Company, international bankers. What are the reasons which he gave for opposing the operation of a free market? They were simply these. He said that today the United States dollar is a world currency, and that the United States gold reserves are world gold reserves. If I were the chairman of J. P. Morgan I would take precisely those views, and I would do it for precisely the same reason. If I were a great United States banker I would like to have my dollar and my gold reserves known as the world gold reserve. It would be a tremendous advantage to me. It was the happy position that the pound had at one time, only never in so great a degree. But here the Americans, quite frankly, want to make the United States dollar the only international currency, and the United States gold reserves the world gold reserve. He admitted it.
Let us go a little further. Mr. Walter E. Spahr opposes a free gold market, but he wants the United States dollar to be returned to the gold standard at $35 an ounce. He wishes convertibility of the United States dollar, the one freedom which the United States dollar does not possess at the present time. He wishes it to be restored. In other words, he wishes that you should go to the mint or to Fort Knox with $35 and buy an ounce of gold. I suggest, Mr. Speaker, that if that were done, even with the tremendous reserves of gold today, Gresham's law would become effective immediately, and there would be a run on the gold reserves of the United States.
We like to think that the United States currency, in regard to gold, is in a happy position. So it is; but let us remember that there are $141 billion worth of United States government obligations outstanding, and these obligations are a prime responsibility of the United States government. There are two other authorities, the economists national committee and the New York board of trade. They have opposed the operation of a free gold market, and have opposed it for these reasons. Therefore unquestionably we would meet great opposition. Not only that, but we

would meet opposition from the United States treasury and the international monetary fund.
I suppose, however, there is a great and growing body of opinion that this is the only method by which we can obtain a norm by which currency can be judged. And unless some norm is found, some agent of convertibility, bilateralism and restraint of trade through monetary restrictions are going to be increased and intensified. We Canadians, because of our erstwhile happy position between the United States and Great Britain, are going to find that we are the supreme sufferers in this impossible situation; and instead of being, as I believe, the greatest per capita exporter, we shall find ourselves in a position in which we cannot export.
Immediately a surplus is built up in the United States, immediately they have a surplus of manufactured goods and of wheat, where are we going to sell our wheat? Where are we going to sell our surplus goods? Immediately that happens we are going to be in an impossible position.
I suggest that certain action should be taken.
I am sure the permanent officers of the international monetary fund are as perturbed as any of us about this situation. I have no doubt they are as anxious as we are to find some method of convertibility. The whole reason for the international monetary fund, the whole hopeful theory behind Bretton Woods, was to prevent the international banditry of jockeying with currencies, and doing all the things which shocked Europe and the world in the late twenties and all through the thirties. Had it worked, possibly no one in the world would have condemned it. It has developed however an entirely new sort of international banditry, the international banditry of bilateralism. That is, two countries get together and one says, "We will sell you this commodity at an entirely fictitious price, in terms of a paper currency. We will sell it to you, not in terms of currency but in terms of something else which you sell us at a far higher price than it would bring in terms of international currency." They price themselves out of the world market.
That is the international banditry that is going on today, and it is a type of trade banditry and unrest which we cannot stand. Until some method is found to overcome this impossible position, we are going to suffer- and to suffer most acutely.
I suggest we should go immediately to the international monetary fund and ask for a plenary session. We would make our claim as one of the great suppliers of food, one of the great creditor nations in terms of foodstuffs, metals and materials required in world recovery. On a per capita basis we are probably the greatest supplier of those
Foreign Exchange Control materials, whether they be food, metals or anything else.
I suggest we should go to the international monetary fund, ask for that plenary session, and put our case on the table before all the countries, saying, "We do not want to take unilateral action in this matter. But unless, through the agency of this fund, we can obtain convertibility of exchange, not at the behest and requests of the national treasuries of the various countries at the pegged rates, but at free rates and rates in terms of gold, our exports are liable to be cut off, and our import position becomes impossible because the countries have priced themselves out of our markets. Therefore our export trade upon which, more than any other country in the world, we depend, is being destroyed. If our export trade is destroyed, our national sovereignty is threatened, because our economy is so desperately bound up with that export trade."
I say that unless we can get some agreement with the other nations of the fund we must be prepared to protect ourselves by unilateral action and enter into what I believe to be the unfortunate business of barter. Even though it was mentioned by the foreign exchange control board, I consider it a retrograde step. But we should strain our efforts first toward obtaining convertibility of currencies through the operation of the free gold market.


Thomas Langton Church: Mr. Speaker, I cannot well understand why some hon. members who supported the Bretton Woods agreement now take the stand which some on this side of the house have taken. I am one who believes that we must look into the cause and effect of all the trouble we have got into. I am not one of those who criticize the ministers of the crown because I think they are doing their best under a very heavy burden. I have always tried to show ordinary Christian charity toward my political opponents of all kinds. I have always tried to get on with people. Mind you, some of them are hard to get on with, but I get on with them anyway. The present Minister of Finance (Mr. Abbott) has been carrying a heavy burden, both as assistant to the former respected Minister of Finance and in connection with his other duties. He has worked very hard.
I was one of those on this side of the house who opposed the principles of Bretton Woods and Dumbarton Oaks because I realized the trouble into which the government would be led. I know I was right at that time. So far as Bretton Woods and Dumbarton Oaks are concerned, they got us into this trouble. A great mistake was made by hon. members on this side of the house in agreeing to that, although I was the exception. The govern-

Foreign Exchange Control ment have been driven into making mistakes along that line.
I am going to speak for only a few minutes; I was down to follow the hon. member for Kamloops (Mr. Fulton). When I opposed Dumbarton Oaks and Bretton Woods I did it for many reasons. I did not like the international monetary fund and international bank features of the agreements; which have had a great effect upon the bill now before the house. They led us into our present imbroglio. I was against the international bank and the international fund which are the basis for the present exchange control bill. I did not believe in the international monetary fund at that time. I said that some pay in and some do not, that some take out and some do not. I referred to the man who broke the bank at Monte Carlo. Tennyson said about this particular matter:
Our little systems have their day;
They have their day and cease to be;
They are but broken lights of thee,
And thou, O Lord, art more than they.
That is what he said in "In Memoriam". Public finance is different from private finance, and when I have completed the few remarks I want to make in this connection I shall have said what I want to say on the motion. I have had some experience with public finance in connection with city government and I know some of the mistakes that can be made. I was a member of the treasury board from 1909 to 1914. In 1915, the second year of the war, we called for quotations, like the present Minister of Finance, from some of the chartered banks, for a loan of $8 million or $9 million on treasury notes signed by the mayor and treasurer of the city. We received quotations of four and a half, four and three-quarters, four and seven-eighths and five for those treasury notes.
I decided to telephone Chicago and New York and I was able to obtain a loan of $9 million from the Chase and National City banks at one and a half, one and a quarter and one and three-quarters. On January 5, 1915, we had $28 million of a sinking fund with which to pay that debt. I suggested to the legislature that there should be an amendment in the city act to permit the city to use that sinking fund for the payment of treasury notes at the current rates.
After that it was decided that instead of the various civic boards handling their own sales of bonds, boards such as the Toronto harbour board and the transportation board and so on, the city would handle everything. At that time there was not a public utility paying its own way. I brought in the late Thomas Bradshaw to act as finance commissioner and from then on we had public TMr. Church.]
discussions of the estimates at open board meetings. A pay-as-you-go system was adopted and there was no inflation of revenues but there was a reduction in the tax rate. In 1915, 1916 and 1917 the expenditures totaled $8 million.
In 1916 I advised the city to apply for legislation to substitute serial bonds for sinking fund bonds and the result was that we were able to refund all our securities and pay something off each year. This was a blessing to civic finances in that we were able to secure loans for debentures at the highest possible rates of any other municipality in the province.
In conclusion I want to say that I was one of those who opposed Dumbarton Oaks and Bretton Woods. We on this side of the house are just as much to blame as the government for the mistakes that have been made. I am willing to admit that. There are also the Geneva and Havana agreements. I was the only one on this side of the house who objected. We should have told our friends in Washington that preferential trade is a family matter and beyond discussion outside the empire.
I am glad I took the stand I did with regard to Bretton Woods and Dumbarton Oaks because they proved to be wrong. They have destroyed preferential trade and they have made us dependent on Washington for many things. They have placed us beyond hope. I am glad I was the only Conservative on these benches who opposed those notorious agreements which have ruined Canada and brought us to disaster. We cannot blame the government entirely for we on this side of the house are just as much to blame. My hon. friends to the left, except those to my far left in the corner, were in exactly the same boat.


Heber Harold Hatfield: Mr. Speaker, I should like to say a few words against the extension of this act and will have to disagree with the hon. member for Charlotte (Mr. Stuart). The premium on United States currency was a great help to all farmers, lumbermen, fishermen and exporters of goods in the maritime provinces. The member for Charlotte went back to 1918 and 1919 and said that the banks paid a different rate on United States currency at that time. They paid a different rate, but it never varied over one per cent in all that time. He said that the Americans came over, put their currency in the bank and received the premium, and that the fishermen received no advantage. That is not correct because when the American buyers put their currency in the bank and received the premium they had to pay out the premium to the fishermen, lumbermen, pulpwood sellers and farmers.

During the years 1918 and 1919 I shipped hundreds of cars of potatoes to the United States and Cuba, and for every one of those carloads I paid the farmer from $100 to $300 per car more than I received for them in United States funds. But everyone made a good profit that year. That shows that the premium was a blessing to our farmers, fishermen and lumbermen of the maritime provinces, and of all Canada, the gold miner and everyone else. It was a great mistake when the Canadian dollar was raised to parity.
The member for Charlotte said that he sold fish and received Canadian currency for it in accordance with the foreign exchange control order of 1939. That order reads:
No person shall, without a licence from the board, accept payment in Canadian dollars for any property exported, or to be exported, to the United States.
Therefore if he sold fish for export to the United States it was contrary to the act.
As I said before, the 10 per cent premium was a great blessing to the farmers, fishermen and lumbermen of the maritime provinces, and of all Canada. It brought more United States dollars into Canada than the austerity program has. We would have plenty of United States dollars today if we had only retained the premium.
The Liberal policy has always been free trade. On November 17 over the radio they put embargoes against United States goods. They did not increase the duty; they placed an embargo against United States goods. That was a great detriment to our export trade. The premium increased our export trade; the premium brought millions of dollars into Canada by way of investment. Now the foreigner is scared to bring his money into Canada because he is afraid that he will never get it back again. The government is today allowing the manufacturers of Canada hundreds of thousands of dollars of United States currency to send over to the United States and other countries to buy potato starch and cornstarch to bring into Canada. At the same time the government is buying in the maritime provinces potatoes which they will dump. Those potatoes should be put into starch to take the place of the starch they are importing, and for which they are using United States currency. The imported starch is in competition with our own starch and is driving the price of our own starch down to the extent of hundreds of dollars per carload. This spring we will be dumping potatoes in the maritime provinces because of the bringing in of corn and potato starch.


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


Some hon. Members:: On division.
Foreign Exchange Control
Motion agreed to on division, bill read the second time, and the house went into committee thereon, Mr. Macdonald (Brantford City) in the chair.



BUSINESS OF THE HOUSE

Douglas Charles Abbott: This evening I have to devote some time to a matter of some importance.


Stanley Howard Knowles: What would it be?


Gordon Graydon: Are you still open to suggestions?


Douglas Charles Abbott: I thought we might carry on this discussion for half an hour or so after the dinner recess, but if it is not possible to complete proceedings by that time I shall have to ask that the debate be adjourned, and that we go on with something else for the rest of the evening.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at seven-thirty o'clock.
The Deputy Chairman:: Shall clause one carry?


John George Diefenbaker: There is just one matter I should like to take up with the minister through you, Mr. Chairman, and that is the enforcement of these regulations. During the past year and a half a number of complaints have been made to me about the enforcement of these regulations and the failure of the officials to respect the spirit rather than the letter of the law. I want to make it immediately clear that what I am about to say is not a criticism of the customs officers connected with the enforcement of this legislation. They have the regulations and they have to go by them. I would be the last person to make uncalled for allegations of injustice against customs officers in the administration of these regulations, for personal reasons.
I suppose I have to explain that statement. It is simply this, that for years my father was in the customs service and I know something of the work in connection with enforcement. What I wish to bring to the attention of the committee, and the minister particularly, is this. In the application of this legislation care should be taken to see that it is administered with discretion and with the avowed purpose of preventing anything of an unjust or tyrannical nature.
I realize that some found contravening these regulations will raise the defence that they were unacquainted with the regulations. That defence, of itself, should not be sufficient to

Foreign Exchange Control guarantee the return to them of the moneys forfeited to the crown. Recently I was in one of the maritime provinces and was informed that on a number of occasions refunds of such moneys were made.
I am going to bring to the attention of the committee two cases that I brought before the foreign exchange control board, as examples of cases where refunds were improperly denied. In the one case, a resident of the province of Saskatchewan was crossing the line at Windsor. When he came to the line he was asked if he had any United States money in his possession. He said "Yes, I have $86 in my possession". He was then asked if he had the necessary travel permit and he said, in effect, "No, I have not. I endeavoured to deposit this money before coming here, but this is a holiday and I have not been able to do so. I am not concealing it in any way". The order was made that the money be forfeited, the wording of the order being as follows:
that the currency so seized shall remain forfeited in view of and on your failure to declare and offer same for sale to an authorized dealer of the board as required by section 22 of the Foreign Exchange Control Act.
There was no concealment. There was an immediate answer to the questions asked. That this man was in no way deceptive in his answers was admitted by the control board when application was made for the return of the money. I personally communicated with the control board, and I shall read in part from the answer I received.
When leaving Canada at Windsor in July, Mr. Boruff, when questioned by a customs officer, declared having $86 in U.S. currency in his possession but was not in possession of the necessary travel permit and $76 was accordingly seized under the provisions of the Foreign Exchange Control Act. The reason for the seizure was not because of any attempt to conceal from the customs officer that he was carrying the currency but because of his illegal possession of it.
I think that is going too far, sir. There was no concealment, not even an endeavour to conceal. As soon as he was approached by the customs officer, he gave him the facts. In my opinion, that is a tyrannical exercise of discretion on the part of the board in refusing to permit this man to have his money. He established his bona tides and his honesty, which was admitted by the board, and it was tyrannical for them to continue to uphold the order of forfeiture.


Harry Rutherford Jackman: The money was never
returned?


John George Diefenbaker: It was not returned.


Douglas Charles Abbott: Does my hon. friend know how long this man had had the $86 in his possession?


John George Diefenbaker: I cannot give the minister that information. No question of that kind was raised by the foreign exchange control board.


Douglas Charles Abbott: I trust my friend appreciates the reason for my question. Anyone who has more than $10 in United States currency is supposed to turn it in.


John George Diefenbaker: I realize that. It was a matter of a few days prior to the date in question, when he crossed the line, that he obtained this money.
The next case I should like to mention, and I mention these cases because they illustrate a lack of the exercise of proper discretion on the part of the board, is a case from my constituency. A man received word that a relative had died in Minnesota. The word was received on a Saturday in a small town in Saskatchewan. He obtained a few United States dollars so that he could cross the line to attend the funeral on the Monday. He crossed the line on Sunday and admitted that he possessed $22 in United States funds. Forfeiture of the money was ordered and that order was upheld by the foreign exchange control board.
It is that type of thing, sir, that arouses people to a realization of the injustice that follows bureaucratic interpretation of the law by the board. Parliament does not want to place honest Canadians in a position of having their money forfeited under circumstances such as those. If there were an appeal to the courts, sir, and the appeal were not from the hired man to the hired man's employer, persons such as those I have mentioned would be assured of justice. There being no appeal to the courts, I make an appeal to the minister.
I ask him whether, in his opinion, it was ever intended that this emergency legislation should be used in a manner that can only have the effect of diminishing the respect for law in the minds of the people and increasing their contempt for bureaucratic power thus exercised and above the law. Parliament is asked to place emergency powers in the hands of this board, and above the courts. Certainly, sir, my opinion is, and I think I am expressing the viewpoint of members in all parts of this house, that the board should endeavour at all times to exercise its discretion for the benefit of the citizen when that citizen has clearly shown the absence of any intent to defraud, defeat or in any way hinder the administration of this legislation.
The minister who is in charge of the administration of these regulations should be in a position to assure parliament that harsh, rigorous, unbending and tyrannical interpretation of these regulations will be reduced to the minimum.

I know that there have been occasions when members of the house have felt that my stand on behalf of the need of preserving appeals to the courts has been advanced to too great an extent. I make no apologies for taking that stand. Following criticism that those who administer this legislation were being placed above the law, finally a year ago provision was made to enable a person who was illegally dealt with or tyrannically treated to take proceedings in the courts. But action is made subject to one condition. No matter what his damage, no matter what his loss, no matter how unjust the conduct of the official might be, the person who is wronged is restricted to nominal damages, which means one dollar, but with no costs of action. The only satisfaction that a law-abiding Canadian citizen has, if he takes proceedings, is that if he is the first he may find his name in the law reports. In return for being perpetuated in that way, he is obliged to submit himself to payment of the costs of action and is denied damages.
Now when this legislation is being reconsidered, provision should be made to assure to the individual who is wronged the right that Canadians should have as against officers of the state who act beyond the powers of the legislation under which they purport to act: a right of action without the necessity of leave for a petition of right being granted by the crown.
In Great Britain there are many such bureaucratic regulations and orders. I think there are ten thousand different cases in which an individual may be searched without a search warrant, under legislation now in effect. But the individual has certain rights which are denied under this legislation. Where he is wronged, he may take proceedings in the court without being required to secure the permission or the consent of the crown. I think that we in this parliament, now that we have accepted the principle of this legislation, should make it a point to do three things. First, we should assure that the law be administered with equality to all. Second, we should assure that no one shall be penalized who, through innocence or ignorance, has committed a contravention of the legislation. Finally, we should insist on the preservation for the individual of right of action against the crown; providing that the crown, in the event of its officials acting illegally, in administering this act, shall be liable for damages to the extent of the damage sustained by the citizen.


Mr. Langlois:: 
William Henry Golding: Order. What the hon. member is doing now is making a second-reading speech.


Stanley Howard Knowles: It is too late for that.


William Henry Golding: It is too late to do that now. We are now dealing with clause 1 of the bill. Any speech in committee must be directly relevant to the clause before the committee. The clause has reference simply to the continuance of these regulations.


J. G. Léopold Langlois: We are still on the general item, Mr. Chairman. Having made these few introductory remarks, I was just coming to the specific points. The hon. member for Lake Centre just gave certain specific examples of a situation which, to his mind, should be corrected. I think it is my privilege, as it is the privilege of any other hon. member, to point out whatever good came about when this measure was in force. Maybe my remarks were too general in the beginning, but I am just coming to the specific point. May I be allowed to continue my remarks?


Some hon. Members:: Go ahead.


J. G. Léopold Langlois: I wish to draw your attention briefly to what this government, especially the Department of Trade and Commerce under the clever direction of its present minister, has done to relieve the situation created last year in eastern Quebec and the maritimes owing to the lack of European markets for our lumber production.
Last fall advice received from the lumber industry in the maritimes and eastern Quebec indicated that lack of orders from the United Kingdom would seriously affect lumber production in this area.


Some hon. Members:: Order.


J. G. Léopold Langlois: A reduction of twenty-five per cent below the 1948 cut was predicted. The industry, however, continued its efforts to develop trade with the United Kingdom, and has now met with considerable success.
1720	HOUSE OF
Foreign Exchange Control It is now expected that a large summer cut in the maritimes and Quebec will make up for the reduced production of the past four months.


William Henry Golding: Order.


Stanley Howard Knowles: Order, order.
* Mr. Richard (Ottawa East): Why do you
not let him go on? He is in order.


Stanley Howard Knowles: Listen to the Chairman.


William Henry Golding: Order. It is not in
order now to deal with the principle of this legislation. The principle was adopted on second reading. We must now deal specifically with the clause that is before the committee. If I permit the hon. gentleman to make a second-reading speech at the present time, there is no reason why other members should not do the same. We do not make much progress if we do that.


J. G. Léopold Langlois: If the committee will give me two minutes I shall conclude my remarks.


Stanley Howard Knowles: Second reading was given to the bill at six o'clock.


J. G. Léopold Langlois: Although officials of the Department of Trade and Commerce, in both Ottawa and London, have assisted in the complicated negotiations, it is true that the maritimes and eastern Quebec lumber industry deserve much credit for having successfully developed this business.
We have just been informed of contracts with the United Kingdom and Ireland which will considerably aid our lumber industry of eastern Canada. The details of some of these contracts are as follows: Of Eastern Canadian spruce: the original requirement by the British timber control was 90 million feet, 30 million feet more than purchased in 1948.
It is my information that 80 million feet has been placed, and that additional contracts are being negotiated which, if successfully concluded, will bring the total volume for shipment in 1949 up to approximately 125 million feet instead of the 90 million originally indicated. The value of these contracts would be approximately $8 million.
Pit props: the United Kingdom has contracted for approximately 225,000 cords of pit props for her mines.


Some hon. Members:: Order.


William Henry Golding: Order. Once more I ask the hon. member to deal specifically with the clause under discussion.


J. G. Léopold Langlois: I shall conclude my remarks-


Some hon. Members:: Oh, oh.


J. G. Léopold Langlois: I have not abused the time of the house to such an extent that I should not be allowed a few minutes.


Stanley Howard Knowles: That is not the point.


J. G. Léopold Langlois: These pit props are produced mostly from spruce and jack pine, and shipments are made from the maritime provinces and Quebec. The value of these contracts amounts to approximately five and a half million dollars.
Hardwood: I have also been informed that the United Kingdom is expected to purchase approximately 10 million feet of hardwood lumber from eastern Canada. This contract is, however, yet to be confirmed.
The authorities in Ireland had placed orders for approximately 20 million feet of Canadian spruce with eastern companies, subject to confirmation and release of funds by ECA authorities. Approximately 6 million feet of the total was confirmed, but difficulty was encountered in obtaining release of the remaining quantity.
Representations were made by Ottawa and Washington officials of our Department of Trade and Commerce on behalf of the Canadian companies holding these contracts. Confirmation has now been received from Washington which indicates that release has been approved for a further quantity of 7,400,000 feet for shipment during the second quarter of 1949. These Irish contracts will amount to approximately $1 million.


Some hon. Members:: Order.


J. G. Léopold Langlois: In conclusion, Mr. Chairman, I thank the Minister of Trade and Commerce for having so effectively given his best attention to my representations and to the representations made by members of our sister provinces to the east. Our lumber producers, and all those who make a living in our lumber industry, will receive the news of these new contracts with great relief and satisfaction.
The Progressive Conservatives may shout their opposition to their heart's content; they will not prevent the public from appreciating the good effects of our policy, which has proven to be in the best interest of the Canadian people.


John George Diefenbaker: Now that my hon. friend has raced through his remarks I wonder whether I can get an answer from the minister. I should also like to ask this question. How many seizures of money took place in 1947 and 1948 by provinces, and in how many cases were the seizures released and the money returned to the applicants?


Douglas Charles Abbott: I completely agree with the point made by my hon. friend in his initial remarks that officials of' the board, or the customs officers who act for them, should in no case be harsh and tyrannical, as he put it. I suppose that all of us who are members of parliament have had some of these cases

brought to our attention. I know that I have had them and I have taken them up with the board. I do not think that the actions that have been brought to my attention have been harsh or tyrannical. I am free to confess that in some cases it seemed to me that the customs officers might have used a little more discretion and given the person the benefit of the doubt as to his bona fides. However, no one will realize better than my hon. friend the difficulty of giving wide discretionary powers in cases of this kind because it is so easy to play favourites. If there is a breach of the law, in the absence of very special extenuating circumstances, certain conclusions must flow. However, I do not differ with him, or with other hon. members with whom I have discussed this question, that judgment should be exercised by people who are in charge of enforcing these regulations, but favouritism should not be shown.
As to the number of seizures, I have not the breakdown by provinces, but I have them for the country as a whole. I shall give the seizures in total, and perhaps I can obtain the breakdown later. In 1947, 347 seizures were maintained and 321 released. The seizures maintained involved a total of 10,991 United States dollars. The seizures released involved 17,807 United States dollars. These are seizures of $100 and under. In 1948, the number of seizures maintained amounted to 1,501, involving 30,768 United States dollars, and 13,668 Canadian dollars. The seizures released in 1948 amounted to 975, totalling 27,003 United States dollars and 1,770 Canadian dollars. At the end of 1948 there were 228 seizures still pending, involving 5,961 United States dollars and 1,768 Canadian dollars.
Only one case was referred to a court for final decision in 1947. In 1948 there were five cases referred to the courts. Seizure was maintained in three and the board's decision was reversed in the other two. I shall try to get the breakdown by provinces.


John George Diefenbaker: The minister says that he agrees the action of the officials should not be tyrannical. Does he not also agree that, in circumstances such as those that I referred to him, the facts were such that the exchange board, in the exercise of its discretion, and having regard to the rights of the individual, might have released the moneys held, since in both cases there was no intent nor was any subterfuge perpetrated with a view to undermining the law? I feel, sir, that these two cases were proper ones for consideration.
The minister has not answered the question that I asked him as to whether or not
Foreign Exchange Control he thinks the time has come, in the granting of these extraordinary powers, that any individual wronged by the illegal exercise of powers by any of the officials, or by the usurpation of powers by them in the discharge of their duties, should have a right of action against such officials and not be limited to the sum of one dollar as nominal damages, irrespective of the enormity of the offence and the interference with his rights and the damage suffered by him. .


Douglas Charles Abbott: On the first point my hon. friend has made quite an appealing case, as he has presented it. My own experience has been-and similar cases have been brought to my attention by my own constituents and others-that there is nearly always some difference of opinion, or some conflict between the statement of facts put forward by the person who is complaining and the report we get from the customs officers.


John George Diefenbaker: I was quoting from the report.


Douglas Charles Abbott: It is sometimes difficult to judge as between the two conflicting stories.
The hon. member raises the point that there should be some recourse against the public officers in the performance of their duties. I do not think I can agree with that. My understanding is that in the Customs Act and the Excise Act for years there have been provisions analogous to that contained in the Foreign Exchange Control Act, protecting officers in the performance of their duties from being exposed to actions for damages. I was informed at the time the act was brought in that the provisions put in the Foreign Exchange Control Act were, with of course the appropriate changes, identical in their terms with those in the Customs Act and the Excise Act and other revenue acts for ^ears.
I should not think there would be any special reason for removing that protection from customs officers exercising their functions in this instance, or that it should be any different from the protection they are afforded in exercising their duties as customs officers proper.


Mr. Kidd:: I have another point I should like to bring up-this is not the first time I have mentioned foreign exchange to the minister. We are really dealing with an act known as the Foreign Exchange Control Act. And I might say to you, sir, that I think a lot of this difficulty rests with the minister -and I am sincere about that.
There was an error in judgment on the minister's part, and I am going to point it out. I will point it out now, because I think there should not be any recurrence of it.
1722	HOUSE OF
Foreign Exchange Control I know that we have complaints where constituents are dealt with unjustly, and they do not receive the compensation due to them.
I think it is the duty of a member to bring this to the minister's attention, because the fault lies with him.
He carried out the same, perhaps I should not use the word tactics, when he was minister of militia. It was most difficult to get the present minister to bring down legislation in the house. I remember that one time when he was minister of militia he made a speech which should have been made here in the House of Commons. We asked him about that speech the same afternoon and in a jocular way he said that it was a political speech, and that we would not wish to hear a political speech. Having said that, he was not very serious about it.
That happened on Friday, May 23, 1947.
I hold in my hand an amendment to the Foreign Exchange Control Act, as it is set out in P.C. 2045, and it is that issue I wish to take up this evening. What happened on that afternoon? The house was in session at that time. I might say that the amending order in council was here. I say the minister should have come to the house, as has been done many times by ministers of the crown, and should have informed the house of the amendment. He should have given us the same information as to the amendment. But instead of that he went on the air at night.
We have a press gallery up here, and they could have given the country the information, but the minister thought better to give it out as a broadcast. What happened? The public did not know anything about it.- And that was the condition in May, 1947.
The months of May, June and July passed. Then what happened? Enforcement officers were appointed. I say that the administration is wrong and that the minister* was wrong. First we have the Minister of Finance dealing with the Foreign Exchange Control Act, and then the administration comes through the Minister of National Revenue.
Two citizens . in my constituency were picked up by officers at the international bridge at Lansdowne in 1947. Naturally I wrote to the minister responsible, in that instance the Minister of National Revenue. He washed his hands of it, and said that this was a matter for the foreign exchange control board.
I immediately brought the matter to the attention of the Minister of Finance. Well,
I did not get very much information there, except to find out who was carrying out the enforcement. What did I find? In the course of a short time in the following session the minister placed hundreds of these enforce-


ment officers all across Canada. These were not trained. And I should like to place myself on record as saying that if this had been left in the hands of the inland revenue branch I believe all of these people would have been justly dealt with. I say that because the enforcement officers with the inland revenue branch are well established officials who have chosen that branch of the service for their life's work. Many of them are returned soldiers, and veterans of the first world war. They know how to deal with these infractions.
However, as soon as the apprehension is made these people are passed on to Ottawa, with the result that the work of the enforcement officers here overlaps. First there is the Minister of Finance, then the foreign exchange control board, and then the Minister of National Revenue.
I am now going to ask my question. What happened? A form was sent out by an enforcement officer over here in the foreign exchange control board. I would like to know who Mr. C. A. Rowe is. This officer was appointed on June 2, 1947. Then, who is J. E. Rowe, appointed on September 22, 1947?
In order to obtain the information I wanted I had to ask these questions:
1.	How many enforcement officers are employed by the foreign exchange control board?
2.	Who are they?
3.	What date were they appointed?
4.	Where are they located?
5.	What salary does each receive?
Naturally one would think that an official who is acting as part of a government organization would be recorded. I wanted to know if this was an honorary appointment. So what did I find? The answer was:
As the officers provided to the board are employees of the Bank of Canada, their salaries are not a matter of government record.
Here we have this document signed by C. A. Rowe. At that time the present Secretary of State for External Affairs was his chief. I did not know that; perhaps I should have directed my question to him.
This is where the administration is wrong. This letter was sent out, and let me point out where it is not quite fair. It is dated September 5, 1947, and, refers to the minister's statement:
In his statement of May 6. 1947, which was given wide publicity in the daily newspapers and over the radio the Minister of Finance announced that customs officials would be instructed to enforce the new permit regulations strictly and that prosecutions would be instituted in cases where Canadians have unlawfully accumulated United States funds or have attempted to export them without permit.
That letter was sent out on September 5, 1947. It was more or less protecting the

minister, and intimated that he had done the proper thing. I can only say again that the Minister of Finance did not do the proper thing.
I am sorry the Prime Minister is not here tonight, but even in his absence there is a recommendation I should like to make. It took me all last year to get this return of 168 pages. No one can tell me that an injustice has not been done. According to the figures given to the hon. member for Lake Centre a moment ago, in 1947 there were 347 cases, the collections were $10,991. This was retained. But they returned $17,000 in 321 cases. I have every one of those names on the list, and not many of them exceeded $50. That money should be returned on the ground that the minister erred in his judgment.
I say that because in December 1947, when Bill No. 3 was before the house, he saw his mistake. Why did he see it? Because he knew then what had happened. In January of 1948 he saw fit to advertise in newspapers across Canada. This is what he should have done the morning after he went on the air on May 26, 1947. The minister will find the details of the Renaud case on file. I do not know why he did not return the money. That woman was just as innocent as she could be. Can the minister tell me why the money was not returned? After he answers that, I should like to put another question. Can you answer my question first?


Douglas Charles Abbott: Why does not my hon. friend address the Chair?


Thomas Ashmore Kidd: It is all right, I will address the Chair.


Douglas Charles Abbott: The hon. member was a
Speaker in a legislature for years.


Thomas Ashmore Kidd: I want to ask the minister, through you, Mr. Chairman, why he has not returned this money. There is another case that I read of only yesterday in the Financial Times. This case was not correctly stated by the foreign exchange control board. This man is a French Canadian, Mr. Peter Brunet, and when he was crossing the bridge en route to Ormstown, Quebec, the English-speaking officer asked him-he works in my constituency-what money he had. He told them he had $5. He thought they were asking him about United States money. They asked for his purse, and when he gave it to them they found $68 Canadian funds in it. They took $43 from him. That man was innocent.
That is why I find fault with the administration of the act. If we had the old trusted inland revenue men they would have told the man to leave the money there because they would know he was coming back on Monday morning. But what was done? These other
Foreign Exchange Control officers put it in an envelope and sent it behind the iron curtain to the foreign exchange control board. The man was penalized and the money has not been returned. The minister knows both these cases and I am glad of this opportunity to bring them before him again. Will the minister state why these moneys have not been returned to Miss Renaud and Mr. Brunet.


Douglas Charles Abbott: The details of these particular cases have gone out of my head at the moment. Many of these cases are brought to my attention, but I do recall my hon. friend took up with me these two particular cases. From the reports which I got from the officials of the board I came to the conclusion that there was no greater justification in these two cases for returning the money than there would be in several hundred others, and consequently the money was not returned.


Thomas Ashmore Kidd: Who is Mr. Rowe and how long has he been appointed?


Douglas Charles Abbott: I am afraid that I cannot give an answer offhand, although I can get the information. I cannot keep track of hundreds of employees in the Department of Finance and the Bank of Canada.


Mr. Cruickshank:: Mr. Chairman, I have only been in the chamber a few minutes because I do not believe in sitting at seven-thirty. I think it is a lot of nonsense because no one is here. I heard what the hon. member for Lake Centre had to say and I agree with everything he said because he talks common sense. But I cannot go as far with the last speaker. If we are going to talk about each individual case involving $10 here and $10 there the bill will never get through. There are one or two ways in which I do not approve of the foreign exchange control. I do not know much about foreign or any other kind of exchange because I have never had any money except what I could borrow.
The other day the Minister of Agriculture said that he always spoke as a politician. I do not, because I do not know anything about politics. My riding borders on the United States and many of my people have to cross the line. There are one or two instances that I want to bring to the attention of the minister. Some of us in British Columbia are honest; we do not all come from the mari-times.


An hon. Member:: Those are the ones from Saskatchewan.


George Alexander Cruickshank: We are allowed $150
United States to cross the line. We may cross the line and being conservative, in the economic rather than the political sense, we save our money and bring back $75. Being honest people in British Columbia, particu-

Foreign Exchange Control larly in the Fraser valley, we turn in $75. Then when we want to go across the line later in the year we cannot get any money. The minister knows that that is the fact. We are not complaining about being allowed only $150 a year, but when we bring back $75-I never do because I happen to be married-we should be given credit. Unlike the Minister of Agriculture, I am not a politician but my riding borders on the United States and these regulations affect my constituents most unfairly.


Heber Harold Hatfield: An act was passed in 1946 permitting a person to have $100 United States currency in his possession; is that still in effect?


Douglas Charles Abbott: It is $10.


Heber Harold Hatfield: When was the act amended?


Douglas Charles Abbott: I do not remember the exact date, but I think it was the date referred to by the hon. member for Kingston City. I do not want to interrupt, but I indicated before dinner that unfortunately I can be here only for a short time this evening. I gather that the committee wants to discuss this measure for some considerable time. If we could finish in ten or fifteen minutes I could stay, but if not I should like to adjourn the debate and have the house go on to something else.


Donald Methuen Fleming: I shall not be long as I am not going to go into details of cases, but there are one or two things I should like to say with regard to the administration of the Foreign Exchange Control Act.
I think there is on the part of the foreign exchange control board far too much of an attitude of distrust toward people in business. I am perfectly satisfied from what I have seen that there is too great a readiness to prosecute. There are many transactions where the regulations have been technically broken but where there has not been the slightest intent on the part of the individual involved to commit an infraction. I feel that there is far too great readiness to distrust the people involved instead of a willingness to sit down with them to discuss the problem.
In connection with the second aspect of the matter that I should like to discuss, I offer this illustration. This particular case involved a substantial amount and it actually resulted in the saving of considerable United States exchange. But the officers of the board considered there had been an infraction. I am satisfied that if there had been one it was purely a technical one. The officers and accountants and auditors of the board went into this place of business in Toronto and asked to see their books and vouchers. The head of the business readily agreed. He said: "You may make yourselves comfortable here. iMr. Cruickshank.]
We will produce anything you want to see." The officers were not satisfied. They said: "We would like to take your books away. Have you any objection?" He said: "Certainly I have objection. You can take copies of anything you want. You can photostat anything that is here, but I am not going to have my books taken out of my place of business." They were not satisfied with that. Nothing was heard of them for several months, and then like a bolt from the blue in walked the R.C.M.P. with a warrant, seized the books, and a prosecution was launched. It seems to me, Mr. Chairman, that reveals a very highhanded attitude. If foreign exchange control must continue then I put the responsibility on the Minister of Finance to see that this highhanded attitude ceases on the part of the officials concerned.
In saying that, I am not going to underestimate the size of the task they have to perform. If we are going to have foreign exchange control, then of course there must be administration, and there must be enforcement, but I think just as important as the letter of the law is the spirit that is instilled into the officials responsible for the administration and enforcement. In that respect it seems to me, with deference, that the Minister of Finance and the chairman of the board could have a beneficial influence.
There is one other matter. I am still concerned about the possibility of the use of this measure for the purpose of regulating or prohibiting in some way or other the movement of goods. I do not wish to thresh old straw. We recall the assurance given to the house on this subject by the Minister of Finance on June 17, 1946, when he said, at page 2547 of Hansard:
We have no intention of using this exchange control legislation to restrict anything but certain types of capital movement.
On that assurance the bill went to the banking and commerce committee of the house. A good deal has been said about what occurred before the banking and commerce committee of the other place, but some things of importance transpired in the banking and commerce committee of this house. I wish to mention briefly two passages in the evidence given by Mr. Rasminsky to the banking and commerce committee of this house on July 15, 1946. At page 55 of the record this question was put to him:
There is one remark of Mr. Rasminsky's that I should like to ask a question about.
Then reference is made to it, and reference is made to sections 25, 26 and 27 of the act. Then this statement is made in the question:
Surely it is not a complete answer to say that protection is provided in what are apparently intended to be the saving or reassuring clauses, section 25, subsection 2, section 26, subsection 2, and section

27, subsection 3. They do not go so far as to remove from the foreign exchange control board all regulatory power with reference to the movement of goods, currency and securities.
Then follows Mr. Rasminsky's answer:
I do think that the subsections to which you have just referred very definitely have this effect, that they make it impossible for the board to withhold permits for the import or export of goods except on two grounds, one, that the payment is not in a currency which has been specified as the appropriate currency for that transaction; and two, on the ground that, there is an improper valuation placed on the transaction.
Mr. Rasminsky, the alternate chairman of the foreign exchange control board, said there were only two grounds on which freedom for the movement of goods could be refused under the provisions of the act. Again at page 57 there is this question:
In other words, the suggestion there is no regulatory power vested in the board with reference to imports at the expense of any power parliament now has in that regard, Mr. Rasminsky, was referring to the export and import of goods rather than securities and currency?
Mr. Rasminsky answered:
That is right.
We know what happened in November, 1947. This house is entitled to the assurance that the act is not going to be used again- or, more accurately, abused again-for a purpose that was specifically disclaimed by the Minister of Finance in introducing the measure, and by the alternate chairman of the board in giving his evidence in the passages to which I have referred. Before the bill is reported to the house I think the minister should be prepared to give assurance that, except in the two cases referred to by Mr. Rasminsky which are clearly within the terms of the act, the act will not be used again to restrict the movement of goods across the border.
It is unfortunate that there is not an opportunity provided now for a review of the whole administration of the act, and a review of the provisions of the act, as there was three years ago when the bill was before us. It is a great pity, because the provisions of this act ought to be very carefully scrutinized by the banking and commerce committee of the house in the light of nearly three years' experience under the terms of this statute. I think the banking and commerce committee would insist on a goodly number of amendments being made if the committee had the opportunity to make that review.
Finally, Mr. Chairman, the minister should give the house some statement as to his objective. It is not good enough to go on saying, "We believe that a need exists for the continuation of the measure; we are not prepared to say when the act should come to an end, and we are asking in the meantime for a
Foreign Exchange Control two-year extension." We had statements of a similar nature when the bill was previously before the house, and I think the house ought to have a clear statement from the minister as to specifically what he is aiming at in that regard. His predecessor as Minister of Finance had this to say on June 17, 1946, in introducing the measure, at page 2547 of Hansard:
We hope-
He is speaking now of the character of the financial relations between nations.
-that it will be one which does not call for restrictive controls and we shall do everything in our power to bring this about.
Again on page 2547 of Hansard he said, following the passage I read earlier disclaiming any intention to restrict anything but certain types of capital movement:
We expect to be able to avoid any interference with current account transactions.
Will the minister give the house some statement as to what his objectives are? Surely the minister must be prepared to subscribe to freedom in this matter as the objective to which the house should be bending its efforts, to which the administration ought to be bending its efforts, and to which the whole purpose of the administration of this measure ought now to be directed.


Douglas Charles Abbott: I think the latter part of my hon. friend's speech was directed rather more to the principles of the bill than to the details of the sections. I do not know that I can add very much to what I said in my rather lengthy speech last Thursday. As to what the government has in mind in asking for the continuation of this measure, in the disturbed condition in which we find ourselves today in the world I look on it as a sort of measure of national defence. I am firmly convinced that we need exchange control, and that we shall continue to need it for some little time yet; but as I have had occasion to say numerous other times when this legislation has been before the house, it is open to the government of the day or to parliament at any time to repeal this measure. It does not have to wait until it lapses by mere passage of time. There is not much, if anything, that I can add to what I said in my speech last Thursday as to the reasons why the government feels that it must ask for the continuation of this measure.


Donald Methuen Fleming: Will the minister give assurance against the use of the act to limit the movement of goods across international boundaries?


Douglas Charles Abbott: I am not going to give formal assurance as to anything. As the committee will recall, the foreign exchange control

Foreign Exchange Control order was used in November of 1947 to control the importation of goods into the country. As I stated frankly at that time, it had never been contemplated that power was contained in the act. In those circumstances I think it was very fortunate that it was there. Concurrently with the use of those powers we introduced into the house a specific bill which is now the Emergency Exchange Conservation Act, in which we put in statutory form the prohibitions and quotas on the importation of goods. I can certainly say, however, that the government has no intention at this moment of using the Foreign Exchange Control Act in that way. The committee will recall that in the Emergency Exchange Conservation Act there is a specific provision that its prohibitions and quotas cannot be increased except by a statute of this house. We can relax, but we cannot increase the prohibitions; I think the law will have to speak for itself.


Mr. Herridge:: I intend to support this measure, but I should also like to express my support for the suggestion put forward by the member for Fraser Valley. I think it was a practical and reasonable suggestion. I also represent a border constituency in which there are a number of people who go back and forth to the United States. Under the present regulations the United States currency they have when they return to Canada is turned into the bank but is not credited to the $150 total United States funds they are allowed per year. If a person returns the unspent balance of this United States money to the bank, in my opinion it should be credited to the total of $150 a person is allowed. I ask the minister if it would be possible to change the regulations in this respect to give effect to that suggestion.


Douglas Charles Abbott: I would be very glad to discuss it with the board. I do not see why it should not be done, but there may be good reasons for not doing it. I will certainly explore the matter. I am sorry, but I cannot stay any longer this evening. If the committee is not ready to report the bill, I shall have to adjourn the debate.


Thomas Ashmore Kidd: Will the minister inform the house who this Mr. C. A. Rowe is, who was appointed-


Douglas Charles Abbott: I will have to get some information as to that. All I can say at the moment is that he is an employee of the board. I do not know what his particular duties are or from where he comes.


Thomas Ashmore Kidd: As long as the minister says he will inform the house-


Douglas Charles Abbott: I will obtain the information and inform the house.


Arthur Leroy Smith: I think the minister should be allowed to leave, since he has an important engagement, and we can go on with something else.
Progress reported.



TRANSITIONAL MEASURES ACT. 1947 CONTINUATION OF CERTAIN ORDERS AND REGULATIONS

Stuart Sinclair Garson: the second reading of Bill No. 86, to amend the Continuation or Transitional Measures Act, 1947.
He said: Mr. Speaker, in moving the second reading of this bill, an act to amend the Continuation of Transitional Measures Act, 1947, I should like to review and, if I can, to clarify some of the issues which have emerged in relation to it. Whatever he may think as to the continuance of the emergency up to the present time, no member will deny that during world war II a national emergency arose.
To deal with the problems created by this national emergency, the government introduced a number of economic and financial controls in respect to matters which it was admitted under normal peacetime conditions would fall within section 92 of the British North America Act and within the jurisdiction of the provinces. The government's authority to deal with these matters was not established by this parliament. It was established by the War Measures Act which was passed in 1914 to deal with a similar emergency created by world war I.
Section 2 of the War Measures Act, 1914, provides that the issue of a proclamation by His Majesty or under the authority of the governor in council shall be conclusive evidence that the war exists and of its continuance, until by the issue of a further proclamation it is declared that the war no longer exists. At the end of world war I the War Measures Act was not repealed and therefore, when world war II began, the government had only to proclaim on September 1, 1939, the War Measures Act of 1914 in order to eliminate all conflicts of jurisdiction between the provinces and dominion. This granted supremacy to the federal parliament to the extent that it was necessary to deal with the emergency of world war II.
Many harsh things have been said by our Progressive Conservative friends in this house concerning the orders in council now under

discussion and the alleged bureaucrats who administered them, including the alleged No.
1 and No. 2 bureaucrats, the Prime Minister (Mr. St. Laurent) and the Minister of Trade and Commerce (Mr. Howe). The leader of the opposition alleges that the present Liberal administration in connection with these orders in council has been guilty of centralization, dictatorial bureaucracy, and invasion of provincial rights, and I believe also of incipient totalitarianism.
Characteristically, he has not at any time taken the trouble to prove these serious charges. We of course emphatically deny them. Most of the orders in council complained about, which authorize all of this alleged bureaucracy, were passed under this War Measures Act of 1914, introduced by a Conservative government under the leadership of Sir Robert Borden and left on the statute books at the end of world war I by the Union government presided over by a Conservative. Order in council P.C. 8528, which is the key order, was drafted as a copy of an order passed during world war I under the War Measures Act, and the words, "unreasonable and unjust", stood the test of time from 1914 until they were somewhat disturbed by the decision in the McGinn case just a few weeks ago.
In saying this, sir, I am implying no criticism whatever of Sir Robert Borden or of the Conservative government in 1914. On the contrary, I say he was right in passing the War Measures Act and we have been right in invoking that act. It is the leader of the opposition and his colleagues in this house now who are wrong in criticizing us for invoking the act passed at that time.
At the end of world war II, the present government did not continue to act under the War Measures Act. As soon as the war ended, this government, which is now charged by the leader of the opposition with flouting the authority of parliament, came back to this parliament for authority for the transitional powers it required to carry on in the post-war years. This authority took the form of the National Emergency Transitional Powers Act, 1945, the preamble to which recites, among other things, the following:
And whereas the national emergency arising out of the war has continued since the unconditional surrender of Germany and Japan and is still continuing;
And whereas it is essential in the national interest that certain transitional powers continue to be exercisable by the governor in council during the continuation of the exceptional conditions brought about by war-
Transitional Measures Act
This is a very pregnant statement-
-and it is preferable that such transitional powers be exercised hereafter under special authority in that behalf conferred by parliament instead of being exercised under the War Measures Act.
In other words, sir, the moment the war was over, instead of this government in any way disregarding the rights and powers of parliament, it ceased to invoke the War Measures Act and came back to parliament for authority to carry on during the post-war period. Thus when our Conservative friends rant in this house about restoring to parliament the powers of parliament, they completely ignore the fact that as soon as the war was over this Liberal government, true to its traditions of acknowledging at all times the' supremacy of parliament, came back to this house for the National Emergency Transitional Powers Act, just as we now seek the passage of the bill which is now before the house. But what our friends of the Conservative party must not forget, I suggest with all deference, is that it is the majority of parliament which determines these matters and not the minority, no matter how noisy and truculent it may be.
After 1945, having secured the authority to carry on in the post-war period, this government came back in 1946 to call for an amendment to the National Emergency Transitional Powers Act of 1945. Then, in the further development of this policy of consulting parliament at all times for authority for each new phase of decontrol, in 1947 this government came back to parliament seeking the passage of the Continuation of Transitional Measures Act, 1947. To this act at that time was attached a schedule which, as it was originally presented-as the hon. member for Vancouver South (Mr. Green) said the other day-contained fifty-seven orders in council; but those had been whittled down to fifty before the bill got through the house. These orders in council -that is, the exact text of the orders in council themselves-were laid before the house in their entirety. Then, order by order and section by section, they were gone over by this parliament; and they will appear in the schedule to that act, with the amendments which were made by parliament to those orders in council indicated as part of the schedule. In other words, parliament approved these orders in precisely the same way that it would approve the sections of a statute. Any suggestion that the procedure followed was a secret procedure or a flouting of parliament is not in any way supported by the facts. More than that, by section 4 of this 1947 act, it was provided that in addition to these orders in council
1728

Transitional Measures Act set out in the schedule to this act of 1947- the terms of which orders in council had been approved of by parliament-the governor in council might revoke in whole or in part any order or regulation, but he could not amend any order or regulation. That means that far from parliament having delegated-as it has done on a number of occasions and as it is quite proper for parliament to do-legislative power to the governor in council, parliament in that bill did no such thing. It undertook itself to go over the exact terms of the orders in council; and by the terms of the act which this government introduced the governor in council was limited to the revocation of the orders but had no authority to amend them in any way.
Was this procedure a flouting of parliamentary authority? Did the consultation of parliament, year by year, take away from parliament's powers? Did the prohibition under section 4, which prevented the governor in council from amending the orders in council which parliament had approved and placed in the schedule to this act, give unto the governor in council any dictatorial, bureaucratic powers, as those words are used by the leader of the opposition? Did the duration of the act until not later than March 31, 1948, as provided in section 7 of that act-thus necessitating the government's coming back to parliament within approximately one year -indicate upon the part of this government a desire to destroy or prejudice parliamentary authority? Surely, Mr. Speaker, the answer to each of these questions is a resounding no.


Some hon. Members:: Oh, oh.


Harry Rutherford Jackman: You will lose the C.C.F. support.


Stuart Sinclair Garson: The leader of the opposition, this great John Hampden of Bay Street-


Arthur Leroy Smith: That is one for
the book.


Stuart Sinclair Garson: -in language reminiscent of-


Arthur Leroy Smith: Young Lochinvar came out of the west.


Stuart Sinclair Garson: -the	battlements-as	a
matter of fact he used the word "battlements". He was speeding to the battlements to protect parliament.


Howard Charles Green: That was the hon. member for Quebec South (Mr. Power).


Stuart Sinclair Garson: No, no. In language reminiscent of the French revolution, tumbrils, barricades and battlements, he talked about restoring the powers of parliament. What powers, Mr. Speaker? What powers does he want to restore?


Gordon Graydon: Chubby Power.


Some hon. Members:: Hear, hear.


Stuart Sinclair Garson: It is a great thing, Mr. Speaker, to have a sense of humour.


Mr. Speaker:: Order.


Stuart Sinclair Garson: However, my hon. friend may not have noticed that I was speaking in the plural. My hon. friend's interjection was in the singular.


Arthur Leroy Smith: Is that the best you can do with that one?


Stuart Sinclair Garson: In reference to these matters, what powers during the last five years has parliament failed to exercise that it should have exercised?


John Ritchie MacNicol: Chubby Power again.


Stuart Sinclair Garson: "Chubby Power" would be about as good an answer as my hon. friend could give to that question. Chubby Power is the answer. That is the only power that was not exercised. Certainly parliament did not fail to exercise legislative powers. In 1947, as I am informed, and as the leader of the opposition seems not to have been informed, this parliament went over not only the sections of the act but the provisions of the orders in council with more care than it takes with the average statute. As I have pointed out, having done so it prohibited the governor in council from amending these orders in council in any way. Although it is a commonplace thing for parliament to delegate to the governor in council legislative powers, the government on this occasion did not ask for that delegation and it was not granted. The orders in council were passed by parliament and they stayed as parliament had passed them, and were so administered and enforced.
Parliament delegated to the executive nothing but executive powers. Is it, perchance, the executive power that our hon. friends of the Conservative opposition want restored to parliament? If so, surely they have enough experience in public life to know that it is nonsense to suggest that parliament hires the administrators, accountants, and clerks to administer this law. Far from having ignored parliament, this government has gone back to parliament every year and not only has submitted to it, but the government itself has suggested, these limitations upon its own authority.
This, sir, is by no means all that this government has done to respect parliamentary authority and to accomplish orderly control.
From 1947 onward the government in its requests to parliament voluntarily has limited itself to the continuation of orders in council which parliament has seen and approved. From 1947 on, the government has been

deprived of any rights there might have been under the War Measures Act to pass any orders in council to deal with any other subject matters. Under the provisions of this War Measures Act, put on the statute books by the Borden administration, all that the government had to do was to carry on and invoke its powers in almost any direction. As soon as the war was over it came to this parliament and limited itself voluntarily to powers actually delegated by this parliament.
From 1947 until the present time this government has revoked thirty-eight of the fifty orders in council that appear in the schedule to the 1947 act. More than that, the ministers of this government have stated time and time again that the remaining controls will be lifted at the earliest time that it is safe to do so. In connection with at least one of these controls, namely, rent controls, a sincere effort was made in good faith to get the provincial governments, some of whom had been very jealous of their provincial rights, to exercise their provincial rights in relation to the subject of rent control. But strangely enough, when it came to doing something rather than merely talking about provincial rights, there was not the same amount of zeal about the exercise of them.


Mr. Zaplitny:: What can you expect from a coalition?


Arthur Leroy Smith: The minister was running Manitoba at that time.


Stuart Sinclair Garson: No, I was just ceasing to run it.


Stanley Howard Knowles: You left it and several other things for Campbell.


Stuart Sinclair Garson: To listen to my hon. friends of the Progressive Conservative party-


Arthur Leroy Smith: The socialists were talking to you just now. Do not mix us up with them.


Stuart Sinclair Garson: There is not much danger of my doing so. Judging by the remarks of the hon. members of the official opposition one would think that the passage of this bill- indeed, this charge has been made-is for the purpose of continuing unlimited bureaucratic dictatorship which we have been exercising during the past several years.


Some hon. Members:: Hear, hear.


Stuart Sinclair Garson: They still think so-in order that we may centralize all the power in Canada in this government, in order that we may destroy provincial rights. Well, sir, under this bill we cannot invoke this continuing emergency to deal with any matter whatsoever, except those relating to the very narrow list now of goods and services, in respect of which an order of the wartime 29087-109i
Transitional Measures Act prices and trade board is in force at the time the bill becomes law. In other words, if we wish to exercise these wide, bureaucratic, dictatorial powers with which we are charged, the only way in which we can legally do so is to come back to this parliament, not by any of the bills which are before us, but by an entirely new bill, asking parliament specifically to grant us that power. Having regard to the fact that we have already brought down this bill, invoking for that purpose the continuing emergency, we would be in a very parlous condition to do so, and I should think it would be at least politically embarrassing, if not legally impossible, to invoke the same emergency the second time for other powers. Therefore, our powers are very narrowly limited, and any suggestion about widespread totalitarian dictatorial powers which flout parliament is just so much nonsense.


Harry Rutherford Jackman: Put it in statute form, then.


Stuart Sinclair Garson: These are the facts upon which the leader of the official opposition relies, because they are the only facts upon which he can rely, to launch his hysterical charges of dictatorship against the Prime Minister and against this government, and his charges of servility upon all those hon. members who support the government's control measures. He says that the members of this government are "drunk with power". Drunk with power on the basis of what I have stated, of a very narrow limit of authority which is deliberately asked for and has been granted by this parliament from year to year.


Arthur Leroy Smith: That is the second best way to get drunk that I know of.


Agar Rodney Adamson: They get drunk easily.


Colin William George Gibson: But not often.


Stuart Sinclair Garson: I say this quite seriously to my hon. friends, who have a sense of humour which functions at times. I say seriously that charges, language and arguments of this kind are not such as to advance the prudent progress of public business or to develop good public policy or properly to care for and discharge the public affairs of this country.
In his remarks the other day the leader of the opposition said-and I quote his exact words so as not to misrepresent what he said-that he:
. . . would be under the necessity of applying a short and harsh word to any of those who said that because his party had voted against this resolution that it was not in favour of rental control.
Well, sir, he and his colleagues in the official opposition have been at very great pains in

Transitional Measures Act this house to establish upon the one hand that they are in favour of rental control, yet, sir, they vote against a resolution to introduce a measure to continue that rent control.


Mr. Cockeram:: We want it by statute.


Stuart Sinclair Garson: They have a perfect right to do that. But within half an hour of the taking of that vote, before a single hon. member could have emerged from this house to talk to any person as to what that party had done or what it had not done, the leader of the opposition was on his feet uttering threats that he was going to brand, presumably as a liar-I imagine that is the short and descriptive word-any person who had sense enough to draw from the vote the only possible deduction that could be drawn from it, namely, that the Conservative party was opposed to the continuance of rent control; for surely, sir, it must be obvious to the meanest intelligence that if all of the hon. members had followed the example of the Conservative party in the vote on this resolution we would not have had any continuance of rent control. That is the answer.


Gordon Graydon: You would have had to bring in a statute.


Stuart Sinclair Garson: I suggest, sir, that such a worry, such a perturbation upon the part of the leader of the opposition within minutes after the vote had been cast, betokens a rather troubled conscience. Methinks, Mr. Speaker, the lady doth protest too much.


Stanley Howard Knowles: He is no lady.


Stuart Sinclair Garson: And, sir, my hon. friend's protests impress, and I suggest that his threats frighten, no one. He has used this short and descriptive word with regard to so many honourable, decent and often distinguished citizens, that it is almost a mark of distinction for him to admit others to their company. It is getting to be that no man in public life today can really claim to have arrived unless he has been called names by the hon. gentleman. It is like a picture by Karsh in reverse. The Karsh picture flatters, and the harsh names of my hon. friend offend, but they are both, with apologies to Mr. Karsh, the hallmarks of arrival.


Gordon Graydon: What section of the bill is the minister speaking on now?


Stuart Sinclair Garson: I shall be very glad to answer my hon. friend. I am speaking on the statement of his leader that he would apply a short and descriptive word to any person who commented upon the vote that was cast by my hon. friend's party on this bill.


Gordon Graydon: What has Karsh got to do with that?


An hon. Member:: The minister had his picture taken by Karsh.


Stuart Sinclair Garson: My hon. friend the other day issued an invitation to the members of this house. He invited us to listen so that we might learn something about constitutional matters in Canada by no more complicated a device than listening to him.
Well, sir, I must say that for a man who professes to be such an expert in this field he portrays, in my opinion, on every occasion on which he speaks concerning it, a most superficial grasp of the principles involved. And as compared with those of the hon. member for Eglinton (Mr. Fleming), for example, or the hon. member for Stanstead (Mr. Hackett), or the hon. member for Lake Centre (Mr. Diefenbaker), his legal arguments upon it neither merit nor warrant a reply. His statements do not make sense even as to the facts. He says, for example, that if there be such an emergency as we allege, then that emergency could be invoked for the purpose of a wholesale invasion of provincial rights.


Harry Rutherford Jackman: Hear, hear.


Stuart Sinclair Garson: And the hon. member says "hear, hear." What are the facts? With these powers which he says we have taken unto ourselves, what have we done? Over a period of years, since the Transitional Measures Act was passed in 1947, and even before that, we have followed a policy of continuous and orderly decontrol practised by this government, which is the very antithesis of any invasion of provincial rights. So that any suggestion such as the one that has been made, that this general emergency which we invoke as the basis for our law, is going to be seized upon for a wholesale invasion of provincial rights, is quite without foundation.
Even the very control which he says he is in favour of, namely rental control, has not been continued by this government until sincere attempts had been made to have the provinces take over this field, if they were prepared to do so. Does this look like an invasion of provincial rights? Does it support any of the extravagant language and the extravagant charges and accusations which my hon. friend has been making so freely at every stage of the debate on this bill? Certainly not.
He drags in, as he has dragged in on every possible occasion, whether it was relevant or not, the old chestnut which is just as incorrect this time as on every other occasion on which he has repeated it, to the effect that after the war the dominion government did not return to the provinces their taxing

powers. This, sir, I suggest is a statement and argument which is intended for consumption by the uninformed; because no one else would pay any attention to it. The constitution, of which my hon. friends are the stout defenders, gave to the dominion government from the very beginning, in 1867, completely unlimited taxing powers. The dominion government does not have to ask any provincial consent to impose any form of taxation.


Arthur Leroy Smith: What section is that?


Stuart Sinclair Garson: May I tell my hon. friend that I am replying to the argument which the leader of the opposition (Mr. Drew) considered so relevant to this matter, which he introduced in the house, and which hon. members and Mr. Speaker permitted him to speak upon, and to which they listened.


Stanley Howard Knowles: You are both out of order.


Stuart Sinclair Garson: If that could be done, then surely we are at liberty to correct a record which has been left in the state in which he left it.
The facts are that during the war the dominion purchased from the provinces exclusive powers in the fields of income and corporation taxes by paying to the provinces good and valuable consideration fixed in freely negotiated agreements between the provinces and the dominion. During the period of the agreement the Drew government in Ontario accumulated an aggregate surplus on current account of over $46,800,000.
At the expiration of this agreement the provinces were offered a generous substitute for it, which substitute recognized and affirmed the provinces' constitutional rights to impose all these taxes if they chose to do so. Again, the provinces were free to accept or not to accept. Two of them, Ontario and Quebec, in point of fact did not accept. The wartime tax suspension agreements had been complied with to the letter, and any statement that the dominion failed to return to the provinces their taxing powers, Mr. Speaker, is just not true.
My hon. friend and members of his party are quite within their rights in a free country and in a free parliament to get up in their places and say that it was his-
-declared desire that the dominion-provincial conference of 1945-46 should succeed.
And in this he is precisely correct. It was his "declared" desire. The record is larded with pious statements to this effect. And he is hlso quite within his rights in the closing hours of the conference to demand as the
Transitional Measures Act price of its success $50 million more than all the provincial revenues, including dominion subsidies, before the war.
My hon. friend is quite entitled in a free country to say that he is entirely in favour of Newfoundland entering Canada; and his party, as he claims, in order to save the Canadian constitution, is entirely at liberty to vote against Newfoundland entering Canada.


Arthur Leroy Smith: Order, order.


Stuart Sinclair Garson: He is entirely free in this issue-


Arthur Leroy Smith: I rise to a point of order. Surely this is not only irrelevant but it is miles and miles from anything connected with the bill we are talking about at the present time-as is 90 per cent of what the minister has said.


Stuart Sinclair Garson: In some respects I quite agree with the hon. member for Calgary West (Mr. Smith). But I am replying to the arguments made by his leader in this debate, and the hon. member for Calgary West should have been more assiduous when the subjects were first introduced in calling the house to order.
As I was saying when I was interrupted by my hon. friend-


Arthur Leroy Smith: I want a ruling on my point of order.


Mr. Speaker:: Order. I am listening to the minister. If I thought he was out of order it would be my duty to intervene, and I would intervene.


Stuart Sinclair Garson: I say that it is-


Arthur Leroy Smith: You are in order. Mr. Speaker said so. Everything is all right.


Stuart Sinclair Garson: My hon. friend the leader of the opposition is entirely free in this issue now before us to say that he and his party favour rent control, and he is entirely free to vote against the resolution which would continue it.
But, sir, I think he will find as time goes on, before he gets finished with these manoeuvres, that the Canadian citizens are too intelligent to be taken in by these conflicts between his words and his deeds.


An hon. Member:: Give them a chance.


Stuart Sinclair Garson: And, this being a free country, they will not be deterred from saying what they think about it by any threats about the use of a short and descriptive word. They will be more disposed to consider his opposition in the light of the fact that the authority which this government has exercised under the War Measures Act of the Borden government has been exercised at all times with a

Transitional Measures Act scrupulous regard for the rights and privileges of parliament.


An hon. Member:: No.


Stuart Sinclair Garson: My hon. friend says that is not true. Thank goodness in a free parliament he will have the opportunity shortly to get up and prove that it is not true, if he can.
Immediately after the fall of Japan this country went to parliament and secured the National Emergency Transitional Powers Act, which has been subject ever since to annual review by parliament.
As I have pointed out, not only has parliament determined the text of the orders in council under which the governor in council has acted since 1947, but the government in acting under those orders in council has carried on an orderly, and latterly an accelerated, decontrol which is still continuing. This government is committed to decontrol, even in respect of the residual controls that are being maintained, as soon as it is safe to do so.
Finally, the fact that two of the opposition parties in this house have supported this bill in its different stages is eloquent tribute to the rightness of the government's action in asking parliament to pass it.


Arthur Leroy Smith: Mr. Speaker, I had not intended to take part in this debate and I would not have done so except for the splendid schoolboy essay just read by the Minister of Justice (Mr. Garson).


Some hon. Members:: Oh, oh.


An hon. Member:: His master's voice.


Arthur Leroy Smith: I would like to hear you all, so I would ask you to speak one at a time. That would be much better. I do want to compliment the minister upon the splendid reading he has just given us. I intend to deal with just two or three things, and I shall deal with the major one first.
The minister has told us that this government has been so generous and kind to us in the opposition and so careful of the interests of the people of the country that they brought this thing back year after year in order to get parliament's support. Of course the answer to that is that the legislation within itself contains the provision that it is only for one year. Therefore they had to come back under the legislation and not through the great kindness that lies in the hearts of members of the cabinet. In fact, in times gone by, it was urged that it should be passed as it was only for a year, that at the end of that time it would probably die a natural death. That takes care of that part.
IMr. Garson.]

Then the minister says that they have eliminated these various things. I ask this simple question even of my impatient brethren across the road, and I assure them that I will not be very long: After the government control over steel, lumber and farm products, what is there left? That takes in the total economy of this country. It may be that there are other industries, other efforts and other energies expended in dealing with other things, but without those three your economy stops dead. A year or so ago we learned that you do not need a general strike in Canada to stop our economy, that all that was needed was a strike in a basic industry.
Dealing now with this matter of rent control, short words and that sort of thing, I suppose the minister was referring to what we usually term as being short, ugly four-letter words or something of that kind. What does it amount to? On the occasion when there were fifty-seven varieties it was put up to this parliament, as it is put up now with the twelve varieties, that we must accept the whole package or go without. We on this side do not and will not accept that sort of judgment. We will not compromise with ourselves or with our people and say that because A, B and C are good, D, E, F, G and so on are bad; that we are going to compromise and vote for all things because there are two or three good ones wrapped up in the package. That is exactly the position that we are taking at the present time and in so far as I know will continue to take as long as we are here.


Stuart Sinclair Garson: Could the hon. member inform the house what the bad things are?


Arthur Leroy Smith: I shall answer the minister's question and deal immediately with two of the things which are bad. I shall read from the orders in council dealing with steel and lumber and then I shall ask the minister if in his judgment and wide experience he thinks that the government needs the powers given in those orders in order to carry out the things the Minister of Trade and Commerce (Mr. Howe) has in his mind. I think that is- a fair suggestion. I brought down these books thinking that we might be in committee, when I intended to ask the Minister of Trade and Commerce about this. But since we have this volunteer across the road perhaps I might mention them to him.
I am reading from the statutory orders and regulations, volume 1, 1946, beginning at page 131. I do not want to read all the order in council, but later on I shall read from page 133. Paragraph (c) reads:
To enter on, take possession of, and utilize any mine, land, plant, factory, mill, refinery, smelter,

foundry, warehouse, building, or place or any equipment used or capable of being used for the purpose of producing or dealing in or with steel and to deal in or with or take possession of any vehicles, cars, ships, locomotives, or other equipment deemed by the steel controller to be required or useful for the operation of any such mine, plant, factory, mill, refinery, smelter, foundry, warehouse, building, or place and/or for producing or dealing in or with steel or equipment; provided that any order of the steel controller made under the powers vested in him by this paragraph (c) shall be subject to any conflicting valid order of the transport controller appointed by the governor in council on the recommendation of the Minister of Transport.
That is only one paragraph of about twenty. Then the definition of "dealing in or with" is given in paragraph (d), which reads:
"dealing in or with" shall include buying, selling, leasing, hiring, exchanging, acquiring, importing, exporting, storing, supplying, delivering, operating, transporting, distributing, shipping, conveying, installing, allocating, consuming or using and "deal in or with" and "dealt in or with" shall have corresponding and similarly extended meanings.
I will not read the definition of steel, but it covers everything that has any ferrous metal in it. My recollection is that ferrous means "pertaining to or derived from iron", so it would mean anything with a component part containing some iron. Under this the government could go and take a farmer's tractor away from him if it was thought it were needed in some little business engaged in dealing in or with steel. There are many more paragraphs. I am going to stop and ask the minister now whether he thinks that, with regard to the present emergency as to steel, the government needs the powers I have read in that one paragraph. Does he think so?


Stuart Sinclair Garson: I have no hesitation whatever in saying that I think none of my hon. friend's remarks are substantially relevant to the matter under discussion.


Some hon. Members:: Oh, oh.


Stuart Sinclair Garson: They are not substantially relevant to the matter under discussion, and when I close the debate I will take the occasion to deal with them.


Gordon Graydon: You are running out on him.


Arthur Leroy Smith: May I thank the minister for his great generosity in telling me that he will put his boys to work and probably find an answer to what I have said, and that he will let me know what the answer is when that time arrives. May I say that under that order there is a steel controller, an associate steel controller, a deputy steel controller, all of whom may depute other persons who may do all of these things. Discretion is completely given to these individuals to do all the things that the controller himself is entitled to do, and the only appeal is to the controller himself. Then
Transitional Measures Act again all these individuals have the most complete protection from actions, and so on; no matter how wrongful their acts may be they have complete protection under this statute. When the minister is boning up on his reply I wonder if he would include that part of it in the answer he is going to make.


Stuart Sinclair Garson: I shall be very glad to do so.


Arthur Leroy Smith: Then I will say a word or two about lumber. I think the difference between lumber and steel is that there is no associate controller. There is only a timber controller and a deputy controller. I said that I was not going to be long, and I mean that. Therefore, without going into all the various regulations, and under one paragraph they run from "a" to "s", I think it fair to say as to the lumber situation-and I hope you will correct me if I am wrong- that the powers are practically the same as those with respect to steel.
Why have I put that forward, Mr. Speaker? Because it seems to me that we have argued, and I think validly argued, that if there be an emergency requiring certain things these matters should be dealt with differently. As I understood it, the explanation of the Minister of Trade and Commerce (Mr. Howe) had to do largely with priorities, and had to do largely with saying that we need this type of manufactured steel rather than that. I think I am correctly stating what the Minister of Trade and Commerce said. Therefore I come back to what the Minister of Justice said, which was that they brought this emergency business, these controls by order in council, before parliament each year, and I say to him, Why has he not studied these various controls to eliminate from the orders in council to which I have just referred the powers that they do not need to take care of present needs, even accepting their word for what those needs are?
Remember, Mr. Speaker, that in this same bill we have controls on certain products of agriculture. I mean prices of agricultural products. Let me repeat for the last time tonight, and if I have the strength I will continue to do so, that we are prepared to consider, to receive, and to support certain controls, rent control if you like, if it is brought to us as a bill, as a statute or as an order in council where the rights of landlord and tenant are clearly set out, and which is not subject to change every few weeks as rent control has been. Then we will support it with a good heart. But we will not under any circumstances, and I hope we never shall, take a great large package of twelve things running from butter through timber to steel, and support that or get nothing. As far as I am concerned, I intend to oppose the measure, and I have no hesitation in doing so-

Transitional Measures Act
Is it laziness? Is it inattention? What is it? The minister said a moment ago that this decontrol was progressive. Let it progress to the place where we may deal with those essential items in our economy one at a time. Let us find out the necessity in the particular case and vote on it accordingly, rather than have this grab box handed to us with a game of bingo to support it, because that is about the only reason that has been given by the minister up to this time.


Clarence Decatur Howe: Will my hon. friend permit a question?


Arthur Leroy Smith: Oh yes, indeed, but do not make it too long.


Clarence Decatur Howe: During the eight years in which these two orders in council have been in force has he ever heard anyone complain about the injustice of their operation?


Arthur Leroy Smith: Oh yes, many, many times.


Clarence Decatur Howe: Can he give me one instance?


Arthur Leroy Smith: I can give you many. May I congratulate the minister and say to him that he does not overstep the mark and does not intend to. But many of his officials who are enforcing these regulations do so.


Clarence Decatur Howe: You are quite mistaken about the latter.


Mr. W. Ross Thatcher (Moose Jaw):: I listened tonight with a great deal of interest to the minister and to the hon. member for Calgary West (Mr. Smith). I think first of all, if I may say so, that the member for Calgary West, with his usual eloquence, was flogging a very dead horse. The bill before us today is a vital one, because it brings parliament face to face once again with what is probably Canada's thorniest domestic problem. As we begin this debate I think there are two significant facts which have developed. I think this may be remembered as a historical night. It will be remembered as such a night because, when the bill is passed, it means that Canada has virtually come to the end of the road as far as controls are concerned. We have been led down the last lap of the route leading to complete decontrol. This night will go down in the history of Canada secondly because George Drew, the hon. member for Carleton, has won his first major political victory, in making the government prematurely throw out all these controls.
The insidious-I do not know whether that word is parliamentary-pressure of the Conservative party has culminated tonight in forcing the government to sacrifice the interests of the average Canadian to the interests

of a few privileged citizens. Those are the two significant points in this debate so far.
I hope that hon. members, even on the government side, will yet consider the matter very carefully before they pass the bill because I think they should keep in mind that in the last three and a half years the cost of living index has gone up forty points.


An hon. Member:: What about wages?


Wilbert Ross Thatcher: I am talking about the cost of living index. I will come to wages in a moment. On August 1, 1945, the cost of living index stood at 119-6, and today, with pretty well all controls removed, it stands at 159-4. I am not going to go again over all that has been said on the resolution. All I want to say with increased emphasis is that the average Canadian has been hurt by decontrol, particularly those in the low-wage income groups, and more particularly pensioners. I think that the inflation I have mentioned indicates, beyond any reasonable doubt, to any reasonable man that parliament so far has failed to deal effectively with the cost of living problem. For a number of years the government has been content to drift along, to hope that something will turn up, to hope that prices will go down of their own volition. I think ultimately prices will come down, but in the meantime a great many people will have been hurt, and hurt unnecessarily. This very stubborn government attitude has benefited primarily only one segment of Canadian society and that is the business and commercial interests.
The other night the member for Rosetown-Biggar (Mr. Coldwell) pointed out that, in the period between 1945 and 1947, profits after taxes of 655 of Canada's largest corporations went up 64 per cent, while in the same period the cash income from farm produce went up only 17 per cent. The member for Comox-Alberni (Mr. Gibson) asked me about wages a moment ago, and I should like to tell him about wages. For instance, in the iron and steel industry-I am sorry I cannot tell him about the lumber industry-weekly wages rose in the period I have mentioned about 9 per cent while profits for that industry rose 66 per cent; in the pulp and paper industry wages went up 23 per cent but profits only 247 per cent. One could give other examples. In almost every case, profits rose much more rapidly than wages.
By means of Bill 86, which is before us tonight, the government is asking parliament for authority to continue certain controls and regulations for a limited period. I suppose we must take it that this is the government's 1949 answer to the cost of living problem. I remember that a year ago this

house was discussing the same problem and had before it a bill of a somewhat similar nature. I remember that even at that time the cost of living was causing concern throughout the country. Every hon. member will recall having received thousands of petitions from protesting citizens, labour unions and the like. All members will also recollect that, about a year ago, the Institute of Public Opinion conducted a poll, which revealed that the majority of Canadians desired the reimposition of some controls.
When Bill 136 was introduced a year ago, those were the circumstances. That bill was quite different from this bill, as the Minister of Justice (Mr. Garson) pointed out. The bill of a year ago gave parliament the power to reimpose controls over the whole broad field if it deemed it necessary. I think it would be fair to say that most hon. members expected, when they gave the government those very wide and comprehensive powers a year ago, that the government would use them to fight inflation. I recall the member for Bonaventure, I think it was, a government supporter, speaking in the debate. He said that drastic measures should be taken immediately in order to bring the cost of living index back to where it was in 1946. He said we could not rely upon time and laissez faire to solve this problem, and price ceilings should be reimposed immediately on timber and basic commodities. A Liberal member said that. I believe there was an indication a year ago that parliament and the country expected the government to use the powers it was given in Bill 136. The country expected some action from the government. But in the past twelve months the government has stubbornly refused to do anything about reimposing controls where it was necessary.
On the contrary, while still piously professing to follow a policy of orderly decontrol, the government has been removing subsidies and controls just as rapidly as they dared in the face of public opinion. Hundreds of controls have been eliminated in the past year and there are almost no subsidies left. In other words, instead of using the powers given in Bill 136 a year ago, the government has practically scuttled the whole system of controls and subsidies. The result, of course, has been a very substantial increase in the cost of living.
Rather than take any tangible action as they were empowered to do, to reimpose controls, in February, 1948, the government set up a parliamentary prices committee. The C.C.F. attitude towards that committee was very clearly expressed by the member for
Transitional Measures Act Rosetown-Biggar (Mr. Coldwell) at page 761 of Hansard, when he said:
. . . we are of the opinion that, in the present crisis in Canada, the people demand not the establishment of a parliamentary committee, but rather some effective step to meet the situation.
When the government refused to take specific action, we did participate in the committee. We did our best to make that committee a reasonable success. Some of our members spent a good many hours on that committee. We knew in advance that the committee could not possibly succeed in lowering prices because its powers were so limited. The only power that the prices committee had was the power to talk. Even if it found acts which were anti-social, there was nothing it could do about them. Thus while the committee sat, prices continued to rise. The members of the committee sat back impotent and helpless; we were restrained from any concrete action by our limited terms of reference.
However, I am not going to say much more about the prices committee except that after sitting for months, and after having heard mountains of evidence, a report was finally brought down in this house. I think it would be fair to say that the Minister of National Health and Welfare (Mr. Martin) and his government supporters brought down those recommendations. We who were in opposition could agree or disagree with them as we saw fit, but they were brought down by the minister. I suppose those recommendations were made in the belief that, if the government implemented them, perhaps something could be done to bring down the cost of living.
I think that was about nine months ago. If the government was sincere about wanting to do something to get prices down, surely ample time has elapsed.
I am not going to be very long, but I suggest we look at some of the recommendations of the prices committee for a moment. Recommendation one urged the setting up of a special commission to continue the work of the parliamentary committee. Before I pass along, I might say that that commission is still sitting. I understood it had finished its work before parliament opened this session, but it is still meeting, and I suppose the members are together drawing $100 or $200 per day of the taxpayers' money. I do not know why it is taking so long to bring in this report, and I think it is shameful that this debate should have to be carried on without benefit of the findings of that commission.
However, recommendation one called for the setting up of a royal commission. In setting up the commission, the government rendered that recommendation useless in advance because the only thing the royal commission could do was talk. If the report of
1736

Transitional Measures Act the commission is brought down, I hope something will be done about it; certainly the commission has not brought down prices.
Recommendations four and nine were really window dressing. Recommendation four concerned the relaxation of the ban on fruits and vegetables. Recommendation nine concerned the removal of the twenty-five per cent excise tax. Those measures would have been carried out whether or not the prices committee recommended them, and they were simply introduced to get the government out of a jackpot. They had imposed a ridiculous tax which the people resented and something had to be done about getting rid of it.
So far as I can ascertain, the remaining recommendations have been more or less ignored. Nothing has been done about them. For instance, recommendation number two is that the work of the combines investigation commissioner should be accelerated and extended and that he should be given more funds with which to work. In my opinion that is an excellent recommendation. Time and again we are finding that when the commissioner does bring in a report on a combine, whether it is a bread combine or a dental combine, the legislation is too weak to support the report and the court throws it out. The commissioner cannot do anything about it. If the government is sincere about reducing the cost of living, why does it not bring in effective legislation to make the combines act work, and accomplish something for the people of Canada? Recommendation three was also a good one, that existing legislation be amendedso that immediate specific action can be taken where the evidence discloses flagrant cases of profiteering at the consumers' expense.
Nothing has been done to implement this recommendation, as far as I know.
I think recommendation five is a significant one, that the government should considerrestricting price rises by special taxation of unreasonable profits.
Again, nothing has been done. I wonder why nothing has been done about that recommendation? I think of the Nicolet-Yamaska by-election and I think of the February 12 issue of Time magazine. I quote from that particular issue as follows:
The Liberals went all-out in support of lawyer Paul Trahan, 40. with $135,000.
That was campaign funds. I have always believed that it was my hon. friends to my right that were financed by the industrial interests of this country; but I am beginning to wonder whether the Liberal party also does not do too badly in that respect. If the statement of Time magazine is correct-and I have not heard it denied in this house- that $135,000 was spent in one constituency

for campaign expenses, surely the Minister of Justice (Mr. Garson) should start some kind of investigation. I do not know how the Liberals could spend that kind of money unless they were handing gifts around in some manner. Mr. Power perhaps has a good idea how the sum was spent.


Humphrey Mitchell: My hon. friend must believe in fairies and Christmas trees when he makes a statement like that.


An hon. Member:: Santa Claus talking.


Wilbert Ross Thatcher: I am quoting from Time magazine. I may be wrong, but that is what it says. Maybe that is why recommendation five has not been implemented.
What about recommendation six, that the government should amend the Companies Act to institute a "uniform system of business accounting" so that excessive profits cannot be so easily concealed? That was a good recommendation, but again nothing has been done about it. And so one could go on down the list, but I will not take up the time of the house to do so. Hon. members can read for themselves the report of the prices committee.
In other words, Mr. Chairman, after this committee was set up; after hundreds of thousands of dollars of the taxpayers' money was spent, at least $200,000 between the two of them; after our leading businessmen were called down here from all over Canada and cross-examined; and after a great deal of the time of the members of parliament was wasted: the government pays absolutely no attention to the recommendations which were brought down by that committee. I say that fact must indicate to the people of Canada that the government cannot be particularly interested in taking concrete action which will bring prices down.
Early in the proceedings of the committee I remember the minister of health (Mr. Martin) making this statement. I know he will remember it.


Paul Joseph James Martin: I remember everything that the hon. member said.


Wilbert Ross Thatcher: I am sure the minister will remember this. He was speaking about the committee members and he said:
I am sure that they will not permit it to be used as a smoke screen. They will not permit it to be used as a means of delaying action.
I think it is fairly obvious to the people of Canada today that the committee was used as a smoke screen, and that it was used as a means of delaying action. Perhaps my time is much less valuable than that of many other members of this house. I will not attempt to deny that. Nevertheless, I am not

anxious to have that time completely wasted, as it apparently was on the prices committee.
I remember when I first came down here about two years ago the government set up a flag committee. I wasted about seventy or eighty hours on that committee. We finally chose a Canadian flag and we brought a report onto the floor of the house. That is the last I have heard of that Canadian flag.
My friend the hon. member for Comox-Alberni (Mr. Gibson) and certain other members have been sitting on the Indian committee for about three years. That Indian committee in my opinion should be now ready to do something for the Indians. But we find that little has been done. I say to you, Mr. Speaker, and through you to the government, that the government is far too prone to use committees and royal commissions or something of that kind to divert public attention from the fact that it has not done anything about a particular problem, or that it does not want to do anything. I suggest that is what has been done with the parliamentary prices committee.
The bill which is before us, namely Bill No. 86, has been called a "control bill" by some of my hon. friends. I suggest that actually it is nothing of the sort but is a "decontrol bill". As I said a moment ago, it is a bill which is leading the Canadian people prematurely down the last lap of the road leading to complete decontrol. I say that this bill is one which virtually abandons any degree of economic planning in Canada.
I have been much surprised to hear the Minister of Justice speak as he has in the last few days. He has been arguing with my Tory friends that a great emergency exists. He says we must have these controls because the war emergency is still on. If the war emergency is still on, I ask this question: Why on earth is he taking oft all the controls?
Neither can I understand the attitude of my hon. friends to my right. Tonight they have won a victory. Tonight I say that 99-9 per cent of the controls have gone down the drain; still they are complaining ,to the government that not enough controls have been taken off. The once great Liberal party used to be known as the party of reform. It used to be known as a party which, generally speaking, would try to legislate for the benefit of the greatest number of individuals in Canada. But, Mr. Speaker, it looks to me as though that is no longer true. More and more often we are finding the Liberal party legislating for a small group or for certain interests in Canada.


Stanley Howard Knowles: Taking a cue from the
Tories.
29087-110i
Transitional Measures Act


Wilbert Ross Thatcher: I want to give my hon. friends a warning. I am sure the Minister of Reconstruction and Supply (Mr. Winters) will take this warning in the vein in which it is given. I do not think that the people of Canada want the Liberal party to out-Tory the Tory party. If they try to continue to out-Tory the Tory party, as apparently they are trying to do in this bill, I think that in five years the Liberal party in Canada will have gone the same way as the Liberal party in England has gone; that is, into oblivion. In the opinion of this group, Bill No. 86 is wholly inadequate to cope with the high cost of living. Moreover, from our past experience, we doubt that the government is anxious to even continue the controls they have in this bill. Probably they will drop them in a few months. In our opinion this bill is a relatively empty gesture made to appease public opinion. I am sure the Minister of Justice tonight must feel somewhat like that Canadian murderer who, in one of our penitentiaries, was stepping up to the gallows. The murderer turned to the executioner just before the trap was to be sprung, and as the noose was being put over his neck said: "This is going to be a great lesson to me." I think the minister should bear that story in mind, because we have an election coming up, and I do not want to see him in the position of the man who was being hanged-having to tell the Canadian people that it is going to be a great lesson to him. This group does not want price controls or price ceilings for one minute longer than they are necessary. As soon as prices start to go down fairly well, we should like to throw out controls. But until that time arrives we think that price ceilings and controls should be reimposed where necessary, at least on basic commodities.


Donald Methuen Fleming: I should like to go back, Mr. Speaker, to the speech made this evening by the Minister of Justice (Mr. Garson). Only he could have made it. That speech could not have been made by anyone who had sat in this house during the four previous sessions in the life of this parliament, because the review of the history of legislation with which the minister introduced his speech, and which occupied much of the time of his speech, was very inaccurate history indeed. I wish to set the record right to begin with tonight, because it would be a great mistake if the record which was given to the house by the Minister of Justice (Mr. Garson) ever by any stretch of the imagination came to be regarded by anybody as an accurate account of what happened.
The minister began with the War Measures Act, and then he said the moment the war
1738	HOUSE OF
Transitional Measures Act was over the government ceased to operate under the War Measures Act. Mr. Speaker, that is not a statement of fact. That is a statement which is at variance with the fact. Then he went on to talk about the bill which was introduced in 1945. I want to go back to the fall session of 1945. The bill which eventually became law in 1945 was not the bill which was originally introduced by the government. The bill which was originally introduced by the government was Bill No. 15, which was to be known as the National Emergency Powers Act, 1945. The minister completely glossed over this. Whoever wrote that speech for him had not told him about this essential feature of the history of the legislation because, Mr. Speaker, this legislation was so shocking in the powers that the government sought thereby to usurp at the expense of parliament that an outcry arose from one end of this country to the other. The powers that the government sought in this measure exceeded those which the government possessed under the War Measures Act. It is high time that the Minister of Justice made himself acquainted with the terms of Bill 15, a shocking bill, because by that bill the government sought at the hands of parliament powers as broad as these:
3. (1) The governor in council may do and authorize such acts and things, and make from time to time such orders and regulations, as he may, by reason of the existence of the national emergency . . . deem necessary or advisable for the security, defence, peace, order and welfare of Canada.
Then it goes on:
And for greater certainty, but not so as to restrict the generality of the foregoing terms, it is hereby declared that the powers of the governor in council extend to all matters coming within the classes of subjects hereinafter enumerated, that is to say:...
Bear in mind, Mr. Speaker, they are given power to do everything that was considered necessary or advisable arising out of the national emergency. What follows is not exhaustive; it is exemplary:
(a)	production, manufacture, trading, exportation and importation;
(b)	foreign exchange;
(c)	transportation by air, road, rail or water;
(d)	supply and distribution of goods and services, including the fixing of prices;
(e)	employment, including salaries and wages;
(f)	appropriation, control, forfeiture and disposition of property and of the use thereof, including the control of rentals and occupation;
(g)	entry into Canada, exclusion and deportation, and revocation of nationality;
(h)	imposition and recovery, in connection with any scheme of control contained in or authorized by orders and regulations, of charges payable to the Receiver General of Canada or into such fund or account as may be ordered.
That bill did not pass, Mr. Speaker, but it was a measure of the mind of the government.


Stuart Sinclair Garson: What bill is my hon. friend quoting from?


Donald Methuen Fleming: Bill No. 15.


Stuart Sinclair Garson: What book is my hon. friend reading from?


Donald Methuen Fleming: The bills of the second session of 1945. That bill, Mr. Speaker, contained the mentality of the government with reference to the powers that it sought to take from parliament in 1945. The hue and cry was such in this house and elsewhere that it found its place into the deliberations of the dominion-provincial conference then in session. It may have escaped the recollection of the hon. gentleman, but the premiers of the provinces then assembled made it quite clear to the Prime Minister of that time that they would not consent, that they would not continue to deliberate with the federal government, if the federal government, by a measure of that kind, was going to trample underfoot the constitution of this country and usurp powers, not only powers which belonged to parliament, but powers which are reposed by the constitution of this country in the legislatures of the provinces. It was under a stream of protest, Mr. Speaker, that the government had to yield and withdraw that iniquitous Bill 15.
Such was the mind of this government, Mr. Speaker, that they were determined to usurp everything that they could, and with a submissive majority in this house they were able to take from parliament in a bill which did become law, and is chapter 25 of the statutes of the second session of 1945, the following powers as enumerated in section 2, which reads as follows:
2. (1) The governor in council may do and authorize such acts and things, and make from time to time such orders and regulations, as he may, by reason of the continued existence of the national emergency arising out of the war against Germany and Japan, deem necessary or advisable for the purpose of . . .
Then there is a series, and (c) reads thus:
(c) maintaining, controlling and regulating supplies and services, prices, transportation, use and occupation of property, rentals, employment, salaries and wages to ensure economic stability and an orderly transition to conditions of peace.
This government wanted absolute power, Mr. Speaker. It wanted all the powers that are reposed in parliament, and it wanted all the powers that are reposed by the constitution in the legislatures of the provinces. That is what this government wanted, and that is the shameful record that the Minister of Justice has the effrontery to stand up in this house tonight and defend, when he says to this house that the moment the war was over this government ceased to act under the War Measures Act, and that it came forward and

did things in a statutory way. What did it do, Mr. Speaker? It took from parliament powers that no government that has any sense of responsibility to the constitution or to the people has any right to demand in time of peace.
That was 1945, Mr. Speaker, and the minister has said that the government came back to parliament in connection with each phase of decontrol. It is too bad that whoever wrote the minister's speech did not take the trouble to give the minister the facts, because the next time that the government came back to parliament was in 1947. And what a proposition it put up to parliament on that occasion! It said: Here are fifty-seven orders in council. It is too much trouble for us to bring in proper bills. We like these orders in council. We have been operating under them, and we have our boards and commissions set up to operate under them. We do not like to make any change. Therefore, parliament, will you be good enough to give statutory effect to these fifty-seven orders in council?
I am going to suggest to the Minister of Justice, Mr. Speaker, that he go back and read that bill, because he told the house tonight that these orders in council were set out in the schedule to the bill. That is not the fact. All that the Minister of Justice, or anybody else, can find in the schedule to the bill is a series of numbers and dates. This house has not yet put its imprimatur upon any official version of the orders in council to which it was called upon to give statutory approval in 1945. All that the house was given, all that you will find in the bill, Mr. Speaker, is the numbers of the orders in council and the dates, and then there are-


Stuart Sinclair Garson: Will my hon. friend permit a question?


Donald Methuen Fleming: I have not much time.


Stuart Sinclair Garson: I shall make it as brief as possible. If what the hon. member says is correct, how does he explain the fact that in the schedule to this bill of which he is speaking, as it was passed, there are indications that the wartime prices and trade board orders in council were amended in many particulars, with the regulations of the corporation and so on?


Donald Methuen Fleming: Surely to goodness the Minister of Justice could not have been paying very close attention to what I was saying. I have just said that the text of these orders in council is not set forth in the schedule to the bill, and all that the Minister of Justice, or anyone else, can find by way of text in the
Transitional Measures Act schedule of that bill is the text of half a dozen amendments. This house was not given-


Mr. Lesage:: Will the hon. member permit a question?


Donald Methuen Fleming: -an opportunity to put the' text of the orders in council in the bill. I asked the Minister of Justice at that time to put the orders in council in the bill as a schedule. He said: Oh, no; we will do nothing but put the numbers in. And, Mr. Speaker, no one who wants to know the law today, whether about the fifty orders in council that became law under that bill, or about the twelve orders in council that exist today, will find it in the statute books. He will not find in this enactment of the parliament of Canada the text of the law that parliament was then enacting. He must go to the privy council office and try to find there what are the orders in council which are referred to by number and date in this legislation, and that act of 1947 is to be continued today. It is too much trouble, Mr. Speaker, for this government to act in the sensible, proper legislative way. It is too much trouble for a government that has become accustomed to ruling by order in council to bring forward measures and to show parliament the courtesy, or at any rate to do parliament the justice, of putting before it the text of what it is being asked to legislate.
And that same situation prevails today. The Minister of Justice (Mr. Garson) has referred to my leader, shamefully, as the John Hampden of Bay Street. Who is his leader? Surely, Mr. Speaker, in the record I have given you tonight you have the mentality of those who occupy the treasury benches and wielded this omnipotence during the war. And it is to that company that the hon. gentleman has now succeeded.
Let me tell him, if he is talking about people on Bay street, that he had better make sure he has first cleared up or cleaned out the nest of the government. He had better start with the Prime Minister (Mr. St. Laurent). When he is talking about big interests he need not look at my leader, because my leader was never part and parcel of big interests. He never was.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: He never was a bank director; he never was a director of a trust company, or of companies, like the right hon. gentleman who leads the government today. And if you are looking for representatives of big business or those in this House of Commons who represented big business before they came here, then let the Minister of Justice
1740	HOUSE OF
Transitional Measures Act page the Prime Minister. There is where he will find his man.
And bear this in mind, that the fact that the Prime Minister had had that kind of experience was put forward by those who brought him to this chamber in the first place, and those who brought about his election as Liberal leader last August, as one of the reasons he should be leader-because he had had all that experience.
Mr. Speaker, I should think that by this time, if the Minister of Justice knows the record a little better by now, he and his ilk in the government ought to be the last to talk about representatives of big interests.
I am surprised to know that the Minister of Justice, who himself was present at that Liberal convention, that cut-and-dried affair, and heard-at least I hope he heard-all the speeches of the candidates for leadership, did not recognize the words quoted in the house by my leader, reference to which was made by the minister in his speech tonight. So there can be no mistake about the source of those historic words I shall now read, for the benefit of the Minister of Justice, the words which were uttered by the hon. member for Quebec South (Mr. Power) on that occasion on August 7, 1948, when he made a speech as a candidate before the Liberal national convention. And at that time he was speaking of those who sat on the platform. He was speaking of those at whom he was looking when he spoke. This is what he said:
X may be leading a forlorn hope, but I am leading it up to the very battlements of autocracy, complacency and inertia.
He looked straight at the Prime Minister of the day as he spoke. And, Mr. Speaker, that is the mantle which the new Minister of Justice has come forward with great alacrity to wear.
I wish to put him right on one other thing. He says that if the resolution preceding this bill had not passed on Friday night we would not have rent control. That is utterly nonsensical, as every member in this House of Commons must know. It would mean that the government would have an opportunity and that the government would have a duty to introduce a proper measure to bring about a continuation of rent control, and to do it in proper legislative form, and in a form which would recognize the responsibility of the government to parliament.
There has been so much misrepresentation on the subject of the position of this party with respect to the emergency and rent control that I should like briefly to say one or two things on the subject. One finds in the bill today no reference whatever to a national emergency. If the government is so convinced that there is today what the Minister
[Mr. Fleming.)

of Justice contended in his speech on Friday last, namely, a general emergency, a general national emergency-and note the word "general"-then one would have thought that the government would have invited the house to make a clear declaration on the point, or that at the very least there would be in the bill a recital of the continuance of the national emergency. But, no; the Minister of Justice does not like to bring that subject too directly before the House of Commons. So he simply relies upon a continuance of the recital in the preamble to the 1947 bill. That is as close as he wants to bring this subject before the house, and into the discussion on the bill.
My leader made it perfectly clear, and the house can see it at pages 1446 and 1448 of Hansard, that this Progressive Conservative party did not oppose rent control. The Progressive Conservative leader and those associated with him say that we are quite prepared and ready to support a proper measure of rent control. But we do not wish to see it done in this form. We wish to see it done in proper legislative form. And that is the position every member in the House of Commons ought to take, if he has any respect for his responsibility as a member of the House of Commons.


Clarence Decatur Howe: So you are for controls, eh? Running back and forth.


Donald Methuen Fleming: We are for controls, but in proper form-not the kind of form to which the Minister of Trade and Commerce (Mr. Howe) has been so long accustomed-a man who, however sound his mind may have been when he entered parliament, has wielded such extraordinary powers for so long that one can see in him the truth of the famous statement of Lord Acton that all power corrupts, and absolute power corrupts absolutely.
Mr. Speaker, the house must make up its mind whether it proposes to proceed by a proper legislative and responsible method, such as we have advocated, or by this omnibus holus-bolus method the government is asking parliament to accept.
Bear this in mind, that we of the Progressive Conservative party have shown how the matter of rent control can be handled. We have shown how it ought to be handled in this House of Commons by proper methods, by a proper legislative enactment which would be clear and which would give to members of the house an opportunity to do their duty, a duty they owe to their constituents, the duty of carefully reviewing legislation before it becomes law. This is impossible to do in connection with these orders in council.
There are some members in the house who have not very much patience with a

discussion about the constitution. That is the kind of mentality that is found in hon. members as a result of the doubtful example set by the government opposite. I wish to give ample warning to those who are prepared to heed warnings that the course that is being followed, in regard to this measure in its present form, is one which may well lead to a defeat of the whole scheme of rent control and of other controls, if this bill should be challenged in the courts.
We have given the House of Commons a clear statement as to how this matter could be handled without jeopardizing the whole system of controls, including rent controls, if the House of Commons would follow the legislative methods we propose.
The Minister of Justice has made it perfectly clear that in his judgment-and in this respect he is correct; that is the one place in his speech where he was right-there is no power in the subjects enumerated in section 91 of the British North America Act to legislate with reference to the matters dealt with in the twelve orders in council which are to be continued.
The minister justified the legislation on the strength of the existence of a general national emergency-not a specific emergency, but a general one. Let me say to the house, and to those who are not interested in the verities of the constitution, and who are not interested in warnings about what may be the fate of democracy if this house does not rise to its responsibilities, that they are jeopardizing everything in these orders in council today by their acceptance of the course the government is pursuing. They are jeopardizing everything.
If the government will bring in individual measures, as it ought to do, it may save the controls believed by the House of Commons to be necessary. But if this measure goes to the courts-this omnibus measure dealing with twelve orders in council on a wide variety of subjects-and if the courts are not satisfied that a national emergency exists with respect to each of these subjects, let us bear in mind the fact that the courts will not sit down and say, "Well, we will recognize the validity of the measure with respect to this control, but not with respect to that control or the other control". The courts are not going to sit down and separate the wheat from the chaff, separate what is ultra vires from what is intra vires.
May I remind the house of what the privy council did in 1937 when they had before them a reference with respect to the validity of the Employment and Social Insurance Act, 1935. The government asked the courts on
Transitional Measures Act that occasion to say whether that act or any part of it was within the legislative competence of the parliament of Canada. They expressly asked the courts in case they found the whole measure was not intra vires of parliament to say what parts of it were. The reasons of the privy council will be found in 1937 Appeal Cases, page 355. In effect they said that they were not going to sit down to try to sift out the wheat from the chaff. Here is the concluding paragraph of the privy council's decision:
The other parts oi the act are so Inextricably mixed up with the insurance provisions of part III that it is impossible to sever them. It seems obvious, also, that in its truncated form, apart from part III, the act would never have come into existence. It follows that the whole act must be pronounced ultra vires.
The privy council were there dealing with only one statute and they were not prepared to say that part III might be intra vires while the rest of the act might be ultra vires. They said that they would not sit down and try to separate the parts that were intra vires from those that were ultra vires. Today we have a measure which cannot be compared as to clarity and specific directness with the statute under review in 1937; here we have an omnibus measure that simply scoops up the twelve remaining orders in council and says that they shall be law for another year. If this measure should go before the courts and it should be found that any part of it is ultra vires by reason of the general national emergency referred to by the Minister of Justice (Mr. Garson) not extending to that particular aspect of it, you may be sure that the whole bill will be ruled ultra vires. Think what a calamity there would be if the whole measure should be thrown out at a time when perhaps parliament was not in session. Would it not be the part of wisdom and common sense to divide up these various subjects and treat them individually, as they ought to be treated, and pass the proper legislative enactments with respect to each? That humble warning may fall on deaf ears, but if this measure is ruled ultra vires those words are on the record.
I wish to comment upon the proposition propounded in this house by the Minister of Justice in support of what he has had to say about the existence of no specific national emergency, if you please, but a general national emergency. He has put the validity of this measure on the basis of the existence of a general national emergency. The word "general" is his. If that general national emergency exists, as contended by the spokesman for the government, it is crystal clear that whether parliament occupies any field of legislative jurisdiction throughout the

Transitional Measures Act whole ambit of self-government in this country is simply a question of expediency or choice on the part of the government. So far as the constitutional argument is concerned, it goes this far: there is no field of legislative jurisdiction in Canada today into which this parliament may not enter by reason of the alleged existence of a general national emergency.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: Any Quebec member may well say, "Oh, oh", but the fact is that the Minister of Justice has propounded that very proposition. He was asked the other evening by the hon. member for Moose Jaw (Mr. Thatcher) what he had to say on this subject. The question asked by the hon. member was not an unreasonable one. First of all I shall refer to what the Minister of Justice said, before he was asked the question, as reported on page 1650 of Hansard. He said:
I apprehend that, once a national emergency has been established, then, on the basis of that national emergency, parliament can legislate with regard to any of those matters if it so chooses.
That closing phrase referred to a long enumeration taken out of the general wartime prices and trade board order. The Minister of Justice was saying that today parliament can legislate with regard to all those subjects because a national emergency exists. Then to make the matter crystal clear, the hon. member for Moose Jaw asked this question, as reported on page 1652 of Hansard:
Will the minister permit a question frt>m this corner of the house? If he says that there is a general emergency, as he is arguing, why are we dropping so many controls as he proposes to do?
That was quite a reasonable question from the point of view of the hon. member asking it. The spokesman for the government on everything pertaining to the law and constitution of this country replied:
That is a very easy question to answer, Mr. Chairman. While the general emergency is the foundation for the jurisdiction that we propose to exercise here, it is a matter of judgment in dealing with the general emergency as to how we should carry on controls or dispense with them.
The position of the government is that they say there is a national emergency and everything that belongs to the field of legislative jurisdiction in Canada lies within the power of this parliament, that this parliament can exercise all its rights in view of the existence of that national emergency. There is no limit. That is the argument of the government. It becomes simply a matter of choice on the part of the government whether it invades the whole provincial field or only part of it. This government has assassinated the constitution.


Some hon. Members:: Oh, oh.
[Mr. Fleming.)


Louis Stephen St-Laurent: Even members of the hon. member's party laugh at that.


Donald Methuen Fleming: Whoever is ready to support the government in this monstrous argument may accept for himself whatever glory he can find in being the assassin of the Canadian constitution. The proper and sensible method that a parliament at all responsible to the Canadian people should follow nearly four years after V-E day is the course that has been proposed in this house by my hon. leader.
I have asked this question: where will the reader of the statutes find the law we are continuing today? He will not find it in the statute books of Canada. He will have to go to the privy council office to learn the law which parliament has enacted.
We are told in this bill that they are going to confine their power to the orders and regulations in existence today, but where do we find those? We will have to go to the privy council office, we will have to go to the office of the wartime prices and trade board, we will have to go to all the other factories where orders and regulations are turned out.


Alan Cockeram: A slot machine.


Donald Methuen Fleming: Slot machine is right. There is a great multitude of slot machines turning out the law, and this parliament is being asked to become a mere rubber stamp to give parliamentary authority to all kinds of order in council and regulation procedure.
We are told of amendments, but how on earth are we going to amend the orders in council when they do not appear before us in the text of this bill or in any statute of this parliament?
I am not going to go into the subject of surplus powers at any great length, but the twelve orders we are being asked to continue are just filled with powers that cannot by any possible stretch of the imagination be said to be necessary. Let any member of the government stand up and try to defend the necessity for the continuance of some of these orders in council. I will not go over the ground covered by the hon. member for Calgary West (Mr. Smith), but I just ask in passing if any hon. member of this house will stand up in his place and say, having regard to what may be suggested by hon. members opposite to be a national emergency, that it is essential in order to meet that national emergency that the priorities officer shall have power to prohibit the making of or dealing in construction materials, because that is what order in council P.C. 1609 says. It provides that the priorities officer shall have power to prohibit as well as to control and regulate the making of or dealing in construction materials. That is not an isolated

case; that is an example, and examples of the same kind can be multiplied by the score in these orders, containing as they do surplus and unnecessary powers that cannot be justified by the existence of anything that has been said at any time in this debate in relation to the alleged national emergency.
By continuing these powers in their present form this bill projects forward for another year the vice of delegation of power, the continuation of irresponsibility. Surely this House of Commons, Mr. Speaker, is not going to turn its back upon its clear responsibility in the matter.
It would be interesting to hear from the Minister of Justice (Mr. Garson) what he, as premier of one of the provinces, had to say in 1945 when Bill 15 first came to the attention of the provincial premiers. Did he say, "Oh, you can trust this government with all power. Let us go right ahead. The war is over, but we will trust this government." Did he say that? If that was the position he took as a provincial premier in the fall of 1945 when the premiers of the provinces were meeting in conference in Ottawa, I would invite the Minister of Justice to stand up and say that he approved that bill. If, on the other hand, like the premiers of the other provinces, in obedience to their responsibility to the constitution, and to the people of their provinces, he stood up and protested, as did the premiers of the other provinces, against this highhanded, arbitrary usurpation of the powers of parliament and of the provinces, and joined them in protest, I think the house would like to know, because the house would like to have the opportunity of testing the glowing words that fell from the lips of the hon. gentleman tonight in relation to the stand he took with reference to that iniquitous Bill 15.
Would it not be comforting at least if the house and the people of the country had some assurance that the government was taking energetic measures to eliminate and to cure the conditions which constitute the national emergency that has been referred to? Would it not be comforting to know that they have some objective for meeting the critical national emergency that exists as to housing, and which justifies and makes necessary a proper measure of rent control today? Would that not have been of some comfort to the house in continuing these broad powers? Would it not have been of some comfort to the house on the other branch of the argument of the Minister of Justice? You will remember he said he supported his argument as to the national emergency on two grounds, first the housing emergency, which everybody on this side of the house knows more about than the government, and secondly, inflation? Would it not have been comforting if the
Transitional Measures Act minister had been able to tell us that the government was doing something to cure inflation, that this inflationary spiral, with which apparently they have been powerless to cope in recent years, was going to be cured by sensible government measures, and that the people of the country were going to be given an opportunity to meet the rising spiral of inflation, the rising cost of living, by reductions in income tax, by reductions in the burden of indirect taxes, all those consumer taxes that have weighed so oppressively upon the backs of the Canadian people?
My time is almost up, but before I conclude my remarks I wish to put forward an amendment which will give the house the opportunity that the government has not seen fit to give it, namely, to proceed with regard to this subject of rent control, and the other subject matters referred to in these twelve orders, by a proper legislative method. Therefore I move, seconded by the hon. member for Peel (Mr. Graydon):
That the said bill be not now read the second time but that the subject matter thereof be referred to the standing committee on banking and commerce with instructions that they have power to recommend a specific measure relating to rent control, and other specific measures relating respectively to other matters provided for in the said bill.
This amendment will give the house an opportunity to break down the measure. It will go to a committee; it will not now be read a second time. It will go to the banking and commerce committee, and the committee will have the opportunity of breaking down the subject matters that are dealt with today in the twelve orders in council. The committee will be able to bring in a proper specific measure with respect to rent control, a proper specific measure with regard to each of the other several matters dealt with in the twelve orders in council that are now under debate. That, Mr. Speaker, is a healthy and sensible procedure. It is the procedure that was followed in the house in 1946 when the government brought in a measure of a similar nature. It is true there was only one order in council involved, but it was a measure-


Some hon. Members:: Time.


Donald Methuen Fleming: My time is not up. It was a measure to extend the life of an order in council, and the house decided it would not proceed by that method, that it would insist that a bill in proper legislative form be brought in, and therefore the house referred the government measure before second reading to the special committee on veterans affairs. That is the procedure that I offer the house in this amendment-a sensible, legislative and responsible method of dealing with the question. *
1744	HOUSE OF COMMONS
Transitional Measures Act
Let it not be said that there is not time to deal with it. The banking and commerce committee can be called together to meet at once. If it be said that there is not now time to deal with the matter adequately, if the government has left the banking and commerce committee too little time to deal with it properly, then we are quite prepared to have a short interim extension to give the banking and commerce committee time to do what this government has not given parliament time to do, to deal with this matter in a responsible way.
On motion of Mr. Graydon the debate was adjourned.


Gordon Graydon: May I respectfully suggest that the amendment should be read?


Some hon. Members:: The house is adjourning.


The Acting Speaker (Mr. Golding):: The
amendment can be dealt with tomorrow.



BUSINESS OF THE HOUSE

Louis Stephen St-Laurent: Do hon. members wish to know what the business is for tomorrow? I was waiting for an inquiry to be made. Tomorrow we shall make an attempt at eleven o'clock to dispose in committee of the Foreign Exchange Control Act. If and when that is disposed of we will endeavour to give comfort to those hon. members who have been asking for it by disposing of the amendment made to the motion for second reading of this bill. As already announced, at seven-thirty the Minister of Finance intends to introduce his budget resolutions.


Stanley Howard Knowles: And then we will return to whatever business was being considered prior to that time?


Jean-Paul Stephen St-Laurent: Yes.
At ten-thirty the house adjourned, without question put, pursuant to the order of the house passed on March 14, 1949.

Tuesday, March 22. 1949