1950-06-28

Mr. Speaker:: I am sure all hon. members have learned with deep regret of the passing of the Hon. J. A. Glen, Speaker of the House of Commons from 1940 to 1945.
Mr. Glen was elected to the house first in 1926 as member of parliament for Marquette. He was defeated in the general election of 1930, but was re-elected in 1935, 1940 and 1945. In 1940 Mr. Glen was elected Speaker of the house, and in April, 1945, joined the cabinet of Right Hon. W. L. Mackenzie King as Minister of Mines and Resources. He was a good administrator and a faithful and loyal member of the government to which he belonged.
In 1948 Mr. Glen was appointed to the international joint commission, and he was chairman of the Canadian section at the time of his death.
Those of us who were here when Mr. Glen was Speaker recall the fair and impartial manner in which he presided over our deliberations. During the difficult days of the war he occupied, with dignity and in the best traditions of those who had gone before him, the position which I now hold.
Mr. Glen had not been well recently, but he endured his illness with a courage and fortitude which deeply impressed all who knew him. I know all hon. members will join with me in extending sincere sympathy to Mrs. Glen and her son.


Mr. W. G. Weir (Porlage-Neepawa):: Mr. Speaker, as a fellow Manitoban I want to say how much we appreciate what you have said with respect to the late Mr. Glen. I know it will be appreciated also by his friends in our province, as well as those from Manitoba who were associated with him in the House of Commons.


Hon. Stuart S. Garson (Minister of Justice):: Mr. Speaker, as one who has had the very great honour of following the late Hon. J. Allison Glen in the constituency of Marquette, I want to say that the sentiments you have expressed will be echoed in the hearts and minds of those who knew him best in the
town of Russell and throughout Marquette constituency. From the time he went there as a solicitor to carry on the practice of law, having come to Canada as an immigrant from Scotland, he had the deep and well deserved respect of his fellow citizens, who even before he became a member of this house had honoured him with many positions of responsibility. In my experience in going about that constituency, no matter in what remote part I might be, I would always find the deepest regard and respect for the late Mr. Glen.
I am sure we all join with you in your expressions of sympathy to the family.


Mr. Gordon Graydon (Peel):: Mr. Speaker, the official opposition would like to join with hon. members opposite who have paid a glowing tribute to the memory of the late Mr. Glen. We desire to have you convey to Mrs. Glen and the family our deepest sympathy.


Mr. William Bryce (Selkirk):: On behalf of this group, Mr. Speaker, I should like to join in this expression of sympathy to those who are bereaved by the passing of Mr. Glen. I have known Mr. Glen for the best part of my life; he always had the respect and admiration of those who knew him, and his passing will be deeply regretted.


Mr. J. H. Blackmore (Leihbridge):: Mr. Speaker, I wish to associate myself, and the Social Credit group, with what has been said about the late Mr. Glen. I knew Mr. Glen from the time he first came to the house. Tn all the various activities in which he participated, he discharged to the full the responsibilities that were placed upon him. He was a good man, and he lived a good life. I am sure he will reap a good reward.



OLD AGE SECURITY

[Stage Direction]
Second and final report of joint committee on old age security.-Mr. Lesage.


Hon. R. W. Mayhew (Minister of Fisheries):: Mr. Speaker, I stated in the house on Thursday last that I would make a statement on the salted cod situation as soon as certain additional information became available. I was referring at that time to important trade


Mr. Higgins:: Mr. Speaker, on behalf of the province I should like to thank the minister for the statement he has just made. There is one particular point that has not been covered, and I would appreciate it if the minister would explain it. It concerns a statement attributed to him arising out of the conference with the chairman of the Newfoundland salt fish board, when Mr. Gushue permitted it to be announced that the conversion of sterling for the sale of up to 400,000 quintals of salt codfish was to be provided. Could the minister say anything about that?


Robert Wellington Mayhew: I had two objectives in view in making this statement today. One was that it would be made prior to consideration of my estimates, and anyone wanting to ask questions about it could ask them when the estimates are taken up; they could be answered with less delay. The other objective was, of course, the necessity for speedy action. If the hon. member will hold his question, I will answer it on my estimates.



REPORTS AND PAPERS


Hon. L. B. Pearson (Secretary of State for External Affairs):: Mr. Speaker, the hon. member for Peel (Mr. Graydon) asked when it was the intention of the government to table the notes concerning relief credits to certain European countries. I wish to lay on the table three copies, in English and in French, of the exchange of notes with

Denmark, Yugoslavia, and Norway respectively. The agreement with The Netherlands was tabled on March 2 last.
I should also like to lay on the table fifteen documents, which are diplomatic instruments published in the Canada treaty series. Perhaps the list might appear in Votes and Proceedings, unless hon. members would wish me to read it now.



FISHERIES PRICES SUPPORT BOARD-ANNUAL REPORT FOR 1949-50

Mr. J. W. MacNaughi (Parliamentary Assistant to the Minister of Fisheries):: Mr. Speaker, I beg leave to table the annual report of the fisheries prices support board for the year 1949-50. Copies of the report in the French language will be tabled when they are available.



EXTERNAL AFFAIRS


Lester Bowles Pearson: Mr. Speaker, perhaps I might be permitted to report to the house on certain developments that have taken place in the last forty-eight hours with respect to the situation in Korea, and to outline the attitude of the Canadian government.
The house will recall that at its meeting on Sunday the security council of the United Nations termed the armed attack upon the republic of Korea as a breach of the peace, and called upon the communist forces to withdraw to the 38th parallel. It soon became apparent that this appeal would be without effect on the communist government of North Korea. Their forces continued to advance on Seoul, the capital of Korea. The United Nations commission on Korea reported that they were convinced that North Korea would pay no heed to the resolution of the security council.
When the charter of the United Nations was drawn up, it was intended that such an act of aggression would be met by the dispatch of forces put at the disposal of the security council by member governments as the result of prior agreements. However, the security council has never been able to negotiate such agreements, for reasons which I need not go into now. In these circumstances, with one link missing in the chain which has been designed to hold aggression in check, it was impossible for the security council itself to take effective action to provide military assistance to the republic of Korea. If help were to be given, the responsibility would have to be shouldered by individual members of the security council acting within the terms of the charter, but on their own initiative. In
External Affairs-Korea
this case the United States recognized a special responsibility which it discharged with admirable dispatch and decisiveness.
As hon. members will know, President Truman yesterday announced that the United States would send air and sea forces to give the Korean government's troops cover and support. I feel sure that all members of the house will applaud and support this act of high courage and firm statesmanship on the part of the government of the United States.
I think it would be appropriate, Mr. Speaker, if I read into the records of the house the statement of the president. It was as follows:
In Korea the government forces, which were armed to prevent border raids and to preserve internal security, were attacked by invading forces from North Korea. The security council of the United Nations called' upon the invading troops to cease hostilities and to withdraw to the 38th parallel. This they have not done, but on the contrary have pressed the attack. The security council called upon all members of the United Nations to render every assistance to the United Nations in the execution of this resolution. In these circumstances I-
That is, President Truman.
-have ordered United States air and sea forces to give the Korean government troops cover and support.
The attack upon Korea makes it plain beyond all doubt that communism has passed beyond the use of subversion to conquer independent nations and will now use armed invasion and war. It has defied the orders of the security council of the United Nations issued to preserve international peace and security. In these circumstances the occupation of Formosa by communist forces would be a direct threat to the security of the Pacific area and to United States forces performing their lawful and necessary functions in that area.
Accordingly I have ordered the seventh fleet to prevent any attack on Formosa. As a corollary of this action I am calling upon the Chinese government on Formosa to cease all air and sea operations against the mainland. The seventh fleet will see that this is done. The determination of the future status of Formosa must await the restoration of security in the Pacific, a peace settlement with Japan, or consideration by the United Nations.
I have also directed that United States forces in the Philippines be strengthened and that military assistance to the Philippine government be accelerated.
I have similarly directed acceleration in the furnishing of military assistance to the forces of France and the associated states in Indo-China and the dispatch of a military mission to provide close working relations with those forces.
I know that all members of the United Nations will consider carefully the consequences of this latest aggression in Korea in defiance of the charter of the United Nations. A return to the rule of force in international affairs would have far-reaching effects. The United States will continue to uphold the rule of law.
I have instructed Ambassador Austin, as the representative of the United States to the security council, to report these steps to the council.
That, Mr. Speaker, is the end of President Truman's statement, issued yesterday. I

External Affairs-Korea should like to point out, if I may, that although the United States government has taken this step on its own authority, it is acting not only in accordance with the spirit and letter of the charter of the United Nations, but also in pursuance of the resolution which was adopted by the security council on Sunday. This resolution, it will be remembered, called on all members of the United Nations to render every assistance in regard to its execution. It should also be borne in mind that the United States has accepted responsibility generally for the maintenance of international peace and security in the Pacific area, and specifically for the maintenance of the security of Japan as the power responsible under international agreements for the occupation of that country. Those specific responsibilities, as well as the responsibilities which are shared by all of the members of the security council-and indeed by all members of the United Nations -for maintenance of international peace and security have no doubt contributed to the decision by the United States to come at once to the aid of Korea. If any further international authorization were needed for the prompt and vigorous action which has been taken by the United States, it has been provided by the further resolution of the security council which was passed last night recommending that the members of the United Nations furnish such assistance to the republic of Korea as may be necessary to repel the armed attack and to restore international peace and security in the area concerned. That resolution was passed by a vote of seven in favour, one against, and two delegations non-participating because they had not at that time received instructions in regard to this matter.


Mr. Green:: Which country voted against it?


Lester Bowles Pearson: The government of Yugoslavia, which had produced a resolution of its own in this matter, voted against the United States resolution. The representatives of India and Egypt had not at that time last night received instructions. I understand they expect those instructions during the course of the day. The U.S.S.R., of course, took no part in the meeting, and the other delegations voted in favour of the resolution.
Possibly I should put on Hansard this extremely important resolution of the security council. It reads as follows:
The security council,
Having determined that the armed attack upon the republic of Korea by forces from North Korea constitutes a breach of the peace;
Having called for an immediate cessation of hostilities; and

Having called upon the authorities of North Korea to withdraw forthwith their armed forces to the 38th parallel; and
Having noted from the report of the United Nations commission for Korea that the authorities in North Korea have neither ceased hostilities nor withdrawn their armed forces to the 38th parallel and that urgent military measures are required to restore international peace and security; and
Having noted the appeal from the republic of Korea to the United Nations for immediate and effective steps to secure peace and security;
Recommends that the members of the United Nations furnish such assistance to the republic of Korea as may be necessary to repel the armed attack and to restore international peace and security in the area.
That, Mr. Speaker, is the resolution of the security council on this matter. As hon. members know, Canada is not now a member of the security council and therefore no decision on our part was required yesterday in regard to this resolution; but I am sure that the house will support, as indeed does the government, the action taken by the security council, because it represents collective action through the United Nations for peace.
It is the firm hope of the Canadian government, as I am sure it is the firm hope of all members of this house and of the Canadian people, that this action which has now been taken by the security council and by the United States government in conformity with the resolutions of the security council will soon end the war in Korea and thereby make possible a fresh attempt to compose the differences which have long kept that country in a state of tension and unrest, and which have led to the present outbreak of hostilities.


Gordon Graydon: I am sure, Mr. Speaker, that the house listened with keen interest and with unqualified approval to the statement of the Secretary of State for External Affairs (Mr. Pearson) indicating the government's policy with respect to support of the security council's decision and the action taken by the United States of America. Perhaps the minister might indicate to the house what that support he has mentioned as having been given by this government may mean when translated into practical terms.
I rose only to indicate that in a matter so serious and so vital to the peace and security of the world as the unprovoked aggression of the North Korean communist forces upon the South Korean territory, the people of Canada, having in mind their great desire for freedom, as they have so often expressed it and fought for it, would expect this kind of support to be given by the Canadian government. I was glad to hear the Secretary of State for External Affairs express it in the terms that he used.
I want to say to the government through you, Mr. Speaker, that when it comes to a

question of such international importance and concern as this, in the twilight between peace and war-to use the expression that the minister used on a previous occasion-all of us in this parliament have a sense of unity of purpose which I hope does credit to the representatives of the Canadian people at large.
On the question of foreign affairs this parliament has sought to speak with a united voice. On an occasion so important and serious as this I want to say that when the preservation of peace itself is at stake, the government can count upon the wholehearted and unanimous support of the opposition in any measures that can be taken which are proper in the circumstances for the preservation of that peace and security. After all, when the vital issues of peace and war are before us there are no divisions in the parliament of Canada. We speak as Canadians rather than as groups divided superficially on party lines. I want to say to the government that we are prepared to lend such support as an opposition can lend in a situation such as this. We hope that the action taken, as the minister pointed out a few moments ago, so rapidly and so decisively by the United States government under the aegis of the United Nations will in the end, indeed in a very short time, bring peace to that area and solve one of the problems which face a troubled world.


Lester Bowles Pearson: I know this matter should not be discussed at this time, but I should like to express my appreciation of what the hon. member for Peel has said, and for the spirit behind his words. He directed a question to the government as to what action we are taking to implement the words of my statement. I should like to point out to him and to the house that we have not yet even received the security council's resolution formally; we saw the text of it last night. I can assure him and the house that we shall be conferring, through the United Nations, with other members of the United Nations as to what part we in Canada can and should take in any future action that may be necessary.


Howard Charles Green: May I ask the minister to tell us what action has been taken by the other governments? For example, we read in the press that the United Kingdom has already taken action. Can the minister tell us what the situation is?


Lester Bowles Pearson: We have had no information on that matter from any other government as yet.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, there will be an opportunity for any extended remarks that may
Questions
be necessary with respect to this matter on the estimates of the Secretary of State for External Affairs, which will probably be before us tomorrow. I rise now merely to say that we welcome the steps that have been taken to make whatever action the present situation calls for not the action of one power, but the collective action of members of the United Nations, prompted by one aim, namely, the maintenance of peace.



QUESTIONS

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


Mr. Quelch:: 1.	What was the total of the transfers made to contingent reserve fund from the earnings of each of the chartered banks in excess of their reasonable requirements for each of the years 1945 to 1949?
2.	What was the amount that each bank was called upon to pay in additional taxation as a result of these excess transfers in each of the years, 1945 to 1949?


Mr. Sinclair:: In view of the secrecy provisions of the Income Tax Act, it is not considered proper to furnish the requested information in respect of individual banks. The aggregate of the amounts transferred by certain banks in 1945 from income to contingency reserves considered to be in excess of their reasonable requirements was $341,536.71, and the appropriate taxes thereon were subsequently paid. There were no excess transfers to reserves in the years 1946, 1947 and 1948. The inspection of all banks for the year 1949 has not yet been completed.



SALE OF WARTIME HOUSES


Mr. Noseworthy:: 1.	How many wartime houses taken over by Central Mortgage and Housing Corporation were taken over at the nominal value of $100 each?
2.	What was the average amount spent to make those houses permanent before they were put up for sale?
3.	How many of those have been sold, and for how much (a) in Canada; (b) in Windsor?
4.	What price is being asked for those houses still unsold (a) in Canada; (b) in Windsor?


Mr. Prudham:: 1.	14,486.
2.	$785.24.
3.	(a) As at May 31, 1950, 4,831 houses have been sold in Canada for an amount of $12,939,916.31. These figures include the en bloc sales to municipalities of 584 houses at an average price of $817.80 and the sales for removal from site of 59 houses at an average price of $807.62.

Questions
(b) As at May 31, 1950, 321 houses have been sold in Windsor for an amount of $935,700.
In addition, on that date 195 agreements covering the sales of houses referred to in (1) above, were in the process of documentation.
4.	The average prices being asked for houses still unsold are:
(a) in Canada (b) in Windsor 4	room	(small)	$2,603	$2,6504	room	(large)	$2,779	$2,9505	room	$3,0006	room	$3,259	$3,450



PROSECUTIONS FOR OPERATING MOTOR VEHICLES WHILE INTOXICATED

Mr. Diefenbaker:: 1.	How many prosecutions, by provinces, of persons charged with operating motor vehicles while intoxicated, took place, and on what date, in each month since the 1st of June, 1949, and of these, how many convictions were registered?
2.	Of those who were convicted, how many received imprisonment of (a) seven days; (b) seven to fourteen days; (c) thirty days?
3.	In how many of such convictions were their drivers' licences suspended (a) temporarily; (b) for a period of three months or more?


Mr. Mcllrailh:: There is no further information that can be given by way of answer to this question other than that given on Monday, June 26. I wonder whether the hon. member is prepared to let the question drop.


Mr. Speaker:: Dropped.



PRODUCTS MANUFACTURED FROM SAWDUST

Mr. Bertrand:: 1.	What products can be manufactured from sawdust of mills?
2.	What industries are manufacturing such products in Canada?
3.	What are the market conditions for the said products?


Mr. Mcllrailh:: 1.	Wallboard; composition flooring; sugars; ethyl alcohol; yeast; molasses; charcoal, acetic acid and methanol; fuel briquettes (sawdust is also used, without any treatment, as a fuel); floor sweeping compound; wood flour -plastics, explosives, linoleum, wallpaper; soil conditioner; animal bedding; packaging material; insulating material; traction product for ice and snow..
There are a number of other uses for sawdust in which only insignificant quantities are consumed. These are not listed above.
In uses for sawdust for such purposes as animal bedding, insulation material, soil conditioner, and packaging, the sawdust is procured from a large number of sources and *normally by individual users, who collect direct from saw mills.
2.	Only a very few of the products listed in the answer to question No. 1 are being produced in Canada from sawdust. The more important are:
Wall'board-produced from sawdust in the maritimes by one lumber mill.
Composition flooring-produced in Ontario by one plant.
Fuel briquettes-produced by several lumber mills in eastern Canada and British Columbia.
Floor sweeping compound-produced by a number of firms.
Wood flour-^prepared by one Ontario mill.
3.	Wallboard and composition flooring have at the present time a good market due to the high level of building activity.
Fuel briquettes are used extensively as heating and cooking fuel in the vicinity of manufacture. At areas distant from the source of supply, high transportation costs limit their use to special luxury purposes such as in open fireplaces.
Floor sweeping compound is in reasonably good demand.
Wood flour has a number of outlets. However, the specification requirements of the final products are so exacting as to make successful manufacture rather difficult and highly specialized.



H.M.C.S. &quot;CATARAQUI&quot;  COMMANDING OFFICER

Mr. Knowles:: 1.	Who is the commanding officer of H.M.C.S. Cataraqui?
2.	What is his rank?
3.	How long has he been connected with H.M.C.S. Cataraqui?
4.	What pay and allowances has he drawn during each year he has been connected with H.M.C.S Cataraqui?


Mr. Blanchette:: 1.	Henry K. Hill.
2.	Commander, RCN(R).
3.	Since August 23, 1948.
4.	Calendar year 1948, $1,243.10; calendar year 1949, $4,911.13; calendar year 1950, to May 31, $2,055.00.



POULTRY INDUSTRY


Mr. Jones:: 1.	What steps have been taken by the Department of Agriculture to curb the spread of Newcastle disease in British Columbia?
2.	Is the department contemplating trying other methods of control, such as vaccine?
3.	What number of birds have been slaughtered to date?
4.	What area beyond the Fraser valley is affected?


Mr. McCubbin:: 1.	A program of eradication by immediate slaughter of infected and exposed birds;

destruction of contaminated eggs; cleansing and disinfection of infected premises including poultry houses and all furnishings and equipment. Poultrymen are instructed regarding precautions to be taken to prevent spread of disease.
2.	The outbreak is now well under control. General use of vaccine not contemplated at present time.
3.	337,760 birds have been slaughtered to date.
4.	One flock at Princeton, B. C., and twelve on Vancouver island.



HOG OFFAL PURCHASES BY BRITAIN


Mr. Harkness:: 1.	What was the total amount of money paid to the bacon board during the war period by the British government for hog offal?
2.	What has been done with this money?
3.	Has any consideration been given to a suggestion that these funds be used to set up a foundation for swine research?


Mr. McCubbin:: 1.	$7,962,953.10.
2.	The full amounts of the British contract prices were paid to the Canadian suppliers.
3.	As indicated in the answer to No. 2, there are no funds.



IMPORTATION FROM THE ARGENTINE

Mr. Diefenbaker:: How many bushels of oats have been imported into Canada from the Argentine since the 1st of May, 1950?


George James McIlraith: Mr. Speaker, while the data for the answer to this question have not been tabulated by the bureau of statistics, I can tell the hon. member asking the question that no oats have been imported from the Argentine since May 1, 1950.



QUESTION PASSED AS ORDER FOR RETURN


Mr. Wright:: 1.	What is the legal description of lands leased from the James Smith or Fort a la Come Indian reserves during 1950?
2.	Was priority given to veterans in this sale?
3.	What is the name or names of those who obtained land from these reserves in sales of leases since 1945?
4.	What is the legal description of the land held by each of the above?
5.	What were the dates on which these lands were posted for sale, and in what places, i.e., post offices, etc., were these postings made?
6.	What is the amount of (a) the lowest bid made on each parcel: (b) the highest bid made on each parcel?
Inquiries of the Ministry


Mr. Wright:: In asking for the returns I used the name "John Smith" reserve. I made a mistake; it is the James Smith reserve. I have been in communication with the department, and they have corrected this.


Mr. Harris (Grey-Bruce):: In answering this question I have taken the opportunity of attaching the papers which have been requested in a motion for papers on the same subject which will come later in the proceedings.


Mr. Speaker:: Answered.



MOTION FOR PAPERS


Percy Ellis Wright: For a copy of all correspondence with respect to the sale of leases on land released from the James Smith or Fort a la Corne Indian reserves, during 1950, also for a copy of the successful bids on all such lands leased since 1945.


Mr. Prudham:: Return tabled.



PARLIAMENT HILL


[Stage Direction]
On the orders of the day:
Mr. Jean Fran?ois Pouliot (Temiscouata):
Mr. Speaker, may I direct the attention of the Minister of Public Works (Mr. Fournier) to the-fact that the historical error on the statue of Sir John A. Macdonald on these grounds has not yet been corrected in accordance with instructions that were given last year. The pince-nez of Sir John is still broken.
May I also bring the attention of the minister to the fact that the statue of Sir Wilfrid Laurier, also on these grounds, has become a sanctuary for birds-a sanctuary for disrespectful and sacrilegious birds. I hope he will see to it that all the dirt on these statues is cleaned off at once.

[Stage Direction]
On the orders of the day:
['Our biologists tell us that there is no evidence of depletion on the Grand Banks, and I think that they are right.\nItem stands.\nProgress reported.']
John George Diefenbaker: should like to ask a question of the Minister of Trade and Commerce, arising out of a request from farm organizations. Since we are approaching the end of the five-year pool, is the minister in a position to indicate the approximate amount per bushel which will be paid to the farmers on the sale of their wheat during that period?
4256	HOUSE OF
Supply-Secretary of State


Right Hon. C. D. Howe (Minister of Trade and Commerce):: While we are approaching the end of the period in which deliveries may be received for the five-year pool, we are not nearly as close to the period which will end the sale of wheat delivered to the pool. It is much too early yet to make any announcement as to the final payment.



[Stage Direction]
On the orders of the day:
Percy Ellis Wright: Mr. Speaker,
I should like to ask a question of the Minister of Trade and Commerce. Is he yet in a position to say what the price of wheat will be to the domestic markets for the coming crop year?


Clarence Decatur Howe: No, sir.


LABOUR CONDITIONS
[Stage Direction]
On the orders of the day:
Mr. J. W. Noseworthy (York South):: should like to ask a question of the Minister of Trade and Commerce. Has he been informed of a labour dispute which has arisen between the united mine workers union and the Dow Chemical Company of Sarnia? If so, in view of the fact that it affects a government-owned plant, does the minister consider the situation of sufficient seriousness to warrant government intervention?


Clarence Decatur Howe: I have not been advised of any labour dispute in the Sarnia area. I should be surprised if the employees of the Polymer Corporation were involved, having in mind the fact that an agreement was signed only a short time ago between the Polymer Corporation and its employees. In any event, any dispute of that kind is handled by the management of the Polymer Corporation, not by the government.

The house in committee of supply, Mr. Dion in the chair.


DEPARTMENT OF THE SECRETARY OF STATE
[Stage Direction]
412. Departmental administration, $173,295.
Mr. Fulton:: I should like to say a word about the work of the custodian of enemy property. I do not find any separate item for that, and this would appear to be the only point at which the subject can be discussed.

For at least two years I have been interested in this matter on behalf of a number of persons who suffered actual loss of their property through the action of enemy governments during the war. In some cases they suffered personal privations and hardships through their being interned, mainly in the hands of the Japanese in the Far Eastern theatre.
A large number of these people who have claims arising from damage sustained at the hands of enemy governments are in straitened financial circumstances as a result of the calamity that overtook them. I have in mind retired persons, for instance, living in the Far East, and I would refer particularly to one typical example, that of a lady who was interned with her husband, and whose husband died as a result of the treatment he received while interned. These retired and elderly people lost everything they possessed, and are not now in a position to start over again to restore their circumstances. They are suffering genuine financial hardship and distress; yet their claims have not been dealt with by the custodian of enemy property. So far as one can make out, no real progress has been made in setting up a system under which these claims could be dealt with, and in establishing a basis upon which they can be rejected, or accepted and eventually paid.
I appreciate the fact that there are difficulties involved. As yet there is no treaty of peace either with Germany or with Japan. The lack of progress results in great hardship to these people, which in the circumstances can only be described as heartless. I am not saying that the officials themselves or the government are doing this deliberately, or that they are heartless; but I am saying that the results flowing from a lack of policy and a lack of progress in dealing with these matters is heartless and imposes an unnecessary hardship upon the people concerned.
On May 15, as appears at pages 2518 and 2519 of Hansard, I received an answer to questions asked of the Secretary of State as to the total value of enemy assets held and the total amount of claims so far received. The answer I received was as follows:
Total assets in the hands of the custodian as at March 31, 1950, $51,124,833.25.
The third and fourth parts of the question were as follows:
3.	How many claims have been received from Canadians for compensation for damage suffered in the European and Far Eastern theatres of war respectively?
4.	What was the tDtal amount of those claims?

The answers were as follows:
3.	European theatres of war, 2,110 claims; Far Eastern theatres of war, 400 claims.
4.	Approximately, $65,000,000.
The assets in the hands of the custodian total $51,124,833. They do not fall far short of covering the total amount of all the claims received. I suppose it is fair to assume that when a policy outlining the basis on which these claims will be accepted and paid is worked out and applied, there will be a reduction in the total amount of the claims, and as a result the claims to be paid will be more in line with the total value of the assets now in the hands of the custodian.
Under the circumstances it is nothing short of heartless not to set in motion now some machinery by which . these people who are suffering hardship can be paid at least a portion of their claims. In the United States a commission has been set up to adjudicate on claims by persons interned during the war, and they are to be paid at the rate of $2 per day for each day of internment. Incidentally I might say that we have no similar provision in Canada. Not only have the United States made that provision, but they are making an interim payment to those whose claims have been recognized by the government.
The United States have not yet made final provision for the basis upon which claims will be paid, and as to the property out of which they will be paid, for the reason that there is not yet a treaty with Japan or Germany. But they have recognized that failure to pay imposes a hardship, and are making an interim payment. Those payments are secured and will eventually be returned to the treasury out of enemy assets held in the United States or on behalf of the United States.
It is imperative that we institute a similar process in this country. The principles could be worked out on which claims for war damage will be recognized and paid. There are 2,510 claims, and the total amount of the payments that would eventually be made could be determined. Having established that we would know how much would have to be paid out eventually, and, depending upon whether or not the total amount of the claims was covered by the $51 million of enemy assets in the hands of the custodian, we would know whether the claims as recognized could be paid in full or not.
It should be possible to make an interim payment of at least twenty-five per cent, which would be secured by the value of enemy assets in our hands. Unless we are to continue a heartless and indifferent attitude toward the suffering of these people, some program must be instituted. It may be years
Supply-Secretary of State before a treaty of peace is signed with Germany and Japan, and no one should be condemned to suffer because such treaties have not been signed. We all know that it is the fault of the Russians; and no Canadian should suffer for that reason. We know we have the assets. I am sure all hon. members would appreciate it if the Secretary of State would indicate what progress is being made in connection with this matter.


Hon. F. G. Bradley (Secretary of Stale):: This matter is not quite as simple as appears on the surface. In the first place, the policy of the government has not yet been laid down. Also certain of the assets in the hands of the custodian belong not to enemies in the full sense of the term but rather to technical enemies, and therefore cannot be applied directly to war claims. In regard to German assets, we are responsible to the inter-allied reparations agency for their disposition. I can assure the hon. member that the custodian's office is doing everything possible to facilitate the settlement of all cases.


Edmund Davie Fulton: It is nearly five years since the end of hostilities, and the government should have been able to lay down a policy and work out a basis upon which claims could be recognized. The government should work out principles to determine which claims are valid and which are not. Once the government knew the total amount of valid claims, it should be able to work out a tentative agreement with the inter-allied reparations agency.


Frederick Gordon Bradley: Detailed recommendations
have been made within the past few months; but the matter is exceedingly complicated. I confess that it is often beyond me to grasp the interlocking aspects of the various interests and exceptions that have been made, as well as their application of the positions of some of the countries with which we are still technically at war. We are getting on with the job just as quickly as we can, and as I say, detailed recommendations have been prepared by the custodian for the consideration of the government.


Gordon Graydon: I want to raise two questions on this administration item. I hope the first comes under the jurisdiction of the minister; if not, he will tell me so. My understanding is that the question of statutory holidays comes under this department. It may be, however, that it comes under the Prime Minister.


Frederick Gordon Bradley: For the civil service, or generally speaking?


Gordon Graydon: No-generally speaking.


Frederick Gordon Bradley: Supply-Secretary of State


Gordon Graydon: That is wliat I thought. I want to raise a question which has been raised by a good many organizations across Canada, and which no doubt has been brought to the attention of the minister from time to time. It has to do with two of our national holidays, May 24, known as Victoria day, and July 1, known as Dominion day. These are the only two I desire to discuss at the moment.
There is a feeling in some quarters that these statutory holidays might properly be observed on the nearest Monday in each case.
I suppose this has provoked about as much general discussion across Canada as almost anything else in recent years. I know there are arguments on both sides; no doubt for sentimental reasons many people will feel that there should be no change, but I wonder if the Secretary of State and the government might not give consideration to fixing the date for the celebration of Queen Victoria's birthday as the Monday nearest May 24, and similarly in the case of Dominion day. The minister might take this suggestion into consideration; I mention it only because so many organizations and citizens across Canada seem to favour the change, and I thought someone should raise the question at this time.
The other matter I want to bring up is of considerable importance; I spoke to the minister about it last session. I have no desire to go into it in any detail at this stage of the session, beyond saying that with business in the position it is, with our commerce expanding generally, the efficient, speedy issuance of patents becomes very important. The patent office is definitely linked with some of the most important branches of business in Canada. Our scientific achievements are well known and recognized throughout the world. We have some of the best scientists, some of the best inventors and many of the best brains in the world when it comes to science and its application to industry and business generally.
Whatever may have been the reasons advanced in the past for not giving aggressive leadership to bring the patent office up to date, it seems to me that now there should be a concerted drive under the leadership of the minister and the government to bring this about. It is a long way behind. I am not going to compare it with the patent offices of the United Kingdom or the United States, except to say that some years ago a concerted drive was made in the United Kingdom and the work of the patent office was brought up to something approaching a current level.
I am not going to say there is not a backlog there, because I take it that in patent work a backlog must be expected. The United


States was a good many years behind, but I understand that not so long ago they made a concerted effort and had substantial results in reducing the arrears of patent applications.
It has not been my privilege to act as a patent attorney, but I have spoken to those who have practised that profession. They have a great deal of sympathy for the commissioner and the other officials, whom they hold in high regard, but they say the whole staff have become discouraged because they are not able to keep up with the current work, let alone whittle down the backlog that has accumulated over the years. In these remarks I want to make it clear that I am not criticizing those officials, who are working hard and conscientiously, but I do criticize the government, the minister, and those who should have been trying to put the patent office on a proper footing. I do not think there is any branch of any government department that should call forth such vigorous condemnation of government policy as the patent office. There is no excuse for having let this matter simply dawdle along, to use a street expression. I had hoped that five years after the end of the war this office would have been modernized and brought up to date, but that has not been done. I am told that some patent applications which were filed back in the thirties have not yet received proper attention because of the conglomeration and congestion of work; that the backlog is so bad today that they are in arrears a minimum of five years, and in some cases much longer.
That is not the whole story. Because they are so far behind and because there are so many applications, it takes that much longer to search through all the unclassified applications which have not been attended to, when new applications are made. Fuel is added to the fire, insult is added to injury every day the patent office is permitted to continue as it is today. I do not think the public realize what this means to Canada and to business, because the patent office is unknown to most Canadians, who of course are not all inventors. Nevertheless the situation in the patent office id directly interfering with progress in the application of scientific discoveries to business and commerce in general. I do not think a government department should be in the position of having to admit that five years after the end of the war the patent office has not been modernized and brought up to date. I suppose the minister will say it is difficult to get patent examiners or other necessary staff. Somehow or other the other departments get these people.
In what sort of position does industry find itself when its scientists, in attempting to find

new formulae or inventions, realize that their competitors in other parts of the world are able to get a patent through and be in competition long before the five years which it takes an application to be dealt with by this office? I say five years, but that is only the minimum; there are many applications that take a great deal longer than that. The government ought to be aroused to the importance of this matter. I am not anxious to thresh old straw or cry over spilt milk, but, year in and year out, those of us on this side of the house have pleaded, urged, condemned -we have done everything we could to get this patent office into better shape. An end does come to the patience of the people of Canada and of the members of the house who want to see something constructive done. It is not enough to say that the patent office is moving into new quarters; it is not enough to say that they are handling more than they did. It is important for the government to announce a new policy with respect to the patent office, and to bring it up to date.
I hope the minister will be able to tell us that a new drive has been made, and that industry in Canada in the years to come will be able to look forward to the prompt treatment of applications for patents. The government has a definite responsibility to business and to applicants for patents; that responsibility is not being discharged. I suggest to the minister that before we meet in another session he should be able to announce the implementation of a new policy with respect to the patent office which will give industry a fair break.


Frederick Gordon Bradley: Mr. Chairman, first of all, with reference to the member's inquiry about Victoria day and Dominion day, I may say that that question has been under consideration by several of my predecessors and myself. There seems to be a good deal of difference of opinion about it, and I suggest to the hon. member that if he wants to try it out he should introduce a private bill.
As to the patent office, I know that this house-I do not say this by way of criticism of the hon. member's remarks, but it is a fact-has used the patent office as a football from time to time. Perhaps there was some reason for that. I do not believe hon. members generally quite understand the difficulties with which this office has to contend, and with which in fact other patent offices are faced. As a matter of actual fact ours is not the only office with a backlog. The United Kingdom has a substantial backlog, as has the United States. In the year 1948, which is the only year for which I have a comparison, we did dispose of seventy-five 55946-269
Supply-Secretary of State per cent of the applications, while our friends across the border managed to dispose only of thirty-three per cent.
There are delays in connection with the issuance of patents, I know. I believe the average period between the application for a patent and the issuance of it is somewhere in the neighbourhood of three years. Please do not lay all the responsibility for that at the door of the patent office. Frequently, very frequently indeed, those delays are caused not by the office but by the applicants themselves, who in many cases make their applications and prefer to wait until they have had an application granted in either the United States or the United Kingdom, as the case may be, and then perhaps amend their own application here to bring it in line with the patent which has been issued to them in the other country.
I know it is a simple matter to talk about speeding up the work of the patent office, but I should, like to point out to the hon. member for Peel that if we proceed to speed up the work of the patent office too quickly, we shall only succeed in slowing the work. A great deal of the work, as my hon. friend is aware, in connection with this office is the work of the examiners. They are the key men to the whole process, and their work covers considerable time. They have to be highly trained men. Most of them, if not all, are engineers. In order to speed up our work we must of necessity bring in new men and train them. The more men we bring in to train, the more we slow up the work. We have to maintain a reasonable proportion between the men that we have and those that we bring in to train. This year we have already, I think, brought in eleven men. The staff of examiners now totals about forty. We cannot bring in any more men to train just now, because if we do we shall slow up the work.


Howard Charles Green: But eventually you speed it up.


Frederick Gordon Bradley: Eventually we speed it up, and then when we have got over the hump we find that we have too many men on our hands. It is not as simple as it appears, but I can assure the hon. member that we are doing our best to get things speeded up, having in mind that if we make too much haste we may in the long run make too little speed.


[Stage Direction]
Item agreed to.
414. Trade marks branch, $124,395.
Gordon Francis Higgins: Mr. Chairman, I have no criticism to make, but I should like the minister to know that trade marks and copyrights were always handled in Newfoundland,

Supply-Secretary of State as he is aware, before union. Newfoundland's work is now being handled in Ottawa, and I should like him to know from my experience that I have always found the officials of that department most courteous and co-operative. I want to pay that tribute to them. I am sure the department has not suffered any from having Mr. Harold Pippy of the Newfoundland office associated with it.


[Stage Direction]
Item agreed to.
416. Canada Temperance Act, $1,500.
William Scottie Bryce: Will the minister explain what this vote is for? There' is nothing in the details to explain it.


Frederick Gordon Bradley: The Canada Temperance Act is in operation in two counties only in Canada at the moment, but the money is provided for in case the need for it arises.


Gordon Graydon: There are three counties only, I think, it which it is in operation.


Frederick Gordon Bradley: Three, is it?


Gordon Graydon: Yes.


William Scottie Bryce: Was the money used last year?


Frederick Gordon Bradley: Last year we spent the amount of $1,500 in legal fees.


William Scottie Bryce: And none has been used this year?


Frederick Gordon Bradley: No, none this year.


William Scottie Bryce: What is the $1,500 for?


Frederick Gordon Bradley: In case there should be a request to bring the act into force; and that can be done at any time.


[Stage Direction]
Item agreed to.
Office of the chief electoral officer-
47. Salaries and expenses of office, $45,515.
Stanley Howard Knowles: What is the reason for the increase?


Frederick Gordon Bradley: That would probably be readjustment of salaries.


Stanley Howard Knowles: Prom the details it looks as though there has been an increase in the number of employees.


Frederick Gordon Bradley: I think there are two additional.


Stanley Howard Knowles: In a non-election year?


Frederick Gordon Bradley: I should like to point out to the hon. member that the fact that there is not an election does not mean that the electoral officer has nothing to do. Perhaps I should not talk politics here, but it strikes me that an electoral officer's duties are similar to those of a political party. The campaign begins when the polls close at seven o'clock in the evening on polling day.


Stanley Howard Knowles: Six o'clock standard time.


[Stage Direction]
Item agreed to.
Civil service commission-
63. Salaries and contingencies of the commission, including the chairman of the civil service commission and two civil service commissioners at $2,000 each, additional to chapter 53, statutes of 1947, $1,561,250.	1
John George Diefenbaker: Why is it that the numbers of appointments outside the civil service commission are apparently so much on the increase? Through the minister's office in answer to certain questions I asked, a return was brought down, sessional paper 102F, of June 14. It indicated the appointments by the civil service during the period from January 1, 1949, to February 1, 1950. The number of permanent appointments was 6,514, and the number of temporary appointments, 18,624. The number of appointments made to the civil service other than by the civil service commission during that period, as I total it, was 5,598. One of the questions was: "How many appointments were made after certificate granted by the said commission?" No answer was given to that question; it was lumped in with the answer given by the civil service commission as to the number of appointments made.
The number of appointments outside the civil service is altogether too large, and cannot be explained away merely by saying there are some temporary appointments. It seems to be that there is quite an extension in each year of the number of appointments made outside the commission, and I feel that that trend should end. Certainly this return indicates that the civil service commission is making too few of the appointments, and that the tendency to go outside is becoming too pronounced.
I would ask the minister particularly this question, because the answer was not given in the return: How many appointments were made in that period of time after certificate granted by the commission? As I understand it, the certificates are granted when it is felt that certain qualifications are required. No answer was given to a clear and straightforward question, and I should like to have the answer now.


Frederick Gordon Bradley: What period did the hon.
member mention?


John George Diefenbaker: January 1,	1949, to
February 1, 1950.


Frederick Gordon Bradley: During that period altogether there were some 25,000 appointments made, of which 6,514 were permanent and 18,624 were temporary.


John George Diefenbaker: That is, by the civil
service commission?


Mr, Bradley:: Yes. As I understand it, in connection with many of these appointments the practice is that the individuals go into the service on a temporary basis, and after a time they go into the permanent list. That is the case with some of the 6,514 that I have just mentioned. They were not all new appointments. Many of them were persons already in the service who had been transferred from the temporary to the permanent list.


John George Diefenbaker: I have all that information, Mr. Chairman. The information that I have not is how many appointments were made after certificate granted by the commission.


Frederick Gordon Bradley: 25,138.


[Stage Direction]
Item agreed to.
Public printing and stationery-*
282. Departmental administration, $60,000.
Stanley Howard Knowles: I should like to ask the Secretary of State one or two questions with regard to working conditions at the printing bureau. I understand that a few weeks ago a notice was posted at the bureau respecting holidays to be taken by the employees this summer. I am told that the terms of the notice were at variance with what has been the practice for a number of years, and that this caused a bit of a stir over there, because to employees who had already made their holiday plans it seemed that they were going to have to alter them. I understand that the result was that a petition was circulated amongst the employees, addressed either to the king's printer or to the Secretary of State, asking that the notice be rescinded.
I am told that before the petition was presented the request of the petition was met and that the notice I am speaking of was changed. In other words, for a time all was happiness and content again, at least so far as that particular grievance was concerned. Now, I am told that another notice has been put up informing the employees that they must take their holidays in either one of two set periods, a certain two weeks in July or a certain two weeks in August.
As the Secretary of State or anyone can realize, employees do make plans in advance as to what they will do on their holidays. They engage certain resort accommodation or make plans with their families or their friends, and it is rather upsetting to have these plans changed. I am wondering whether the Secretary of State can inform me if this offensive order has been restored, and if so whether something could be done to make for better relations in connection with this matter.
55946-269J
Supply-Public Printing and Stationery


Frederick Gordon Bradley: I do not altogether approve of the word which my hon. friend used in describing this notice. He said it was offensive. I do not think there was any intention on the part of anybody to issue an offensive notice. He has part of the story correctly.. Whether the rest of it is correct I cannot say at the moment. I presume he receives reports from somebody, but I should like to point out to him that there are substantial difficulties in dealing with the employees of the-printing bureau, not because they are a more belligerent type of employee than any other, but because we have there two, yes three, types of employees. In the first place there are the civil servants; then we have the prevailing rates men, and even they are subdivided into various groups, from highly skilled labour to the ordinary labourer. It is not always easy to adjust the notions of unionist hourly paid labour to monthly civil servants, and the king's printer has considerable difficulty in that respect.
We try as best we can to adjust things to meet the convenience of our various employees but it must be borne in mind that the department has at least some rights, and we must adjust holidays in such a way as not to interfere with the production of the bureau.
It is quite true that there was a notice issued, as my hon. friend points out, in connection with holidays, which in itself, if it had been agreed to, would I think have been excellent from the point of view of production in the department. Of course the bureau has been operating for a number of years. Conditions of work and holidays, and so forth, have been changing from time to time. Possibly, having regard to the practice of the past, this may have been a little bit too drastic a change to make at the time; but it must also be borne in mind that the employees themselves, while they have some rights, I presume, as to when they should take their holidays, and at least should be given consideration cannot be permitted to take their holidays whenever they please. Some regard must be had to efficiency, and the production-of the department; because it is so easy in a department of that kind, where the work of one man is dependent on the work of a man in the line immediately ahead of him, to-throw the whole system out of gear and reduce production tremendously. I think, however, we have been working the matter out fairly well during the past three or four weeks, and I am optimistic enough to think that the difficulty which my hon. friend has. heard of will be overcome.


Stanley Howard Knowles: I take it when the Secretary-of State admits that part of my information is correct he is referring to the statement I
4262	HOUSE OF
Supply-Public Printing and Stationery made about the original notice a couple of weeks ago and the fact that that notice was withdrawn. I take it the part he is not up to date on is whether or not I am correct in saying that another notice has been put out specifying that the holidays are to be taken in the two two-week periods that have been indicated. If he will make inquiries, I believe he will find my information is correct.
I will admit that regard has to be had to the efficiency of a plant such as the printing bureau, and that there has to be give and take and recognition of rights on both sides. But if the practice has been well established as to how holidays are to be taken, it does seem to me that before making a change in a practice of that kind it would have been only fair, indeed it would have been good labour-management relations, to have some discussion with the representatives of the employees.
I know the Secretary of State does not want to say that printers are difficult people to get along with, and being one myself I can assure them that they are not. But I can .assure him also that printers, like other trade unionists, are jealous of their rights. They are not unmindful of the rights on the other side, but it does seem to me that there is an opportunity here for the Secretary of State to explore the possibility of finding some better way than now exists for maintaining the best of labour-management relations at the printing bureau. I urge him to look into the matter. He will recall that earlier in the session I asked whether or not this whole matter might be referred to the committee on printing. The minister gave a more or less favourable answer, provided that it could be arranged; but the session is passing and obviously it is not going to happen before prorogation. I would1 suggest that he try to obviate the necessity of my asking for that at the next session by trying to work out better labour-management relations during the period between now and the next session of parliament.
If, when the next session of parliament meets, help is needed on that score, I would suggest that consideration be given again to the idea of the parliamentary committee on printing meeting and having before it the king's printer on the one hand and representatives of the employees on the other.
While I am on my feet may I ask the Secretary of State another question? In view of the uncertainty about the five-day week and the five-and-a-half-day week for the summer, will the minister tell us what pay the employees at the bureau will get when they are off on their holidays during July


or August? When they are off for their two weeks, will they be paid on a five-day or a five-and-a-half-day basis?


Frederick Gordon Bradley: They will be paid at exactly the same rate as those who work while the others are on holiday.


Stanley Howard Knowles: That means that these printing bureau employees who get two weeks' holidays with pay will actually get two weeks' holidays with short pay rather than the pay they would normally get for two weeks in the ordinary working part of the year?


Frederick Gordon Bradley: They are given exactly the same pay as they would receive if, when they are on holidays, they had been actually working.


[Stage Direction]
Item agreed to.

[Stage Direction]
524. Board of transport commissioners for Canada -administration,	maintenance and operation,
The Chairman:: The committee is now considering item 524 in the estimates. To this item an amendment was moved by the leader of the opposition (Mr. Drew):
That item No. 524 be reduced to the figure of one dollar.
Then we have a subamendment moved by the hon. member for Cape Breton South (Mr. Gillis):
That the amendment be amended by striking out the word- "to" and substituting therefor the word "by."
The amendment of the leader of the opposition would then read:
That item No. 524 be reduced by one dollar.
I have examined the subamendment, and I must say that it seems to me it is out of order, because the reduction is not substantial. Therefore I rule the subamendment out of order. The question is on the amendment.


Mr. Low:: Mr. Chairman, I believe when this matter was considered before I moved the adjournment of the debate. I should like now to try to sum up the case which I suggested that evening had not yet been dealt with.
Let me make it clear at the outset that the Social Credit party in the house realizes, as do all others, that the railways might need increased revenue to meet increased costs. We are' not arguing that at all. If that is so, then the railways ought to have the increased revenue. But we say that no increase in freight rates should be allowed until such time as a mutually satisfactory railway freight rates policy is devised and laid down. That has not yet been done.

The board of transport commissioners is not the body to lay down policy. Evidently the government has been attempting to use it either for that purpose, or merely as a body to whom they might pass the buck when they get into difficulty-a sort of shock body.
The function of laying down policy is that of the government and parliament, and not that of the board of transport commissioners. I do not intend to belabour the board or to say unkind things about it. It might well be that the biggest reason why the iniquitous discrimination in the Canadian freight rate structure has been allowed to continue is that the board have never been given any clear and adequate directive by the government, by this department, by statute, or in any other way. Certainly they have not exercised any initiative of their own.
The act under which the freight rates structure is set out and under which it operates does not contain any clear statement of policy to guide the board. For that reason the board find it convenient to follow the practices of the past, as they have grown up, in a rather haphazard manner. I do not think any body can claim honestly that our freight rate structure was built up in a comprehensive way, and based upon the principle of justice and non-discrimination and in the full light of facts that obtained at the time the freight rates were established.
I think as a matter of fact that almost anyone who has made a study of the situation must admit at once that the Canadian freight rate structure has developed on a piece-meal basis, and that actually there have grown up in Canada five main rates territories which correspond to the five main geographical regions of the country. For example we have the Ontario region, which has its rates; the maritime territory, which has its rates; the Ontario-Superior region, the prairie region, and the Pacific region. Those are the five, and each has its freight rate structure.
The eastern rates are rankly discriminatory against the western regions. In his speech the other day the hon. member for Lethbridge pointed out some examples, and I shall add to them so as to bring the information up to date. We advocate the removal of regional discrimination as a first step in the effort to give justice to consumers in all parts of Canada, as well as to put the railways in such a position that their revenues will adequately cover their requirements.
It must not be forgotten that shippers, with the exception of farmers, are in a position to pass on their freight rate costs to the ultimate consumers. Everyone knows therefore that
Supply-Transport
the consumer has to bear the full weight of any increase granted in freight rates. I might point out here incidentally that the farmer is the only one who pays his freight rates both going and coming. That is something that must be considered when this whole question of freight rates is studied. I am concerned about the position of the board in this matter. I am convinced that the board simply cannot remove these regional discriminations and introduce the principle of equalization without clear and precise direction laid down by the government in the railway statute, because to do so would be for the board to presume that it has the right to lay down policy. The minister and his colleagues must know that the board has not the right to lay down policy. I think that it was a recognition of that principle that led the original framers of the Railway Act to put in section 52, which placed upon the government not only the right but the responsibility to take action when direction is needed by the board.
There is no statutory direction to the effect that there must be no regional rate discrimination, and for that reason the board has doubtless felt that its main job in the matter of freight rates is to prevent unjust personal discrimination or undue preference within a region. That seems to be the principle which has guided them thus far and the tradition upon which they work whenever a reference is made to them. I must say that consistently and constantly the board have been actuated by tradition and not by good sense or judgment.
In 1925 the government of Canada appeared to have realized that what I have just stated was true, and in that year they passed order in council P.C. 886, which made explicit reference to the equalization of freight rates as a matter of government policy. I should like to quote from the directive given by the committee of the privy council to the board, as follows:
The committee therefore advise that the board be directed to make a thorough investigation of the rate structure of railways and railway companies subject to the jurisdiction of parliament, with a view to the establishment of a fair and reasonable rate structure, which will, under substantially similar circumstances and conditions, be equal in its application to all persons and localities, so as to permit of the freest possible interchange of commodities between the various provinces and territories of the dominion and the expansion of its trade, both foreign and domestic, having due regard to the needs of its agricultural and other basic industries. . . .
However, in the general freight rates investigation that ensued, the directive from the government to the board in connection with equalization was followed only to the extent of prescribing that branch line rates on grain in western Canada should be equal

Supply-Transport
to main line rates. The difference between standard class rates and tariff rates in western Canada was left unchanged, and the mountain differential was not removed. In my judgment the pity was that the government of the day made no changes whatever in the act which would give specific directions to the board.
I should like to refer to another order in council, P.C. 1487, passed on April 7, 1948, containing another directive to the board of transport commissioners on the same subject of the equalization of freight rates. I should like to quote briefly the directive part of that order in council, to show how similar it was to the one passed in 1925, and to show that no more could be done under that directive than could be done in 1925. It reads:
The committee also observe that since decision was rendered upon the Investigation referred to in the preceding paragraphs, namely by judgments of the said board of September, 1927, many changes have taken place in the economy of Canada and it is therefore advisable that the Board of Transport Commissioners for Canada be directed to make a thorough investigation of the rates structure of railways and railway companies which are under the jurisdiction of parliament, with a view to the establishment of a fair and reasonable rates structure which will, under substantially similar circumstances and conditions, be equal in its application to all persons and localities so as to permit the freest possible interchange of commodities between the various provinces and territories of Canada and the extension of Canadian trade both foreign and domestic, having due regard to the needs of agriculture and other basic industries.
The committee, accordingly, advise that the Board of Transport Commissioners for Canada be directed to undertake a general freight rates investigation along the lines indicated in the preceding paragraph subject to such special statutory provisions as affect freight rates-
Those last words render the directive absolutely useless. The same thing will happen as happened after a similar directive was passed in 1925. The board will find it impossible to remove regional or other discriminations. The failure of the board in 1925 and thereafter to make specific progress toward equalization as a result of the general review of freight rates that took place then emphasized the need for a change in the Railway Act if any particular change in policy is to be accomplished by which effective equalization steps can be taken.
With regard to statutory regulations, we in this corner of the house have advocated constantly two guiding principles that ought to be in the minds of the government and the board. The first is that the general form of the rate structure should be prescribed by statute and not be allowed to rest in the hands of a board that is guided almost solely by tradition. The responsibility of the board then would be, and ought to be, to maintain
TMr. Low.]
the form, laid down by the sovereign power in this country, the representatives of the people in this parliament.
The second guiding principle is that the regulations and rates should be governed in the main by standards of comparison which do not go beyond the rates themselves. When that sort of freight rate structure is built, then I maintain that the board will really have something to guide them. Until then they will not.
I would direct the attention of hon. members to the fact that the Maritime Freight Rates Act contains certain sections which illustrate the kind of change which may be required in order to establish the principle of equalization. I should like to quote briefly from section 3, subsection 2, of that act, as follows:
The board of railway commissioners, hereinafter called the board, is authorized and directed to
(a)	approve such cancellations, and, subject to the provisions of the Railway Act, respecting tariffs of tolls for the carriage of freight, where not inconsistent with this act, to approve all tariffs of tolls so substituted;
(b)	maintain or cause to be maintained such substituted tariffs, subject to all provisions of the Railway Act respecting tariffs of tolls not inconsistent with this act, on the general rate level of approximately twenty per cent below the tolls or rates existing on the first day of July, one thousand nine hundred and twenty-seven, while the cost of railway operation in Canada remains approximately the same as at the said date, but the board may allow the increase or reduction of such tolls or tariffs' from time to time to meet increases or reductions, as the case may be, in such cost of operations;
(c)	adjust or vary such substituted tolls or rates from time to time as new industrial or traffic conditions arise, but always in conformity with the intent of this act as expressed in sections seven and eight and other relative sections hereof.
As a result of the specific direction given the board in that act, it is no longer necessary for a shipper in the maritimes, in making a complaint against a difference in class or commodity rates as between the maritimes and central territories, say in Ontario or Quebec, to show personal discrimination or actual detriment in order to obtain an adjustment. All the board requires is to have someone raise the question, whether he be a shipper or not, and under th'e section I have just read the board is bound to consider the complaint and shippers in the maritimes are thus given almost automatic adjustment. That is the sort of thing that ought to be in our whole freight rates structure, and that is what we are asking the government to consider.
Before I pass on I should like to emphasize that the significant part of the section which I read lies in the fact that a directive is given to the board which finds no parallel anywhere in the Railway Act, which governs

western and central railway freight rates. According to the section I read, the Board has been directed to maintain a certain relationship between the rates of the two regions, and to vary the rates in the maritime region always in conformity with the intent of the act, which was to make it possible for the maritime freight rates schedule to be twenty per cent lower.


Mr. McLure:: Are you opposed to that?


Solon Earl Low: No, sir; I am not opposed. I say that is only one compensation, and perhaps a small one, for what confederation has done to the maritimes. I am not at all opposed, but I say that in principle it is the kind of directive that should be given in our general freight rate law; that is all.


Winfield Chester Scott McLure: That was given only to compensate the east for what the west had.


Solon Earl Low: I understand that, but of course it goes beyond that point now. It puts the maritimes at a very great advantage over the west at the moment.


Winfield Chester Scott McLure: I do not agree, but I will take the matter up with the hon. member later.


Solon Earl Low: That is fine; I respect my hon. friend's judgment. Let me make it clear again that I am not complaining about the twenty per cent compensation. I think it is coming to the maritimes. I am trying to emphasize that the government realizes that the board of transport commissioners requires a specific directive to be able to accomplish that result. So, I contend, they must give a directive to the board of transport commissioners in order to bring about the result which must be achieved if the west is to get away from these serious discriminations.
I do not believe I need say any more at the moment to convince members of the committee that responsibility for removing the discriminatory features of the present freight rate structure lies with the government itself, not with the board of transport commissioners. Whether or not we have confidence in the board, that body simply cannot do its job without a law giving it proper directions as a matter of settled policy. Let us leave it at that. The minister may want to deny this, but right now I charge the government with having used the board as a buffer when they did not want to stand up and accept their responsibility.
Western Canada is facing a shocking situation, to say the least, as a result of the freight rate increases of the past two years. The recent twenty per cent award by the board of transport commissioners is a paralysing blow to the prairie provinces, and especially to my own province of Alberta, which stands
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at the very peak of the whole structure. Saskatchewan is almost as badly off, and my words now are an appeal for fair play to all the prairie provinces, which are suffering together. People have been led to believe that the recent increases were horizontal, and it will come as a shock to many that this is not so. The railways have already decided that no portion of the last twenty per cent increase will be applied to the competitive rates that exist in the western provinces. The board's orders of March 1 and May 11 of this year make that procedure quite possible, and the railways have already come to a decision in the matter. The question, then, is whether this twenty per cent increase, from which the railways expect to gather in another $29 million-


Mr. Chevrier:: I do not want to interrupt the argument of my hon. friend, but I am sure he does not want to make a statement that is wholly inaccurate.


Solon Earl Low: Of course not.


Lionel Chevrier: The railways have already made the statement in their briefs that upwards of forty per cent of the forty-five per cent increase that has been granted has been applied to competitive rates.


Solon Earl Low: I said that the railways had
already decided that no part of the twenty per cent increase would be applied to the non-competitive or normal rates.


Lionel Chevrier: I must say that statement is wholly inaccurate and untrue.


Solon Earl Low: I accept the minister's statement for the time being, but that is the information coming to me directly from the railways themselves. There is no gainsaying this; that in the board's orders of March 1 and May 11, provision is made whereby the railways can do that. I do not believe that can be denied; and if the loophole is left in the board's orders do you suppose for one moment the railways will not take advantage of it? We will leave it at that and see what happens.
Under the orders of the board the railways have the right to gather in another $29 million of revenue, and in all probability that $29 million will be added to the noncompetitive or normal rates; we will put it that way. This simply means that the whole twenty per cent increase will be paid by the people of Saskatchewan, Alberta and Manitoba, with the lion's share being paid by Alberta and Saskatchewan. All the canned goods, textiles, clothing, automobiles, farm machinery, tools, furniture and a great many other necessities that go into Alberta will be subject to a large and unwarranted freight increase, and the costs of these things to the

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consumers out there will take another great jump as soon as the new rates go into effect, unless this government takes counter-action following the petition presented by the provinces last week against the twenty per cent award. The government can quite properly do this under section 52 of the Railway Act. Whether or not that has ever been done, this government has done a good many things never done before, so why in the name of common sense should they fall back on a foolish argument like that?
This increase of twenty per cent will further accentuate the difference between the cost of living in eastern and western Canada. It will be simply one more tariff barrier against trade between the central provinces and the Canadian west, which is a very serious matter. Our people out there are asking with increasing frequency of late just where are those benefits that people have been talking about as accruing from confederation. If these iniquities continue there will be a greater outcry against the terms of confederation. Our people do not want anything but a unified Canada, but certainly they want fair treatment and I bespeak it for them. Again, the twenty per cent increase will apply to everything shipped out of Alberta and Saskatchewan bound for either the west coast or the east coast, with the exception of our grain. Our coal, oil, beef, pork, pottery, hides, lumber and fish will be handicapped by one more laid-down cost disability, so that the producers in those provinces will not find it possible to compete against eastern or foreign products of the same kind. I say this is a shocking situation.
Moreover, thanks to the canals built and operated free of charge by the federal government, for which our western people helped pay; and thanks to the competition provided by the Panama canal route with respect to goods shipped by way of Vancouver and the west coast, the competitive railway rates which apply in Ontario and Quebec, and also on through shipments to the west coast, will bear no portion of the twenty per cent increase. To all intents and purposes the canals were provided for Ontario and Quebec free of charge, and their operation is also provided without charge to the central provinces. As a result Alberta and Saskatchewan get it in the neck, and that is not right.
I should like to cite briefly, Mr. Chairman, some examples to illustrate how unjustly discriminatory to the west the rates have become. Let us take this one first: When the recent twenty per cent increase becomes effective, the rate on canned goods, which form a substantial part of the wintertime diet of the western people, from eastern Canada will be as follows: From Toronto to

Calgary and Edmonton, $2.77 per hundredweight; from Toronto to Vancouver, $1.40 per hundredweight; from Vancouver to Calgary and Edmonton, $1.25. Now, the rate to Calgary and Edmonton directly from Toronto and the rates from Vancouver to Calgary and Edmonton will be increased because they are normal or non-competitive rates. But the rate from eastern Canada to Vancouver, which is a competitive rate, will not be increased at all. As a result the rate to Calgary will be 197 per cent of the rate to Vancouver, although the distance to Vancouver is 500 miles greater. If that is not rank discrimination, you show me.
To make the matter look even more ridiculous, the rate from Toronto to Vancouver and back from Vancouver to Calgary or Edmonton, will be 12 cents per hundredweight less than the published rate direct from Toronto to Calgary. Talk about stupidity and being bound by tradition! Yet the the minister says there is no discrimination.


Lionel Chevrier: Mr. Chairman, the minister made no such statement.


Solon Earl Low: If the minister will look at the speech he made when this subject was under discussion three weeks ago, he will see that he did.


Lionel Chevrier: I object to the hon. member putting words in my mouth. I did say that there was discrimination, but there was a distinction between the discrimination as mentioned in the Railway Act and the illustrations given. The point at issue is whether there is unjust discrimination. The hon. member has been citing cases all along, none of which are proof of unjust discrimination within the meaning of the act; that is the whole point.


Solon Earl Low: That is exactly the whole point I am discussing today. I am appealing to the minister to see to it that the act is changed so that these diabolical things cannot continue.


Lionel Chevrier: That matter has been referred to the royal commission. When we have the report of the royal commission, perhaps we shall be able to act in accordance with the recommendations.


Solon Earl Low: Perhaps. I am just wondering how many times we have to have royal commissions before we can get justice.


Lionel Chevrier: That is what the house wanted-a royal commission.


Solon Earl Low: We wanted the act changed. We have been asking for it for years, and instead of that we get royal commissions, and reports which nobody reads-at least, no one that can do anything about it. The people in the

west are wondering if this whole thing is deliberately engineered in order that prairie points may not become distributing centres. In any event, that is the effect of it. Whether or not it is done deliberately, a good many people ask themselves just how it is engineered.
Here is another example concerning an item that is vital to farming in western Canada-tractors.	These implements are
necessary to enable the people to produce the quantities of wheat and grain that they do. Many of them come from Rock Island, Illinois. From Rock Island, Illinois, to Montreal, Quebec, which is a distance of 997 miles, in 1947 the rate was 99 cents a hundredweight. In 1950, if the last twenty per cent award is put into effect, there will be no increase on that particular haul. But from Rock Island to Neepawa, Manitoba, a distance of 1,001 miles, the rate in 1947 was $1.40 per hundredweight. When the twenty per cent increase is applied it will be $1,561, as compared with the 99 cents for a distance only four miles less. The rate to Manitoba would then be 57 per cent more for approximately the same mileage. Who can justify that sort of discrimination? If it is not unjust, I should like the minister to explain it in a way that reasonable people can understand.
For the same haul of a tractor from Rock Island, Illinois, to Quebec city, a distance of 1,170 miles, the rate is $1.10 per hundredweight. That was the charge in 1947, and that will be the rate under the new schedule, because it is a competitive rate for which there will be no increase under the twenty per cent award. The rate to Swift Current, Saskatchewan, the same mileage, in 1947 was $1.72, which is discriminatory in itself. In 1950 it will be $1.93 per hundredweight, showing a rate discrimination of seventy-five per cent against the west for exactly the same haul in miles. For hauling one of those tractors from Rock Island, Illinois, to Saint John, New Brunswick, a distance of 1,472 miles, in 1947 the rate would have been $1.25 per hundredweight. No increase will be made under the twenty'per cent award, so it will remain at $1.25. However, to Brooks, Alberta, a distance of 1,480 miles, eight miles further, in 1947 the rate was $1.96 per hundredweight. The new rate under the twenty per cent award will be $2.27J per hundredweight, showing a ninety per cent rate discrimination against the Alberta point for a haul of only eight miles further. Yet there is no unjust discrimination, the minister says. .
Let us take a shipment of binders as another illustration of this iniquitous discrimination. A binder that weighs 2,052
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pounds, shipped from Hamilton, Ontario, to Saint John, New Brunswick, a distance of 1,115 miles, in 1947 took a rate of $11.39. The 1950 rate will be $16.62-that is when the twenty per cent increase is applied. For the same binder shipped to Lethbridge, Alberta, from Hamilton, a distance of 1,897 miles in 1947 took a rate of $32.82, but the 1950 rate will be $48.69. The distance from Hamilton to Lethbridge is 780 miles further than from Hamilton to Saint John, but the rate to the Alberta point is almost three times that to the New Brunswick point which indicates at least a fifty per cent discrimination against Alberta.
This is not the end. It seems, Mr. Chairman, that the railways are to be faced shortly with a further wage demand that may run into $19 million or $20 million. This will probably mean another application by the railways for freight rate increases. If the application is granted, then the non-competitive rates are likely to take another jump. The freight rate structure is breaking down before our very eyes, while the government stands idly by, passing the buck to the board of transport commissioners which is prostrated into incompetence through lack of specific direction from the government.
We in the Social Credit group hold the definite view that whenever the railways really need added revenues, and when they are unable or unwilling to apply an authorized rate increase equally to all parts of the rate structure and to all sections of Canada, then we say the time has arrived for the consolidated revenue fund to provide the amount of the increase. This would prevent the widening or aggravation of regional discrimination, that otherwise is sure to result. Surely, to call upon Alberta or any other province to pay not only its share of the rate increase, the total of which is now forty-five per cent above 1947, but also the share which the competitive rate areas escape paying, is indefensible and unjust action which can and must be corrected by providing relief to the railroads out of the public treasury. By doing this the burden of rail costs can be equitably distributed over the whole of Canada.
Unless some such action is taken, and soon, confederation may be strained very close to the breaking point, and that would be a disaster that should never be allowed to occur. I am speaking advisedly when I say that. A good many people, and I am one of them, believe that the Canadian railways are pricing themselves out of business. I am one of those who think that the railways have become complacent and lazy; that they have not kept up with the times in equipment, service or operating costs; and that is why

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they are facing such strong competition from the buses and trucks in many parts of Canada. It seems to me that they ought to be following some of the policies that are being followed by certain railways in the United States. Those railways have given us an object lesson; they have provided lighter trains, faster and better service, pickup service, and delivery service. They have reduced their rates in many instances, and their business is booming.


Lionel Chevrier: They have increased rates by over sixty-five per cent.


Solon Earl Low: Yes, I know. I will just refer the minister to something I noticed the other day. This was an article in Harper's magazine in the United States, quoted by the Lethbridge Herald in its editorial of Monday, May 22. I am just going to read a short part of it, as follows:
The United States rail story is told by Herbert Askwith, a New York public relations counsel who has travelled far and observed much. As a commuting New Yorker he has felt the impact of increased rail rates, so he decided to study the problem and see what he could find. And what he found is a rather scathing denunciation of what the American railways have been doing. In "Railroads on the Wrong Track", he fears that, because of ever higher rates, the railways may be heading into government ownership and socialism through loss of patronage to other forms of travel-the plane for passenger and the truck for freight. He knows the Americans wouldn't like that.
But he thinks he has found the antidote in the action of some of the western U.S. roads, the Southern Pacific and the Santa Fe in particular. As against the poor showings of the eastern roads, these western systems both made good money in 1948 by running good passenger trains and charging less per mile, and by improving their freight handling program so as to do a more efficient job for their customers. Mr. Askwith points out that while the eastern roads are charging around 3 375 cents a passenger mile one way, the Santa Fe is charging 2-41 cents a mile for a one-way ticket and just over two cents for a round trip. Southern Pacific on some of their de luxe coach passenger trains in the south and west are as low as 1-59 cents single and 1-43 cents per mile on a round trip. In April of last year the S.P.'s famous "Daylights" serving the west coast carried 10 million passengers. Fares are low because they're not running with empty seats and because they're beating plane fares. This is in contrast with what Mr. Askwith says appears to be an "unstoppable determination on the part of the eastern roads to price themselves out of the market."
That is what is happening in the United States, and that is what is happening in Canada. Then the railroads come crying to the board asking them. to stop this iniquitous bus competition and bus competition. I think it would be a tragedy if the board of transport commissioners or this government interfered until such time as the railroads have brought themselves up to date and have shown some pioneering spirit in these days.

I just want to close by making a short reference to the Crowsnest freight rate agreement. It is an agreement to hold in perpetuity. It is an agreement that must not be broken. It is an agreement which I know certain forces have been trying to have abrogated. But I will tell you that it is vital to the success of the farming operations in the west. It is vital to all our people. I will say this, Mr. Chairman. The railroads have never yet been able to show that they are not making money hauling grain under the freight rates of the Crowsnest agreement; and until such time as they do show that they are losing money, not even slight consideration should be given to any change in the policy. The minister will certainly get himself into trouble, and so will the government, if they ever permit the abrogation of the Crowsnest agreement.


Mr. Argue:: I listened carefully to the
speech delivered by the leader of the Social Credit party, and I wish to compliment him on his excellent presentation. I also wish to assure him that I support what he has said. As he so well pointed out, the chief fact before us today is that, with increasing railway freight rates, there is an increasing amount of discrimination. The minister himself, in a remark he has just made, underlines that fact when he says there has been a forty-five per cent increase in general rates and a forty per cent increase in competitive rates. When one considers along with that the fact that the competitive rates were initially lower, and that the percentage increase in competitive rates has been less than in other rates, then one realizes that the regular rates which are paid by us in the west and the competitive rates paid by the people in central Canada are getting farther and farther apart.
I believe it is the duty of the government to adopt a freight and rail policy which will be fair to all parts of Canada. In a country so wide and extensive it is essential that we have an adequate and efficient transportation service. We in the west have been hoping for many years to have our area industrialized to a greater extent, but with each increase in freight rates the possibility of our getting industries into that part of Canada is getting less and less.
The first increase in freight rates came about in the spring of 1948. Since that time, during almost all of that time, there has been an application before the board of transport commissioners. We know that when an application is before the board of transport commissioners we in parliament are denied the right to discuss railway freight rates.

Although this is the third increase that has taken place since last fall, we were not able until June 2 to have a general discussion on the government's freight policy and the policy adopted by the board of transport commissioners. I object to an opportunity not being given to parliament, at regular intervals, to discuss our transportation problems. It is important that we do not allow the fact that the matter is before the board of transport commissioners at any time to prevent parliament from discussing railway freight rates and transportation policies. Surely we on all sides of the house have a real responsibility in that regard.
On June 2 it was said by most speakers in that debate that the board of transport commissioners has been inadequately staffed, and that it has shown, by its various judgments and the mistakes which it has admitted, that it is incompetent. I believe that one of the commissioners, Mr. MacPherson, in the judgment of March 1, 1950, or in his statement following the judgment of the chief commissioner, frankly admitted that the board was not in a position to deal adequately with the question of discrimination. Let me quote what he said:
I concur in the judgment of the assistant chief commissioner although I would prefer to see some relief given by way of maximum increases on basic materials where the markets are long distances from the source of supply. I realize, however, that the board cannot deal with the over-all revenue requirements and limit the increase in certain cases. To do so would entail a much more complete study of individual types of traffic than the board is able to do at the present time.
In other words, Mr. MacPherson said that something should be done to remove discrimination, but the board is not in a position to undertake such a job. The government should see to it that the board of transport commissioners is adequately staffed; that it is in a position to study and to establish freight rates in Canada that are equitable to all parts. While it may be the duty of the board of transport commissioners, so far as it is possible, to remove discrimination, it certainly is the duty, obligation and responsibility of the government to remove discriminatory freight rates against any section of western Canada to which they may apply.
The government of course was quite willing to appoint a royal commission; it was quite willing to shelve its responsibility for a year. The minister has said before that the provinces were not anxious to place their case before the board of transport commissioners in relation to the general inquiry; that they wanted a royal commission. Well, that is true; but the provinces want the removal of discrimination. They
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felt that from the experience they already had with the board of transport commissioners it was useless for them to go to the expense and the trouble of submitting reports for a general inquiry; they would rather take their chances on a brand new body. Of course that is why they asked for a royal commission. They asked for a royal commission in the main because they wanted the royal commission, but they asked for a royal commission also in the hope that somehow, some time, a royal commission might give some information on which the government would act to remove discrimination.
We shall soon learn whether or not the government set up the royal commission with the objective in view of removing discrimination, or whether it was set up only in order that the government might shelve its own responsibilities until the election was over, and after that to allow three further increases in freight rates, and perhaps in the future allow further increases and further discrimination to take place.
Before the royal commission has come some excellent information as to the impact of freight rates on various industries and various parts of Canada. At the sitting in Regina in June of last year, Mr. J. S. Turnbull, of the Saskatchewan dairy association, placed on record the impact of freight rates against the dairy industry in Saskatchewan. He pointed out that while the whole cost of operation in the manufacture and distribution of a pound of butter amounted to 9-92 cents, of that amount 4-97 cents was used for the payment of freight rates. In other words, the total cost in the manufacture and export of butter from the province of Saskatchewan has in it a 60 per cent cost for freight rates, which amounts to 5 cents a pound. That was before the last three increases in freight rates. We know that the price of butter has been going down because the government has set lower and lower floor prices under butter. According to the submission of Mr. Turnbull, the dairy industry in the province of Saskatchewan was in real peril back in June, 1949. Of course that peril has been increased because the price of butter itself has gone down, and there has been a further addition in cost owing to three increases in freight rates.
The Saskatchewan poultry producers informed the board that the total cost of freight going into the collection and distribution of a dozen eggs amounted to 6 cents. They pointed out that while in 1948 the eastern prices for eggs were 474 cents a dozen in the spring and 54J cents a dozen in the fall,
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because of freight rates and other reasons the producers in Saskatchewan received only 30 cents a dozen. Of course now the price of eggs has been reduced, the government's floor price has been reduced, and on top of the original 6 cents freight cost there have been three further freight rate increases. It is little wonder that in correspondence I get from poultry and egg producers in Saskatchewan they tell me that at the present time they are receiving only from 19 to 20 cents a dozen on the basis of average grades. That is understandable, when in 1948 they received only 30 cents a dozen.
The Canadian Co-operative Producers Limited, which is a meat processing plant located in the city of Swift Current, placed before the royal commission the effect of high and discriminatory freight rates against that industry. In his submission the secretary of that co-operative had this to say:
The net effect of increased cost was a deficit on 1948 operations of $93,663, and an examination of figures presented herein shows that discriminatory freight rates and other transportation difficulties have been mainly responsible.
In other words the high and ever-increasing cost of transportation was crippling the Canadian Co-operative Producers Limited. According to the reports submitted to the royal commission, freight costs were crippling the poultry and dairy industry in Saskatchewan. I should like to see a policy adopted that would encourage the industrialization of the prairies and the maritimes, but the government through its transportation policy, or lack of policy, allow increasing freight rate increases, increasing discrimination, and by that means not only fail to encourage industrialization in these parts of Canada, but even prevent industry already located in those areas from operating at a profit. Instead of those areas becoming further industrialized, the industry which they now have is being crippled through increased freight rates.
The government have taken this attitude: The main thing in the question of freight rates is to see that the Canadian Pacific Railway Company makes a profit. That would be the yardstick. The C.P.R. must make enough to have a reasonable margin, have a reasonable surplus and pay a reasonable dividend; we shall set freight rates in such a way that the C.P.R. will show that profit position. The government have been very successful in that regard. The C.P.R.'s profits in 1949 were $2 million higher than they were in 1948. Instead of the government making C.P.R. profits the yardstick of its transportation policy, they should make equitable freight rates their yardstick. The

government should say: We are going to have equitable freight rates, freight rates that will apply equally to all parts of Canada. Then we would find out whether the railways. make money or lose money. If they lose money, the government should consider subsidies. But the government should not say that our transportation policy is based upon profits to the C.P.R. Rather it should say that it is based upon an equitable freight rate structure, and then, if necessary, take care of the operating expenses of the railways by some other means.
The government have done something in the way of subsidies on freight rates. Feed grains going to eastern Canada from western Canada have been subsidized for a number of years. The total subsidy to date has amounted to about $139 million. It has been suggested by members from western Canada from time to time that that subsidy was one only to the eastern producers. I believe that when the government pays a subsidy on a shipment of feed grain from Fort William east, and by that means removes the freight cost, the result is beneficial not only to eastern but also to western producers.
The hon. member for Peace River has mentioned the Crowsnest pass rates, and has said that those rates should not be changed. He pointed out that if they were changed there would be the greatest possible amount of resentment shown in western Canada. I agree with him wholeheartedly in that statement. I want to point out, however, that so far as the shipment of certain grains to eastern Canada is concerned, we have something Which is just a little better than the Crowsnest pass rates. We have the Crowsnest pass rates on grain going to Fort William, and then we have free freight after that. In my opinion that is a good thing.
I am trying to say to the minister that the government is already paying a subsidy in respect of freight rates on a certain commodity. It has not entirely opposed subsidies on freight rates. I say it should now give consideration to a greater subsidy, if that is necessary-and I believe it is-in order that freight rates may be equalized from one end of Canada to the other.


Gordon Francis Higgins: Mr. Chairman, I intend to speak to the amendment offered by the leader of the opposition, but in doing so I shall not use general arguments but rather shall confine my remarks to the recent decision of the board of transport commissioners in the matter of the application of Newfoundland in connection with freight

rates. I spoke on, this matter some time ago, but imagine that what I said at that time is not fresh in the minds of hon. members.
The position is that prior to confederation it was clearly understood by the people of Newfoundland that the freight rates structure of that new province would be comparable to the freight rates structure of the maritime provinces, subject of course to the mileage differential.
As a member of the national convention of 1946, and as a member-of the national convention which came to Ottawa to discuss with a committee of the cabinet the whole proposition related to confederation, I would say that at that time it was my definite and clear understanding that Newfoundland in the event of union was to receive the same treatment as the other maritime provinces.


Lionel Chevrier: Without wishing to interrupt the hon. member, may I point out to him that neither of these decisions in any way affects Newfoundland. I am sure he understands that. It was not intended, either in the twenty per cent case or the other case.


Gordon Francis Higgins: I am not referring to that. My remarks are directed to the amendment offered by the leader of the opposition.


Lionel Chevrier: That amendment is to reduce the vote to one dollar. I hope the hon. member will make his remarks pertinent to the amendment.


Gordon Francis Higgins: I am endeavouring to do so, and I think the minister will see what I am talking about. The report of that delegation was announced at the conclusion of the talks. What I have just said with respect to treatment was placed before the convention, and was spoken about on a number of occasions at those meetings. During both referenda in 1948 this same position was stressed by the parties advocating confederation. There was no question at that time that the government of Canada had any different views, because a representative of the government attended all sessions of the convention, and the High Commissioner for Canada, Hon. J. Scott Macdonald, was present in Newfoundland during both referenda campaigns. Certainly he heard the radio addresses made, as
well as meetings.	the	formal	addresses	made atWhen	the	second	delegation	came to
Ottawa following the referenda to conclude the final terms of confederation, six members of that delegation returned with exactly the same opinion as I have outlined. So that the position is that the members of both delegations, having talked here in Ottawa on both occasions with committees of the cabinet,
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appeared to understand that we were to be put in that same position. That was notwithstanding the necessity for water carriage between North Sydney and Port aux Basques, with the consequent extra handling of freight at those points. It was also notwithstanding the fact that the Newfoundland railway is a narrow-gauge railway, and the freight cars are consequently very much smaller in size.
That was all understood. Section 32 (2) of the terms of union designate that the traffic between North Sydney and Port aux Basques is all-rail traffic. I submit therefore that that definitely guarantees a freight rate structure on through traffic going into Newfoundland comparable to like traffic in the maritime provinces, subject of course to the mileage differential.
In that connection may I quote from Hansard when the matter was discussed in the house in 1949. The minister, referring to section 13 of the Maritime Freight Rates Act, said, as reported at page 607:
I should repeat everything I said on that occasion, except to say that the freight rates structure of the maritime provinces will be made applicable to the province of Newfoundland.
Referring to this matter of water traffic, the Prime Minister said, as reported at page 608 of Hansard:
That is something also which was carefully discussed with the representatives of Newfoundland, and they were told that all these matters would have to be taken into consideration by the transport commissioners. What is provided is that this connection to Port aux Basques is a part of the railway rate, but the maritime rate will apply within Newfoundland. It does not apply now to the traffic carried by water from Halifax to any point in Newfoundland; but in determining what will be proper rates to charge for rail movement the board will have to take all appropriate factors into consideration. The delegates from Newfoundland finally were satisfied with this position; that we do not want to have things happen which will interfere with the economy of Newfoundland.
At page 609, the Prime Minister said:
It is part of the agreement that water transportation between Sydney and Port aux Basques will', be on the same basis as if it were a rail operation;, that is the agreement.
And again:
Through traffic moving by rail and having to take-this jump across the water will be treated on the same basis as if that mileage were part of the railway haul.
Then at page 619, the Minister of Transport:
The provision in the bill that through traffic between Canada and Newfoundland shall be treated as all-rail traffic when passing over the water route between North Sydney and Port aux Basques on the steamship now owned by the Newfoundland: railway is nothing unusual. It is the same practice as: was followed with respect to the vessel service between the mainland and Prince Edward Island many years ago, when through rates were made via that

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service; the only difference is that the steamer service between the mainland and Prince Edward Island has been changed to a car ferry.
Incidentally I want to thank the minister for making provision for a new ferry in the estimates.
It is not possible under present conditions to establish a car ferry between North Sydney and1 Port aux Basques; therefore the steamship service must be considered as a substitute for a car ferry service.
And again:
The same situation exists with respect to the water service now carried on via the car ferry between Mulgrave and Point Tupper-that is, the rates between the rest of Canada and Cape Breton are on a through rail basis.
And again, in the middle of the page:
Such rates will have to conform to the general pattern of rail rates in the other provinces of Canada; otherwise they would be discriminatory. Discriminatory rates, either higher or lower than in the same general territory, cannot be maintained under the Railway Act. Therefore, as stated, the rates will follow the general pattern of the rates in other provinces.
And then on page 621, the Prime Minister:
No increase is being provided in rates from any point within the preferred area to any point in Newfoundland. At the present time there are no through rail rates from Halifax to Newfoundland. There is a rail rate to Halifax, and then water carriage beyond that. Under this arrangement a through rate will be possible from points within the preferred area through North Sydney and Port aux Basques, treated as an all-rail rate.
In connection with discriminatory rates, the minister is reported on page 3166 of Hansard of June 2, 1950, as having said:
It is well known by all who have given any attention to the matter that the board of transport commissioners have no power of themselves to deal with discrimination affecting geographic, economic and industrial conditions. That is the very essence of the case for the provinces. Their whole brief was based on this argument. It has been held time and again that a rate-regulating commission has no right whatever to attempt to equalize geographic, climatic or economic conditions. They are simply and wholly concerned with questions having to do with the reasonableness of rates or tolls.


John George Diefenbaker: 'Who has the power?


Lionel Chevrier: The only conclusion I cam come to is that the language used by the leader of the opposition and the hon. member for Lake Centre is-


John George Diefenbaker: Who has the power?


Lionel Chevrier: Just a moment. I did not interrupt the hon. member when he made his speech, when he waxed so indignant. Let him allow me to carry on, because there are a number of things that have not been said that need to be said.


John George Diefenbaker: It is a question that you cannot answer.
When following that decision by the board of transport commissioners the premier of Newfoundland announced that he was going to appeal to the cabinet, apparently he made the approach and then was advised that the matter should be referred back to the board
IMr. Higgins.]
of transport commissioners. That has not been done as yet. In the event of there again being an unfavourable decision by the board of transport commissioners I should like to ask the minister if there is any right of appeal to any body, or what is to happen?
I should like to read from the record of the national convention on January 5 and January 19, 1948, where an answer was given, I presume by the cabinet or by some official, with regard to the terms of union, as follows:
Although it would be inappropriate to guarantee in the terms of union that there would be no increase in any rates in any of the above services after union, it would seem that in general Newfoundland users of these services after union would benefit from the extension of Canadian rate schedules and the Canadian system of protecting consumers from unfair and unreasonable rates.
In the application submitted to the board of transport commissioners the special case of the Buchans Mining Company Limited was set out. This company operates in the middle of the island and ships ore to a point to be forwarded by boat. This part of the application reads:
The annual production of concentrates of the company, amounting to approximately 130,000 long tons, is shipped by rail from Buchans via Bishops Falls to the port of Botwood on the northern coast of Newfoundland.
The company is presently paying a rate varying from $2.35 to $2.75 per ton on the movement of the concentrates from Buchans to Bishops Falls, and the schedule of rates applicable is the same as applied prior to confederation of Newfoundland with Canada.
This movement is a preferred movement under the Maritime Freight Rates Act, and is entitled to a twenty per cent reduction on the basic rate under the statutory requirement of that act. The application of the act and the statutory twenty per cent reduction would result in a substantial decrease in the rate presently fixed on these concentrates. It appears that this movement has not been accorded the benefit of the act or any reduction whatsoever.
Apart from the failure to apply the Maritime Freight Rates Act in this instance, it would seem that the basic rates fixed on this concentrate movement are excessive and discriminatory. Despite the fact that, in connection with the movement of the Buchans concentrates, the Buchans Mining Company Limited furnishes all the ore cars for the movement and maintains forty-seven per cent of the trackage used in the movement and assembles all the ore trains, the freight rates chargeable by the Canadian National Railways are in excess of rates for comparable movements in other parts of Canada where all equipment is provided and track maintenance and services assumed1 by a railway.
By way of comparison and illustration, it is pointed out that the rate on lead concentrates released to $50 a ton from Montauban to Montreal (for export)'-a distance of 126 miles-is $2.39 per ton, reflecting a ton mile earning of 1-8 cent which, applied to the 79 miles movement from Buchans to Bishops Falls, produces a rate of $1.42 per ton. This latter would give a fair basic rate for the Buchans movement if the provision of all equipment and maintenance of all trackage were obligations of the railway. As this is not the case, a further deduction and allowance should be made on this rate of $1.42 per ton in order to arrive at a fair basic for

the Buchans concentrates movement. When that rate Is established, the twenty per cent deduction under the Maritime Freight Rates Act would then have to be applied.
As I say, the rate charged another producer for a haul of 126 miles is $2.39 per ton. For the 79 miles from Buchans there is a rate of $2.75. That fact also has been placed before the board of transport commissioners.
As to how the other parts of the maritimes feel about that and about the contract, I should like to refer briefly to an editorial which appeared in the Halifax Chronicle-Herald of March 8, 1950, under the heading "The Terms of the Contract." It had this to say:
Newfoundland, as a result of union, is a maritime province, the fourth maritime province. And the terms of union with Newfoundland provide that "for the purpose of railway rate regulation, the island of Newfoundland will be included in the maritime region of Canada" and "through traffic moving between North Sydney and Port aux Basques will be treated as all-rail traffic." And generally, "all legislation of the parliament of Canada providing for special rates on traffic moving within, into, or out of, the maritime region will, as far as appropriate, be made applicable to the island of Newfoundland."
That is clear enough and specific enough. Certainly, there can be no possibility of doubt about the spirit of the terms or the intentions of government and parliament in approving them. And while the qualifying phrase is there-"as far as appropriate"-the people of the rest of Canada want to see Newfoundland a maritime province in all that the name implies.
As I say, in spite of all these facts having been brought before the board of transport commissioners by counsel for the province of Newfoundland, that board upheld the discriminatory Newfoundland freight rate structure. I am now quoting from page 2 of the judgment of that board, dated February 14, 1950:
The common law contains no rule against discrimination by common carriers, and the only kind of discrimination prohibited by the Railway Act is discrimination that is undue, unfair or unjust.
Certainly this discrimination is unfair and unjust.
Railway companies have, therefore, always had the right to discriminate in rates because of dissimilarity in circumstances and conditions. Do the statutes referred to in the preceding paragraph-
Those are the statutes I have quoted.
-lay down a different rule in Newfoundland?
In our opinion the answer is no.
Then they go on to quote the terms of union, and here is what they say about that:
We think that the obvious purpose of this subsection is-
That is the one referring to through traffic, -first, to make Newfoundland part of the maritime region in order that Newfoundland may have the benefit of the Maritime Freight Rates Act in
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respect to all freight movements between points in Newfoundland and points in the rest of the maritime
region; and
Secondly, to provide that carriage by water between North Sydney and Port aux Basques is to be regarded as carriage by rail for rate-making
purposes.
This subsection may also mean that the rate structure in Newfoundland is ^o be in general conformity with the rate structure in the other maritime provinces.
They do not answer that specific question; they say it may be, but they make no ruling on the matter. That is one reason why I certainly approve the motion of the leader of the opposition. As hon. members will understand, local businesses and industries in Newfoundland have been greatly affected by confederation. One of the things we were led to believe would happen was that the cost of living would be greatly reduced. That has not come about. If, as my leader suggests, the freight rate structure should be such as to be economically sound in every part of Canada, bearing in mind the economy of each province, it is the contention of Newfoundland that a freight rate structure comparable with that of the maritimes should be conceded.


Some hon. Members:: Carried.


Gordon Francis Higgins: I shall not be long. In speaking on this matter previously I made some statements that were considered rather strong. I do not intend to repeat them, but certainly 1 intend to stand by what I said at that time; I have not changed my opinion. I would say that if the fault is with the board of transport commissioners, then they are not competent to perform their duties, with all due respect to the remarks of the hon. member for Bonaventure. If the fault is elsewhere than with the board of transport commissioners, then I submit that Newfoundland is entitled to a full and complete explanation. If the fault is with the government, then I say Newfoundland has been the victim of the crime of false pretences in entering into union, and that false pretence has been either express or implied.


Mr. Hansell:: Mr. Chairman, I recognize that we are now in the dying moments of this session. I have also been told that the minister is anxious to get away; therefore I shall attempt to cut short my remarks this afternoon. 1 do feel impelled to say a word or two with respect to the Crowsnest pass agreement, however, by reason of the fact that we have received so many resolutions and letters opposing any change in the statute. These resolutions and letters have come from many organizations, as well as individual farmers, and I do not feel I should let the session close without saying a word or two on behalf of my constituency, which is

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approximately sixty-five per cent agricultural. Grain, rates by statute has been the national policy of this country for over fifty years. No matter what party has been in power, whether Liberal or Conservative, all administrations have accepted the fact that grain rates by statute is a matter of national policy. Now a move is being made to lift the Crowsnest pass freight rates out of the statutes of Canada and place the responsibility for those rates in the hands of the board of transport commissioners. I rise to oppose that move as vigorously as I can. In doing so I am not registering any particular criticism of the board. The point I want to make is that the board of transport commissioners, in fact any board or commission, is set up to administer government policy, not to make it. Since the Crowsnest freight rates by statute has been the national policy of this country for over half a century, I do not believe the question of changing that policy should be placed in the hands of any commission, no matter what it may be.
My second point is that agricultural economic principles are never static. That is the reason the Crowsnest pass agreement must remain as the law of Canada. That is the reason the Crowsnest pass freight rates must remain statutory. The economic principles of agriculture move up and down continuously. At the moment prices are in all probability on the decline. Our overseas export trade for wheat and other grains is also probably on the decline. If these declines do take place, the result will be that farm income will be reduced. The extreme variability of economic principles as applied to agriculture makes it all the more necessary to retain the Crowsnest pass freight rates on the statute book. Another thing I should like to say-it has been said before but it will bear repeating-is that the farmers of this country sell on an uncontrolled market but they have to buy on a controlled market.
Mr. Chairman, the depression of the thirties still remains vividly in the minds of the farmers of this country. I remember in 1935, when some of us were first elected to this house, how the farmers came to us, and some of them were crying because they were about to lose their farms. The mortgage companies and individuals who held mortgages on their land were threatening foreclosure. Many times we were asked to draft or write letters for farmers to mortgage companies in order to help them retain their land. There was no hope in the world at that time of the agricultural industry of Canada remaining solvent. In Alberta the Aberhart administration took the bull by the horns and put a moratorium on debt. If it had not been for that
[Mr. Hansell.l
action, many of the farmers in that part of the country would have lost their homes and farms. Then the debt adjustment boards were set up in an attempt to bring creditor and debtor together. These boards helped to some extent in solving the problem; at least the farmers were able to save their homes.
Two or three years later the war broke out, and that changed the economic picture for the farmers of western Canada. Prices began to rise, and the farmers began to see their salvation. What a tragedy it is to think that we should have to have a war in order to save the homes of the farm people of Canada! That was the situation, Mr. Chairman. As I say the economic principles of agriculture are never static, but fluctuate one way or another, and that is the main reason why the Crowsnest pass agreement must remain on the statute book.
Another point I should like to make is that the development of this entire nation is largely due to the expansion of the prairie provinces in agriculture. I realize the argument will be advanced that the railroads stretched their ribbons of steel from coast to coast across this country, and where the railroads went, industry and the farmers followed. I do not know whether that is the order in which the events should be placed; perhaps where the farmers and pioneers went, the railroads followed. I am rather inclined to think that is the more accurate picture. Let us remember that in the early days of railroad construction in this country the people of Canada, through the government administration, poured millions of dollars into those railroads in the form of gifts. I am not objecting to that; it is now history. But we are continuing to pour money into the railroads of this country.
Not only were millions of dollars placed at the disposal of the railroads in the early days, but I would remind you, Mr. Chairman, that no less than 32 million acres of land were given to the railroads to compensate for cost of construction. Thirty-two million acres is a lot of land. I realize that much of the land is raw land, but they have had the opportunity of selling that land, as they do today, and the price received in the aggregate would amount to astronomical figures. Every little town we pass on the railway means that the railway has created that townsite and sold the land. I have no criticism to make. It is a good thing they did; it is exactly what they should have done. My point is that over the years the railways have not fared badly at all. May I say, too, that on the 32 million acres that were given to the railroads of this country the mineral rights were reserved for them.

The next point I wish to make is that a previous prime minister of this country committed himself and his government to retaining on the statute book the Crowsnest pass agreement. On May 4, 1922, at page 1436 of Hansard, the former prime minister, Mr. Mackenzie King, stated:
Unless it can be shown that in the public interest there are good and sufficient reasons why what is termed the Crowsnest pass agreement of 1897 should not again become operative in July next, the existing statute will not be interfered with.
Those are the remarks of the then prime minister, and we can take them as a pronouncement of government policy at that time. Mr. Chairman, I have not been able to discover any evidence submitted before the commission from which it could be deduced that it would be in the public interest that the Crowsnest pass agreement, which so vitally concerns a large and important part of Canada, namely, the agricultural industry, should be altered or disturbed in any way. I say that this Crowsnest pass freight rate must remain on the statute book. I cannot emphasize too strongly the fact that the farmers and the entire agricultural industry of this country are banking on this government, and on any government that might follow, to retain as government policy the statutory fact of the Crowsnest pass agreement.
Before I sit down, there is one further comment I wish to make. I wish to support the hon. member for Bow River in the speech he made the other day, and also the leader of this group, the hon. member for Peace River, in the speech he made today. I believe that the speech made by the leader of this group today was one of the most dynamic that has been made on this issue. I refer particularly to the points made by both hon. gentlemen with respect to the trucking industry of Canada; for a move has been made to curtail the interests of the trucking industry, which move would be favourable to the railways.
I know that we should look at these things in a solid fashion. We must not go off halfcocked and let our emotions run away with our reason. I recognize that fact. I also recognize the fact that when millions upon millions of dollars have been invested in an industry, you just cannot close your eyes to the fact that such an industry must be protected. I am all for it. But I do say that there must be an attitude of fairness in relation to other industries that are imposed upon us by the development of the country and the advancement of civilization-and I think I can use the term "civilization" because what
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is true today in industry affecting the lives of our people may not be true ten, fifteen or twenty years from now.
There was a day when the railways refused to look upon the trucking industry as a menace to their interests. Now they are beginning to discover that the trucking industry can haul freight and give a service which is perhaps cheaper and more favourable to the public than the service the railroads can give. That is a thing that is coming and we cannot help it. We have to recognize it.
We have these problems coming up every few years. The discovery of vast resources of oil in Canada means that the coal mining industry of Canada is now being pushed into the background and will perhaps eventually deteriorate to a place where it is almost non-existent. I do not know what will happen, but the fact that oil has been discovered causes the coal mining industry to worry considerably as to its future. What are we going to do about it? I use that only as an illustration. You cannot stop progress. It is bound to come. The day may come when the utilization of air traffic will be such that it will become a threat even to the trucking industry. We cannot help that. While on the one hand, we have to try to protect large investments in industry, we must be fair to any newly-developed industry that is going to serve the country and serve the people, and, speaking of trucking, one that is able to transport freight in many instances much more cheaply than the railroads and to give a service which to many people would be much better-not always, but in many cases -than the railroads can give.
I have a great many notes before me on the trucking industry, Mr. Chairman, but I know that the minister is anxious to get away, and I will not detain him or the committee. I will forgo any discussion of those notes now, and perhaps if I have another occasion at some future time to talk about this matter, I will pursue them further.
May I just say one word in closing? I cannot emphasize too strongly the fact that the minister's portfolio is that of Minister of Transport, not minister of railways or airways or shipping.


Howard Charles Green: Or Trans-Canada.


Ernest George Hansell: Or Trans-Canada. He is Minister of Transport, and he is just as much responsible for fairness to the trucking industry as to any other branch of Canada's transportation industry.


Mr. White (Middlesex East):: Mr. Chairman, I hold in my hand a finding of the board of transportation commissioners dated August

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12, 1949 and initialled "T.D. 14157-4". It is signed by P. F. Baillargeon, secretary. This finding deals with an application of the milling and feed industries in regard to the freight rates on soybeans from southwestern Ontario to Toronto; and the application for a decrease was refused. This statement by the board points out why they have refused the decrease in freight rates. I want to review the paragraphs that are pertinent to the request dealing with the decrease in rates. I will provide the minister with a copy of this finding so that he will know what I am referring to.
Paragraph 4 reads as follows:
The premises upon which this application is made appear to be that a reduction in the present rates on soybeans would promote an increase in acreage; that large imports are now necessary from the United States; that Canada's edible oil requirements exceed domestic supply; and that diversion to truck transportation is likely to occur.
That is the first time I ever heard that the freight rate was to be based on the question whether it would increase or decrease the production of farm products. I understood that freight rates are based on the cost of haulage, on the competitive rates of other transportation systems, and the like, and not on whether they would increase or decrease the acreage of a certain product.
Paragraph 6 reads in part as follows:
The board's powers are limited to considerations of the reasonableness per se of the rates charged and the removal of unjust discrimination. Consequently, features of your complaint, other than the latter, will not be dealt with herein.
Unjust discrimination? Where are we going to draw the line? I never heard of such a thing as just discrimination.


Lionel Chevrier: There is discrimination undel the Railway Act. This is what is meant.


Harry Oliver White: I see. Take a carload of corn or wheat from the same station to Toronto; the rate is three cents lower than it is on soybeans loaded in the same kind of car by the same machinery. They would like to know why the rate on soybeans should be three cents higher. The board say that is not unjust discrimination. I cannot see the reason for that.
In paragraph 9 there is a statement of the dominion bureau of statistics showing that the increase in the acreage of soybeans has been considerable. Since 1942 the increase has been from 44,000 acres to 94,000 acres in 1948. By that they are intimating that the rate is not too high. They say that because there has been a great increase in acreage the rate is not too high. The actual fact was that the price of soybeans had improved to such an extent that it was more advantageous to grow soybeans than some other cash crops. 
They also tried to prove that the freight is not discriminatory today because there has been an increase in acreage.
Let me read paragraph 11, which deals with it:
It is obvious from this tabulation that the acreage and total production has substantially increased. It would not appear that the railway freight rates complained of had a tendency to curtail production, nor is it clear that a reduction in such rates would tend to further increase production. The board is, therefore, unable to find any indication that unreasonable rates per se have been or are being applied.
There is nothing reasonable in a difference of three cents between corn, wheat and soybeans. Production should not be the basis of a freight rate.
Paragraph 13 reads in part:
Difference in rates is discrimination; but the prohibitions of the Railway Act in regard to discrimination are prohibitions of unjust discrimination or undue preference, and the question is whether the discrimination amounts to an unjust discrimination or undue preference.
My only comment on that is that there certainly is unjust discrimination.
In paragraph 14 they deal with the findings regarding the Ontario Paper Company, and point out the ruling there. That has absolutely no bearing whatever on freight rates so far as farm products are concerned. Paragraph 15 reads:
Evidence is required as to how rates complained of react to the detriment of the applicant.
We grew two million bushels of soybeans in 1948, and considerably more last year. If you multiply that by three cents a bushel you will get $60,000. It cost the producers of southwestern Ontario just that much money, and that is how it is reacting to the detriment of the applicant.
In paragraph 16 they deal with the water rate, and say that it is not discriminatory. Actually the water rate from Chicago is to the advantage of the Toronto elevators which bring beans from Chicago rather than from Chatham by rail. Therefore the statement in paragraph 16 is not borne out by the facts.
Paragraph 18 reads:
From Information in the board's possession it would appear that the product chiefly derived from soybeans is the oil extracted therefrom. The board is informed that oil constitutes approximately sixteen per cent of the production plus imports of beans, and that in consequence of the extraction of oil the residual meal is about 73 per cent. The board's information is that soybean flour is about three per cent of the said production plus imports of beans.
Actually, these figures do not add up. They say that oil constitutes sixteen per cent. I have been informed that it is not quite that much, but we will say it is sixteen per cent. What is all the rest? It is residue

of one kind and another. It constitutes the bulk of the bean, not the oil. Soybean meal goes into feed for livestock. It is shipped all across Canada. I want the committee to understand that the producer is paying three cents more freight on the raw product to the mill, but when the mill sends it out again to the farming areas as feed for livestock it goes out at the same rate as the by-products of wheat and corn, so that the farmer alone is the boy who is taking the loss on that particular article.
Paragraph 19 reads:
The railway tariffs applicable to Ontario grown grain and grain products show that grain products rates are accorded to shipments of soybean flour, meal and cake; therefore, these products are not placed at any rate disadvantage compared with other grain products.
In other words the millers again, are the ones who are winning, and not the farmers. We heard something about the milling combine. It would appear that they have a finger in the pie here.
Paragraph 20 continues:
On the other hand soybeans are accorded the same rates as contemporaneously apply on flaxseed.
Any hon. member who knows anything about flaxseed knows that there is no comparison in the risk of handling soybeans as compared with flaxseed. Flaxseed will go through almost any small hole. It is a difficult product to ship, but not so with soybeans. I continue:
It is noted that oil produced from soybeans is also utilized in the manufacture of paints.
What bearing that has on the setting of a freight rate for the bean is more than I can understand.
Paragraph 24 reads:
While the board views the ex-lake rates as being, in a large measure, controlled by competition, it also considers that such rates form only a portion of the total transportation movement and that "notwithstanding the spread between the ex-lake export rates from the bay ports and from Ontario points, the transportation cost to the eastern Canadian seaboard in respect of the export of western Canadian grain and the products thereof is greatly in excess of the transportation cost from Ontario points."
This actually has no bearing whatever on the freight rates, so far as soybeans are concerned, from western Ontario to Toronto. It is another red herring drawn across the trail to confuse the farmers and those Who are applying for a reduction in the freight rates.
Paragraph 25 goes on:
In view of the conclusions therein stated the board is unable to And that a fixed spread of 1 | cents on ex-lake soybeans over other ex-lake grains constitutes unjust discrimination of Ontario soybean movements.
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Actually, as I mentioned before, the net result is that the preference is given to the United States soybeans from Chicago and not to the Canadian, growers.
Paragraph 26 is very revealing. It reads:
Reference herein has been made to the board's possession of data from which certain conclusions have been drawn. It may be stated, for your information, that the source of such data is the dominion bureau of statistics, who have requested that the information furnished be privileged due to the restricted scope of manufacture of soybean products.
I cannot see why any figures supplied by the dominion bureau of statistics should be privileged. We should know about them just as we do about anything else. We are paying for the compilation of those figures. Then the paragraph goes on to say:
In view of the board's understanding that Victory Mills Limited is considered to be the leading processor of soybeans, the conclusions stated can no doubt be readily verified.
That is all the more reason why the minister and the board of transport commissioners should look into this vexatious question of discriminatory rates so far as soybeans from southwestern Ontario are concerned.


Howard Charles Green: Mr. Chairman, as the committee is aware, this question of freight rates is of great importance to all the provinces of Canada, with the exception of Ontario and Quebec. While Newfoundland has not been a party to the various appeals, I imagine that when that province finds out just what its freight rates structure really means, the government of Newfoundland will also be vitally interested in this whole question of freight rates.
This afternoon I should like to ask the minister to answer one question which to my mind is at the heart of this whole problem. My question is this:	How and when is the
question of discrimination to be decided?


Lionel Chevrier: Mr. Chairman-


Howard Charles Green: I do not want the answer so fast. To my mind that is the heart of the problem. The board of transport commissioners has obviously failed to deal with the disparity in the freight rates applying to different parts of Canada, because all the increases the board has granted have been on a horizontal basis. That, after all, has the effect of making the discrimination worse.
I think the situation was clearly summed up by the resolution presented in the British Columbia legislature on March 20 this year, when dealing with the decision of the government of British Columbia to join with six

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other provinces in an appeal to the dominion cabinet. One paragraph of the resolution reads as follows:
The board-
Referring to the board of transport commissioners.
-erred in authorizing a general horizontal or flat percentage increase, disregarding and accentuating existing disparities in the freight rates structure;
And the board further erred by failing to limit the authorized increase to flat maxima amounts of by other exceptions, or otherwise.
When the first decision was given, back in March of 1948, there was a great volume of protests from seven provinces in Canada. At that time the Minister of Transport was very much on the spot. He was being attacked in the House of Commons, and was dodging from one excuse to another. He was really in extreme difficulty.


Lionel Chevrier: You know that is not so.


Howard Charles Green: Well, perhaps we could say that he was very much embarrassed. If he was not, he should have been. In any event, under that pressure the government, through the Minister of Transport, announced that there was to be a general investigation of the whole freight rates question in Canada by the board of transport commissioners. I have here the minister's statement on April 7, 1948, when, on the same day, he tabled an order in council which authorized this general investigation by the board of transport commissioners. I shall read a portion of the order in council to which reference is made at page 2717 of Hansard just to show the step the government was taking at that time:
. The committee-
Referring to the privy council.
-observe that no general investigation of freight rates has been made in Canada since that conducted in 1925 by the board of railway commissioners for Canada. . . .
The committee further observe that in the said order in council it was stated that "the policy of equalization of freight rates should be recognized to the fullest possible extent as being the only means of dealing equitably with all parts of Canada and as being the method best calculated to facilitate the interchange of commodities between the various portions of the dominion as well as the encouragement of industry and agriculture and the development of export trade."
Then it goes on to say:
It is therefore advisable that the Board of Transport Commissioners for Canada be directed to make a thorough investigation of the rates structure of railways and railway companies which are under the jurisdiction of parliament, with a view-
And this is the important part.
-to the establishment of a fair and reasonable rates structure which will, under substantially similar circumstances and conditions, be equal in its application to all persons and localities so as to permit the freest possible interchange of commodities between the various provinces and territories

of Canada and the extension of Canadian trade both foreign and domestic, having due regard to the needs of agriculture and other basic industries.
Then the order in council went on to authorize the general investigation. Even that proposal was not satisfactory to the house. There were further protests, with the result that six days later, on April 13, the minister made a lengthy speech in which he pointed out that the board of transport commissioners, under the order in council I have just read, was being given the widest possible power to deal with discrimination. The minister's statement is to be found at page 2898 of Hansard for 1948, and he concluded by saying that the chairman of the board of transport commissioners had told him that there was nothing in the Railway Act which hampered them in any way in dealing with inequalities or the so-called discrimination which may exist in the country.
That was the stand taken by the government at that time. Some hon. members asked how long it would take for the board of transport commissioners to make the inquiry, and the minister answered as reported at page 2904 by saying that the chairman of the board had assured him that it would require an absolute minimum of six months in which to complete the investigation, and that it would probably be completed within the year. That would be a year from April 13, 1948.
On that same date the then leader of the opposition, Mr. Bracken, pointed out that he was afraid there would be a much longer delay, and that these increases were making the discrimination that much worse. As a matter of fact, Mr. Bracken moved an amendment to the motion then before the house.
The board of transport commissioners took action on that order in council right away and two days later, on April 15, issued a notice to the public which said that in order to carry out as expeditiously as possible the directions of the order in council the board invited provincial governments and other authorities, boards of trade, chambers of commerce and other interested parties to submit to the board any statements of fact under which it was claimed unjust discrimination or undue or unreasonable preference or advantage or unfair treatment existed against or in favour of any locality, province or region by reason of the present rate structure. In that notice the board asked that the submissions be filed not later than May 25, 1948. The notice also contained this paragraph:
The purpose of this notice is to put the board, as early as possible, in possession of any and' all complaints against the existing rate structure, and to specifically direct attention to the subject matter

*of such complaints, with a view to considering what changes, adjustments and redistribution in rate incidence may be necessary to correct the defects complained of.
That was over two years ago and it is interesting to note what happened. The story is contained in a statement made by the Minister of Transport in this house on June 2 of this year, to be found at page 3115 of Hansard as follows:
To date the plan and proposals of the railways have not been received, and the provincial governments have not made any submission with respect to the order in council.
The board of transport commissioners were of the opinion that the report and recommendations of the royal commission should be studied before completing their findings pursuant to P.C. 1487.
A royal commission had been set up in the meantime to consider the transportation problem of Canada with the exception of this question of freight rates. Throughout, during this whole time, there has been a demand for some steps to be taken to remove these discriminations. In the speech from the throne delivered on January 26, 1949, the government had this to say:
A royal commission has been appointed to inquire into and report upon all questions of economic policy within the jurisdiction of parliament arising out of the operation and maintenance of national transportation. Together with the findings of the investigation by the board of transport commissioners, the report of the royal commission should furnish parliament and the government with the basis for a sound transportation policy.
That was a year and a half ago but now we find ourselves in the position where the board of transport commissioners has not carried out its investigation and where the royal commission is not to make its report this year. Yet the government has taken no steps to correct this problem of discrimination. There was one decision made by the board for which I give it credit, that removing the mountain differential which affected British Columbia, but on the general question of discrimination there has been nothing accomplished and there will be nothing accomplished until the royal commission reports next year.
I submit that we have good reason to be doubtful as to whether the board of transport commissioners will deal with the question of discrimination on a Canada-wide basis even after the royal commission reports. If they do it will probably be more years before there is a finding by the board. I submit to the minister and to the committee that the government should act without delay and not permit this discrimination to continue indefinitely. I ask the minister to answer the question I posed in the beginning: How and when is the question of discrimination to be decided?
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The amendment now before the committee questions the capacity of the board of transport commissioners and asks that the vote for the board be reduced to $1. I do not intend to say anything about the various judgments in connection with freight rates but they certainly do not indicate great strength. However, I should like to say a word about a recent judgment of the board in connection with an application by the British Columbia Telephone Company for an increase in telephone rates in British Columbia. That application was heard by three members of the board. The chairman started out to take part in the hearing but was taken ill and did not get to the Pacific coast. The members who did sit told counsel representing the company, the province of British Columbia, the cities of Vancouver, Victoria, and New Westminster, the municipality of Burnaby, the Union of British Columbia Municipalities and various other public bodies that only a certain number of days could be spent on the application as the board had to get back east to deal with other business. From the tone used one could only assume that that business was considered far more important. The result was that a proper opportunity was not given for the consideration of this application.
The application affected most of the people in British Columbia because the British Columbia Telephone Company serves most of the settled portions of that province. The hearing was held in January of this year and on May 30 an interim judgment was handed down which granted the company 93 per cent of certain of the increases applied for. No reasons for judgment have yet been given to my knowledge and the result is that those of us who are interested cannot find out on what basis the award was made. The cities interested cannot decide whether they should appeal because they have no reasons for judgment upon which to base a decision.
That is not good enough for a board of this kind. While the board gave an interim judgment which awarded a large increase it has called upon the British Columbia Telephone Company to supply further information before rendering a final judgment. I submit that if the board of transport commissioners is to retain the respect and confidence of the Canadian people it must be a great deal more careful in the way it does business. I think it must be far more ready to look out for the interests of the little fellow, the man who has to pay these bills.
On this particular hearing there was one point which I thought was of some importance. When the British Columbia Telephone Company came to this house in 1947 asking

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for an increase in capital, we obtained from the member who sponsored the bill on the floor of this house an undertaking that they had no intention of applying for an increase in rates. At page 2718 of Hansard for May 2, 1947, I asked the then member, now Senator Reid:
I understand that the hon. member has been authorized to give assurance to the effect that the company has no present intention of applying for an increase of rates and will not make any such application unless compelled to do so by extensive changes in conditions.


Mr. Reid:: That is my definite understanding.


Howard Charles Green: That assurance is clearly worded and contains a statement to the effect that an application will not be made unless the company is compelled to do so and then only by reason of extensive changes in conditions. If the hon. member for New Westminster is prepared to give that assurance on behalf of the British Columbia Telephone Company I for one shall have no objection to the bill passing.


Thomas Reid: I am authorized to do so, and it is my definite understanding.
That was in May of 1947; hon. members will notice that there was to be no application for increased rates unless extraordinary conditions arose. I believe the telephone company officials went right back to Vancouver and started preparing an application for an increase in rates. At any rate they were not very long in applying for an increase. When counsel for the city of Vancouver tried to bring in that assurance as evidence before the board of transport commissioners the chairman ruled him out of order and would have nothing to do with it. He ruled that what had been said in the House of Commons was not evidence, that it was of no importance whatever, and went right ahead to hear the presentation by the company. In other words right there the board ruled for the company; it agreed with the submission of counsel for the company that this assurance could not be brought in as evidence, and I do not believe the board gave the people of British Columbia a fair run for their money. If we are to have a board of that type, in such a great hurry to hear the representations of these big companies and not giving the little fellow a break, I think it is time something was done about the board itself.
I suggest to the minister that he had better not be so sure as he was when he last spoke on this amendment that the board of transport commissioners is perfect. I admit that it has plenty of problems, but I am afraid it is far from perfect. Certainly some of its actions recently have shaken the confidence of the people in its wisdom. I would hope that the minister will take steps quickly to see that the board is strengthened.


Lionel Chevrier: If I may be allowed a moment to reply to the question put to me by the hon. member, he asked how and where discrimination is to be eliminated. Discrimination can be eliminated in more than one fashion. It can be eliminated by the railways themselves; that has been done on many occasions. It can be eliminated by the board as a result of its hearings. It can be eliminated by P.C. 1487, the general investigation the government has authorized by the board. The fact that it can be eliminated is indicated by the words of the hon. gentleman, who says the mountain differential was removed following the hearing held by the board in Vancouver. Then it can also be eliminated by recommendations that may be made by the royal commission on the general question of transportation.
I do not think there should be any doubt in the mind of the committee that under P.C. 1487 the board has the right to eliminate discrimination. The difficulty has arisen because of the fact that no evidence has been submitted. It is true that the provinces were busy with the royal commission and these other two hearings, and I believe now they have given an undertaking to co-operate to the fullest extent, so I am hopeful that from now on they will make submissions. Since 1925 no evidence has been submitted before any public body or commission to establish discrimination. I do not want to go over the discussion that took place previously, but most hon. members maintained that there was discrimination. Well, as far as the board is concerned it could not consider discrimination until it had been charged with that responsibility, as it has now been, and until evidence of discrimination has been submitted. Under P.C. 1487 the board is anxious that there be public hearings so it may determine what the discrimination is, if any.


Howard Charles Green: Then is this the minister's plan: first, that nothing further will be done until the royal commission reports, which he said would be next year. Then the board of transport commissioners will have a general inquiry into the whole question of discrimination, and after that is held and a decision is announced the government will have to act to make any amendments to the statute law that may be necessary. Is that the course the minister believes should be followed?


Lionel Chevrier: No, that is not the course I suggest at the moment. What I suggest is that two years ago the board was required under P.C. 1487 to conduct a general rate investigation. During that time the board has invited any public parties interested, particularly the provinces, to submit evidence of

discrimination. The provinces have given reasons why they could not or should not do so. Meanwhile the board has not remained idle. It has commenced studies of the waybill question, and is making a complete analysis of the freight waybill in order to ascertain by that method, which I understand is a new method, whether there is discrimination and to what extent. It may well be that they will make a finding before the royal commission on transportation brings down its report. On the other hand the chairman of the board has indicated to me that a complete investigation could not be made until such time as certain questions referred to the royal commission were answered. The whole point, I would think, is that evidence should be submitted before the board by the parties alleging discrimination.


Howard Charles Green: Once the board embarks upon this general inquiry, how long does the minister think it will take to complete that work? Has he asked the chairman of the board for an estimate?


Lionel Chevrier: I would not attempt to answer that question in any way other than the way I answered it when my hon. friend referred to the matter previously. I could not attempt to answer it, because it depends upon so many contingencies. It depends upon the length of time required for the waybill study. It depends upon whether or not the provinces will make submissions to the board. It depends upon when the royal commission is likely to report. It depends upon so many contingencies that any answer I might make could not possibly be at all accurate.


Mr. Smith (Calgary West):: I should like a few moments of the time of the committee, in the hope that what I say may be regarded as a contribution to an understanding by the committee of our real problem with respect to railways. In saying that I do not wish it to be inferred that I am presuming to speak as an expert, in any broad sense of that word. Freight rates are something with which I have had some experience, particularly in the western part of Canada. I cannot help recalling that my parents came to the city of Regina before the Canadian Pacific Railway. From the time I was able to read or to listen, I remember the battles which took place between the Canadian Pacific and the various municipalities that thought they were discriminated against at that time-that is the settlers in their areas thought they were discriminated against.
Now that was a time in the history of rate making when it was one hundred per cent true to say the basis of rate making was what
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the traffic would bear. I do not think that will be disputed by anyone whose memory goes back any considerable distance. The rates vary all across Canada, not by the fixation of those rates by the board of railway commissioners, as they were first known, but in the discretion of the railway itself. I do not say that critically, because I would think that would be the way that any of us would probably conduct our business in the event that circumstances of a like kind were present in the conduct of that business. Before I am finished I am going to make a suggestion, and it is this: that until we make rates which bear some relationship to the cost of carriage, then I believe our troubles will never end. Even today there is no such relationship established in any broad way.
I well remember the debates in this House of Commons in 1921 and 1922 when the Crowsnest rates were made statutory. I believe it is well to remember that they were first made by agreement, at a time when the railways were, to use an ordinary expression, in the driver's seat, because they had no competition whatever in connection with the haulage of those goods covered by the Crowsnest pass rates. We cannot blind ourselves to the developments which have taken place since. The result has been that in central Canada a new source of competition, in the old days completely unheard of, has sprung up, and that is transportation by truck. In those old days we had only one yardstick to use in controlling freight rates, and that was transportation by water. Many of us are old enough to remember the change that took place at the time the Panama canal was opened. We then had a major change in the structure of water competition. One could ship by water from Hamilton, through the Atlantic ocean and the Panama canal to Vancouver, and that shipment enjoyed the cheaper water rate.
We are coming to a point now where the members have listened with much interest, as I always do, to the member for Macleod insisting that the Crowsnest pass rates, which are statutory rates made by this parliament, must be maintained at all costs. I am going to agree with that, with a modification, but for an entirely different reason. My reason is that they have been in force for such a length of time that those rates must now be regarded as part of the basic structure of freight rates, and should not be regarded as a stab here and a stab there to suit different occasions. I know quite well that the railways were happy to haul all the grain they could to eastern Canada at those rates. I say, therefore, that in any consideration of our

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.general rate structure they should not be regarded as a change in the structure now *debatable, but should be regarded as part of the whole rate making structure in connection with our railways.
I remember coming down here before the railway commission many years ago when we endeavoured to find the cost of hauling a ton of goods, we will say from Drumheller in Alberta to the city of Toronto. I believe our efforts on that occasion could only be described as futile, because of the inability of those of us who were not experts in rate making to present evidence to the board in contradiction or in contradistinction to that presented by the two railways. The railways, of course, have made great studies of those matters. Having regard to my amateurish theory, if you like, with respect to costs, I well remember endeavouring to find that cost by asking both railways why they did not base it on their own costs. The railways have a term known as OCS, or on company service. In other words, they haul their own coal from the Crowsnest pass to Winnipeg or they haul their own ties and other supplies, and they charge themselves, to use the initials, an OCS rate.
Upon my examining the higher officials, they frankly admitted that the OCS rate, that is what they charged themselves to do their own business, had no relationship whatever to cost, and was simply an arbitrary figure which they had fixed for the conduct of their own business. What are the changes, perhaps I should say in the economic life of the country, which most affect the rates?
I mentioned the canal. I mentioned the increase of trucking service. Let us not forget what this trucking service is doing; and we have all been approached by emissaries of the truckers in the last while, What they are doing is skimming the cream off the freight business. We shall need our railways. Certainly in bad weather we shall need them to carry all of our freight and, in other times, to carry that which goes a considerable distance.
In addition to that, we found the eastern part of the country building good highways with which those highways of ours farther west could not compete, and everything I say, Mr. Chairman, applies to the maritimes as well. We found ourselves in the position that we did not have the highways nor did we have the money to build them. The density of our population does not even compare with the density down here in the east. The truck, of course, would call at your place of business

and deliver the freight at the place of business to which it was consigned at the other place. That is the next important fact which has entered into this picture.
We shall now take a horizontal increase in freight rates. What does it mean? We have heard much about the province of Ontario and the province of Quebec not appearing before the commission. If I were running either of those provinces I would do exactly the same thing as they have done. Why? Because they know perfectly well that you can make a horizontal increase in freight rates clear across the country and it is not going to cost them a dime because the railways cannot collect that increase, in view of the truck competition and water competition through your rivers and canals which are in this part of the country. What I say is this. It is just a matter of common sense, a matter of simple arithmetic, to know that horizontal increases, in so far as they may benefit the finances of a railway, are paid for-I was going to say entirely, but perhaps that is too strong a word-in great proportion by those of us who live far from here, both in eastern and in western Canada.
I add this comment. I think it is a wrong principle that, in determining rates, there is such a complete separation between the passenger rates and the freight rates. Included in your passenger rates, of course, consideration must be given to the operation of railway hotels across Canada. Those were built, of course-and wisely built-in the first place in order to find more passenger traffic. Yet it is generally accepted today that the passenger traffic is conducted at a loss. Someone may quickly rise and say, "well, that should be stopped". That, of course, would be said by someone with no knowledge of the situation. Your transcontinental traffic is governed by two things: American competition out of Seattle, through Chicago, up into Toronto, we will say; and now, with the addition of air travel, there is another competition. He would be foolish who would simply say, "Raise passenger rates in Canada", because that indeed would be killing the goose which laid some kind of an egg, even though it be not a golden one.
I want to speak of another principle before I come to a suggested solution, and it is this. I am one of those who think that a railway company should never be called upon to operate a railway at a loss and to take the profits from its other investments into account in determining what is an adequate freight rate. I cannot help bringing that proposition down to its simplest form, to my way of thinking; because I think in simple form. Let us assume that over on Sparks

s.reet here I had a fair boot and shoe business, just to pick one out of the air. If I had, I would not have holes in both shoes I am wearing. But let us assume that I have a boot and shoe business that is doing fairly well. Then, out on Bank street or in some of those areas, let us say, I think there is an opening for, we will say, a grocery store. So I take my savings and I put them into my grocery store. Then suppose hard times come to one of my small industries. Who is there so foolish as to say that I must continue to operate my boot and shoe business, which is losing money, because my grocery business is making money? That is all there is to this argument that the railways should be compelled to put into a common pot all the money they receive from their various investments.
I now come back to what I said in opening. You meet today the request for the removal of discrimination, and certainly I agree heartily that there is need for that. But what we need is not so much a raising or a lowering of rates. In dealing with this problem, we shall'never get anywhere until we have equalization on some common basis across the Dominion of Canada. When I say "equalization" I mean this. We must get into our rate-making at least some of the principle that a longer haul does pay more money than a shorter haul. That is not true today. That principle is just good common sense, Mr. Chairman. If you buy a ticket for a passenger trip to Vancouver, you will pay a great deal more than you will for a ticket from, we will say, here to Winnipeg or vice versa. But that is not true with respect to freight.
I therefore come back to my original proposition, that until we get to some extent an introduction of the rule of costs of doing the business, we shall never be out of the bush with respect to special rates on this commodity and that commodity and with respect to discrimination here, there and elsewhere. In that regard we must all remember the terms on which our outlying provinces came into confederation. I am not saying for a moment that you can just adopt that rule. It might increase certain freight rates because of these three changes in conditions which have arisen very much within my own time, but what I am saying is that unless you start with a sound basis you will never get anywhere. From that sound basis you will have to make changes here, there and elsewhere, but now we cannot make any change without introducing so many complex questions of various kinds that we do not know where we are.
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May I say one thing more about our present procedure? I think this appeal from the board to the privy council is one of the silliest procedures I have ever known.


Lionel Chevrier: Hear, hear.


Arthur Leroy Smith: I do not know how many members there are of the privy council but let us use the figure twenty. I remember an appeal in which I was involved some years ago. I think it was that twenty-fifth time the minister spoke of; but in any event my late friend, Mr. S. P. Woods, was counsel in the matter. What happened? I am not blaming the members of the privy council. You come down to the privy council with volumes of evidence. Today you will have the Prime Minister, the Minister of Transport and somebody else on the council. The following day, owing to duties that they must carry out, you will have perhaps one of these three gentlemen and three or four others. You could easily come to the place where you would never have even one minister listening to your appeal day after day throughout the whole appeal. Therefore when I use the word "silly" I can think of no better one. Perhaps "ineffective" would be better. It is a completely ineffective way of proceeding with appeals.
A word with respect to the amendment, and I am through. I am bound to say this. I am going to vote for the amendment. I realize the difficulty that the board of transport commissioners have to contend with, but in my judgment they have fallen far short of the mark. One reason may be that the difficulties are too complex. Perhaps the fact that they divide themselves up to hear cases, one section in one end of the continent, and another section in another, has something to do with it. The only thing I am going to say is this. In recent years they have proved ineffective. I hope no one will go to the members of the board and say I am suggesting that they are no good. But I am saying this. They have not fulfilled the hope held for them. For reasons perhaps better known to others than to me they have proven incompetent to discharge the duties thrust upon them by parliament and by circumstances at the present time; therefore I will vote for the amendment.


John George Diefenbaker: There are just one or two observations that I am going to make on this matter. I am not going to traverse the ground I did on June 2, but I do wish to make one or two references to the speech made by the minister on that occasion. He denied that there was discrimination against the western provinces. All I can say to that is that if he be correct in that view then every

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newspaper in the western provinces has been wrong for fifteen long years. Every newspaper supporting the government of the day has had editorial comments indicating that there is unjust discrimination against the western provinces.
All I can say in regard to the increase is this. No one objected, nor will anyone object, to any increase necessary to assure that the railroads of this country shall, when efficiently operated, return the cost of their operation and a fair and reasonable profit. No one argues anything contrary to that. But what we from the western provinces argue, and have a right to argue, is that in a series of horizontal increases we today are paying 21-7 per cent higher freight rates than are paid in Ontario and Quebec. The result is that our people are suffering unjustly and unfairly by these horizontal increases.
If I were to say to you that certain businesses of the prairie provinces are going to suffer as a result, and will be placed below the profit level in consequence of the increases, you might feel, sir, that I was speaking without justification. I therefore call in support the Saskatoon Star-Phoenix, which on May 26 said in reference to the recent increase in freight rates1-that was the last one:
But coming on top of three other increases in a little more than two years it will inevitably push some farm districts and some businesses in western Canada below the level of profitability.
In the course of his remarks the minister said there was no proof of discrimination. I have his remarks here but I am not going to quote them. He said that I advanced no proof of discrimination in my argument. He as a lawyer knows that when a thing is so obvious that all know it proof is not required. However, if proof is required cannot the board of transportation commissioners read the evidence that has been taken before the Turgeon commission? For over a year and a half the Turgeon commission has been hearing evidence. The evidence is there regarding discrimination. It was placed there by eminent counsel representing the three western provinces. Surely further evidence is not needed. Cannot the board of transport commissioners read the evidence that has been taken, or must they again have further evidence to establish what is already known?
I am not going to answer my hon. friend on this occasion in kind. Were I to do so I would be speaking at greater length than I intend to. Suffice it to say this: the fact that I do not answer that flamboyant speech that he made on June 2 is no indication of any desire not to answer him, for it consisted
[Mr. Diefenbaker.J
in large part of generalities and indicated on his part not that sympathetic attitude that a minister of the crown, occupying the high and responsible position that he occupies, should have toward the western provinces for which I believe I am speaking now.
Alberta, Saskatchewan and Manitoba are not in disagreement in this any more than the maritime provinces are in disagreement that they are being discriminated against. The minister's attitude indicated not that regard for the national viewpoint that I would have expected him to have displayed. I can only take it that it was made in the pique of the moment, and that in annoyance he gave expression to certain things that indicated a considerable removal from that judicial viewpoint that I would have expected him in a matter of this kind to have exercised.
Sir, I repeat what I have said on this and on other occasions, No one has any objection to an increase in freight rates to permit of efficient operation and a fair and reasonable profit. We take ' that for granted. But what we do object to, and what the legislature of Saskatchewan unanimously objected to, was the loading of the western provinces with still a greater burden of freight rates by reason of unfair discrimination being intensified through the increase.
For some reason or other when we try to get relief through the use of the Hudson Bay railway we get little support in that direction. Indeed, if press reports of the last few days are correct, the Hudson Bay route during the present year is going to be used less than it has been in the last two years. That would have reduced freight rates. That would have given to the western farmers a larger share of the amount ultimately realized. But even hopes in that regard are not going to be maintained. More than that I will not say on this occasion. But I should have liked to see Liberal members from all parts of western Canada rising on this occasion in the house in protest against this injustice, which is a denial of the principles of confederation-equality to all provinces, and injustice to none.
An increase horizontally allowed makes agriculture in the western provinces less remunerative, and imposes a burden greater than there is any justification for imposing at this time. I will not go into the question of discrimination. If there is to be an argument on that, then I have the material before me. It is accepted that it is unfair. I submit a horizontal increase should not be allowed.

The minister might say that there could be an appeal to the cabinet, as he said on that occasion.
Well, if an appeal is made to the cabinet, as has already taken place, I understand, on the part of seven provinces, I hope the minister will not adopt the adamant attitude he did in the House of Commons, and that the attitude here displayed was merely for show purposes in the House of Commons, and was in no way indicative of his general attitude toward the unfairness that is being shown to the western provinces.


Lionel Chevrier: May I just say a word. I am sure the hon. member for Lake Centre would not wish to leave the impression that by anything I have said in my speeches in the past I am not fully sympathetic toward the problems of western Canada as well as the problem of the maritime provinces, because if that impression was created in his mind and in the minds of any others I wish to dispel it immediately. That certainly is not the position that I have undertaken to adopt.
There is one thing however which my hon. friend said, and I am sure he will not wish to create a wrong impression as it certainly is not in accordance with my recollection of what I said. The hon. member said that I denied there was discrimination. At no time did I say that. On the contrary, I said that if there was discrimination there was no evidence of it. I said that discrimination was undesirable. I said on a number of occasions during my speech in the House of Commons that there is discrimination, but why not let the board determine the extent.
In answer to the hon. member for Van-couver-Quadra I said that there were several methods whereby the proof could be established, whereby evidence could be given, and one of these was before the board. In fact, when the provinces came here the other day they indicated their co-operation by stating in effect through their counsel that they would co-operate by offering evidence of that discrimination. I have stated in the house repeatedly that since 1925 or 1927, since the year of the last general investigation into freight rates, there has been no official inquiry into that discrimination, and hence no evidence which the board could be seized of.


John George Diefenbaker: Was there not evidence
given before the Turgeon commission?


Lionel Chevrier: I am coming to that. My
hon. friend states there was evidence. Yes, there was evidence, but the board of transport commissioners has been set up as a board of inquiry to decide whether or not there is
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discrimination. I think it is proper that if there is discrimination those concerned should come before the board and establish it.
My hon. friend says they are paying in western Canada 21-7 per cent higher freight rate costs by reason of the horizontal increase. That is a statement made in the evidence. Mr. Moffat gave this evidence before the board. That has been denied by the railways, and they denied it in their appeal before the governor in council the other day. The provinces in their brief maintain one position; the railways in their brief deny that position and until there has been a determination by a competent authority such as the board on this question of discrimination, it is not competent for my hon friend simply to state that there is a discrimination equivalent to 21-7 per cent against western Canada.
I have been most anxious to approach this, as I have said repeatedly, with the greatest of sympathy, because I realize that politically, economically and financially this is a tremendous problem. I noted the hon. member said that I was flamboyant. However, the hon. member for Lake Centre is sometimes flamboyant.


John George Diefenbaker: You were not imitating
me?


Lionel Chevrier: I felt, Mr. Chairman, that I
should put on record what was intended by my remarks, namely that no general inquiry was held. An inquiry has been authorized, and the provinces are happy and willing to give evidence. I just wished to clear that up, and the board is anxious to clear it up.


John George Diefenbaker: So that there may be no misunderstanding as to the way the minister expressed it, I read this from page 3166 of Hansard:
He said that the latest decision will accentuate and increase the discrimination. That was the important statement made by the hon. member for Lake Centre. Of course if discrimination exists it is bound to be accentuated by an increase in freight rates. I do not think there could be any doubt about that.
And then he goes on to say this:
True, you can have a removal of discrimination if it exists; but my hon. friend did not put one tittle of evidence on the record to indicate that there was discrimination.
And then later on:
He took it for granted, as many others take it for granted, that there is discrimination. Yes there is, but to what extent? While it is true that freight rates in Ontario and Quebec are generally lower than those in the maritimes and on the prairies, and on the Pacific coast they are somewhat lower than on the prairies, there has been no evidence since the case of 1927 to indicate wherein that discrimination lies.
The minister now has been fair enough to say that evidence taken by the Turgeon

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commission is to that effect in certain cases. I would wish that he might see to it that the board of transport commissioners will be allowed just to look at that evidence so that they will have before them a compendium of pages and pages of evidence indicating conditions of discrimination both unjust and unfair.
There is another matter about which I should like to ask the minister. It arises out of a debate on March 22, 1950, but I do not know whether I should bring it up under this item.


Lionel Chevrier: I would ask my hon. friend to leave it until an item is called which has to do with Canadian National Railways.


John George Diefenbaker: It may not be applicable to that other item, but it probably will be more in place, and I bow to the minister's suggestion.


Mr. McCusker:: I spoke the other day on this matter of western freight rates, and I think I outlined pretty clearly what seemed to me to be the discrimination that existed. Having received the assurance of the government that the royal commission was looking into this matter, I was satisfied to wait until we had their report. I see no sense in repeating my remarks two or three times, as the hon. member for Lake Centre has just repeated his speech of the other day, with a few more exaggerated gestures, and as my hon. friends further along in the opposition have done. These hon. members have accused the western Liberal members in the house of not supporting the claims of the west in connection with freight rates. They have charged, both in the house and on the hustings, where they have been spending a lot of their time lately, that we are not doing anything to protect the rights of our provinces. As I stated previously I made a speech on freight rates the other day and I am ready to stand by what I said.
Amendment (Mr. Drew) negatived: Yeas, 32; nays, 53.


[Stage Direction]
Item agreed to.
Canadian maritime commission-
525.	Administration, $190,170.
Howard Charles Green: Mr. Chairman, when the estimates were last under discussion we had just begun to consider this item, which brings up the whole question of Canadian shipping policy. There are two matters I should like to place before the minister today. The first is the question of faster cargo vessels for Canada, which I raised on the previous occasion. At that time the minister did not give a clear-cut answer as to whether the government had a policy to help provide

faster cargo vessels for the Canadian merchant marine. I had pointed out to him that under what was known as the replacement plan the government had allowed certain owners of wartime ships to sell them provided that the proceeds were placed in an escrow fund; further, that it had always been my understanding that the main purpose of that provision was to make money available for the building of faster cargo vessels.
In his reply on May 26, as reported at page 2929 of Hansard, the minister intimated that this escrow fund had only served the purpose of enabling Canadian ship owners to consolidate their holdings, and helping the government to get back certain money still owing on the original purchase price of the wartime ships.
If the minister will refer to the first report of the Canadian maritime commission he will find that in several places it is emphasized that one of the main jobs of the commission is to recommend the means by which Canada can get a modern merchant navy. We find the tonnage replacement plan carefully explained in the report. They say:
One of the principal problems being dealt with by the commission is that of modernizing the Canadian-flag fleet. The Canadian fleet now consists mainly of 115-10,000 ton and 22-4,700 ton ex-"Park" ships which were sold by the government to private Canadian shipping companies on liberal terms with a flag transfer restriction prohibiting their being resold with transfer of registry.
And again:
These war-built ships made a most important contribution to the Canadian and allied war effort and are still suitable for carrying bulk cargoes in many trades. However, many Canadian ship owners must have faster and more specialized tonnage for their services if they are to meet foreign competition effectively.
To meet this problem, the commission is carrying out a tonnage replacement plan to enable Canadian ship owners who need new tonnage to sell their ex-"Park" ships with transfer of flag, using the proceeds to obtain replacements.
And again:
It is felt that the plan will benefit both the shipping and shipbuilding industries. The ship owner is enabled to obtain the present high world market price for his war-built ship and to replace it with a ship better suited to his operations and capable of meeting foreign competition. The plan should provide long-term employment for Canadian shipyards and the personnel they employ. Merchant seamen will have better accommodation and living conditions and a greater guarantee of continued employment. The government will receive prepayment of the mortgages now outstanding upon ex-"Park" ships and Canada will have a more balanced up to date fleet to serve her external trade and provide for the needs of national security.
That is a clear-cut explanation by the commission of this tonnage replacement plan. It obviously was designed to enable Canada to

have a fleet of fast cargo vessels, but the present position is that we have none of those faster cargo vessels except the one or two owned by Canadian National Railways. Apparently none are being built under this tonnage replacement plan, and we are ending up with forty wartime vessels. That is to be the Canadian merchant navy, forty old, slow, wartime cargo vessels. I would like the minister to explain whether the government has given up all hope of Canada's merchant navy having any of these fast cargo vessels.
There is one other question I would like the minister to answer, having to do with the north Atlantic shipping control board. When the north Atlantic council met in London a few weeks ago they agreed upon the setting up of a north Atlantic control board, which I believe was supposed to hold its first meeting last Monday. I would like the minister to explain just how Canada is affected by that board, and who is to be our representative on it.


Lionel Chevrier: Dealing with the first matter, it is true that in its first report the maritime commission advocated the construction of fast cargo ships. As my hon. friend knows, however, the position in reference to the Canadian maritime fleet was seriously affected by a number of causes in 1948 and on into 1949. Until the end of 1948, yields and profits from the operations of the fleet were good. Suddenly, however, because of a decision by the United States that at least one-half the movements under ECA should be in American bottoms and the other half in bottoms of the recipient countries, the financial position of Canada was unquestionably affected. Then came devaluation, which struck a serious blow at our merchant fleet. Then there were the costs of operation, which even before devaluation were not very satisfactory, and were aggravated following devaluation.
So when my hon. friend asks whether the government have given up hope of building fast cargo vessels, I must reply that as long as the position remains as it is I do not think we can give serious consideration to their construction. However, we are hopeful that the situation will remedy itself. When it may be possible to give consideration to these questions is another matter. Certainly it cannot be done at the moment, when we are putting into operation our policy of assigning ships to the United Kingdom and paying subsidies to other ships in order to keep them in operation in Canada.


Howard Charles Green: Just on that point, the maritime commission still has under its control in this escrow fund a good many million dollars. Is that money to be paid out to the shipping
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companies without any obligation upon them to build fast vessels, or is it to be held?


Mr, Chevrier:: I have already put on record the conditions governing the replacement plan. I put them on record last year, and again in the statement I made, though I did not say how much money was in the fund. There has been paid into the replacement fund $27 million, from the sale of some forty-four ships. Of that amount $4,249,000 has been spent for the conversion or improvement of ships.


Howard Charles Green: That has been paid out?


Lionel Chevrier: Yes.


Howard Charles Green: So there is still $23 million in the fund?


Lionel Chevrier: There is still the difference between $27 million and $4,249,000 in the escrow fund, and that may be taken out only if it is to be used for construction or conversion. If anyone does want it, he has to pay a pretty stiff penalty.


Howard Charles Green: Will it be allowed out for the construction of any vessel, or must the new vessel be fast and modern?


Lionel Chevrier: The answer to the latter part of the question is no; and it can be assigned, as it has been on some occasions, to other companies so that they in turn may build under the terms and conditions providing for the payment in of these moneys.


Howard Charles Green: Then in effect we have no hope of getting any fast cargo vessels in the near future?


Lionel Chevrier: I should not think we would have any hope for 1950.
Dealing with the next point, unfortunately that is a matter on which I cannot give a great deal of information, since it concerns security. All I can do is repeat what I stated in the previous debate, that a north Atlantic shipping control board has been established; that it has met in Washington and London, and that its purpose is to devise ways and means of establishing a shipping pool in case of emergency; that the plan has been worked out, and that our representative on the board will be the High Commissioner for Canada in London, Mr. Wilgress.


[Stage Direction]
Item agreed to.
Canadian maritime commission-
526.	Mail subsidies and steamship subventions, as detailed in the estimates, $3,317,000.
Howard Charles Green: I should like the minister to explain what portion of this amount is payable to companies operating on the west coast, and to what companies.

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Lionel Chevrier: Two of these subsidies are provided for operations on the west coast. One is to the Vancouver and northern ports of British Columbia and Queen Charlotte islands service, operated by Union Steamships Limited of British Columbia.


Howard Charles Green: How much is that?


Lionel Chevrier: The subsidy is $345,000. The other company is the C.P.R., in the amount of $60,000. *


Howard Charles Green: Some question has arisen in connection with this subsidy to Union Steamships Limited. Apparently it is supposed to be paid in connection with their northern run, but I understand they are in very keen competition with a line operated by young Canadian naval veterans, called Gulf Lines Limited. This new line operates on the southern end of the run, and apparently Union Steamships Limited have followed the practice of cutting rates on the portion of the run also served by this new line. As a result the government would appear to be in the position of subsidizing the older company to make things difficult for the new one. I do not believe that is fair. I understand there is some suggestion that this subsidy is all spent on the northern run, that none at all finds its way to the southern part of the run, where there is competition; but it is strange indeed that there should be these reductions in rates which make it almost impossible for the young veterans to carry on. I would like the minister to explain the picture with regard to that subsidy.


Lionel Chevrier: I must say that the maritime commission conducted a complete investigation into a number of services that made application for the subsidy under the Steamship Subvention Act, and a full hearing was held in this city. I cannot recall from memory what companies made application, but there were several; the Gulf Line to which my hon. friend referred, and two or three others. After three days of careful, protracted hearing by the commission on a number of questions, the commission came to the conclusion that those were the two lines which, because of the principles laid down by the commission, were entitled to a subsidy. They so found, and there will also be an item in the supplementary estimates covering the C.P.R. in the amount of $40,000.


Howard Charles Green: The Union Steamships is getting $345,000?


Lionel Chevrier: The same amount as last year.


Howard Charles Green: What inquiry was made into this question of Union Steamships Company spending all that government subsidy on the northern route?


Lionel Chevrier: A very full inquiry was made, and the decision rendered as I stated.


Howard Charles Green: Are their accounts in such shape that an examination can be made?


Lionel Chevrier: Yes, and the commission have auditors who examine the accounts and make a careful examination.


Howard Charles Green: Did the commission inquire into the practice of reducing rates on the routes where there is competition?


Lionel Chevrier: I am told it did.


Mr. Black (Cumberland):: I should like to ask the minister if any headway has been made towards restoring the ferry service between Parrsboro and Wolfville. The people who have been served by this ferry for fifty years or more feel that they have been robbed of their rights, and that this government has been the robber. The people who have utilized this ferry for so long were glad to surrender their rights and have the boat, the Kipawo, taken for war purposes, although it was specially built for the ferry service. The subsidy was then cancelled, the only service of this kind in all Canada where this was done. The boat was taken to Newfoundland and sold, the proceeds of the sale being added to the consolidated revenue fund of Canada. This complaint has been before the government from time to time, and I should like to know what steps have been taken or are being taken by the government to see that this ferry service, which saves 150 miles of travel, is restored?'


Lionel Chevrier: I have too much respect for the hon. member to even attempt to say anything that would be offensive, but I am sure that when he reads what he said a moment ago he will want to change it. He said that this service has been robbed, and the government was the robber. I do not believe he would want to leave that impression, because he knows as well as I do that there can be no action of that kind before an application is made by the contractor to the commission so that at least the commission may have an opportunity of determining whether or not, because of public convenience and necessity, the service is warranted, and the subsidy, if any, which should be granted. My hon. friend has brought this up before, and I have indicated to him that if an application is made to the commission by a contractor it will receive very careful attention. If he wants to send it to me, I shall see it

receives their usual consideration. Thus far no company or contractor has come forward for this service.


Percy Chapman Black: I want to point out again that there was a special obligation on the minister and the government which cannot be overlooked, because they took that boat from this service, under the guise of war necessity, and did not restore it. They did not give the people interested an opportunity of having it brought back. Instead the boat was sold in Newfoundland at a considerable sum, which amount was turned over to the consolidated revenue fund of Canada.


Gordon Francis Higgins: Mr. Chairman, I believe this question was answered some time ago by the minister, but I would appreciate it if he would answer it more fully at this time. It is in connection with the operation of the steamship Eskimo, owned by the government of Prince Edward Island. The premier of Prince Edward Island announced that so far as losses were concerned this vessel was being subsidized by the federal government. The vessel is in trade with Newfoundland, and it is in competition with the farmers of Newfoundland by reason of the fact that it brings farm produce to the island. Some time ago the minister announced there was no subsidy, but I should like him to confirm that in view of the positive statement of the premier of Prince Edward Island.


Lionel Chevrier: The position is the same, so far as I am aware. No application has been made to give any subsidy, and no subsidy has been granted.


Gordon Francis Higgins: Will there be a subsidy?


Lionel Chevrier: There cannot be a subsidy until an application is made, and no application having been made the answer is the same as heretofore.


[Stage Direction]
Item agreed to.
Canadian maritime commission-
527.	To provide assistance for Canadian flag ocean shipping industry, $3,000,000.
Howard Charles Green: This is an item to provide $3 million for Canadian flag ocean shipping, as announced by the Prime Minister last year. I would ask the minister to explain to the committee whether the plan is to subsidize for one year or whether this policy is to be continued for a period of years. When the Prime Minister announced it on December 9, he said, as recorded on page 2981 of Hansard:
The policy is to provide a subsidy not exceeding $3 million under which it is hoped that the owners of approximately forty of these ships-
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That is the wartime cargo vessels.
-will undertake to keep them in operation under Canadian registry and the Canadian flag for the year during which they will get a portion of the subsidy.
I wish the minister would explain his present plan.


Lionel Chevrier: Mr. Chairman, the Prime Minister made it quite plain in his statement of policy that the subsidization of these forty-odd ships was for a period of one year. There is nothing which would indicate that policy should be changed, certainly nothing of which I am aware. The Prime Minister's statement went on to say, as I have stated from time to time, that it was hoped because of this policy that at the end of the year these ships would be able to stand on their own and operate economically.


Howard Charles Green: There really is no possibility of the subsidy being continued beyond the end of this fiscal year?


Lionel Chevrier: No.


Howard Charles Green: How many ships are now getting that subsidy?


Lionel Chevrier: None.


Howard Charles Green: Can the minister tell us -the names of the ships in respect of which the subsidy is paid, including the names of the companies?


Lionel Chevrier: I have already done that. It is in Hansard now.


Howard Charles Green: When the minister last spoke, the whole forty had not been picked.


Lionel Chevrier: What I stated was that no subsidy had been granted, and that is still the position today. It cannot be granted until this amount is voted. Applications have been made and have been approved. When this money is voted these thirty-five ships will be granted the subsidy, and there are some nine applications still before the commission.


Howard Charles Green: Are there still to be forty ships, or is that number to be reduced?


Lionel Chevrier: That is the intention, -that there be forty.


Howard Charles Green: How many Canadian ships are now laid up?


Lionel Chevrier: Prior to this policy going into effect, there were forty ships laid up and there are nine now.


Howard Charles Green: About -those ships that have been transferred to British registry, are the owners permitted to sell them, and if so are

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sales subject to tlie tonnage replacement plan or just what provisions apply to those particular ships?


Lionel Chevrier: The owners are not able to
sell them without the consent of the commission; and it is subject to the replacement plan, yes.


Howard Charles Green: The proceeds of any sale would have to be paid into the tonnage replacement fund?


Lionel Chevrier: Yes.


Howard Charles Green: Is there any change in the figures since the minister last gave his statement?


Lionel Chevrier: In what figures?


Howard Charles Green: The numbers of ships that have been so transferred.


Lionel Chevrier: I think I gave 93 at the time. There are 95 now.


[Stage Direction]
Item agreed to.
Government-owned enterprises-
National harbours board-
557. Advances to national harbours board, subject to the provisions of section 29 of the National Harbours Board Act, to meet expenditures applicable to the calendar year 1950 on any or all of the following accounts: reconstruction and capital expenditures, Halifax, $1,655,000; Saint John, $282,000; Quebec, $520,000; Port Colborne, $176,000; Churchill, $321,000; generally unforeseen and miscellaneous, $200,000; total, $3,154,000; less amount to be expended from replacement fund, $130,000, $3,024,000.
Howard Charles Green: We have a problem which comes up under this item, Mr. Chairman. Within recent weeks a new charge has been levied in Vancouver harbour on the wharves. It is known as a wharfage charge. I asked the minister about that matter in the house on May 23, and he indicated that nothing could be done to change the provision, and that this new charge would have to apply. He went on to say that one reason it was being levied- was that there was a similar charge in the northwestern United States ports, such as Seattle, Tacoma and Portland. But I do not think that is a good reason for levying a charge in a Canadian port.
According to the annual report of the national harbours board for 1949, Vancouver harbour showed a net income surplus of $122,057. The suggestion has -been made to me that the harbours board should make some reduction in the cargo rates that are being levied in Vancouver harbour. Apparently those charges are not levied in any other harbour and they netted the national harbours board about $680,000 last year. I would ask the minister whether consideration could be given to a reduction in those cargo rates, particularly in view of the fact that this new wharfage charge has been levied.


Lionel Chevrier: I am sure that -the hon. member will appreciate the fact that this decision to establish a berthing charge was not the decision of the national harbours board.


Howard Charles Green: They joined in it.


Lionel Chevrier: I will come to that. It was a decision of the B.C. wharf operators' association which comprises all the owners of wharves at Vancouver and New Westminster. The national harbours board is a member of that association but is not the owner of the majority of the wharves. It is true that the national harbours board joined in the decision. In other words, it was a unanimous decision.


Howard Charles Green: Why did they do that?


Lionel Chevrier: Because they were convinced that the arguments made by the association were such as to warrant the increase. Here is what it is, in case there should be some difficulty about it. While the berthing charges did not exist before on working ships, they did exist on ships that were idle in the harbour. The charge is five cents per linear foot of the wharf used for an eight-hour period, so it comes to fifteen cents a d^y per linear foot. In the case of an ordinary ship, it might mean about $60 per day. As to why it was brought about, I now state what has been given to me by the B.C. wharf operators' association as the reason for the increase. It was brought about because of the increase in costs, and also because of the fact that there had been no increase in these wharfage dues coming to the association over a period of forty years.


Howard Charles Green: It is terrible to change it now
after forty years. I do not know why the government had to do it.


Lionel Chevrier: The government did not do
it, and I am sure my hon. friend is not trying to create that impression. It was done by the association and an agency of the government which is one of the many owners and operators.


Howard Charles Green: The government is responsible for what the harbours board does-


Lionel Chevrier: Will my hon. friend allow
me to complete my answer?


Howard Charles Green: Go ahead.


Lionel Chevrier: He has asked me a question and I am attempting to answer it; he interrupts me by asking more questions, thus making my task more difficult. What I am trying to say is that the national harbours board is one of fourteen owners and operators and they must take the responsibility for the action. A number of associations have

made representations to which I am giving consideration at the moment. I do not know what the decision will be, but from what evidence I have at the moment I would think it is going to be rather difficult to upset the decision that has been made.


Howard Charles Green: What about the cargo rates?
The minister has not said anything about them. The national harbours board could reduce the cargo rates.


Lionel Chevrier: Yes.


Howard Charles Green: They are making money in Vancouver harbour and I suggest that that help should be given to the harbour.


Lionel Chevrier: They are making money elsewhere. They are making money in Montreal and in other harbours, and it all inures to the benefit of the harbours because it means that the harbours will get greater facilities and it will be much easier to finance the facilities and the additions and betterments which from time to time must be made to the harbours. But if it will please my hon. friend, 1 shall be glad to ask the board to take a look at the matter.


Howard Charles Green: The minister will have the board give consideration to a reduction in the cargo rate?


Lionel Chevrier: I shall be glad to ask them to consider whether or not it can be done.
The Depuly Chairman:	Shall the item
carry?


Some hon. Members:: Carried.


Percy Chapman Black: Does that mean, Mr. Chairman, that the whole appropriation in item 557 is to be carried without any further particulars being given? I should like the minister to explain the details of this appropriation of $1,655,000 for Halifax. I know it is warranted, but I should like to have particulars of it. I should also like to know the relative traffic that is passing through the port of Halifax this year in relation to recent years. I understand that the volume of traffic is most disappointing. First, I should like the minister to explain the details of this appropriation, reconstruction and capital expenditures, Halifax, $1,655,000.


Lionel Chevrier: That amount is for the construction of the new pier 3 and sheds at the deep water terminals. This project consists of the replacement of an old timber pile wharf and single-storey wooden transit shed by a modern reinforced concrete crib wharf. The amount to be expended upon that project is $1,640,000. The rest of the item is for a heating unit on pier 2.
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Percy Chapman Black: May I ask he
minister if the contract has been let; and
if so, to whom?


Lionel Chevrier: Yes. It has been let to E. G. M. Cape and Company. It was let on May 14, 1949.


Percy Chapman Black: When is the contemplated work expected to be completed?


Lionel Chevrier: We hope it will be done some time in October or November of 1950.


Percy Chapman Black: Can the minister give us some information as to the traffic passing through this important port, the best natural large port on the eastern coast?


Lionel Chevrier: Those figures can be found in the annual report of the national harbours board which was tabled here. It gives a fairly good indication of the traffic. My information is that the traffic is holding its own, or that is has been reduced by a small percentage only. The board and the government consider that Halifax is an important port and will certainly treat it as such.


Percy Chapman Black: That report will apply only to traffic in the previous years. The minister is not able to make a statement regarding the current traffic?


Lionel Chevrier: It applies to the year 1949. The figures for 1950 are not yet available.


Percy Chapman Black: Has the minister any information as to the relative traffic for this year in comparison with 1949?


Lionel Chevrier: Thus far it is down by 5 per cent or 10 per cent.


Mr. Brooks:: I am amazed to find in this
item such a small amount going to the city of Saint John. Halifax has $1,655,000. Of the five ports mentioned Saint John has the least with the exception of Port Colborne. Churchill has $321,000, and in item 560 another $203,000. It does seem a very small amount of money to be spending on such an important seaport as Saint John. Will the minister tell us what this money is being expended for?


Lionel Chevrier: On the contrary, we are spending a substantial amount of money at Saint John.


Alfred Johnson Brooks: You are?


Lionel Chevrier: Yes. The amount of $282,000 in the estimates now is for the remainder of the construction of the new Pugsley wharf for which there has been voted already $3,140,000.


Alfred Johnson Brooks: Is it not a fact that we have waited for that a good many years? The minister must know that.

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Gordon Francis Higgins: As the minister is aware, there is no national harbour at St. John's, Newfoundland or in Newfoundland. The provincial government has submitted a brief to the royal commission on transportation suggesting the establishment of a national harbour at Bay d'Espoir on the south coast of Newfoundland. I should like to tell the minister that it is an utterly impracticable place for every reason. If there is going to be only one national harbour it should be at St. John's where the bulk of the trade is carried on. If Bay d'Espoir is decided upon it will mean a cost of $9 million to connect with the railroad. That is the estimate of the manager of the Canadian National Railways, Newfoundland service. I do suggest to the minister that any suggestion by the provincial government or by any other body making Bay d'Espoir a national harbour in preference to St. John's should be disregarded.


[Stage Direction]
Item agreed to.
Deficits-
Transport-
558. Amount required to provide for the payment during the fiscal year 1950-51 to the Canadian National Railway Company (hereinafter called the national company) upon applications approved by the Minister of Transport made from time to time by the national company to the Minister of Finance and to be applied by the national company in payment of the deficit (certified by the auditors of the national company) in the operation of the Prince Edward Island car ferry and terminals arising in the calendar year 1950, $1,159,000.
John George Diefenbaker: I wish to direct the attention of the minister to a matter that affects many thousands of employees of the Canadian National Railways. I dealt with this matter at some length on March 22 of this year, which may be found at page 1023 of Hansard, and set out the situation prevalent with regard to pensions to Canadian National Railways employees. I pointed out that in Canada there were 2,952 employees of the Canadian National Railways who are receiving upon retirement after thirty and forty and more years of service the amount of the basic pension, namely, $25 a month. That amount may or may not have been sufficient at the time the pension plan was set up; but today, having regard to the increased cost of living, it is unjustifiably low and meagre.
On the occasion to which I refer I asked the minister, as I have on a number of occasions since July 2, 1947, to bring to the attention of the board that administers the pension scheme of the railway the need of there being a substantial increase in that amount. Since bringing the matter up I have received many letters from the lodges of the various railway brotherhoods asking whether or not something could be done in order to increase

this basic pension. I speak particularly of the employees in the lower income tax brackets who are unable to provide for themselves, and who, after years of service, find themselves receiving less as a retiring pension than do many of those retired by private business. I believe that the government as an employer through government companies should be a model employer. As I see it, the provision of $25 a month cannot be justified. Not a day goes by-and I do not want to overstate it-certainly not a week goes by, without some employee writing in. I hold in my hand a letter from a constituent of my hon. friend who has just interrupted. This is what you might call a coincidence because it came to hand today. It asks for consideration and points out that the writer, after having given 38 years' service, receives but $25 a month.


Mr. Blue:: What is his name?


John George Diefenbaker: I will let my hon. friend have it. When I brought the matter up last time the minister stated-and I quote from his remarks at page 1025 of Hansard of March 22:
I consider these matters of such importance that I do not think I can in a minute or two reply to the questions that my hon. friend has raised.
There were other questions in addition to the pension matter. I continue:
My suggestion to him and to the committee is that perhaps I might be allowed to make a statement when my main estimates are up for consideration.
I would ask the minister now to make a statement on this matter which is of preeminent importance to the welfare of many thousands of Canadian National Railways employees, and in particular to those who, unable to make provision for their own pensions after retirement, find themselves in the position of having a reduced standard of living and having in large part but $25 a month upon which to live. Besides the fact that the amount is small, it places many of them in a position after five years, when they reach seventy years of age, of having too great an income to permit them to receive the old age pension.


Lionel Chevrier: It is a fact that when this matter was up for consideration on the supplementary estimates prior to the main estimates I did indicate that this matter was of great importance. I had hoped that there would be an opportunity of discussing it more fully. There was that opportunity on two or three occasions when the main estimates came up, but I think I can deal with it now, though not at as great length as I would like to.

The question of the basic pension being insufficient for employees of the Canadian National Railways is one which has been given careful consideration by the directors of the railway. In fact representations have been made by the brotherhoods suggesting increasing the basic pension, and the railways have given it careful hearing. They did, according to my understanding, establish an internal committee to deal with it, and I think reports were given to the directors from time to time. If my memory serves me correctly I believe that the president of the Canadian National Railways indicated in general terms only the position with reference to this subject when he gave evidence before the committee on railways and shipping. However it is a question which cannot, I think, be disposed of by itself.
There is not only the question of the Canadian National Railways employees under their own pension plan to be given consideration, but there are also other pension plans of the railways, such as the Intercolonial plan, and the plan in Prince Edward Island. The employees of the latter group have made representations to me and to the government on one if not more than one occasion to the end of increasing their basic pension which, according to them, was far too small.


John George Diefenbaker: What was the amount of their basic pension?


Lionel Chevrier: It is on the same basis as the pension plan of the Canadian National Railways. I told them on one occasion at least that the whole matter must be studied in the light of all superannuated civil servants who felt that they were in the same position, and in the light of owners and holders of government annuities, and the representations made by pilots in this country who feel that they should be entitled to a pension plan and have made representations accordingly, and in the light, too, of the report tabled today in respect of old age pensions and social security generally.
After having given the matter consideration the management of the railways wrote to the general chairman of the association of brotherhoods a letter, the last paragraph of which is as follows:
After full consideration of the Implications involved in respect of general policy, we regret to have to advise that we are unable to advance this proposal to the point where the expense involved could be included in our annual budget, which as you know, requires the approval of government and the authorization of parliament.
That letter was dated February 15, 1950. I think the president at that time was making the position quite clear in so far as the railways are concerned, and I have attempted in my present short reply to make the position
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clear in so far as the government is concerned, namely that it would be difficult to render a decision on this matter without also giving consideration to the whole problem. I hope that it will be possible to do it.


Mr. Gillis:: Mr. Chairman, I am not going to follow up the matter introduced by the hon. member for Lake Centre because with the report of the committee on social security before the house I do not think it is proper for us to do that kind of thing. I rise at this time to comment briefly upon a reasoned article appearing in the Ottawa Journal in which we find a discussion of this whole matter of government-owned enterprises.
This article of recent date in the Journal carries the caption, "Government Lost $27,648,000 in Business", and states:
Mr. Canada's business, as represented by government boards, corporations and railways, is closing the books on a poor year.
The loss, as represented in the accounts of various government organizations, mostly for the year ending March 31, is somewhere near $27,648,000, according to figures in reports available to parliament today.
It should not be my job to bring this before the committee. I say government members should have picked it up, because the statement contained in this article is false and misleading. Certainly it does not reflect the true position of the organization to which reference is made. I like to give credit where credit is due. A number of organizations are mentioned here. These are under the jurisdiction of the government, and I say that not only have they done a good job from a financial standpoint, but they have done an excellent job from the standpoint of service.
I shall read further from the article just to show how it is juggled and made to mislead the public. I know that the people who own the Ottawa Journal and who write its editorials do not believe in government enterprise, but I think they should be at least honest when they write this kind of thing for public consumption. Under the paragraph headed "Bank of Canada Ahead" they say:
Some Institutions did very well-like the Bank of Canada, which reported a profit of $20,667,378. But the Commodity Prices Stabilization Corporation went in the hole $14,910,943.
Eldorado Mining Company, plucking wealth in uranium and associated minerals from the Northwest Territories, produced a neat $1,335,399 profit for the government, but the national harbours board took it away again with a loss of $1,493,517.
Nineteen organizations under government control, including the Canadian National Railways, produced a total profit of $36,723,842 and a loss of $64,371,884.
Would not someone outside the house reading that find it rather peculiar? It is stated here that while these corporations had a total profit of over $36 million, they had a deficit of over $64 million. It is hard to figure that

Supply-Transport
out. However, the propaganda is designed to discourage government enterprise. Then they go on to say:
In the profit column were these others: Farm loan board, $148,488; foreign exchange control board, $8,438,081; Northwest Territories Power, $63,681; Central Mortgage and Housing, $4,032,195; Canadian Patents and Development Limited, $73,452; Commodity Credit Corporation $234,352; Northern Transportation Corporation, $1,024,136; Polymer Corporation $403,542 and Sugar Stabilization Corporation, $303,228.
In the loss column were: Fish prices support board, $868,793; Export Credits Insurance, $34,515; Canadian National Railways, $42,043,026; Canadian National (West Indies) Steamships, $460,497.
My reason for getting up at this time is the same reason I have given on every other occasion when the totals for government enterprises-and there is a considerable number of them-are given. They didi not have a deficit of $27,648,000 as indicated in this press dispatch. In the dispatch are lumped what are called the deficits of the Canadian National Railways, so that the whole operation is discredited. If that so-called deficit is taken out, the over-all operating profit of these businesses amounts to over $15 million. This $42 million that they bring in, for public consumption, as a deficit in the operations of the Canadian National Railways, is no such thing; and the newspapers of this country should be made to understand that. That is a fixed debt of interest on old bonds taken over from defunct railways and harnessed to the Canadian National Railways for years and years. They are old historic bookkeeping records.
I rise at this time to point out that most of the organizations set out in this press statement are service organizations and are not designed to amass profits. Seventy-five per cent of the organizations referred to in this press statement, such as the harbours board and the commodity stabilization corporation, are maintained by the government to give service to the people of Canada which they could not get from any other organization. I thought that particular press statement should be straightened out on the record of this house.


Winfield Chester Scott McLure: I have tried to point out to the minister on several occasions the difference between deficit and service, and this time I shall direct my remarks to his two officials in order that they may grasp the idea. The government owns the Abegweit and the Prince Edward Island, which are sublet to the Canadian National Railways, who operate them in fulfilment of a contract entered into with the province of Prince Edward Island in 1873. Why should this be shown as a deficit when it really represents a service that is being given? If there is a shortage as
[Mr. Gillis.l
between the government and the subcontractors it should not appear against Prince Edward Island as a deficit. I cannot understand why the government persists in showing it in this way. If the officials will look up the meaning of deficit and service I think they will realize that it should not appear as a deficit. As long as it does appear in this way I shall bring it to the attention of the minister.


[Stage Direction]
Item agreed to.
National harbours board-
560. To provide for payment to national harbours board of the amount hereinafter set forth to be applied in payment of the deficit (exclusive of interest on dominion government advances and depreciation on capital structures) arising in the calendar year 1950, in the operation of the Churchill harbour, $203,100.
John George Diefenbaker: To what degree is it expected the facilities at Churchill will be used this year?


Lionel Chevrier: I would think to the same extent as last year.


John George Diefenbaker: Two or three days ago the press carried an item to the effect that it was not expected that much wheat would be shipped through the port this year. If I remember correctly, it was intimated that only about 40 per cent of what was shipped last year would be shipped in the coming season.


Lionel Chevrier: When the discussion was had on this item earlier my information was that about five million bushels, perhaps more or less, would be shipped, an amount similar to that shipped last year. I have no different information today, but it is quite possible that there will not be that amount. It is difficult at this stage to say exactly what there will be. All I can say is that it is anticipated it will be about the same.


[Stage Direction]
Item agreed to.
Marine service-
787. Nautical service	administration-further
amount required, $275,000.
Howard Charles Green: Apparently this is for further vocational training for the merchant navy men. The minister will remember that earlier in the session I asked him to relax the regulations applying to this training and I would be grateful if he would state whether he is prepared to do that.


Lionel Chevrier: This amount is exclusively for vocational training, and is in addition to the amount already voted in the main estimates for that purpose. The hon. member asked that I give consideration to relaxing the provisions of the order in council. I did

give consideration to that in a general way and I have to say that until such time as it can be ascertained what the effect will be of the shipping policy it will be difficult to relax the terms of the order in council. We feel that there is sufficient here to look after the position as it now stands. If it should aggravate itself, then I shall be glad to look at it again.


Howard Charles Green: Will any of this vote be used for the training of those men who served in the merchant navy but are not presently eligible or those younger men who joined the merchant navy since the war and who have lost their jobs because their ships have been transferred to British registry?


Lionel Chevrier: This vote is available to those in receipt of either one or other bonus and who apply for vocational training.


Howard Charles Green: It is still confined to those eligible under the old provisions?


Lionel Chevrier: Yes.


Howard Charles Green: How many men remain in the Canadian merchant navy?


Lionel Chevrier: At the end of 1949, 3,225.


Howard Charles Green: That was six months ago.


Lionel Chevrier: That is the position today, roughly.


Howard Charles Green: Quite a few ships have been transferred to British registry since then.


Lionel Chevrier: It will be some time before it will be possible to ascertain the actual number of seamen affected.


[Stage Direction]
Item agreed to.
Marine service-
788. Marine service steamers, including icebreakers -maintenance operation and repairs-further amount required, $600,000.
Gordon Francis Higgins: Is there going to be any extension of the icebreaking service? I am thinking particularly of North Sydney where many times during the year the ferry cann.ot get in and has to use Louisburg and more particularly Corner Brook, Newfoundland.


Lionel Chevrier: This item is to provide for the operation of two weather ships on the Pacific coast.


[Stage Direction]
Item agreed to.
Marine service-
791. To authorize the write-off from active assets to consolidated deficit account of the balances of advances or loans made to the Halifax and Sydney pilotage districts, $8,359.
Percy Chapman Black: Can the minister give some information with respect to this item?
Supply-Transport


Lionel Chevrier: This is for the operation of pilot ships and to provide for the purchase of a ship at Saint John.


Percy Chapman Black: Will that be purchased by tender, or in what way?


Lionel Chevrier: That has not yet been decided.


Percy Chapman Black: The contract has not been let?


Lionel Chevrier: No.


Percy Chapman Black: What are the specifications? Is this to be a wooden vessel?


Lionel Chevrier: I should think it would be of about the same type as that in use at Saint John; 65 feet long, I am told.


Percy Chapman Black: Will tenders be called?


Lionel Chevrier: I am not in a position to answer that question.


Percy Chapman Black: In this connection I want to point out that at Port Greville, near Parrsboro, there is a shipbuilding yard as good as any now remaining in the maritime provinces. It has been in operation for a great many years, and has skilled, experienced workmen. The work put out by that yard is equal to the best; it is so good and reliable that inspectors are not required to examine and check it. There could be no question as to the quality of the work done there. There could be no question as to this yard being deserving, and no question as to the whole community being deserving of special consideration when this contract is let, since they have suffered through lack of employment and by the discontinuance of the ferry service. I would like some assurance from the minister that this yard will be given consideration and that the contract will not be let without tenders being called. I think that is the least we should expect, and the least the minister should be prepared to undertake.


The Deputy Chairman:: Shall the item carry?


Percy Chapman Black: I suppose it must, if I cannot get any assurance from the minister.


Lionel Chevrier: I am sorry, but I cannot give that assurance to the hon. member.


[Stage Direction]
Item agreed to.
Marine service-
793. To provide for the construction of a general service workboat for use at St. John's, Nfld.-capital, $38,000.
Gordon Francis Higgins: Would the minister outline what this item actually means?

Supply-Transport


Lionel Chevrier: It is for the construction of a small wooden general service workboat to work in ice for local lighthouse supply and buoy work in Newfoundland coastal waters, where required.


Percy Chapman Black: I ask the minister a similar question with respect to this boat. Will it be built under contract, and will such yards as I have referred to be given an opportunity to tender?


Lionel Chevrier: That has not been decided yet.


Percy Chapman Black: And the minister is not prepared to give any assurance?


Lionel Chevrier: That is right; I cannot give that assurance.


Gordon Francis Higgins: Where is it proposed to construct this boat?


Lionel Chevrier: That has not yet been determined.


[Stage Direction]
Item agreed to.
Marine service-
794. To provide towards the construction of a lighthouse supply and buoy vessel for the east coast (estimated cost $1.725,000)-capital, $103,000.
Percy Chapman Black: The same
questions would apply to this item.


Lionel Chevrier: No; this boat has been completed, and this is the last payment.


Percy Chapman Black: Where was it built?


Lionel Chevrier: By Vickers.


Percy Chapman Black: A steel boat?


Lionel Chevrier: Yes, and it is now in operation.


[Stage Direction]
Item agreed to.
Marine service-[DOT]
796.	To provide for the construction of a general service workboat to be operated out of Parry Sound, Ont., agency-capital, $12,000.
Mr. Fraser:: What is this for? It seems a small amount.


Lionel Chevrier: This is a small service work-boat in the Parry Sound area.


[Stage Direction]
Item agreed to.
Marine service-
797.	To provide towards the construction of a lighthouse supply and buoy tender vessel for service at Victoria, B.C. (estimated cost $1,100,000)-capital, $100,000.
Percy Chapman Black: What is this appropriation for?


Lionel Chevrier: This is the last payment on the Alexander Mackenzie, a ship for service on the west coast.


[Stage Direction]
Item agreed to.

Marine service-
799.	To provide towards the reconditioning and refitting of vessels for Pacific ocean weather station "P" and the expense of transporting vessels to station operating base-capital, $960,000.
Howard Charles Green: Will the minister explain this?


Lionel Chevrier: This is for the the cost of construction and reconversion of two weather ships for the west coast.


Howard Charles Green: Is that the total cost of the two ships?


Lionel Chevrier: Together with item 788 that is the cost of three ships, though one is going to be transferred from the east coast to the west coast.


Howard Charles Green: How many weather ships will Canada have on the Pacific?


Lionel Chevrier: One station and three vessels.


Percy Chapman Black: These last three items were all to provide for boats on the west coast.


Lionel Chevrier: The last two; but there are several in there for the east coast.


[Stage Direction]
Item agreed to.
Railway service-
800.	To provide towards the construction of an auto-ferry vessel for service between North Sydney, N.S., and Port aux Basques, Nfld.-capital, $300,000.
Mr. Hatfield:: Will this vessel take trucks, or is it only for automobiles?


Lionel Chevrier: My information is that it will include accommodation for motor vehicles, and I take that to include trucks.


Heber Harold Hatfield: How about the car ferry from Yarmouth to some point in Maine? Has that been put into service yet?


Lionel Chevrier: Far from having been put into service, the matter has not been finally determined. The general policy has been laid down in accordance with the statement I made in the house some months ago. At that time I indicated that a committee of representatives of the Canadian National, the province of Nova Scotia, the Canadian maritime commission and others would be established to decide upon the terminals and the plans and specifications.


Heber Harold Hatfield: The terminal in Maine has not been decided yet?


Lionel Chevrier: Not yet.


Heber Harold Hatfield: How about having that boat call at Saint John?


Lionel Chevrier: That has been given consideration by the committee.


Gordon Francis Higgins: 
Lionel Chevrier: All I can say is that this is to provide a sufficient amount for the plans and specifications for the construction of this ship.


Gordon Francis Higgins: When would you expect it to be completed?


Lionel Chevrier: I would not think before the end of 1951, and that is conjecture.


Gordon Francis Higgins: Has the minister any idea of the size or anything of the kind?


Lionel Chevrier: Not yet.


Percy Chapman Black: Is this to be a wooden or steel vessel?


Lionel Chevrier: That has not been determined, but since it is an automobile ferry I should think it would be built of steel.


Heber Harold Hatfield: Has any consideration been given to a car ferry from Sydney to Newfoundland, the same as we had operating to Prince Edward Island before the wide gauge was put on the island? They hadi a car ferry that took the large cars over and then transferred goods from the small cars on the island. That saved a great deal of expense in handling goods.


Lionel Chevrier: I am sorry to say that matter has not been considered.


[Stage Direction]
Item agreed to.
Bailway service-
801. To reimburse the Canadian National Railway Company for expenditures to be incurred for a special railway maintenance work program in the province of Newfoundland, $750,000.
Gordon Francis Higgins: Would the minister give a few details on this?


Lionel Chevrier: This is to provide additional employment in Newfoundland by way of a special railway maintenance work program which will be carried out by the Canadian National during the summer and' autumn months of 1950.


[Stage Direction]
Item agreed to.
General-
803. To provide for the expenses of the royal commission on national transportation-further amount required, $94,545.
John George Diefenbaker: What has been the total cost of the royal commission to date?


Lionel Chevrier: 


John George Diefenbaker: Is it anticipated that this amount of $94,545 will be sufficient to complete the work of the commission?
Supply-Transport


Lionel Chevrier: I have no assurance, but I hope it will.


[Stage Direction]
Item agreed to.
Air service-
Civil aviation division-
Airways and airports-
804. Construction and improvements, including radio facilities-capital-further amount required, $1,101,000.
Howard Charles Green: On May 26 I asked the minister whether any money would be provided this year for extending the runways at the Vancouver airport in order that trans-Pacific planes could be adequately served there. At that time he said he would give the matter consideration, but he was not sure whether there would be anything included in the supplementary estimates. Is there any money included in this vote of $1,100,000 for that purpose?


Lionel Chevrier: No, there is not.


Howard Charles Green: Is there to be anything done during this fiscal year about those runways?


Lionel Chevrier: I would not say there is to be nothing done about them, but there is no money provided in these supplementary estimates.


Howard Charles Green: Is there money provided in any vote?


Lionel Chevrier: No, there is not.


Howard Charles Green: I do think that might be quite serious, in view of the situation in the Pacific.


Lionel Chevrier: I can assure my hon. friend that I am familiar with the position; I know the implications of it. I have seen at least two groups from Vancouver who have made representations to that effect, and I have told them what the position was, part of which I have already put on record. I can only say I am sorry there is no item in here to provide for that.


Howard Charles Green: Is there any way by which that work could be commenced during this fiscal year?


Lionel Chevrier: I hardly think so.


Winfield Chester Scott McLure: Is there an amount in this vote 804 covering the Charlottetown airport?


Lionel Chevrier: No. There is no amount provided for the Charlottetown airport here, but there was in the main estimates. There is nothing in the supplementaries.


Gordon Francis Higgins: I asked the minister some time ago about the lengthening of the runways at Gander. He told me it was not the intention to lengthen the runways this year at least. I would ask him to reconsider that

Supply-Transport
decision because of the facts that have come to my attention recently, and which I have drawn to the attention of the Minister of National Defence.
As a result of the seepage of water last fall the runways were heaved by the frost during the winter, and they are now in very bad condition. They have been dug up in several places and resurfaced, and the whole runway system now resembles a patchwork quilt. Heavy planes like the Boeing are unable to take off from Gander except when the temperature is under 40 degrees, and that does not happen too often at this time of year. On one occasion during the past few weeks one of these heavy aircraft had to dump 1,500 pounds of cargo before it could take off. That seems to me a rather impossible situation at an airport such as this, and I wish the minister would look into the matter.


Lionel Chevrier: I shall be glad to take a look at it.


Percy Chapman Black: Would the minister advise what airports are included in this amount of $1,101,000?


Lionel Chevrier: There is a long list of small items for various airports which would be too lengthy to put on the record. There is Fort Smith, $10,000; Goose Bay, $10,000; Lethbridge, $22,000; Norman Wells, $10,000 and Prince George, $30,000.


Percy Chapman Black: Perhaps the minister could put them on the record.


Lionel Chevrier: I would rather not do that. Perhaps I should state to the hon. member that there is an item of $70,000 for Fredericton, and there was a provision in the main estimates for substantial expenditures in the maritime provinces.


Heber Harold Hatfield: Will this amount be used for the extension of the Fredericton airport?


Lionel Chevrier: It is for the construction of a radial range being transferred from Bliss-ville to Fredericton.


[Stage Direction]
Item agreed to.
Civil aviation division-
806. Contributions, subject to the approval of the governor in council, to assist municipalities to improve existing airports or to provide new airports, the sites of which have been provided by such municipalities-further amount required, $127,000.
Mr. Herridge:: I am not going to detain the house long. I have been quiescent throughout the minister's estimates, but I do want to mention one subject which I missed on the main estimates because I was called to British Columbia in a hurry. I am concerned about assistance to the municipal airport at Castlegar which is owned by the city

of Nelson and the villages of Castlegar and Kinnaird. I think the minister and his officials are well acquainted with the situation. It is a most important airport so far as the southern interior is concerned. I believe it deserves special consideration, because the local people have done a lot themselves. I am not going to read the details, but the local people and the Canadian Pacific Air Lines since 1945 have spent a total of $12,495. Of course, the Canadian Pacific Airlines has spent the larger amount of that. I think they have petitioned the minister for assistance, and I understand they require a minimum of about $35,000 to do the necessary work to put this airport in first-class condition. There is the grading of the north end of the field, $25,000; gravelling the taxi strip at the edge of the field, $10,000; new construction for extension at south end of field $5,000.
I brought this matter up when I first came to Ottawa, and discovered then that the government did not assist airports not owned by municipalities. I suggested the people should get a municipality to own it, and they have done that. They have regularized everything, so that all that is necessary is for the minister to include an item in his next estimates.


Percy Chapman Black: This item of $127,000 covers assistance to municipalities to improve existing airports. When this subject was being discussed on the main estimates, I pointed out the position of the Amherst airport. I am not going to repeat what I said at that time, except to advise the minister that I sent a copy of Hansard to the mayor of the town of Amherst. I had a telegram from him, which unfortunately I have not with me at the moment or I would read it into the record, stating positively that the town of Amherst had never taken over this airport from the department after the close of the war. This is in direct contradiction to what the minister said was his understanding. Some minor repairs are necessary, and it is urgent that they be undertaken or the airport will deteriorate rapidly. The town certainly desires, in view of what it has done heretofore, that the department shall not allow this airport to deteriorate to a point where it would not be useful. All I am going to do is to ask the minister if he will give special consideration to the communication from the mayor of Amherst, which I shall send him, and let the mayor know just what the department is able to do.


Lionel Chevrier: If the hon. member will send me the correspondence he has received from the mayor, I shall be glad to give it my attention.


Heber Harold Hatfield: Will the minister say if it is the intention of the department to complete the Fredericton airport this summer?


Lionel Chevrier: This vote provides for assistance to municipalities.


Heber Harold Hatfield: Is that not a municipal airport?


Lionel Chevrier: Fredericton is covered by a separate vote which was approved in the main estimates.


[Stage Direction]
Item agreed to.
Civil aviation division-
807. Contribution to the South Pacific air transport council as Canada's share towards the maintenance and operation of air transport facilities in the south Pacific-further amount required, $112,500.
Stanley Howard Knowles: When the corresponding item on the main estimates was before us, an amount of $112,000, the minister indicated that this was for the purpose of paying towards the maintenance and operation of air transport facilities in the south Pacific, and that the only Canadian line making use of those facilities was the Canadian Pacific Air Lines. Is that still the case, and what is the reason for the increase of this figure from $112,000 to a total now of $224,500?


Lionel Chevrier: Yes, Mr. Chairman, by virtue of an understanding or undertaking given by Canada at the South Pacific Air Transport Council, it was decided that we would pay a portion of the costs of maintenance and operation of air transport facilities in the south Pacific. Along with Australia, New Zealand, Fiji and the United Kingdom, we were assessed a certain amount. When the main estimates came forward, it was not determined what the full amount was. When the main estimates came forward all we had was the current expenses. They amounted to $112,500. This is for the other.


Stanley Howard Knowles: The other was $112,000.


Lionel Chevrier: It is the same as this, I am
told.


Stanley Howard Knowles: I am sorry, but the other
was $112,000; that is item 509.


Lionel Chevrier: And so is this.


Stanley Howard Knowles: This one is $112,500.


Lionel Chevrier: It is the same amount.


Stanley Howard Knowles: I will not fight with you
about it. There is $500 difference, though. That is still a lot of money to me.


[Stage Direction]
Item agreed to.
Radio division-
810.	Administration of the Radio Act and regulations-further amount required, $59,520.
Supply-Transport
Gordon Knapman Fraser: We have to buy radio licences for our cars. From people who have to travel some distance over the highways I have had a number of complaints that there is a constant leak from the power lines along the highways. Is there any way the minister's department checks into that matter? Is there anything that can be done about it?


Lionel Chevrier: Yes. That is provided for
in a vote in the main estimates, radio interference. If there is any particular case that my hon, friend has in mind, and he will bring it to my attention, I will see that it is investigated. But it is not covered in this vote.


Gordon Knapman Fraser: I think that all the minister
has to do is to turn on his radio when he is travelling along where the power lines come near the road, and he will have trouble without my telling him any more about it.


Lionel Chevrier: I am not in the fortunate
position of having a radio in my car.


Gordon Knapman Fraser: The minister evidently knows what it is; where you come to a power line, the radios are no good.


[Stage Direction]
Item agreed to.
Radio division-
811.	Telegraph and telephone service-construction and improvements-further amount required, $38,650.
Gordon Francis Higgins: Has the minister received any request for the establishment of telephonic communication between the island of Twillin-gate and the mainland of Newfoundland? I refer to an application from a private corporation.


Lionel Chevrier: I receive hundreds of applications. I may well have received it and not have it before me at the moment. But I shall be glad to inquire.


Gordon Francis Higgins: At Twillingate, which is the home of the hon. member for Grand Falls-White Bay, one of our larger hospitals is situated. There is now only telegraph communication, and I believe the company that is formed proposes to establish telephone communication. There is merely the little matter of competition with the C.N.R. telegraphs. The hospital is so important, serving 40,000 people, that I suggest that when the minister gets the application, if he has not already received it, he give it every consideration, because it is an important matter.


[Stage Direction]
Item agreed to.
Canadian maritime commission-
812.	Mail subsidies and steamship subventions, as detailed in the estimates-further amount required, $122,000.
Howard Charles Green: To what company on the west coast is the $40,000 of this subsidy paid?

Supply-Transport


Lionel Chevrier: Union Steamships.


Howard Charles Green: The full amount of $40,000?


Lionel Chevrier: I am sorry; I have not the detail before me, but I gave that on the original estimate when it came up a few moments ago.


Howard Charles Green: It is the service from Victoria to the west coast of Vancouver island, and I do not think they have a ship on that run.


Lionel Chevrier: This is for an additional $40,000 to Union Steamships.


Howard Charles Green: That means a total of $385,000?


Lionel Chevrier: That is right.


Howard Charles Green: Can the minister give us any details of this particular service?


Lionel Chevrier: I am sorry, but I have not the supplementary estimates here. I know I should have them. I thought I had them. I can give my hon. friend the details; perhaps he will allow me to send them to him. Oh, I am sorry, but I was in error. The subsidy is altogether $40,000 to the Canadian Pacific Railway Company.


[Stage Direction]
Item agreed to.
Loans and' investments-National harbours board-
819. Advances to national harbours board, subject to the provisions of section 29 of the National Harbours Board Act, to meet expenditures applicable to the calendar year 1950 on the following account: reconstruction and capital expenditures- Montreal-further amount required, $300,000.
Percy Chapman Black: There is $300,000 in this vote?	-


Lionel Chevrier: Yes.


Percy Chapman Black: What is this for?


Lionel Chevrier: This is to pay for the structural steel purchased1 directly by the board for the shed in Montreal harbour.


Percy Chapman Black: If this is the last item, I have one question to ask the minister arising out of the main estimates. I asked him what had been the total cost of dredging the main channel of the St. Lawrence, and he was not able at the moment to answer me. I could well understand that. But he said he would get the information and give it to me later. I should like to have it. It would not include the actual dredging or improvement in Montreal harbour, but I wanted it for the main channel.


Lionel Chevrier: That information has been obtained for me, and I thought I had it in my files, but unfortunately I have not. I am afraid I shall have to ask my hon. friend if he will allow me to send it to him by mail.


[Stage Direction]
Item agreed to.

DEPARTMENT OF NATIONAL REVENUE Customs and excise divisions-
259. General administration, $1,687,155.
Hon. J. J. McCann (Minister of National Revenue):: Mr. Chairman, this appropriation of the Department of National Revenue is for the sub-department of customs and excise divisions. The total amount requested in the four customs-excise votes for 1950-51 is $20,886,229, an increase of $1,560,628 over the amount requested last year.
Of the total amount requested, 82-8 per cent represents salaries, and the increase over last year's estimates is due to higher salary costs. As regards non-salary items, we are budgeting for an over-all reduction of $105,888 compared with last year, but the higher salary costs result in the net increase of $1,560,628 mentioned previously.
The principal function of the customs and excise divisions is the collection of revenue- customs and excise duties and taxes. It is of interest that our pre-war net customs-excise revenue in the year 1938-39 was $292 million, while our estimates for that year totalled $9,861,000. This year our estimates total a little over twice as much as they did in 1938-39, but our net revenue for 1949-50 of $1,019 million represents an increase of over three times the pre-war customs-excise revenue. In addition to the increased revenue collected, there has been a marked increase in administrative volume, since customs and excise has had to take on work connected with foreign exchange control, import quotas, et cetera, which have materially increased the work load. All this has been accomplished with a staff increase of less than forty per cent over the pre-war period.


Mr. Fleming:: There is a matter which I should like to bring to the attention of the minister, if indeed it has not already been brought to his attention. It has to do with the customs service for the city of Toronto, and the methods now followed of selling goods that have been placed under seizure. According to my information the methods now being followed are not efficient, and are not yielding the full value that could be realized on the sale of goods. There was a time when goods were sold at auction by true auctioneers who gave adequate publicity to the sale. According to my present information that method was abandoned some time ago as a result of some patronage difficulties that the government encountered, and now the sales are simply carried through by members of the staff of the department who are not qualified as auctioneers.

Here is a situation where more money could be yielded to the public treasury if efficient methods were followed in realizing the utmost possible on goods under seizure. I would ask the minister to look into this matter, and give it his personal attention because, according to the information I have, much more could be realized on the sales if efficient auctioneering methods were followed.


James Joseph McCann: I had not any knowledge that the method of disposal of seized goods had been changed. Notice of the auction is given to the public press and the goods are sold by auction. It may well be that there is a difference in the classes of auctioneers. Some auctioneers may be able to get a better price for goods than others, but the best possible price is realized when goods under seizure are disposed of. However I shall be glad to look into the suggestions of the hon. member for Eglinton, and if the method is not up to date we shall bring it up to date.


Edmund Davie Fulton: If I may, I should like to express to the minister my own personal appreciation, and I am sure my feeling is shared by others, of the statement that he gave us at the introduction of his estimates. It is very helpful to hon. members and to the whole country to understand the scope of operation of a department and some of the reasons for changes, if changes should be made, and I hope that the habit will spread to others besides the present minister.
What I want to ask is I think perhaps best asked on this item, although if there is another item on which the minister would prefer to have me bring it up I shall be glad to do so. It has to do with the question of space being acquired or arranged for by the Department of National Revenue in the various cities across Canada. As I understand the practice, it is that the department indicates to the Department of Public Works what space is necessary and the arrangements for the space are actually made by public works. Is that correct?


James Joseph McCann: Yes.


Edmund Davie Fulton: In the case of rented premises who pays the rental, public works or national revenue?


James Joseph McCann: I think, Mr. Chairman, certainly in the case instanced by the hon. gentleman, the rent would be paid by public works as a matter of general policy, since public works supplies the buildings that are required by other departments. If the Department of Public Works supplied a building to the Post Office Department the post office would get it free; but if they supplied 55946-2724
Supply-National Revenue the space I presume they would pay the rent. It really does not make an awful lot of difference because it has to come out of the same pocket, but it may be charged to a different department. The department in question would ask for an appropriation to meet that amount.


Edmund Davie Fulton: I think it might make some difference in keeping what is obtained strictly in line with what is required. If the department had to pay its own way and showed that rent as a charge or as a dispersal it might make a difference. What inquiries are made when the Department of National Revenue requisitions, as I think it is called, for space with the Department of Public Works? What inquiries are made as to whether the actual amount of space asked for is in fact needed and occupied? Can the minister say what the relationship is between the two departments?


James Joseph McCann: Yes. Our needs are made known to the Department of Public Works. Just at the moment we are discussing the matter of customs and excise. I presume the hon. member's question refers to customs houses. In a growing community we would be guided by the amount of business in that particular community. With reference to the location, if we are near a harbour the proper place for a customs house is in the vicinity of where your business is. In some localities along the United States-Canadian border, where there are crossing points, we build a number of these places ourselves. All of these matters are given consideration, and most are made known to the Department of Public Works, and they say as to the amount of space, accommodation and refinements and the like that are needed.


Solon Earl Low: Can the minister tell the committee what is being done to inform Canadian tourists travelling in the United States about restrictions on materials that they may bring in from the United States?


James Joseph McCann: When they get the passage
card or permit, if they are driving a car out, that information is usually printed. I think the information is pretty well known that after a stay of forty-eight hours a Canadian citizen coming back from the United States can bring in goods to the value of $100, and that that cannot be repeated within a period of four months. Where many people make a mistake is that they do not make a declaration of these goods when they are asked. Even if they bring in $90 worth of goods they are supposed to make a declaration. They are asked by the customs officials probably two or three times if they have anything to declare. If they say no, and a seizure is made, the

Supply-National Revenue goods become the property of the crown. They can be fined for a breach of the Customs Act and the vehicle in which they bring the smuggled goods can be confiscated. As I say, these regulations are generally known. In case they are not known we print the information and it is clearly exposed at all the customs houses. In addition to that, on the permit which they take out with their car the information is given.


Solon Earl Low: Trouble arises sometimes when
people do not know that there are prohibited goods. I am just wondering whether anything is done to inform them of that when they get their permit. Are they told that there are certain things they cannot bring back? As I understand, there are certain electrical goods that they cannot bring back even if they purchase them for less than $100.


James Joseph McCann: Under $100 I think there is
nothing prohibited. Any person who is travelling from Canada to the United States and who has not that information can easily get it at the customs houses.


Gordon Knapman Fraser: The minister said that nothing is prohibited. If a man brought in a commercial toaster for which he paid $99 it would be prohibited.


James Joseph McCann: Under the act it is for personal use, and in baggage which can be carried.


Gordon Knapman Fraser: I think that is what the hon.
member wanted to get across. You are not allowed to bring commercial goods into the country free.


James Joseph McCann: That is true. It is for personal use.


Mr. Catherwood:: I understand there are
some changes in the regulations as to a farmer charging profits and losses to a succeeding year. I wonder whether the minister will explain that.


James Joseph McCann: I think the hon. gentleman
is confusing the taxation division with customs and excise. I would ask him to wait until the taxation division is called.


Edmund Davie Fulton: Could the minister tell us what the guarantee fund is? In the details for the customs and excise divisions there is a comparatively small amount for the guarantee fund. Is that a fund to guarantee against wrongful action of customs inspectors, or something like that?


James Joseph McCann: That is right.


Edmund Davie Fulton: How is it accumulated, where is it held, and what sort of offence would it cover?


James Joseph McCann: It covers defalcations of an officer collecting money.


Edmund Davie Fulton: A sort of insurance fund to reimburse the treasury?


James Joseph McCann: Yes.


Edmund Davie Fulton: Would it apply to reimburse a person duties wrongfully charged by a customs officer?


James Joseph McCann: No, that would be done by remission.


Edmund Davie Fulton: What were the expenditures in the last year for travelling in connection with the administration item?


James Joseph McCann: The amount spent under that item was $24,977.


Edmund Davie Fulton: What is the total of the guarantee fund? Is it carried from year to year, and is it cumulative?


James Joseph McCann: The guarantee fund is $13,900.


Edmund Davie Fulton: Is that under the administration item?


James Joseph McCann: No, under that item it is $300; under inspection it is $1,600; and under ports it is $12,000.


Edmund Davie Fulton: Is the fund cumulative and
carried forward with additions from year to year? Is there a larger total fund than that shown in this year's estimates?


James Joseph McCann: No, this is like paying an insurance company. This is to reimburse the department for any loss sustained through defalcations of employees.


Edmund Davie Fulton: What does treasury board do with this? Let us suppose that $13,000 comes in, and there are defalcations of only $1,000, or none at all; next year another $13,000 is put in.	1


James Joseph McCann: Yes.


Edmund Davie Fulton: Is that held in treasury board as a separate fund?


James Joseph McCann: No, the surplus goes back into the consolidated revenue fund.


Winfield Chester Scott McLure: I notice the total we are asked to vote for the Department of National Revenue is $51,950,979. Out of this amount 26 per cent or $13,485,000 is given to the department as a blank cheque for the payment of temporary employees. We have had no breakdown of that amount, except as to the number of employees. We have never had that information before. In another year I would ask the department to give us details of this large amount. For instance, they could tell us whether there were ten or fifteen clerks at $5,000 each, and so many

more at $4,000, the same as they do in connection with permanent civil servants. That would give us some idea of where this amount, which is more than a quarter of the total vote, goes. One could then find out how many of those temporary employees have been in the service for a good many years and have never been made permanent.


James Joseph McCann: Before we proceed further may I point out that the hon. member is referring to the estimates of all branches of this department. There are two distinct sections, that having to do with customs and excise, with which we are now dealing, and the other dealing with the taxation division. The total appropriation for the customs and excise divisions is $20,886,229-and not $50 million, as the hon. member indicated.


Winfield Chester Scott McLure: I was referring to the total for the whole department.


James Joseph McCann: If the hon,. member would turn to the details at page 191 he would find information concerning salaries both below and above $5,000. He will see reference there to the deputy minister and to the assistant deputy ministers. If there is any further information the hon. member wishes to have, I can supply it.


Winfield Chester Scott McLure: I am asking for information about temporary assistants.


James Joseph McCann: This gives the salaries of permanent employees but it lists the number of permanent and temporary employees.


Winfield Chester Scott McLure: But it does not give any information, about the temporary employees, other than the number of them.


James Joseph McCann: It does not give detailed information with respect to the salaries of temporary employees, that is right.


[Stage Direction]
Item agreed to.
Customs and excise divisions-
718. Ports, outports and preventive stations, including pay for overtime, notwithstanding anything in the Civil Service Act, and- buildings and rentals for temporary purposes-further amount required, $255,557.
Donald Methuen Fleming: Would the minister explain this item?


James Joseph McCann: The details are given at page 29 of the further supplementary estimates. There are additional salaries for permanent employees amounting to $19,340, and for temporary assistance $112,785. In the summertime when the tourist trade is at its peak it is necessary to employ a number of people temporarily at border points. Students and others are given the opportunity to do this work. These two items I have mentioned total $132,125. Then we require $50,000 for stamps and labels, principally excise
Supply-National Revenue stamps to be placed on tobacco and liquor. Then there is an item for the acquisition or construction of buildings and works, including the acquisition of land, to an amount of $73,432. All these items total $255,557.
This item for the acquisition or construction of buildings and works is here because in small places, with buildings costing less than $5,000, the department has the authority to go ahead with construction, on tender.


Donald Methuen Fleming: This would seem to be an addition to item 261. Where are these new buildings to be erected? If there is a large number of them, would he indicate the number and give some idea as to their distribution?


James Joseph McCann: There are to be two additional buildings at Little Gold Creek in the Yukon, and they will cost $25,000. Then there is an amount in the new housing item to be spent at Gander, where we expect to construct six units, and at Goose Bay four units. At Sandspit, British Columbia, there is one; at Armstrong, Quebec, seven. Those are for housing for our employees and the total is $54,000. Then at Chief Mountain, Alberta, three. That is the housing program for this year, totalling $279,000, with the additional supplementaries. It includes the construction of ten temporary buildings and residences at border points, $150,000, plus the ones I have mentioned. In addition, Fort Nelson, $18,000 and Grand Falls, $10,500.


[Stage Direction]
Item agreed to.
Taxation division-
263. General administration, $1,778,855.
Edmund Davie Fulton: Is the minister going to make a statement on this item similar to the one he made on customs and excise?


James Joseph McCann: Mr. Chairman, this part of the estimates has to do with the other division of national revenue known as the taxation division. Hon. members might be assisted in their consideration of the estimates of the taxation division, Department of National Revenue, if I made a few remarks regarding the larger items:
Reference to the estimates-page 35-will show that the total amount required is $29,288,350. This compares with the estimates for the year 1949-50 of $31,315,212, with actual expenditures for the year 1949-50 of $28,029,214.
Of the $29,288,350 required, $25,330,550 represents salaries and the salary item compares with actual expenditures for 1949-50 of $24,891,263. There has been a major change in the composition of the salary item. When the last report to the house on estimates was made I said that the staff at

Supply-National Revenue October 31, 1949, consisted of 10,963 persons. At the end of May, 1950, this figure had declined to 10,477, composed of 5,231 permanent employees and 5,246 temporary employees. At the end of March, 1949, there were 11,704 employees, of whom 2,773 were permanent.
The estimates before you provide only for positions occupied at the time the estimates were prepared and a small number of student assistants, 210, taken on in the various district offices for the summer to assist in clearing peak-loads of work. There is a steady, continuing shrinkage in staff due largely to the introduction of new methods and procedures and to the fact that, through prodigous efforts last year, the great backlog of work accumulated during the war has been cleared. I am unable to forecast accurately what the ultimate shrinkage in personnel will amount to, but I am satisfied that it will be substantial and I hope that, by the end of the current fiscal year, I shall be in a position to make a more realistic statement as to the level at which the staff will tend to become stable.
Hon. members will be interested to know that as of this date all assessments for 1948 and prior years have been made, with few minor exceptions which have arisen for reasons outside the control of the department. I should also add that a very substantial part of the returns filed for the year 19*9 have also been assessed and that practically all refunds arising from overpayments of 1949 taxes have already been made to the taxpayers. The comparable inventories of all unassessed returns on hand at May 31 were as follows:
May 31, 1949	 3,398,682
May 31, 1950	 772,591
Of the inventory on hand at the end of May 1950, practically all are 1949 and 1950 returns, whereas a substantial part of the inventory on hand at May 31 last year consisted of returns for 1948 and prior years.
It should be added that reductions in staff do not necessarily represent comparable reductions in dollars because there are promotions, reclassifications and salary increases occurring constantly. These are very carefully screened by the department, the civil service commission and treasury board.
The second largest item to which I should like to refer briefly represents printing, stationery and equipment for which submission is made for $1,605,000. This compares with $1,610,000 in the estimates of 1949-50 and actual expenditures of $1,258,078. Included in the estimates is an amount of $188,980 covering accounts for the 1949-50 year not rendered until after the end of the fiscal year. Expenditures under this item

consist largely of stationery and forms. As hon. members will understand, the consumption of forms is enormous. In addition to millions of personal returns, there are information returns and departmental forms of various kinds required in head office and district offices of the department in the handling of the large sums for the collection of which the department is responsible. Considerable progress has been made in eliminating unnecessary forms and in simplifying those in use. There has, however, been a constant increase in the cost of getting forms made. This work is handled through the office of the king's printer and I am satisfied that the greatest care is exercised in ensuring that the work is done at the lowest possible cost to the crown.
The third largest item in the estimates is travelling expenses. Figures for travelling are as follows:	In the estimates of 1949-50,
$1,015,500 was voted. The actual expenditures for that fiscal year were $604,708. The amount requested this year is $900,000. The amount of travelling done by officials of the department is governed almost entirely by the amount of field work done. To ensure equitable administration of the tax legislation involves a considerable amount of field work. While travelling expenses may appear to be high, I am satisfied that this amount is fully justified by the results of the work done by the officers of the department who are required to travel.
The next largest item is postage. This represents postage at the district offices. The district office postage cost covers largely communications with taxpayers, including a substantial amount of mail required to be registered. No important reduction can be anticipated in this item.
The next item to which I should like to make brief reference is legal costs. It was estimated for 1949-50 that these costs would amount to $200,000. The actual expenditures were $165,000. The amount requested this year is $200,000. The increase over the actual expenditures is due to the fact that the department expects to spend more this year in collecting overdue accounts. A program has been undertaken to ensure that taxes for 1949 and prior years will have been collected in full by the end of March, 1951. The public might as well have that known at this time. This is now possible because the assessing for those years has recently been completed and it is felt that collections must be brought into line with assessing.
I should like to add a brief word on publicity. The department's advertising costs, except for a small amount for newspaper notices, are entirely those expenditures made

by way of radio and street car advertising in the spring of each year, advising taxpayers of the requirements for filing returns and endeavouring to persuade taxpayers to get their returns in early. This publicity is of assistance to the public and at the same time accelerates the flow of returns, which means that the returns can be dealt with more efficiently in the district offices.
With the very able assistance of the comptroller of the treasury and his officers, the handling of refunds of overpayments was greatly expedited this year. Between February and June 9, some 1,599,810 cheques for $44,473,335 were issued to individual taxpayers, representing overpayments of 1949 taxes. On March 31, some 8,137 cheques for $52,436,515 were issued to corporate taxpayers, representing the refundable portion of the 1944 excess profits taxes. Those two figures give a total of $100 million which was returned promptly to Canadian taxpayers in that period.
There are still in the hands of the department some 76,665 cheques payable to individual taxpayers in respect of the refundable portion of taxes. Claims for these cheques are still coming in, but at a diminishing rate. Those cheques which have not been delivered by the end of the current fiscal year will be returned at that time to treasury for cancellation.
During the fiscal year which ended March 31, 1950, some 33,395 individual taxpayers received interest of $87,040.87. This is the first time this item has appeared in departmental accounts, following the new provisions in the Income Tax Act. The smallness of the amount in relation to the refunds made is an indication of the speed with which overpayments are now being restored to the public.
I should like to place on record a short statement of comparative costs of collecting, by districts. The hon. member for Greenwood, who is not present, asked me a day or so ago if this information could be provided by provinces. That cannot be done, because some districts such as Ottawa, for example, take in portions of two provinces. The table is as follows:
Department of National Revenue Taxation Division Collection cost
	1948-49	1949-50
	Cost per	Cost per
	$100	$100
District	collected	collected
	$	$
Newfoundland 			2.40
Charlottetown 	
5.16	5.86Halifax 	
2.92	3.18Saint John 	
2.34	3.00Sydney 	
3.56	5.77Quebec 	
2.35	3.33
Supply-National Revenue .
		1948-49	1949-50
		Cost per	Cost per
		$100	$100
District		collected	collected
		$	$
Montreal 	
1.60	1.62Sherbrooke ....	
1.83	5.13Ottawa	
2.15	2.29Kingston	
3.35	4.93Belleville 	
3.46	4.27Toronto 	
1.15	1.15Hamilton 	
1.72	1.73London 	
1.31	1.51Fort William ..	
1.63	2.53Winnipeg 	2.03Regina 	3.15Saskatoon	4.56Calgary 	1.97Edmonton 	3.33Vancouver 	2.02Yukon 	2.86District totals ..	
1.71	1.86Head office and	other	undis-	tributed costs including printing and stationery	34	.30Total 	
The explanations		I have given are for the	
purpose of helping	hon. members	to understand the estim&tes.	I shall be glad to give any	further information	which may be	required.


Edmund Davie Fulton: Once again I would like to		
express appreciation of this quite complete statement by the minister on the operations of the department, which in addition to being informative is actually a very interesting survey of the work of the taxation division. I have just one or two comments arising out of the statement. The first has to do with the amount of overpayments refunded to individual taxpayers; I believe $44 million was the figure mentioned. In that connection I think the department is entitled to a word of commendation from those of us who are sometimes critical of the work it has done in catching up with overdue assessments. I do feel that a tremendous effort has been made by the minister, and I think those of us who have urged that this be done should express our appreciation.
It seems to me the amount of the refund of overpayments would perhaps justify some of the criticism that has been [DOT] directed not to the minister but to his colleague the Minister of Finance in connection with the penalties on arrears of income tax. This $44 million refunded in overpayments would indicate that Canadians are much more prone to overpay their taxes than to deliberately underpay them. Yet I recall that in giving reasons for the quite heavy interest rate imposed as a penalty on arrears of taxes, the Minister of Finance said that was done to discourage underpayment. Certainly it cannot be said that the interest rate allowed on advance payments is any encouragement to overpay,

Supply-National Revenue so I believe it is a tribute to the honesty of the Canadian people and their desire to comply with the income tax laws to the very best of their ability; and when they err they do so on the right side. I am not going to press the point, because it concerns the Minister of Finance, but I believe it does reinforce our contention, which I still put forward, that the interest penalty on arrears of taxes is unfair and too heavy, particularly when, as in most cases, it can be clearly proved that the underpayment resulted from an error and not from any deliberate intent. I am interested in that figure; I think it will serve as a basis for discussion when the budgetary provisions are before us again.
The minister mentioned 76,000 cheques representing refundable portions of taxes which had not been distributed. I should like him to give us the reason for that. Is it because the addresses of the taxpayers are not now on record, or what is the reason?


James Joseph McCann: We have tried every method we could think of to locate thfse people.


Edmund Davie Fulton: The reason is that their addresses are not available?


James Joseph McCann: Or the marital status has changed; the name has changed. Miss Jones put in her return; now she is Mrs. Brown, and has changed her residence; and unless she puts in a claim there is not much chance of locating her. I am not going to review the methods followed, but we did have a very fine follow-up system which worked well in the great majority of cases. Many people are careless about their money, however, and once it is gone they do not try to reclaim it. These refunds will not be lost. At the end of this year we have to turn these cheques back to the treasury, but people who can establish a claim after that time will do it through treasury rather than through the revenue department.


Edmund Davie Fulton: If they establish their identity they will still be able to have the money returned?


James Joseph McCann: Yes.


Edmund Davie Fulton: The minister will remember that some time earlier I asked about the relationship between his department and the Department of Public Works. I find I should have discussed that matter under this item, because it was a taxation building rather than a customs building I had in mind. I wonder if the minister has any information on the situation in St. Catharines, where I have been informed the amount of space requisitioned and provided greatly exceeds the space at present occupied by the department.


James Joseph McCann: The explanation is that a few years ago we had a survey made by a very competent committee of outsiders, working with officials of the Department of National Revenue, in connection with the location of tax offices. At that time it was considered that it might be in the public interest to establish a tax office at St. Catharines. The department communicated with the Department of Public Works, and asked them to get us so many square feet of space. From the amount of taxes collected in a particular community we can calculate what our requirements will be. If it is decided that we need 100 square feet for each of our employees, and we have 100 employees, we shall need 10,000 or 12,000 square feet.
As things developed we found that with the great burden of work there was in connection with arrears it would not allow us to take personnel from the established offices, such as Hamilton, or Toronto, to establish a suboffice in that particular city. There were other things that entered too, such as the matter of space, and the matter of trained personnel. We shall have before us the matter of establishing a number of offices in other parts of the country. For instance, there should be an office, according to the recommendations in the report, somewhere in the north country to relieve the office in Ottawa of the amount of work it has. Primarily, though, the office should be established to give better service to the public. As I say, when we know approximately what the collections are in a district we can estimate how many people it will take to provide service. Then we can estimate the amount of floor space we shall require, and we can requisition for that. All of these things are determining factors in deciding the amount of space we need. In growing communities we feel we should make provision for the future growth of a particular district, because I think one can state without fear of contradiction that income tax collection is going to be a continuing process in this country.


Edmund Davie Fulton: Mr. Chairman, following up this question, I understand that the amount of space requisitioned at St. Catharines was 16,000 square feet. Arrangements were made through public works for the leasing of that space for five years at an annual rental of $1.75 per square foot. The income tax division took occupancy of only 7,283 square feet, or less than half of the amount requisitioned and obtained by the Department of Public Works. Then I am informed that the Department of Public Works made various attempts to sublet the surplus space, and managed to rent 1,500 feet of it at a dollar per square foot or 75 cents per square foot less than they are paying. In 1949 they

sublet an additional 2,435 square feet at $1.25, or 50 cents less than the price they are paying. Up to March, 1949, or for a period of less than half the term of the lease, the Department of Public Works has experienced a direct loss of $28,000 for rental of the unoccupied space.
This brings to mind certain questions in connection with the transaction. The minister has explained why they could not occupy all the space they first wanted, but does he know whether the balance of the unoccupied space is now rented, and if so at what price?


James Joseph McCann: Mr. Chairman, I would not know that. When we came to the conclusion we did not require all the space which we had requisitioned, and which had been leased for us, we informed public works of the amount we could release. It was up to them to re-rent it. At the present time the number of employees we have at St. Catharines is 18 or 20, and the space we are using is adequate for our needs.


Edmund Davie Fulton: The minister has not got that information; it would only be with the Department of Public Works. I want to go back to a matter which was touched on before, the question of who pays the rent for this building. I would ask the minister what his attitude is to the suggestion that, in cases such as this, the Department of Public Works should be entitled to recover the loss from the requisitioning department, that is any loss it incurs by reason of not being able to sublet the surplus space or being able to sublet it only at prices lower than the original lease. It seems to me it would act as a control measure, not only for the Department of National Revenue but for all departments, if they were likely to be billed for such losses. I know that the money comes out of the same pocket, but I do not believe any department would like to have in its account a bill for space that was not used. I think such billing might act as a control measure on all departments, and would mean keeping their requisitioning of space to a minimum. I wonder if the minister, who is a financial man, would give his reaction to that suggestion?


James Joseph McCann: Mr. Chairman, any comments I would make upon it would be entirely personal. I think the hon. gentleman will recognize that it has always been the policy of governments, irrespective of political shade, that all buildings are controlled by the public works department under the Public Works Act. From a strict accounting point of view, it might be better if the Post Office Department were charged rental for the buildings they occupy, and
Supply-National Revenue national revenue were charged for the space they occupy. However, that has not been the method. I presume if the government could be persuaded some time they would not be averse to a change in that direction if it were to be for the general advantage of the country.


Stanley Howard Knowles: I wish to rise on a question of privilege. I realize that a decision was taken by the house last night, and I was here when it was taken, that we sit straight through today from eleven to eleven without any break. So far as I am concerned that is all right, but I would point out it is a heavy burden upon some of the people who work for us, particularly the Hansard reporters and the amanuenses upstairs. I wonder if we could not reach an agreement to recess for half an hour some time between now and eight o'clock. I do not suggest that it be at this moment, but perchance when the items of this division are finished. The reason I suggest it now is that, if we are going to do it, it would be useful for the Hansard reporters, the amanuenses and other members of the Hansard staff to know in advance. I would suggest that when we reach the end of items 263, 264 and 265, we agree to recess for thirty minutes.


James Joseph McCann: Why not take the whole department first?


Stanley Howard Knowles: I would be willing to suggest that, but I know that the member for Eglin-ton has a speech, which will probably not be short, on the C.B.C.


Donald Methuen Fleming: Let me make the speech, and determine the length of it.


Stanley Howard Knowles: If we wait until that is completed, it will be eight o'clock.


Emmett Andrew McCusker: I would suggest he make that speech during the thirty-minute recess.


Joseph-Alfred Dion: It would have to be done by unanimous consent of the house, not the committee.


Stanley Howard Knowles: If there were unanimous consent, the chairman might simply leave the chair for half an hour.


Mr. Murray (Cariboo):: We could all be of assistance to these distinguished Hansard reporters by being brief.


Joseph-Alfred Dion: If there is not unanimous consent, we shall have to continue.


Stanley Howard Knowles: Would the chairman inquire to ascertain whether there is unanimous consent?


Joseph-Alfred Dion: Is there unanimous consent to the adoption of this course?

Supply-National Revenue


Mr. Fournier (Maisonneuve-Rosemoni):: No;
we are here to work, and we shall work.


Heber Harold Hatfield: I should like to ask the minister if there is any consideration being given to the plan used in the United States, whereby when income tax returns have to be made out there is an advertisement inserted to the effect that a man will be at a certain post office in certain centres to aid the farmers and workingmen to make out their income tax returns. He is there for a week or two, depending upon the size of that centre. That has been a great help and it has collected a great deal more money for the taxation department in the United States than has any other one thing, I understand. I was wondering about it here.


James Joseph McCann: That is a matter to Which the department has been giving consideration. At the present time we render every assistance that we can to taxpayers to help them to make out their returns. We do not make the return for them. They make that. But the matter is being given consideration, and we hope at some future time to extendi the facilities of the department in order to make it easier for farmers and other taxpayers to submit their returns.


Heber Harold Hatfield: That is done only in the cities where you have offices. I meant in places out in the rural districts. A great many farmers have not made out an income tax return for the simple reason that they do not know how to do it. They do not want to spend the money to hire an auditor and they just have not done it. The department have lost a great deal of money on that account.


A. Earl Catherwood: I believe there are some changes made in the regulations with regard to farmers filing their income tax returns, and charging over to a succeeding year. I wonder if the minister would give the house a little clearer picture of these new regulations regarding the position of the farmer, as to the method and as to how they could carry out the new regulations of the department.


James Joseph McCann: Does the hon. member refer to the matter of losses that are sustained?


A. Earl Catherwood: That is right; to losses.


Joseph-Alfred Dion: Shall the item carry?


Gordon Knapman Fraser: No, not yet. The minister is going to answer the question asked by the hon. member for Haldimand.


James Joseph McCann: The new regulation provides that losses can be carried back one year and forward for five years. The old regulation was that they could be carried back one year and forward for three; so that it gives the farmer the opportunity of spreading the losses
[The Chairman.]
on any of his operations over a greater period. Is that the information the hon. member wants?


A. Earl Catherwood: Yes. Is it optional with the farmer as to whether he uses that method or not?


James Joseph McCann: Yes, it is optional.


Gordon Knapman Fraser: The minister's department have been kind enough to put a temporary office in Peterborough for a month before the income tax is due. Could that period not be extended a little longer, perhaps to one and a half months or two months? Last year they came in on a Saturday, the first of the month, and they had. only one man there. I mentioned the matter in the house, on account of the crowd; but I discovered the reason for it. They did not think they would have many in at that time. On the Monday they had four there and they did excellent work; but they were busy all the time. They had four there for the whole month. I think if you could get two in there for a month before that, it would help a great deal.


James Joseph McCann: We should be glad to consider that suggestion. If the records show that it would be of greater benefit to have them in the hon. member's particular district for six weeks rather than for four weeks, we shall carry out that suggestion. The general policy of the department is to attempt to facilitate the work which the taxpayer has to do with reference to making his return, and to make it as easy as possible for him to be accommodated by the department.


Gordon Knapman Fraser: I want to say that the Kingston office has been extremely co-operative. It has helped as much as possible. All those who were put in the Peterborough office did the work well, and everybody seemed quite satisfied.
The minister mentioned that he advertised on the radio with regard to people getting their income tax returns in. I may say that in my parliament hill broadcast at the last of March I asked the people to be sure to get their income tax returns in as soon as possible.
There was one other question I wanted to ask and it is this item. Has anything been done regarding the collection of 1942 tax? There was the uncollected1 half of tax that was levied, and I believe it was only for one year-they could pay on the life expectancy basis on that half. I wondered if anything else had been done regarding this collection. Some people will die and they might not leave enough to pay their income tax that is due. If it is not paid, there is an 8 per cent penalty on that.


James Joseph McCann: What the hon. member is referring to is the deferred tax?


Gordon Knapman Fraser: That is right.


James Joseph McCann: That there was a change in the method of collection, from the year before to the current year. The answer to his question is that nothing further has been done in that regard.	.


Gordon Knapman Fraser: I wonder if it would not be wise to make some suggestion to the public to get that paid because it is going to be a hardship on the heirs of an estate if they have not money enough to pay that half when the time comes.


James Joseph McCann: That is a matter that the Minister of Finance has to deal with; and if he will change the law, we will carry it out.


William Scottie Bryce: In an answer to the hon. member for Haldimand the minister said that the farmer could start the new system when he liked. Is that right?


James Joseph McCann: No. That is not right. I did not say that.


William Scottie Bryce: When can he start? I understood the minister to say that he could start when he wanted to.


James Joseph McCann: This of course has to do
with losses, and the farmer would not start it until he had a loss. If he had a loss in this year, he could carry it back to the previous year or retain that and carry it forward for the next five years until the time he sustained a loss.


William Scottie Bryce: But if he starts the system that you are proposing to have or that is being put on the statute books, he cannot go back to the old system?


James Joseph McCann: There has been no change in the system. It has only been an extension of the time giving the farmer a further benefit in which he can write off his loss against his profit.


William Scottie Bryce: If he adopts that system you offer him of taking it from year to year, at no time in the future can he go back to the old system?


James Joseph McCann: I think the hon. member is talking about a different thing. He is talking about the system of accounting, whether he is doing it on a cash basis or on an accrual basis. Is that not it?


William Scottie Bryce: Yes.


James Joseph McCann: That is a different question. If he is doing it on a cash basis, then from year to year he gives his cash receipts and his expenditures and he pays on the profit which he makes or the income. On an accrual basis he takes into account both his receipts
Supply-National Revenue and expenditures in any year, whether or not he has received the money in that year or made the expenditures in that year.


William Scottie Bryce: If he adopts that plan, can he go back to the old system?


James Joseph McCann: No. He is supposed to stick to the one system.


Heber Harold Hatfield: At the present time an incorporated company has six months in which to make out their returns after the close of their year. Has any consideration been given to giving that time to the farmer? That is, has any consideration been given to giving him six months to make out his income tax return?


James Joseph McCann: No. The farmer makes his return at the end of December andi pays 75 per cent of his tax. He then has until the end of April, like the individual taxpayer, in which to make his return.


Winfield Chester Scott McLure: I think the minister misunderstood me when I was mentioning the total amount for the Department of National Revenue. When I said 26 per cent was for temporary assistants I meant that that referred to the total of the whole department. We are now on item 265 of the taxation division which will probably explain more fully what I had in mind. For instance, $26,310,140 is asked for for district offices. Over 33J per cent of this amount is for temporary assistants, namely, $8,566,165. We have this explanation regarding it. During the last year the permanent positions have been increased to 5,272, while the number of temporary assistants has decreased. What I was asking for in the first place was that at another session we should have a breakdown in rough figures giving us the number of grades, their salaries and so forth. The average salary for temporaries in this department is now about $1,850. If we had that information we could then calculate how many of these would eventually be made permanent.


James Joseph McCann: The practice that we follow
in the Department of National Revenue is the practice that is followed by all government departments. However, we will give consideration to the hon. member's suggestion.


Edmund Davie Fulton: Can the minister tell me what progress is being made in opening up the assessment office of the taxation division in Kelowna, British Columbia? There was to be a sub-office of the Vancouver office in order to have someone there to assist the ranchers, the farmers and the businessmen of the interior in ironing out their tax problems, and helping them to get their assessments in quicker than if the office were in Vancouver.


James Joseph McCann: I cannot give a very encouraging answer to that because we have not

Supply-National Revenue made any progress in opening up an office at Kelowna. We have one at Vancouver and one at Victoria, and up to the present time they appear to meet our needs, because in order to run a tax office you must have experienced help. You need accountants; you need auditors; you need experienced people, and it is not the easiest thing in the world to get them. When you do get them and start an office you have to get your costs down in order to justify your continuing it. As I indicated earlier the smaller the office the greater the cost.


Edmund Davie Fulton: Yes, but I want to say this. I understood at the time that the decision was made. It was two years ago when it first came up. I was under the impression from what the minister said it was a decision which was taken, a definite decision, and that the matter would be proceeded with as soon as the department was able to get around to it. My recollection is that the minister said at that time that owing to the terrific pressure of trying to catch up with arrears of assessments they did not want to disturb the set-up in Vancouver or divert their attention by undertaking additional activities such as opening up a new office; but as soon as that pressure was off and the backlog was disposed of they would turn their attention to opening up the office. I understood the decision had been taken and they were merely waiting for the right time to implement it.
In reference to what the minister said I would point out that this office would serve a very productive area, and an area of at least a hundred thousand in population, but not a hundred thousand taxpayers, in the southern interior of the province.


James Joseph McCann: With reference to the matter of opening up a tax office at Kelowna, I remember having discussed it. No decision was made. It was a decision of the committee and it was a hope of the department at that time, a hope that has not been realized.


Edmund Davie Fulton: May I ask the minister another question or two? Has he figures of the amount of arrears of income taxes in each province? I think he gave us figures of the arrears in assessments. Has he the amount of arrears of taxes by provinces and the total for the country and the number of prosecutions by provinces in the last calendar or fiscal year, whichever is more convenient?


James Joseph McCann: Our figures are not kept by provinces, because we have overlapping. Take the district right here in Ottawa. It would be foolish to have a district headquarters in Ottawa and another across the river in Hull.


Edmund Davie Fulton: I see that.


James Joseph McCann: Therefore part of the province of Ontario, of the Ottawa district office, goes over into Quebec province.


Edmund Davie Fulton: It would be more convenient if I asked for that information by districts?


James Joseph McCann: Yes.


Edmund Davie Fulton: The information I want is with reference to the arrears and the prosecutions by districts and the number of prosecutions in the last year.


James Joseph McCann: I have not the arrears at the moment, but if the hon. member will look back a week or two ago he will see I made a return in answer to a question having to d'o with the total amount of arrears. I am not sure whether the hon. gentleman asked the question or not, but it showed the amount of arrears for a year, and from one to five years, and of all the arrears beyond five years. I remember this figure. The figure of arrears of more than five years-I remember that was away back to 1917-was only a little over $5 million.


Edmund Davie Fulton: Was that return made by districts?


James Joseph McCann: No, it was not made by districts.


Edmund Davie Fulton: If it is not immediately available so as to be given to the committee while we are sitting, can the minister have it brought in later and tabled so that it may go on Hansard; also the number of prosecutions by districts to collect arrears of taxes?


James Joseph McCann: We will try to get that information for the hon. gentleman. The prosecutions in 1949-50 under the Income War Tax Act for failure to file returns totalled 4,301. It is believed that some prosecutions were instituted against farmers in this figure, but the number has not been segregated. Prosecutions in 1949-50 for failure to deduct or remit taxes under section 92 of the Income War Tax Act or 112 of the Income Tax Act totalled 126; prosecutions in 1949-50 instituted for false or deceptive statements totalled 24. Only one of these was against a farmer.


Edmund Davie Fulton: The minister will follow that up and give us the figures by districts?


James Joseph McCann: Yes.


Edmund Davie Fulton: I think this is my last question. The minister made reference to the amount for travelling expenses which he termed fully justified. While I do not think I would be prepared to go that far, I certainly am prepared to say that I agree with

him, that, if tax enforcement is to be uniform throughout the country, then it is necessary to provide an adequate amount for travelling. But I am a little surprised that the amount should be so substantial under the administrative branch. As reported at page 198 of the details the minister is asking for $90,000 this year. I would have thought that the branch would not have needed quite as much as that, although I can appreciate that a large amount might probably be necessary in the internal inspection and verification branch of the taxation division and in the district offices in order to provide for collection and inspection, and so on. Can the minister tell us how much was spent last year in the administrative branch?


James Joseph McCann: The amount spent last year in the administrative branch was $44,525.


Edmund Davie Fulton: The minister is asking for $90,000 this year. It does seem to me to be a very large amount to ask for under branch administration when at the same time you are asking for large amounts for the field and for the districts. Why does the minister want so much more than he spent last year?


James Joseph McCann: I am informed that more work will be done by head office staff in the district offices than has been done previously. Take the matter of inspection. We have inspection service, and they go out from head office and inspect all the district offices. It is just the same principle as bank inspectors. These trips are made, and our staffs go from here to Vancouver and from here to Newfoundland and to Halifax and to other offices, and that costs a good deal of money for travelling.


Edmund Davie Fulton: Is it really felt that the amount of such liaison and inspection carried on in the past year or two has not been adequate?


James Joseph McCann: No.


Edmund Davie Fulton: And that you need to double it this year?


James Joseph McCann: No, I would not admit that it has not been adequate; but this will give us the opportunity of doing it more frequently and perhaps more thoroughly.


Donald Methuen Fleming: Mr. Chairman, one remark made by the minister in his introductory statement attracted my attention. It had to do with the provision for legal fees. He mentioned that last year $131,000 was appropriated for this purpose on the taxation side of the department, and that $165,000 is sought this year.
May I say at once that where people have not paid their taxes I do not think anyone in the House of Commons is going to
Supply-National Revenue have any undeserved sympathy for them. We wish to see vigilant enforcement of the tax law. That, however, does not go the whole way of justifying the large increase in this item. I have found that in more cases than there is any necessity for the department engages outside counsel to represent it in taxation cases. This in many cases becomes a matter of making patronage payments.
There are most competent counsel in the minister's department; and in many of those cases where counsel from the department are appearing as junior counsel to assist someone from outside, those junior counsel do most of the work. I wish to make this observation that I think outside counsel are being retained in many more cases than they are required. Those competent counsel in the department are capable of handling more cases than they are being given the opportunity to handle at the present time.


George Matheson Murray: That is peculiarly a Toronto viewpoint. Let us suppose there is a prosecution in Dawson Creek; would the hon. member send counsel from Toronto or Ottawa to prosecute, when competent counsel could be retained in Dawson Creek?


James Joseph McCann: In connection with tax collection prosecutions we are up against the best talent in business who, in the great majority of cases, within the law attempt to have their assessments reduced. I can think of cases over the last few years in which enormous amounts of money have been involved. We would be derelict in our duty if we did not employ the best counsel procurable to advocate our side of the case. That is why we have made provision for this expenditure, and it has paid profits, I am sure.


Donald Methuen Fleming: The minister has not
answered the point I have raised. Of course there always are and always will be cases where counsel from outside have to be retained. The point I make is that outside counsel are retained in many cases where they are not necessary and where they do not add anything to the competent presentation of the case made by counsel in the department.
As for the observation made by the hon. member for Cariboo, may I say that many of these cases are handled here in Ottawa. The exchequer court is trying them all the time. Counsel are often brought here by the department from outside to argue these cases. I am speaking from personal observation when I say that I think money could in many instances be saved by the department without weakening one iota the presentation of its case before our courts.


[Stage Direction]
Item agreed to.
[Stage Direction]
Supply-National Revenue Income tax appeal board-266. Administration expenses, $73,000.
Winfield Chester Scott McLure: I have in mind the case of an immigrant whom I shall call John Doe who came from England to Prince Edward Island on June 20, 1948. This man had a wife and one child. In 1948 he received no family allowance payments. The law had just been changed from three years to one year. This man filed his income tax return for the year 1949, and claimed $400 exemption for his seven-year-old child. In place of this he was allowed only $150.
This man had received family allowances for only a short time. Should the family allowance payments of a few dollars be figured in connection with his income, letting him have the total exemption of $400, or should it be figured on a basis of his receiving family allowance for the child for five months? In this way five-twelfths of $400 plus seven-twelfths of $150 would give him an exemption of $260. I understand the taxation branch do not want to allow him anything in addition to the regular $150.


James Joseph McCann: The hon. member is referring to a specific case. If he would send the information to the department we would have it investigated, and the taxpayer would be given as fair treatment as it is possible to give him.


Donald Methuen Fleming: Is the minister in a position to indicate the extent of the backlog of cases awaiting decision now by the income tax appeal board?


James Joseph McCann: Yes, I can give that. This
estimate is to include salary, printing, stationery and travelling expenses. There have been 290 appeals received. Appeals filed with the board up to June 22, 1950, are as follows:
Disposed of (judgments delivered)	 97
Judgments expected shortly	 31
Appeals settled or withdrawn	 40
This gives a total of 168. Appeals yet to be considered number 122.


Donald Methuen Fleming: Over what period of time?


James Joseph McCann: Since the appeal board was
established two years ago.


[Stage Direction]
Item agreed to.
International shortwave broadcasting station-
267. Maintenance and operation, $1,598,400.
Donald Methuen Fleming: This brings us to an entirely different subject. As hon. members realize, this item represents the cost of a service operated on behalf of the government by the Canadian Broadcasting Corporation, and has nothing to do with the budget of the corporation itself. The corporation acts as the agent of the government in operating this

service, which has proved to be useful and well received in countries abroad to which broadcasts have been beamed by C.B.C. in their local languages.
At the outset I should like to say that the two items under this heading were thoroughly considered by the special committee on radio broadcasting, which heard officials of the Canadian Broadcasting Corporation, and reported favourably on them, after which the items were recommitted to this committee of supply. I express the hope that this practice will be followed in future sessions, because in that committee the items can receive a more complete study than in committee of supply.
The details of the first item of $1,598,400 appear on page 203, and among these details is a sub-item for "travelling and removal expenses and duty entertainment, $55,000." That detail is in turn broken down into the following three sub-items:
Travelling	   $45,000
Removal	 5,000
Duty entertainment	 5,000

The amount of this item last year as voted was $60,000, and at first glance it might now appear that there is a reduction; but the amount actually expended was $34,868; in fact there is an increase of $20,000. The evidence submitted to the committee did not1 justify an increase of $20,000.


Mr. Stewarl (Winnipeg North):: On a point of order, may I point out that there does not appear to be a quorum in the committee.
On the count being made, more than twenty members were declared to be present.


Donald Methuen Fleming: The facts brought forward by the officials of the corporation in support of the item and the increase of $20,000 over last year's requirements were to the effect that there was value in having the officers engaged in this international service visit the countries to which the broadcasts are carried, and in addition that there was a conference at Rapallo this year to which representatives would be sent.
It was not suggested that more than two or three officials at the most would be sent abroad in any one year for the purpose of establishing contacts with those interested in receiving these broadcasts, and the conference at Rapallo is not going to necessitate such a large expenditure as to take up the difference between the expenditure last year and the estimate this year. It is quite clear, and this was not denied in the committee, that $10,000 in addition to what was spent last year would meet the expenses of sending

delegates to Rapallo and sending two or three officials abroad for the purpose I have indicated.


Mr. Maybank:: I rise to make a correction which I think the hon. member will permit. I do not think he intended to say that the argument he is now putting forward was not controverted in the committee. The record of the committee is available, and I am sure he will admit that there was controversy over this item.	*


Donald Methuen Fleming: The hon. member was not following what I said. I said that it was not denied that $10,000 in addition to the expenditures of last year would meet these additional expenses.


Ralph Maybank: That is the point I was making.


Donald Methuen Fleming: That will be found on pages 317 to 323 of the proceedings of the committee. 1 moved in the committee that the amount of the item be reduced by $10,000, which would still leave $45,000 available this year as compared with an expenditure last year of $34,868. That suggestion was sought to be answered by saying that the amount would not be expended unless it was required, and if it was not needed under this particular detail it could be used under some of the other details which were rather tightly estimated. The fact is that in the evidence given before the committee no case was made out for the need of an additional amount, and therefore I intend to make the same motion I made in the committee. I move:
That the amount set opposite item 267 be reduced by $10,000, from $1,598,400 to $1,588,400.
In moving this amendment I emphasize the fact that it has nothing whatever to do with the national service provided by the Canadian Broadcasting Corporation. It will not affect that in the slightest degree. Here, I think, is a clear-cut instance where $10,000 can be saved.
Amendment (Mr. Fleming) negatived on division.


Stanley Howard Knowles: Mr. Chairman, I move that the committee rise, report progress and ask leave to sit again later this day. The motion is not debatable, but may I just say that if it carries, when the Speaker then takes the chair I would move that Mr. Speaker leave the chair until thirty-five'minutes past seven o'clock, which is half an hour from now.


James Joseph McCann: I would not object to a little intermission, but would hon. members agree to extend the sitting after eleven o'clock this evening to make up for the time taken in the intermission? I do not like to take the responsibility of cutting down the time covered
Supply-National Revenue by the motion yesterday, which was from eleven o'clock in the morning until eleven o'clock at night. If we rose for half an hour now could we agree to sit half an hour later tonight?


Stanley Howard Knowles: I would not object, but I think it would be difficult for us to bind those who might be in the house at eleven o'clock. I would point out that we are working the Hansard reporters and amanuenses, in particular, unreasonably long hours without a break.


Joseph-Alfred Dion: The motion is not debatable.
Motion negatived: yeas, 7; nays, 20.


[Stage Direction]
Item agreed to.
Canadian Broadcasting Corporation-
719. To provide for advances to the Canadian Broadcasting Corporation, subject to such terms and conditions as the governor in council may prescribe, for working capital and to partially finance the deficit of the corporation pending determination of the provision to be made for its future financial requirements, $650,000.
Donald Methuen Fleming: May I say at the outset, Mr. Chairman, that, contrary to the unauthorized statement of the hon. member for Winnipeg North Centre a few minutes ago, I do not intend to make a long speech on this subject. However, even at this late stage of the session there are some points I think should be mentioned with respect to this important item.
Hon. members will recall that the special committee on radio broadcasting tabled its report in the house on June 26, two days ago. The scope of the review conducted by the committee this year was considerably narrower than that of the last two committees in the sessions of 1946 and 1947. There was a general feeling in the committee that in view of the fact that the royal commission on national development in the arts, letters and sciences is sitting and may submit its report within the next few months, it was unnecessary and perhaps undesirable for a committee of the house to cover the same ground. Consequently the whole subject of the basis and system of control of radio broadcasting in Canada was not touched upon in the committee, except briefly in relation to television. Those in competition with the corporation in local areas were not before the committee, which concentrated on an examination of the C.B.C. officials in regard to the operating side rather than the controlling and regulating side of the corporation. In a sense the evidence we heard was the evidence of only one side, in some matters; but, all things considered, I believe the committee adopted a course that was reasonable.
Before I go further I should like to pay a tribute to the officials of the corporation. The relationship between the committee and those

Supply-National Revenue officials has always been happy and harmonious, and I think every member of the committee respects the officials for the quality of their service and for their intense loyalty to the system which is placed in their hands to administer.
The report tabled in the house on June 26 contains a good deal with which some of us who did not support it nevertheless find ourselves in agreement, including the desirability of extending the services of the corporation to areas which do not enjoy those services now, and also the desirability of making improvements in the system. The report, however, was adopted by the committee on division. Those of us who were not able to support it felt on the one hand that the tone of the report was altogether too sweeping, based largely as it was on hearing only one side in certain cases. On the other hand we felt that many of the recommendations contained in the report ought to have been deferred until after the royal commission made its report. For instance, there are extensive recommendations on the subject of the financing of the operations of the system, which field is under study at the present time by the royal commission. Some of these problems have to be faced in the very near future, including the question of the basis of financing the operations of the corporation, but some of us felt that to make extensive and in many cases sweeping recommendations to the House of Commons at the present time was premature, having regard to the fact that the royal commission will be bringing in recommendations on these same matters within a short time.
When I speak of sweeping comments I would direct attention to an example of the sort of thing I mean. In the report of the committee, at page 577 of Votes and Proceedings of June 26, this statement appears in reference to what would happen if the Canadian Broadcasting Corporation were called upon to live within its present sources of income:
It could reduce expenditures. The consequences of doing this would, however, be disastrous.
Now, I think the word "disastrous" is too strong, as I said in the committee. Undoubtedly certain features of the system would suffer. I mention that as one example of what I think is a certain tone running through this report that goes too far, that is too sweeping.
However, sir, having regard to the desirability of economizing on time, I shall confine my remarks to three subjects which are dealt with in this report and which were considered by the committee. Those subjects

are finance, the Radio Canada building in Montreal, and television. Other subjects were considered by the committee and some of them are referred to in the report. If there were time I think those subjects are worthy of consideration in the house, but our time is very short. I shall confine myself, therefore, to those three subjects.
The subject of finance must soon be faced. The Canadian Broadcasting Corporation is confronted with a situation today where deficits are mounting. In the year 1948-49 the system incurred a deficit of $43,000. In the year ended March 31, 1950, a tentative figure for the deficit was given as $242,000. The officials of the corporation estimate that the deficit for the current year ending March 31, 1951, will amount to $962,000. I trust that the minister will give the committee some information concerning the way in which the particular amount in this item 719 was arrived at, because the figure of $650,000 covers only about seventy per cent of the deficit estimated by the officials of the corporation.
I have indicated that I thought in the committee, before we made recommendations on this subject, we should have the benefit of the study made by the royal commission. However, the subject is here, and I wish to make just one or two observations about it. The committee has said that it refrains from indicating how moneys should be raised, although it feels that additional money must be supplied to the corporation. In the brief tendered to the royal commission by the Canadian Broadcasting Corporation-


Stanley Howard Knowles: Order.


Donald Methuen Fleming: -a fee of $5 was suggested for persons having receiving sets in place of the present $2.50 fee. The way in which that amount was arrived at was not made clear, except that it was shown to the committee that, while the corporation does not designate that as necessarily the method, the yield from such an increase would meet the revenue needs of the corporation for the measurable future. I wish to say this, sir, that the present licence fee of $2.50 is nothing more than a nuisance tax. The cost of collecting it has been borne, since 1947, not out of the yield of the tax to the Canadian Broadcasting Corporation, but out of the consolidated revenue fund. The cost is running in the neighbourhood of $600,000 per year to collect this one source of revenue to the corporation. I might say that that represents about twelve per cent of the amount collected through that $2.50 licence fee, and that is an unusually heavy percentage for the cost of collecting.

In the concluding paragraph of its report the committee has drawn attention to that fact. The report reads:
Costs of collection of this licence fee run to between twelve per cent and thirteen per cent, which seems to your committee to be a very high collection cost. In saying this your committee intends no criticism of Mr. Browne or his staff,-
That is to say, the staff of the radio division of the Department of Transport.
-who in fact are both conscientious and efficient, but it would suggest that unremitting consideration be given to discovering less expensive ways of obtaining these fees.
So I say that the time is fast approaching when the house will have to face the problem of meeting the cost of operating the corporation out of a parliamentary vote.
The second subject of the three is the Radio Canada building in Montreal. That building, sir, you will recall, was acquired, by the government through the assistance of the Canadian Broadcasting Corporation in the spring of 1948. This is the first time any parliamentary committee has had an opportunity of reviewing that purchase and the expenditure involved. The committee went to Montreal and examined the building. I was one of those who went, and I wish to say, with all frankness and emphasis, that I think that building, acquired by the government for the use of the Canadian Broadcasting Corporation, is a very suitable building. I was impressed by the fact that the corporation has done good work in converting the building, the former Ford hotel, to the use to which it is now to be put. The building will house not only the many services and departments of the corporation generally, but also the international shortwave service. An annex is in the course of construction now to provide for a producing centre for television in Montreal.
The price paid for the building was $2,200,000, which included a figure of $150,000 required to buy out the occupation rights of tenants then in the building. I am not in a position, and I feel that the committee was not in as good a position as members seemed to think, to pass on the price of the building. For instance, I asked in the committee whether independent appraisals or reports had been sought or obtained by the corporation from valuators before the purchase had been made. We were told that no outside valuation had been obtained by the corporation. Dr. Frigon did consult certain sources of advice open to him, and we had some evidence directed to comparing the price paid with the price paid for a nearby property acquired by the Y.W.C.A. I mention that, sir, and I do not express any opinion on the point. I should like to have seen the cor-
Supply-National Revenue poration, before making that large purchase for the government, obtain the report and advice of a competent independent valuator.
As to the cost of renovating the building and fitting it for its intended use, there are one or two facts deserving of mention. The cost of renovating the building was $1,300,000. The estimate originally prepared by the corporation was $1 million. Without inviting tenders at all, the corporation retained the services of a general contractor in Montreal, who is widely acknowledged to be a competent and efficient general contractor. He agreed to a fee not to exceed eight per cent of the corporation's estimate, that is, a maximum fee of $80,000. I have stressed the fact that no tenders were invited for the general contract. It is only fair to say that when the corporation came to let the subcontracts, about seventy per cent of the cost of the work was let to subcontractors by tender. In the case of the provision of the fittings for the building and the installation, $800,000 was the estimated amount. Again the contract was let to the same general contractor without tender. In the case of the fittings, about $345,000 of the $800,000 is being let by way of subcontract on tender.


Ralph Maybank: Mr. Chairman, I wonder if the hon. member would object if I suggest a correction to him?


Donald Methuen Fleming: No, Mr. Chairman; I should be glad to have it if I have made an error.


Ralph Maybank: I rather think that an error has been made just now, unintentionally. Reference has been made to $800,000 for equipment, as though that were part of what the contractor was supplying, and also as if it were something for which the contractor was being paid eight per cent or any other percentage. If the hon. member will recall the evidence, I am quite sure that he will realize that such a statement is entirely incorrect. The contractor, of course, has nothing to do with the buying of equipment. Consequently this eight per cent does not apply upon the cost of it. On consideration I think the hon. member will agree with that.


Donald Methuen Fleming: I wish to be perfectly fair. I cannot at the moment take the time to look up the page of the evidence on that point. If the hon. member assures me that I am wrong, I am quite happy to accept his correction.


Ralph Maybank: There was an estimate of the total cost of the transformation, not including equipment, and eight per cent was reckoned on that. If that estimate were to turn out to he wrong-that is, too low-and
4316	HOUSE OF
Supply-National Revenue consequently more money was spent, that eight per cent would not arise. There was a limit of $80,000.


Donald Methuen Fleming: Oh, quite so. I mentioned the fact that there was a maximum fee of $80,000 on the work of renovating the building. The estimate, as it has turned out, was low by about twelve per cent, in the case of both the estimate of the cost of renovation and the estimate of the cost of the fittings for the building.
I turn now to the third and final subject, that of television. The future of television is vast. The officials of the Canadian Broadcasting Corporation, in the evidence taken, acknowledged that in television a tremendous field is opening up in this country. We are far behind the United States and the United Kingdom in this respect. It is estimated that there are 6 million television sets in use in the United States as against 5,000 in Canada.
The situation here to some extent stems from the use made of the licensing powers under the broadcasting act. With regard to television, the position under that act is precisely the same as it is with regard to sound broadcasting. The licensing of stations for the use of designated frequencies lies in the hands of the Minister of Transport, on recommendation of the board of governors of the Canadian Broadcasting Corporation.
We have not any television being produced in Canada today. Any television that is being received in Canada today is being received from United States stations. The Canadian Broadcasting Corporation is now at work in setting up two producing centres, one in Montreal and one in Toronto. It is expected that they will be in operation by September 1, 1951. That is a long time for Canada to wait for television, Mr. Chairman.
I say that we Canadians would have had television earlier if those responsible for licensing had been willing to grant licences to persons who were making application and who were prepared to meet whatever requirements were laid down.
In previous sessions I have referred to the fact that we have not been getting television in Canada nearly as fast as we should have; and I think that those responsible for the licensing of television producing stations in Canada must accept a large share of the responsibility for this delay. In the first place, a paternalistic attitude was adopted, for which the government must take responsibility. Applicants were told, as was the radio committee, in 1947, that persons should not be permitted to risk their money in the development of television under private auspices in Canada until the experimental stage
[Mr. Maybank.j

had been passed because they might lose their money. It did not matter that they were willing to risk their money; it was felt by the government that they should not be allowed to risk it. That was not a good enough excuse.
Then a question has been raised all along, and properly raised, as to the Canadian content of television programs that might be made available if television licences were issued. Let me make it abundantly clear that I for one want to see the highest possible Canadian content in television broadcasting. Had the licensing authorities seen fit to grant licences to private applicants, it would have been the duty of the corporation, to see that a proper Canadian content appeared in all those television programs.
A third excuse given for delay was that if licences were issued to private applicants, they might just sit on their rights and not develop television. That is a pretty empty excuse when you consider that these licences would probably have been granted for a year at a time, and they are subject to close supervision on the part of the corporation. If any licensee simply sat on his rights, his licence could be immediately cancelled.
The fourth occasion for delay has been the answer given by the corporation to certain applicants, in telling competing applicants that they should get together and embark on a co-operative enterprise. There may be some difficulties presented in an area like Toronto where there are only two channels to be made available to private television stations and where there have been four principal applicants. In Montreal, on the other hand, there have not been as many private applicants as there are television frequencies available to be assigned in due course to private applicants.
I want to express the opinion that to tell people who are keen competitors in the field of sound broadcasting that their applications for television licences are not to be dealt with until they have joined together and decided to co-operate and to go into the venture as a joint enterprise, is dodging the responsibility laid by statute upon those who are charged with the duty of recommending the issuance of licences and the duty of actually issuing them.
In my opinion the explanation of this long and unfortunate delay in dealing with applications on the part of private applicants for television licences is not to be found in any of these factors that I have mentioned. They have been merely useful excuses. The fact of the matter is, sir, as I see the situation, that the government could not make up its mind

what to do about the development of television under the auspices of the publicly-owned Canadian Broadcasting Corporation. After a long delay they eventually made up their minds what they were to do, and the applications of others who would have liked to go ahead and develop television in this field have simply been held up in the long meantime, until the government made up their minds as to whether and how they were going to develop television through the Canadian Broadcasting Corporation.
This long delay is most regrettable. Canadians who have shown themselves capable of keeping abreast of the world in any form of technical and scientific development have by the government's decision in fact been deprived of the development of television in Canada in these recent years, and we are now far behind the United States and the United Kingdom. I for one express here the hope that no more time will be lost in dealing with these applications.
Obviously the corporation may have a difficult problem on its hands in selecting those who are to be successful in an area like Toronto where there are more applications than there are available frequencies; but that is one of the duties laid upon the board of governors and upon the minister, and the decision is not going to be made any easier by being delayed. Therefore I urge that the time has come when some decision must be made in this field so that this development may not be longer delayed.
As I have indicated, sir, there are other matters which are worthy of the attention of the committee at this time, but in view of the fact that we are in what I understand to be the dying moments of the session, and in view of the fact that there are so many of these matters of leading importance which are to be, we expect, the subject of recommendations of the Massey commission, we may await a better opportunity to debate them at the next session of parliament, when we hope to have a full report of the royal commission before the house.


Alistair McLeod Stewart: I have
listened to the hon. member for Eglinton speaking on the Canadian Broadcasting Corporation for several years now, and I feel that this was probably the least critical of his speeches. There may be a reason for that. For the first time for many years the committee got down to considering the Canadian Broadcasting Corporation itself, how the corporation works, what the corporation is hoping to do, and what the corporation needed. As he pointed out, the committee did a constructive job of work in its investigation, and I share with him his appreciation of the way
Supply-National Revenue in which the officials of the broadcasting corporation tendered their evidence. However, although I do think that much of what the hon. member said was constructive, there are some of his views with which I disagree, and one of them is in the field of television.
The government may have been laggard in its approach to this new avenue of education and entertainment, a matter on which I have not yet made up my mind, and one which I do not think at the moment is very important because, to use a cliche, television is still in its infancy.
The hon. member for Eglinton said we had a long time to wait for television. Well, if what I have seen in the United States is any criterion I am quite content to wait for another year or two; for much of it is not particularly edifying. What the Canadian Broadcasting Corporation must remember is this. Surveys in the United States have shown that children now are watching television for as many hours as they are receiving education in the schools. That means that television can be a tremendously important social force, either for good or for ill. My opinion, for what it is worth, is that had commercial licences been granted I doubt very much whether the owners of those licences would have realized to the full the possibilities of television; that they would have concentrated, within the rules of the system, on making as much money as possible out of their broadcasting. We would have been inundated with all sorts of commercials, and I do not share the feeling of the hon. member for Eglinton that the programs would have had a large Canadian content. I think the officials of the corporation are right when they say that television in Canada must be Canadian, must have a large Canadian content. Certainly we do not want to prohibit anything which may come from the United States or from some other country, but we have to remember first of all the responsibility of the corporation to Canada, and I do not think private interests would have fulfilled it.
There is another aspect of the situation, and it is this. Commercial groups have approached the corporation for licences for television and they have been turned down by the board of governors. They were turned down because in the opinion of the board the applicants did not make out a sufficiently good case to be awarded a licence. If the board is right, then I think there should be no criticism, and I accept the board's judgment at the moment, although my opinion of that judgment may be wrong and the hon. member for Eglinton may be right.

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As regards the radio building, I think those of us who saw that building at Montreal were impressed by it. The corporation has every right to feel proud of its own architects and engineers who out of the shell of the Ford hotel have constructed studios which I believe will be the most up to date on the North American continent. If I have to find fault-and I have to find fault in one place-it would be with the height of some of the operating booths. Their ceilings are far too low, and on more than one occasion my head came in violent contact with beams which had not yet been hidden.
As regards finance, it is true that in the coming fiscal year the corporation may have a deficit of almost a million dollars; and yet the committee, I think unanimously, has asked the corporation to increase its expenditures for the coming year. Therefore the committee must realize that the deficit may be larger if the corporation goes ahead and gives the further services that are desired by all. Whether they can or not of course will be a matter for the corporation to decide. What is evident above all as a result of the committee's studies is the lamentable lack of money from which the corporation suffers. It must have more finances, I would say a minimum of $5 million per annum in the next two or three years, if it is going to do the job which we expect it to do. It cannot get more money from additional commercial advertising, because more advertising would be distasteful to the great majority of Canadians, and would be opposed to the policy of the corporation. The raising of the licence fee to $5 is I think impracticable. I object to the idea of the corporation having to come to parliament year after year, cap in hand, to ask for a grant of money sufficient to cover the deficits.
If we are to keep the corporation independent and as far as possible out of the political arena, then the corporation has to get money in some other way. I have a personal suggestion with which my party is not associated. The corporation should be given funds by statute on the basis of a dollar per capita of the Canadian population per annum. That would amount to about $13 million. We could then abolish the licence fees and in place of the five or six million the corporation has in the form of revenue from licence fees it would have $13 million. With that amount of money it would have no possible excuse for not giving the service the people of Canada want. I would not want my remarks to be distorted, because I feel the corporation is only too willing to give that service. However up to now it has not been able to give it because of a lack of funds. If

we want the corporation to do the job of work Canada expects it to do, then it has to be provided with money. The way I am suggesting is one which I believe will assure the independence of the corporation.


Gordon Francis Higgins: Mr. Chairman, for some time past there appears to have been grave misconception as to the value of Newfoundland as an added asset in the confederation of Canada. Many assertions have appeared in the press, credited to various people, that Newfoundland's coming into the Dominion of Canada has been a deficit. In that particular connection I should like to refer to a broadcast made, I believe, by the minister on February 17, with respect to the broadcasting facilities of the broadcasting corporation of Newfoundland, the predecessor of the Canadian Broadcasting Corporation now operating in the province.
At that time the minister tabled the report of the C.B.C. and expressed some concern as to its financial position. He referred to the present financial loss and then, according to the information I have, added that the cost of the service for Newfoundland is burdensome. This is a most unfair statement. I say that because at the time of confederation the Canadian Broadcasting Corporation took over all the assets of the broadcasting corporation in Newfoundland which, at that time, consisted of a 15 kilowatt station then known as VONF, a shortwave station at St. John's, VONH, a shortwave station at Corner Brook, VOWN, a 500-watt station at Gander, VORG, as well as the equipment for the projected station they were about to open at Grand Falls, and which has since been opened.
This service included a complete and up-to-date set of transmitting equipment, a $25,000 studio building at Corner Brook, an extensive program library, and a line service between St. John's, Grand Falls and Corner Brook. In fact the broadcasting corporation of Newfoundland at that time regarded its equipment as being very much up to date. This service cost the C.B.C. not one penny. Upon the acquisition of that equipment belonging to the broadcasting corporation of Newfoundland programs were changed very considerably, and the people of that province were given what the people in the rest of Canada have come to know as soap operas. I am told 80 per cent of the broadcasting hours in each day are taken up with these soap operas. I am further informed that the improvement, if it can be called that, has not been very great.
My chief annoyance is with the suggestion that the taxpayer of Canada has been asked to carry a heavier burden. That suggestion is most unfair. Whatever burden in dollars

the Canadian taxpayer has had to assume because of the entrance of Newfoundland, Newfoundland has more than compensated for in other ways. I say that in connection with this particular operation involving the C.B.C. no additional burden has been assumed at all.
In the eleven years of operation of the broadcasting corporation in Newfoundland some facts might be of interest to the committee. It started out in 1939 with a capital investment of $8,000. Over the eleven years of its existence it was able, through the sale of licence fees, radio time and the opening of three additional stations to remodel the entire existing facilities, and to purchase all the necessary buildings which have now been handed over to the C.B.C. It was able to instal the best possible equipment and to give a service which the most severe critic could not possibly criticize.
When the broadcasting corporation of Newfoundland was dissolved as a result of having been taken over by the C.B.C. there was a surplus amounting to over $150,000. I am informed that with the revenue available to the corporation in Newfoundland it showed an annual profit of $15,000. My information is that the people of that province are very much upset about the minister's suggestion in the broadcast of February 17 to the effect that the addition of Newfoundland to the dominion has meant an additional burden upon the people of Canada generally. I feel certain that the minister would now like to retract his statement.


Some hon. Members:: Carried.


Gordon Francis Higgins: Does the minister wish to reply?


James Joseph McCann: Item 719 in the supplementary estimates has to do with $650,000 to meet the operating deficit that is likely to occur from April 1, 1950, to April 1, 1951. We believe that will be the actual cash deficit. The amount of $962,000 that was suggested would be the paper deficit and, according to the method of accounting, known as the accrual method, would include depreciation allowances and the like.
The other item of $938,961 is made up of a revote of $638,961, which is a revote of money voted last year to finish the Radio Canada building in Montreal, plus $300,000 to meet the requirements to finish that building. ' I mention these two facts to make clear to the committee the purposes for which the money is required.
It was not my intention to discuss at length the operations of the C.B.C., because perhaps it would be out of place to do so at this time. Opportunity was given to hon.
Supply-National Revenue members to learn, from the report of the radio committee of this year, all the items having to do with the C.B.C., the international service and with television.
In his remarks about these two items the hon. member for Eglinton availed himself of the opportunity to discuss the finances of the C.B.C., Radio Canada building, and television. It is in that connection I wish to make a few remarks. I have no doubt it was made abundantly clear to the committee that the C.B.C. could not continue to operate and to produce the type of product or program they have produced throughout the year on the finances available to them, and that some method would have to be found so that they could increase their revenue. I am not in a position to say just what that method will be. As all hon. members are aware, this matter is before the Massey commission. Representatives of the C.B.C., as well as other persons throughout Canada interested in broadcasting, made representations to that commission. I feel that sometime this fall the commission will bring in a report and make suggestions to the government as to the best method of financing. Whether that will be on a fee basis or in the form of a subsidy along with fees or the total cost to be borne by the government is a matter of government policy which, of course, would be further reviewed by parliament when it meets.
I sometimes marvel that the C.B.C. has done as good a job as they have with the money made available to them. Everyone must admit that they are carrying on now with fees that were in existence ten years ago. It has been clearly demonstrated that in their operation, as in every other operation in the country, the cost of wages, services and equipment has gone up materially. It could not be expected that they would continue as they had in former years to show an operating profit. It is a good thing that they had an operating profit in former years because they were able to meet the deficit for the year ending March 1949 out of the reserves built up in former years. That obligation was not placed upon the government. The general expansion of the Canadian Broadcasting Corporation under which the greater part of the country is now serviced is well known to all hon. members.
With reference to the Radio Canada building in Montreal, I am sure that all hon. members are familiar with that building. I was glad to hear the words of commendation from the hon. member for Winnipeg North and the hon. member for Eglinton. I am sure that they feel, as I do, that when this building is completed we shall have a radio centre second to none in the world. Within

Supply-National Revenue the last two or three weeks I have had the opportunity of visiting a number of radio centres, including the British Broadcasting Corporation in London. They have not anything such as we have. It is true that in London they propose to change from Alexandra Palace to another location, but at the present time their studios do not compare to the splendid studios we shall have in the Radio Canada building.
It is true that this has cost a lot of money. We did pay a considerable amount for the Ford Hotel building, including the purchase of the franchises which already existed. While it is not on the record that an appraisal was made of this building, I made it my personal business to interview people in Montreal who were able to give accurate information as to values and I was told that this was a good bargain at the price we paid. I am willing at any time to substantiate and back up the deal.
With reference to the transformation of the building into studios and the purchase of equipment, I am ready to admit that some of our estimates fell far short of the actual cost. In this connection I should like to give one example. A control board was needed and it took the companies that tendered something like six months to figure out their tenders and they varied all the way from $175,000, which was the figure of the Northern Electric Company, up to $375,000. When concerns in a particular business show such great variation in their estimates on a piece of equipment I think it can be readily understood why some of our estimates did not equal the actual cost. All in all it is going to take a revote of $678,000, plus an additional $300,000, to complete the building. But when the building is completed, the Canadian people will have the most outstanding broadcasting facilities in the world.
With regard to television, I cannot agree with the hon. member for Eglinton that we have been dilatory in announcing a policy or in carrying it out for the Canadian people. I remember over two years ago I went to New York and visited the studios of C.B.S., the National Broadcasting Corporation and of private concerns, and I made it my business in February to go to Chicago to see what was new there.
I found that within the last two years while there have been some advances they have not been great. In the meantime the broadcasting corporations and private industry have spent something like $50 million in an attempt to develop television. I am not ashamed to say that two years ago my advice to the Canadian Broadcasting Corporation

was to delay for a time any expenditures on experimental work until we saw what advances were made in the United States. We might be accused of hanging on to their apron strings, but they had a lot more money to spend than the Canadian people, and we had no appropriation to carry out that work on behalf of the Canadian people.
Today we are able to start in with no cost at all and take advantage of the advances that have been made. Television is going to mean a lot to Canada, but it is going to cost a lot of money. As I indicated when the policy was announced, the $4,500,000 will provide only for telecasting in two languages in Montreal and in the city of Toronto. Before facilities are extended to the greater part of Canada it will cost between $10 million and $15 million.
Private industry has not been in too great a hurry to get into this business. It has been found from the experience in the United States that it costs approximately half a million dollars to set up a station, and you must be prepared to take a loss of half a million dollars before commercial advertising will place you on an earning basis. We have guarded the Canadian people against the granting of licences to people who were not prepared to go ahead. We do not want them to have the advantage of having television licences and then trafficking in them because of their increased value.
I am particularly pleased with the progress we have made. I wish to say just a word about what television will mean with regard to the electronics industry. I should like to quote an article from the Financial Post, of June 17, entitled, "TV sales climb here; export parts to U.K." It reads:
The television virus which is spreading like wildfire through the United States is gradually-infecting Canadians who are within range.
At last count (April 30):
13,500 Canadians had bought television receivers. At an average price of around $400, they had dug down for a healthy $5.4 million since Canadian General Electric turned out the first Canadian set in 1948.
That is just two years ago.
TV antennae are sprouting from more and more rooftops in the fringe areas where U.S. stations can be picked up: about 2-5 million persons in southern Ontario are within range of stations at Buffalo, Rochester, Syracuse, Erie, Cleveland, Toledo, Detroit; about 100,000 in the Vancouver area can get Seattle.
That means that something like 2-6 million people in this country are already within range of television stations and able to receive television programs. As at April 1 some thirteen Canadian radio manufacturers were making television receivers. So far this year they have made 5,300 sets.

Projected production for the year is 31,000 sets, with some estimates going as high as 35,000. Canadian General Electric is already producing cathode ray or picture tubes for domestic purposes, and within the last few months received an order for cathode tubes worth half a million dollars for delivery to the United States, thus giving work to Canadian people.
Some criticism has been directed toward the Canadian Broadcasting Corporation for not buying their transmitters from Great Britain. We in Canada are adopting the United States standard in television. This means that United States and Canadian receiving sets will be able to record the programs coming from both United States and Canadian telecasting stations. Had we adopted the British standard, while the British machines would have been able to record the telecasts of Canadian stations, they would not have recorded those of United States stations. Therefore one order was given to Canadian General Electric and the other to RCA Victor. Canadian General Electric equipment is manufactured in the town of Peterborough, and seventy per cent of the content of that transmitter will be of Canadian manufacture. While 1 was in London I had the privilege of visiting the great factory of the Marconi wireless people in the city of Chelmsford. I went there because the Canadian Broadcasting Corporation has already given them orders on a competitive basis for over $600,000 worth of equipment, thus giving Britain Canadian dollars with which to buy Canadian products.
I am not going to say anything further, except that I have carefully read the record of proceedings of the committee on radio broadcasting this year, and I want to commend the members of that committee for the very thorough manner in which the affairs of the broadcasting corporation and the international shortwave broadcasting station were reviewed. I believe the report tabled by the chairman of that committee was excellent. I must not close without mentioning the reference by the hon. member for St. John's East to the use of the word "burdensome". Perhaps that was not the right word. I meant it in the sense of an obligation, that an added obligation had been assumed, which I am sure the hon. member must recognize.
Mr.-Higgins: You did not mean you were taking over a deficit?


James Joseph McCann: It was not meant in that sense at all. We are very glad to have been able to link up our broadcasting facilities with those of Newfoundland. The comment I have heard by people from that
Supply-National Revenue province is that they are pleased with the splendid additional programs they receive over the trans-Canada networks.


Gordon Francis Higgins: I am very happy to have the explanation by the minister; I am so glad he agrees that in taking over the Newfoundland broadcasting system the C.B.C. got an asset. A correspondent writes me stating that at the time the system was taken over there was a vacancy on the board of governors of the C.B.C., and he suggests that it was rather a discourtesy that the chairman of the Newfoundland broadcasting system was not appointed. Is there such a vacancy, and is there a possibility that the former chairman might be appointed to it? The other question is not mine; before he left the hon. member for Eglinton asked me to put it to the minister. He mentioned a figure of $962,000 as the deficit, while this estimate calls for $650,000, and he would like to know the reason for the difference.


James Joseph McCann: I explained that a moment ago. They worked out the deficit as $962,000; but included in that, as I am sure the hon. gentleman will understand, was provision for depreciation, which was a very considerable amount. This was brought to the attention of the broadcasting corporation, who were asked to revise their figures, and this $650,000 will meet the actual cash deficit.


Gordon Francis Higgins: Then what about the vacancy on the board?


James Joseph McCann: There is one vacancy at the present time. I believe the act requires that the members of the board of governors shall represent different occupations and geographical districts. The present vacancy was caused by the resignation of the gentleman who is now lieutenant governor of Alberta, and the west feels that it should be given representation. However, I shall bring the suggestion of a representative from Newfoundland to the attention of the government when the vacancy is being filled.


Gordon Francis Higgins: I can assure the minister that the former chairman of the Newfoundland system would be an admirable member of the board in every way.


Arthur Leroy Smith: I am sorry I missed the earlier remarks of the minister, because I always listen to him with great interest. However, I have been in the railway committee room, listening to something even more enjoyable.
In view of his compliment to the committee, of which I was a member, I must say that I think this year's committee was the most useless I have ever known to be set up by this house, though no doubt it was asked

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for by someone on this side. I made that very plain the first minute of the first day we sat. There we were, carrying on a review parallel in every particular with that which was carried on by the Massey commission dealing with the fine arts, culture and so on. I assume they included radio broadcasting under the broad term "culture"; otherwise I don't know how it could have come in through the door. I felt that we were duplicating the work of the Massey commission. I attended every sitting I could, and in the committee we were in this position: We heard only the officers of the broadcasting corporation, with the exception of a contribution made by a member of the Department of Transport, Mr. Browne, and a gentleman from Toronto whose name escapes me at the moment. So as far as the policy of the Canadian Broadcasting Corporation is concerned, we had only a onesided picture.
I am not complaining. Everyone had full opportunity to come and state his views if he wished to do so. I assume that most people agreed with the idea I had, that we were pursuing a phantom and uselessly expending a great deal of time, at the same time making the job of the officers of the corporation infinitely more difficult. I did not hear the minister's remarks, and if he has answered this previously, I hope he will quickly tell me. The inquiry I make about television is this. I hear from people who should know that there are many more bands for television than for ordinary sound broadcasting. I heard the minister say that if someone starts a station he must be prepared to lose something in the neighbourhood of half a million dollars in order to get it on its feet. If someone wants to lose half a million dollars, why don't we let him do it?
We are going to have television stations in Montreal and Toronto, which will be a very satisfying business for the people who live in that neighbourhood. While a great deal of the tax money comes from that area, ultimately the rest of us are going to be paying for television for those people. We in the distant points hope that some day we shall have the privilege of buying a television set and enjoying it. What I am utterly unable to understand is this. If a person in the city of Edmonton wants to lose his money in an effort to give that area television, why in the world is the Canadian Broadcasting Corporation, who admittedly are doing nothing in that area and do not intend to do anything for some time to come, prohibiting the establishment of that station? Why is it the policy of the government-because it is the government which issues the licence-not to permit 
someone to attempt to make television go in these outlying places?
I know all the arguments in favour of Canadian culture, and I know that we are going to have Canadian programs. I trust some day you will find someone to listen to them; that is at least a hope I express. I cannot see why the government, or the government-owned corporation, should not let anyone, shall we say in Edmonton, attempt to establish a station. Give him a licence; let him spend his money; and reserve to the corporation any number of bands which they might at some future time require. I cannot see that to do otherwise is good business or common sense.
I want to pay a compliment to our committee chairman this year. He had nothing very difficult to do, but he is one of those fellows who can do a pleasant thing in a very difficult way. This year he did not do that; he was good-natured throughout the piece, and I am sorry I missed the opportunity of shaking hands with him when we had finally got our report together. It was a very pleasant experience; in fact it was a joy right through. There was nothing to the whole business at all. I heard someone say "carried", and that is the kind of committee it was. There is no doubt about that; the word "carried" came in and you did not even have to press a button. The "carried" boys were all there, well schooled and anxious to exercise their throats in the one way, by calling "carried".


[Stage Direction]
Item agreed to.

[Stage Direction]
1S3. Departmental administration, $321,042. (Translation):
Mr. Dumas:: Mr. Chairman, I do not intend, at this stage of the session, to launch into a discussion on the estimates of the Department of Mines and Technical Surveys. However, as the mining industry ranks third, in our country, both in production and exports, I believe it well deserves a few minutes of our time.
There are several mines within the limits of the constituency of Villeneuve and it behooves me, I believe, as the member for that constituency, to draw the attention of my hon. friends to certain facts and to quote certain figures which may help them to understand the true importance of this industry.
(Text):
Mr. Chairman, when we look at the country's record for the first half of the century, we realize what mining has done in transforming the economic and social life of the country. If our country is a leading power in the complex world of today, it is due to the

great expansion of its mining industry. Canada leads all other countries in the production of asbestos, nickel, platinum and its associated metals; Canada is second in zinc and cadmium, third in gold, copper, magnesium and cobalt, and fourth in silver and lead. We have reason to be proud of our country's record in mineral production during the second world war, when the allied nations were so pressed by an urgent need for base metals.
During the six war years, the total value of our mineral production amounted to over $4 billion. Of this, $1 billion worth of base metals only was contributed to the war effort, including 3-6 billion pounds of copper, 1-26 billion pounds of nickel, 1-6 billion pounds of zinc, and 1-3 billion pounds of lead. That is a fair record for a country like Canada. It is true to say that we surprised ourselves with the vastness of our own war contribution.
In time of peace we are continuing to produce minerals at an accelerated pace. The total Canadian mineral production for the year 1945 amounted to $499 million; in 1947 it amounted to $645 million; and in 1949 to the spectacular figure of $890-2 million. This last figure includes the production of Newfoundland, which amounted to $25-7 million. These are impressive figures if we consider that the total mineral production in Canada during the year 1900 barely exceeded $64 million.
According to the most recent survey the production of 1949 is divided as follows: Metallic metals, $534-8 million, including gold to an amount of $147-8 million; nonmetallic metals-that is fuels-$184-2 million; other non-metallic metals, including asbestos, barite, salt and quartz, $62-3 million; clay products and other structural materials, $108-8 million.
The mining industry is the third leading producer in Canada. Not long ago we could read in the Financial Post, immediately before the trade fair took place in Toronto, this title: "Canada: The largest per capita trading nation in the world". Below that we could also read:
In the past thirty years we've seen $80 billion of goods and merchandise cross our borders.
Our total export in 1949 amounted to $3 billion and the leaders in the commodities which were exported were the following: wood, wood products and paper to the amount of $875-3 million; agricultural and vegetable products, $773 million; non-ferrous metals, $426-6 million. The world today has become dependent upon Canada for such necessities as nickel and asbestos. Without our mines humanity would be sadly deficient in gold, 55946-273
Supply-Mines and Technical Surveys silver, copper, zinc, lead and platinum. Canadian uranium played a vital role in the development of atomic energy. In metals, above all, Canada outdid itself not only in quantity but in quality and diversity. As countries go, Canada is still young.
The foregoing is a short resume of its achievement in mineral production. It is, we can say, our duty to keep up the pace.
Here I should like to refer hon. members to an article which appeared in Saturday Night of June 27. I should like to read these few lines:
Prospects for the sale of Canadian metals in the United States never have been as promising as they are today. ... In the 12 months ending February 28.	1938, the United States imported
$43 million worth of non-ferrous metals from Canada. For the 12 months ending February 28, 1950, they had jumped to $198,800,000.
These are impressive figures. In another paragraph we can read the following;
The U.S. has less than a 35-year supply of 21 out of 35 minerals. Some of these, such as petroleum, copper, lead and zinc, are minerals in which the United States led the world for many years.
While the U.S. has lost her leadership in the raw materials field, Canada is fast becoming the world's greatest source of such items as copper, zinc, lead, nickel, and aluminum. Tomorrow she may take her place as one of the leading producers of iron ore, petroleum and titanium.
Non-ferrous ores and metals constitute the largest single classification of imports to the United States. Ores and metals were brought into the States to the tune of approximately $550 million in 1947: $775 million in 1948, and $840 million in 1949. And such shipments bid fair to be much higher again this year.
After taking cognizance of this article we can see that in the United States we have a big market for our metal production, and it is up to us either to increase our production or to find new mines.
Here I should like to say this. If our country is a leader today in base metal production and if we are capable of such achievements in mining during the first part of the century, I will venture to say that it is owing to the incentive our prospectors had when they were prospecting, always hoping to find that famous gold mine.
Today many people think that the gold mines are not so important. But I will say this; it is owing to the fact of the prospectors looking for gold mines that our base metal mines were found. We must not forget that fact. Besides that, the production of gold during the last three years has been increasing, owing to the encouragement on the part of the government. The gold production in Canada from 1858 to 1949 amounted to $3.3 billion. The gold production in 1945 amounted to $103.8 million; in 1946, to $104 million; in 1947, to $107.5 million; in 1948, to $125.6 million and in 1949 to $147.7 million. We
4324	HOUSE OF
Supply-Mines and Technical Surveys see that there was a substantial increase from 1947 to 1949. We know that it is mostly due to the Emergency Gold Mining Assistance Act which we call EGMA as an abbreviation.
Hon. members are aware that this act will terminate at the end of December, 1950. I will not ask the minister to state definitely what the government intends to do after that date, but I will urge him to study closely all that is related to the gold mines. For instance, we know that some gold mines do not need this emergency assistance; on the other hand, we know that other gold mines need it. The word "emergency" was correct when the government passed that act and it_ is still correct today in the case of many mines. If the low-grade mines today did not have this act to help them, and did not have this bonus, they would certainly be obliged to close. That would be a bad thing. It would have a very bad effect on many parts of the country from British Columbia to the maritimes. I shall cite only a few instances in my own constituency and especially in my own town where we have four gold producers and they are all low-grade mines.


Arthur Leroy Smith: Will the hon. member permit one question before he leaves the last subject? He gave us the increase in dollar value of gold production throughout the area. What relation to that increase do the subsidies paid by this government bear? In other words, suppose we gained $2 million in one year, how much did we put out by way of subsidy in that year to get the $2 million gain?


Armand Dumas: I will tell the hon. member for Calgary West that it was not only an incentive to the gold mines to produce more gold, but without it some of the gold mines would have been obliged to close their operations. If it had not been for the bonus these gold mines would have had to shut down.


Arthur Leroy Smith: I favour the subsidy. But I wondered how it compared with the amount of new gold we mined.


Armand Dumas: In 1948 it cost the government $10 million in bonuses paid to the gold mines, and the increase of gold in that year amounted to $16 million. From 1947 to 1948 $16 million worth of gold came to the government.


Arthur Leroy Smith: In other words, we paid $10 million to get an increase of $6 million.


Armand Dumas: Yes, but I ask the hon. member to recall that in the first year of the act all the gold mines could not get organized in


the space of a few months to produce more gold. He will notice that in 1949 the production jumped to $147 million, and it did not cost the government any more for these gold mines to produce $40 million worth more of gold in 1949 than in 1947. Therefore I think it paid the government, because of the bad situation we were in so far as United States dollars were concerned.


Arthur Leroy Smith: I agree with the bonus. I just want to find out what the bonus paid. We paid 25 cents to get a dollar back.


Armand Dumas: I do not want to take up too much of the time of the committee. I ask the minister to think seriously of extending the bonus into 1951, but probably on a diminishing scale. I ask him to extend the bonus so that our marginal mines can keep on producing gold that we need and also as an incentive to prospecting. We know that our prospectors will go into the bush and try to find a gold mine but they will not go into the bush and try to find a base metal mine. It has been proved in the past in all the mining districts of Canada that wherever the prospectors went to find gold mines they also found base metal mines, and our base metal mines are leaders in our mining industry.


Arthur Leroy Smith: I have only a word to say, and I am going to say it on the first item. I think I may ask questions here which can be answered now, and we shall save the time of the committee and save me the trouble of asking them on the individual items. The first question is very narrow. I want to know what this geographical names board is, and what portion of the $1,386,410 goes to the geographical names end of it. The next question is a broad one. If you look at items 188 to 196 you will observe that they are items in connection with surveying. If you turn over the page you will find that we are paying the Royal Canadian Air Force the same sum in both years, namely $1,340,000. I am not complaining about this cost. My only worry is this. Do the items which I mentioned a moment ago eliminate all air service in connection with surveys? In other words, does the $1,340,000 mean the total paid to the air force in connection with all surveys? I assume that is probably correct; but in trying to follow the items, the numbers of which I gave, I should like an answer to see whether there is any overlapping in any of these items. First I want to know about the geographical names. I do not know what it means.


James Joseph McCann: Would it suit the hon. member to wait until we come to these items?


Arthur Leroy Smith: I had hoped
the minister would answer it now and I would not have to wait, but I will wait.


Mr. Browne (St. John's West):: Hon. members may feel that Newfoundland is getting a lot of prominence in the discussion of these estimates, but it is because it is the expiry of the first full year of union.
The report of the Department of Mines and Resources which I have in my hand deals with the fiscal year ended March 31, 1949, and it is very difficult to know exactly what was done in Newfoundland during the past summer. In reading the report I notice that a great deal of investigation has been going on in different places on geological, hydrographic, topographic and engineering work. I am wondering whether we have to wait until next year before we get any indication of any discoveries that were made in Newfoundland.
In connection with these reports, I also notice that the department is assisting industry to a very large extent, making studies of minerals, and helping in the search for minerals. In Newfoundland, as hon. members know, we have three mines, the iron ore mine on Bell island, the lead zinc nickel composite ore at Buchans and the fluor spar mine at St. Lawrence in the southern part of Newfoundland. In addition to that the country is highly mineralized. In the past we have suffered from lack of trained geologists. We have only one geologist at work in the island. Before he was appointed we had to engage a man from Princeton, Professor Snelgrove.
Great work was done in the early days by Mr. Howley, but nothing compared to what is going on in the other provinces of Canada. I am wondering whether the minister has considered extending the services which have been given to other provinces in regard to these minerals, which are considered the most profitable at the present time.
We have an oil well at Parson's Pond, which was discovered over a hundred years ago, but we do not know the extent of it, and we cannot know it without proper geological and more intensive surveys. I do not know what facilities the department has for estimating what quantity is there but I understand that the provincial government is engaging the services of an airborne magnetometer for this summer. With regard to radioactive investigation, I saw in one of the local papers that a discovery of radioactive minerals had been made down there. I am wondering if that has been brought to the attention of the minister's department? Finally, what relationship is there between this Department of 55946-273J
Supply-Mines and Technical Surveys Mines and Technical Surveys and the department of resources in Newfoundland?


James Joseph McCann: There is no relationship
between this department and the provincial department; but there is a very close association whereby we put the services of the Department of Mines and Technical Surveys at the disposal, so to speak, of the provincial department.
With respect to the work going on in Newfoundland, or that contemplated this summer, one engineer will be there to make a general investigation of the mineral resources of the province. At the same time he will act as deputy inspector of explosives. A ceramics engineer will investigate the clay deposits and will assist the brick industry. A third engineer will make a survey of peat bogs for the provincial department of agriculture, and will also investigate the suitability of peat for fuel purposes.
We intend to put out a number of parties. In connection with the geological survey we will have four field parties. In topographical survey we will have five field parties, and three in the Quebec-Labrador section. In the hydrographic surveys we will have three boats charting Newfoundland waters; in the geodetic survey we will have four field parties, and five in Labrador. In the legal survey we will have one field party on radar altimeter work. In the geographic branch we will have two field parties in Labrador and two in Newfoundland. In connection with the dominion observatory there will be one party on magnetic surveys work, and there will be aerial photography of 14,183 square miles of Newfoundland done by the Spartan company and 800 square miles of Labrador done by the R.C.A.F.
I suggest that contemplates a very good program for the first years in which we have undertaken to do work in that province. The party is made up in some instances of an engineer and four or five other people. Parties can be either larger or smaller than that. So that in all these different branches of the Mines and Technical Surveys department, including geological, topographical, hydrographic and so on, we are detailing to Newfoundland a very fair proportion of the available staff for this kind of work.


William Joseph Browne: The minister did not mention the work done last year. Did he have parties in all these branches then, too? If a person is interested in a mineral deposit how does he go about having an investigation made? I would understand that he would have to go to the geological branch in St. John's, and a geologist may turn him
4326	HOUSE OF
Supply-Mines and Technical Surveys down. I have done that for years in connection with a property in which I was interested. Promises were made to me, and I was put off.
The area to which I am referring is highly mineralized. In the area of Placentia Bay copper is to be found in several places. Fee simple grants have been given because a certain amount of mining has been done. This was done under the old system. Under the modern method it should be possible for a geologist to give some account as to the economic value of these deposits. There are three places I have in mind, the first of which I have mentioned, the other two being Fleur de Lys and Baie Vente. The people interested in the minerals at these points do not seem to be able to get ahead. They are not satisfied with the work done by the local geologists.
I suggest the department should be guided to some extent by the reports which have been given in the past. I know that there have been favourable reports about the three places I have mentioned.


James Joseph McCann: It is not the policy of the government or of the department to make examinations at the public's expense of every private property, and to give an opinion upon it. It is the policy of the government to study the general conditions. Ore that might be found in any particular area could be sent to headquarters at Ottawa where it will undergo an examination and a report will be made upon it.


William Joseph Browne: In the
neighbourhood I have mentioned there should be other deposits worthy of investigation.


George Matheson Murray: Is there any likelihood of renewing the dominion-provincial arrangements whereby assistance was given in connection with the construction of trails and roads leading to mining areas? This policy in the past has resulted in bringing in a good many mines in British Columbia, and in the north. I would hope it -might be resumed.
Does the minister not think that the project launched by the board of trade of Niagara Falls for the casting of silver dollars by the Canadian government is one which should interest the mining fraternity? We in the Cariboo are large producers of silver. The same applies in Quebec, Manitoba and other provinces. While I have not any desire to introduce the subject of monetary reform,
I do suggest that the value of a silver dollar as a souvenir, particularly for the tourists, is something which should not be overlooked. I should like to see a policy whereby instead of exporting our surplus silver to the United States or Belgium it would be retained in


Canada and coined into silver dollars so that it might be made available for general circulation particularly in those areas visited by tourists.
The mines branch in Canada has always led in the development of that industry. Reports were made by Dr. G. M. Dawson of the geological surveys branch in the early days of our country. He made a blueprint of all the mineral-producing areas we have in Canada today. Dr. Eugene Haanel and Dean Brock of the geological surveys branch, and later of the university of British Columbia, contributed greatly to the mining industry in our country. I believe this work could be encouraged.
I have only one suggestion to make to the minister, and that is that in connection with the oil industry we should have here in Ottawa an engineer of outstanding ability to make a check on the new oil wells -being brought in in Alberta and the northwestern part of the country. Thus we would have available an exact, authentic and official record for the guidance of investors and for the general shaping of this great oil industry which has been developing in our land.


Arthur Leroy Smith: Perhaps I could answer the last part of the hon. member's speech. All the information needed by the hon. member for Cariboo could be obtained from the oil and gas conservation board of Alberta. Dr. George Hume is in charge of this work in Ottawa, and I do not think a better man could be found to do what the hon. member has suggested.


Gordon Francis Higgins: Will the minister state briefly his opinion of the Labrador-Quebec iron ore potentials, and what effect this development will have upon the St. Lawrence seaway?


James Joseph McCann: That is a pretty large question. The reports are that -there are enormous deposits of iron ore in Labrador, and private interests -have indicated that they are prepared to spend between $150 million and $200 million in building a railroad, developing water power and bringing out the ore. My hon. friend asks what effect this will have upon the St. Lawrence waterway. Any extensive development of natural resources cannot help but be of benefit to the whole country. I think it is proposed that when this ore is produced, part of it will be smelted in Canada and part of it somewhere in the middle west and along the eastern seaboard of the United States. We have continuous negotiations with the promoters and the people who are sufficiently interested to put up their own money, and progress is being

made with regard to this development. I understand the actual starting of the development is awaiting further drilling and testing so that a sufficient quantity of ore may be outlined to guarantee the life of the property for a great number of years.


Gordon Francis Higgins: Will the water powers of Labrador be used, and who is going to carry on this development?


James Joseph McCann: Our information is that the development might start in 1951, and from what I have read I understand that it is proposed to use potential water power in Labrador. This development is being carried on with a combination of United States and Canadian money.


Gordon Francis Higgins: The principal company being?


James Joseph McCann: There are a number of companies, one being the Labrador Mining and Exploration Company. The Canadian interests are the Timmins people, who are the owners of the Hollinger mine. They were initially responsible for the development.


Gordon Francis Higgins: How much ore has been blocked out so far, and how much will have to be blocked out before production actually starts?


James Joseph McCann: I understand they have in the neighbourhood of 300 million tons, and they would like to block out in the neighbourhood of 350 to 400 million tons before starting the actual development.


Gordon Francis Higgins: Will Labrador power be used for smelting?


James Joseph McCann: That is a possibility.


[Stage Direction]
Item agreed to.
Mines branch-
185. Mineral resources investigations, $1,722,053.
Percy Chapman Black: What work has been carried on under this vote, and what have been the results?


James Joseph McCann: This vote provides for office, laboratory and field investigations relating to metallic minerals, industrial minerals, fuels, and mineral economics. The Geology and Mines Act of 1907 provided that the mines branch of the then department of mines was "to make such chemical, mechanical and metallurgical investigations as are found expedient to aid the mining and metallurgical industry of Canada." The present mines branch assists the bringing into production of Canadian mineral deposits by developing suitable ore-dressing and bene-ficiation methods. Research is being carried
Supply-Mines and Technical Surveys out to find efficient processes for treating low-grade and complex ores and to find means of lowering the costs of producing such metals as lithium and titanium.
The facilities in physical metallurgy are used to assist Canadian industrial development, and major problems in research concern advice and assistance to the national research council in connection with the atomic energy project. Co-operation with the Department of National Defence and with manufacturers of equipment involves various fields of research on alloy metals, including testing and development to find metals most suitable for service at extreme low temperatures and other metals which will withstand the extremely high temperatures required for jet propulsion. The branch, at the request of national research council, has undertaken investigations into the application of radioactive tracer materials for industrial and scientific problems. Some of the problems involve work of highly confidential or secret nature. In the field of fuels, close liaison is maintained with the dominion coal board, and major projects on coal include evaluation of Canadian coals for stoker operation and research on pressurized combustion to develop the use of coal in turbine propulsion. The problems in coal, natural gas and oil technology referred to the branch are many and varied. Included in the investigations and experimental work is the means of extracting and utilizing the oil in the bituminous sands of Alberta.
The hon. member's question referred more particularly to Nova Scotia, but the principles I have enunciated would apply to that province as they apply to other parts of Canada.


Percy Chapman Black: How much work has been done and what has been accomplished?


James Joseph McCann: There are two resident geologists in Nova Scotia, and with their parties they are engaged in exploring possible extensions of the coal properties in that province.


Percy Chapman Black: What results have been accomplished up to now?


James Joseph McCann: If the hon. member would be content to allow me to defer that answer, I will try to get it a little later.


Clarence Gillis: Supplementing what the hon. member for Cumberland has said, I find it difficult to understand where all this money goes to. This survey in Nova Scotia has been going on for the last eighteen months, at least, and a million and a half dollars is a lot of money to have been spent last year in that field. The mining association met in Nova
4328	HOUSE OF
Supply-Mines and Technical Surveys Scotia within the last week; the press gave a complete report of government undertakings in that province in that field, and they sound very good. I have also gone over the report of the mines branch, but it devoted only about one paragraph to the survey going on in Nova Scotia.
It seems to me that government departments carrying on this kind of work, involving large expenditures of public funds, at least should make some comprehensive report to the minister and to the house to justify the appropriations. I find it hard to understand what is going on. I thought the mineral resources of Nova Scotia had been pretty well mapped out a long time ago. I know it is a good many years since I read the geographical surveys of the coal companies and papers and articles by F. W. Gray. The provincial department of mines did a great deal of work in that field, too, and I have wondered what kind of supersurvey was being carried on now and what results we got from the expenditure last year. I am glad to see this being done, if we can find out exactly what is going on. What progress was made last year which would justify the amount appropriated for that project in Nova Scotia?


James Joseph McCann: I will get further information as to just what has been done in Nova Scotia, but if the hon. member turns to page 159, where the details of this vote are set out, he will see that $405,000 is for the permanent staff, which includes highly trained and highly paid technicians, scientists, assayers, chemists, electricians, engineers and so on. Then the temporary staff accounts for $718,000. There is $30,000 for casuals, an amount for overtime, and the necessary expenditures for printing, stationery and travel. There is an item of $296,000 for the acquisition of equipment, and $140,000 for supplies and materials; and the comparison is given with the previous year. Few of the people engaged in this activity are in the field; most of them are in the laboratories here in Ottawa, known as the Booth street property. There samples of ore are tested; investigations are made in reference to the mineral resources of Canada, and so on. While what is done in any particular ' province is not kept segregated, field parties are sent out every year with a view to keeping up to date with any mineral properties that may be found, or extensions of present fields.


Clarence Gillis: That statement would hardly justify the expenditure of this amount, if you are just going to spend it on highly trained technical employees. What I have in mind is that in the field of geology I thought the work in Nova Scotia was pretty complete. It is largely a question of coal in that province;


that is about all they will find there. I was wondering if this department was carrying on any research in the direction of finding new uses for coal. Oil is very definitely entering that field, and I think the time is not far distant when we may have to take the by-products of coal and use them for commercial purposes. That industry is shrinking; and I do not think the discovery of new coal fields is the answer, because the markets already established are disappearing. I wondered if some of this money was being used in research of that kind, instead of sending out geological parties to find more coal.


Herbert Wilfred Herridge: I understand that some of the research staffs of the large mining companies in Canada are working with research workers of this branch in the laboratories of the department.


James Joseph McCann: That is right.


Herbert Wilfred Herridge: What arrangements are made for the research men of private companies who work in the laboratories of the bureau of mines; and are any discoveries made there available to all companies in Canada?


James Joseph McCann: We do provide facilities for private companies to carry on experimental work in our laboratories. Such work is being done at the present time by a number of companies, more particularly one from northern Manitoba which is attempting to work out a new process for the smelting of nickel. We co-operate with them, give them all the assistance we can, and any finds made by our people are available to the general public. Anything new developed privately is a matter for the people concerned in its development, but as a rule it is given to the public later.


Percy Chapman Black: I understood there were enormous deposits of nickel ore in the northwestern parts of the prairie provinces. Can the minister make any statement in that regard, and what part the department has played in those discoveries?


James Joseph McCann: I do not know that I can give any more information than I have just given the hon. member for Kootenay West. I should like to answer the question concerning these surveys in Nova Scotia. The answer is that surveys of various Nova Scotia coals covered their physical and chemical properties, and so on; producing better and more marketable products, and eliminating waste; the interrelation of coal seams to aid in determining the future course of mining development. That is the work being done in reference to the coal industry of Nova Scotia.


Percy Chapman Black: Does that include examination into the practicability and necessity of washing plants for certain grades of coal?


James Joseph McCann: I am told we do that work, too.


[Stage Direction]
Item agreed to.
Mines branch-
187. Investigations of radioactive ores, $280,991.
Mr. Harkness:: Would the minister tell us what this branch does? In the details at the back I notice that only three permanent employees, one chemist and two engineers, are listed. Is this branch chiefly concerned with what might be called assaying samples of radioactive ore sent in, or is it chiefly concerned with the investigation of any ore bodies that may be reported?


James Joseph McCann: This appropriation is to
maintain the services of the radioactivity division of the bureau of mines. These services were commenced in 1945 at the request of the minister of munitions and supply and the president of the national research council for the purpose of carrying on research on ore dressing and recovery of uranium from ores from the crown-acquired Eldorado mine at Great Bear Lake. The services to the crown company, Eldorado Mining and Refining (1944) Limited, are increasing in importance with the understanding of large-scale experimental work on the problem of recovering uranium lost by present methods of treatment. The policies of the atomic energy control board, in stimulating search in Canada for uranium-bearing minerals, are having widespread effect in causing new discoveries and the board takes the view, for security reasons concerning processes, that the burden of assaying and carrying on development of ore treatment methods for privately controlled uranium enterprises should be borne by the mines branch. The work of the section is part of the secret atomic energy project being carried out by certain government departments. Included in the activities is research into methods of detecting uranium which may have an important bearing upon the results of future prospecting in Canada.
The development of uranium ores, as I am sure the hon. gentleman knows, has been stimulated greatly by the increased price for uranium oxide. At the moment I believe it is somewhere in 'the neighbourhood of $6.00 per pound as compared with $2.75 per pound about a year ago. There has been a lot of activity in that particular development. The government, through Eldorado Mining and Refining Company, is in the market for uranium oxide as it is produced. The department of mines attempts to assist people by
Supply-Mines and Technical Surveys giving them such information as is available concerning the places where uranium might be found, taking into consideration geological factors. The department gives information with regard to the type of instruments which are now being used for the detection of those ores.


Douglas Scott Harkness: I understand this particular branch is concerned with working out a new process for the recovery of uranium ore, and also with giving advice to people who are attempting to find those ores. Has the department anyone who goes out to the places from which samples have been sent to survey the ore body in order to determine how much there might be? The reason I ask the question is that the extent of the uranium ore which we have is a vital matter from the atomic point of view, and a vital matter from the defence and security point of view. I wondered whether either this particular branch or any other branch of the department has mining engineers who go out to the places where ore bodies have been discovered to make surveys?


James Joseph McCann: Yes, we have an appropriation here of $8,000. This $8,000 is for field investigation of radioactive mineral occurrences which are brought to our attention, and which we consider are worthy of more detailed examination. In addition to that, geological parties that are out in the field will make examinations of particular ores that are brought to their attention.


Mr. Maliais:: In view of what the minister has said, I wonder if he has any information about a survey having been made in the province of Quebec, in the county of Charlevoix, in the vicinity of St. Simeon?


James Joseph McCann: I understand that a geological party of the province of Quebec is engaged in surveying this area. So far as analyses are concerned, we do not give the result publicly. They are given privately to the people who send in the sample.


[Stage Direction]
Item agreed to.
Geological survey of Canada-
188. Geological survey administration and miscellaneous services, $156,300.
Arthur Leroy Smith: Mr. Chairman,
you will observe that the votes from No. 188 to 196 involve surveys. I have examined them, and I have no particular questions to ask, except if the minister would relate them to the item over the page which concerns payments to the Royal Canadian Air Force and commercial companies for air photography, and to defray the expenses of the interdepartmental committee on air surveys, $1,340,000. I believe I have referred to all the items with respect to surveys other than the one which

Supply-Mines and Technical Surveys I have read. I am only anxious to know whether this vote No. 201, $1,340,000, covers the total cost of air services in connection With these many surveys which are mentioned on the previous page?


James Joseph McCann: The answer is no, it is not
the total cost of air services. This item of $1,340,000 has to do only with aerial photography. About $250,000 of this sum goes to private companies which have contracts to photograph 64,000 square miles, and $1,100,000 goes to the R.C.A.F. who will photograph about 200,000 square miles.


Arthur Leroy Smith: Apparently I
have not made myself clear to the minister. Let us take item 189, which reads:
Geological surveys, including an amount of $2,500 for Canada's share of the cost of the committee on mineral resources and geology, London, England, and a contribution of $3,000 towards the Arctic institute expedition to Baffin island, 1950.
Then there is the surveys and mapping branch, surveys and mapping branch administration, and what I am trying to find out is -I think this must be so-whether that $1,340,000 is the total paid for air work in connection with the items listed on the previous page.


James Joseph McCann: Well, I am informed that the vote of $1,340,000 has nothing whatever to do with these other votes. That is money paid out to the private companies and the R.C.A.F. for aerial photography, but in carrying out the other surveys, geological surveys, topographical surveys, hydrographic surveys and geodetic surveys, there are expenditures for aerial transportation of the parties distinct from the amount the hon. member is questioning us about.


Arthur Leroy Smith: I rather fail
to understand it, because the only use you can make of surveys by air is to fly over and look at the ground beneath you and then to photograph it. That is all you do on an aerial survey. If you will notice item 189 which I just read, you will find there that we are spending $1,524,774, an increase of $329,409. I hope the minister will appreciate the fact that I am not criticizing this. I assume that the increase in the vote must be for more extensive work. What I am trying to find out is how much of the money we are spending is going for surveys by air and how much of it remains for surveys on foot, by motorcar or on horseback. In all these items on the first page to which I referred, page 29, it is difficult for anyone to segregate the various types of effort which we are putting forward. If air surveys are also included in items 188 to 197, it does not give us much information to say that the air force and private companies doing aerial

photography are getting $1,340,000. We do not know what portion of these other items are going to aerial surveys, and I have read as carefully as I can the details given later on in this book.
I want to ask one other question. I take it that the minister may answer both questions at the same time and then I at least have finished. I wish he would tell us separately about item 191, topographical surveys-I know what that means-including expenses of the Canadian board on geographical names. When the minister rises, I wonder if he would tell us about that. Then I have nothing further to bother him with.


James Joseph McCann: I think I can deal with those matters now satisfactorily. This vote of $1,524,774 is to continue the geological survey of all the provinces of Canada, the Northwest Territories and the Yukon, with the object of determining potential sources of minerals, oil and gas; to initiate and maintain research facilities in all the branches of geology, with the object of advancing the practical application of geology to the search for mineral resources; to compile records and issue maps of field investigations and studies for the purpose of informing and assisting prospectors, mining men and others interested.
The principal increase here is in salaries. The increase is $329,000. Of that, the principal increase in salaries is $142,000; field surveys, $109,000; acquisition of equipment, $45,000. These increases are based on additional requirements for personnel and equipment for an increase of about 20 per cent in the number of field parties that are sent out in the summer; additional personnel, instruments, equipment, etc.; and for the extension of mineralogical investigations and of increased costs of materials, supplies and printing.
My understanding of it is that in those items which the hon. member has indicated, other than item 201 which is' for $1,340,000, there is nothing included in them for aerial mapping but there is included in them something for air services. That would be the transportation of men and materials into and out of the fields where they go. But the amount of money spent on aerial mapping is, as I indicated, $1,340,000. It is divided between private companies and the R.C.A.F., so that there is not a duplication in those items in the charge for aerial mapping. They are all correlated because the ground on which the geological parties are working either has had aerial photography or will have it. It is the compilation of the information which is brought in by those geo-

logical, topographical, hydrographic or any other parties that are in the field, along with the mapping, that gives the basis to the department to make the maps during the winter months. Really that is what a great deal of this information is collected for.


Arthur Leroy Smith: They also, of course, have air assistance in connection with their field parties?


James Joseph McCann: Yes.


Arthur Leroy Smith: In many places I have no doubt that air transport takes them in and brings them out again.


James Joseph McCann: Yes.


Arthur Leroy Smith: Will the minister tell me about this geographical names business, and then I will have nothing further to ask. You will find that in item 191. I hope the minister will not mind my grouping these.


James Joseph McCann: Not at all.


Arthur Leroy Smith: I think they are full brothers.


James Joseph McCann: There was a time when I knew as little about it myself. On item 191-


Louis-René Beaudoin: Order. I am quite willing to go along with the minister, but for the purpose of order, and so that all hon. members may know exactly with what item we are dealing, I think we should proceed item by item.


Arthur Leroy Smith: You are quite right, Mr. Chairman. I was trying to cut a corner.


Louis-René Beaudoin: We are now on
item 188.


James Joseph McCann: May I answer the hon. member for Calgary West? This is taken from the annual report of the Department of Mines and Resources. As to the Canadian board on geographical names, order in council P.C. 3397 of August 3, 1948, changed the name of the geographic board of Canada to the Canadian board on geographical names, and brought up to date the authority, the functions and membership of the board. The names for 88 maps and 49 hydrographic charts were adopted and many new names and changes were considered. A revision of the board's regulations, principles, nomenclature and bylaws was published and considerable work was done in preparing a forthcoming gazetteer of Canada series. Then it goes on to give the names of the different people on the board, and their function is to select proper names for rivers, mountains 55946-274
Supply-Mines and Technical Surveys and these geographical places that have to be named, to see that appropriate names are given and that there is no duplication in them.


Arthur Leroy Smith: What does it cost?


James Joseph McCann: The board works without salary.


William Joseph Browne: I should like to ask the minister when the report for the fiscal year ended March 31, 1950, will be published. It seems to me that when the reports appear-and this applies to all departments-they are so ancient that they are not read so much as they otherwise would be. Is it not possible to have the report of the geological survey published sooner? Evidently the 1950 report will not be published until 1951 or 1952.


James Joseph McCann: The report for the work that is done this year will be compiled in the next winter months and published six months after that.


William Joseph Browne: We have not received the report of last year's work yet.


James Joseph McCann: That will be in shortly.


William Joseph Browne: When do you expect to have it published? I refer to the report of last summer's field work.


James Joseph McCann: According to the statutes, it will be reported at the next session of parliament within ten, fifteen or thirty days after the session opens, for the fiscal year preceding.	[DOT]


Percy Chapman Black: I notice that the expenditures contemplated by this item go far afield, over water, over ice and over Baffin island. I think we should know what have been the results of the explorations of Baffin island.


James Joseph McCann: During the summer of 1950, the Arctic Institute of North America will sponsor an expedition to Baffin island in order to study the glaciology, geology, and biology.
The former department of mines and resources was approached by Mr. P. D. Baird, director of the Montreal office of the institute, who requested participation by the department in the expedition to the extent of supplying a geologist and one assistant, and a contribution of $3,000 towards its financing. Inasmuch as the geological survey of Canada is much interested in studying Baffin island, which is part of the Pre-Cambrian shield, Mr. Baird has been advised that a geologist and

Supply-Mines and Technical Surveys one assistant will be provided, and that parliament will be requested to approve of a graht of $3,000 to help meet the expenses of the expedition.


[Stage Direction]
Item agreed to.
198. Geographical branch, $160,000.
Mr. Gibson:: This being the department of technical surveys, I wonder whether the minister has considered the possibility of making a factual survey of the proposed routes of the various pipe lines which are supposed to go from Alberta to the Pacific coast. It would be very valuable. Instead of our taking secondhand information from the various private companies as to whether one route or another route is feasible, and whether one would cost $20 million more than another, it would be very valuable to the board of transport commissioners or to the cabinet when it comes time for them to make a decision in this matter of the exportation of fluid and electricity to have the minister's department provide them with firsthand information. Does the minister not think it would be valuable, and has he considered making a survey of that kind?


James Joseph McCann: Mr. Chairman, that is a suggestion which could be considered at least; but I might say to the hon. gentleman that the matter of pipe lines comes under the Department of Transport.


Howard Charles Green: The Department of Trade and Commerce.


James Joseph McCann: The Department of Trade and Commerce; if we were requested by that department to make a survey and we could get the money somewhere with which to do it we would be prepared to do it.


John Lambert Gibson: I am sure we would vote the money for it if the department were asked to do it.


[Stage Direction]
Item agreed to.
195. Legal surveys, including grant of $350 to assist in printing the publication of the Canadian Institute of Surveying, $572,167.
Percy Chapman Black: This is an item which raises the curiosity of a good many. I suppose legal surveys are surveys of the legal profession. This is quite a large sum. I do not know how far it would go if some of the firms of lawyers that this government employed are on the payroll. It is an interesting title to give an appropriation under the minister.


James Joseph McCann: "Legal" as it is used here has nothing to do with the legal profession. The purpose of this vote is to maintain the
	.
legal surveys division which undertakes all legal surveys of crown lands in the Yukon and Northwest Territories, of national parks, ordnance lands, and Indian reserves, and legal surveys required by the departments of the dominion government; the preparation of electoral district maps; the plotting, preparing and maintenance of aeronautical charts of all kinds for civil and military purposes; the preparation of air flight manuals; the maintenance of a central distributing agency for charts, maps, plans and technical publications, and the maintenance of the central office for indexing, filing and recording survey returns and plans and supplying information from them.
This is a very important function. During the summer months we will have a great number of field parties out that will be doing this work. We will have certain parties on the Yukon-British Columbia boundary; one on the Alberta-British Columbia boundary; another on the Alberta-Northwest Territories boundary; Alberta survey of the western boundary of Wood Buffalo park, Indian survey in Alberta; surveys will be carried out in Assiniboine, Nut Lake and Meadow Lake at the request of the Indian affairs branch. There will be surveys in Manitoba, in Ontario, and in every province of the country. A press release was given out a few weeks ago with reference to some of these survey parties and the number of parties that will be engaged in this particular work is twenty-five. It is not entirely a spending department. There was a small revenue amounting to $44,183 in the past year.


[Stage Direction]
Item agreed to.
713. Gratuity to Mrs. Michael Feniak, widow of the late Dr. Feniak, a former employee of the geological survey of Canada, who lost his life while on duty in the Northwest Territories, $2,000.
Stanley Howard Knowles: Is this gratuity covered by item 713 the only payment that will be made to this widow? I am not complaining about the payment. It seems to me that unless there is some other provision, the amount should be larger.


James Joseph McCann: This has to do with the gratuity which is paid to the widow of Dr. Feniak, who was an employee on the geological survey of Canada. He lost his life while on duty in the Northwest Territories.
Under the workmen's compensation ordinance, Yukon Territory, Mrs. Feniak received a lump sum payment of $5,000 for herself and $1,500 for her two children, a total of $6,500. Had hqr claim been administered by the Ontario workmen's compensation board she would have been provided with a pension of

$50 per month until death or remarriage plus $10 per month for each of her two children until they reach the age of sixteen years. It is obvious that the Ontario pension offers greater security over the years and takes into account the age of the children. The income from her present lump sum benefit will be most inadequate for herself and the two children in the years directly ahead. Mrs. Feniak is but thirty years of age.
Mrs. Feniak's case was brought to the attention of the Northwest Territories council with a view to having the compensation paid to her supplemented by ordinance or otherwise. The council were in favour of assisting her in this way and sought the opinion of the deputy minister of justice as to whether they had the authority to do so. However, the deputy minister of justice gave an opinion that they did not have this authority.
Since Dr. Feniak's widow and children are to suffer financially, because of the geographical location of his work at the time of death, this department considers that a gratuity of $2,000 would be of some assistance to Mrs. Feniak in bringing up her two small children.
That is why this is sought as a vote from parliament.


Stanley Howard Knowles: May I ask whether this amount will put Mrs. Feniak in the same position she would have been in had her husband lost his life in Ontario?


James Joseph McCann: No, it will not.


Stanley Howard Knowles: It seems to me if there is an argument for making this payment, as I believe there is, the department should have gone all the way at least to equalize the position she would have been in had her husband died while in Ontario.


[Stage Direction]
Item agreed to.
714. To authorize and provide for a compassionate payment, by way of reimbursement to the province of Manitoba, of the department's share of the costs in connection with an accident to Angus Thomas, employed by the Ontario-Manitoba boundary commission, who was severely burned while engaged in survey work in northern Manitoba, $7,000.
Stanley Howard Knowles: Perhaps the minister would make an explanation of this item as well. Again my interest is in seeing that this Mr. Thomas, who was severely burned, gets a fair-


James Joseph McCann: An explanation of this is, to authorize and provide for a compassionate payment, by way of reimbursement to the province of Manitoba, of the department's share of the cost in connection with an accident to Angus Thomas, employed by the Ontario-Manitoba boundary commission, who 55946-274J
Supply-Mines and Technical Surveys was severely burned while engaged in survey work in northern Manitoba.
Angus Thomas, an Indian dog driver employed by the Ontario-Manitoba boundary commission, was severely burned in a tent fire on January 25, 1948, while engaged in survey work in northern Manitoba. His injuries have rendered him totally disabled. The commission filed a claim on his behalf with the workmen's compensation board of Manitoba. This claim was accepted and it was necessary for some time to pass before the full extent of the medical and pension costs could be determined.
The Ontario-Manitoba boundary commission is financed jointly by the federal, Ontario and Manitoba governments, each government being responsible for one-third of the cost. Because they are closer to the work being done, the department of mines and natural resources of the Manitoba government handles the accounts for the commission. Commission expenditures are made through the open ledger account of the Manitoba government who in turn are reimbursed by the other governments.
During the winter of 1950 this department was informed by the workmen's compensation board of Manitoba of the cost incident to the accident sustained by Thomas, as well as an estimate of the future cost. Payments made by the workmen's compensation board of Manitoba up to January 21, 1950, amount to $1,470.82 plus medical expenses, making a total of $4,520.70.
In addition the board have on hand an outstanding air transportation account of Central Northern Airways Limited in the amount of $172.20. I could give considerable detail, but perhaps it would be sufficient to say that the gist of the whole matter is that the sum of $7,000 comprises $6,836.85 for the reimbursement of the province of Manitoba in connection with Thomas' medical costs to date and his compensation pension to date and in future, and the remainder is to provide for the possible medical and transportation expenses which may be incurred during the year 1950-51.


Stanley Howard Knowles: In other words this is money that will be paid to Manitoba by way of reimbursement. We cannot tell from this information what Mr. Thomas' position is as a result of whatever has been done?


James Joseph McCann: We have taken the figures of the workmen's compensation board in Manitoba, as to what their projected cost is.


Percy Chapman Black: Would the minister make a statement as to the headway made in connection with the examination and

Supply-Mines and Technical Surveys development of bituminous sands. There has been a great miscarriage of appropriations in this matter up until recently.


James Joseph McCann: During my years in parliament going back for the past fifteen years the development of Abasand oils has been a live issue. Money was appropriated for it; but during the last two or three years, since the enormous development of the Alberta oil fields, not so much attention has been paid to the Abasand development.
The department has taken an interest since early in this century in investigating the occurrence and possible utilization of these sands as a source of petroleum products. A scarcity of petroleum during world war II stimulated investigation of these deposits and of the recovery of bitumen.
In 1942 drilling was undertaken to discover, if possible, a uniformly rich deposit of the sands which could support a large oil industry. By 1947 a four and a half square mile area had been located containing an estimated 900 million barrels of bitumen.
In 1943 the government, in an effort to solve other problems confronting the utilization of bituminous sands, undertook to finance the improvement of the plant of Abasand Oils Limited. Some results were obtained but the separation plant was destroyed by fire on June 16, 1945.
Because of the change in the war picture by that time, the federal government decided not to continue with the project, and an agreement was entered into between the federal government and Abasand Oils, conveying to the latter all rights and equipment, on consideration of which the company undertook to pay the government the sum of $2,063,289.11, part of it to be reimbursed from the sale of movables; another part from the proceeds of rentals on buildings and machinery; the major portion, amounting to $1,913,427.08, to be reimbursable at the rate of 5 cents per barrel of bitumen produced or contained in materials sold, if and when the company would enter into production.
The indebtedness of the company to the federal government now stands at $1,802,107.39.
The department's view is that the production of petroleum products from the bituminous sands would be uneconomic in competition with Alberta crudes at their present prices.
The mines branch have developed on a pilot plant scale a cold water method for the separation of bitumen from the bituminous sands.


[Stage Direction]
Item agreed to.
[Mr Black (Cumberland).]

[Stage Direction]
111. Departmental administration, $418,340.
Mr. Applewhaite:: Mr. Chairman, there is a matter connected with the Department of Fisheries which I believe I might well discuss under this item,. I feel sure however that the people in my section of the Pacific coast, irrespective of their political persuasions, would never forgive me if I were to undertake to speak on this, subject without first expressing their appreciation to the department and its minister.
I would not like to say that they have no complaints and no requests for betterment. No one in this parliament knows better than the Minister of Fisheries that in any business once anyone reaches a stage of complete satisfaction and complacency, once he stops trying to improve and to get ahead, just at that time he begins to slip back. So I shall warn the minister that we will never stop asking for more, and expecting to get it.
I wish to tell him however that that part of the fishing industry for which I am speaking, along the northern Pacific coast of British Columbia, is appreciative indeed of the work being done in their interests and for their good by the Department of Fisheries. They place the credit for that largely where it rightfully belongs, namely with the Minister of Fisheries.
The subject I wish to discuss this evening is that of the halibut season on the Pacific coast. Perhaps I shall suggest certain changes in the powers and set-up of the international fisheries commission. May I make it clear however that I am not attacking the members of that commission. On the contrary I am convinced that they are doing as good a job as is possible under present conditions, and that they are not only keen but also enthusiastic in their work, which is being done most conscientiously and efficiently.
They are restricted by a convention and a statute. I wish to discuss the convention and the statute. The views I am about to discuss this evening are those I obtained before this session opened from an open mass meeting of the fishermen in my area held under the auspices of the deep-sea fishermen's union, with the approval of the halibut vessel owners association, and from conversations with several sound and experienced halibut fishermen.
The statements of fact I am going to make were acquired in that way. I believe they are correct. If not the minister will correct me. If I make any misstatement of fact it will be through error and not by intent. The administration of the Pacific coast halibut fisheries, so far as the closed season is concerned, comes under a convention between

the United States and Canada signed on June 29, 1937, and confirmed by chapter 36 of the statutes of that year. That convention gives to the international fisheries commission the power to make certain recommendations. I wish to emphasize the fact that they have power to recommend, not to order. The commission does not make final orders, and it does no enforcing. The operative words there are these:
The international fisheries commission . . . subject to the approval of the President of the United States of America and of the Governor General of Canada-
Then it goes on to set out the powers to divide the waters into fishing areas, to limit the catch, to set a closed season, to fix the size and character of the appliances, and so forth. I wish to emphasize the words, "subject to the approval of the President of the United States of America and of the Governor General of Canada" which surely prove that when the orders are finally issued they are government orders. That point is made clear in the statute itself. I quote section 9, subsection 1, which reads:
The governor in council may make orders and regulations to give effect to any permission, limitation, regulation, prohibition, or other action of the international fisheries commission, pursuant to the provisions of the convention.
I wish to establish, first, that the powers of the commission are to make recommendations, and, second, that the orders as finally issued are orders of the respective governments. The next point I want to make is that the powers of the commission are based! upon principles of conservation only. The commission is set up in the interests of the conservation of the north Pacific halibut fishery. The commission is not set up to regulate the industry. Under the terms of reference they cannot be influenced in their judgment by matters of business practice. As I say, they are restricted to the title of the treaty, which is, "for the preservation of the halibut fishery of the northern Pacific ocean and Bering sea". Such recommendations as they see fit to make can be made only in that connection.
But the government and) we in this parliament are interested, not only in conservation but in. the efficient conduct of the industry. We are interested/ further in the working conditions of the men engaged in the industry. I can hardly say their comfort and convenience, because those words are a little soft when applied to an industry of that sort, but efficiency and satisfaction in their work are matters that can be considered in connection with any industry, including the fishing industry.
Supply-Fisheries
As I say, my second point is that the commission is confined in its recommendations to those concerning conservation, but the government of the country can take into consideration matters having to do with the most efficient conduct of the north Pacific halibut fishery.
What the halibut fishermen want is a split season, or two seasons. The present halibut season is too short. I think it is necessary that one should explain how it comes about that there is a restricted halibut season and how such season is based on principles of conservation. The commission has power to investigate and to recommend what quantity of fish it is safe from a conservation point of view to take from any given area.
Let us say that they take a given area and say that 10 million pounds of halibut can safely be taken from that area. When those 10 million pounds are taken the season comes to an end. The claim of the halibut fishermen is that the present season is too short for efficient operation. It is possible that there are other views; it is possible that other branches of the fishing industry on the Pacific coast may not be in favour of changing the present short halibut season. I have no idea what the views of the large companies are, but I suspect that the salmon fishermen like the present short halibut season very much because it enables them to fish for halibut for a few weeks andi then go into their own line of salmon fishing.
The halibut fisherman, with the type of craft he uses, cannot go into salmon fishing, and from his view a certain proportion of those engaged in salmon fishing chisel into his industry. I admit that there may be different views on this matter but I suggest to the government and the minister that the views of the producers of halibut should receive first consideration. It is their industry that is primarily involved, and their views should receive paramount consideration. In justification of my statement that the season is too short, may I point out that in area No. 2 in 1931 the halibut season was 245 days. It has steadily shrunk until in 1949 it was 34 days, and this year it was 31 days. In area No. 3 the season was 245 days in 1931, and in 1949 it had shrunk to 73 days.
Thirty-one or 34 days is a pretty short period in which to earn the most of your year's income. I do not think that is an unfair statement to make. The halibut fishermen are so equipped that they cannot fish for any other type of fish. If a ship has a slight mechanical break-down and loses a trip, or even three or four days, that constitutes a substantial part of its annual earning capacity. Halibut vessels cost a lot of

Supply-Fisheries
money, and they can be paid tor only by earnings. Thirty-one or 34 days is a short time in which to earn an amortized share of the cost of a halibut vessel.
Recently 'there has been an unfortunate slump in dogfish livers, which used to be a first-class sideline. That alternative to which the halibut men could turn is being restricted also. I may be wrong in my next statement, but it occurs to me that this progressive curtailing of the season may result eventually in forcing up the price to a point where it will be beyond the reach of the average consumer.
I said that there might be opposing views to my other suggestions, but I do not think there are any opposing views to my next suggestion, which is based on conservation. The halibut season for this year opened on May 1 and closed on June 1. There are halibut on the banks in July. It is the opinion of the fishermen on the coast that those halibut which are on the banks in July were not there in May and will not be there next May, and so are not being fished at all. In other words there is a run of fish not being considered, which does not come into the picture when the quotas are being fixed. In that connection I want to read the binding words dealing with the season, as they appear in the treaty. It is within the power of the commission to-
(c) prohibit departure of vessels from any port or place, or from any receiving vessel or station, to any area for halibut fishing, after any date when in the judgment of the international fisheries commission the vessels which have departed for that area prior to that date or which are known to be fishing in that area shall suffice to catch the limit which shall have been set for that area. . . .
So if a limit of ten million pounds is set for an area and that limit is caught every year by the first week in June, those July fish are not caught at all. I understand that scientific opinion is gradually coming to be the same as -that of the fishermen themselves, that these July or later runs are not being fished. In that connection I note with pleasure further down the page that item No. 118 is being increased by $15,000. I presume the United States government will have to match that, since the expenses of this commission are borne fifty-fifty. May I express the hope that the $30,000 so made available, or some portion of it, will be used, as I have reason to believe it will, in proving or disproving our theory that those July and later halibut are never fished. If that theory can be proved correct, there are two to four million pounds or more of halibut available to be caught every year which at present are not being touched, which presumably die a natural death and represent a total waste. Therefore
IMr. Applewhaite.l
I claim, and with reason, that if our arguments are correct the opening of a later season can have no possible adverse effects from the conservation angle.
To get at those July or later fish would involve a split season. The fishermen on the coast are of the opinion that the Canadian and United States governments do not interpret the present treaty in the same way. I have no personal knowledge of the interpretation either government places upon the law, but I must read this section once more in order to explain to the committee the problem with which the fishermen are faced. The powers of the commission in connection with fixing the season, skipping some words, are:
-to prohibit departure of vessels from any port or place . . . after any date when in the judgment of the international fisheries commission the vessels which have departed . . . shall suffice to catch the limit . . . set for that area.
Under a very strict interpretation of those words there might be power to prohibit vessels sailing into a ten million pound area after eight million pounds had been accounted for in order to permit them to return later in the year and pick up the other two million pounds. A very close reading of the provision, however, might lead one to the opinion that the fishermen may only continue fishing until the limit has been caught, and then they must stop for that year. The fishermen on the Pacific coast are of the opinion that this is not the interpretation placed upon the treaty by the Canadian government, that the Canadian government believe that under the present treaty there may be power to order a split season. They also believe that the United States government holds a different view. Rightly or wrongly my fishermen are firm in their belief that the view of the United States government is that under the present treaty there shall be one season only. I do not know what the interpretation is; but if we are right in believing that the Canadian government thinks the power is there now, then we respectfully suggest that the government could not have much objection to entering into a new treaty which would state in so many words that the right is there, putting the matter beyond all possible question.
So our request is that this government, at the earliest possible moment, enter into negotiations with the United States with a view to drafting a new treaty to cover this point. A draft has been drawn already, of which I have a copy. I understand the author is Dr. Chapman, special assistant to the under secretary of state of the United States. At any rate I know Dr. Chapman read and

explained this treaty at public hearings for fishermen on the Pacific coast. On the point I have been discussing the new treaty would read as follows:
-the international fisheries commission, with the approval of the president of the United States of America and of the governor general of Canada, may, after investigation has shown such action to be necessary, in respect of the nationals, inhabitants and fishing vessels and boats of the United States of America and of Canada, and in respect of halibut or sablefish or both, as the case may be:
(a)	divide the convention waters into areas;
(b)	establish one or more open or closed seasons, annually, as to each area.
We have been given to understand in some quarters that objection has been raised to extending these powers, to giving the international fisheries commission too much power. I repeat that under this draft, as under the existing treaty, the powers of the international fisheries commission in reference to enforcing their regulations are entirely subject in Canada to the governor general in council and in the United States to the similar organization under the president. Incidentally this draft treaty also makes another change; it increases the number of members of the international fisheries commission from four to six. This would enable one of the United States members to be a representative of Alaska; and I should mention that under my hand I have a copy of a resolution from the associated boards of trade of central British Columbia, passed last year, endorsing that principle.	.
I am not wedded to the terms of this draft treaty, but I am wedded to its objectives. I do not plead for the government to sponsor this particular draft, but I do plead with them to investigate the possibility of negotiating some document which will incorporate the main provisions of this draft. The draft to which I refer has been adopted by the united fishermen and allied workers union in a statement I have under my hand. It has been approved by the united fishermen's cooperative association, which approval I also have.
What about the industry as a whole; what is their view? A poll has been taken up and down the Pacific coast among both boat owners and fishermen. It is not unanimous, which proves that it is genuine. I should like to give the committee the result of that poll. In Juneau, Alaska, both boat owners and fishermen were against adopting the split season. In Petersburg, Alaska, the boat owners were against adopting the split season and the fishermen expressed no opinion. In Ketchikan, Alaska, owners and fishermen were both in favour of a split season. In
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Prince Rupert, British Columbia, owners and fishermen were both in favour of a split season. In Vancouver owners and fishermen were both in favour of a split season. In Seattle, Washington, owners and fishermen both favoured a split season. I do not think there can be much doubt, therefore, as to how the industry feels on this question.
In conclusion, therefore, I should like to urge this government to give prompt and favourable consideration to these proposals which have the overwhelming support of the people who are concerned, the halibut fishermen on the Pacific coast. I would ask them to bear in mind, if it is true that they feel the power is there and so a change is not necessary, that it cannot do any harm to make the power even more obvious. I should like to ask the government to bear in mind what we realize, that the whole treaty system is set up on a basis of conservation. My fishermen want a split season, but they do not want to affect in any way the excellent conservation work that is being done. On the contrary they feel the adoption of their proposals would assist in conserving the stocks which at the present time are being fished, and at the same time make available a stock that has never been fished.
I would ask the government to consider that it is the long line fisherman himself who wants it. It is for him I am speaking in making this proposal. I would ask the government to consider, although it has nothing to do with conservation, the benefits that would be derived by enabling men engaged in the halibut fishing industry to know that if they come into port on Saturday and stay over until Monday they have not lost one-tenth of the year. That may sound exaggerated to some members, but it is equivalent to a little over a month of our time. I have seen a ship held up for thirty-six hours and thus miss a trip, and that represented about one-sixth of her earning capacity for the year. The only other objection that I think might be raised at this time is that the argument that the July run is not being fished may not be sound. It may be that those July fish on the banks were the same ones that were not caught in May. Well, Mr. Chairman, I would suggest that if that is true the commission will not recommend a split season. It would not hurt anyone, since international negotiations take a long time, to make the necessary treaty provisions so that, if the scientists and conservationists believe it is justified, we will be ready for the next season. Then we shall not have the men who are trying to make a living starting their year's work on the first

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of May, finishing it on the first of June, and wondering how they are going to get by the rest of the time.


Howard Charles Green: Mr. Chairman, I had intended to say a few words about this subject when vote No. 118, to provide for the Canadian share of expenses of the international fisheries commission, was under consideration. Now that the subject has been raised by the member for Skeena, and dealt with by him so thoroughly, I would merely like to add that I have had similar representations from the fishermen and the vessel owners' association as well as the co-operative in Vancouver. A large number of halibut fishing boats go from Vancouver, and the opinions of the fishermen there as expressed to me, are along the same lines as the views given tonight by the member for Skeena.
They suggest too that the position now is that halibut can only be caught for one month, and that as a result most of the halibut being sold throughout the year is in the frozen form rather than as fresh fish. The fishermen believe that is another bad feature. I do not believe the member for Skeena dealt with that aspect of the matter.
Apparently the United States government is prepared to negotiate a new treaty, and the delay seems to be on the part of the Canadian government. That is what I have been told. It may not be correct, but the understanding of the men who interviewed me was that the Canadian government had been delaying action. They felt that government policy should now be directed towards the negotiation of a treaty with the United States which will bring about the results requested by the member for Skeena. When the minister replies, I hope he will be able to give us some assurance that the government realizes the importance of this problem and is prepared to take action.


Mr. Sluarl (Charlotte):: Mr. Chairman, I just want to speak briefly about a problem that is confronting the fishermen on the Atlantic coast. This problem is connected with the sardine industry. The fishermen on the east coast today are facing a season that is not so bright, owing to the fact that the prices paid for raw materials by the Maine canners have been cut in two since the first day of June. The demand for sardines is very limited. Other branches of the fishing industry on the east coast are faced with the same problem. At the present time, one of our very important industries in the Quoddy area is the pollock fishery. These fishermen are in a position to make very large catches 'of fish, but the price has dropped from ten to twelve cents each during the past few weeks.
[Mr. Applewhaite.l
In my opinion the most serious problem is presented by the sardine industry. At the present time the cost of maintaining and operating sardine weirs is at the highest peak in the history of this country. Fishermen who had a few thousand dollars this spring decided, owing to the fact that during the past eight or nine months the catch of sardines had been limited, and it was assumed the market was clear, to take their savings to buy the materials to go back into the business this year. Up until the first of June the catch had been very small. Then sardines struck in large quantities in Maine and Charlotte county and also in Saint John county. The fishermen were able to shut off thousands of hogsheads of sardines in coves. In a very short time it was found that there was no market, and the price dropped from $20 a hogshead to $10 in a few days. Along the main coast, where there were thousands of hogsheads shut off the fishermen held them until the situation was hopeless, then lifted the twine and let them swim away. Today the demand is limited and the price is 50 per cent lower than it was one month ago.
Listening to the debates in this House of Commons, I often wonder just what would happen if the price of wheat dropped 50 per cent or the price of beef suddenly dropped 50 per cent, or any other of the primary products. We would see the members from all the agricultural districts in Canada telling their story in the House of Commons. This problem is one which seems to have created very little interest, and very little worry except to the people who are directly affected. I do hope that conditions may improve, but I can assure you that at the present time the outlook is gloomy.
One week ago tonight I attended a meeting in my home town. It was an international gathering and there were 50 or 60 representatives from the state of Maine. A large proportion of that number were engaged in the sardine canning industry. Mr. Pike, who is president of the Maine sardine canners association, spoke at that meeting and gave us a clear picture of the situation in which the fishermen and canners find themselves today. Markets are extremely dull. They were hesitant as to buying sardines at the price they had been paying for two or three years, holding off when it looked as if the price of canned sardines would drop. For that reason about 50 per cent of the canneries in the state of Maine are operating. The other 50 per cent have their doors still closed and it is doubtful as to when they will start again.
During the war a ceiling price was put on sardines. The fishermen were given to

understand that after the war every effort would be made to maintain a fair price in order to make up for some of the loss they sustained during the war when they might have taken, on many occasions, double what they were getting. But it has not worked out just that way, and they find themselves in the same position they have found themselves in after every war. The market is limited; the price has been cut in two; and the outlook is none too good. I hope that the Canadian canneries will continue to pay $15 per hogshead as they are at the present time. They are taking perhaps 50 per cent of the sardines that are being caught. In Saint John county and in Charlotte county there are hundreds of hogsheads for which markets cannot be found.
I intend to speak only briefly because I realize that we are trying to get through. But before taking my seat I want to compliment the Minister of Fisheries and the officials of his department for the concerted effort they have made during the past few years to create a more friendly feeling and greater evidence of co-operation between the fisheries department and those engaged in the fishing industry. It is quite noticeable where I live that every effort has been made by the fisheries department to create this friendly feeling; and I know that between the industry and the department there is better co-operation today than there has been at any previous time.
I believe that if those engaged in the fishing industry and also those in the canning industry can be educated to provide a better article, it will do the industry a great deal of good. In the past our weakness to a great extent has been that we were not providing as good an article as we could provide. I believe that the Department of Fisheries, through their efforts, and with the knowledge they have, can be of great assistance to the industry. I want to say that the assistance they are giving and the evidence of co-operation between the department and the industry are greatly appreciated. If it continues, I believe that we may look forward to something better in the fishing industry in the future.


Gordon Francis Higgins: I wish to join with the hon. member for Skeena on the other side of this great country and on the other side of this chamber in extending to the minister, as I have before, and all those associated with him, our thanks for his work and for the statement of the work that he is doing. I expect he is going to hear continually from this side of the chamber requests such as he heard from the district represented by the hon. member for Skeena.
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As hon. members of the committee are aware, I have been asking questions on various occasions about this matter of the fisheries, particularly as it pertains to Newfoundland. I do that not for the sake of talking but because I realize, as do hon. members and as does the minister, how vital this industry is to Newfoundland itself. When I talk of the fishery, I refer particularly- and I intend to do so tonight-to the salt codfish industry. In order that hon. members may be able to evaluate the position in the proper perspective I should like to say that the total production of all the provinces engaged in the salt codfishing industry is scarcely 40 per cent of the average normal Newfoundland production. The hon. member for Charlotte will probably know that as well. Moreover, the markets to which salt codfish is sold by the other provinces are all on this side of the Atlantic. Because of the size of the catch of the other provinces and its relation to the total industry of each of the mainland provinces the salt fish trade is of comparatively little importance to these provinces.
The question of marketing of any surplus occasions little worry and the only problem really is the sale of the current year's catch. The problem in the newest province is quite different indeed, because almost half the catch each year must be sold in European markets. If prices are low or if there is difficulty in making sale, the effect on the economy of the province might well be ruinous. It must be remembered that salt fish supports practically half the total economy of the province of Newfoundland. Up to the present time there is no alternative means of providing earning power and I suggest that it is much better to produce salt fish, even though government assistance may be required, than to stop fishing. Hon members will appreciate the fact that of the population of some 325,000 people in Newfoundland, some 30,000 are engaged in the fishing industry, scattered over the province in some 1,300 fishing communities. It will therefore be realized what an important factor the salt codfish industry is to the province.
I have read the statement of the minister today, and frankly I must confess to him that although I thank him for it, I do not feel entirely satisfied with it. I realize fully, of course, the position the department was up against. But in so far as I am concerned, whilst the statement is appreciated it does not go far enough and it does not answer the worries that the people engaged in the fisheries in the province of Newfoundland wish answered. Actually all that has happened is this. The government is to buy at two-thirds of the 1948 price the amount of fish in the hands of the fishermen. As the

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minister stated, that amount is comparatively small. The minister may feel like telling the amount but I am not going to press him to do so. Neither am I going to ask him what amount of fish is still in the hands of merchants and exporters in Newfoundland. I do not think that amount of fish should be disclosed. It may interfere with future marketing, and I certainly have no intention of putting that question to him.
With all due respect to the fisheries prices support board and their recommendation, I suggest that their recommendation is not a sound one. As the minister well knows, the fishing industry in Newfoundland is carried on under a system that is unique, having regard to the rest of the dominion. It is largely a credit business. Fishermen do not go fishing until they have been given supplies by the merchants in the various settlements before the fishing begins. As I am quite certain the hon. member for Grand Falls-White Bay will agree, having surplus fish in the hands' of merchants, particularly where the capital of the merchants is not great, is going to preclude the giving of supplies to fishermen. With all due respect to the advice the minister has received, I feel it is not quite the answer to the problem. I feel that there is a real emergency in the province at the present time, and I feel that there should be given a definite undertaking to buy at least the amount of fish that was left over, that could not be sold and that will not be sold in the ordinary manner and through the ordinary channels at the end of the year. If that is not given then I fear very much for the supplying that is going to take place this year. I realize of course that they are going to fish because Newfoundland people are usually independent, but if the needed money is not in the merchant's hands to grant supplies then I do not know how it is expected that the ordinary fisherman is going to be able to go fishing. I say that with all due respect to the particular committee that made the recommendations to the minister.
I have eight particular things that I want to discuss with the minister. The second one is the question I put to him this morning, namely, arranging the convertibility of sterling for the sale of salt codfish up to 400,000 quintals. To bear out what I said this morning I want to read two or three excerpts from newspaper accounts at the time the explanation was made. The first one is dated April 24, and is from the Halifax Chronicle-Herald. It reads;	.
The government of Canada will aid Newfoundland in selling her salt codfish to Europe over the

sterling-dollar exchange barriers during 1950, fisheries minister R. W. Mayiiew announced here today through Newfoundland fisheries board chairman Raymond Gushue.
It is understood1 that the federal government will provide the necessary exchange to enable Newfoundland to sell 400,000 quintals of codfish to Italy, Spain and Portugal.
On the same day, April 24, in the Evening Telegram of Newfoundland in big black headlines we find the following:
Federal government will help Newfoundland sell salt cod to Europe
The government of Canada will aid Newfoundland in selling her codfish to Europe over the sterling-dollar exchange barriers during 1950, fisheries minister R. W. Mayhew announced here Sunday through Newfoundland fisheries board chairman Raymond Gushue.
The report is practically the same as that which appeared in the Halifax Chronicle-Herald. The statement is made in the issue of the Evening Telegram of April 26, and again on May 2 in an editorial in the Daily News of St. John's, beginning:
That Ottawa's undertaking to facilitate the marketing of 400,000 quintals of salt fish in Europe has not been sufficient to facilitate spring supply has been illustrated by the demands of many fishermen for guaranteed minimum prices.
The last one is the particular reference that I made this morning to the announcement by the acting chairman of the Newfoundland salt codfish association, and this is what he said:
As indicated in the recent statement brought back from Ottawa by Mr. R. Gushue, the federal government is sympathetic and is anxious to help find a solution to the problems, and that statement has been interpreted by Mr. Gushue to mean that the federal government will undertake to provide conversion to dollars for the sale in sterling areas of not over 400,000 quintals of the 1950 production of Newfoundland salt codfish.
Definitely, whatever the minister's views are in the matter now, that was the way the statement was interpreted and I hope that he may be able to clear up whatever confusion there may be in the matter.
The next matter to which I wish to refer is the question of trawlers. The minister has already made a statement on that matter. He has sent his largest boat, the Cygnus, to the banks. I do not know whether the minister is fully aware of the situation, and I am certainly not going to read all the newspaper clippings that I have because they are too numerous. But we start off with the statement of the Evening Telegram of June 12 headed, "Piracy on the Grand Banks". It gives a description of what has happened. Then we have another account describing the number of people that are fishing on the banks and who they are. This is from the Telegram of June 10:
Well, the result of many inquiries made by the Telegram during the past couple of days indicates

that close to two hundred, if not actually more, ships from Spain, France and Portugal have been on the banks at one time or another this year.
They range in size from tiny 58-ton Spanish trawlers which fish in pairs to the mammoth 1,000 tonners of which each of the European countries sends out many to the new world waters.
At present there are seventeen ships from Portugal.
There are forty-eight from France and I do not know how many from Spain, but they are quite numerous. There has been some very strong comment over the fact that crews have been losing lines. They have been losing their trawl lines. One fellow reported losing seventy. Another crew reported losing forty, and in one particular item it was reported that there was actually great danger to the fishermen in the dories. I know the minister is very serious about this matter. I hope that because of the provisions of the international northwest Atlantic fisheries convention which has been adopted by this parliament this year the situation will be taken care of in the future. If the minister is going to reply I would like him to tell me what will be done by this fisheries convention and what is proposed by Canada should be done.
Also in connection with these trawlers fishing the banks there comes the very vital matter of the depletion of the resources of the Grand Banks. In that connection I would refer the minister-I am sure he remembers it-to a statement made by him on March 21 on the first day's session of the meeting of the fisheries council of Canada. This is what he said at that time:
Our industry both for itself and for future fishermen must recognize the importance of such conservation work. On the Atlantic the European fishing fleets will by next year be 140 per cent above their pre-war capacity and they will be fishing more intensely the waters around our shores.


George James McIlraith: Carried.


Gordon Francis Higgins: I will not be long; you can carry me after that. At page 5 of the annual report of the fisheries research board of Canada for 1949 appears this statement:
Fisheries that are being studied for the purpose of detecting changes in abundance due to overfishing include the cod, haddock and other ground-fish off our east coast. Fishermen of many countries including the United States and several European countries (France, Spain, and Portugal), fish the Grand Banks, and waters even nearer our shores. Some believe that overfishing is taking place and that there should be international action for the control of fishing. Canada's stake in these fisheries is so great that we must have reliable information of our own as a basis for action to protect our interests in negotiations looking to the study and control of these fisheries. Such studies have been under way for a number of years but they must be expanded as rapidly as possible. Our responsibility for Newfoundland's fisheries has increased our responsibility in this regard.
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I have just a couple more excerpts to conclude this matter of depletion. The Daily News of May 26 reads as follows:
Vast as are the fishing resources of the Grand Banks, they are not inexhaustible and it is consequently disturbing to hear of the damage that some trawlers have been doing to the grounds. The owner of a banking vessel has told recently how his schooner had to sail through a large area of water which was covered with young fish that had escaped from trawlers' nets or had been thrown overboard as too small for commercial use. That can hardly be good for the preservation of the banks as a first-class fishing reserve.
From the Telegram of March 24 I quote the following:
As soon as the war was over European trawlers began crossing the ocean in hundreds to fish the waters of the Atlantic. At the same time American trawlers moved north as the old Georges bank and other Yankee fishing grounds became depleted. All of them moved in on the fishing grounds which Newfoundland and Canadian fishermen had come to regard as their own.
At the same time these foreign fishermen were not too particular as to how they treated the grounds nor the Canadian fishermen. They'd sweep through nursery grounds, killing all the small fish on them, and they'd sweep straight through the gear of the Canadian fishermen, wrecking it completely.
It is on the subject of conservation that I hope the minister will make some comments because last year at the time of his estimates I believe he said there was no evidence at all to justify any contention that the fishing grounds were being over-fished. I hope he can give some guarantee this year. It would be interesting to hear it.
I should like him also to comment on the question of Labrador fisheries, in so far as Newfoundland is concerned. I believe there has been a suggestion that to continue that fishery would be impractical and uneconomical. There are so many persons in the province engaged in that fishery that unless there is a very clear statement as to why it would be uneconomical I fear it will continue to be prosecuted. I certainly would like to have the minister's views in the matter.
The next matter has already been raised by my colleague. It has to do with unemployment insurance for fishermen. I realize the difficulties there may be in this respect. However the situation which has developed in the new province is commented upon in the Daily News of April 18, from the Grand Banks on the south coast. Here is what they say:
It is reported that some of the bank fishermen have decided not to go fishing this year but are seeking other employment in which they can qualify for unemployment insurance. In interviews with some of the men who are going fishing it was learned that bank fishermen feel strongly about not being included in unemployment insurance. They argue that they are the primary producers of codfish and are not included in the insurance scheme, whilst the women and men ashore

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who cure and handle the fish in preparing it for market are eligible and have been receiving benefits this past winter.
I would urge the minister to think over the possibility of making fishermen eligible to come under the Unemployment Insurance Act.
The final matter I should like to bring to the minister's attention arises out of the marketing of salt codfish. I do not mean the actual selling of it, but the straight marketing. In a brief presented by the Newfoundland Associated Fish Exporters Limited this selling agency expressed an opinion to the royal commission on transportation, I believe, and a particular reference was made to what was happening in connection with the transportation of fish to market.
I shall not delay too long in drawing to the minister's attention the chief points to which these Newfoundland salt codfish are sent. The first of these groups is (a) by direct vessel to Jamaica, Puerto Rico, Cuba, Dominica, Grenada, St. Lucia, St. Vincent and some three or four more. Then there is group (b), which includes transshipments via Halifax and/or New York.
In connection with group (a) the situation is that these are by locally-owned vessels, and they are required to pay 50 cents per cask over and above the regular freight rate. In class (b) the shippers are obliged to pay a freight rate which is based upon the regular rate from Halifax, plus the cost of movement from ports in Newfoundland to Halifax.
The general plea is that they ask that arrangements should be made whereby Newfoundland salt fish moving to markets under (b) should receive a freight concession on an equal basis to that granted movements of salt fish from points on the mainland to export points.
An additional charge of 50 cents a cask which many shippers are at present obliged to pay for the privilege of having direct vessels load at their port should be, at least in part, absorbed by the Canadian National Railways in accordance with the policy of providing special depressed rates to cover similar situations in other provinces, and because there are no facilities for the movement of fish by rail.
A very serious situation would arise in Newfoundland in the event of the direct vessels at present serving markets under (a) being withdrawn, or the rates increased.
I draw this to the minister's attention, because I believe he should be aware of it. That sums up what I had intended to say. All hon. members appreciate the work of the minister and of his assistants, and their great interest in the fishing industry. I am
[Mr. Higgins.l
sure when I bring these points to his attention he will understand that it is only because of the keen interest he has shown in the fisheries.


Robert Wellington Mayhew: Mr. Chairman, I should like to answer some of these questions before they pile up ahead of me. Perhaps I might first reply to the hon. member for Skeena and the hon. member for Vancouver-Quadra. The hon. member for Skeena was right in the premise he took that the halibut commission had the authority only to recommend and not to regulate. We are quite prepared to enter into a treaty, so long as that treaty has in it that provision. But if it means that they want the power to regulate, then we do not think that as a federal government we can agree to it without becoming involved in provincial as well as marine law.
For instance, we would not want anyone to regulate the time our boats would leave or return to port. If the term "regulation" were changed to "recommendation" we might agree to such changes in the treaty as proposed.
One point was made which I think was a mistake. The impression was left that the department was confining the catch of halibut to thirty days. That is not so. We regulate by the amount of fish caught. In area 2 the quota set for this year is 25,500,000 pounds. That amount was caught this year in thirty days. In area 3 the quota is 28,000,000 pounds, and they will catch that amount in about sixty days. I might point out that in 1931 there were 328 vessels on the banks, whereas now there are 744. That is the reason they get this quantity of fish in such a short time. We have no regulation that they must be caught in one month. This is controlled rather by the number of boats on the banks. They catch the quota which has been set by the halibut commission.
We are now investigating whether there should be more fish caught, and whether the banks will allow us to continue to fish at that rate or at a greater rate. If the halibut commission believe that the fish are there, they can make a recommendation to us, and it will no doubt be carried out.


Howard Charles Green: What about the split season?


Robert Wellington Mayhew: There is no reason why we
should say that we would not be prepared to recommend a split season. But what good would it do? You would work for fifteen days and catch your allotment and then lay up your boat for a month or so. You would then go out and fish for another fifteen days and catch another allotment. Unless we are prepared to increase the allotment I do not

see any sense at all in having a split season. The fishermen would not catch any more fish and their boats would be laid up for one or two months. As has been suggested by the hon. member for Skeena and the hon. member for Vancouver-Quadra, investigations should be made and they are being made.
The hon. member for Charlotte referred to a problem in connection with sardines. We will ask the fisheries prices support board to take a look at the situation. But I would remind the hon. member that sardines and herring are unpredictable fish. Some years you are able to catch a lot of them and in other years you get very few. Some seasons the catch is so large that it is almost impossible to take care of it. We have been able to take care of a similar situation on the west coast by the use of reduction plants and possibly the same method could be used in other areas. At any rate we will have the fisheries prices support board look into this situation.
The hon. member for St. John's East referred to the statement I made today and intimated that I had not gone far enough. We followed the recommendations of the prices support board which I think were fair and reasonable. We are taking the fish from the fishermen for more than one reason. The fish were not cured until this spring and we are not sure whether or not they should go on the market. This will give us a chance to find out and to eliminate any that should not go on the market. One of the principles we try to maintain is to see that the quality of our fish is high because that is what the people want. Any fish of inferior quality that get on the market are a detriment to the rest. The amount involved is only 12,000 or 15,000 quintals, but we do not want even that small amount to get mixed up with the good stock now held by the merchants and processors. That stock is disappearing fairly rapidly and I do not think there will be any difficulty in disposing of it.
The hon. member then referred to the alleged statement made by Mr. Gushue. Mr. Gushue was authorized to say that the government of Canada would do everything in its power to see that the exchange difficulties with certain European countries would interfere as little as possible with the disposal of the 1950 catch. Hon. members will appreciate that arrangements of this kind are not solely in the hands of the Canadian government. The matter is under active discussion with the government of the United Kingdom and as soon as a definite announcement can be made the industry in Newfoundland will be informed. The negotiations are going on and for that reason we are not in position to say anything more about them.
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Gordon Francis Higgins: I did not mean to say that Mr. Gushue made the statement. It was attributed to him.


Robert Wellington Mayhew: That is what I said. The hon. member referred also to piracy on the Grand Banks. Those waters are international and our own fishermen are down there just the same as the fishermen from Spain, Portugal and seven or eight other countries. We have no jurisdiction over those waters nor has the northwest Atlantic convention. They are concerned only with conservation. The rules of the road will be discussed this fall but that is quite a different matter from conservation.
Labrador fisheries were also mentioned. I may be wrong, but my understanding is that the Labrador fish is not equal in quality to the fish caught off the shores of Newfoundland. It is considered to be a second-grade fish and we feel that as far as possible the fish marketed should be of the highest quality and be caught where they can be caught most cheaply.
The matter of unemployment insurance for fishermen is being considered by the Department of Labour and is something with which we are not concerned. Freight rates are a responsibility of the Department of Transport, but we will see what can be done about them.


Gordon Francis Higgins: I thank the minister for the information he has given. Can he say anything about the depletion of the Grand Banks?


Robert Wellington Mayhew: Our biologists tell us that there is no evidence of depletion on the Grand Banks, and I think that they are right.
Item stands.
Progress reported.



BUSINESS OF THE HOUSE

Walter Edward Harris: Tomorrow we shall proceed with fisheries, external affairs, justice, the Prime Minister's office and legislation. I understand that there are some uncompleted items in finance, veterans affairs, post office and health and welfare. We shall take the first three or four in the order mentioned, but the remainder will be taken as occasion permits.


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

[Stage Direction]
412.	Departmental administration, $173,295.
413.	Companies branch, $69,900.
[Stage Direction]
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414.	Trade marks branch, $124,395.
415.	Bureau for translations, $698,100.
416.	Canada Temperance Act, $1,500.
Patent and copyright office-
417.	Administration division, $47,580.
418.	Patent division, $530,180.
419.	Copyright and industrial designs division, $16,820.
420 Patent record division, $71,005.
421.	Contribution to the international office for the protection of industrial property, international copright union office and union for the protection of literary and artistic works, $4,000.
General-	[DOT]
422.	Expenses in connection with the bibliographic centre (National Library), $41,240.
777.	Companies branch-further amount required, $3,145.
778.	Bureau for translations-further amount required, $34,715.
Patent and copyright office-
779.	Patent division-further amount required, $115,950.
780.	Contribution to the international office for the protection of industrial property, international copyright union office and union for the protection of literary and artistic works-further amount required, $500.
Office of the chief electoral officer-
47. Salaries and expenses of office, $45,515.
Civil service commission-
63. Salaries and contingencies of the commission, including the chairman of the civil service commission and two civil service commissioners at $2,000 each, additional to chapter 53, statutes of 1947, $1,561,250.
Public archives-
281.	General administration and technical services, $208,242.
Public printing and stationery-
282.	Departmental administration, $60,000.
283.	Printing, binding and distributing the annual statutes, $30,000.
284.	Canada Gazette, $130,000.
285.	Plant equipment and replacements, $30,000.
286.	Distribution of official documents, $108,730.
287.	Printing and binding official publications for sale and distribution to departments and the public, $230,000.
726. Plant equipment and replacements-further amount required, $139,375.

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Board of transport commissioners for Canada-
524.	Board of transport commissioners for Canada-administration, maintenance and operation, $624,800.
Canadian maritime commission-
525.	Administration, $190,170.
526.	Mail subsidies and steamship subventions, as detailed in the estimates, $3,317,000.
527.	To provide assistance for Canadian flag ocean shipping industry, $3,000,000.
Governmept-owned enterprises-
Non-active accounts-National harbours board-
557.	Advances to national harbours board, subject to the provisions of section 29 of the National

Harbours Board Act, to meet expenditures applicable to the calendar year 1950 on any or all of the following accounts: Reconstruction and capital expenditures-Halifax, $1,655,000; Saint John, $282,000; Quebec, $520,000; Port Colborne, $176,000; Churchill, $321,000; generally unforeseen and miscellaneous, $200,000; total, $3,154,000; less amount to be expended from replacement fund, $130,000, $3,024,000.
Deficits-Transport-
558.	Amount required to provide for the payment during the fiscal year 1950-51 to the Canadian National Railway company (hereinafter called the national company) upon applications approved by the Minister of Transport made from time by the national company to the Minister of Finance and to be applied by the national company in payment of the deficit (certified by the auditors of the national company) in the operation of the Prince Edward Island car ferry and terminals arising in the calendar year 1950, $1,159,000.
559.	Amount to provide for the payment from time to time to the Canadian National (West Indies) Steamships, Limited (hereinafter called "The Company") of the amount of the deficit occurring during the year ending December 31, 1950, in the operations of the company and the vessels under the control of the company, as certified by the auditors of the company, and upon application made by the company to the Minister of Finance and approved by the Minister of Transport, not exceeding $720,000.
National harbours board-
560.	To provide for payment to the national harbours board of the amount hereinafter set forth, to be applied in payment of the deficit (exclusive of interest on dominion government advances and depreciation on capital structures) arising in the calendar year 1950, in the operation of the Churchill harbour, $203,100.
Loans and investments-National harbours board-
561.	Advances to national harbours board, subject to the provisions of section 29 of the National Harbours Board Act, to meet expenditures applicable to the calendar year 1950 on any or all of the following accounts: reconstruction and capital expenditures-Montreal, $1,718,700; Vancouver, $106,500; total $1,825,200; less amount to be expended from replacement funds, $328,247; total $1,496,953.
A-Department-
Canals service-
786.	Canals-construction and improvements-further amount required, $1,783,947.
Marine service-
787.	Nautical service administration-further amount required, $275,000.
788.	Marine service steamers, including icebreakers-maintenance, operation and repairs-further amount required, $600,000.
789.	Construction, maintenance and supervision of aids to navigation, including salaries and allowances to lightkeepers-further amount required, $351,100.
790.	Administration of pilotage, including authority for temporary recoverable advances, and contributions to various pilotage funds to the extent of expenses incurred by the pilots in the operation and maintenance, as required, of necessary pilotage vessels-further amount required, $126,770.
791.	To authorize the write-off from active assets to consolidated deficit account of the balances of advances or loans made to the Halifax and Sydney pilotage districts, $8,359.

792.	Steamship inspection and the carrying out of the provisions of the conventions for the safety of life at sea and load lines-further amount required, $12,500.
793.	To provide for the construction of a general service workboat for use at St. John's, Nfld.- capital, $38,000.
794.	To provide towards the construction of a lighthouse supply and buoy vessel for the east coast (estimated cost $1,725,000)-capital, $103,000.
795.	To	provide	towards	the	construction	of	a
lightship for the port of Saint John, N.B. (estimated cost $732,000)-capital, $126,000.
796.	To provide for the construction of a general service workboat to be operated out of Parry Sound, Ont., agency-capital, $12,000.
797.	To	provide	towards	the	construction	of	a
lighthouse supply and buoy tender vessel for service at Victoria, B.C. (estimated cost $1,100,000)-capital, $100,000.
798.	To	provide	towards	the	construction	of	alighthouse supply	and buoy vessel for the	west
coast (estimated cost $1,034,000)-capital, $367,000.
799.	To provide towards the reconditioning and refitting of vessels for Pacific ocean weather station "P" and the expenses of transporting vessels to station operating base-capital, $960,000.
Railway service-	[DOT]
800.	To provide towards the construction of an auto-ferry vessel for service between North Sydney, N.S., and Port aux Basques, Nfld.-capital, $300,000.
801.	To reimburse the Canadian National Railway Company for expenditures to be incurred for a special railway maintenance work program in the province of Newfoundland, $750,000.
802.	Canadian government railways-repairs to Ogden Point piers, Victoria, B.C., $43,000.
General-
803.	To provide for the expenses of the royal commission on national transportation-further amount required, $94,545.
Air service-
Civil aviation division-
Airways and airports-
804.	Construction and improvements, including radio facilities-capital-further amount required, $1,101,000.
805.	Operation and maintenance-civil aviation services-further amount required, $333,683.
806.	Contributions, subject to the approval of the governor in council, to assist municipalities to improve existing airports or to provide new airports, the sites of which have been provided by such municipalities-further amount required, $127,000.
807.	Contribution to the south Pacific air transport council as Canada's share towards the maintenance and operation of air transport facilities in the south Pacific-further amount required, $112,500.
808.	Contribution to the international civil aviation organization as Canada's portion of the financial assistance to the government of Iceland in respect of the provision, operation and maintenance of certain air navigation services-further amount required, $8,000.
Meteorological division-
809.	Meteorological services-further amount required, $328,575.
Radio division-
810.	Administration of the Radio Act and regulations-further amount required, $50,520.
Supply
811.	Telegraph and telephone service-construction
and improvements-further	amount required,
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B-Canadian maritime commission-
812.	Mail subsidies and steamship subventions, as detailed in the estimates-further amount required, $122,000.
Loans and investments-
National harbours board-
819. Advances to national harbours board, subject to the provisions of section 29 of the National Harbours Board Act, to meet expenditures applicable to the calendar year 1950 on the following account: reconstruction and capital expenditures- Montreal-further amount required, $300,000.

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Customs and excise divisions-
259.	General administration, $1,687,155.
260.	Inspection, investigation and audit services, $2,374,122.
261.	Ports, outports and preventive stations, including pay for overtime, notwithstanding anything in the Civil Service Act, and buildings and rentals for temporary purposes, $16,624,952.
262.	To provide for payment of expenses, law costs, refunds and awards arising out of seizures and charges of contravention of customs or excise laws, $200,000.
718.	Ports, outports and preventive stations, including pay for overtime, notwithstanding anything in the Civil Service Act, and buildings and rentals for temporary purposes-further amount required, $255,557.
Taxation division-
263.	General administration, $1,778,855.
264.	Internal inspection and verification, $1,199,355.
265.	District offices, $26,310,140.
Income tax appeal board-
266.	Administration expenses, $73,000.
B-Canadian Broadcasting Corporation-International shortwave broadcasting station-
267.	Maintenance and operation, $1,598,400.
268.	Acquisition and alterations-equipment, land and structures, including supervision, $105,000.
719.	To provide for advances to the Canadian Broadcasting Corporation, subject to such terms and conditions as the governor in council may prescribe, for working capital and to partially finance the deficit of the corporation pending determination of the provision to be made for its future financial requirements, $650,000.
International shortwave broadcasting station-
720.	Acquisition and alterations: equipment, land and structures, including supervision (revote $638,-961)-further amount required, $938,961.

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183.	Departmental administration, $321,042.
Mines branch-
184.	Mines branch administration, $64,650.
185.	Mineral resources investigations, $1,722,053.
186.	Explosives Act administration, $71,725.
187.	Investigations of radioactive ores, $280,991.
Geological survej' of Canada-
188.	Geological survey administration and miscellaneous services, $156,300.
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Supply
189.	Geological surveys, including an amount of $2,500 for Canada's share of the cost of the committee on mineral resources and geology, London, England, and a contribution of $3,000 towards the Arctic Institute expedition to Baffin Island, 1950, $1,524,774.
Surveys and mapping branch-
190.	Surveys and mapping branch administration, $27,860.
191.	Topographical surveys, including expenses of the Canadian board on geographical names, $1,386,410.
192.	Canadian hydrographic service, $1,732,243.
193.	Geodetic survey of Canada, $662,775.
194.	International boundary commission, $59,800.
195.	Legal surveys, including grant of $350 to assist in printing the publication of the Canadian Institute of Surveying, $572,167.
196.	To provide for the payment of fees of the board of examiners for dominion land surveyors, of the secretary and of the sub-examiners and for travelling expenses, stationery, printing, rent, etc. (the fees of B. W. Waugh, J. E. R. Ross and J. L. Rannie, members of the board, and A. W. W. Cole, secretary, are to be paid out of this sum), $2,100.
197.	Map compilation and reproduction, $463,399.
198.	Geographical branch, $160,000.
Dominion observatories-
199.	Dominion observatory, Ottawa, $401,740.
200.	Dominion astrophysical observatory, Victoria,
B.C., $65,385.	.
201.	Payments to Royal Canadian Air Force and commercial companies for air photography, and to defray the expenses of the interdepartmental committee on air surveys, $1,340,000.
Mines branch-
707. Mineral resources	investigations-further amount required, $95,490.
708.	Investigations of radioactive ores-further amount required, $20,560.
Geological survey of Canada-
709.	Geological surveys-further amount required, $59,726.
Surveys and mapping branch-
710.	Topographical surveys, including expenses of the Canadian board on geographical names-further amount required, $117,060.
711.	Canadian hydrographic service - further amount required^ $87,186.
Dominion observatories-
712. Dominion observatory,	Ottawa-further amount required, $12,048.
713.	Gratuity to Mrs. Michael Feniak, widow of the late Dr. Feniak, a former employee of the Geological Survey of Canada, who lost his life while on duty in the Northwest Territories, $2,000.
714.. To authorize and provide for a compassionate payment by way of reimbursement to the province of Manitoba, of the department's share of the costs in connection with an accident to Angus Thomas, employed by the Ontario-Manitoba boundary commission, who was severely burned while engaged in survey work in northern Manitoba, $7,000.
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Thursday, June 29, 1950