1950-09-11

FAR EASTERN COMMISSION


Hon. L. B. Pearson (Secretary of State for External Affairs):: Mr. Speaker, I wish to table copies, in English and in French, of the third report of the secretary general on the activities of the Far Eastern commission for the period December 24, 1948, to June 30, 1950.



QUESTIONS

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

Mr. Diefenbaker:: What has been the amount of the expenditure made on the south Saskatchewan power and irrigation project in each month since the 1st of April, 1950?


Mr. McCubbin:: April	$ 90,448.75
May	 25,541.33
June	 54,284.53
July	 39,090.38


NEWFOUNDLAND
Mr. Browne (Si. John's West):: 1.	Have any dredges been in operation in Newfoundland this year?
2.	If so, where have they been operating, and what other places are they scheduled to visit during the remainder of the season?


Mr. Fournier (Hull):: 1.	The only dredge operating in Newfoundland this year is the dredge General Currie.
2.	It has operated in Bonavista harbour from May 13 last to September 1 instant, and is scheduled to move to Catalina immediately and operate there until September 25. It will then move to Fortune and operate there as long as weather conditions will permit.


R.C.A.F. HANGARS, SASKATOON, SASK.-RENTAL FOR MUSEUM PURPOSES
Mr. Knight:: 1.	Does the dominion government rent a Royal Canadian Air Force hangar at Saskatoon for purposes of housing a museum of pioneer vehicles? If so, to whom, and at what rental?
2.	Under such a rental agreement, who is responsible for (a) repair; (b) maintenance; (c) insurance?
3.	Is the rental on a monthly or annual basis?
4.	Have any complaints or reports been received from the lessee as to the state of repair of the buildings? If so, what action has been taken?
5.	What is the general condition of the property?


Mr. Chevrier:: 1.	A Department of Transport hangar at the airport is leased to the western development museum board at a rental of $212.42 per month, for the purpose of "creating exhibits for a western development museum to contain the older types of agricultural implements and transportation equipment."
2 (a), (b), and (c). The lessee.
3.	See answer to No. 1.
4.	Yes, the lessee complained of the condition of the roof and requested that free rental be granted for a period of one year in order that the lessee might make the necessary repairs. The department advised it was unable to make such an exception.
5.	Apart from the roof, the property is considered to be in good condition.


GOVERNMENT OCCUPANCY OF BUILDINGS IN KINGSTON, ONT.
Mr. Knowles:: 1.	Is the Department of National Revenue occupying space in premises at the comer of King and William streets in Kingston, Ontario?
2.	If so, how much space is being rented therein, what monthly rental is being paid, and to whom?
3.	Is the building formerly occupied by the income tax division of the Department of National Revenue, located at the corner of King and Clarence streets in-Kingston, Ontario, now vacant?
4.	How far distant is this building from the one referred to in question 1?


Mr. Fournier (Hull):: 1. Yes; at 243 King street east.
2 (a) 3,704 square feet; (b) $479.17 a month; (c) The Empire Life Insurance Company.
3.	Yes.
4.	Two and one-half blocks.


GANDER, NFLD., AIRPORT  RUNWAYS
Mr. Higgins:: 1.	Have any arrangements been made to lengthen the runways at Gander airport?
2.	If so, by how many feet, and when is the work
to begin?	.


Mr. Chevrier:: Plans and specifications are being prepared for the lengthening of one runway to 8,600 feet, with a bearing capacity

Questions
of 150,000 pounds. It is expected the work will get under way as soon as weather permits in the spring of 1951.


R.C.M.P.  NEWFOUNDLAND
Mr. Higgins:: 1.	How many former employees of the customs preventive service of Newfoundland joined the marine section of the Royal Canadian Mounted Police following union between Canada and Newfoundland?
2.	What is the present number of such employees? Mr. Garson:
1.	Thirteen all told.
2.	Eight. (Four took their discharge and one was transferred to the department of customs).


R.C.M.P., NEWFOUNDLAND  PATROL VESSELS
Mr. Higgins:: 1.	Is there a Royal Canadian Mounted Police patrol vessel stationed in Newfoundland?
2.	If so. what class ship?
3.	How many Royal Canadian Mounted Police patrol vessels are stationed at Halifax?
4.	Of what classes?


Mr. Garson:: 1.	Yes. One during the summer months.
2.	"Fort" class.	[DOT]
3.	Three, but these vessels are assigned to work in inland waters, such as the gulf of St. Lawrence as well as in Halifax area.
4.	Two "Commissioner" class; one "Detachment" class.
PORTUGAL COVE, NFLD., WHARF Mr. Higgins:
What steps are being taken with respect to repairs to the wharf at Portugal Cove, Conception bay, in the district of St. John's East, Newfoundland?


Mr. Fournier (Hull):: No steps are being taken by this department for repairs to this wharf. It serves as a wharf for the ferry plying to Bell island, which is entirely within the province of Newfoundland, and the dominion government does not accept responsibility for the upkeep of such ferry wharves.


WHEAT BOARD-BARLEY AND OATS-SALES AND PRICES
John George Diefenbaker: How many bushels of (a) barley; (b) oats, were sold by the wheat board in each month from April to July inclusive, and what was the average price per bushel received therefor in each of the said
months?


Mr. Mcllrailh:: Mr. Speaker, the Canadian wheat board has not yet completed the accounting for the last crop year, so it is impossible to get the figures to answer this 	i
question. There is no objection to giving the answer, but the information is not yet available.


John George Diefenbaker: That is a strange thing. Question dropped.


TRADE AND COMMERCE
Mr. Balcom:: 1.	Is there a publication known as "Prices and Price Indexes" issued by the Department of Trade and Commerce?
2.	When was said publication started?
3.	What quantities were printed each month during the year 1950?
4.	What was the total number printed since first issue?
5.	What is the total cost per year of preparation and printing?
6.	(a) What is the annual subscription price per year? (b) per single copy?
7.	What was the revenue for years ending March 31, 1949-50?


Mr. Mcllrailh:: 1.	Yes-"Prices and Price Indexes".
2.	1923.
3.	1,500.
4.	Not available.
5.	Annual cost of preparing stencils and printing is estimated at $1,266.
6.	(a) $2.00; (b) $.20.
7.	Revenue figures for publications of the dominion bureau of statistics are not classified separately.



QUESTION PASSED AS ORDER FOR RETURN


Mr. While (Middlesex East):: How many persons have been taken on by the civil service for civilian defence personnel (a) in the year prior to June 30, 1950; (b) since June 30. 1950, to the present?


Mr. Bradley:: Return tabled.



COMBINES INVESTIGATION ACT


[Stage Direction]
On the orders of the day:
John George Diefenbaker: should like to direct a question to the Minister of Justice in connection with press reports in Saturday's Montreal Standard about a possible prosecution against an alleged match combine. What has been done, and what prosecutions are being launched?


Hon. Sluarl S. Garson (Minister of Justice):: In reply to my hon. friend's question, which is based on a newspaper report that unfortunately I have not seen, the position is that

we wrote to the attorney general of Quebec pointing out to him that, although we had taken the power to launch these prosecutions ourselves, we should be glad to do so in his name if he desired that that course be followed. After conferring with us he said he would prefer that that should be done. Accordingly we, assisted by our counsel, Mr. J. G. Ahern, K.C., and Mr. Guy Favreau, have been acting in collaboration with the attorney general's department of Quebec. The newspaper report to which my hon. friend refers had reference to these actions which I have just indicated.


John George Diefenbaker: If I may, I should like
to ask one further question. In connection with the activities, investigations and the making of surveys, do the mounted police act under the direction of the Department of Justice, or of the attorney general of Quebec?


Stuart Sinclair Garson: In this particular case I
imagine they are acting in collaboration with our own counsel. While as a matter of form and out of respect to the province's priority in that field the action is being taken in the name of the attorney general of Quebec, we are the ones who are doing the actual work in it; and I imagine that the instructions to the mounted police have in this case come either directly or indirectly from our counsel.



RAIL CONNECTION TO BORDER BETWEEN CANADA AND UNITED STATES

[Stage Direction]
On the orders of the day:
Mr. Gordon Gray  don@Peel: On Saturday
I directed to the Secretary of State for External Affairs (Mr. Pearson) a question arising out of a statement alleged to have been made by Senator Magnuson of the state of Washington with regard to a projected railroad to be built between the United States and Alaska, and running through Canada. Is the Secretary of State for External Affairs now in a position to make any comment with regard to the matter?


Lester Bowles Pearson: I hope, Mr. Speaker, to
be in a position to deal with that question tomorrow.



PUBLIC WORKS


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: I wish to direct a question to the
Minister of Public Works. Can he at an early
Inquiries of the Ministry day give some indication as to any changes that may be made in the department's program for public buildings as a result of the policy announced by the Minister of Finance; and in particular can he say whether the new post office in Winnipeg will be gone ahead with?


Mr. Sinclair:: Let us economize.


Alphonse Fournier: I could not make a statement at
this time about the matter, but I am giving it a great deal of thought. When my mind is made up, I certainly will make a statement to the house.



ESSENTIAL MATERIALS


[Stage Direction]
On the orders of the day:
Mr. George A. Drew (Leader of the Opposition):: I wish to raise a question of privilege, Mr. Speaker. The Canadian Press carried a dispatch dealing with the debate on Saturday, the opening paragraph of which reads as follows:
The Commons spent three hours Saturday debating an opposition motion aimed at killing a government bill seeking wide stand-by powers of control over
essential ' materials needed in Canada's rearmament program.


Some hon. Members:: Hear, hear.


Mr. Speaker:: Order.


George Alexander Drew: Mr. Speaker, the interjections at this point merely indicate the necessity for correcting the inaccurate impression contained in the report.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order.


George Alexander Drew: With the customary reliability of the Canadian Press, the report went on to interpret accurately the effect of the motion, and to quote certain statements that were made. There is no occasion to be critical of an interpretation which seeks to explain a motion of this kind. Hon. members of the house know, however, that a motion of this kind seeks to impress the government with the necessity for holding the bill back, revising it and presenting it in a form that is consistent with the recommendations that are made.
In view of what was said in the opening paragraph of this report, I should like to quote briefly what I said on Saturday, September 9, as reported at page 519 of Hansard:
Mr. Speaker, I propose to deal with two points that have been raised in the amendment that is before you. First, however, I wish to refer to the general purposes of the bill. On second reading we
532	HOUSE OF
Inquiries of the Ministry are considering the principle of the bill; and basically the principle is to give to the government certain extremely broad powers for the purpose of meeting any situation which may affect our economy as the result of our defence preparations.
From the day that this house began to discuss the international situation and the steps that were being taken or not being taken to deal with it. we have sought to emphasize the fact that there is an emergency on a scale which has not been accepted or recognized by the government in any statement that has been made in this house.
Then I referred to certain details, and following reference to those details I said:
As I said yesterday, when the resolution was before us, the desire of every hon. member should be to ensure in every way he can that while we give such clearly-stated powers as can be shown to be necessary to the government, we do not abdicate our functions as members of the supreme authority of the people of Canada, and as a parliament we do not give a blank cheque to this or to any other government.
I would simply point out, Mr. Speaker, that this is a form of motion which has been accepted on a number of occasions by this government and many other governments under a similar constitution; and following that acceptance they have decided that the bill would not be read at that particular point but could be revised and brought forward in a form which would be in keeping with the recommendations which had been made. We have put forward recommendations as to the way in which this bill would carry out the intention and the purpose in a manner consistent with our constitution; and that was the purpose of the motion.



FLOOD CONDITIONS


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, I should like to direct a question to the Minister of Finance. Has there yet been reached an understanding between the federal government and the government of the province of Manitoba with respect to the final amount to be paid on account of assistance in fighting the flood of last spring, the undertaking of remedial measures, and so on?


Hon. Douglas Abbott (Minister of Finance):: There has been nothing further in that connection. A payment has been made to the province of Manitoba on account of the $12,500,000 which was voted at the last session of parliament, but there has been no further discussion as to the final amount which may be paid.


Stanley Howard Knowles: Not even any further discussion?


Douglas Charles Abbott: We made a generous vote. ESSENTIAL MATERIALS (DEFENCE) ACT



PROVISION FOR CONTROL AND REGULATION OF PRODUCTION, DISTRIBUTION AND USE OF ESSENTIAL MATERIALS AND SERVICES

[Stage Direction]
The house resumed, from Saturday, September 9, consideration of the motion of Mr. Howe for the second reading of Bill No. 5, respecting materials and services essential for the purposes of defence and national security.
Some hon. Members:: Question.


Mr. Macdonnell (Greenwood):: Mr. Speaker-


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, I believe I adjourned the debate, if I am not mistaken.


James MacKerras Macdonnell: I thought the minister was not rising.


Clarence Decatur Howe: I am not as fast on my feet as my hon. friend. Mr. Speaker, I wish to say just a few words about the amendment offered by the Conservative opposition to the bill now being considered by the house. I was interested in the statement of the leader of the opposition (Mr. Drew) that the Canadian Press are quite mistaken in saying that the opposition amendment would kill the bill. Should this amendment be adopted, it would not only kill the bill but would kill the government.


An hon. Member:: What a blessing that would be!


George Alexander Drew: That is a blessing to Canada that we cannot quite hope for yet.


Clarence Decatur Howe: I suggest that the Canadian Press need not apologize or bother to publish the statement of the leader of the opposition to the effect that his amendment would not kill the bill, because it would of course have exactly that effect.


Mr. Graydon:: You are not going to control the press in this bill, are you?


Clarence Decatur Howe: I must say that I am amazed at the direction that the debate on this bill has taken. The bill provides for the allocation of such materials in scarce supply as may be required for the defence of Canada, and for the fixing of prices of materials so allocated, in order that the short supply may not have the effect of increasing prices.
The amendment contains parts facing in two opposite directions. First it says that the government should declare a state of emergency. There could be only one reason for that, namely, an emergency arising out of apprehended war. It would mean invoking the War Measures Act of 1914. That act

would give the government overriding power over provincial jurisdiction and allow it to take any action that in its wisdom it believed to be necessary for the prosecution of government in a state of emergency.
The amendment goes on to say that the government is taking far too wide powers. It suggests that if we wish to allocate materials we should declare in the bill the materials that we wish to allocate; that if we wish to decide what materials are in short supply, we should decide that now; that if we make an error as to the material that may in future become in short supply, there is nothing we could do about it later.


James MacKerras Macdonnell: Nonsense.


Clarence Decatur Howe: The amendment leaves the Conservative opposition in a position to go before the Canadian Corps Association and say: We want to place legislation on the statute books, and we do not want to place any limitation on the powers of the government; we want to invoke the War Measures Act and place the government in a position to do anything required. They could go before the Canadian Manufacturers Association and say: We tried to stop this clubbing of industry into submission-I believe that is a phrase that is used by the opposition. They could say: The government should by this legislation declare what materials are to be controlled, and put them under controls now, so that industry would know where it stands. That is the effect of the amendment.
Some strange phrases are being used. The hon. member for Lake Centre (Mr. Diefen-baker) used the stock phrase: "Parliament is being by-passed and ignored." To show the extent to which parliament is being bynpassed and ignored, I would point out to him that in the last twelve months parliament has been in session in the months of September, October, November, January, February, March, April, May, June and August. In other words it has been in session ten out of the last twelve months-and he says that parliament is being ignored.
I believe the hon. member brought in his other phrase, namely, that we were invading fundamental freedoms and human rights in taking power to allocate materials and fix prices.


John George Diefenbaker: I never made any such statement or suggestion.


Clarence Decatur Howe: I thought the hon. member did.


John George Diefenbaker: Read it.


Clarence Decatur Howe: I thought I could find that in the hon. member's remarks. If he did not include it, I am very glad.
Essential Materials (Defence) Act


John George Diefenbaker: Read it.


Clarence Decatur Howe: I would have to argue that we are not exactly doing that. If we are doing it, we are doing it in a very minor way, consistent with the situation in which this country now finds itself.
It has been suggested that this bill will permit the government to take over the railways and settle a railway strike. May I say that it does not permit the government to take over anything. True, it does give the government the right to allocate railway service, provided that there is railway service. In other words, if the railways are carrying on normally, and if it is necessary to move wheat instead of something else, such as newsprint, for instance, the government can pass an order on to the railways to do so. But there is certainly nothing in this bill that will enable the government to take over the railways, and there is nothing in the bill that will allow the government to intervene in a strike such as was dealt with by parliament in the early part of this session. If inadvertently there were such a power in the bill, the government certainly would not make use of it. Hon. members know that the government has a very different process for dealing with labour-management disputes, and there is nothing in this bill to change the process that has applied in that respect over the years.
We are told that this bill constitutes an invasion of provincial jurisdiction. The hon. member for Calgary West (Mr. Smith) went so far as to say that the bill cannot be constitutional because we had no right to invade provincial jurisdiction. I think he took all of ten minutes to study his constitutional points. I suggested his was a curbstone opinion, and he corrected me to say it was a horseback opinion. However, in this bill the government has no intention of invading provincial rights. If any order is issued which constitutes an invasion of provincial rights, the injured party has the right of appeal to the courts, and the Supreme Court of Canada will be quick to abrogate an order if it is in fact an invasion of provincial rights.
The government is advised by its Minister of Justice and is bound to accept the opinion of the Department of Justice-


George Alexander Drew: Oh!


Clarence Decatur Howe: -that this bill is constitutional. The government has the right to bring in measures directed toward the defence of Canada; it also has the right to enact measures relating solely to trade and commerce in this country. The government for the present

Essential Materials (Defence) Act is quite satisfied with that limited right, and feels that no additional rights are justified by the defence situation at this time.


John George Diefenbaker: What does the minister mean by "no additional rights are justified"?


Clarence Decatur Howe: No rights of invading provincial jurisdiction.
We find the Conservative opposition demanding great war activity. We find them insisting that the manpower devoted to war should be expanded tremendously. We have the hon. member for Kamloops (Mr. Fulton) advocating that the young manpower of this country be conscripted forthwith, and yet we find-


Mr. Fulton:: On a question of privilege, the minister will not find that statement anywhere, nor can he read that interpretation into my statement, except by a complete twisting of it.


Clarence Decatur Howe: I listened very carefully to the broadcast of the hon. member for Kamloops, and I read it carefully. He demanded conscription, and advised men experienced in warfare not to enlist until they got it. Perhaps his further explanation is required before we just accept his correction.
The point I make is this. The opposition members demand more war activity. The colonels of the Conservative party are demanding that we immediately turn Canada into an armed camp, and yet every measure____


George Alexander Drew: That is absolutely untrue.


Clarence Decatur Howe: That is your statement; I make my own.


Lionel Chevrier: Was the hon. member for Kamloops speaking for the leader of the opposition?


Clarence Decatur Howe: I point out that every measure we bring down directed to put Canada on a war footing, even the moderate measure that we are bringing down at this time, is met with vigorous opposition from the other side of the house.
Recently the congress of the United States passed a bill called the Defence Production Act of 1950. It gives priority in allocation authority, and provides for requisitioning in the interests of national defence, expansion of production and stockpiling authority, voluntary agreements between industry and labour groups on prices and wages, price and wage controls, and consumer rationing if price and wage controls are unsuccessful; settlement of labour disputes through voluntary conferences; control over consumer credit; control over certain phases of real estate credit. That is a similar bill which has just been passed by 

the congress of the United States, and I suggest that the opposition cannot claim that we in Canada are going further than those responsible for government in the United States believe to be justified at this time of crisis.


Mr. Coldwell:: The minister referred to the bill now before the house as a similar bill to that which has been passed in the United States. Is it not entirely different in that it does not give the government control of prices?


Clarence Decatur Howe: The United States bill is called the Defence Production Act of 1950.


Major James William Coldwell: But I would like to know the extent to which this bill goes. I am anxious to see some price controls, and I do not see any in this bill.


Clarence Decatur Howe: Well, I can perhaps discuss that aspect of controls in closing the debate on the bill, assuming that the government is not defeated on the amendment. I think perhaps I have said all that is required to be said at this time.


James MacKerras Macdonnell: Mr. Speaker, like the Minister of Trade and Commerce (Mr. Howe) I have very little to say. I have been much interested in his remarks, and I have also been much interested in seeing him appear, among other things, as a legal authority. After all, the minister is a man of many devices and of many qualities. I suppose we should be very glad to see him appear in a new role, and I am sure the Minister of Justice (Mr. Garson) will be particularly glad.
The minister began by saying that this is a bill for the allocation of materials. I should like to read one or two very brief sections of the bill and then ask any reasonable and reasoning man if he can reconcile what the minister has said with the two or three brief sentences I shall read. We find this:
The minister may by order . . . prescribe the quantities of, the manner and circumstances in which and the conditions on which any essential materials may be produced, processed, used, acquired or disposed of-
And "essential materials" are defined as such materials and substances as are designated from time to time by the governor in council. So, without reading any more, I think anyone who wishes to know what the bill means will see at once that the powers are really quite extraordinary.
The minister has said, and perfectly properly, that we have been very insistent in demanding action. I would like to add that we are reasonable people, and I think we have made it clear that we wish the minister to have adequate power. But as a matter of

fact it has become fashionable in the house to do nothing about suggestions from the opposition and to give no consideration to them. If this house wished, I have very little doubt that parliament could agree on the materials which are essential and we could get away from this omnibus legislation. But as I say, we have now reached the stage in the House of Commons when an amendment is scarcely listened to; the government just plows ahead with its overwhelming majority. Even a person with my small parliamentary experience can see the difference between this parliament and the last one.
Now, I say again that I think we would say sincerely that the minister should have special powers-and also, may I add, that I think the minister would use them well. But there is such a thing as having adequate powers, and also such a thing as having unlimited powers. This bill to all intents and purposes gives unlimited powers.
There is such a thing as fighting for our way of life. We use the word "freedom" in connection with it in such a way as to lose it. Of course our amendment could easily be accepted if there were a disposition to discuss those things in a reasonable way. There are only two obstacles to its being accepted; one of them is that it is so much easier to ask for unlimited powers than to define what is needed, and the other is that the Minister of Trade and Commerce has an enormous appetite for power.
The minister is here asking for unlimited powers. Instead of his being content with what has been suggested this morning, we find that he has here what might be described as the "new look" in powers. If I recall aright, he has said this morning that he is not going to use all these powers, and that they would be safe in his hands. What he is offering here is really an "or else" proposition- "You do this, or else". I believe the members of this House of Commons, and also the people throughout the country, do not like this "or else" argument. We know that it is an argument that has flourished. It flourished in Germany under the nazis, and it flourishes in Russia today.
Do not let us fool ourselves. This bill contains a threat and an argument that if you do not do this, all kinds of things will happen. The minister is using this "or else" argument, and has told us he wants these powers and proposes to use them. I think myself it is a shocking argument to be put forward in any free assembly.
There is one other thing I would like to say, that of course the political appeal in a thing of this kind is tremendous. Let us remember that the minister has-and one might say this without exaggeration-the economy of
Essential Materials (Defence) Act Canada in the hollow of his hand. There will be all kinds of direct government contracts, and there will be indirect contracts based upon these contracts. The number of people who will be really depending upon the minister and the government, in their business life, is something which must be considered seriously. I am not hoping to impress the people in this House of Commons, but rather the people of Canada. One can imagine the minister saying to himself, "With this power I can make our party virtually impregnable."
Then we must recall this power does not go to the minister alone. It goes on to satellites, the smaller and smaller people, all depending upon powers derived by the minister, powers to invade business and to interfere with it. In fact it is not an exaggeration to say that there are endless influences the people will feel while this legislation is on the statute book, and they will feel that whatever they get in the end comes to them "with the compliments of the Minister of Trade and Commerce".
There is a disposition in some quarters to suggest that because there is a provision in section 9 requiring that these orders be tabled, parliament will in some manner control. I hope we shall not fall into any process of self-deception as stupid as that.
The minister indicated this morning that parliament was not being by-passed, because parliament would be sitting most months of the year. I do not care if parliament sits three times a day every day in the year; the powers the minister is being given here give him authority to go ahead. Tell me how, after these powers are used, when an order is tabled days, weeks or a year after, we can go back and unscramble what has been done. Let us be fair with ourselves; let us be honest with ourselves. Indeed, not only is parliament by-passed, but as a matter of fact I wonder if the cabinet is not by-passed, when wp see that many of these powers are exercisable by the minister alone.


An hon. Member:: Good old C. D.!


James MacKerras Macdonnell: Yes, good old C. D.; I could say that as well as the hon. member who interrupted, if the minister would only be content to have a reasonable amount of power.
I have one more comment to make. I think it is worth pointing out that we now have a new Liberal principle of unlimited power plus "or else." The minister is delightfully honest when he admits that no one should waste the time of this house talking about political principles, and that only a sap would do so. I believe that there are still people, even in the Liberal party, who are interested

Essential Materials (Defence) Act in political principles. I believe that this new political principle of unlimited power, even if it is accepted in this house-this new political principle, as I say, which turns us into ciphers; I believe that if the minister is given all these powers there are people up and down the country who will gradually become interested in this matter.
It is for that, reason that I have taken the time of the house for a few minutes. I believe that unless there are sufficient people to take an interest in this matter we may find that in defending liberty we have lost a great deal of it ourselves.


Mr. Donald M. Fleming (Eglinton):: Mr. Speaker-


Some hon. Members:: Oh, oh.


Some hon. Members:: Question.


Donald Methuen Fleming: I thank the government
supporters for their encouragement, but I am not so sure that it is necessary having regard to what I propose to say in reference to this bill. I feel sorry for them because they have nothing else to do in the house. When a member of the cabinet is speaking their sole duty seems to be to thump their desks, but when an opposition member is speaking their sole function seems to be to interrupt. One feels sorry for them in that unhappy position.


Mr. Bradeite:: Feel sorry for yourself.


Donald Methuen Fleming: I speak for those who are
too dumb to speak for themselves.


An hon. Member:: That is right.


Some hon. Members:: Oh, oh.


An hon. Member:: You are a member of
the Conservative party.


Mr. Speaker:: After these pleasantries I
think the hon. member should be permitted to continue without interruption.


Donald Methuen Fleming: The measure before the
house at the present time is exceedingly important. We have been dealing with matters of first importance during this session; in fact, I think it can be said that the measures which have confronted this present session of parliament are in general much more important than those that ever fell to the lot of an ordinary session of parliament in peacetime to consider. It seems to me that the measure with which the house is now called upon to deal in principle is certainly not the least important of the measures that the house has been called upon to deal with at this session. In the way in which it can touch the economic lives of the people of Canada it may in some

respects prove to be the most important measure that the house will be called upon to deal with at this special session.
Having regard to the importance of a measure of this kind, one is not unmindful of the willingness of the people of Canada to sacrifice for freedom; one is not unmindful of the need to proceed with speed to deal with emergent problems; one is certainly not unmindful of the plight faced today by many Canadian families as a result of the soaring cost of living and the fact that our defence preparations are going to be infinitely more costly than any defence preparations of a similar extent in our previous history.
Taking account of these circumstances, we as members of parliament have a fundamental duty that we owe to this institution and to the people of Canada. Emergencies will come and emergencies will go, but this parliamentary institution must go on. There must be no diminution of its position. There must be no whittling away; certainly there must be no chopping away at the foundation of our parliamentary system in meeting national problems.
I listened with a measure of interest to the remarks this morning of the Minister of Trade and Commerce (Mr. Howe) in connection with this bill and the amendment introduced on behalf of the official opposition by the hon. member for Lake Centre (Mr. Diefenbaker). I should have thought that if this is such an emergency measure as the minister pictured it, it would have required something less than the intemperate language in which the minister indulged to support the measure. I cannot find any reason for his intemperate statement. I think the minister has demonstrated quite clearly by his touchiness that he realizes there is a great deal more in this bill, a great deal more power being given to him and the government in this bill than the house has hitherto been led to understand.
In dealing with this subject of a national emergency I do not intend to discuss the treatment of the legal aspects of that subject by the Minister of Trade and Commerce. I may have something to say about the treatment of that subject by the Minister of Justice (Mr. Garson) in his speech last Saturday. I wish, however, to say several things on the subject of the emergency.
The first is that in order to give parliament power to enact a measure of this kind there must in fact exist a national emergency. If the argument of the Minister of Justice as delivered: in this house on Saturday is that parliament in normal times, quite apart from the existence of a national emergency, possesses power to pass legislation in the form

before us, then may I say with the greatest respect that I disagree completely with him.
I doubt very much if the minister can adduce constitutional authority in support of a proposition of that kind that will very much impress the house. The fact of the matter is that there is nothing in section 91 of the British North America Act that gives parliament the right to enact legislation in sweeping terms such as these. Therefore I say there must exist a national emergency if parliament is to possess the power to deal with this situation.
I scanned the terms of this bill, particularly the recitals, for some clear statement that a national emergency does exist in order to qualify parliament to enact this measure, but I have searched in vain. There is no statement in this measure that a national emergency exists. If this bill and its constitutionality are to be founded upon the existence of a national emergency, not only is it desirable, it is essential that parliament should state in plain categorical terms its opinion that a national emergency does in fact exist.
The courts, particularly the privy council, have in direct decisions on this matter stated that if a national emergency does exist the courts will not too closely scrutinize a statement by parliament that a national emergency does exist. But there must be somewhere on the part of parliament a clear expression that it is its view that a national emergency does exist. Otherwise the courts are not going to assume that view on the part of parliament. If it is the view of the government that a national emergency does exist, and if that is the view of parliament, why should there be hesitation on the part of either the government or parliament in stating that in clear terms?
I am sick and tired of seeing the government trying to have it both ways on this subject. We have been in session now for two weeks, and I am sure it will be a matter of interest to those who in years to come read Hansard for this session to find such a cacophony of statements on the part of ministers on	this subject of national
emergency. One must wonder, after listening to their statements in their infinite variety, whether or not a national emergency exists in the view of the government.
I remember the speech of the Prime Minister (Mr. St. Laurent) a week ago Friday in which he dwelt in serious terms on the danger that may confront this nation within the next ten months. That sounded as though the Prime Minister considers there is a national emergency today. But then one listened for some days last week to the
Essential Materials (Defence) Act Minister of National Defence (Mr. Claxton), and I defy any member of the house, after listening to the Minister of National Defence, to say that in his opinion the minister was arguing that there is a national emergency in existence today. No; the attitude of the Minister of National Defence was: Well, we are taking these problems as we come to them. We are meeting everything in our stride. Everything is all right. We have not any very definite plan, but that is the beauty of the way we go about these things. We have no plans and therefore there is no misplanning. Everything is to be dealt with as it arises. It is a sort of fluid preparation for situations that may or may not occur. No; one cannot treat anything that the Minister of National Defence said last week as reflecting a view on his part that a national emergency does in fact exist.
Then there was the speech of the Minister of Finance (Mr. Abbott) on Thursday evening of last week. Of course the ingrained habits of the government cannot quickly be cast off, and we had a statement, of the kind we are so accustomed to from the optimistic gentlemen who occupy the treasury benches, that everything is all right, the Canadian economy is fundamentally sound, we are at the highest peak of prosperity, everybody's pockets are full of money, and all that nonsense.
Of course it was not to be expected that the Minister of Trade and Commerce would be far behind in airy talk of that kind. In his speech when he introduced this measure at the resolution stage, if you please, he gets up and reminds the country again of the fundamental soundness of the Canadian economy. Everybody is working, everybody is happy, everything is right with the economy.
Now, sir, is there a national emergency, or is there not? If there is a national emergency, let the government have the courage and intestinal fortitude to stand up and say so. Let it demonstrate its courage by going further and inviting parliament to declare in legislative form the existence at this moment of a national emergency. Why not? If it exists, then such a declaration is necessary in order to give parliament clear power to legislate on the basis of the existence of a national emergency, and it might have a very useful and beneficial effect in many quarters. But the government has not done so. Its failure and omission to do so are, I think, not without significance. I am prepared to say categorically, Mr. Speaker, that, unless the government is prepared to say that a national emergency exists today, unless it is prepared to invite parliament so to declare, parliament
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Essential Materials (Defence) Act in undertaking to consider this measure is dealing with a measure beyond its legislative competence.
On the other hand, if an emergency does exist, then let parliament so declare. We shall know then on what basis parliament ought to be approaching the problems confronting it at this present important session. I am not of a suspicious turn of mind, but I have something more than a passing hunch why the government is falling significantly short of inviting parliament to declare that a national emergency in fact exists. I think the Minister of Justice (Mr. Garson) was not too discreet on Saturday in venturing some comments about the War Measures Act. I put it to you, Mr. Speaker, and to the house that the reason the government shrinks from inviting parliament to declare that a national emergency exists today is that they are afraid of the political effects in this country of creating a legislative situation where the War Measures Act may be in effect.


Clarence Decatur Howe: Perhaps trying to avoid bludgeoning industry.


Donald Methuen Fleming: Apparently a rose by any other name would smell as sweet. The idea of the Minister of Trade and Commerce is that you sugar the pill but you fortify the medicine therein contained. I wish to be very sure that parliament and the people of Canada are aware of the bitter and powerful medicine concocted by the Minister of Trade and Commerce when he went to work with his pestle and mortar on the ingredients of this bill and turned out this doubtful work of art.
There is one other observation on the subject of an emergency. I again emphasize that I am not a person of a suspicious frame of mind, but I am not unmindful of the history of parliament in recent years. I am not unmindful of the willingness-yes, the alacrity- of the government to grasp and retain power at the expense of parliament. Even the leopard cannot change its spots overnight. Those spots are deep. The government's love of power has been the leading motive for so many of the things it has done, and I refuse to believe that it is not a factor in the government's approach to this particular measure.
One has in mind the not undue difficulty experienced in the past in persuading the present Minister of Trade and Commerce to accept, however reluctantly, powers thrust upon him by an insistent parliament.


An hon. Member:: He loves it.


Donald Methuen Fleming: I have not detected in the protestations of the same minister on the 

occasion of the debates on this measure any of those evidences of invincible repugnance to the acceptance of power.
I invite those who believe in parliament as an institution to examine the terms of the bill. It is a matter of profound regret and disappointment that throughout this session there has been such complete silence on the part of government supporters. With scant exception, the talk on the government side has all come from cabinet ministers. If private members who support the government believe that this is the kind of legislation parliament should enact, I wish they would stand up and say so. Let them not sit back as silent men. Let them appreciate their responsibilities as members of the house and stand up and give their opinions on the bill. For one, I shall respect their frank and sincere opinions, whether or not they happen to agree with mine; but let them not sit back. Let them stand up and state those opinions, if opinions there be.
In approaching this important Bill No. 5, one who reads it cannot fail to be impressed by the absolutely sweeping character of the powers that it proposes to confer upon the governor in council. The Minister of Trade and Commerce can argue all day in the same fashion as he did this morning in attempting to convince the house that there is not very much in this bill after all, and inferentially, that even if there is, we should trust the government. They do not exceed powers- no, not they! But, sir, let the members of this house frankly and carefully examine the terms of this legislation. Let them see, in the first place, that there is no effective limitation on either the goods or the services to which the governor in council may apply his powers. We are simply legislating in the dark if we pass this measure in its present form. We are simply handing this government a blank cheque to say, in the first place, to what goods and services the power shall be applied, and in the second place, to what extent those sweeping powers shall be exercised. Let no member of this house come to vote on this subject simply having heard the soothing, syrupy statement of the Minister of Trade and Commerce, without having read for himself the language of this bill. Let him see that we are in effect putting dictatorial powers back into the hands of the Minister of Trade and Commerce. I defy any hon. member of this house to stand up and disprove that statement.
This bill, if this house passes it and it is passed by the other place, will vest in the Minister of Trade and Commerce almost unlimited powers. He will become again, as he was in the past, the complete dictator of the Canadian economy.


Some hon. Members:: Hear, hear.


Mr. Ferrie:: He did a good job.


Donald Methuen Fleming: I hope, sir, that the Hansard reporter did not fail to record the fact that some government supporters have applauded the fact that this bill, as I have interpreted it, does create an economic dictatorship with the Minister of Trade and Commerce as the kingpin of that dictatorship. Let the people of this country bear in mind the mentality of the government supporters in this house, and take note of the fact that there are government supporters who will applaud the creation of an economic dictatorship in Canada today, with the Minister of Trade and Commerce as the supreme dictator.


Mr. Sinnott:: You would not want him at the other end of the kingpin, would you?


Donald Methuen Fleming: It would not matter much to me if it were the member for Springfield (Mr. Sinnott) or the Minister of Trade and Commerce; either two-job John or fifty-job C.D.
Look at the powers in this bill. I invite hon. members to read the terms of sections 3 and 4. Note that those sections contain the kernel of the bill. By these sections the governor in council will acquire the power to designate from time to time as essential materials such materials or substances as in his opinion are essential for defence purposes, and to designate as essential services the carrying on of such commercial activities, including the generating and distribution of electrical energy, as in his opinion are essential for the adequate production, storage or distribution of essential materials or otherwise for defence purposes.
As if that were not enough, look at the way we find the powers extended by section 4:
The governor in council may do and authorize such acts and things and make from time to time such orders and regulations as he deems necessary for the purposes of this act to control and regulate the production, processing, distribution, acquisition, disposition or use of essential materials or the supply or use of essential services.
Then there follows the enumeration of the things he may do if he deems it necessary:
(a)	require any person who produces, processes, deals in or has in his possession or control any essential materials to deal with, supply or dispose of any such materials in such manner and in such priority to that person's other transactions as the minister may prescribe;
(b)	require any person who produces or processes any essential materials to produce or process any such materials in such manner and in such priority to that person's other production or processing operations as the minister may prescribe;
(c)	prescribe the quantities of, the manner and circumstances in which and the conditions on which any essential material may be produced, processed, used, acquired or disposed of, . . .
Essential Materials (Defence) Act
(d)	require any person who supplies any essential service to supply the service to such persons, to such extent and on such conditions as the minister may prescribe;
(e)	prescribe the restrictions and conditions according to which an essential service may be supplied or used, either generally or within periods of time prescribed by the minister, and for these purposes may require persons to obtain permits;
(f)	fix the maximum prices, either by determining the selling price or the mark-up, at which and the terms and conditions on which any essential materials or essential services may be sold or offered for sale by any person; and require any seller to refund to any buyer any sum or consideration received in excess of a maximum selling price so fixed.
These are only a few of the powers, Mr. Speaker. There is no time at this stage to read the whole list. Can any member reading those provisions of the bill deny that if the minister is given powers as sweeping as those, he holds the economy of this country in the hollow of his hand? We of the Progressive Conservative opposition have said that if the government will plainly state the extent of the emergency we are quite prepared that clearly defined powers should be legislated in proper parliamentary form to meet the emergency according to the extent that it exists. But we are not prepared simply to abdicate our functions as members of the House of Commons of Canada and hand over all these powers nor to abdicate in favour of the Minister of Trade and Commerce.
I ask hon. members to go further and to examine the recitals in this bill. Bear in mind, sir, that the only possible constitutional justification for parliament to proceed to deal with measures of this kind is the existence of a national emergency-not in the .future, but today. It would be completely unconstitutional for parliament to say: In case a national emergency should arise some time in the next six months we now give powers to the government which will come into effect if and when a national emergency arises. Such a course would be illegal. It would be utterly unconstitutional. Yet I say to you, sir, that is precisely what this bill purports to do.
Look at the recitals. I have already indicated that we do not find there the slightest trace of a clear statement that a national emergency exists today. You will find in the fourth paragraph of the preamble a statement that steel and other materials, electrical energy, may be insufficient-it does not say that they are-to meet the requirements. In the final paragraph of this preamble it is said:
... in order to avert possible disruption of such defence preparations, to lessen the resultant disruption of normal trade and commerce and to prevent economic disorder and hardship on a national scale it is essential in the interest of Canada as a whole
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Essential Materials (Defence) Act to provide for the control and regulation of the production, distribution and use of such materials and services.
But, sir, what dues the Minister of Trade and Commerce say while putting that recital in the mouth of parliament? He says we are not going to exercise these powers today; we are simply taking stand-by powers so that if a national emergency does arise we shall have the power to act. I say to you that between the statements of the minister and these recitals in the bill there is a complete contradiction. When parliament is toeing asked to legislate in the terms of this bill in the face of a statement of the kind we have heard from the Minister of Trade and Commerce, I say to you that parliament is toeing called upon to legislate fundamental dishonesty. If the Minister of Trade and Commerce was correct, then the terms of this preamble are wrong, and parliament has no right to legislate in those terms. It is absolutely destructive of what is fundamental in the constitution of this country for parliament to say today we are going to create powers to come into effect if and when a national emergency arises, but we are not saying a national emergency exists today. I say to this house, that if the majority of the members want to vest in the Minister of Trade and Commerce these dictatorial powers and want to make them stick in a legal sense, it is necessary to say that a national emergency does exist which requires parliament to confide such sweeping powers in the minister.
But that has not been said. The government have not had the courage to say it. What they are calling upon parliament to do in this lame way is to say that if a national emergency arises some time before parliament meets again, then parliament will have this power by reason of a national emergency, even though we are not saying that one exists today. That, Mr. Speaker, is fundamental dishonesty in legislation.
When the privy council laid down the principle that in a national emergency parliament would have the right to encroach upon fields of jurisdiction that normally are assigned to the provincial legislatures by the division of constitutional power in this country under the British North America Act, I certainly do not think they ever intended that parliament should abdicate the right and duty to declare the existence of a national emergency, and place it, as would be done by this bill, in the hands of the governor in council-which means in the hands of the Minister of Trade and Commerce, in effect-to declare the existence of a national emergency, thereby and 

at that time effecting a transfer to the Minister of Trade and Commerce of wide constitutional powers at the expense of the legislatures of the provinces.
Some hon. member may say: Oh, the emergency may come swiftly; we must anticipate it. I ask him to recall the fact that a national emergency descended upon this country just two and a half weeks ago, in the form of a complete railway stoppage. On that occasion the government called parliament. I suggest, Mr. Speaker, that parliament can be called to deal with any national emergency that exists requiring the use of powers in excess of those that we in our amendment have indicated we are prepared to see conferred to the extent of any present emergency that the government is prepared to show exists, provided that those powers are clearly defined in the act and are not made an occasion for abdication on the part of parliament in favour of a minister of the crown.
Parliament can meet in a hurry. This idea that parliament is not capable of meeting the exigencies of a national emergency in haste has gone forever. The Royal Canadian Air Force, Trans-Canada Air Lines and the other means that were resorted to in order to bring members of parliament to Ottawa in haste have effectively disposed of that bogey which has served the political interests of this government extremely well, to their satisfaction in times past.
I invite hon. members to consider calmly and dispassionately the amendment which has been put forward on behalf of the official opposition by the hon. member for Lake Centre, and to have due regard to the actuality of the extent of the power proposed under this bill to be confided in the governor in council.
Our amendment reads as follows:
That Bill No. 5 be not now read a second time but that it be resolved that while this house is ready and anxious to adopt all appropriate measures which will prevent economic hardship and disorder on a national scale and provide for the necessary regulation of the production, distribution and use of materials and services for defence purposes, it regrets the circumstances connected with the introduction and prosecution of this measure, namely, that the government has failed to name and declare the national emergency upon which it seeks to base authority for this bill and has not specified the materials and services which are to be subject to the provisions of the bill.
If the government wanted to do it, Mr. Speaker, it would be relatively simple to spell out the necessary goods and services that are required to be provided for now, in the light of defence preparations. The house has only to look at Bill No. 4-and I am not going to discuss that bill at the

moment. I use it merely as an illustration of the way in which, when the government wishes to and when this house requires it, the things to which the powers are to extend can be defined. I am not altogether satisfied with the provisions of Bill No. 4 in that respect. But at least Bill No. 4 contains an answer to those who are saying that there is no other way of doing this thing, that you cannot spell out the necessary powers that are required to meet the situation, that you cannot specify the goods and services that ought to be designated as those to which the powers will apply; it is an answer to those who say that you simply have to hand over holus-bolus, to an omnipotent minister of the crown, everything in the way of power. In its own Bill No. 4 the government has given the answer to that kind of argument.


John George Diefenbaker: And in the preamble of
the bill.


Donald Methuen Fleming: And in the preamble of the
bill you will find provisions which are or could be a useful guide and precedent for t this government in what it is inserting in Bill No. 5, if there were on the part of the government the will and the determination to make parliament a proper partner in the proposals that are to be made to meet the situation that exists. Parliament is supposed to be supreme, but this government are not even prepared to make a partner of parliament. Nothing will -suffice to satisfy their hunger for more -power except a complete abdication and surrender on the part of parliament.
Let there be no -misunderstanding on the part of anyone in this house or on the part of any citizen of this country. As an official opposition-and we have said it times without number at this session-to the extent that a national emergency exists, we are prepared to co-operate with the government to meet it. We are prepared to see that they are given the powers that may be required to meet it, in proper legislative form and under proper parliamentary practice. We are prepared to co-operate and see that powers commensurate with the actual need are given. But we are not prepared simply to see parliament commit suicide at a time when, above all others, we -ought to proclaim to the world that parliamentary processes and parliamentary institutions are the pathway, the means to and the guarantee of freedom.


Stanley Howard Knowles: I have listened, Mr. Speaker, with considerable interest and attention to the arguments that have been put forward by members of the Progressive Conservative
Essential Materials (Defence) Act party with reference to the constitutional and parliamentary aspects of this whole matter. I take second place to no one in concern for the responsibility to parliament of the government of this country. I take second place to no one in insisting that parliament must know at all times the full meaning of the legislation that it passes, particularly when that legislation gives powers to the government. In that connection, we have already made it plain that we want a clear-cut statement from the minister as to what this bill means and as to what it may not mean. That indeed was the import of the question asked a while ago by the hon. member for Rosetown-Biggar (Mr. Coldwell) of the Minister of Trade and Commerce (Mr. Howe), who said that he would answer the question when he closed the debate on the main motion.


Donald Methuen Fleming: Do you not want it right in the bill, though?


Stanley Howard Knowles: I am asking the minister not to forget his promise to speak about that matter when he closes the debate on the main motion.
I was about to say, however, that I am fully prepared to give to my hon. friends to the right-the Progressive Conservatives- full marks for their interest in the constitutional aspects of this question and for their interest in maintaining the control of parliament over the government. At the same time I cannot help but wonder if some of the vehemence of their opposition to this bill does not stem also from the fact that they in principle do not like to see business and industry-as they sometimes put it-"pushed around by the government".
The hon. member for Cape Breton South (Mr. Gillis) says that "regulated" would be a better word, and I agree. But the other phrase expresses the feelings of those opposed to any such regulation, and that is why I used it.
Our position in this matter, Mr. Speaker, is very clear. We supported controls on our economy in the interests of the people during world war II. And we urged that those controls, particularly where they were clearly necessary, should be continued in the period of peace that followed world war II. Accordingly, when we now ask for the reimposition of price controls, which we think were wrongfully and -too hastily removed, it is a continuation of the policy that we have advocated right through the years.
May I make it clear that during the years of peace, when we asked for the continuance or the reimposition of price controls, we took the position that in our view it was within

Essential Materials (Defence) Act the constitutional power of the federal parliament to take that course. The former member for Kindersley, Mr. Frank Jaenicke, went into that from the legal point of view on a number of occasions, and cited in particular the decision of the privy council in the Canada Temperance Act case, where words were used to the effect that whenever a matter by its inherent nature is of concern or importance to the whole country the federal parliament has the right to deal with it.
We contended through the years, even when there was no War Measures Act in effect, that on the basis of that decision, because the matter of prices, by its inherent nature, was of concern and of importance to the people of Canada from coast to coast, this parliament had the right to legislate in the field of price controls.
As to the argument my friends to the right are making about the necessity of the government declaring an emergency before they can go into this field, I for one do not think such a course has to be taken. I think the decision to which I have already referred, and which we quoted a number of times during the years since the end of world war II, is sufficient basis for the federal parliament acting in this matter in the interests of all the people of Canada.
I confess that I am going to have a few words to say about constitutional matters myself, Mr. Speaker, but I want to urge that the important question before this parliament, the question the people of Canada are now asking, is what the government's position is going to be in this matter. And while I would hope that the Minister of Justice (Mr. Garson) might pay some attention to the arguments that I am going to make respecting the constitutional aspects of the matter, I am most anxious that the Minister of Trade and Commerce should make a clear-cut statement on this matter in reply to the questions which the hon. member for Rosetown-Biggar put to him, because it is very clear from the way prices are rising, the way they are getting out of hand, that nothing is of so much concern to our people in this country today, certainly on the home front, as the need for this government to take steps to protect the living standards of our own people.
With respect to the discussion that has taken place on the constitutional aspects I should like to say this. I respect, as all of us do, the constitution of this country. One must do so if he believes, as I do, in the rule of law. It should not be treated disrespectfully. At the same time we think it should be improved. The constitution itself should be brought up to date; it should be made to meet


the conditions of 1950 rather than the conditions of 1867. But what I do not like about the way in which this government treats the constitution is that they trot it out as an excuse for not doing something when they do not want to follow a certain course, but they drive a twenty-mule team through it when there is something that they decide they want to do. Look at what has happened in this very session. When we have been pressing for the reimposition of price controls the Prime Minister (Mr. St. Laurent) has said to us that they have talked the matter over and have come to the conclusion that it would be an invasion of provincial rights to go into that field. In other words, it would be in violation of the constitution; and the urgent request of the people of Canada for price controls is denied because of the constitution. But when the government decides that they want the particular kind of powers which are set out in the bill now before us, which include the power to control the prices of certain commodities and services, the Minister of Justice rises in his place and says that the federal parliament has the right to do that under the headings of national defence and trade and commerce, as set out in section 91 of the British North America Act.
I would like the Minister of Justice to explain to me how it is that control over trade and commerce gives the federal authority the right to control prices of steel and electricity, but does not give it the power to control the price of bread, which has been going up in a concerted fashion across this country lately.
It seems to me that we had a similar disregard of the constitution when the government brought in the bill respecting instalment buying. The Minister of Finance (Mr. Abbott) admitted that that control was in effect during the war under the War Measures Act. But the Minister of Finance said he was bringing that measure in now under the responsibility of the federal parliament for currency and credit. When I heard the minister use that phrase it registered something in my mind that made me wonder about it, and so I thought I had better look it up in the British North America Act. I found that section 91 of the British North America Act does not say that the parliament of Canada has control over currency and credit, but rather class 14 of section 91 reads: "Currency and coinage."
The Minister of Finance said that the purpose of that bill was to do something about inflation. I do not think he needed to quote that section of the British North America Act, either correctly or incorrectly. I think he was perfectly within his rights in saying this problem of inflation, by its inherent nature, is of concern and of importance to the whole

people of Canada, and on that basis they had the right to bring in that bill. Whether or not we agree with it is another question. That is my view with respect to this whole question of the constitution. I think the government is bringing the constitution into disrespect by proceeding in this way, by the Prime Minister saying on the one hand we cannot give you price controls because it is unconstitutional, and on the other hand by the government bringing in a bill that provides for such price controls as the Minister of Trade and Commerce thinks are good, the indications so far being that only such items as steel and electricity are in mind.
Well, now, they cannot have it both ways. I am not seeking to buttress the arguments of my hon. friends to the right, that it is necessary to declare an emergency. I have already said that we did not think it was necessary in 1947, 1948 and 1949, when we were asking for the control of prices in peacetime. But I do think that the government should stop this driving of a team of horses through the constitution the way they have been doing, and using it in both ways, as has been the case in this very session.
Our position is clear. Our quarrel with this bill is not that it does not declare an emergency, but rather that it does not go far enough in the field of controlling our economy in the interests of our people to meet the emergency which is already here; and along with that it does not go far enough in spelling out clearly what the powers are that the minister is taking.
I look at this bill at times and say to myself: Maybe it does give the minister power to go into the field of general price controls; but then I realize that that would have to be taken in conjunction with the context of the preamble, although Beauchesne says that preambles are not important in legislation. I suppose, too, it would have to be taken in the light of what the minister said the purpose of this bill was, and what he may still tell us is its purpose. But that being the case, we are left near the end of this important special session with no guarantee to the people of Canada that there will foe legislation to protect their living standards.
One other word and I shall resume my seat. Sometimes it is said to us that it is strange that we talk so much about freedom and at the same time talk about controls. Surely it is elemental that in order for people to have real freedom there must be economic freedom, freedom from the poverty and suffering that economic tyranny so often imposes upon our people. We are not asking for control of our people; we are asking for control
Essential Materials (Defence) Act of economic forces, control of the economic order of this country so that there may be a chance for economic freedom for our people.


Mr. Howard C. Green (Vancouver-Quadra):: Mr. Speaker, considerable heat has been displayed in the discussion of this measure. I should like now to place before the ministry, and particularly the Minister of Trade and Commerce (Mr. Howe), one or two suggestions with regard to this legislation which I hope will be given at least careful consideration. I hope also that as a result the government will make amendments to the bill.
In the first place I do urge most strongly that there be written into the bill, as a schedule thereto, a list of the materials and services which are to be considered as essential, and which will therefore become subject to the powers set out in the bill. It may be that there should also be power taken in the bill for the cabinet to add to that list; for the moment I am not arguing that such is the case, but the bill would be much less objectionable if a list were written into it showing what materials and services the government considers essential. If there should be a war, and a much longer list of materials became essential, that difficulty would be met by the fact that in such event the War Measures Act would be invoked at once.
Parliament will be sitting again within about four months. We need deal now only with that period of time from the middle of September until, let us say, the middle of January. It is not as though there were any great necessity to enact legislation now which would foe sufficient for a year or for a longer period of time. At this special session parliament need only provide for the next four or [DOT] five months.
In the preamble to the bill one of these materials regarded as essential is actually listed, as is also one type of essential service. I refer hon. members to the fourth paragraph in the preamble, which reads:
And whereas steel and other materials and electrical energy and other services will be urgently required for such defence preparations and it is expected that the supply of such materials and services may be insufficient to meet such requirements together with the requirements of normal trade and commerce . . .
The draftsman of the bill took the unusual course of setting out one material and one type of service which were regarded as essential. This having been done, it seems strange that we find in the bill no schedule listing all such materials and services; on the contrary, in the bill itself a general power is given to the cabinet to declare that any
544	HOUSE OF
Essential Materials (Defence) Act material or any service may be considered essential, and therefore under the provisions of the bill.
While I have not had an opportunity to check the legislation in the United States, I believe that in that country the government has stated what particular materials are to be covered by their bill. I have before me an issue of U.S. News and World Report for September 8, and at page 23 I find this:
A new government list of materials that are considered "critical at this time" offers a clue to where controls may hit first. This list, published by the general services administration, includes eleven items: aluminum, cement, copper, lead, leather, lumber, paper, rubber, steel, wool and zinc.
When the resolution preceding the bill was under discussion the other day I asked the Minister of Trade and Commerce what materials he had in mind. His reply is found at page 460 of Hansard in these words:
Any item where war buying interferes with the normal civilian supply. It could easily be copper or zinc. Nickel is already being rationed by the producer in consultation with the government. It is being rationed both in Canada and the United States.
Then I asked if lumber would be included, and the minister answered:
Lumber might very well be one of these commodities.
I repeat the hope that the government will give consideration to attaching to the bill a schedule containing the materials and services which it is believed will be essential during the next four months.
Such action is not merely a question of doing what is right in drafting a bill, but is fundamentally sound for two other reasons. In the first place, these laws are drawn to control the conduct of the Canadian people, and our people are entitled to know exactly what the terms of the law are. It is unwise to have them in a state of doubt, realizing that there are general powers but not knowing in just what way those powers will apply.
The people of Canada are entitled to definite, clear-cut legislation, particularly where that legislation is punitive. This bill is of a punitive type. As the minister himself said the other day, it is to be used as a threat to the people. Where we have punitive legislation of that kind it should be clear-cut; there should be no generalities; yet this bill is not clear-cut at all. As I have said, it does not state what materials or services are to be covered, but gives very wide general powers to the Minister of Trade and Commerce. I have no intention of reading them at this time, but hon. members will find them set out in section 4(2). Not only does it give those general powers to the minister; it gives them also to anyone he chooses to appoint to


carry them out. For example, we find that section 5, subsection 2, reads:
The minister may authorize persons to act under his control and direction on his behalf in the exercise of powers conferred on him by this act or by regulations.
As I read that subsection it means that an administrator or controller appointed by the Minister of Trade and Commerce could issue an order which would have the same effect as though the order had been issued by the minister. In other words, there will be no necessity for the minister to approve any such order; it can be put out by his officers. While there is provision for the publishing of regulations made by the government under sections 3, 4 and 10, there is no such provision with respect to the orders issued by the minister or one of his officials. Orders issued under section 4, subsection 2, do not have to be published in the Canada Gazette or laid before parliament. Those particular orders are the ones which should be checked most carefully, because they tell John Jones or William Smith exactly what he has to do. I repeat that there is no provision in the bill for having such orders published or laid before parliament.
The bill is not in the clear-cut terms to which the Canadian people are entitled. As I have said, it is punitive legislation; I think it can fairly be described as big-stick legislation. The Minister of Trade and Commerce explained frankly his attitude with regard to this legislation as 'reported at page 460 of Hansard of September 8. I quote:
I suggest to the committee that a word from the government is more effective if there is a law in the background that can be applied in case the response is not all that may be desired.
He had been explaining that it is possible generally to bring about satisfactory arrangements with businessmen by sitting around a table, but the minister added that he wanted this power behind him so that if Canadians would not agree to the terms imposed by the minister or his advisers, there would be a big stick that could be used. Let us not be in any doubt about it, this is big-stick legislation. Legislation of that type is fundamentally unsound. But if we are to have it, then let us have the terms written clearly into the statute so that the Canadian who is to be affected thereby may know exactly what are his obligations.
Just a word or two with regard to parliament and this type of legislation. During the last war parliament was by-passed, generally speaking, and the country was governed by order in council. I admit that such action was necessary. Time and again the opposition

refrained from criticizing government measures because we thought we might hurt Canada's war effort. It was only human nature that every member of the cabinet who served during the war years, as well as every government supporter, and perhaps every member of the opposition, lost some of the respect for parliament he had had before war commenced. Things had to be done differently under the pressure of war, and unfortunately parliament lost a great deal of its prestige and a great deal of its actual power. Parliament was one of the casualties of the last war, and we should remember that at the present time. Since 1946 we have been faced with what has been called a cold war. We are now in another era which I referred to the other night as the Korean era, and which I notice the papers are calling a warm war. We have gone from the cold war stage to the warm war stage and the publication from which I quoted a few minutes ago says that it is expected that this latter stage will last at least five years if we do not have a third world war.
No matter how long it lasts, we are certainly in for a period which can properly be known as a warm war. The government has said that this is not the time to use the War Measures Act; the ministers have been careful not to go that far, but I do suggest that in this warm war era there is a great need to maintain the prestige of parliament and the respect for parliament across the nation. If we are not careful in these days when there are such great worries we are apt to take steps which will ruin completely the usefulness of parliament in Canada. There is a far greater danger of that happening now than there was in 1939 when war broke out because of what has been going on for the last ten years.
In this bill the Canadian parliament is not being given a square deal. We are being asked to pass legislation which is punitive in character and which is not clear-cut. We are being asked to pass that legislation under pressure, and in my opinion any such step will be doing parliament great harm and will be a great injustice to the Canadian people.
In concluding may I urge upon the Prime Minister and the cabinet that they give consideration to setting out in this bill a schedule of the materials and services which are to be controlled for the next four months. In my opinion that would remove the worst feature of this legislation and go a long way toward helping parliament to maintain the respect of the Canadian people.
Essential Materials (Defence) Act	
The house divided on the amendment (Mr.	
Diefenbaker) which was negatived on the following division:
 YEAS Messrs:	
Adamson	Harkness
Balcer	Harris (Danforth)
Black (Cumberland)	Hees
Blair	Higgins
Brooks	Hodgson
Browne (St. John's West) Homuth	
Casselman	Lennard
Catherwood	Macdonnell (Greenwood)
Charlton	McGregor
Coyle	McLure
Diefenbaker	Nowlan
Drew	Smith (Calgary West)
Fairclough, Mrs.	Tustin
Ferguson	White (Hastings-
Fleming	Peterborough)
Fulton	White (Middlesex
Graydon Green	East)-33.
 NAYS Messrs:
Abbott	Gingras
Anderson	Gingues
Applewhaite	Goode
Argue	Gourd (Chapleau)
Ashbourne	Hansell
Bater	Harris (Grey-Bruce)
Benidickson	Harrison
Bennett	Healy
Bertrand	Hellyer
Beyerstein	Helme
Blackmore	Henderson
Blanchette	Herridge
Boisvert	Hetland
Boivin	Huffman
Boucher	Hunter
Bourget	Jeffery
Bradette	Johnston
Bradley	Jones
Brisson	Jut r as
Brown (Essex West)	Kent
Bruneau	Kickham
Bryce	Kirk (Digby-Yarmouth)
Campney	Knight
Carroll	Knowles
Carter	Lafontaine
Cavers	Laing
Clark	Langlois (Berthier-
Coldwell	Maskinonge)
Cote (St. Johns-Iberville- Langlois (Gaspe)	
Napierville)	Larson
Cote (Matapedia-Matane) Ueger	
Crestohl	Little
Darroch	Low
Dechene	Macdonald (Edmonton
Decore	East)
Dewar	MacKenzie
Dion	MacLean (Cape Breton
Douglas	North and Victoria)
Dube	MacNaught
Dumas	Macnaughton
Fair	McCann
Ferrie	McCubbin
Fournier (Hull)	McCulloch
Gardiner	McCusker
Garland	Mcllraith
Garson	Mclvor
Gauthier (Sudbury)	McLean (Huron-Perth)
Gauthier (Lapointe)	McWilliam
George	Masse
Gibson	Mayhew
Gillis	Mott
546	HOUSE OF
Essential	Materials (Defence) Act
Murray (Oxford)	Smith (York North)
Murray (Cariboo)	Stewart (Yorkton)
Nixon	Stewart (Winnipeg North)
Noseworthy	Stick
Pearson	Stuart (Charlotte)
Picard	Thomas
Pouliot	Tremblay
Quelch	Ward
Riley	Warren
Roberge	Weaver
Robertson	Weir
Robinson	Welbourn
Rooney	Whiteside
St. Laurent	Whitman
Shaw	Winkler
Simmons	Winters
Sinclair	Wood
Sinnott	Wright
Smith (Queens-	Wylie-136.
Shelburne)


Mr. Speaker:: I declare the amendment lost. Is the house ready for the question on the main motion?


Some hon. Members:: Question.


Mr. Pearkes:: Mr. Speaker, I paired with the Minister of Veterans Affairs (Mr. Lapointe) in order that he might take my greetings to the Canadian Legion convention in Winnipeg.


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


Stanley Howard Knowles: Mr. Speaker, there was an undertaking by the Minister of Trade and Commerce that he would answer certain questions when he spoke in closing the debate.


Alphonse Fournier: Could he do it in
committee?


Stanley Howard Knowles: No; I think it had better be done on second reading.


Some hon. Members:: One o'clock.
At one o'clock the house took recess.
The house resumed at three o'clock.


Mr. Speaker:: Is the house ready for the question?


Stanley Howard Knowles: May I again, Mr. Speaker, point out to the Minister of Trade and Commerce (Mr. Howe) that he indicated this morning that when we reached the end of the debate on second reading he would answer the kind of question that was put to him by the hon. member for Rosetown-Biggar (Mr. Coldwell). In order to indicate the questions that were in our minds, so that the minister can deal with them fully, I would point out that we should like to know wherein this act is similar to the United States legislation to which he referred this morning, and wherein it is dissimilar. We should also like to have the minister tell us in what way the government 

interprets the clauses in the act that refer to essential materials and essential services and give the minister power to fix maximum prices therefor.
The basic question that is before us is this: How far does this bill go? For example, will it be possible for food to be considered as an essential material, and will it therefore be brought under the price-fixing powers of the minister? If that is not the way in which the minister and the government interpret the wording of the legislation, or at least if that is not the way in which they intend to use it, we should like to know whether or not, in their view, its wording is such that they can use it in that way if they become convinced that they should.
We feel that we should have a clear and frank statement from the minister as to how the government intends to use this bill and how they intend not to use it; and if there is anything more he can tell us by way of bringing us up to date with respect to the government's position as to over-all price control, we think that now is the time to do it.


Mr. Speaker:: If the Minister of Trade and Commerce (Mr. Howe) speaks now, he will close the debate.
Right Hon. C. D. Howe (Minister of Trade
and Commerce): In the course of this lengthy debate, Mr. Speaker, I think that most matters have been discussed. In speaking to the amendment, however, I said that I would give more details of the bill which was recently passed by the congress of the United States and which extends to the president of that country powers somewhat similar to those referred to in the bill before us. I have not the act itself. A printed copy of it has not reached Ottawa as yet; at least, it has not reached my desk. But I have here a summary of it furnished by our representatives in Washington and I shall read from it.
The purposes of the act are to facilitate the production of goods and services necessary for national security through a system of priorities and allocations of materials and facilities; by providing financial assistance to expand productive capacity and supply, by strengthening controls over credit and regulating speculation on commodity exchanges.
Section 101 of the bill gives the president authority to require contracts to be accepted and performed with priority, and to allocate materials and facilities in order to promote the national defence.
Section 102 prohibits the hoarding for personal, business, or home consumption, or for the purpose of resale at greater than market prices, materials which have been designated by the president as scarce materials.

Section 103 provides for a fine up to $10,000 for failure to comply with the anti-hoarding regulations.
Section 201 gives the president authority to requisition plants and facilities, including materials, for national defence purposes and to pay for them and to return them to the owners on payment of the fair value thereof after the property is no longer required. If compensation set by the president is unacceptable, the owners can accept seventy-five per cent of the amount set, and take court action to settle the amount of compensation.
Sections 301 and 302 give the president authority to make loans, either direct or by guaranteeing private loans, for expansion to meet defence needs. The authority to supply or disburse funds for this purpose can be delegated by the president to "guaranteeing agencies"-that is, government departments or agencies such as army, commerce, et cetera, responsible for national defence procurement.
Section 303 allows for the government purchase of scarce materials including metals, minerals and liquid fuels, and for the exploration, development and mining of critical minerals and metals; and includes the right to transport, store and have materials processed and refined.
Section 304: The total amount borrowed is not to be more than $600 million outstanding at any one time. In addition, sums not exceeding $1,400 million can be appropriated to carry out sections 302 and 303.
The sections under the title of price and wage stabilization vest wages and price control authority in the president, the main exceptions being prices or rentals for real property, margin requirements on any commodity exchange, rates or fees for professional services, rates charged on any common carrier or public utility. I point out that these are excepted from the provisions of the act.
Section 401 sets out the objectives behind price and wage stabilization, for example, to prevent inflation, eliminate profiteering and hoarding, maintain balance between purchasing power and supply of consumer goods and services.
Section 402 provides the president with authority to approve voluntary programs and agreements on the part of business, agriculture, labour and consumers to stabilize prices and wages. To the extent these programs are unsuccessful, the president has the authority to initiate selective price controls which must be accompanied by wage controls within the industry producing the product subject to price rulings. If general price controls are introduced, there must also be general wage controls.
69262-35J
Essential Materials (Defence) Act
Wages are to be stabilized at rates paid during the period from May 24, 1950 to June 24, 1950, inclusive. Extensive regulations governing prices of agricultural commodities are set out in subsection (d) (3).
Section 403 provides that at such time as the president determines it is necessary to impose price and wage controls generally over a substantial portion of the national economy, he shall administer such controls and rationing at the retail level of consumer goods for household and personal use, through a new independent agency created for the purpose.
Sections 404 to 409 deal mainly with regulations governing protests against this part of the act or violations of its terms.


George Alexander Drew: Section 401 is really the main operative section, is it not? That is the section that sets up economic stabilization-


Clarence Decatur Howe: Yes, as far as prices and wage controls go. Then there is settlement of labour disputes. This part of the act deals with effective procedures to settle labour disputes affecting national defence. The president is authorized to call voluntary conferences of management, labour and representatives of the government and the public, and to take action as decided upon by such a conference.
Control of consumer and real estate credit. The board of governors of the federal reserve system are authorized to carry out consumer credit controls until such time as the president determines that such controls are no longer necessary, but in no event beyond June 30, 1951. My hon. friend will appreciate that a similar bill is being introduced at this time by the Minister of Finance.
Under section 602 the president is authorized to prescribe regulations with respect to real estate construction credit. Then there are general provisions.
Section 703 (a) gives the president authority to delegate any power or authority conferred upon him by this act to any officer or agency of the government, including any new agency or agencies, and this section further gives the president authority to create new agencies as he deems necessary. The hon. member for Lake Centre (Mr. Diefenbaker) will be shocked at that provision.


John George Diefenbaker: No. The United States act sets out the power in detail.


Douglas Charles Abbott: The minister was referring to delegation of powers.


Clarence Decatur Howe: The hon. member for Lake Centre objected to that.
Section 712 sets up a joint congressional committee to be known as the joint committee

Essential Materials (Defence) Act on defence production, to study the programs of this act and review and report on the progress made.
Section 716; titles I, II, III and VII terminate on June 30, 1952, but are effective after June 30, 1951 only to the extent necessary to carry out contracts entered into before July 1, 1951. Titles IV, V and VI terminate on June 30, 1951.
These are the notes I have. The other question my hon. friend asked was the extent to which the present legislation would oe made effective in controlling prices, and what would be considered scarce articles necessary for defence. I think the test of that would be whether the particular article is being bought in quantity for defence, and whether the defence purchases create a scarcity. It will not be difficult to determine whether defence purchases of any particular article have the effect of increasing the price of the article, and if that is the effect, the purpose of the present legislation is to give the government authority to freeze the price and thus prevent public exploitation arising out of government defence purchases.


Major James William Coldwell: Does the minister consider
that this will affect only a very limited range of goods, and not such goods as farm production, and that kind of thing?


Clarence Decatur Howe: There again the test will be:
Can the army buy the required amount of food without creating a domestic shortage and thus creating a price inflation? The test applies to food as it would to any other article.


Major James William Coldwell: Clothing?


Clarence Decatur Howe: Clothing; anything that is being bought by government purchasing.


Mr. Fraser:: Especially canned goods.


Some hon. Members:: Nails.


George Alexander Drew: The minister has indicated by
his remarks that, as he interprets that part of the legislation, it will be the actual situation that determines what it covers. But I think he has made it quite clear that if the pressures were such as to create a shortage, then this legislation would cover food or any other commodity that might be in short supply. Is that right?


Clarence Decatur Howe: I would like to limit it to the
pressure of buying for the services, buying for defence. If pressure arises in the material which we are not buying in quantity for defence, the particular article would not come under the provisions of this legislation, as I interpret its terms.


George Alexander Drew: I do not want to debate the
point, as one cannot of course say just exactly
	I

which particular thing is being purchased at a particular time. Is it not reasonable to say that if as a result of these added defence purchases there was a shortage which limited the possibility of getting requirements for the defence forces, then this would apply to that particular commodity?


Clarence Decatur Howe: Quite.


George Alexander Drew: Is that right?


Clarence Decatur Howe: That is the exact situation.


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


George Alexander Drew: On division.


Mr. Speaker:: Carried on division.
Motion agreed to on division, bill read the second time and the house went into committee thereon, Mr. Dion in the chair.
On section 1-Short title.


John George Diefenbaker: Now that the house
has heard the explanation by the minister, more than ever I say the criticism advanced by the opposition becomes even more tenable. The minister tells us that there is similar legislation in the United States, and he produces a summary of the legislation passed within the last two days by the United States congress. The interesting point in connection with what he has stated bears out the basis of the criticism made by the opposition, namely, that whereas in the United States the full powers being granted are written into the act to the extent of some 800 sections, as I understand it, thereby giving in detail the power granted to the president by the United States congress and limiting his powers to the legislative authority comprised in the act, we in this country are giving to the minister full and uncontrolled powers.
It was stated on Saturday that it would be possible to challenge anything that had been done in excess of the powers being conveyed to the minister in these general terms. One realizes from the experience of the past that any such challenge by way of amendment to the address in reply, or on going into committee of supply or otherwise, would be regarded as a vote of non-confidence and would be voted down. So that constitutional power which is referred to in such fulsome terms by the Minister of Justice is indeed nothing more than a sham and a delusion in this parliament.
There is no control under this bill over 'the absolute powers of the minister. On previous occasions we have given powers to the minister and he has used them under

orders in council so as to deny the rights of individuals to the rule of law. I will give one example. In an order in council passed under the general powers vested by parliament in the government during the days of war, a controller was set up. Under that order in council provision was made whereby any person brought before the controller to give evidence was refused any constitutional safeguards whatever, and refused counsel. There was a provision in that order in council whereby, however illegally the controller acted, the individual had no right of recourse.
All of us in the House of Commons wish to do everything we can to assist in the mobilization of our country for defence. What we contend for in this debate is not our opposition to the granting of necessary powers to the minister, but rather to the granting of absolute powers which permit him to deny to the individual the right of recourse to the courts and, if he wishes to do so, to deny to any individual equality under the law.
The minister mentioned a while ago that the hon, member for Lake Centre would have objected to certain provisions. There would be no objection if we had in this measure the right of the individual to appeal to the courts, a right which is given in the United States act.
Under the United States act, if the president acts in such a manner as to cause a subject of that country to believe it to be a denial of justice under the law, there is a right of recourse to the courts. Under the United States law, when the president directs an individual or a corporation to do anything -to sell, for instance, at a price designated by the president-the individual against whom such order was made has a right of recourse either to arbitration or to the courts so as to preserve his rights.
This bill in its present form simply amounts to the granting of extraordinary powers to be exercised by the minister or the governor in council without a right on the part of any person to raise objection in the courts as against any injustice that may be done. We are willing to grant rights; but our objection has been that in doing so we must preserve under the law the right of the individual to protect himself against arbitrary caprice or injustice that may be exercised by the minister or by his successor or by the governor in council.
No one objects to the giving of powers to the executive at this time, provided that we in parliament know what we are giving. It was interesting to note that the minister could not and did not give assurance in con-
Essential Materials (Defence) Act nection with bringing in a system of price controls; indeed he indicated that under this measure he would not have power to do so. As I understood him, his powers will simply be the right on his part !to intervene in connection with commodities required for defence. If an arbitrary price is asked, or scarcity results, he will then be able to step in.
But that is not what the sections mean, if they are interpreted in their ordinary terms. Those sections give to the minister absolutely uncontrolled power to do anything which in his opinion he considers necessary. The interpretation of the act will be his interpretation. The limitations upon his powers will be the limitations he chooses to put upon his powers. No individual whose rights are interfered with has any right under this measure as it now stands to do more than make an objection. The courts of this country are denied to the individual, although they are not denied under the powers conferred upon the President of the United States.	.
We believe that parliament has a right not to grant powers that depend for their interpretation upon the will of a minister. We believe that the powers granted should be set out in such a way that those who run may read. Under the measure in the United States, any person in that country can refer to the statute and there find the power granted to the president. As to the blanket powers granted under this measure, no one may know what their limitation may be. However far the minister may go in his interpretation of his powers, he alone, in his supremacy, may say that his decision is the final decision. The courts of this land have no right to delimit him in any way, or indeed to protect the subject, regardless of how unfair the order may be. He may say to one individual: You shall sell at such and such a price; and to another individual within the same industry: You shall sell at a lesser price. When provision is made whereby any minister of the crown has the power, as among individuals within a class, of extending certain rights 'to one individual that he may deny to another, no one in this house can say that such power should be granted by parliament.
We agree with the objective. We want to see everything done at this time to mobilize the nation. The Minister of Justice found something on Saturday. He found the War Measures Act, which is known to every person in this country. He gave his reasons why the government did not proceed under the War Measures Act. My answer is that the War Measures Act was not used
550	HOUSE OF
Essential Materials (Defence) Act because if it had been used the question of the mobilization of manpower would have to be faced. If the minister is to have the power to say to an industry what it shall produce, and to a producer what he shall produce; or if he can direct that the production of a certain commodity shall be expanded, he has to have the power as well to control and direct manpower in order to secure the production that he requires.
I repeat that if the War Measures Act had been invoked it would have been necessary to deal also with the matter of manpower, and it was for that reason that this method of dealing with the question has been used. We are given a bill which is allegedly an imitation of the bill empowering the President of the United States, but in fact it is as far removed from the bill in the United States as daylight is from darkness. In the one case the president gets power which is controlled by the courts and designated by congress; in this bill the governor in council and the minister get powers which are undefined, unexplained and uncircumscribed, and without providing for the right on the part of the individual to raise any objection. After saying that the minister shall have these tremendous powers, finally, in order that there may be no mistake, the bill provides that the minister shall be empowered to do such further things in regard to the production, supply, distribution and use of essential materials or services as may be authorized by order or regulation.
I think this debate, which has brought to light the viewpoints of members on both sides of the house, has in fact clarified the atmosphere. I should like to ask the minister a question. There has been some suggestion in the United States that the powers vested in the president under the United States act would permit the necessary power development measures to be taken by the government of the United States and the government of Canada to develop the St. Lawrence waterway. Is the question now being considered of proceeding with this work in order to bring together in co-operation the economies of Canada and the United States, to the end that there will be available necessary power as a stand-by in order to ensure the industrial expansion and development that is so necessary as between these two nations?


Clarence Decatur Howe: Mr. Chairman, I always listen with great enjoyment to the eloquence of my hon. friend.-He can never be accused of consistency. Start him off on one trail and he develops that trail with great detail and great eloquence and in a most convincing manner; but I have never seen him limit himself to any one direction. He has just [Mr. Diefenbaker.)

presented an amendment which states that the government should declare a national emergency. Such a declaration can be based only on apprehended war under present-day conditions.


John George Diefenbaker: It is more than that.


Clarence Decatur Howe: Apprehended war is the only present reason for a state of emergency that I know of. Then he asks us to invoke the War Measures Act. As hon. members know, the War Measures Act was written in 1914 by Sir Robert Borden. If in that act there is any limitation of the powers given to the government I must say I have never found them, and I have operated under that act for several years. The act simply provides that the government can do anything that is necessary for the prosecution of the war and the protection of the civilian economy.
The hon. member goes on to say that the government did not invoke the War Measures Act because it would have to deal with manpower. May I tell my hon. friend that this government has dealt with manpower, and I believe dealt with it to the satisfaction of the country, in spite of what has been said by the hon. member for Kamloops. Then the hon. member goes on to say that we should describe down to the last detail exactly what we plan to do. He says that we should state now whether there is going to be a shortage in nails, which I mention because of the traditional interest in that subject of the hon. member for Peterborough West. He says that we must decide whether copper is going to be short, or whether almost anything than can be thought of is going to be short. If we do not now think of a commodity as being short we will not be able later to do anything about it. If a commodity does not happen to be classified now as likely to be short, we will have legislation on the statute book that is not going to help that situation very much. However, he wants to know now just what is going to be short. I cannot tell him what is going to be short.


John George Diefenbaker: Nobody suggested that. It was simply an inquiry as to what your powers are to be.


Clarence Decatur Howe: I think the powers are pretty well explained. My hon. friend says that they are unlimited, but there are certain limitations on them. One limitation is that I cannot invade the jurisdiction and authority of the provincial governments. If my hon. friend knows anything he knows that the authority of thq provincial governments touches the life of the individual to a much greater extent than authority of the federal government. The hon. member smiles. If any man can

show that under this legislation we are invading provincial authority, that man can go to the Supreme Court of Canada and have a ruling upsetting any such action taken under this bill. Every hon. member who knows anything about his rights is aware of that fact.


John George Diefenbaker: I do not know to whom
the minister is referring when he talks about smiling. I have been listening to him.


Clarence Decatur Howe: I was talking about the young lad from one of the Toronto ridings who has had a lot to say about this bill. I hope that when he is as old and experienced as the hon. member for Lake Centre he will not smile at these provisions. Perhaps that is too much to hope for, as he does not seem to have very much equipment to start with.
My hon. friend asks if under this legislation the president intends to build the St. Lawrence waterway. From everything I know I would say that that is most unlikely. It has always been considered that a treaty would be necessary before that waterway could be built, and I think there is nothing in the present situation that has changed that position.


Donald Methuen Fleming: May I ask the Minister of Trade and Commerce this simple question, if we can arrive at a basis that is simple enough for an exchange between our minds. He seems to think it has to be on a pretty simple plane.


Clarence Decatur Howe: Make it pretty simple.


Donald Methuen Fleming: I shall put the question to his exalted intelligence, his autumnal wisdom. Is there a national emergency in existence in Canada today?


Clarence Decatur Howe: Mr. Chairman, the courts may find so, but the government has not said so, except with reference to rent control.


An hon. Member:: What did you call the session for?


Donald Methuen Fleming: The minister says that the government has not said so. We well know that. Anybody who can read English or French can see it is not in the bill. I still persist in addressing to this august intelligence a simple question, coming from a simple mind-


Some hon. Members:: Hear, hear.


Donald Methuen Fleming: -and, apparently in the view of the minister, quite a youthful and immature mind. Nevertheless I think it is a very simple question for his great intelligence. I am not asking whether the government has said so or whether it has not. I am asking whether in the view of the government there is a national emergency in existence today.
Essential Materials (Defence) Act


Clarence Decatur Howe: There is only one authority that can determine that-the courts of the land.


Donald Methuen Fleming: No, no.


Clarence Decatur Howe: My hon. friend has asked whether, legally speaking, there is an emergency in the country. Let him go to the courts. I would think that even he would know the source of such a judgment. In the Manitoba courts this government said there was an emergency and the high court of Manitoba said that there was not. That decision is under appeal to the supreme court at the moment. Perhaps when the supreme court brings down its finding we shall know whether there was an emergency in this country a year ago. I suppose the courts would be very glad to consider anything that my hon. friend wishes to put before them with respect to whether there is an emergency at the present time.


Donald Methuen Fleming: We have just had a first-class exposure of the completely befuddled thinking of the government in relation to the whole problem. We have been here now for two weeks. We were called here for an emergency session to face, as we were told, a crisis. One would have thought that the crisis must have a relation to a national emergency. Certainly the validity and constitutionality of such measures as the one now before the house depend entirely on whether a state of national emergency does or does not exist at the present time.


Clarence Decatur Howe: Another curbstone decision.


Donald Methuen Fleming: The minister seems very unwilling to accept instruction, but he might have consulted the Minister of Justice. Apparently he does not consult him any more since he told him, like a small boy, as much as to behave himself and say nothing in the house a little less than a year ago. Now that the Minister of Trade and Commerce has taken over the functions of the Department of Justice together with his own, and is undertaking to interpret constitutional law, I should like to ask the minister where, apart from the existence of a national emergency, parliament derives its power to legislate in the terms of this bill, which certainly invades the field of property and civil rights in the provinces.


Clarence Decatur Howe: As I stated earlier, the government is bound by the opinions of the Minister of Justice, and I shall ask him to give his opinion on that situation.


Stuart Sinclair Garson: I have been listening with great interest to this exchange of views. If I may express my opinion, in spite of the
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Essential Materials (Defence) Act sheepskin that the hon. member for Eglin-ton has, I think that the Minister of Trade and Commerce is a better lawyer.


George Alexander Drew: Since when did you become capable of judging?


Donald Methuen Fleming: What does he wear, a goatskin or a wolfskin?


Stuart Sinclair Garson: No matter what he wears, it is what he has in his head that counts. We have heard a great deal about the necessity for a statement of an emergency in the legislation now before us. With much of what has been said by the hon. member for Lake Centre and the hon. member for Eglinton as to this, I am prepared to state my disagreement. Although he also is not a lawyer, the hon. member for Winnipeg North Centre gave an enunciation of the legal principles which to my mind is much more sound. I am not surprised at that.


Mr. Smith (Calgary West):: In the name of Samuel Goldwyn, include me out.


Stuart Sinclair Garson: I did not want to comment on the performance of my hon. friend from Calgary West, because he had too great an advantage the other night. He expressed an opinion of dissent although he was not in the house to hear the opinion from which he was dissenting. It is hardly fair to put him in the same category as the others. I am not surprised that the hon. member for Winnipeg North Centre should have a pretty firm grasp of the legal principles involved, because he indicated the source of his information, the former member for Kindersley, Mr. Jaenicke, who in my opinion is an excellent constitutional lawyer, judging from the statements he made in the house.
I think the whole difficulty with my hon. friends of the Conservative party is that they have neglected to keep up with their reading of constitutional case law. The statements of law which they have mentioned are statements that would have been accepted as perfectly sound as applied to this bill ten years ago, but since that time other judgments have been given which apparently they have not taken the trouble to read. I judge that is the reason why they have been expounding their theory of national emergency. I should like to refer them to the exact language of Lord Simon, rendering the judgment of the privy council in the case of Attorney General for Ontario v. Canada Temperance Federation. I shall not read from the judgment at great length, but in relation to the question whether a matter comes under federal jurisdiction on the one hand or provincial on the other Lord Simon says:
In their lordships' opinion, the true test must be found in the real subject matter of the legislation: 

if it is such that it goes beyond local or provincial concern or interests and must from its inherent nature be the concern of the dominion as a whole (as, for example, in the aeronautics case and the radio case), then it will fall within the competence of the dominion parliament as a matter affecting the peace, order and good government of Canada-
That is even in cases where it does not come under the specific classes of section 91 of the British North America Act it may still come within dominion competence.
-though it may in another aspect touch on matters specially reserved to the provincial legislatures.
For example, property and civil rights.


John George Diefenbaker: Was not that contention argued before the Manitoba court of appeal, your own court, and they decided against it?


Stuart Sinclair Garson: I have very great respect for the court of appeal for Manitoba, but I still think that Lord Simon is a pretty good authority on the matter which I am discussing at the moment.


George Alexander Drew: He will be happy to know that.


Stuart Sinclair Garson: Lord Simon goes on to say:
War and pestilence, no doubt, are instances: so, too, may be the drink or drug traffic, or the carrying of arms. In Russell v. The Queen, Sir Montague Smith gave as an instance of valid dominion legislation a law which prohibited or restricted the sale or exposure of cattle having a contagious disease.
I ask my hon. friends to listen particularly to this:
Nor is the validity of the legislation, when due to its inherent nature, affected because there may still be room for enactments by a provincial legislature dealing with an aspect of the same subject in so far as it specially affects that province.
Now that being so, the justice department, in the drafting of this legislation-not necessarily as an opinion expressed by myself, although I must say I entirely concur in the view which was reached by the law officers- thought it could be stated that under such conditions as exist at the present time there was an obligation upon parliament and upon the government to look after the defence of the country, and that a law clothing the government and the Minister of Trade and Commerce with such powers as were necessarily ancillary to the carrying on of the defence of the country was a law which was within the competence of parliament.
In addition to that we were of the opinion, which I think every member of this house will share, that when we get into a condition of great economic and industrial activity, a condition of boom, and we have superimposed upon that, not only in this country but in many other countries, a great amount of activity connected with defence preparations, it is almost inevitable that these defence activities can be the means of disrupting normal trade and commerce. I

believe the member tor Lake Centre and the member for Eglinton will agree that the orderly conduct of trade and commerce in Canada as a whole is certainly the responsibility of this government and of this parliament, and is not the responsibility of any province. This act could be, therefore, defended as to its constitutional foundation on that ground as well.
It could also be defended, in the terms of Lord Simon's statement, as an act for the peace, order and good government of Canada, whether or not there is in the preamble a declaration of a statement of emergency in Canada.
The member for Lake Centre asked me a question-


John George Diefenbaker: Will the minister allow a question at this point?


Stuart Sinclair Garson: Just a moment; he has asked me as to the date of this judgment. It is 1946. If I am not mistaken I am sure my hon. friend, upon the reflection which he has not yet given this matter, will agree with me that this is still the leading case.


John George Diefenbaker: The Manitoba court of appeal did not agree with that.


Stuart Sinclair Garson: My friend says the Manitoba court of appeal did not agree with that, but at the time that decision was given the privy council was senior to the Manitoba court of appeal. I believe my friend will also agree with that proposition.


John George Diefenbaker: All this exhibition of pomposity does not answer the question. I asked the minister whether under this bill as it stands the government has the power to put into effect an over-all price ceiling in this country on the grounds advanced by the minister, that when the situation becomes so serious economically that it affects the whole country, such powers are then vested in the federal authority. Under this bill, and without any declaration of emergency, has the minister or the government the power to fix prices in this dominion?


Stuart Sinclair Garson: In reply to that question, Mr. Chairman, I would say that in my own personal offhand opinion the government and the minister have no power to regulate anything under this bill except in so far as it deals with the matter of securing essential defence supplies and services for this country. Whether they will have the power to inaugurate an over-all price ceiling will depend on whether an over-all price ceiling becomes, under the circumstances of the future which one cannot now foresee, essential in order to secure the defence supplies and services which Canada then requires.
Essential Materials (Defence) Act


Donald Methuen Fleming: May I address to the Minister of Justice a simple question which the ancient Minister of Trade and Commerce adroitly sidestepped? Can the minister state whether, in the view of the government, there exists in Canada today a state of national emergency?


Stuart Sinclair Garson: I would object to that question as being completely irrelevant, upon the very ground my hon. friend has stated-that we are not supporting this legislation upon the assertion of an emergency. I should be glad to express my opinion to the hon. member privately to satisfy his curiosity, but that is the only purpose my answer would have in this context, because it has nothing to do with the matter at all.


Donald Methuen Fleming: Apparently it has nothing to do with any subject before the house at this session! After being here for two weeks at a so-called special emergency session to consider matters that were said to be related to a national emergency, here we are today with the Minister of Justice not prepared to state whether the government has or has not a view on the question whether there does or does not exist in Canada today a state of national emergency. I should tell him-


An hon. Member:: Now, be careful.


Donald Methuen Fleming: The Minister of Justice talked about some reading. I think his reading of law began too late. I believe a little more reading and a little earlier commencement of the subject might haVe done the Minister of Justice some good. I shall tell him that the principle he was attempting to find within the statement of Lord Simon is not a statement of principle that has any bearing on the question we have raised as to this bill, as to its preamble and constitutionality. The minister had better scurry around and find some evidence of the existence of a state of national emergency if he is going to make this kind of legislation stick, and if the people are to try to carry on business within this country and abroad; because there will be some assurance required as to what the rights of the people are to be in their trading contacts with one another. He will have to have a more solid foundation than the one he is putting before the committee this afternoon.


Gordon Graydon: I have listened to the Minister of Justice describing in circuitous fashion what this bill means to the ordinary man. As I listened to the discussion on the question whether under certain cireumstances the dominion government would be able to institute a system of price controls I wondered how I could ever use the phraseology of the minister to answer a country storekeeper in my riding when he says to me: "Gordon, what
554

Essential Materials (Defence) Act did they do down there? Did they put through legislation that would enable the government to put in price and wage controls?" I cannot answer that in the language the minister used, because the storekeeper would not understand it any more than I did. What I want to know from the minister is this. When I am asked that question, can I say that under certain circumstances the government has the power now to institute price and wage controls?


Stuart Sinclair Garson: I think the hon. member could cover it in about twenty words. They are these: only so far as it may become necessary in order to obtain essential goods and services, and then only in respect of such essential defence goods and services.


Mr. Hodgson:: Oh, answer the question.


Stanley Howard Knowles: May I join in the simple
questions being directed to the Minister of Justice? First of all, in order to get it clear I should like to pursue the question as to price control power under this bill as it now stands. I think the point has been made fairly clear that in the mind of the government the test is whether or not certain goods are essential for defence purposes. Suppose the government for defence purposes, for supplying the armed forces, were purchasing large quantities of beef, and suppose that had the effect of increasing the price of beef. Does that give the government, under this bill, the power to put a ceiling on the price of beef, both as to purchases by the government and as to purchases by the consumers of this country?


Stuart Sinclair Garson: I think that undoubtedly
would provide the minister with a set of circumstances which would warrant his exercising the powers conveyed by the act.


Stanley Howard Knowles: In other words, the answer is yes.


Stuart Sinclair Garson: I do not want to mislead any person here through a misconception which might arise, as it often does, from the answering of purely hypothetical questions.
I am sure the hon. member who asked the question must realize that while a shortage might arise-and I will take the example he mentioned-in beef, because of the demand of the armed forces, any powers that can be exercised legally under this act are still subject to the usual economic and fiscal difficulties; and therefore, as I think will be agreed by anyone who has had much experience with applying controls, it is extremely difficult to isolate any one commodity and establish a control over it, although that may be the only one in which a shortage has developed. That, of course, is a case for 
the good discretion of the Minister of Trade and Commerce; and his capacity to discharge a discretion of that sort has, I think, been fairly well established over the years in that particular field.


Stanley Howard Knowles: The minister has just said
that it is difficult to put a price ceiling on one or two items. Yet the only information we have so far is that these powers will be used for just one or two items such as steel and electricity.
I want to ask another question, which the minister may say is hypothetical but which I think is very real. Suppose the purchases by the government for defence consume large quantities of steel and thus result in a shortage of refrigerators, electric stoves and appliances of that kind for which the ordinary consuming public is in the market, and that as a result of such defence purchases the prices of those commodities start to go up. Has the minister power under this bill to put a ceiling on commodities of that kind?


Stuart Sinclair Garson: I think the answer would be yes.


John George Diefenbaker: Would be what?


Stuart Sinclair Garson: Would be yes. My hon.
friend asks the bare, naked hypothetical question: Has the minister power to do this? I say the answer would be yes. Whether he should or not, under the circumstances, is another entirely different question. But upon that one question I think the answer is yes.


Stanley Howard Knowles: I appreciate the frank and
one-word answer to my question.


Donald Methuen Fleming: A bare, naked answer.


Stanley Howard Knowles: If it is to be admitted that under certain circumstances the minister, under this act, would have the power to put a ceiling on the price of beef, and if under certain circumstances he would have the power to put a ceiling on the price of refrigerators and electric stoves, who draws the line, and where is it drawn? Maybe it is a good thing that we in this group voted for this bill. Maybe it will eventually turn out that it has in it the price control powers which we are asking the government to take.


Donald Methuen Fleming: It has everything in it. It has all the powers.


Stanley Howard Knowles: The other question I wish to put to the minister is this. If perchance this bill does have a line drawn in it somewhere, and if perchance there is not the power to go the whole way, as it might be thought from what I have just said, is it not the case that the minister in his remarks this afternoon has established the right of the federal

parliament to pass legislation to give to the government powers of that kind? I appreciated the compliment paid to me by the minister in connection with my remarks when I quoted the judgment of Lord Simon. Naturally I would presume that that compliment carries with it agreement with the position that I was taking. Indeed, in his effort to answer the arguments of the Progressive Conservatives as to the need for a declaration of an emergency-and I agree with him-he seemed to me to be founding the federal government's authority to enact this legislation on the principle laid down by Lord Simon, namely, the inherent national interest involved in the problem that faces us. My question therefore is this, if I may try to sum it up simply: If there is not in this bill full power for price control, has the Minister of Justice not made it clear from what he said this afternoon that the federal government now has the power to bring in a bill for that purpose if only they wished to do so?


Stuart Sinclair Garson: I think that is not a necessary corollary from my answer, for this reason. We affirm the constitutional validity of the bill which is before the house-


Stanley Howard Knowles: Granted.


Stuart Sinclair Garson: -for the reasons that I stated a few minutes ago: it has to do with the providing of defence materials at a time when Canada is in great need of defence materials, and it has to do with the prevention of complications in trade and commerce at a time when there is a great likelihood of such complications occurring. From that argument, however, it does not follow that, in the absence of the necessity for defence or in the absence of an abnormal condition, in peacetime the federal parliament can pass laws in relation to those subjects which ordinarily fall within provincial jurisdiction. When one comes to consider this matter, one cannot answer these questions in the abstract or on a hypothetical basis. We say that this bill is constitutionally valid because there are the plain facts upon which the constitutional authority is based. But my hon. friend would be quite wrong in jumping to the conclusion that in normal times of peace it was possible for this parliament to step in and to pass general price control legislation.


Stanley Howard Knowles: Does that mean-and I hope the minister is not going around in circles here-that to a certain extent the Minister of Justice bases the validity of the bill now before us on the fact that there is something abnormal about the times in which in these days our lot is cast?
69262-36J
Essential Materials (Defence) Act


Stuart Sinclair Garson: That is right.


Stanley Howard Knowles: All right; then we will not pursue for the moment the question as to whether there was power to retain or to introduce price controls two or three years ago. We will agree to disagree on that. But if the abnormality of our time is the basis for the legislation as far as this bill goes, does not that same abnormality provide the basis for the further legislation respecting price controls which we are requesting?


Stuart Sinclair Garson: Well, that too is a hypothetical question, Mr. Chairman.


Stanley Howard Knowles: It is very real to the housewives of Canada.


Stuart Sinclair Garson: That is right. I would say not necessarily. I do not want to seem to hedge on this thing; but I am not in the habit, as some opposition members are, of giving off-the-cuff opinions on matters of this consequence. If in the Department of Justice we were called in and instructed along these lines: "We want you to investigate the constitutional validity under present circumstances of a general across-the-board price ceiling," then we would have to take that problem back and consider by what methods of drafting we could produce a bill which would hold water. And it would not necessarily follow from the fact that we could justify this bill in relation to defence and to trade and commerce and to the peace, order and good government of Canada that we could justify an across-the-board price control at the present time. That is a matter upon which I certainly would not express an opinion without much more mature consideration.


John George Diefenbaker: Have you not had a legal opinion from your officers?


Stuart Sinclair Garson: We have been instructed to produce the present bill. We have produced it and we think it is a good one. We think it can hold water, the hon. member for Eglinton and the hon. member for Lake Centre to the contrary notwithstanding.


Mr. Stuart (Charlotte):: I have listened to the discussion in connection with price control, and I have just two questions to ask the minister. I have also listened to the long discussion carried on by hon. members of the opposition on this side of the house, and their assertions that to a great extent Canada is under the influence of the United States. But I would like to ask the minister whether in his opinion it would be possible to maintain price controls in this country until similar steps were taken in the United States. Would it be possible to maintain those controls here if the United States had not taken that stand?
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Essential Materials (Defence) Act


Clarence Decatur Howe: I do not know that I am competent to answer that question. I have said previously that, in my opinion, it would be impossible to maintain price controls in this country unless they applied across the board and also included wage and salary controls. It would be very difficult to maintain overall control against a rising United States price level, but nevertheless we were able to do it in 1942 and 1943. Conditions are somewhat different today. We are starting our control at a much higher level, at an inflated level of prices. Whether any effective price control could be applied at this time assuming an uncontrolled economy operating in the United States, I am doubtful.


John George Diefenbaker: There is just one reference I should like to make. When the minister swept aside the authorities with that cavalier attitude of his, he forgot the authority of the decision on the wartime leasehold regulations by our own supreme court. I refer that authority to the attention of the house, 1950 Supreme Court Reports, page 124. The minister said that no longer did the doctrine of emergency apply and that we should bring our reading up to date. All I have to do, sir, is to point to Chief Justice Rinfret's judgment at page 130, where he deals with the question of emergency, and also to the judgment of Mr. Justice Kerwin at page 133.
The minister says that he cannot, by giving an off-the-cuff opinion, say whether or not an over-all ceiling could be placed on prices by the federal authority, having regard to the economic conditions now prevailing in this country. I ask the minister whether in the bill as it now stands he has the power to control wages in any way. I refer particularly to section 4, subsection 2, paragraph (i) which, after setting out the various powers, finally says:
... do such further things in. regard to the production, supply, distribution and use of essential materials or essential services as may be authorized by order or regulation of the governor in council.
Will the minister say that the government has power in any way, in order to secure production of necessary defence materials or commodities, to fix the prices of wages in so far as the employees within the industry are concerned?


Clarence Decatur Howe: This bill refers to materials and services. It does not specify articles and things. It does not give the government the power to fix the price of refrigerators or any similar article. It refers to materials and services, and it does not refer to wages. If we


were fixing the price of wages we would mention that in the bill. If my hon. friend would read and consider instead of just asking questions I think he might cut the time of the debate down materially.


John George Diefenbaker: That is the usual attitude of the minister. He resents parliament. He wants power. He has the power complex.


Clarence Decatur Howe: That is idle talk.


John George Diefenbaker: It was not idle talk when the minister denied to individuals in this country the ordinary rights that individuals have when investigations take place.


Clarence Decatur Howe: That is a complicated sentence.


John George Diefenbaker: It was not idle talk when he told people in this country: You must give evidence, and no matter what you say you will have no defence against it, and there will be no protection. It was not idle talk when he passed an order in council that denied any individual in this country the right of recourse to the courts regardless of whether what was done was illegal. I asked the Minister of Justice a simple question. The Minister of Justice is helping the Minister of Trade and Commerce out. I want to ask the Minister of Justice this question again. I ask him whether he did not secure an opinion from the law officers of the crown within the last three months as to the power to impose a price ceiling in this country.


Stuart Sinclair Garson: Dealing with my hon. friend's observations in the order in which he made them, may I say first of all I am very glad he brought up this question and the observations which he made concerning the matter of national emergency, because I certainly did not mean to imply by anything that I said today that there are not certain sets of circumstances under which that doctrine will not have an application at the present time.


John George Diefenbaker: You swept aside the question of emergency.


Stuart Sinclair Garson: Just a minute! My hon. friend has a great faculty of strategic or tactical interruption. I was suggesting, and I continue to suggest, that as applied to the circumstances of the case with which we are dealing the doctrine of national emergency does not have that significance that has been attached to it by the hon. member for Lake Centre and the hon. member for Eglinton, and is not conclusive as applied to these circumstances.
With regard to his second question, having to do with wages, I think that if he will look up the interpretation section and read the definition of essential services he will find

that that is an answer to his question. With regard to the third question. I am not aware that an opinion of that sort has been obtained, but I shall be very glad to check up and make sure.


Stanley Howard Knowles: This is very interesting. A half hour or so ago, when certain questions were put to the Minister of Trade and Commerce that were of a legal or constitutional nature, he suggested that the government was bound by the ruling of the Department of Justice, and that those questions should be directed to the Minister of Justice. So, in the course of our interrogation of the Minister of Justice we get the statement from him that under certain circumstances-and I make that clear-under certain circumstances this bill would give the Minister of Trade and Commerce power to put price ceilings on beef, refrigerators and electric stoves. Now the Minister of Trade and Commerce, who said the government would be bound by the decision of the Department of Justice, says that that answer is wrong.


Gordon Knapman Fraser: He does not know what he has got.


Stanley Howard Knowles: Who is going to sort this out?


Clarence Decatur Howe: The regulations are based on thie recommendations of the Minister of Trade and Commerce.


John George Diefenbaker: The minister will be their only interpreter.


Stanley Howard Knowles: Yes, we can be sure of that- the final decision will be made by the Minister of Trade and Commerce.


An hon. Member:: He will look after it.


Stanley Howard Knowles: I notice that the cheering section certainly goes to bat when these references are made to the Minister of Trade and Commerce. The bill in a number of instances specifically puts powers right in the hands of the minister himself. Where the bill does not do that, it puts powers in the hands of the governor in council. We know from our reading of orders in council that they are always passed on the recommendation of the minister. So that it is either an order directly by the Minister of Trade and Commerce or an order in council passed on his recommendation. But I take at its face value what he said a while ago, that the government would be bound by the decision of the Department of Justice. We have on the record here the statement of the Minister of Justice that in certain circumstances this bill would give the government power to put price ceilings on beef, refrigerators and electric stoves. "Yes," he said, in plain English.
Essential Materials (Defence) Act


Douglas Charles Abbott: So did the Minister of Trade and Commerce.


Howard Charles Green: I understood from what the Minister of Trade and Commerce said a moment ago that he has in mind raw materials such as steel, to which reference is made in the recital. The other day he also mentioned copper, zinc and nickel. If hon. members will recall, I made the suggestion this morning that a schedule should be written into the bill listing these different materials to be covered by the bill, with the additional provision, if desired, that the governor in council could add materials to the list. Is the Minister of Trade and Commerce prepared to accept my suggestion?


Clarence Decatur Howe: No.


Howard Charles Green: Why not?


Clarence Decatur Howe: The bill seems to me all right without that change.


Howard Charles Green: I think we are entitled to an explanation as to why the minister thinks that should not be done.


Clarence Decatur Howe: My hon. friend suggests we write certain matters into the bill, and write certain other things in later. I suggest that it would be better to write them all in later, as we get a clearer picture of materials which are in short supply. It may be just a difference of opinion, and I think my way is the better way.


Howard Charles Green: It is the intention of the government, then, that essential materials will be listed in the bill?


Clarence Decatur Howe: Not in the bill.


Howard Charles Green: At a later session?


Clarence Decatur Howe: They will be designated by regulation.


Howard Charles Green: At a later session of the house?


Stanley Howard Knowles: By order in council.


Clarence Decatur Howe: Orders in council will be tabled from time to time; that is, the regulations will be tabled.


Howard Charles Green: Can the minister tell us what materials and services he considers at the present time should be brought under the bill?


Clarence Decatur Howe: At the present moment there is nothing I consider should be brought under it.


Howard Charles Green: Not even steel or electrical energy?


Clarence Decatur Howe: They are being successfully rationed by the producers at the present time.
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Essential Materials (Defence) Act


Howard Charles Green: There is no need to use the bill for materials or services at the present time?


Clarence Decatur Howe: No.


Mr. Wright:: I am not a lawyer, but I should like to ask the Minister of Justice a question, one which I should think a good many other people would like to ask. It would seem that under this bill the minister may declare a commodity to be scarce, and he may believe it necessary to bring that commodity under the act for the purpose of limiting prices. Has the producer of that material the right to appeal to the supreme court, as to whether it is in fact a material or product which is scarce at the present time?


Clarence Decatur Howe: No; the Minister of Justice may give a ruling, but I think the intention of the bill is that if the government says it is a scarce material, it is a scarce material.


Gordon Knapman Fraser: You are the court.


Stanley Howard Knowles: What does the Minister of Justice think of that?


Douglas Charles Abbott: It is a pure question of fact.


Stuart Sinclair Garson: I agree entirely with what the Minister of Trade and Commerce says. It is one thing to appeal to a court on a question of fact of that kind. It might be inferred from some of the remarks made this afternoon that the subject, the citizen, is quite defenceless in respect of any invasion of his rights by an excess assumption of powers by parliament or by the governor in council. I think it should be pointed out that, in so far as it has been alleged in the House of Commons that we have exceeded our powers in seeking passage of this bill, that matter can be brought before the courts and, if in fact we have exceeded our powers, the courts will so declare. Similarly if in any order in council passed pursuant to the bill the governor in council exceeds his powers, that also can be attacked in the courts. But so far as discretion in the minister is concerned, as I read the bill, there is no appeal to the courts.


Percy Ellis Wright: The minister says the only appeal the producer would have would be as to the validity of the act itself?


Stuart Sinclair Garson: Yes.


Percy Ellis Wright: The validity of this measure.


Stuart Sinclair Garson: Yes.


Percy Ellis Wright: Whether this act is in fact valid, under the British North America Act. He could not appeal a particular decision?


Stuart Sinclair Garson: That is right.


Mr. Browne (St. John's West):: Mr. Chairman, the minister said he did not think there


was any commodity which was not being controlled by the industry itself. He also said a moment ago that this country is susceptible to the influence of price changes, in the United States. He is aware, of course, that prices have advanced in the United States during the past month or so, and that there are shortages in many materials. I would ask him if there have been any price advances in what he considers essential materials in the last few months, and whether or not there are shortages in essential materials such as lumber, rubber and steel.


Clarence Decatur Howe: There has been no advance in the last three or four years in the price of rubber produced in Canada. Synthetic rubber sells for the same price now that it has since 1946. Natural rubber is not manufactured in this country. I presume that its price is governed by the price of crude rubber in the Far East. I do not know of any way the Canadian government can regulate the price of crude rubber.
Then, so far as steel is concerned, the price of steel has been stable. There may have been minor changes within recent months, but I know of none that are substantial.
Then, with respect to lumber, I would say that the price of lumber has been controlled by the export market, and that prices have been soaring in my opinion altogether too fast.


William Joseph Browne: I believe last year there were several shortages in the building industry, of which cement was one. Is there any shortage in cement today?


Gordon Knapman Fraser: Yes.


Clarence Decatur Howe: Yes; I suppose a man cannot
have all the cement he wishes for his cellar, but if any cement is required for defence purposes, ample supplies are available. There is a close balance between enough -cement and not quite enough.


Gordon Knapman Fraser: Supply and demand.


George Alexander Drew: Mr. Speaker, the committee has shown some measure of impatience that there should be any discussion of this subject and yet the fact is that every answer that has been given has demonstrated that this committee needs a great deal more information than it has obtained. The Minister of Trade and Commerce and the Minister of Justice have given two diametrically opposed answers in regard to an important provision of this bill. The Minister of Trade and Commerce has told us that this bill would not invade provincial rights and the Minister of Justice, in this case accurately, has told us that it would.


Stuart Sinclair Garson: I must object to that as a complete perversion of the remarks I made.


George Alexander Drew: Surely the Minister of Justice is perfectly aware that this covers property and civil rights, and he has so indicated in this discussion.


Stuart Sinclair Garson: My hon. friend in his interjection has given a good demonstration that he -I shall not put it quite so bluntly, but I was going to say that he does not know what he is talking about. However, I think that might be too harsh. The British North America Act outlines the matters coming within dominion and provincial jurisdiction. Certain subjects like bankruptcy, for example, are assigned to the dominion, and certain subjects, like property and civil rights, are assigned to the provinces. When the dominion parliament passes a law in relation to bankruptcy, which cannot help dealing with property and civil rights, that process is not looked upon as being an invasion of provincial legislative authority over property and civil rights. If in the process of carrying out that federal legislation property and civil rights are, in so far as they are covered by the subject matter of bankruptcy, affected to some extent, that is not an invasion of provincial rights.
It is only by that kind of assertion that my hon. friend can put in my mouth the words which I certainly never uttered, nor could any inference to that effect be taken from them, that we were proposing in any way to invade provincial rights. We are doing nothing here but to take care of the essential defence supplies of this nation and to guard against inflation in our trade and commerce, both of which subjects, although they may touch upon property and civil rights, can be legislated upon by us without any invasion whatsoever of provincial rights.


George Alexander Drew: Will the Minister of Justice answer one straight question? Does this cover wage control? Does it cover the direction of labour?


Stuart Sinclair Garson: That question has already been answered. If my hon. friend will look, as I suggested a moment ago to the hon. member for Lake Centre, at the essential services section, which is section 2, paragraph (c), I think he will find an answer to his question.


Mr. Gibson:: It seems to me that a great many questions are being asked and with all due deference to the leader of the opposition and the distinguished legal talent we have in the committee I think they have mostly been academic. That may not be a fair statement for me to make because after all I am a logger and not a lawyer. I am quite sure that if an emergency develops suddenly in this country our provincial governments will be extremely glad to have their rights invaded
Essential Materials (Defence) Act and invaded promptly. When I go back home I shall be glad if I can tell my constituents that the government has the power to do anything required to meet any emergency that may develop.


George Alexander Drew: Mr. Chairman, the answer just given by the Minister of Justice is an example of the way he runs away from any real explanation. When he says that section 2(c) answers the question he knows perfectly well that it does not answer it at all. I am asking him if it is not so that under the provisions of this bill wages, the allocation of labour and other matters of that kind could be covered.


Stuart Sinclair Garson: I referred my hon. friend to
section 2(c) because I felt that a perusal of it would answer the question he asked. If it does not I shall be glad to take up the time of the committee and spell it out in words of one syllable so that he will be sure to understand it. Section 4, subsection 2, reads:
Subject to the regulations, if any, the minister may by order, as he deems necessary for the purposes of this act,
(d) require any person who supplies any essential service to supply the service to such persons, to such extent and on such conditions as the minister may prescribe;
If "services" includes the labour services of an individual citizen, then I suppose it could be argued that this would give power to establish wage control as the leader of the opposition suggests. But the interpretation section, which is section 2, reads this way:
In this act,
(c) "essential service" means the carrying on of any commercial activity-
Not working for wages but carrying on any commercial activity.
-including the generation and distribution of electrical energy, as is designated from time to time by the governor in council under section 3 as being essential for production, storage or distribution of essential materials.
As I suggested a few moments ago a perusal of that interpretation section indicates very clearly that the powers of the minister as to the requisitioning of services means the services of a -large organization, not the services of an individual employee of that organization.


George Alexander Drew: Mr. Chairman, every answer
that the minister gives simply indicates a reason for asking further questions. Of course the answer given is preposterous. In the first place, there is nothing in this bill that places on it the interpretation he has mentioned. It simply demonstrates the kind of problem that we are being asked

Essential Materials (Defence) Act to deal with without any satisfactory explanation at all. Section 2(b) reads:
"essential materials" means such materials and substances as are designated from time to time by the governor in council under section three as being essential for defence purposes.
Then section 4, subsection 2(i), reads:
Subject to the regulations, if any, the minister may by order, as he deems necessary for the purposes of this act,
(i) do such further things in regard to the production, supply, distribution and use of essential materials or essential services as may be authorized by order or regulation of the governor in council.
The governor in council may authorize the minister to deal with anything that is incidental or part of the production of any essential material, and that includes anything that might be described as an essential material of any kind in Canada. The minister's answer does not cover that at all.


[Stage Direction]
Section agreed to.
On section 2-Definitions.
William Joseph Browne: Paragraph (g) of this section reads:
(g) "price" includes rate or charge for any service;
Would not the word "service" in that paragraph refer to the service of a man working in a factory?


Stuart Sinclair Garson: It would in the absence of the definition section, but the definition section makes it clear that essential services are as stated in section 2(c).


William Joseph Browne: This paragraph says "any service."


Stuart Sinclair Garson: Service is still service under section 2(c).


William Joseph Browne: But it says here:
"price" includes rate or charge for any service.
It does not say any essential service or it does not say services in connection with any essential material; it just says any service. I am willing to go along with the minister in his reference to subsection 2 of section 4, paragraph (f), which states that the minister may by order:
(f) fix the maximum prices, either by determining the selling price or the mark-up-
If you substitute the words "rates or charges" that would then read:
(f) fix the maximum rates or charges, either by determining the selling price or the mark-up, at which and the terms and conditions on which any essential materials or essential services may be sold or offered for sale by any person; and require any seller to refund to any buyer any sum or consideration received in excess of a maximum selling price so fixed;

Therefore does it not bring in any services that might be rendered in connection with the production of essential materials?


Stuart Sinclair Garson: The short answer to my hon. friend's question is no.


William Joseph Browne: Let me suggest a situation, and I must say it is hypothetical because the bill is so succinct, so reduced, that I think the only way we can deal with it is by putting hypothetical questions. Steel is regarded as an essential commodity, but steel is only a production of a factory. Before steel you have pig iron, and before pig iron you have iron ore. Is there going to be any control of the production of iron ore? Is that not also going to be regarded as an essential material? Will the services of the thousands of men who work in the mines producing iron ore not also be controlled in order to control the price of steel?


Clarence Decatur Howe: To cut this discussion short, I can say to my hon. friend that there is no intention to use the act to regulate wages. If he can accept that, then let us get on with the bill.


[Stage Direction]
Section agreed to.
On section 3-Governor in council may designate essential materials and services.
Mr. Adamson:: I should like to ask the minister a question with respect to section 3 (b). A number of industrialists in my constituency have come to me and asked what they should do, and what the government is likely to want them to produce in the case of an emergency. All I could tell them was that, in my opinion, the thing they should do is to write to the Minister of Trade and Commerce.


Clarence Decatur Howe: Very sound advice.


Agar Rodney Adamson: It may be sound, but it is not very satisfactory because some of them have considerable problems to decide at the present time. I feel that it would help the industrialists of Canada if they knew what machinery there was to enter into the production of war materials. I have a case in point of an electronics manufacturer. I shall not mention his name, but he is one of the largest manufacturers in North America with a United States branch. Representatives of the Canadian factory have come to me and asked whether the government is likely to want them to manufacture this type of electronic equipment. They want to know whether the government is likely to want them to manufacture the equipment they produce in the United States, precision fuses, and quite a number of other highly technical products.


Clarence Decatur Howe: Why didn't you tell them?


Agar Rodney Adamson: I have only arrived today, and I have a letter upstairs that I can show to the minister. That is the quandary that a great many industries axe in at the present time with regard to what to do. I should like to know whether any machinery is available for the registration of productive facilities. Presumably what industries did after the last war was well known, but since that time many new industries have sprung up and many old industries have altered their methods of manufacturing. They are capable of producing a great variety of different things at the present time and in larger quantities. What steps are being taken to alert industries that may be called upon to produce specific war materials?
If the minister will make a statement as to what machinery is available, I feel that industrialists will know what they are up against and what steps they should take in order to be prepared. As the minister knows, and as every other hon. member of the house knows or should know, when you start out to try to manufacture specific war goods it takes a great deal of time to tool up, and it is going to cost a lot of money. You are going to have great delays. I feel that steps must be taken, and that it would be of great assistance to the house if the minister would state the preliminary steps and tell industrialists who may be called upon to produce war materials what they should do.


Clarence Decatur Howe: I am very glad to solve my hon. friend's problem. There is an organization known as the Canadian industrial preparedness association. It has a large membership and a considerable budget. It has a secretarial staff and very able officers. It operates for the particular purpose to which my hon. friend has referred. If my hon. friend has any further inquiries of that sort, let him just write a short note and ask his industrialists to apply for membership in the Canadian industrial preparedness association. Then his troubles will be over.


Agar Rodney Adamson: Where are the central offices of the industrial preparedness association, and who are their officers?


Clarence Decatur Howe: I think your industrialist would know that. I do not know myself but my office can give you that information.


[Stage Direction]
Section agreed to.
On section 4-Governor in council powers to regulate and control.
John George Diefenbaker: We realize that any suggestions made receive very short shrift, but nevertheless I repeat what we have said before, that this section provides for tremendous powers being granted to the minister
Essential Materials (Defence) Act in the matter of making regulations, or in the absence of regulations to make such orders as he may consider necessary. After all, one of the aims of parliament must be to prevent uncontrolled power being used that is detrimental to the rights of the individual. I hope I shall have the support of the Minister of Justice in what I am about to move because after all he holds the king's conscience in his custody.


Mr. Gauthier (Sudbury):: What do you hold?


John George Diefenbaker: I hold my responsibility as a member of parliament that uncontrolled powers shall ndt be granted. On occasion I have heard the Minister of Justice make reference to the necessity of assuring the preservation of the rule of law. What I am about to ask him to accept as an amendment will in no way interfere with "the power of the Minister of Trade and Commerce to do the things necessary for the preservation of our defence in anticipation of what the future may hold. Therefore I suggest1 that the legal rights of the individual should be preserved in the carrying out of the powers contained in this section, and that the individual should not be denied recourse to the courts. As it now stands, no matter what the minister does-and after all he said a while ago, "I will interpret it"

an individual who is unjustly aggrieved should have the right to take his case before a court. Such a procedure will not interfere with the minister's powers, but it will assure the individual that he shall not be arbitrarily treated, and that the minister shall not have the power to discriminate between individuals. My amendment is one that has received support in the British parliament. It is one that is provided for in the sections that the minister read containing the powers granted to President Truman. Recourse to the courts was provided therein. I move that there be added to section 4 a subsection 3 reading as follows:
No order or regulation made under this section shall deny any person feeling aggrieved thereby from the right of recourse to the appropriate courts.
I appeal to the Minister of Justice particularly, and also to the Minister of Trade and Commerce to assure that, while giving the minister powers, no injustice shall be done to an individual.


Stuart Sinclair Garson: Mr. Chairman, I would be glad to give effect to my hon. friend's suggestion, but as a matter of fact with regard to most of the area covered by his amendment the law as it stands protects the subject. The amendment reads:
No order or regulation made under this section shall deny any person feeling aggrieved thereby from the right of recourse to the appropriate courts.

Essential Materials (Defence) Act


John George Diefenbaker: If the minister wants to change it to meet the situation-


Stuart Sinclair Garson: Yes, but there are three ways in which he can feel aggrieved. He can feel aggrieved with the bill itself, saying that it is beyond the power of parliament.


John George Diefenbaker: I have not stated otherwise.


Stuart Sinclair Garson: The subject could also feel aggrieved in that the order in council was beyond the government's powers under the bill.


John George Diefenbaker: He already has that power.


Stuart Sinclair Garson: Yes. The third way in which he would feel aggrieved is that he would disagree with the executive decision of the minister in regard to a particular defence service or defence supply. In so far as the first two ways are concerned, I am sure the hon. member will agree that, in the absence of any provision to the effect that no order made under this statute shall be removed by way of order of certiorari, the subject could bring it before the courts. The subject has this protective right of access to the courts in any such case.
It is only in respect of a citizen feeling aggrieved by the actual decision of the minister, for example as to the price of his commodity or something of that sort, that he could not apply to the courts. That is left out. I speak subject to correction, but I believe that a provision such as proposed by the hon. member was not included in most of the orders in council that were passed under the War Measures Act, under powers much broader than those contained in this bill. In a time like this when one is dealing with defence supplies, I think it is highly desirable, where the minister and the government have given a demonstration over a period of some nine years that they are thoroughly responsible in administering precisely this kind of thing, that there should be some sort of finality in order that these supplies and services may be made available for the nation as expeditiously as possible. For that reason I am sorry but I cannot do anything but oppose the amendment.


John George Diefenbaker: Mr. Chairman, I come back to the point we have raised from the beginning. We are, in fact, granting absolute powers above the supervision of the courts. The only right of the courts under this section will be to determine whether or not parliament has the power to pass this act. From that point forward absolute uncontrolled power is given to the minister. I had expected that the Minister of Justice,

who has always been an oracle in support of the rule of law, would realize that no one could accept his statement that no complaint had ever been made about injustice during the ten-year period to which he referred. I think of one example, and that was the order in council which took away from the individual all his constitutional rights. However illegal the action on the part of the crown might be, the individual had no rights.
When the minister says he will not accept the amendment, I give him as an answer what one of the great Liberals speaking in the British House of Lords said. I am referring to the Marquis of Reading. He said:
Personal freedom had for so long been the current coin of life in this country that we had been apt perhaps to forget that currency may be slowly and stealthily withdrawn from circulation, that coinage may be debased without any very evident outward signs, and that it may even be deliberately counterfeited without immediate detection.
Then he goes on to deal with a trend which we in the opposition have warned against, which places in the hands of the executive unlimited powers. No matter what order the minister makes, that order is not challengeable in the courts. All the minister will have to do in order to prevent an individual who is wronged under this law from having the right of recourse is simply to insert that provision in the regulations, and that will be the end of it. The minister says that one cannot conduct defence proceedings unless one has these arbitrary powers. The President of the United States, with all his prestige and power, under the defence legislation of the United States is limited, and the courts of law are allowed to decide whether or not injustice has been done. The granting of the right of appeal to the court will not deny the efficiency or effectiveness of defence preparations, but it will preserve the rights of the individual. I quote something further from Lord Reading, and he was supported in the House of Lords by several outstanding Liberal law lords. He says:
It is not part of my case today to allege any malign conspiracy on the part of anyone deliberately to attempt to overthrow the liberties of the subject. The process has been gradual, stealthy, haphazard, almost inadvertent, but unfortunately both insidious and menacing in its cumulative effect.
He finally ends by saying this:
These tendencies . . .
He is referring to excesses in the illegitimate encroachment of authority.
. . . are, unhappily, no new feature of our life. They have now been nurtured upon the special conditions of emergency obtaining throughout two long, arduous and fluctuating wars. But that is no reason why they should be indefinitely perpetuated without some attempt being made to curtail them within reasonable restraints.

Having again voiced this protest I have nothing more to say. I point out, Mr. Chairman, that parliament is in fact giving the executive, particularly the minister, the right to say to one individual in this country, "You shall sell at X price"; to another "You shall sell at Y price", and another at Z price. Whatever wrong may be done to any one of them their right to appeal as against the amount fixed is, in fact, denied by the powers that we grant.


Major James William Coldwell: May I ask either the member for Lake Centre or the Minister of Justice a question? I have a great deal of sympathy for what the member for Lake Centre has said, but would this amendment enable in any way a powerful corporation to take something into the courts and in the meantime hold up any defence preparation that was dependent upon that matter? I cannot think of a small individual doing it because he probably would not have the money and so on in order to go to the courts. But what about a powerful corporation? Could that result? I should like to know before I am called upon to rise or to sit still in my seat.


John George Diefenbaker: Mr. Chairman, my answer to the hon. member is no. The amendment is simply a means whereby, after the event, after the order has been made, equality under the rule of law will be assured to each and every person.


Major James William Coldwell: But in the meantime he would have to fulfil the direction.


John George Diefenbaker: He has to fulfil whatever direction he is given by the .minister but the right of recourse to the courts is provided.


Stanley Howard Knowles: In other words, could he or could he not get an injunction to stay the order?


John George Diefenbaker: No.


Major James William Coldwell: Does the Minister of Justice agree with that view?


Stuart Sinclair Garson: I do not think I do, although my hon. friend's wording is ambiguous. He says he is willing to accept any amendment that we may suggest, however.


John George Diefenbaker: I will.


Stuart Sinclair Garson: His wording is as follows:
No order or regulation made under this section shall deny any person feeling aggrieved thereby from the right of recourse to the appropriate courts.
In other words they can have recourse to the courts, unless this wording is greatly narrowed from what it is at the present time, in respect of any point of law or fact-


John George Diefenbaker: No.
Essential Materials (Defence) Act


Stuart Sinclair Garson: -which might arise under this section. If this wording is given its ordinary meaning, it would certainly seem to me to be susceptible to the dangers just mentioned by the leader of the C.C.F. party. As a matter of fact, in times of emergency and stress that will arise if this act is being invoked perhaps a year from now, I should think that whatever deprivation there might be with regard to those large concerns-and for the most part they will be large concerns -supplying these goods in wholesale quantities to the government is not a great matter to offset against the national interest in a time of great danger and hazard. As I pointed out before, and I want to emphasize it again, as to the rights of the individual citizen as against the improper use of constitutional authority, those are all preserved for him under the existing act, and he can take those rights into court for vindication at any time. There is nothing in this act to prevent him from doing that, either with regard to an excess assumption of authority on the part of this parliament or with regard to an excess assumption of authority upon the part of the governor in council or the minister.


The Chairman:: Shall the amendment of the hon. member for Lake Centre carry?


Stanley Howard Knowles: Before you put the amendment, Mr. Chairman, I wonder if it might be agreed to allow the section to stand until the minister and his officers have had time to look at it and to see whether they could produce a wording which would give effect to what there is agreement upon?


John George Diefenbaker: Let the minister have his law officers draft it.


Stuart Sinclair Garson: I should be glad to do that, but I do not think there is any wording that could be produced which will get over the fact that, if you want an expeditious production of war goods and war services, you do not want to have carried along contemporaneously with that from one court to another any extended litigation with regard to prices and the like. My hon. friend talks about there being no sanctions upon the government; surely that is not so. Governments have to get elected at times. There has to be a degree of fair dealing with the people concerned if they are going to get elected.
Amendment (Mr. Diefenbaker) negatived.


Howard Charles Green: What effect will the provisions of this bill have on the Combines Investigation Act.


Mr, Drew:: You mean: Will he respect it?


Gordon Graydon: Be careful on this one.

Essential Materials (Defence) Act


Stuart Sinclair Garson: The Combines Investigation Act was drafted and passed for the purpose of preventing illegal agreements to fix prices. It has a closer application really in a buyers' market in which there are a number of people anxious to sell goods of which there is a plentiful supply but in which the buyers are few in number and in purchasing power. In other words, where there is a tendency for the price to go down, there is a greater likelihood of these people who are in the business trying to protect the price against any further decline than there is in the situation such as that at the present time where there is a great demand and in many fields a shortage, so that the economic law of supply and demand will tend to carry prices up regardless of any price fixing agreement.
Mention has been made previously in the debate-I think by the hon. member for Lake Centre-of the opinion that the Combines Investigation Act should be used as a price-fixing or a price-controlling device. But the only increases in price that can be affected by the operations of the Combines Investigation Act are those which take place as a result of an agreement which is illegal under the act. If the price goes up, for economic reasons or others that are unconnected with an illegal agreement, then the Combines Investigation Act has no application to it. If this bill is passed, as I feel quite certain it will be, it will take care that defence supplies shall be obtained on a fair basis; whereas the Combines Investigation Act could only deal with those supplies in respect of which it was alleged or thought that an illegal agreement to maintain their price had been reached by certain people in the trade.


Howard Charles Green: Suppose the Minister of Trade and Commerce or one of his officials under this bill authorized firms to set an increased price. Can any action then be taken under the Combines Investigation Act?


Stuart Sinclair Garson: I am speaking now just from memory, but as I recall it the offence under the Combines Investigation Act is the entering into of an agreement to fix prices against the public interest. In a prosecution under that act, provided the accused can show that on the facts of -his case he was acting pursuant to a direction from the minister under this act or of the administrator under the wartime prices and trade board regulations, acting as he thought in the public interest, and can establish that to the satisfaction of the court at the trial, he will have established a good defence.


Howard Charles Green: In effect then this act would override the Combines Investigation Act?


Stuart Sinclair Garson: It is not likely that it would become involved with the Combines Investigation Act at all unless some question arose of illegal agreement under the Combines Investigation Act. If that case arose so that there would be some connection between the two statutes, then in a given case, if the accused had acted pursuant to a direction from the minister under this act and could establish that fact to the satisfaction of the court, I think that would be a good defence; because then he could say that he acted in the public interest, although it may have been an agreement which would otherwise be illegal under the Combines Investigation Act.


Mr. While (Middlesex Easl):: From what I have heard of the debate this afternoon, the minister has said that the price of farm commodities is going to be controlled, if necessary.


Clarence Decatur Howe: He did not say that, no.


George Stanley White: Don't shake your head at me. He said beef would be.


Clarence Decatur Howe: I did not say that.


George Stanley White: Let us get
that straight. That is what I want to find out.


Stuart Sinclair Garson: I did not want to take up the time of the committee with this before, but I think probably I should now. The hon, member for Winnipeg North Centre asked me whether under this legislation it would be possible to fix a maximum price, fix a price ceiling. One of the powers is the power to fix a maximum price. That is an answer to the question as to whether the legislation permits the governor general in council to do that.
The minister who administers the department has said that there is no intention as a matter of policy to fix a price ceiling, and therefore that is the statement which will govern, because I am sure my hon. friends are all aware that we pass a statute which is the authority for the governor general m council to pass orders in council, and after those orders in council have been passed the minister has power to make a ministerial order, and it is the ministerial order which affects the citizen, the ministerial order passed under the authority of an order in council, which in turn is passed under the authority of the act; therefore it does not necessarily follow by any means that a pricefixing power contained in the act will emerge in an order which affects the citizen in the form of a price ceiling.


Clarence Decatur Howe: I think perhaps it goes one step farther than that. The act will permit price control in the event that the defence buying

Essential Materials (Defence) Act
creates a shortage, and in that case it provides that the governor general in council can define such product as an essential defence supply and fix the price.
Before my hon. friend starts asking questions will he answer one for me? Just name one agricultural product that is likely to be short on account of defence buying.


Harry Oliver White: Beef.


Clarence Decatur Howe: How much beef will the army be buying?


Harry Oliver White: The situation is this. In the light of the statements that have been made this afternoon, any farm product that the minister may see fit for defence buying may come under a price ceiling. Then the minister turned right round and said wages will not be controlled. How are we going to reconcile that back on the farm?


Clarence Decatur Howe: You could try it.


Harry Oliver White: I do not know, because the things the farmer is producing-


Clarence Decatur Howe: I do not think, the farmers are that stupid.


George Stanley White: -will be controlled in so far as prices are concerned, while the things he has to buy will not be controlled.


Clarence Decatur Howe: I would hate to think that the farmers are as stupid as the hon. member would make them out to be.


William Joseph Browne: The minister has overlooked subsection 2 of section 4, which says:
Subject to the regulations, if any, the minister may by order, as he deems necessary for the purposes of this act-
-do certain things. The minister has power to do all these things where there is no .regulation.


Donald Methuen Fleming: If the Minister of Justice
had been in this house longer and had some experience with this government in the last parliament he would never act so airily in brushing aside this and other questions that have been raised.
In expounding the terms of this bill the Minister of Justice said in the house this afternoon that it could apply to beef. That was an example that was put directly before him, and his answer was yes, that the powers conferred by this legislation could be applied to beef, and they could be applied to certain other things that were mentioned before, namely, stoves and refrigerators. There is his categorical statement. It is
based upon the interpretation of the bill by the Minister of Justice, presumably speaking with the advice of the law officers of the crown. The Minister of Trade and Commerce undertakes to override that by saying in effect, well, you cannot imagine a situation arising where we would do that. We do not intend to do that. Well, sir, it is not the function of this parliament, I hope, to be giving powers wider than the actual necessity for them has been made out to be.
I have a very clear recollection of a statement being made in this house, I think in
1946,	by Mr. Ilsley in introducing the Foreign Exchange Control Act. He made the categorical statement in the house at that time that the act did not apply and would not be used for the purpose of regulating the movement of goods. He said it simply applied to the movement of capital. And yet those of us who were in this house in November,
1947,	saw the government tear up that statement and use the powers conferred upon them by that act for the very purpose for which they said they would not use those powers. We have another situation like that in the committee this afternoon. The Minister of Justice says that the powers in this legislation can be applied to beef, refrigerators, washing machines and electric stoves. The Minister of Trade and Commerce does not deny that the powers do go that far. He simply says: Oh, you cannot imagine we would use them. Well, sir, I think those of us who had the experience of seeing the government tear up its own promises, reduce its representations to the house to a scrap of paper, will want something more than the kind of statement we have had this afternoon, and I hope the committee will not permit sections of this kind, or the bill itself, to be passed until proper limitations have been written into it.
Why does the Minister of Trade and Commerce insist on jamming through this house a bill vesting in him powers infinitely wider than he is prepared to say here he needs, while parliament at the same time puts it beyond its control to deal with the problem and to keep the situation in its own hands?


Alphonse Fournier: Carried.


Clarence Decatur Howe: Question.


Donald Methuen Fleming: There is another question somebody would like to ask the Minister of Trade and Commerce some day when he has acquired some respect for parliament or for parliamentary processes. He just does not belong in a parliament elected by free votes.


Mr. St. Laurent:: Tell that to his electors.


Agar Rodney Adamson: The minister gave me an extraordinary answer. In fact he showed

Essential Materials (Defence) Act some irritation, I think, that I as a private member of this house should have any dealings with the industrialists of my own riding, who are rather anxious to find out-


Clarence Decatur Howe: I do not understand why the industrialists of your riding would question you on matters of that kind.


Agar Rodney Adamson: What the minister has said just goes to show his attitude with regard to private members of this house. He thinks that private members should come here, thump their desks on the Liberal side, keep quiet on the Conservative side, and let the whole industrial picture of Canada be governed by one man, himself. That is the sort of thing we are complaining about. That is the danger that is going to arise under this bill. Then when I ask him what the industrial preparedness association is, and who its . officers are, he says "I do not know." Yet this association is responsible for the industrial preparedness of Canada. Well, now, Mr. Chairman, here is a responsible minister taking these powers. I asked him who the industrial preparedness association are; where do they come from; where is their corporate being; what authority have they? He said: "I do not know." He must know. I suggest that he give the committee the answer.


Clarence Decatur Howe: Many people do know. My secretary knows, many of my staff know. I just do not know. If I knew the address I would give it to you, but I do not.


[Stage Direction]
Section agreed to.
On section 5-Assistants and advisers to the minister.
Stanley Howard Knowles: My question with respect to clause 5 is this. Will the provisions of the Civil Service Act apply to these appointments?


Clarence Decatur Howe: Such approval is not statutory. It is not provided for by statute. As a matter of practice the civil service commission is always consulted about staff appointments and asked to recommend an appropriate salary, and their advice is accepted.


Stanley Howard Knowles: I am glad to know that that is the practice. If that is the practice it seems to me that the legislation should make it clear that it is. I know that sometimes we get sections like this which contain the phrase: "notwithstanding the provisions of the Civil Service Act." In this case it seems to be rather ambiguous; in fact it is left to the minister.


John Sylvester Aloysius Sinnott: We have heard the hon. member for York West complaining about the Minister of Trade and Commerce having too much power. Is anyone in doubt about the minister's way of handling his department 
during the last war? This bill would give him the same powers, and I do not think anyone should complain.


[Stage Direction]
Section agreed to.
Sections 6, 7 and 8 agreed to.
On section 9-Publication of orders and regulations.
Howard Charles Green: I think there should be some improvement in this section by providing that the orders made by the minister should be published and tabled. This section reads as follows:
Every order or regulation made by the governor in council under sections three, four or ten shall be published forthwith in the Canada Gazette and shall be laid before parliament within ten days after publication thereof, if parliament is then in session, or, if parliament is not then in session, within ten days after the commencement of the next ensuing session thereof.
It will be noted that section 4(2) is not covered in this tabling provision, so that there will be no way whatever in which the House of Commons can be kept informed of the orders issued by the minister under that section. In a bill of this kind those are the orders which should be made public.
I move therefore:
That section 9 of Bill No. 5 be amended by adding after the word "ten" in line 31 thereof the following:
"Or under section 4 by the minister or any person on his behalf."	,
The result of this amendment would be that the orders issued by the minister would be made public, and the people could then tell what he has done.


Clarence Decatur Howe: We have been through all this in one great war. Perhaps my hon. friend has not, but I have. It is unnecessary and almost impossible to publish all the administrative directives issued from day to day in carrying out the administration of these controls. If we undertook to publish directions of the controllers my hon. friend would require us practically to file every letter written in the course of administering controls. If he saw the volume of correspondence that goes out in connection with one control he would know how impossible the suggestion is.


Howard Charles Green: It is not a question of filing correspondence; the amendment mentions only orders.


Clarence Decatur Howe: Directives, orders.


Howard Charles Green: My amendment mentions only orders. The tabling of orders in council passed by the cabinet would not amount to very much for they would be largely only orders in council having to do with naming or describing certain things as essential

materials. The operative part of the bill is that power given to the minister to make certain orders. I do suggest that any orders made by the minister, as distinguished from letters written by him to firms, should be made public. I agree there would be no sense in saying that the correspondence be published. But where orders are made, those orders should be published and laid before parliament.


Clarence Decatur Howe: All I can say is that we have fought a great war on the principle that it was not necessary to table those orders. No one seemed to suffer greatly by that practice. We are entering into another period which may develop into something very serious. I am not prepared to tie every administrator and every controller to tabling every order issued in the name of the minister, because I do not see any necessity for it; and I think my judgment in the matter is far better than my hon. friend's.


Howard Charles Green: We have listened all day today to remarks of that kind by the Minister of Trade and Commerce. May I say through you, Mr. Chairman, that the Minister of Trade and Commerce has not added to his reputation today by his complete lack of self-control and by his dictatorial attitude.


Joseph-Alfred Dion: Is the committee ready for the amendment?


Howard Charles Green: May I ask the Minister of Trade and Commerce, or the Minister of Justice, how a member of parliament is to find out what orders have been issued under this statute-because it is a statute giving very wide powers to a minister? In what way will a member find out what orders have been issued?


Clarence Decatur Howe: He may ask the House of Commons for an order for return.


Stanley Howard Knowles: Will the orders and regulations passed under this measure be governed by the provisions of the statute we passed last session respecting the publication of orders and regulations?
There are three ministers over there; which one will answer?


Louis Stephen St-Laurent: When that act is in force it v/ill apply generally. But it has not been proclaimed, and a consolidation of existing orders is being prepared. The present intention, I am told, is to have it ready for proclamation on January 1.


Howard Charles Green: Does that mean that at that time these orders passed under this measure would be published?
Essential Materials (Defence) Act


Louis Stephen St-Laurent: No, no more than we
would publish the details concerning a transaction where a department bought a pair of shoe laces.


Howard Charles Green: The Prime Minister need not lose his temper.


Joseph-Alfred Dion: Shall the amendment carry?


Some hon. Members:: Yea.


Some hon. Members:: Nay.


Joseph-Alfred Dion: In my opinion the nays have it. I declare the amendment lost. The question is on section 9.


William Joseph Browne: Mr. Chairman, I am wondering if there are not in section 4(2) certain powers given to the minister of a general nature which might require something by way of publication. In addition to the individual directives in connection with rationing, permits, and maximum prices, there are matters of a general nature which might apply right across Canada. I should think anything of a general nature should be published somewhere.


Stuart Sinclair Garson: I understood the hon. member to ask if there might not be some regulations of a general nature passed under section 4(2). I think if the hon. member will read the section again he will see that section 4(1) provides for orders in council of a general nature, and that section 4(2) is Confined to ministerial orders made with regard to transactions coming before the minister.


William Joseph Browne: Perhaps I did not use the correct expression when I was comparing subsection 2 with subsection 1. However, if we will take, for example, paragraph (d) we find that the minister may-
-require any person who supplies any essential service to supply the service to such persons, to such extent and on such conditions as the minister may prescribe.
That does not mean necessarily that only one person will be directed to perform that service. It might apply to the electrical industry, for instance. There may be two or three plants in one place, and an order may be of a general nature. For instance, in dealing with steel, would not a maximum price for that product be a maximum price all across Canada? Would it not be sent out as one order? It seems to me that during the last war thousands of orders were made by the wartime prices and trade board and published in some government publication. There must be some place where the public can see what is going on, when the general interest is involved? Will provision be made for that?
568	HOUSE OF
Essential Materials (Defence) Act


Stuart Sinclair Garson: Does not my hon. friend agree that there is provision in the bill as it now stands for that? Section 4(1) reads:
The governor in council may do and authorize such acts and things and make from time to time such orders and regulations as he deems necessary for the purposes of this act to control and regulate the production, processing, distribution, acquisition, disposition or use of essential materials or the supply or use of essential services.
I think the idea set out there is that all orders in council of a general nature which apply>
we will say, across an industry or to a portion of it, will take the form of an order in council passed by the governor in council and that subsection 2 is confined to the limits set out in its terms, which are:
Subject to the regulations, if any, the minister may by order, as he deems necessary for the purposes of this act-
-do certain things pursuant to those general regulations.


William Joseph Browne: Supposing there is no regulation and the minister does something?


Stuart Sinclair Garson: If there were no regulation I am quite confident that the minister, following his usual practice, would see that a regulation was passed and then would carry out his executive action under it.


William Joseph Browne: He does not have to do that.


Stuart Sinclair Garson: I think he does, yes, and I am sure he would have every intention of doing it.


[Stage Direction]
Section agreed to.
On section 10-Date of expiration.
Donald Methuen Fleming: This section is open to the strongest objection because it provides that the act shall not expire until July 31, 1952, nearly two years from now. The only provision for its termination is that it may be terminated at an earlier date if the governor in council so orders. There is a further provision which reads:
-if at any time while this act is in force, addresses are presented to the Governor General by the Senate and House of Commons, respectively, praying that this act be continued in force for a further period, and the governor in council so orders, this act shall continue in force for that further period.
What control will parliament have over the administration of this act if it passes this section in its present form? It means that there is no possibility of obliging the government to bring this act or its administration before parliament before July 31, 1952. In the meantime parliament has parted with its control over the administration of this act. The Minister of Trade and Commerce has


said that he is asking only for stand-by powers; he has said in effect that he does not need today any of the powers provided by the bill and may not need them, yet those powers are to remain in legislative effect for nearly two years and there will be no opportunity in the meantime of compelling the government to submit its administration of the act to the house for review, or for a determination by the house as to whether there is any occasion for a continuance of these sweeping powers. I submit that parliament ought not to consider for one minute legislating in sweeping terms like this for such a long period.
In the second place I submit to the committee that this idea of having legislation extended by addresses passed by the two houses is wrong. It means that the government in seeking a continuation of these sweeping powers simply asks the house to pass a resolution. The house would have no such opportunity as is normally afforded by a bill to consider the measure. When a bill is presented there is an explanation on the first reading, an opportunity for discussion on the second reading, an opportunity for further detailed study in committee, and a further opportunity for debate on third reading. Under this proposed procedure the house will have only one opportunity to consider the extension of these sweeping powers, and none in committee.
I submit that that kind of procedure for the extension of such powers is quite inadequate for the preservation of parliamentary control. It seems to me that the proper course for this house to pursue is to insist that an accounting be made at the next session of parliament and that a time limit be placed upon this bill which will ensure that that accounting is made. Therefore I move the following amendment:
That section 10 of the bill be amended by striking out all the words after the words "day of" and substituting therefor the following words:
"March nineteen hundred and fifty-one."
The section would then read:
This act shall expire on the thirty-first day of March, nineteen hundred and fifty-one.
If the government comes to the house asking for a continuance of these powers parliament will be in a position to extend those powers, but parliament will also be in position to withdraw those powers or permit them to expire.
Amendment negatived.


[Stage Direction]
Section agreed to.
On the title.
Mr. Hansell:: Before the title carries there is one loose end I should like to pick up. During the discussion this afternoon while

the legal brains of the committee were slugging it out I tried my best not to get the floor but rather to keep my seat. The opportunity is now afforded me to rise. There was some considerable discussion with regard to the invasion of provincial rights and I should like to ask a question which concerns my constituency as well as my province. The natural resources of this country are now under the control of the provinces and I should like to ask the minister to state what will be his position with respect to the exercise of controls over the production and distribution of oil.


Clarence Decatur Howe: As I have pointed out several times, the only reason for exercising control under this bill would be a shortage of supply arising out of defence purchasing. If there were to be a shortage in the supply of oil across the country it might be necessary to exercise distribution control at some time in the future under the provisions of this bill, but why decide that there is going to be a shortage of oil when there is no indication of it at this time?


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


George Alexander Drew: Next sitting.


Mr. Carroll:: Mr. Speaker, may I say something on the third reading?


Mr. Speaker:: When the bill is called for
third reading the hon. member will have an opportunity to speak.



MAINTENANCE OF RAILWAY OPERATION ACT


Louis Stephen St-Laurent: With the permission of the house
I should like to revert to motions in order to table an order in council. Newspapers have carried the report that both the railroads and the negotiating committee for the railroad operatives have asked for an extension of the thirty to forty-five days as the time for negotiations, which they say cannot be completed within the period of thirty days. Their request was received by the government and has been acquiesced in, and I wish to table the order in council extending the period for an additional fifteen days.


Stanley Howard Knowles: Will the Prime Minister (Mr. St. Laurent) say from what date that time is dated? In other words, what are the dates of the extended period to which the order in council refers?
Maintenance of Railway Operation Act


Louis Stephen St-Laurent: I do not want to be too definite about that. My recollection is that the bill was assented to on the 30th of August. Thirty days would extend to the 29th of September, and this adds fifteen days to the period of thirty.



CONSUMER CREDIT


Douglas Charles Abbott: the second reading of Bill No. 4, to make temporary provision for the regulation of consumer credit.
He said: Mr. Speaker, I think perhaps I had better make a brief statement on this measure. When I was presenting the tax proposals to the house the other day, I referred to certain indirect measures that might be necessary to support the government's anti-inflationary fiscal policy. One of these, as I indicated at that time, would be a bill to enable the government to restrict the volume of consumer credit. This bill is now before the house for second reading.
Its purpose is to give the government authority to restrain spending by limiting the amount of credit available to consumers for the purchase of goods. Under ordinary circumstances, as the house will appreciate, this is not a matter with which the federal government would concern itself. But our own experience and the experience of other countries during world war II has shown that the expansion of consumer credit can add substantially to inflationary pressure and to the demands for essential materials and thus frustrate national policy and counter-inflationary action in other fields. This is a risk we cannot run and we are, therefore, seeking authority now to regulate consumer credit in the interests of sound credit and currency policies, so that the necessary measures can be put into effect when required without delay.
While the government would probably have asked for this authority as a precautionary measure in any event, recent trends do, in fact, show a very considerable expansion in the volume of consumer credit. Hon. members may have noticed a recent bulletin by the dominion bureau of statistics showing the volume of lending by finance and acceptance companies. According to the published figures, the total volume of instalment financing of consumer goods by finance and acceptance companies in 1949 exceeded the volume in 1948 by 55 per cent. It is significant too that the balances outstanding with these companies at the end of 1949 had increased by 65 per cent over the total at the end of 1948.

Consumer Credit Act


Agar Rodney Adamson: Can the minister give the total?


Douglas Charles Abbott: I have the details which I can give in committee, if my hon. friend wishes.


Agar Rodney Adamson: Just the total figure now.


Douglas Charles Abbott: I wonder if the hon. member would allow me to complete my brief explanatory statement. Then I would turn up the figure, which I have on my files.
More recent trends are shown in another bureau of statistics bulletin dealing with retail trade. Between the first quarter of 1949 and the first quarter of 1950, cash sales by retail stores went up by 4 per cent. Between the same two quarters instalment sales, on the other hand, went up by nearly 27 per cent. In the first seven months of 1950, financing of sales of new passenger cars, which are included in the total of retail instalment sales, increased by 104 per cent as compared with the same period of 1949.
Part of the explanation for the recent expansion of consumer credit lies, of course, in the increased availability of goods that are ordinarily purchased on credit. But even when allowance is made for this factor, the remaining expansion is very substantial and indicates quite clearly that consumers are to an increasing extent buying on credit rather than out of current income or past savings.
In the bill now before the house, authority is sought to regulate three types of credit transactions. First is instalment selling, the kind of transaction with which all members are, I am sure, familiar. This is the most important form of consumer credit and the one which usually shows the greatest fluctuation.
The second type is the charge account. Ordinarily the volume of goods purchased under charge accounts does not change rapidly but it is necessary to take powers to regulate the payment of charge accounts, otherwise this device might be used to circumvent and frustrate restrictions imposed on instalment sales.
Finally it is necessary to take powers to regulate the repayment of loans which are made to finance the purchase of consumer goods. Such loans have the same effect as instalment credit and must be treated in the same manner.
Since the purpose of the legislation is only to restrict the volume of consumer credit the authority is limited to regulation of the financing of goods purchased on credit either under an instalment plan or under a charge account and to regulation of the repayment of loans related to the purchase of goods. Hon. members may recall that the principal means 
of accomplishing the necessary restriction of consumer credit during world war II was to require minimum down payments and to limit the terms of payment for the balance outstanding. This proved to be an effective method of control and it is likely that it would be followed again if the necessity arises.
I shall not at this stage attempt to give a full account of the administration of the consumer credit regulations during world war II but it may interest hon. members to know that while total sales of retail stores increased by 36 per cent between 1941 when the consumer credit regulations came into effect, and 1945, instalment sales declined in the same period by 41 per cent. Not all of this drop in instalment sales can be attributed to the regulations for there was of course a sharp drop in the production of the kinds of goods usually sold on instalment. But the regulations did have a restraining effect upon the demand for particular kinds of goods and by limiting the amount of financing available they did reduce the quantity of money competing for the limited quantities of goods available during wartime. The whole operation was carried out, I think it is fair to say, in a smooth and efficient manner by a relatively small staff.
I also should make it clear that, under the legislation, the government can designate the consumer goods or classes of consumer goods to which the restrictions shall apply, and can vary these from time to time, thus giving the flexibility required to meet changing circumstances.
With this flexibility it will be possible to direct the restrictive measures where they can be most helpful to the national effort. It will be possible, for example, to apply the restrictions first and most severely to the financing of those consumer goods, the manufacture of which competes most directly for labour and materials with the defence program, thus supporting other direct and indirect measures to curtail civilian consumption. In other words, the regulation of consumer credit can be used not only as a general anti-inflationary device but also as a selective weapon to support the national effort.
In many ways I would have preferred to bring in a bill which set out specifically the restrictions that may have to be imposed. For reasons which I feel sure the house will understand, this is not possible-and, indeed, in my opinion would be most inadvisable. It would be a mistake, I think, to set out in legislation specific restrictions which may or may not have to be put into force at a later date and which might encourage the public to indulge in anticipatory buying on credit.

To some extent, though not, of course, entirely, the need for regulation of consumer credit depends upon the actions of sellers and buyers themselves. Under present circumstances, attempts by sellers to high-pressure customers into buying by offering easier terms will only add to the inflationary pressures and make restriction inevitable and urgent. Similarly, I hope that consumers will, in their own individual interests, as well as in the common interest, think twice before incurring additional debts for the purchase of consumer goods, which they might be able to avoid.
Regulation of consumer credit, as I have said, is one part of the government's program to counteract the inflationary tendencies generated by rising defence expenditures. By itself, such regulation would be of value in restraining excessive demand. Combined with a pay-as-you-go policy of government financing and with other supporting measures, it can make an even more effective contribution to the stability and strength of the national economy.
I believe the hon. member for York West (Mr. Adamson) asked about the dollar value of retail financing of consumer goods. The figures I have here show that in 1948 the retail financing of consumer goods by finance and acceptance corporations amounted to $122,522,000; in 1949 it was $190,574,000, an increase of 55J per cent. The balances outstanding with finance and acceptance companies on consumer goods paper at the same date, at the end of 1948 amounted to $70,451,000, and at the end of 1949, $115,977,000, an increase of 64-6 per cent.


Stanley Howard Knowles: Does the minister know if these figures would include borrowing from the banks for the purpose of consumer purchase?


Douglas Charles Abbott: Subject to correction, and when we are in committee I shall verify it, I would think that the statement as given to me covers the financing with finance and acceptance companies, not the bank loans which may have been made by individuals in order to pay for consumer goods.


Major James William Coldwell: Mr. Speaker, I believe this is a bill which is quite important, and quite useful, so far as it goes. I noticed the Minister of Finance said that, while he did not wish to bring in a bill, he would rather have had one designating certain articles. May I take this opportunity of saying that, for a long period of time, I have felt we should have a comprehensive bill before this house to regulate instalment buying. I say that not only because at the present time it may be an anti-inflationary
Consumer Credit Act
measure, and such it is, although perhaps it is somewhat discriminatory in that the person who still has a bank account will be able to buy whatever he likes.


Douglas Charles Abbott: There is a provision that will prevent that if the individual makes a loan.


Major James William Coldwell: Yes, but if he has the cash he does not need to borrow and you will have to appeal to the good will of such an individual to restrict his buying. What I have in mind is that we need a bill which will prevent the kind of instalment buying we have in this country by means of which persons make a payment of ten per cent or less of the cost of various goods, and after further instalments sometimes lose what they are attempting to buy. I do not believe we have the same protective legislation as some other countries. I think in Great Britain it requires an order of a court to repossess the goods after a certain amount has been paid.
I have been told that a number of these companies that are selling various products today, for example furniture, radios and so on, and some of the larger chain store organizations across the country, are not so much interested in selling furniture and similar commodities as they are in making loans. A person signs a pledge to pay over a long period of time at a relatively high rate of interest. After all the rate of legal interest on small loans is eighteen per cent, and that is a high enough rate. Then we see advertising of the type seen in some jewelry stores, in which people are invited to pay a ridiculously small amount down and the balance over a period of eighteen months or two years. Perhaps the person wants a certain article, and there seems to be no reason why he should not have it when payments seems so enticingly easy. The thing is that very often many people do not realize they are paying such a high rate of interest. In some instances because of that they are unable to buy more food or other necessaries of life which the family may need. Many people buy various household commodities, also at a high rate of interest.
I am seizing this opportunity-I do not want to delay the house-to draw this to the attention of the government. I believe the time has come when we should review this instalment buying, and do what we did in connection with small loans a few years ago. We did enact legislation which was of a protective type to an extent-not a sufficient extent I thought, and not a low enough rate of interest-but still better than we had before. I have been told by small merchants that they find it difficult to carry the load that they must carry because some of these

Consumer Credit Act
large organizations, more interested in the interest on the unpaid balance, are able to finance the undertaking. I believe that this is a matter which the government should consider.
So far as this bill is concerned I believe that it should get the support of the house for the purpose intended, although it will not completely fulfil that purpose, because apart from those who buy on the instalment plan there are the people who will be buying these goods out of their personal savings or resources. The same objection I have made to the instalment buying will not apply to the people who buy with their savings. The people who do have money will be able to buy a couple of cars or a couple of refrigerators if they wish, and they will be using materials that are in short supply. The only thing to do in a situation of this description is to publicize the matter, and ask for support in preventing the inflationary result. I am, as I said, drawing the attention of the government to the fact that we need some kind of permanent legislation that will protect the public from the high rate of interest and loss of the article if they cannot meet their payments. It may be argued, of course, that the loss of the article can be construed as belonging to property and civil rights, and the provinces might have an obligation in this connection. Still if we can control the interest rates we may be able to do indirectly what we would like to achieve. I am drawing this to the attention of the government.


Agar Rodney Adamson: I do not want to delay the bill; in fact, I am inclined to support it. Will the minister say whether the figures he has just quoted are from a general release by the dominion bureau of statistics or are they the subject of a special release for the information of the minister?


Douglas Charles Abbott: Subject to correction again, I think the information is contained in a general release, Mr. Speaker. It is contained in a memorandum which I had prepared for my own information, but I saw the figures in the press a day or two before I got this memorandum, so I think it has been the subject of a general release. It may be that some of the figures I have here are not in that release, but when we are in the committee stage I hope to have further data here with which to answer these questions.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
Mr. Vicior Quelch (Acadia):: I think, Mr. Speaker, that the need for legislation of this type is obvious, because the expansion in defence expenditures will no doubt be greater than the slack in our economy; that is, if we are going to continue to expand our defence expenditures even after the war in Korea may be over. Mind you, I am not for one minute suggesting that we should not do that. As a matter of fact, I think it will be absolutely essential to do it. No doubt it will therefore be necessary to control the expenditures by civilians on consumer goods.
It is, however, interesting to recall that it is only a few months ago that the Minister of Resources and Development (Mr. Winters) warned the people of this country that they would have to let up some on their practice of saving and would have to expand their purchases if we were to avoid a depression at this time. I mention that fact because it shows that it must have been quite obvious then that quite a considerable lag was developing in this country as between demand and supply.
Now apparently there is a complete change in the situation owing to the fact that we are having to increase our war expenditures. Nevertheless, I think we must be careful to see that we do not reduce expenditures that are absolutely essential for the maintenance of a high level of production of food in this country. If we do that, we shall not only weaken our economy generally but we shall also weaken the war effort.
I have never liked the general practice of buying on time or on the instalment plan because, after all, I have always looked upon the job of industry as being that of producing and selling. It should not be the responsibility of industry to finance their sales. That, of course, is actually what industry is doing when it sells on time on the instalment plan. However, owing to the fact that in normal times there is a lack of effective purchasing power with which to buy the total production of the country, the result is that goods pile up and surpluses develop. Hence industry, in an endeavour to get rid of their goods, sell them on time or on the instalment plan. After all, the only solution for the problem, of course, is to take steps to expand the purchasing power of the people to a level that will make it possible for them to buy the total production of the country. Selling on time is not and cannot be regarded as a solution; because unless steps are taken to increase the purchasing power of the people, the situation will of course become even more

aggravated because selling on time is bound to increase costs and to increase prices.
I hope that the regulations that are to be drawn up under section 3 will be sufficiently elastic to take care of cases of real need. I have in mind especially the cases of young couples just starting out. It is all very well for the majority of us who, during the past five years, have had the opportunity to buy those things we needed; that is things which cannot be considered as being absolutely essential but are things which everybody wants today. There will be many young couples starting up from now on who have not been able to accumulate the things they need and who will be desirous of buying certain things like refrigerators, washing machines, et cetera, although they may not have the full purchase price. When these regulations are drafted I therefore hope they will be sufficiently elastic to make provision for that class of people and also to take care of cases of sickness where people run into heavy medical expenditures and are therefore not able to pay cash for everything they have to buy.
There is also the danger that unless these regulations are made sufficiently elastic, those people may be driven into the clutches of the loan sharks. Some years ago we amended the Small Loans Act and I think we improved it. But there are many companies which are not operating under the dominion charter; and as we all know, when people get into their clutches they have an extremely tough time indeed, and the costs of the things they buy in that manner are greatly increased. It certainly will not be to the advantage of the country if, by tightening up on these regulations, we make it impossible for the younger people to buy the things they need and hence force them to use the small loan companies. I suppose section 3 will provide for regulating the small loan companies. On the other hand, I can envision a great deal of difficulty in regulating loans by that class of people generally referred to as loan sharks, because they are operating anyway in an underground manner and are therefore not easily subjected to the general regulations which are imposed by the government.
Then of course there is the problem of the farmer who may be obliged to borrow in order to meet operating expenses. There again I suppose some people will argue that, with the fairly good prices we have been having in the past, farmers should not need to borrow. On the other hand, anybody who knows anything about farming, and especially about grain farming, will realize the tremendous hazards that are faced by farmers, and will know that it is quite possible to have two or three years of crop failure due to drought,
Consumer Credit Act
frost or hail, something which makes it impossible for the farmer to finance his current operations. Hence he is obliged to borrow or to charge up at the local store his bills for oil, gas, et cetera. If he is not allowed to do so and if he is not able to get money with which to buy gas to run his tractor, it means that the summerfallowing will not be done and actually we shall be interfering with the efficiency of the operation of the farm.
From the press I understand that it is the intention of the government to restrict the operation of the Farm Improvement Loans Act. I understand that there will not be any actual amendments to the act, but that the banks will be advised to restrict their loans under it. I can quite see that it may be necessary to tighten up the conditions controlling the entitlement to a loan. On the other hand, I think the government would make a great mistake if they tried to tighten the act in such a way that the period of time is shortened for which a loan is granted.
As we all know, in farming the time for which a loan is granted must fit in with farming operations. In the old days it used to be common practice for banks to lend money for only three months. But a three-months' loan is absolutely useless for the purpose of farming operations because you have a longer cycle there. The crop is sown in the spring and is not harvested until the fall. Therefore, if money is borrowed in the spring, it is essential that the loan be made for a long enough period of time so that the crop can be sold and the loan be paid back. Otherwise what happens? It just means that you force that farmer to sell his crop at a time when maybe it is not opportune to sell it and orderly marketing in the country is destroyed. In that way you not only hinder efficient operations but you also interfere with orderly marketing. I am not going to say any more at this time, but I am hoping that the minister, either before we pass the bill or when we are in the committee stage, will go into some detail regarding the operations of section 3.


Mr. H. R. Argue (Assiniboia):: I can agree at this time that steps must be taken by the government in various ways to prevent inflation and the rising cost of living. The government has already announced to us various steps by which it hopes it may cope with the ever-increasing level of prices. We know that the Minister of Trade and Commerce (Mr. Howe) is being given certain powers; we know that the government is proposing certain tax increases; we know that along with this measure the government, as announced by the Minister of Finance (Mr. Abbott) the other night, is proposing other somewhat

Consumer Credit Act
similar anti-inflation measures. Therefore I think, that we should look not at this bill alone, and not judge the bill solely on the basis of whether or not what is proposed is in fact anti-inflationary, but whether this bill, taken together with the other steps the government has implemented and proposes to implement, will hold down the price level, and hold it down in an equitable manner.
I wish to agree with the remarks presented just before six o'clock by the leader of this group, when he pointed out that there is great need in this country at the present time *for something more than a bill which will merely increase the down payments and shorten the terms of instalment buying. Something should be done as he said to prevent high pressure salesmanship by firms which are attempting to unload on the market the articles which all of us will agree are not necessary. Something should be done, as he said, and done in this bill, to reduce the very high interest rate which is now charged on small-term loans. We know the maximum rate is 18 per cent a year. That is certainly very high. If one looks over the various firms which sell articles on the instalment plan such as Eaton's and Simpson's, and calculates the interest rate on that type of buying, one will find that the interest rate approaches the maximum of 18 per cent per annum.
In introducing the bill this afternoon the minister made a number of comments. At one place he pointed out that in 1945 instalment buying was down 41 per cent from 1941 resulting, I presume, from the curtailment of that type of buying. That is no doubt true. But people could well afford to accept a lesser amount of instalment buying when the government implemented over-all price ceilings. I could go over some of the figures that I was able to jot down that the minister gave in his remarks. For instance he said-and he can correct me if I took them down wrongly-that in the first quarter of 1950, as compared with the first quarter of 1949, cash purchasers were up by 4 per cent; but in the same quarter of 1950, as compared with that quarter in 1949, instalment sales were up 27 per cent.
The minister said that this bill was aimed at the system of charge accounts and at instalment buying, but I notice he failed to tell us the position of charge accounts in the country at the present time. I have before me a publication of the dominion bureau of statistics entitled "Retail Consumer Credit". If one looks over these statistics and compares the first quarter of 1950 with the first quarter of 1949-and these statistics show what percentage of the total retail volume is

covered by cash, instalment buying and charge accounts-one will see that while the amount of instalment buying increased in the first quarter of 1950 as compared with the first quarter of 1949, the amount of charge accounts decreased by almost the same proportion. These figures are taken on the basis of one hundred. For every $100 spent in the retail trade in the first quarter of 1948, $63 was spent in the way of cash. In the first quarter of 1949 the amount of cash was $62.90 for every $100 spent. In other words, the proportion of cash had dropped by only 10 cents on $100. In 1950 the amount of cash out of each $100 of retail trade amounted to $60.70, a drop of only 20 cents in $100 as compared to one year ago, a drop of only 30 cents on $100 as compared to two years ago. In other words, the proportion of cash that is used by the public in making retail purchases was almost as high in the first part of 1950 as it was in the first of 1948 or the first part of 1949.
I know that statistics may be brought forward to show that the instalment sales are up. Of course they are up, and so are cash sales. The main reason instalment and cash sales are up is that prices are up and volume is up. Thus even if the same proportion of $100 is spent in cash, total cash sales will be up because total dollar value of sales has gone up.
If you compare the amount of instalment buying in the early part of 1950 with 1949 you will see that of each $100 spent in the retail field $9.10 was on instalment purchases. That is not very high. That is less than 10 per cent, and that is only $1 higher than the year before.
If you look at the charge accounts you will find that out of each $100, $28.20 was charged early in 1950, but for the same period in 1949, $29 was charged. In other words, in the early part of 1950 of each $100 spent in the retail trade, instalment sales were up by $1 and charge sales were down by 80 cents. Therefore anyone who says that there is a runaway in instalment buying and that is the reason there is this huge pressure on prices cannot in my opinion substantiate his claim.
If one compares the indices in the early part of 1950 with the base, which is taken as 1941, one finds that instalment sales in 1950 increased over 1941 by 41 per cent. Cash sales in 1950 increased by 77 per cent over 1941. In other words, the cash available in the pockets of the Canadian consumers at the present time is exerting a far greater pressure on prices, in proportion to 1941, than has the increase in instalment buying.

Therefore I come to this, that if the government were really anxious to reduce the pressure on prices, the best way to reduce that pressure would not be to prevent instalment buying in a general way, nor even to reduce it to a large extent, but rather to cut down the amount of cash the Canadian public has to pay for the goods.


An hon. Member:: Do you want compulsory savings?


Hazen Robert Argue: I am coming to that point right now. The minister has given us his financial proposals for the coming few months. There have been some increases in taxes. Almost all of them I would say are regressive, but no Canadian will have any less income two months from now by reason of a change in income tax. If a Canadian is earning $50,000 a year he will pay no more when this session ends than he was paying when the session began. But the little people, the people who must purchase goods on the instalment basis if they are going to have certain kinds of goods at all, are going to have part of those goods taken away, because the government is introducing a measure to reduce the amount of instalment buying. I say it would have been just as anti-inflationary and much more fair if the government had increased the income tax on people in the high income brackets, and left alone the little fellow who has to purchase goods on the instalment basis.
I know a great many people in my constituency who must resort to instalment buying. I know a number of housewives who have kept a few turkeys in the summer months, who milk a couple of cows, who keep fifty chickens or so and then buy a washing machine costing $150 or $200. They buy the washing machine on an instalment basis. These people have not a great deal of money. They are not going to have any more because of the financial policy of the government adopted at this session.
But the wealthy farmer who has three sections of land, and a big crop, is also not going to have any less money because of any change in the income tax. Whereas this housewife may be denied the washing machine or proper clothes for her children in the winter, which she must buy on the instalment basis, the wives of husbands whose incomes are high will find that the take-home pay of those husbands after income tax has been deducted has not been touched, and that they and their husbands will be able to buy two washing machines, two refrigerators and two new cars every year, if they feel that is the best way to spend their money.
Consumer Credit Act
I do not oppose in any way a bill of this kind if with it are coupled measures to protect the living standards of the Canadian people. In 1941 steps were taken to reduce instalment buying. But in that very year price controls were implemented in this country, the announcement being made by the prime minister of that day in October of that year. No doubt one of the reasons he announced price controls was that the cost of living index had been rising rapidly during 1941- so rapidly, in fact, that in the first eight months of 1941 the cost of living index increased by 5-4 points.
We are now attending a special session of parliament. The cost of living index in 1950 for the same eight months has increased, not 5-4 points but 7 -5 points. There has been a far greater increase in the cost of living index in 1950 than there was in 1941. In that earlier year the government restricted instalment buying and charge accounts and in the same year implemented price controls to protect the wages and living standards of the farmers and industrial workers.	,
In this session however the government does not propose to ask the highest income earner in Canada to pay another dollar into the treasury by way of income tax, but is taking steps that may result in people on low incomes not being able to purchase some of the necessities and amenities of life.
The Minister of Finance, in forecasting this piece of legislation, announced that similar steps would be taken to reduce the credit made available through the Farm Improvement Loans Act. Let me tell the minister that that act has been of real advantage to prairie farmers, and I would also tell him that it has not done the banks any harm in the meantime. Until the end of 1949 banks had lent over $62 million on farm improvements; and while they are guaranteed by the government against 10 per cent of the aggregate loss, or guaranteed in that length of time against a loss up to $600,000, nevertheless the operations under , that act until the end of last year had been so successful that the government had to recoup losses to the banks to the extent of only a little more than $10,000.
It has been a good piece of legislation for the banking institutions. It has been of advantage to western agriculture; but I should like at this time to bring to the attention of the Minister of Finance a practice that has been developing in Saskatchewan in relation to the Farm Improvement Loans Act and of which the minister himself may not be aware. I have heard this report from a great many farmers in my locality this fall, and from other people in whom I

Consumer Credit Act
have confidence living in districts of Saskatchewan hundreds of miles removed from my own locality.
The experience of many farmers in connection with this legislation has been this: a farmer will go into a bank asking for a farm improvement loan. If the sum involved is $3,000, say to buy a tractor, the banker will ask the farmer to pay $1,000, and the farmer will receive a loan for the balance of $2,000. As security under the act the bank is allowed to take, and in fact does take, a lien on the farm tractor. In addition to that security by way of a lien against the machine in which, when he takes it home to the farm, the farmer has a third equity, the banks are guaranteed by the government against 10 per cent of the aggregate loss-an amount which in actual experience up until the end of 1949 was sixty times larger than the amount of losses experienced by the banks under that act. In addition to all the protection the banks have through the 10 per cent guarantee, in addition to the security of the farmer's implements in the different areas, the bankers are now asking the farmer to come in and deposit the title to his farm before he gets a loan. I think that is a shame.
I know of one young man, 30 years of age, married with no children, who has a clear title to his land. His wife is a schoolteacher with an independent income. He has a full line of machinery. In addition to the farm he owns he rents a number of other farms. This year in July he had 700 acres of wheat that looked like the biggest crop he had ever produced. It looked as though it would yield 30 bushels or perhaps even 40 bushels to the acre. He went into the local bank to get a loan under the Farm Improvement Loans Act in order to buy a new combine. He had the cash to make the down payment. The banker said, "I will lend you the money if you bring in your clear title and deposit it in the bank."' The farmer said that he did not want to be put in a strait-jacket like that because he might want to expand his operations a little later or there might be sickness and he would not be able to raise money after having handed to the banker the clear title to his property.
That is not just an isolated case; it has been the general practice followed in my district and in many others. The result is that almost all the new combines sold this fall in that locality were sold on the basis of the dealers' credit and risk. The dealers have been providing the farmers with combines and have been financing the purchases because the farmers have been unable to get loans under the Farm Improvement Loans Act.

The minister has said that he may consider increasing the amount of cash the farmer must put up in order to get a loan from the bank with which to buy an implement, and shortening the time in which he has to pay. If he does that I hope he will look into this practice and, if he finds that it is as I have outlined, that he will take steps to see that banks do not ask this unnecessary and unwarranted security. The Farm Improvement Loans Act has been a good act, but the practices that are being followed reduce the value of the act.
Coming back to this bill to restrict consumer credit, I was glad to hear the minister say that he may use it on a selective basis. I take it that he means that if refrigerators are in short supply and electric stoves are in long supply, the down payments on refrigerators may be greater than the down payments on electric stoves. I hope that is what he means because that is a fair policy to follow. But unless something is done to prevent the terrific increase in the cost of living, coupled with the fact that no adequate steps have been taken to prevent inflation and reduce the income in the pockets of the well-to-do, if this bill, represents all that is to be done, the government may succeed in stopping to some extent a rise in prices but it will mean that the low income groups in the country will have to reduce their standard of living even lower, and in my opinion that would be most unfair.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I should like to take advantage of this opportunity to make a few remarks in connection with the second reading of this bill to make temporary provision for the regulation of consumer credit. I have always been particularly interested in instalment buying because I consider it to be one of the diseases of modern capitalism which today is running rampant. Before proceeding to deal with my subject may I say that I support the bill in principle although I offer the same criticism as was offered this afternoon by the hon. member for Rosetown-Biggar (Mr. Coldwell).
In my opinion much instalment buying is a method by which persons of limited means can purchase today the luxuries of yesterday by pledging tomorrow's earnings. While there has been a great increase in instalment buying in recent years this is not a recent development. I was interested some time ago to read that there are quite clear records of instalment buying in the early days of the Mesopotamian empire. It was very prevalent in France in the days prior to the revolution and developed in England to a limited extent in the 18th century. At that time it was used

mainly for the purchase of furniture and household goods. It developed in the United States in a limited way in the 19th century, but the first large-scale instalment selling appears to have been practised by the Singer company after they had perfected some of their early inventions. From then on the practice covered other lines such as books, pianos, organs and things of that kind.
Up to the time of the development of the automobile industry instalment buying was confined largely to household articles, and to small useful articles. The great increase in instalment buying as we have it today through the finance companies began as early as 1912. We have the Commercial Credit Company of 1912; the General Motors Acceptance Corporation of 1919; Commercial Investment Trust of 1915; Universal Credit Corporation of 1928; and so on until today in Canada and the United States there are thousands of finance corporations operating in every city, and town and almost every village. I know in British Columbia you will find local companies that have been formed by small groups of local people who want to take advantage of human needs by reaping the profits derived from operating a finance company.
I understand that the great boom in instalment buying came after the first war when the automobile industry went into the field. According to my reading it was at that time that the practice became thoroughly respectable. Up to that point apparently it had not been quite respectable to buy goods on time; you were usually considered to be, shall I say, in the lower classes, if you purchased on the instalment plan.
Instalment purchasing represents a process of going into debt, probably a sound policy under certain conditions. It is a sound policy if you are buying farm or other machinery for productive purposes where you are going to earn something with the article purchased. It is a sound policy so far as certain necessary household equipment is concerned. It is a sound policy for any person who buys on proper terms, signs a proper contract, and has an assured income to meet payments planned on a conservative basis.
As instalment buying has been practised in Canada in recent years it has occasioned a great deal of misery to a good many Canadians who were preyed upon by people who knew human weaknesses. I remember being in a home when one of those travelling persons known as book salesmen arrived. Incidentally it was a French-Canadian home, and this man persuaded the wife to buy an expensive set of books on the basis of educating the children in English. The cost of the books was nearly $200. She signed the contract, and 69262-37
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when her husband came home he began to wonder where the money would come from. At that point they would have liked to cancel the contract.
I believe that the whole question of instalment buying, Mr. Speaker, requires the very serious consideration of the federal and provincial governments because a lot of good people, who apparently cannot do arithmetic, are getting into serious difficulties on account of it. There are certain reasons put forward in support of instalment buying by those who advocate it. I am going to give those reasons and then the reasons against it. The reasons set forth in favour of instalment buying by big corporations who, as I said before, feather their nest from human weakness are:
1.	That it encourages thrift. But I say it only encourages thrift if people are already thrifty.
2.	It enables a person who lacks ready cash to buy those things which make for enjoyment, ease and time-saving a few months before he or she would otherwise take possession.
3.	For better or worse, it is claimed that instalment selling has made possible a new source of credit. I believe under proper legislation and restrictions this new source of credit can be of some advantage, but it is a dangerous source of credit as used today in this country.
4.	Industry has found the instalment plan of selling one means of quickening distribution in emergencies. I think that is quite right for a short period.
5.	A large proportion of cars are bought and paid for through finance companies. Sales mount and production is on a mass basis. The companies' contention is that increased sales make for lower prices for all. However, in my opinion the increase in sales is only temporary, and so can only occur but once. Furthermore, any abnormal increase is followed by an abnormal decrease when, for some reason or other, general business and employment suffer.
6.	The general standard of living is raised a few months before it otherwise would be for people who purchase on the instalment basis.
7.	Instalment purchasing temporarily has a part in the employment picture. As it grew it increased the number of workers tremendously, but only for a short period.
8.	It appeals to the sense of budgeting, which has become a byword in many households, and people are urged to budget to meet payments.
9.	So far as the businessman is concerned, it is claimed that if he does not use instalment

Consumer Credit Act
selling and carries on his business on an open account basis he risks having his accounts run indefinitely or having them never paid.
10.	This method of financing purchases affords a very easy method of handling payments. There is no chasing around trying to arrange suitable credit and security in order to make the purchase. All that is taken care of by the seller of the goods in the contract that the purchaser signs.
These reasons sound very good on the surface, but there are substantial reasons for being opposed to certain types of instalment buying because of the abuses existing today. They are several:
1.	Without question instalment buying encourages many consumers to run into unnecessary debt.
2.	Instalment buying tends to make some people spendthrifts.
3.	Instalment buying leads to extravagance, particularly when you see people purchasing furs, jewelry and unnecessary articles which in my opinion people should not purchase until they have the cash to pay for them. Many are purchasing such things on credit and it definitely develops extravagance.
4.	The quality of merchandise purchased on the instalment plan is not always the highest. I think that is generally recognized by people who have given some study to the question.
5.	Only a small down payment is required of the customer, who looks upon his investment as a small item. When the down payment amounts to one-third of the total cost, which is what I presume is intended by the bill, then the customer thinks twice before risking loss of both the money and the goods because of default.
6.	Instalment purchases have lessened the volume of savings.
7.	There are some stores whose methods of conducting instalment selling are very questionable. I believe that is one reason why we should have legislation.
8.	Buying some goods on the instalment plan tends to slow up payments due on other accounts. We all know people who buy jewelry, furs and other articles on instalments and let the grocer and hardware merchant wait.
9.	Instalment selling increases very heavily the cost of distribution to the public.
10.	Without doubt some of our industries suffer at the expense of others. It is a strange thing, Mr. Speaker, that people, because of competition for markets, efforts to sell, and the desire of finance corporations to obtain immoral interest, will be induced to

buy jewelry, furs and other unnecessary things on credit as I said before. Again, some people buy these things on the instalment plan, and the very same people complain that they cannot pay the present price for butter, a food required in every household.
As I said before, I believe that the question of instalment buying requires the attention of the federal and provincial governments. I am sure it is a much more serious social disease at the present time than many members of the house realize. Therefore I heartily support the remarks made by the hon. member for Rosetown-Biggar (Mr. Coldwell) this afternoon. I believe that the present type of instalment buying, which is stimulated by. advertising of all types, on the radio and in the press, is evidence to a certain extent of a moral break-down of character on the part of some operating in that field.
I want to make a few suggestions. I have just given some of my opinions regarding this financial disease, and I consider it a disease in its present abnormal form. First of all I suggest that we require a federal act to deal thoroughly with the whole question of instalment buying from the point of view of contracts, rates of interest, repossession, and so on. Possibly it should be modelled on the act passed in Great Britain in 1937. At that time the whole question received considerable attention by the parliament of that country as a result of the tempo of abuses at that time. I think that the first requirement is federal legislation. Then I think that the provincial governments and the people themselves can do something. We all know that the cost of' education is rising in all provinces. There is a great deal of good work being done in the providing of new and better equipment, and in the improving of curricula. However I still maintain, as I have maintained on many other occasions, that in many respects our schools fail to train our children for life and the realities of life. I believe, Mr. Speaker, that our children in all grades at school, and the students in the universities, should be trained to understand arithmetic, because I find many people who buy on the instalment plan do not understand simple arithmetic. They do not know what obligations they have undertaken. They do not know what some firms are taking from them unfairly. I believe we have classes who are trained to write advertising, but I think children should first of all be trained to adequately read advertising.
In addition to that I think there is an opportunity in this connection for the people, through various organizations such as the

labour organizations, the co-operative organizations, farmers' organizations and consumers' organizations, to bring to the attention of their members the real situation with respect to the purchase of consumer goods by the instalment plan. The people should bring their views to the attention of this government and the provincial governments. The pioneers of the co-operative movement were not searching for the easy way. Their method was the most sound and lasting way of increasing consumer purchasing power. The early pioneers of the co-operative movement, and all those who have believed in it since, built their foundation on the enduring rock of pay as you go. I believe, because of that, the co-operative movement is established on a firm foundation. I believe that the more co-operative societies we have in this country, the more credit unions we have in which people are taught to save and establish credit as a result of saving, the less need we shall have for the instalment plan. I believe that is a process of education through people's organizations, and I think if we work towards the growth of the co-operative movement and the credit union movement, we shall effectively overcome in time the present unreasonable development of the instalment buying system in Canada. The more co-operatives we have, the more credit unions we have, the less unsound instalment buying we shall have.
Now, Mr. Speaker, I believe when we come to a subject like this we could very well take the advice of St. Paul, when he said that we should owe no man anything. I believe there are many people who have failed to take heed of that good advice. Before concluding, I should like to make a few comments on the bill and I may have a few questions to ask in the committee stage. I intend to support the bill because I believe the principle is good. I do not think it goes far enough, however. In the first place, I believe it should deal with the question of interest rates. I agree with the member who spoke previously that, under this bill, the man with the cash can buy all the articles he requires. The man without the cash who is required to buy on the instalment plan, particularly those in the low income brackets, is in some cases being unfairly denied the things he requires. I maintain that if this bill is to be effective and fair, Mr. Speaker, rationing of any commodity that is in short supply should go with it.
That is all I have to say at this time, Mr. Speaker. But again I want to emphasize the fact that, while this bill is necessary under present circumstances, we are only touching the fringe of the question. I would 69262-37J
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urge members of the house to give some attention to the injury the present abnormal instalment buying has done to many homes in this country, as well as the abuses of the present law by some of the finance companies and those who are promoting the sale of articles on the instalment plan. Then I hope in the near future we will be ready to give consideration to a question which is of serious concern to Canadians in the lower income groups.


Mr. Clarence Gillis (Cape Breton South);: Mr. Speaker, I am not going to detain the house very long. My main reason for rising at this time is to ensure that there will be nomisunderstanding as to where this group stands on this particular matter. The member for Rosetown-Biggar (Mr. Coldwell) told the house before six o'clock that we were supporting this legislation, but that it did not go far enough. The member for Assiniboia (Mr. Argue) said he agreed with the member for Rosetown-Biggar, and then spent twenty-five minutes in a long academic argument to prove that everything the member for Rosetown-Biggar said was not true, and that in effect this legislation was not necessary at alL


James Sinclair: Where do you stand?


Clarence Gillis: I listened to the member for Kootenay West (Mr. Herridge). I admire his clarity and his descriptive language. There was no doubt as to where he stood on the matter. While we are dealing with the principle of the bill, I thought I might take a moment or two to let the house know that I not only agree with the policy announced by the member for Rosetown-Biggar in connection with this legislation, but also to state my reasons for agreeing with him.
So far as this bill is concerned, it is good peacetime legislation and should be worked out carefully. It should be continued whether or not we have a war. I think that the thing that makes a man a slave under our present scheme is to be working on the average income of salary and wage earners in this country, that is around the $2,000 mark, and to have himself in debt to the extent that he has to pay $2 a month here or $2 a week there; that continuous load of debt piled on him keeps him subservient to the job he has. He loses his independence and feels as if he has nothing to live for. It has always been my policy to pay for what I got when I got it. If I could not afford it, I did not get it. I believe in retaining my independence, and not putting a yoke of debt around my neck.
As the member for Kootenay West pointed out, that has been the basis of the co-operative movement, not only in Britain but in Canada and everywhere else that the system has its roots. It is aimed at giving the purchaser the

Consumer Credit Act
greatest amount of goods and services for the dollar he spends. Over the years this instalment buying system has grown up. The member for Assiniboia says that the interest rate is around eighteen per cent. It is not a matter of interest at all. In the contracts you sign there is a service charge, and it runs as high as twenty-eight per cent, not eighteen per cent. The people of Canada who are living in industrial sections, particularly since the end of the war, find that firms like Eaton's and Simpson's move into a community and the press carries a notice to the housewife every day that they have a budget plan under which she can buy washing machines, chesterfields or anything else she cannot afford to buy outright. You make a certain down payment and the firm delivers it to you; then you pay $5 a month or $2 a month. The result is that the small merchant, the backbone of the community, who has built up a business on the basis of reasonable service is backed out of the picture. He cannot compete with that sort of financing. He stands on the sidelines and watches Eaton's, Simpson's or the other chain stores take over, while he pays the taxes and keeps up the community. It is not only injurious to the worker himself, in that he wastes perhaps twenty-five per cent of his earnings per year in buying on the instalment plan, but it is injurious to the whole community in the way I have just described because it affects the small merchants. The interest charges as such are not so great, but the interest charge is not an interest charge as we understand it. They call it a service charge on the contract or a carrying charge or something else.
Another angle to it is this. These large concerns, in addition to making their money in that particular way, set up finance companies of their own. You can go to the same people. You borrow money from them. You pay them a rate of interest of 6 per cent or 7 per cent. Then you do the budget plan business with the same people and you pay the other 18 per cent to 20 per cent of service charge on those contracts. The time has gone by long since when a look at the whole thing should have been taken and some measures adopted to protect the public who apparently are not wise at the present time.
The hon. member for Kootenay West (Mr. Herridge) stressed this credit union movement. I have always been interested in it. I helped to organize it in Nova Scotia. The kind of thing about which we are talking here tonight is what drove us into the formation of credit unions and co-operatives. In communities in which you have a credit union this kind of thing is not necessary. The money of the community stays in that community for the purpose of building up the people's credit amongst themselves.

I can go to a credit union when I am at home if I want to borrow $100, $200 or $300. I am borrowing it from myself and from the people of that community. On getting that money I can make a cash purchase, and by making that cash purchase I can save that 18 per cent or whatever that service charge may be. That is in my pocket. Then that loan that I take through my credit union is insured, and if anything happens to me during the time that loan is outstanding, the insurance that we carry on it, at no cost to ourselves except that it is paid out of the earnings of the credit union, wipes out the loan debt and it doubles the share to your beneficiary. The incentive is there for the worker to save. The more he saves, the greater insurance protection his beneficiary has. If he has a loan, he is not taking any chance. You are not leaving a debt to someone else if you die; it is also insured.
That is the type of organization that should be sponsored and promoted. When you get a group of people working like that in a community, establishing their own credit, the money stays in the community. It is spent to better the community. There is a feeling of independence when you make yourself financially independent of the loan sharks and of institutions such as those we are talking about here tonight.
I do not want to go any further. I could talk for a long time on this kind of thing because I feel strongly about it. I agree with the hon. member for Kootenay West (Mr. Herridge) when he says that instalment plan buying as we know it today, promoted by the larger organizations of this country, is one of the greatest evils of the system under which we live and one of the most injurious to the income group around $2,000 and under; and we have many in that group. Advantage is taken of them right and left.
As I see it, this legislation does not stand by itself. In my opinion this legislation before us cannot be divorced from all of the other steps we have taken for defence. But it does not go far enough. It is merely stand-by legislation. Before this legislation has to be used I believe that we shall be back here again and shall be able to take another look at the thing, because I do not anticipate any further inflationary spread. It is bad enough as it is, but I think the steps taken now will level off that inflationary tendency. I do not see anything within the next few months that is going to disturb the economy greatly.
I hope that the Minister of Finance (Mr. Abbott), during the process of administering this legislation, will this time have some of his experts take a look at this whole thing,

not as an anti-inflationary measure because of the war but because it is a measure which is necessary for the stability of this country, in order to protect the low-income groups and to safeguard the interests of the small merchant and the small businessman who are hurt perhaps more than is the average wage earner when these large organizations move in and set up this kind of thing with which they cannot compete. They pay the taxes, help keep up the community, and stand on the sidelines and watch the money siphoned off from community after community, centralized somewhere, and banked in a trust or something else. The part of the country in which they are operating is that much poorer. I think this should be peacetime legislation. If it is not a federal matter, when there is no emergency, then I think the provinces should work on it and draw the line somewhere.


Arthur Leroy Smith: I shall detain you for only a moment or so, Mr. Speaker. I stand as exhibit "A" greatly in favour of buying things on credit. I speak from personal experience. If it were not for the fact that, when I first was married, I was able to get credit, my wife and I would still be sleeping on an iron bedstead and cooking on a smudge in the backyard. There is no doubt about that. The people who gave me credit, at their risk, took that chance; and I have been grateful to them ever since. Every little thing we have in our home was bought on credit; and it took us an extremely long time to pay for what we bought in that way.
I will frankly admit this. I do not care what you go into, abuses will arise. It is a fact that they arise. These chaps about whom the hon. member for Cape Breton South (Mr. Gillis) has been talking, and who are making 12 per cent or 24 per cent a year, are people that I have not any doubt need to be taken care of. This abuse is one of these excrescences which grow on a proper business, just as a barnacle will grow on the bottom of a decent ship. No matter how good your ship is, you are going to have these evil things about. It seems to be our way of living.
I was reading the home paper today, and I read about a gambling place in my city. Those who ran it were called leeches by an alderman. He said they should have been ridden out of the city on a rail. I know the alderman. I will not say that that should have happened to him some time ago, but now he is a great public-spirited citizen. Some of these fellows who run the gambling club are friends of mine. There is one thing that I can assure you of about gamblers. When they hire lawyers, they pay them. There is no credit there. Frankly, I may say that I have done extremely well. I mention this fact
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particularly to my friend the Minister of Justice (Mr. Garson), so that he will know that my practice is many-sided. I am not just a constitutional lawyer as he is, although he learned the definition of the word only since he came down here to Ottawa.
May I say that I am in agreement with putting restrictions on crooks in any walk of life. My gambler friends are respectable now. They made plenty of money at what they were doing and now-I was going to say they are aldermen but they are not- they are respectable people in the community. But do not let us run away with ourselves and damn everybody who lends money to people who need to borrow. There are many decent organizations in the lending business. Then I heard the hon. member crying over the small merchant who was in trouble because bigger people came along. I want to tell him something about the small merchant. It is true in western Canada, and I am sure it is true all over Canada. What has the small merchant done? They all have votes; they all have families; but I am going to say it anyway.
There are a number of elements that enter into the high cost of living. There is your raw product; there is your farm product, if you like; there are your wages, because in spite of the argument of the hon. member for York South (Mr. Noseworthy) the other evening that raising wages does not raise the cost of living, it does. He can go on smoking that kind of tobacco; it may last him a long time, but at least he has the smoke in his eyes with respect to that part of it. Of course all these things enter into the cost of living.
It seems to me our chief trouble today is this. One group, one interest, is pulling for protection for that interest-the labour people, if you like. Remember, if you are talking about strikes, I am not one of those who thought that the striking railway men were overpaid. But you can go back to the producer and the farmer. I saw by the paper in the place in which I live that when the railway strike was on the president of the farmers' union of Alberta said: "It must be stopped because the farmer will get a cent or two less for his beef". The farmer is getting too much for his beef now. Let us have no doubt about it. When beef becomes a dollar a pound look out for trouble; and when beef is selling on the hoof at 28J cents a pound you have beef at one dollar a pound.


Gladstone Mansfield Ferrie: What about when it sold for
a cent a pound?



S82 HOUSE OF COMMONS

[Stage Direction]
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Arthur Leroy Smith: I ate more of
it, and if you were tough enough to grow it for one cent a pound then God help you; that is all.


Mr. Cruickshank:: What about the lawyers?


John Sylvester Aloysius Sinnott: No ceiling on the lawyers.
What about the lawyers?


Arthur Leroy Smith: Well, what
about the lawyers? I never knew anybody Who needed a lawyer worse than you do. I continue with the other elements. All of these added together account for the very high cost of living. Let us take the retail merchant. My friends in my own town, and there are lots of them, are not blameless.
Remember this, Mr. Speaker; during the last war we got into the habit of fixing margins of profit on the various articles of food which we were buying. Did somebody say it was in England? It was true in Calgary. The Minister of Trade and Commerce (Mr. Howe) has not discovered yet that that place is in Canada, but it is, there is no doubt about that. Then we got into the habit of mark-ups, and those in the wholesale distribution business of foods also got into the same habit. We came to the place where an article sold for one dollar, and then with inflation and one thing and another we will say the mark-up was 10 per cent. Well, when the same article sells for $2 the profit is 20 cents and that is one thing which is wrong. We are dealing with our friends, these merchants who are great friends of our wives, and who do all their business over the telephone. They do not even put the number of pounds of meat on the roast you buy these days. All you get is the price.
The other day I was doing an errand on behalf of the culinary department of my family. I went down to the Hudson's Bay Company and I bought some of these big paper bags. I was commissioned to do it. It was a very rainy day. It was these bags that you put inside your slop pail. They are using fancier names on them today, but when I was a youngster it used to be called a slop pail. Now it is called a garbage can. I priced them at the Hudson's Bay Company store and I bought fifteen of them for 25 cents. They did not last forever. In my house we have three meals a day. As a matter of fact they ran out, and my wife telephoned to our regular grocery man. I was eavesdropping; I was listening, and she wanted some of these bags. He said that he had them and that they were three cents apiece. My wife said, "That seems awfully high." And the reply came back, "Yes, but you know paper has
IMr. Ferried
gone up." As a matter of fact, they phoned back a few minutes later and said that they had made a great mistake.
But all we get out of our merchants these days is that things have gone up, and we all seem to be perfectly satisfied with it. We do not ask why. All we hear is that something has gone up and we say: "Oh, goodness, we are in for it again."
We are dealing with bills having to do with consumer credit, and the other one which under the rules of the house I dare not even mention, I cannot call it by number, but it was that bill in which the Minister of Justice (Mr. Garson) created more law than Black-stone ever did. There was no doubt about that. I love the newness of it. You like a new article; his ideas were new; but when you try them you will find that perhaps some of the well worn ones are infinitely better than this sharp blade that he put in his idea. You know perfectly well that if you ever cut a piece of soap with it there will be no blade left. That is the kind of law he produced in this house just recently. [DOT]
Coming back once more, sir, to my earlier experience, I am willing to cut down credit. I do not know enough about inflation to understand all the reasons for it; but if people, as the hon. member for Cape Breton South (Mr. Gillis) has said, are getting into the clutches of loan sharks, because I think that was the people he was talking about, I agree with him this is good peacetime legislation and it is good wartime legislation. I know a bit about that. I put two of them in jail. I have not seen them recently, and I hope they are there yet, because this business of taking advantage of people with small incomes, with chattel mortgages and every other kind of mortgage that ties them body and soul, with quick remedies against them if they happen to fail, cannot be defended.
I see women coming to the same floor on which my office is with their little pieces of money, their weekly pay in their hands, and being met by these chaps who are so smooth, so genteel, so kindly when they get them to sign on the dotted line. They stand there like Simon Legree and the little woman comes around while her husband is at work. I hate, loathe and despise them just as much as the hon. member does, yet I am not content to have the decent credit people wrongly condemned in this House of Commons.


Agar Rodney Adamson: 
An hon. Member:: Fuller brushes.


Agar Rodney Adamson: Yes, but they are very useful. The other day a lawyer friend of mine said to his wife, "Take a note of what you are offered every day in a week, and indicate how much it would have cost if you had bought everything offered to you." At the end of the week it was indicated that if his wife had accepted everything offered for sale she would have had to spend almost $350.
That was the experience in only one week. Commodities were offered on long-term credit, with the option of a dollar down or five dollars down or only to sign on the dotted line. I suggest to the minister that there may be a way in which this high-pressure door-to-door selling could be restricted. The husband goes to work, and the wife is left at home alone, harassed by the daily chores of keeping house. She is subjected to pressure by door-to-door salesmen to purchase articles which, had she not been importuned, she would not have thought of buying. In consequence there must be many people in Canada today who have made purchases which can be considered only as purchases made under pressure of commodities they do not want, and which they are incapable of adjusting to their weekly budgets.
These are points which have impressed me in connection with the problems of urban dwelling. While I realize that to a degree the matter of selling comes within provincial jurisdiction, and while there is some question as to whether it would come within the currency sections of the British North America Act, the fact remains that the expansion of credit is just as inflationary as the expansion of the money base.
If this continues there will be many families who will find their obligations tremendously increased. They will find themselves obligated in the evening for things they did not want, and indeed which they did not have in the morning. Not only is this an inflationary practice, but it is infuriating to many husbands who work hard all day and return to their homes at night only to find
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that some salesman has been around and sold something to their wives while those husbands have been out earning their daily bread. They come home to find some wretched thing in the house they did not want, and for which they will have to pay for months. I should think some sort of agreement might be arranged with the provinces by way of licensing the salesmen of these goods. I realize that under our economy goods have to be sold, and that in a normal year the salesmen must go out to make sales. We realize that the function of the salesmen is an important one. Today, however, with the tremendous inflationary pressure and the constantly rising cost of living, I do believe there might be some way in which the Minister of Justice (Mr. Garson) and the Minister of Finance might get together-and I should hope more happily than did the Minister of Justice and the Minister of Trade and Commerce (Mr. Howe) this afternoon-to see if some agreement could not be worked out with the provinces whereby this pressure to purchase unwanted goods might be restricted in this emergency.
I am very much in agreement with the bill. Debts outstanding, my own included, frighten me. I hope they frighten other people, but I find that sometimes they do not. There are many people who are paying greater and greater proportions of their incomes by way of fixed charges. In an expanding economy, with tremendously inflationary pressure being exerted, that is one of the great problems. While I will not say it will destroy our economy, I will say the average man will find it more and more difficult to maintain a home and to make ends meet at each pay period, whether it be at the end of a -week or the end of a month. I would welcome any measure which would make it easier for the average householder in this difficult time to meet the strain of the increased cost of living.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Dion in the chair.
On section 1-Short title.
Douglas Charles Abbott: Mr. Chairman, a number of questions were asked on the debate on second reading as to the manner in which the measure would be carried out. First let me say I am gratified that the principle of the bill has received such universal approval, qualified in some cases by the desire that it might have gone further. Nevertheless on all sides of the house there seems to be approval of the principle itself.

Consumer Credit Act


James MacKerras Macdonnell: Did the hon. member for Calgary West give complete approval?


Douglas Charles Abbott: I did say that in some cases there had been qualified approval but that I had thought that the principle of the bill had been generally acceptable. The hon. member for Cape Breton South pointed out that there was some difference of opinion among the members of the C.C.F. party. I think that some of the points raised by the hon. member for Assiniboia were pretty effectively answered by the hon. member for Kootenay West and I have decided that probably I will not have to answer them.
The hon. member for Acadia asked me to indicate to what extent the bill was going to be implemented. I might say that anticipating that the house would approve a measure of this kind I asked the officials of my department to make a survey of the existing practices in instalment selling and of recent trends in the various retail businesses. When that survey is available the government will be in position to consider to what extent regulations should be introduced for the control of consumer credit.
A good many hon. members will recall that during the war we adopted this measure of control under the War Measures Act which was administered by the wartime prices and trade board. Order 225, which was the final consolidation of the consumer credit orders, is a fairly elaborate order and it is quite likely that at this time it will not be necessary to exercise as extensive control over consumer credit as was necessary during the war. It certainly is the intention of the government to do so selectively. As has been indicated by some speakers, it may be found necessary to apply restrictions to only certain kinds of goods and to vary the requirements as to down payments in terms of total cost. These questions will be settled after we have received the survey to which I have referred.
Incidentally I may say at this time that it would be appropriate for trade associations and others who may be familiar with the technical problems involved to make representations to me or to the officials of my department in order that we may have the advantage of whatever assistance they may be in a position to give in the drafting of these regulations. I do not think that I would be in position to indicate now in detail just how and to what extent the enabling powers under this legislation will be applied, but the broad principles will be those which were applied in the similar control measure which was in effect for four or five years during the last war. tMr. Abbott.]


Donald Methuen Fleming: Would the minister be in position to indicate what sort of organization within his department he proposes to have to administer this legislation?


Douglas Charles Abbott: I can give a general idea as to that. When we were administering this particular order during the war the maximum staff was something in the neighbourhood of 30 to 40 employees. We had in Toronto a main office which consisted of a director, four investigators, legal counsel and a small stenographic and clerical staff. Other officers, principally investigators, were employed in the larger centres such as Halifax, Saint John, Quebec, Montreal, London, Winnipeg and so on. From the preliminary discussions that I have had with officers of my department who were familiar with this matter during the war I should think that at the outset it will not be necessary to establish a very large organization. There will probably be a limited number in the Department of Finance in Ottawa with a certain number of investigators in some of the larger centres to which I have referred.


Stanley Howard Knowles: To what extent is this legislation tied to the bill that was before the house this afternoon by virtue of the fact that the preamble to this bill seems to rely on what is contained in the preamble to the other bill? In asking that question I have in mind the fact that we had quite a discussion this afternoon as to the constitutional validity of measures of this kind. I also have in mind the fact that this afternoon it was stated that the test of the kind of materials that would come under the other bill would be defence. The preamble of this bill ties it to the other bill and I should like to know if there is any significance in that. Will the classes of goods covered by this bill have the test of defence applied to them, or what is the situation?


Douglas Charles Abbott: Answering the first part of my hon. friend's question with reference to the preamble of the bill which was discussed this afternoon, the preamble to this bill was worded as it is in order to eliminate the necessity of reciting the circumstances which were set out in the preamble to the other bill and which have a similar application to this bill. Answering his second question as to the goods that will be dealt with here, that is to say, consumer goods with respect to which credit will be restricted, they would not be, either generally or particularly, the same class of goods as would be dealt with under the allocation bill which was discussed this afternoon.
The main purpose of this bill, as the preamble indicates, is to deal with the inflationary forces which now exist and which may become considerably stronger. This is one of the

weapons which the government is suggesting should be used to damp down those inflationary forces. My hon. friend will have seen in reading the preamble to this bill that reference is made to the preventing of inflationary expansion of currency and credit. Under the British North America Act the federal government is given responsibility with respect to currency.
I am not going to go into the constitutional aspects of this bill. I am not a specialist in constitutional law; taxation is more in my line; but I will say that constitutional law offers a wonderful opportunity to make assertions because it is most difficult for anyone to prove you wrong. In the case of a good many other branches of law you have to establish in the courts at an early date that you are either right or wrong, but that is not true in constitutional law. You can assert with a good deal of boldness that a thing is either constitutional or unconstitutional and it is very unlikely that you will be checked up in the very near future.
I prefer in a case of this kind to follow the law and take the advice, which I am bound to take, of the law officers of the crown that the bill which I am presenting is within the legal competence of parliament, and I have been so advised.


Stanley Howard Knowles: I am reminded that the Minister of Finance has complained about arguments from this side of the house on the ground that they were arguments by assertion. We now seem to have a new type of legislation, legislation by assertion. I am interested in the preamble to this bill for at least two reasons. One is that we seem to be getting in these bills today a new basis for legislation. If the government is not satisfied that it has authority to go into a certain field, and if on the other hand the government does not want to declare an emergency and base its legislation thereon, it would seem that they are now trying to get by with a special kind of preamble. The preamble becomes the basis for the legislation the government wants to bring in.


Gordon Graydon: Legislation by preamble.


James MacKerras Macdonnell: You have the word of the Minister of Trade and Commerce that it is good law. What more do you want than that?


Stanley Howard Knowles: The Minister of Finance is a lawyer and he says that it is just a matter of asserting that the government is right.


Douglas Charles Abbott: I said that I was relying on my constitutional right to take the advice of the law officers of the crown as my legal 69262-38
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counsel in this case that the bill I am presenting is within the powers of parliament.


Gordon Knapman Fraser: You said you were bound to take their advice.


Gordon Graydon: Is it the Minister of Justice you are speaking about now? Better be careful.


Louis Stephen St-Laurent: He is the one the revised statutes speak of.


Stanley Howard Knowles: I turn now to the other point I had in mind. In the preamble we have the government expressing its belief that defence preparations may be expected to expand purchasing power and the demand for consumer goods, and at the same time limit the quantity of consumer goods available for ordinary or civilian requirements. Then the preamble goes on to say that this may result in inflationary pressures which it is desirable to do something about. I am sure the government is getting tired of our pressing this point at this special session, but we will keep on pressing it as long as we are here. If the government admits, as it does in the preamble, that these factors can create inflationary pressure, thus shoving up the cost of living, and just because it believes that to be the case sees fit to bring in this kind of legislation, then I submit they have the power to bring in price control legislation and do something about this problem directly.


Victor Quelch: I should like to get some assurance from the minister with respect to the Farm Improvement Loans Act. I understand that the intention is to increase the amount of the down payment and shorten the time during which the loan can be repaid. I think the minister will realize that if that is done it is going to make it very difficult indeed for the small farmer, or the man with an averagesized farm, to meet those conditions. If the intention is to try to cut down the number of loans made under the act, would it not be better to tighten up considerably the conditions under which entitlement to a loan is granted? In other words, in order to get a loan to buy a machine or to make an improvement on his farm, the farmer would have to convince the bank manager that the article was absolutely essential to the efficient operation of the farm. But once entitlement is granted I say that the terms of repayment should not be made any more onerous than they are at the present time. As the minister knows, the price of farm machinery is at a very high level today. If you are trying to buy a self-propelled combine costing $5,000, or a tractor costing three or four thousand dollars, and a substantial down payment has to be made with repayment within two years or less, it will be very hard for the small or

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average-sized farmer to meet those conditions. Surely it would be better to tighten up the conditions under which entitlement is granted.


Douglas Charles Abbott: As my hon. friend is aware, the Farm Improvement Loans Act is not under consideration at the moment. In my budget remarks the other night I referred to the fact that, as a part of the moderate curtailment of credit which the government feels is desirable in order to prevent further inflationary price rises, the question of loans under the Farm Improvement Loans Act was being reviewed, and that the conditions would be made somewhat tighter. But no final decision has yet been taken as to the exact basis on which that will be done. I shall be very glad to take into consideration the point that the hon. member for Acadia has raised.


Hazen Robert Argue: On that point I should like to ask the minister a question relating to something I referred to in my speech. Perhaps he will recall what I said, but if he does not it is all right. I referred to the growing practice in my own community, and I believe also in other parts of the province of Saskatchewan, of bank managers asking farmers to give additional security on the purchase of a machine to that which is provided under the act. They are asking that the farmer deposit in the bank the title to his land, and as I understand it if the farmer has it in his possession it must be a clear title. Under the act there is provision for a mortgage and a hypothec in certain instances, but I refer to cases where the terms of the loan make it impossible for the bank to require a mortgage or hypothec. The minister is a lawyer. I should like him to tell me what it means when the bank manager asks the farmer to deposit the title to his land.


Douglas Charles Abbott: I am not familiar with the particular circumstances to which the hon. member for Assiniboia refers. I am also not too familiar with the detailed application of the Farm Improvement Loans Act and the methods followed by the banks. I can inform myself as to the conditions to which he refers. Generally speaking, however, the banks are entitled to and do ask for additional security in the case of the larger loans under the act. They take it in different forms, and I suppose the extent to which they ask for security depends upon their assessment of the creditworthiness of the applicant and the credit risk which they are assuming. I will make some inquiries and ascertain whether the practice, to which the hon. member refers, is widespread.


Hazen Robert Argue: I thank the minister for his answer. I want to tell him that, as I understand the act, if a farmer obtains a loan of
CMr. Quelch.]
over $2,000 for a term of more than five years the bank can then ask for security on the loan.


Douglas Charles Abbott: In the form of a mortgage; that is right.


Hazen Robert Argue: Otherwise the bank is not entitled to do so under the act.


Douglas Charles Abbott: Is not required to. My hon. friend will realize that under the Bank Act generally speaking banks are not entitled to lend on the security of real estate. This provision in the Farm Improvement Loans Act is an exception to the general law in that respect, and they take it as additional security.


Hazen Robert Argue: I do not think the minister has got my point. I say I realize that, under the Farm Improvement Loans Act, if the loan is greater than $2,000 and the term of repayment is five years or more, the bank may take that kind of security. The cases to which I am referring, however, are cases where the term of repayment is a good deal less than five years. As I understand it, the banks are not allowed to take that kind of security under the act, and instead of asking for a mortgage on the farm they are asking the farmer to bring his title to his land and deposit it with the bank during the term of the loan. From the farmer's point of view it is just a mortgage because he has not the title any more. He cannot sell his farm until he gets the title back. He cannot take a mortgage on the farm until he has the title. In the meantime the bank has his title.


William Joseph Browne: There are
one or two observations I should like to make. One has reference to the operation of the Farm Improvement Loans Act in Newfoundland. The provincial government has recently passed three acts. One deals with loans to farmers for the purpose of making improvements; the second is to assist fishermen, and the third is an industrial loan. A large amount of money has been provided in each case. They have set up these banks, as they call them, and appointed new managers. The intention is to lend money to farmers and fishermen to purchase equipment.
For example, if a fisherman wants to get a fairly good sized boat, with an engine that may cost $1,000, he can go to the loan board and obtain a loan. I think that is covered under this particular bill, and I should like to draw the attention of the minister to the three new loan boards established in the province of Newfoundland. They have just started to operate. We are not over-flush with money in Newfoundland, and it is desirable that fishermen and farmers should be given some encouragement. As a matter of fact, traditionally fishery has been carried on by means

of credit. The merchant goes to the bank and borrows perhaps $10,000, $20,000 or $30,000 to buy supplies. Then he gives out those supplies on credit to the fishermen without any security at all. The fishermen start fishing in June and turn in their fish toward the end of August, or in September or October. The fisherman pays for the supplies he gets at the end of the season. I should like the minister to keep the conditions in Newfoundland in mind because we. need credit there to carry on our business.


Douglas Charles Abbott: That would most certainly be done. That illustrates the point I made, namely, that in reviewing this whole situation the implementation of the bill will be on a selective basis. If it is clear that a general enforcement of credit terms with respect to the purchase of consumer goods would be inapplicable to the circumstances which the hon. member for St. John's West has outlined, then of course it will not be made applicable to that type of transaction.


Gordon Graydon: I should like to ask the
minister whether this legislation is in any way comparable to that which is proposed in the United States at this time?


Douglas Charles Abbott: I am informed that it is. Certainly the general purpose of the legislation is identical, although the method of administration may vary. We have a considerable amount of experience as a result of four or five war years, and that experience will be followed, but its purpose is exactly the same.


Major James William Coldwell: Before the supper recess tonight I had made some strictures on instalment buying. I think I should say that I realize there are some things that have to be charged, and that it is advantageous to the country to have the payments spread over a period of time. I am thinking particularly of the manner in which many householders in the city of Ottawa and elsewhere buy coal. It is advantageous to the country if they get their coal early in the autumn or even during the summer months, and spread payment over the winter months. I was glad to hear the minister say just before I rose that it would be done on a selective basis, and I should like to suggest that that particular feature be kept in mind. I do not think there is a coal merchant in this city charging the kind of interest rates to which I alluded before dinner tonight. I think that it is advantageous to the economy of the country, and the spreading of the mining period over a longer period of time, to have citizens enabled to buy their coal during the summer or early autumn and pay for it as they use it without a high rate of interest. I know that the coal merchants do not charge such high rates.
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Douglas Charles Abbott: My hon. friend may recall that during the war, in the corresponding provision of the consumer credit order under section 2, fuel of all kinds was exempt from the operation of the order. Essentially what this type of control does is to stipulate a minimum down payment and a maximum period of time over which the instalments may be spread.
Just as a matter of illustration, during the war the minimum down payment in the case of automobiles and most other goods was one-third, with the payments spread over eighteen months. For most other goods the down payment was a third and the maximum period of credit was six months, for wearing apparel except furs. Ten months for all other goods where the amount financed was less than $500 and fifteen months for all other goods where the amount financed was greater than $500. I do not want to say this would necessarily be the rule that would be put into effect in this case, but something of that sort would be the course followed.


Mrs. Fairclough:: Mr. Chairman, I hope the minister will take into consideration the situation in which many families find themselves today because of the housing shortage in some of our more crowded municipalities. I am sure he is familiar with it. They formerly rented apartments, but are no longer able to find them, and are forced to purchase homes at prices far in excess of what they would normally be able to carry. Consequently, they carry large mortgages on those homes. Many of these homes are in outlying districts or new districts, and the people are carrying a large burden in local improvement taxes. Many of them have moved into houses from apartments which were equipped with stoves, refrigerators, and the like, so they have all these things to put into their new homes. The burden is well-nigh intolerable. One could say that the same thing applies to an automobile because, in many instances, the people working in cities are forced to purchase homes at some distance from the towns in order to find housing. I do hope the minister will take all this into consideration in laying down the rules for this new legislation.


Douglas Charles Abbott: He will.


James MacKerras Macdonnell: The minister has answered nearly all the questions I was going to ask, but can he give us an indication in general terms as to whether the government has a figure in mind showing what the effect may be in the way of reducing purchases, or whether what was done during the war would give us a yardstick by which to measure the magnitude of the results which would follow these restrictions?

Consumer Credit Act


Douglas Charles Abbott: It is almost impossible to
do that in the case of indirect controls. You put them in, but you cannot measure their effect. You know that they have some effect, but it is not like giving an order to a man not to go down the street. You block the street, and he cannot go down. In the case of fiscal measures, and in the case of measures such as this, it is agreed that they are effective, but it is not possible to measure in advance just what the effect will be. This afternoon I gave some figures showing the shrinkage in instalment sales between 1941 and 1945, but even that of itself does not conclusively prove that that represented an absolute reduction in sales. There may have been other factors entering into it. There may have been Changes in prices or a greater amount of cash available; all that sort of thing. All that one can say is that all persons who are familiar with these things, economists and the like who are qualified to judge, do agree that measures of this kind have a definite anti-inflationary effect. It is really not possible to give any accurate figure as to just what the extent of that is.


James MacKerras Macdonnell: There is just one other question. It has been brought to my attention that there are approximately 90,000 houses under construction. Most of them are going to be occupied, probably by young people setting up in life. It was probably advisable that stoves were omitted from the list of taxable articles the minister mentioned last Thursday. It is pointed out to me that it would be highly desirable that the effect of leaving them tax free should not be negatived by too stiff regulation of instalment buying. These are the very people who will need to buy these articles on instalments, and I think it would be undesirable that stoves should go only to people who can pay in cash.


Douglas Charles Abbott: I agree that the regulations should be framed in such a way as to make necessary articles of that kind available to the people who need a reasonable amount of credit to pay for them. The purpose of this measure during the war, and now, was to see that there is a reasonable down payment and a reasonable period within which the future earnings may be mortgaged.


Agar Rodney Adamson: Did the regulations that the minister mentioned, concerning automobiles during the war, and so on, result in many complaints from people?


Douglas Charles Abbott: No; this was about the only control I think that we did not have any real difficulty in administering. We did not get any real volume of complaints from anyone. The merchants who had to sell the goods

seemed to be satisfied. The finance companies who were discounting the paper seemed to be reasonably well satisfied, and we did not get any kicks from the consumers. I think it is fair to say that this was one of the control measures that caused us almost no trouble.


Gordon Graydon: As a matter of satisfying my own curiosity with respect to automobiles financed, has the minister any figures to show just what the average amount of the down payment on automobiles is in Canada?


Douglas Charles Abbott: I am informed that we have not that information available, but that is one of the things we have asked and we should get it in this survey to which I referred a few minutes ago.


Hazen Robert Argue: I have some figures here which are taken from the dominion bureau of statistics daily bulletin of September 5. In the first seven months of this year there were 267,000 new motor sales valued at $518 million. Of that amount 78,000 were financed for $108 million. In other words, only 20 per cent of the total value of all new motor sales in the first seven months of this year were financed. Of the ones that were financed, just looking at it quickly, I would say about three-quarters of the value of those automobiles was financed-in other words, about $1,500 per automobile. The total financing of all automobiles was only 20 per cent.
I should like to bring those figures to the minister's attention to substantiate what I tried to say on second reading of the bill and that is that even if this legislation is made retroactive in regard to automobiles, all you are doing, unless I misread the statistics, is working on the 20 per cent that are bought on the instalment basis. Of course, these are people who have not the full purchase price, and for that reason I hope the minister is very careful in the way he deals with this legislation.


[Stage Direction]
Section agreed to.
On section 2-Definitions.
Donald Methuen Fleming: In section 2 there are four definitions or what purport to be four definitions. They concern the expressions "charge account", "consumer goods", "conditional sale contract", and "sold at retail". Of those four expressions three are given a definition in this section. However, "consumer goods" is not given any definition in the section. It is simply provided in section 2 (b) that "consumer goods" means "any goods or class of goods declared by the governor in council to be consumer goods for the purposes of this act". The minister has given some indication of the difficulties with which he is faced

in trying to draft legislation that will make it clear to what classes of goods the act will apply. Nevertheless I think he will agree that this lack of definition is most unsatisfactory; and the committee is entitled to as clear a statement as the minister can possibly give as to the kind of goods to which it is to apply. For example, questions have been asked about some classes of building materials, quite apart from installation in homes; and anything that is chattel property as distinguished from real property appears to be within the possible scope of this provision.


Douglas Charles Abbott: My hon. friend has raised a good point and one to which we have given a good deal of thought. The reason for putting this definition in this way which, as he pointed out, is really hardly a definition, is that we wanted to maintain in this act a real degree of flexibility. As the committee will recall, in the order during the war subsection 2 provided that this order applies to all goods now in use except, and then we had a long list of exceptions. It will be found that the extent to which the order applied was fairly wide.
As I said in my general statement a little while ago, here we really feel that we need to have a bit more information as to the extent to which this order needs to be used before we draft the regulations. We have therefore taken in the act the discretion to the governor in council to determine what will come within the general description of consumer goods. I think it is fair to say that the governor in council will and should be bound by that general description. But admittedly it lacks precision. The order in council which will have to be passed pursuant to this paragraph (b) would have to specify what those goods are; and under a subsequent section would have to be published in the Canada Gazette, be tabled in the house, and so on, so that it would be available in the same way as the order of the wartime prices and trade board was available during the war. But at this time I repeat that we feel that it is desirable to maintain a real degree of flexibility in the legislation itself. That is the reason that the definition is in the terms in which it is framed and is not in effect a definition in the strict sense of the term.


Donald Methuen Fleming: As the minister has indicated, the principle of this bill has commended itself to the house. Nevertheless, I think one is bound to point out that the provisions of legislation of this kind are not those that parliament should be called upon to enact. If this bill becomes law, there will not be any opportunity for parliament to review the extent to which the provisions of the act may be applied to all manner of goods and classes of goods within the next two
Consumer Credit Act
years. We are simply handing every possible class of goods and all chattel property over into the keeping of the governor in council, having regard to the application of this act'. There are no limitations in the act at all. For my part I view with misgiving legislation as wide and unrestricted in its terms as that.


Douglas Charles Abbott: I can see my hon. friend's point. I must confess this, and it is the voice of experience speaking. I believe that it is difficult if not impossible to carry out control measures of this kind without conferring a wide measure of discretion upon the executive. From my point of view that is one of the objectionable features of control measures. I do not like them as such. I do not believe in them as such, except under special circumstances. But when you are obliged to have them, I suggest that one of the penalties

if it is a penalty; and I know perhaps my hon. friends in the C.C.F. party would not agree that there was any particular objection to that-or one of the features of that is that you must give a substantial measure of discretion to the executive and to the people whom the executive appoints to administer them, in order to make them bearable as far as the public are concerned. You must have that degree of flexibility in there, and you cannot spell it out too definitely. You are likely to be tied up unless you keep parliament continuously in session so that you can make amendments from day to day. That is one of the features that I found inevitable in these controls.


John Lambert Gibson: From time to time since the session started the government has indicated that it might be advantageous to restrict capital investment in industry in Canada. I wonder if the minister has given any thought to the possible licence that might be given in that field in order that it might not just be a straight retail proposition that we are considering restricting.


Douglas Charles Abbott: This bill, of course, does not relate to that type of control, and I do not know that I am anxious to get led into a discussion of discretionary controls at this time. Certainly experience again showed during the war that in the case of these capital controls -that is, the control of building products- the only way they can be made effective is by giving to some minister or to some official the right to issue a permit to build such and such a thing.
That is an extremely difficult control to administer. I know that my colleague, the Minister of Trade and Commerce, is often accused of wishing to arrogate to himself great powers. But I know that he just shudders at the thought of being



S90 HOUSE OF COMMONS

[Stage Direction]
Consumer Credit Act
asked to differentiate between people and to say who will build a store here, who will build a store there or who will build a factory here and who will build one there. That is therefore one of the most difficult types of control and one which might perhaps lead to greater discrimination than almost any other. That is why I for one like these indirect means of control, because they act impersonally; they have their effect impersonally. There may be some injustice as a result of their application, but they do not depend upon the whims of any individual or of any controller. That is why I am one of those who want to use the indirect method as long as it can be reasonably effective. As I said in my budget speech the other night, if you get into total war of course you may have to come to more direct measures and the people will probably accept them. But that is one reason why, up to the present time at any rate, the government has felt that the field of direct control in the capital investment sphere is one that we should not attempt.
Section agreed to.
On section 3-Regulations.
Donald Methuen Fleming: There are three provisions in clause 3, subsection 1, each of which has a different purpose. In his statement this afternoon the minister indicated that the bill was designed to apply to three things. The first was instalment buying, the second was charge accounts, and the third was a matter that I shall mention in a moment. These provisions in paragraphs (a), (b) and (c) of section 3, subsection 1, seem to be intended to deal with these three matters that the minister spoke of this afternoon. I would point out that paragraphs (a) and (c) touch on matters that seem to be related to each other; but paragraph (b) touches on a matter which does not seem to be related to paragraphs (a) and (c). Paragraph (a) relates to the payment for consumer goods sold at retail under a conditional sale contract or any goods sold at retail under a charge account. Paragraph (c) relates to the repayment of loans, the proceeds of which are used to pay for consumer goods purchased by the borrower at retail. I mention, Mr. Chairman, that those two paragraphs seem to have this in common: It is the purpose of the loan which is the governing factor, not the security. But when we come to paragraph (b), we find that it deals with the repayment of loans wholly or partially secured on consumer goods purchased by the borrower at retail. That provision, it seems to me, makes not the purpose of the loan but the security the leading test. Having 
regard to that fact, I wonder if the minister considers paragraph (b) of section 3, subsection 1, to be strictly necessary? In his remarks this afternoon I noted that he said this, and I take it that this particular remark applied to or foreshadowed section 3 (1) (b). He said: "It is necessary to take powers to regulate the repayment of loans which are made to finance the purchase of consumer goods. Such loans have the same effect as instalment credit, and must be treated in the same manner." He did not expand on that thought. It strikes me, Mr. Chairman, that there is a difference as between 3 (1) (b) on the one hand and 3 (1) (a) and 3 (1) (c) on the other.


Douglas Charles Abbott: My hon. friend is quite right. The purpose of 3 (1) (b) is this. Where loans are secured on consumer goods which are purchased at retail by an individual 3 (1) (b) creates the presumption that the loan has been taken for the purpose of purchasing the goods; and as was done during the war, the regulations will provide that the provisions of the act will not apply to a loan made foy a borrower. I am reading from the old order. "The provisions of this bill"-that was the wartime order-"shall not apply to a loan made to a borrower who signs a statement that the proceeds of the loan are not intended to be used and will not be used in whole or in part toward the purchase of goods, or to replace money used for the purchase of goods, and no person shall make a false statement to this effect." If consumer goods are purchased by a borrower at retail and1 are then used as security for a loan a presumption is created as a result of this section that the loan has 'been obtained for the purpose of making the purchase in whole or in part; unless the borrower takes an affidavit, makes a declaration to the lender, that that is not the case, that the loan is not for the purpose of purchasing the goods

and that was followed all during the war. In the personal loan department of banks the borrowers were required to make a declaration that the loans which they were making were not for the purpose of purchasing goods on terms contrary to the provisions of the consumer credit order. Admittedly there would be opportunities for evasion in that case, and a hundred per cent enforcement would not toe possible. But proceeding on the presumption that I believe to be the case, namely, that the vast majority of people are honest, and will not make false declarations, I am told that the operation and enforcement were reasonably satisfactory.
Then paragraph (c) of course relates directly to a loan, the proceeds of which are used to pay for consumer goods purchased

by the borrower at retail. It is clear in its terms, and the point which my hon. friend has quite properly raised is, what is the distinction between (to) and (c)? And that is what I have endeavoured to explain.
I have an amendment to this section which I shall have to ask one of my colleagues to move. In drafting it and attempting to make it restrictive we referred to the repayment of loans, but did not indicate that the restriction should apply as well to the loan itself, and therefore my amendment would add as the concluding words of 3 (1):
And with respect to the amount of loans referred to in paragraphs (b) and (c).


Mr. McCann:: I so move.


Joseph-Alfred Dion: Shall the amendment
carry?


William Joseph Browne: Before the amendment carries may I make an observation in connection with (c)? In the city of Quebec last week 2,000 people gathered to celebrate the golden anniversary of the foundation of the caisse populaire, which was started by Alphonse Desjardins at the beginning of this century. I should like to be one to pay tribute to the enormous social value of the work done toy Mr. Desjardins and by those who succeeded him.
I know thait this movement of caisse populaire, or the credit society union, has a long history, going back to the Monts-de-Piete of the middle ages, and to that of Raiffeisen banks and Schulze in Germany in the last century. We in Newfoundland have copied the credit society or the credit unions from the co-operative movement of Nova Scotia, and I can say that that movement has done an enormous amount of good in Newfoundland. It seems to me that consideration should be given to the exclusion of credit societies or caisse populaire from the operation of this section, because the money which they lend is their own; it does not create new money as a loan from a bank would. If a man goes into a bank and borrows money from the bank the banker creates the amount of the loan which the person wants; whereas if a man goes to a caisse populaire or a credit society he is using only his own or his neighbour's money for that purpose, and no new money is created. I think that is recognized. Perhaps the minister will give consideration to that when he is drawing up the rules.


Percy Ellis Wright: I want to ask the minister a question along the same line that the hon. member for St. John's West has asked with regard to whether paragraph (c) would apply
Consumer Credit Act
to loans made by credit unions to their members. Is it the intention of the government to pass a regulation under this clause which will affect the loans of credit unions to their members?


Douglas Charles Abbott: During the war, and I think the same practice would be followed here, all loans made by individuals or lending institutions were subject to the rule that the borrower must make a declaration that the proceeds were not being used to purchase consumer goods in contravention of the terms stipulated in the consumer credit order as it stood at that time. Of course regulations have not been drawn under this legislation yet. With due deference to the hon. member for St. John's West I would see little difference in the anti-inflationary effect of borrowing whether it is from a bank or a private individual, a credit union or any other form of credit institution, provided that the individual is borrowing money and not using his own cash.


William Joseph Browne: I should like to ask the minister whether he has really reflected upon that point because, as I said, it is recognized by economists that no new money is created there as in a loan from a bank.


Douglas Charles Abbott: I do not want to get into a monetary argument with my hon. friend, but no new money is created by the bank either. However, that is a question that I hope we will not have to traverse this evening.


Victor Quelch: Does section 3 (c) apply only to lending institutions of one kind or another, or does it apply to loans between one individual and another?


Douglas Charles Abbott: Well, it is really regular lending companies, lending institutions, that are contemplated. I question whether it would be feasible to attempt to enforce a measure of this kind on private arrangements between individuals. So far as I am aware no attempt was made during the war to extend it to private individuals.


Victor Quelch: I think it would be a good thing personally.


Douglas Charles Abbott: I think the terms of the order were broad enough to cover it, certainly.


Mr. Knight:: This curtailment of instalment buying will tend to drive more and more people into the hands of the so-called small loan companies. I think I should draw the attention of the minister to certain practices of these people, particularly with regard to their advertising. I think there should be some restriction on the tactics that these

Consumer Credit Act
people usually use. The exact amount of interest that people are paying for accommodation is said to be so much per annum. That is to say, I think someone should insist that when loan companies advertise they should state in their advertisements, not the various amounts that must be paid back monthly, but the actual amount of interest per annum charged.
As the minister is no doubt familiar with the System, he will know that these people advertise in the press and in other ways that they are prepared to lend let us say $100 on twelve instalments of $9 each. People who use these facilities are not always those who are blessed with the ability to do arithmetic problems, and when they see reference to twelve instalments at $9 each, spreading $100 over the year, they naturally jump to the conclusion- and I think it is natural for them to do so- that they are paying 8 per cent per annum. As a matter of fact they have not used $100 for a period of twelve months, at all, but have used $50 for twelve months or $100 for six-whatever way one wishes to put it. It is my opinion that if people knew what they were up against in the matter of paying interest rates they would be more careful in the use of their credit. That is one angle the government should take into consideration.
While I am on my feet may I mention a matter I mentioned before, namely the practice of charging bonuses for loans. I shall not recount tonight the pitiful tale I told the house before, where the woman borrowed $3,500 and was then forced to sign a first mortgage for $4,000 on the house she purchased with the $3,500. In other words she will be paying for the next twenty years interest on $500 she did not borrow. I do not know whether the minister would consider that inflationary or not. Whatever it is, it is something which should be discouraged.


Donald Methuen Fleming: I have nothing to say about the amendment, but I should like to make some observations about subsection 3. As to subsection 1, my inquiry relates to the date upon which the act is intended to be operative. For instance in paragraph (a) we find reference to payment for consumer goods sold at retail. Is this legislation to be applied in the case of goods sold prior to the date on which the act comes into effect?
Then paragraph (b) refers to the repayment of loans wholly or partially secured on consumer goods purchased by the borrower at retail. Is the act to have application to loans made prior to the date upon which the act

comes into effect? Secondly, is it intended to have application in the case of goods purchased before the act comes into effect?
Paragraph (c) refers to the repayment of loans. Is it intended to have application to loans made prior to the date of coming into force of the act?


Douglas Charles Abbott: Certainly there would be no
possible question of the retroactive effect, so far as loans are concerned. I might as well state frankly that I did not contemplate that there should be any retroactive effect otherwise. If it became apparent that there was a widespread anticipation of these regulations and a number of spurious contracts entered into, it might be necessary to consider some other date. But I think I can state frankly that there would be no present intention of making the new regulations operative prior to the date on which they will be adopted and announced. That is the present intention, and I have no reason to think that it will be changed.


Donald Methuen Fleming: The minister mentioned
loans. I also asked as to the purchase of goods as set out in section 3(l)(b). May we take it that the minister is saying that this act will not be applied to any goods purchased prior to its coming into effect?


Douglas Charles Abbott: Absolutely. Any bona fide
purchase prior to the coming into effect of the regulations would not be affected.


Mr. Hatfield:: Under the small loans legislation parliament has allowed loan companies to Charge 22 per cent interest?


Douglas Charles Abbott: I would have to inform myself on that point. I cannot give an opinion upon that offhand, as to what the Small Loans Act provides. However, I shall be glad to look into the matter and refresh my memory.


Donald Methuen Fleming: In section 3(3) parliament
is being asked to give the governor in council power to prescribe a fine or a term of imprisonment for violation of any regulation, and also to prescribe whether a penalty shall be imposed upon summary conviction or upon conviction under indictment or upon either summary conviction or conviction under indictment. I am aware that the subsection does proceed to put a limit upon both the fine and the term of imprisonment which may be imposed for breach of a regulation; but I do urge that it is quite unsound legislation for parliament to vest in anyone the right to define penalties of that kind, whether by fine or imprisonment.
Granting that there are limits placed upon the power to be exercised with respect to fines and imprisonment, I for one wish to

record my opposition to legislation which purports to confide in some body outside parliament the right to determine penalties for breaches of a law made by parliament, or a law parliament authorizes to be made by the governor in council by way of regulation.
If it is feasible to put a limit upon a fine or imprisonment that may be attached in respect of the breach of a regulation under this act, then certainly it should not be beyond the wit of the draftsman to set out in the bill in plain terms the maximum penalties that should attach to breaches of the regulations. It seems to me that this is a form of legislation that is unsound in principle, and to which parliament should not lend itself.


James MacKerras Macdonnell: I am fully in accord with what was said by the hon. member for Eglinton on this point, and I do hope the minister will give consideration to it.


Douglas Charles Abbott: As was pointed out toy the hon. member for Eglinton, limits have been put in here as to the penalties which can be imposed. They are lower limits than were included in the general penalty clauses of wartime prices and trade board orders. The reason here for giving the discretion, and for spelling it out by regulation, is to maintain the principle of flexibility and the possibility of mitigating the otherwise rigid provisions which it would be necessary to insert in the bill.
In oases where there was flagrant violation of the regulations by, let us say, a loan company, or some other vendor advertising in violation of the regulations, the governor in council might feel it proper to proceed by indictment and, as a consequence, the penalty would be more serious. On the other hand a more or less inadvertent violation would be prosecuted by way of summary conviction, and a smaller penalty asked for.
If one grants the principle that this control should be imposed, then I think there should be some discretion in the executive; and if one puts in maximum and minimum penalties it is no serious contravention of sound parliamentary principles to allow discretion to frame regulations which will determine the category within which particular classes of offences will fall. That is the reasoning which lay behind the drafting of the section in this form and that is the reason why my considered view is that it is desirable to have it in this way.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 4 agreed to.
Consumer Credit Act
On section 5-Expiration.
Donald Methuen Fleming: I do not propose to weary the committee with a long argument or repeat what I said this afternoon in connection with a similar section in another bill, but I do urge the minister to consider reducing this period. He has referred to certain things this evening, notably the fact that he does not necessarily propose to put this legislation into effect immediately. There is also a great area within the scope of the bill in connection with which the minister has reached no decision as yet as to the extent to which power may be exercised. For these reasons it seems to me that it is desirable that this legislation should come back to the house before the expiration of the time limit provided in section 5.
If this section is passed it means in effect that parliament will not have this matter before it within two years. It seems to me that the various factors I have mentioned and others that have arisen during the debate make it desirable that parliament should have some closer contact with the administration of this act and the results of that administration than the two-year period provides. Therefore, I urge the minister to shorten the period provided in this section.
There is a second point which I raised also this afternoon on Bill No. 5. I do not think an address is the proper method of extending the life of legislation of this kind because it deprives hon. members of the opportunity that the normal procedure of a bill gives them to discuss the matter at various stages instead of its being left to a sudden decision after a discussion at only one stage in the proceedings.


Douglas Charles Abbott: This question of procedure is a matter of opinion on which my hon. friend and I may differ. His opinion is available and so is mine. The usual procedure in legislation of this kind-I refer notably to the Foreign Exchange Control Act-is not to have an expiration date but to leave it to parliament to repeal the legislation at such time as it is felt proper to do so. In this case, as in the case of the Foreign Exchange Control Act, it was felt desirable to put in a termination date.
It is always open to any hon. member who has ceased to have confidence in the government to base a motion of want of confidence, either on the address or at another appropriate time, on the fact that this act should be repealed or that it is not being administered properly. As to opportunity for discussion, it should be remembered that this will be under the administration of the Minister of Finance. I shall have to make provision in my

Consumer Credit Act
estimates for its administration and anyone who wishes to ask questions will be perfectly free to do so. I cannot see a great deal of validity in the point raised by my hon. friend that the termination date should be a nearer date than July 31, 1952.


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


Stanley Howard Knowles: By leave.
Motion agreed to and bill read the third time and passed.



BUSINESS OF THE HOUSE

Alphonse Fournier: the adjournment of the house.


Stanley Howard Knowles: What do we do tomorrow?


Alphonse Fournier: Tomorrow we will take up the third reading of Bill No. 5 and then continue the debate on the budget.
Motion agreed to and the house adjourned at 10.40 p.m.

Tuesday, September 12, 1950