1950-05-09

Mr. Jean Francois Poulioi (Temiscouala):: Mr. Speaker, I have learned with great regret that there is another disaster in eastern Canada. Fire is raging at the present time at the village of Cabano in my constituency. The Red Cross is sending supplies to help the people, and I ask the government to do all they can to send help to stop the fire and assist those who are victims of it. I hope something will be done at once for these people. I extend to them my sympathy, and express the hope that the fire will soon be under control.


Right Hon. L. S. Si. Laurent (Prime Minister):: Mr. Speaker, I can assure the hon. member for Temiscouata that the government wishes all Canadians to be treated alike, and that, under conditions which require aid, immediate instructions are given to all federal services to provide as much emergency aid as they can. The Minister of National Defence will state what has been done since news was received of the fire.
(Translation):


Hon. Brooke Claxton (Minister of National Defence):: Mr. Chairman, like all members of the house I am very sorry to hear of this terrible disaster. Local authorities have requested our help and troops are already on their way to bring assistance.


Jean-François Pouliot: I wish to thank the right hon. the Prime Minister (Mr. St. Laurent) and the Minister of National Defence (Mr. Claxton) for their kind willingness to help the sorely tried population of Cabano.
(Text):



PRIVATE BILLS


[Stage Direction]
Bill No. 182, for the relief of Jack Elmhirst Webster.-Mr. Winkler.
Bill No. 183, for the relief of Annie Kwiat Maislin.-Mr. Winkler.
Bill No. 184, for the relief of Douglas Charles Blair.-Mr. Winkler.
Bill No. 185, for the relief of Therese Simonne St. Onge Laurier.-Mr. Winkler.
55P46-146J
Bill No. 186, for the relief of Carmen Emily Adelle McCoy Jackson.

Mr. Winkler.
Bill No. 187, for the relief of Helen Alma Lambert Anderson.-Mr. Winkler.
Bill No. 188, for the relief of Bertha Marks Cohen.-Mr. Winkler.
Bill No. 189, for the relief of Stella Margaret Rollo McKee.-Mr. Winkler.
Bill No. 190, for the relief of Helena Matyla Martyniak.-Mr. Winkler.
Bill No. 191, for the relief of Marie Rosanna Emelda (Imelda) Lecomte Bolduc.- Mr. Winkler.
Bill No. 192, for the relief of Rose Slosarczyk Bydlinski.-Mr. Winkler.
Bill No. 193, for the relief of Helen Meadows MacNaughton.-Mr. Winkler.
Bill No. 194, for the relief of Walter Kerr Dow.-Mr. Winkler.
Bill No. 195, for the relief of Thora Yvonne Easy Weaver.-Mr. Winkler.
Bill No. 196, for the relief of Robert Cohen. -Mr. Winkler.
Bill No. 197, for the relief of Ruby Gladys Burns Thornhill.-Mr. Winkler.
Bill No. 198, for the relief of Joseph Francois Xavier Beland.-Mr. Winkler.
Bill No. 199, for the relief of Joseph Neist. -Mr. Winkler.

[Stage Direction]
QUESTION AS TO SALARIES OF VICE-PRESIDENTS On the orders of the day:
Mr. G. K. Fraser (Peterborough West):: On
May 4 the parliamentary assistant of the Minister of Trade and Commerce told me that on the following day he would give me an answer on the orders of the day as to the salaries of the national research council vice-presidents.


Mr. G. J. Mcllrailh (Parliamentary Assistant to the Minister of Trade and Commerce):: The salary being paid to the vice-presidents of the national research council is $10,000 a year.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. G. F. Higgins (St. John's East):: I wish to direct a question to the parliamentary assistant to the Minister of Fisheries. What action does the government propose to take

Inquiries of the Ministry with respect to the setting of a guaranteed price to fishermen for Newfoundland salt codfish for 1950?


Mr. J. W. MacNaughl (Parliamentary Assistant to the Minister of Fisheries):: The
hon. member for St. John's East was kind enough to telephone me and to send me a copy of his question. In reply thereto I wish to say that the world prices of salted codfish have remained through 1949 above wartime levels, while the prices of other primary products have had some downward adjustment. The world supply of salt codfish is still below the pre-war normal, and the people in the consuming countries are anxious to have this kind of diet. The going prices for 1950 will be determined by the output in other producing countries, such as Norway and Iceland, as well as Canada, and by the demand situation overseas during the year.
The fisheries prices support board has had and will continue to have this situation, as it may affect the Canadian salt fish trade, under the closest review. In the light of unfolding conditions and any needs that may later arise, the board will recommend to the government the course of action it believes the situation then calls for.


Gordon Francis Higgins: The parliamentary assistant is aware of the present situation in Newfoundland and the need for price support now?


John Watson MacNaught: The officials of the fisheries prices support board are keeping in constant touch with the situation in Newfoundland.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Hon. Humphrey Mitchell (Minister of Labour):: Yesterday the hon. member for Cape Breton South (Mr. Gillis) asked if the government had been requested to extend the date for the payment of supplementary benefits under the Unemployment Insurance Act. These benefits, by an amendment to the act approved at this session of parliament, were to lapse as of April 15.
I may say to the hon. gentleman that some municipalities did ask if the benefits could not be continued until a later date; I think May 31 was mentioned in one instance. However, we felt that we could not do this because of the special provision that had to be made to take care of the cost of the supplementary benefits up to April 15. We have also been watching the employment situation, and indications are that there are now increased opportunities for employment. As hon. gentlemen know, the act as amended provides for

supplementary benefits in future years, to those qualified, covering the period January 1 to March 31.
Our main efforts now are concentrated on getting men and women back into gainful employment.



COMMUNIST ACTIVITIES IN CANADA

[Stage Direction]
The house resumed from Wednesday, May 3, consideration of the motion of Mr. Fournier (Hull) for committee of supply, and the amendment thereto of Mr. Drew.
Mr. Rodney Adamson (York West):: Mr. Speaker, when I moved the adjournment of this debate last Wednesday I stated that one of my reasons for wishing to speak was that I had been the first member of the Canadian parliament to advocate official recognition of the Soviet government. I did so on February 3, 1942, at page 299 of Hansard for that year, in these words:
I suggest that we should immediately take steps to recognize the government of the Soviet union . . . We should welcome in this country a Soviet military mission and should send one of ours to Russia. I believe we have much to teach them, and it is more than likely that they have much to teach us...
The Russians have been the first people to meet and defeat the blitzkrieg. It is to them we must look for the initial destruction of the German land forces. Their magnificent heroism has sent the brazen horde reeling in disorder from their capital. Today the Soviet power is the second or third most important in the world. Soviet Russia and Canada are near neighbours: we are both northern people living in an extreme climate; we both have a great country to develop. Yet one would think it was almost indecent to mention Russia . . .
I am not afraid of the spread of communism in Canada, if we treat Russia as a full ally and welcome members of her armed forces in the same way as we do those of any of the other "united nations." I should like to see a Soviet legation at Ottawa; the hammer and sickle should fly proudly at the masthead instead of being considered an emblem of somewhat questionable morality ... to refuse to recognize this great power is building up trouble for ourselves and is going to give great aid to subversive elements which are even now at work trying to undermine the security of the state. We are going to have to admit that the Soviet philosophy exists and that it has done great things; let us admit it openly and above the broad tables of government rather than have snivelling, subversive agents peddling anarchist literature to the adolescent minds of the students in our schools, universities and training camps. We have seen what anarchy has done in other countries. It can happen here.
The point stressed, it will be seen, was that official recognition of Soviet power, and, by association, of the communist party, would bring communism into the open, and any actions of communists or of the party therefore would be fully exposed to the public view. My point was that communism would then be considered as a system of government which, while we did not agree with it, had

every right to co-exist with our democratic and free parliamentary system. This view was widely held at that time, even by such persons as the President of the United States and Winston Churchill. The fact that two communist members were elected to this House of Commons in the nineteenth and twentieth parliaments shows how far official acceptance actually went in Canada.
How tragically wrong subsequent history has shown this argument to be! The hopes we all had that Hitler's folly might have paved the way for Russia to become co-operative with the free nations of the world were almost immediately destroyed. Even while fighting for her very existence she treated the military missions of her allies with extreme suspicion and scant courtesy, and did everything possible to prevent them from gaining any firsthand knowledge of the tactical or strategic problems of the actual fighting. As an example of this, the only information we could get about the weapons and armoured vehicles 'with which we supplied her, and how they were standing up under actual combat conditions, came not from our mis-sion-and when I say that I mean the British mission to Russia-but from our own agents in Germany. Her shocking ingratitude in regard to the appalling task of supplying her through the tremendously hazardous Murmansk convoy route was a high point of international bad manners without equal in history. Her querulous and carping criticism of everything we did for her right from the start showed that the communist soviet state, like the leopard, cannot change its spots or its disposition.
An interesting aside of those early days on the eastern front was that the people of the Ukraine welcomed the Germans as deliverers; and had Hitler promised a free Ukraine, and not behaved with such abominable ruthlessness and barbarity, there is little doubt that his endeavour to capture Moscow and reach the Urals would have succeeded. The arrogant nonsense about a master race in all probability can be said to have cost him the victory.
Irrefutable evidence shows that it was touch and go whether the Soviets started a shooting war after the end of the major hostilities in 1947, but they apparently thought that they could win with the Berlin blockade. With the tremendous aerodrome construction projects being rushed to completion in Germany for fighter and bomber aircraft at this very moment, who can reasonably doubt the real intentions of these people? Instead, Mr. Speaker, of judging communism by the remarks of such leaders as Lenin and Stalin, who have both made a fundamental
Communist Activities in Canada point of their doctrine that communism cannot co-exist with free democracies, we made the fatal mistake of judging others by ourselves, and, assuming that because we and no other democracy had any designs on any communist state, it would therefore follow that no communist state would have any designs on us.
Two costly and fundamental lessons have been learned, at least by some of us. First, if you recognize communism it does not do away with its underground activities. The argument that to take steps against communism in the open would drive it underground is entirely specious. No matter what recognition we give to communism and communists, they will continue to have an active and extremely dangerous underground. The communist party is like an iceberg, eleven-twelfths of which is submerged. It is just as foolish to try to alter the nature of a communist as it is to try to alter the physical properties of ice. Ice will always float with eleven-twelfths of it submerged, and communism will always carry on most of its activities underground. This is true, strangely enough, even in countries where there is a communist form of government in power.
The second lesson that we have learned, and it is a bitter one, is that communism and freedom cannot peacefully co-exist in the world today. Every single doctrine of the communist ideology is diametrically opposed to every principle in which we in the free countries believe. This is not a case of communism versus capitalism. Today Russia has a capitalist oligarchy, and the difference in income of the various classes in Russia is infinitely greater than in any capitalist country. No; the quarrel is not between socialism and capitalism; the quarrel is between the dignity of man and the slave state. Were I a religious man, I would say that the difference is so fundamental that the Christian teaching is that man is created in God's image, whereas the communist teaching is that man is created to serve his master, Stalin, the narrow dogmatic Marxist view of man as a servile animal disciplined by fear.
For anybody in this house to say, as some speakers did last week, that to bring communism out into the open prevents it from being underground, and that communism and freedom can peacefully co-exist, is to show that they have learned nothing from recent tragic history. It can be classed as criminal stupidity.
There is another point which must be brought out at this time, and that is the belief, to use the Prime Minister's words, that the best way to destroy communism is to make democracy work. Nothing could be
2304	HOUSE OF
Communist Activities in Canada further from the truth. Even if all the cardcarrying members of the communist party in Canada were put into the Senate and given a pension of $6,000 a year for life, they would still be communists, and they would still actively seek to destroy the land in which they live. A man or a woman who has been infected by the communist virus will be a communist, and will advocate communism even though he or she be a millionaire and lives in a marble palace. Why this is so is not the point at issue in this debate, but recent history has shown it to be true. To use the words "defeat communism by making democracy work" is to actually play into the hands of the communists. Their argument is -that democracy does not work, and if we, by specious negative statements such as this, state even by inference that it does not work, the communists will use our words, as Kipling puts it, "to see the truths you've spoken twisted by knaves to make a trap for fools."
The danger of ideological appeasement is just as great as the danger of physical appeasement; in fact, it is probably worse. Communist Russia has never had to send an army across any frontier to make new conquests. She has only had to rely on subversive activity. This is the new weapon of the new warfare, and it is just as important for us to combat it as it would be to combat an invading army using infantry, tanks and bombs. The subversive war is going on now. This must be clearly understood. Therefore, Mr. Speaker, I hope this is the last time we shall ever hear this method of defeating communism advocated, at least by members of responsible political parties in this house. I repeat that the three fundamental facts which recent history have taught us are: first, that communism cannot co-exist peacefully with freedom; second, that to recognize communism does not destroy its underground movement; and third, that communism cannot be defeated by economic prosperity.
One further gross error made by the Minister of Justice (Mr. Garson) was in his statement that the prosecution of communist or other subversive acts was the duty and responsibility of the provincial authorities. For the first years of the war, that is from 1939 to April, 1942, I held the position of district intelligence officer for military district No. 2, with headquarters in Toronto. This district, as is known to members, was by far the largest military district in Canada. It was then, and still is, the centre of communist activity. The question of subversive activity was a direct responsibility of the intelligence staff. As I had the responsibility during all the time the United States was


neutral, and there existed an active nazi organization known as the German-American Bund, as well as an active communist party, both in Canada and the United States, who did everything to hinder our participation in the war which was termed imperialist and capitalist aggression, I feel that my experience during those years gives me the right to speak on the subject of the prevention of subversive activity and enforcement of laws designed to combat it.
The first thing I wish to say is that during this entire period it was the federal authority who dealt with subversive activity; it was the federal police who made the investigations, made the arrests, laid the charges and presented the evidence in court. Naturally we in the army co-operated with them in every way, as did the provincial police. The point I wish to stress, however, is that it was the Royal Canadian Mounted Police who, in all cases, looked after the prosecution of persons charged with subversive activity. It is true that I did occasionally see the then attorney general for the province of Ontario, Mr. Conant, which at that time had a Liberal administration. He was, however, emphatic that all questions dealing with subversive activity were a federal responsibility. The provincial police did co-operate with us, but only when we asked them to do so. Our dealings with the Federal Bureau of Investigation were also on the Canadian federal level. I do not propose to enlarge on this work, because much of it probably still comes under the Official Secrets Act. The fact I want to make very clear is that subversive activity is considered by the authorities directly responsible for its prevention to be entirely a federal matter.
The officers of the Royal Canadian Mounted Police with whom we worked during the war frequently said to me privately that they wished there was an amendment to the Criminal Code similar to that envisaged by this resolution so that prosecution would be made more simple. When dealing with subversive activity, the aim is to prevent the act being committed, not to prosecute after the foul deed is done. Prevention, not prosecution, is the slogan of all who have the responsibility of dealing with treason and sabotage.
Another error I wish to correct in the statement of the Minister of Justice and the Prime Minister is that England took no steps to prevent communist or other subversive activities. Nothing could be farther from the truth. While the communist party was, it is true, not officially banned, nevertheless under the Defence of the Realm Act-known as "Dora"-the widest possible powers were

given both to the military and to the civil powers to arrest, and to hold without trial and without warrant, any suspected person. It may not be generally known, but the Defence of the Realm Act had in it clauses such as the one which allowed any officer of any of the armed forces in uniform to apprehend and hold any civilian for a period of forty-eight hours before he even had to report the arrest to his superiors. If the individual was suspected, he could be put away virtually without a trial in a concentration camp and held there at His Majesty's pleasure. With powers such as these, there was absolutely no necessity officially to ban the communist party, or even Sir Oswald Mosley's fascists; but Mosley himself was nevertheless quite effectively locked up.
I now come to conditions as they exist today in Canada. Section 134 of the Criminal Code deals with sedition; and while sedition is not defined specifically, one of the generally accepted definitions is "to lead ignorant persons to subvert the laws". Recently we have had a number of instances of this in Canada. I speak of the communist propaganda directed toward the displaced persons who have for the past year or so been entering Canada for the prime purpose of getting security from Soviet expansion and, in fact, escaping the communist state.
One of the instances was when a riot took place in Timmins and the displaced persons who wished to be free turned on the communists who were trying to subvert them. Most hon. members will have received communist bleats about this episode, with the usual nonsense that they had been turned on by fascist dogs. I believe that anyone who tries to subvert or to incite these people who are now coming to Canada, and whom we hope to make into free and useful Canadian citizens, should be prosecuted, and that the Criminal Code should be altered to make this possible.
Another example of the necessity for an alteration in the Criminal Code is what is known as the policy of separation from sensitive positions of persons in the civil service if they are thought to have subversive contacts, or even subversive inclinations. Such a matter as having in their possession or in their residence lists of addresses and telephone numbers of known subversives, or to have visited and been seen in the company of known subversives, is considered evidence enough to bring about separation. Thus the government can and does deprive people of their jobs and economic security without a trial and without recourse. If a man is subversive, he is just
Communist Activities in Canada as subversive in a key position in a sensitive industry as he would be in the film board or in any government department, with the possible exception of the department of state and the Department of National Defence. If a man is not subversive and wishes to appeal from the decision of the investigating authorities, he should be able to do so; but to provide security and to prevent the methods used by the police from becoming known, an alteration in the Criminal Code would seem advisable.
To show that the government is aware of this fact, it was announced that an amendment to the Official Secrets Act is proposed this session. While I am not, of course, in a position to anticipate the nature of this amendment, it is obvious that recent events have shown the inadequacy of the present law. Whether subversive activity is an offence against the Criminal Code or against the Official Secrets Act, or both, is a question of legal and administrative argument. It is apparent, however, that the government considers the present legislation inadequate for the purposes at hand.
The motion before the house recognizes this situation, and is directed to the introduction of a preventive, not a punitive measure. I say again that the aim of all responsible democratic authorities is primarily to prevent subversive activities from taking place, rather than to punish those who have engaged in them. This amendment was drafted to bring this about. It is not aimed at outlawing anyone, nor does it in any way attempt to do anything to anyone because of his thoughts. I therefore support the amendment, Mr. Speaker.


Mr.  A. J. Baler@The Balllefords: In rising to say a few words on this amendment, Mr. Speaker, I shall first of all read the amendment and then make a few observations.
The amendment read's as follows:
This house is of the opinion that appropriate legislation should be introduced so that communist and similar activities in Canada may be made an offence punishable under the Criminal Code.
In speaking to this amendment I think we can again say that possibly we are trying to decide which is the right way to do the right thing. After listening to the mover of this resolution, I have been doing a little bit of thinking; and I have come to the conclusion that if the amendment were adopted we would be endeavouring to do the right thing in the wrong way. I thought that the Secretary of State for External Affairs (Mr. Pearson) struck the right note when he replied just last week.
I recall some twenty-one years ago, being back in the country which gave me my birth.

Communist Activities in Canada I was walking down from Whitechapel to Westminster Abbey and the parliament buildings, and there I saw what I had often heard about, namely, a man standing on a box. He had an audience of only four people. I said to the guide, "What is that man doing there?" He said, "Oh, he is just having a little conversation with the three or four people who are his audience." I walked over to this man who was on a box near the parliament buildings in London. There was a policeman there, with no revolver. I said to the policeman, "Is this permissible?" He said, "Oh, yes, we allow it." He said, "It is quite all right. It is our law. He is just letting off a little bit of steam. He is not hurting anyone." But he was surely laying out the government of the day at that time.
It has been said by the fascist and communist countries that our system of democracy is slow. It is * quite true that it is slow. That which I saw there in England was just twenty-one years ago. Subsequently some communists were elected to the House of Commons in England. How many were elected in the recent elections there? Not one. I therefore say, Mr. Speaker, that while our system may be a little bit slow, it is possibly in the best interests of the country in the long run.
Mention was made of what some other countries, including some of our commonwealth countries, are doing at the present time in respect to communism. I wish to read an editorial from one of our western papers. It is as follows:
Australia and Communism
The new Australian government is losing no time in carrying out its election pledge to ban the communist party. In the speech from the throne at the opening of parliament last week it was announced that "legislation would be brought down to make the party illegal.
Other countries have sought to check communism by various legal means, but Australia will be the first English-speaking country to try to ban the movement altogether in peacetime.
There are undoubtedly substantial reasons for taking this step. The Australian communist party is the most active and aggressive in the commonwealth. Since the war ended it has organized a long series of disastrous strikes in the coal mines, on the docks and in other vital industries, and caused incalculable damage and suffering to the country. These strikes, communist leaders frankly acknowledge, were called not to remedy legitimate labour grievances, but for political purposes-to disrupt the national economy, and to sabotage defence preparations.
As a climax, the secretary of the party, Laurence Sharkey, stated openly last year that if Soviet troops invaded Australia he and his followers would help them. This was too much for the Labour government then in power, and Sharkey was convicted of sedition. As a result of all this, public demand for the suppression of the party has become almost irresistible.
[Mr. Bater.l
Nevertheless the wisdom of this move is open to question. Communist parties have been outlawed at various times in European and Asiatic countries, but always with indifferent success. Such laws may cause the party to disappear from view, but they do not destroy it. The members simply go underground and carry on as a wholly secret and illegal organization. In that situation they often do more damage than they could when their activities were partly in the open. Also, an active harrying of the Reds gives them the opportunity to pose as martyrs and win support among sentimental and ill-informed persons.
It is sometimes argued that "driving the communists underground" is of little importance because a large part of their work is secret and conspiratorial anyway. This is true. None the less the existence of the "legal" wing of the party, like the tip of a largely-submerged iceberg, has often been valuable to the authorities, as it makes it easier to watch the activities of the whole organization. It was for this reason that J. Edgar Hoover of the F.B.I.-an implacable foe of communism if ever there was one-recently advised the United States congress against trying to outlaw the communist party in the United States.
Then, too, there is the unavoidable fact that however vicious communist activities are, we are departing from our traditions of free speech and political liberty when we punish Reds merely for their speeches or their membership cards.
This Australian experiment will be watched with interest.
Now we have a stranger within our gates. According to the press the Red Dean was asked many questions last night as to what they have and what they have not in one of the communist countries. What was his answer? He said what they had in Russia, but we know what they have not that we have, and it is the No. 1 bulwark of our democratic system as we know it in Canada and in the commonwealth countries; I refer to free speech and a free press. The fact that we have a free press is in itself almost sufficient to justify our not passing the amendment moved by the leader of the opposition.
I think I should read what Franklin Roosevelt, son of the late President Roosevelt, said on being interviewed just a short time ago:
Liberal democracy will win over communism, not with hydrogen bombs but by the practice of our ideas and ideals.
That is a great statement coming from a man who is the son of the late president.
In conclusion, Mr. Speaker, I think we as a government, as a parliament and as individuals, have to play a sincere part in practising, not only in this House of Commons as members of parliament, but outside of this house, and endeavour to encourage in every individual in the country, regardless of his calling, the principles we profess to admire in our democratic system. If we do that, then the amendment which is now before the house will not be necessary.


Mr. J. G. Diefenbaker (Lake Cenlre):: Mr. Speaker, I listened with a great deal of interest to the remarks of the hon. member for The Battlefords (Mr. Bater) when he described the operations of our British philosophy of freedom. With his remarks I am in general agreement, as are hon. members on all sides of the house.
This amendment and debate have been beneficial in that they have brought to the attention of the house and of the country a condition that challenges our way of life, not only within our own country, but generally everywhere throughout the world.
As I listened to the debate the other day I recalled that five years ago, at the United Nations conference in San Francisco on international organization, Mr. Molotov, speaking for the U.S.S.R. as its foreign commissar and representative, said that no longer would aggression be allowed among the nations of the world; that no longer would injustice be permitted to exist anywhere; that when the United Nations charter was finally completed and accepted by the nations of the world never again would there be aggression, or the possibility. That was five years ago. Events of the last six weeks have been the most challenging in the history of the democratic nations and in their fight for survival. I shall mention only one or two.
During the last six weeks the U.S.S.R. has adopted a more truculent attitude than ever before. She has asked Great Britain and the United States to leave Trieste. She has placed over the Polish army, officers of the U.S.S.R., and she has made the serious threat that on May 28 five hundred thousand communist Germans will cross into the British or the United States zones of Berlin. That indicates a state of mind and an attitude that challenges members in this house, and in all democratic parliaments, to view the threat of communism, and consider how its illegal and overt acts are to be met under the law.
As one who over the years has advocated the establishment in this country of a national bill of rights for the maintenance and preservation of our freedoms from within, and also the necessity of parliament accepting its responsibilities in connection with the United Nations charter by the adoption of the United Nations declaration of freedom, I view with deep concern the situation brought about through communist activities in our own country and in the countries that have been overrun.
There are one or two matters concerning which we are all in agreement. One is that conditions internationally are serious. No one need say in this House of Commons how accursed communism is; that is admitted.
Communist Activities in Canada But where the division of opinion comes is in this: What measures should be taken to the end that communism and its activities within our country shall not be permitted to remain outside of jeopardy for the commission of wrongs against the state?
We ask ourselves the question whether the law, in its present state, does in fact meet the needs and exigencies of these times. When we face that problem the next follows naturally and it is this: What has the government, representative of the people of Canada, done in the last few years to enforce the law so far as illegal communist activities are concerned? Has the law been used? Is the law sufficient?
That brings one to the question of enforcement or non-enforcement of the law as it now stands. The next phase of the problem is to determine how far our country should go in protecting security and at the same time preserving freedom. After all, freedom is our tradition, and without it our parliamentary system cannot operate. Freedom does not mean licence. Freedom does not mean the right to do the things we will. Freedom, simply defined, is our right to proceed and to act in accordance with the dictates of our conscience, so long as in the exercise of our freedom we do not invade or interfere with the freedoms of others. Freedom consists of freedom of speech, of religion, of associations-and I think, too, freedom from unjust state control. Freedom does not mean that in the exercise of freedom of speech we must be right; it implies that we must do right. Freedom does not mean that we cannot be wrong; freedom under law denies our right to do wrong.
Measured in these terms one looks back over the last four years since Mr. Churchill made his speech at Fulton, Missouri. If ever a stateman prophesied what would happen, certainly he did when he spoke in that historic speech. He warned of the danger to the world and the serious threat to the preservation of the United Nations which is implicit in the expansionist policy of the U.S.S.R. In our own country within the last few days it has been stated in The Outlook of Mayj 1950:
The communist offensive of 1950 is now in lull swing. For the first time, Canada is a main objective. The Moscow politburo has ordered its agents to concentrate on wrecking the economy of Canada.
Then it goes on to say:
The main communist objective in Canada-industrial collapse-is to be pressed with maximum effort.
What do the Prime Minister (Mr. St. Laurent) and the Minister of Justice (Mr. Garson) say? I shall refer to their remarks in a general way and then, if the Minister of Justice desires me to do so, I shall refer to

Communist Activities in Canada them in particular. If I understood correctly the purport of the remarks of the Prime Minister and the Minister of Justice, it is this: that the law today is sufficient.
There are laws on' our statute books-
Said the Prime Minister, as reported at page 2087 of Hansard.
-laws in the Criminal Code, which are sufficient, if applied-*
And I accentuate the words "if applied".
-to deal with all overt acts directed against the security of the state.
The Minister of Justice, in the course of his remarks, referred to the sufficiency of the law, when, as reported at page 2139 of Hansard, he said:
The law today is sufficiently extensive to support convictions in all those cases where overt acts can be proved.
Then he goes on to quote with approval the words of Mr., then Senator, Meighen. Sir, it is indeed something to hear a member on the government side quoting Mr. Meighen with approval; but that is what the Minister of Justice has done. I know the minister has no ghost writer in his department who writes his speeches for him; he prepares his own speeches and delivers them as prepared. Referring to section 98 he quoted Mr. Meighen in these words:
Senator Meighen put it-
That is, the idea that even section 98 did not punish .anyone for his ideas.
-in this rather pungent language: "The memorandum-"
A memorandum prepared by the late Mr. Lapointe.
"-quotes an opinion of Macaulay's that it is only when the individual, having harboured wrong ideas, gives effect to them to the detriment of the state, that he ought to be punished. Who within the four walls of parliament or anything other than a lunatic asylum would ever entertain a contrary opinion?"
I agree that a person should not be punished for what he thinks; but I would ask the minister this: How do you, as a member of the government, and believing that, from time to time join in the removal of people from departments of government, not for what they do but only for what you suspect they think?
Section 98 was introduced and became law in 1919. There are parts of that section that cannot be justified in days of peace; and when I say that, I have distinguished support, not only from the Minister of Justice, but also in the words of Mr. Lapointe, Mr. Bennett and Mr. Meighen. Came the campaign of 1935, and in it the Liberal party had as one of its fourteen points the repeal of section 98. When the election was over they

introduced legislation to repeal section 98. Let me refer to the opening paragraph of the section, which reads as follows:
Any association, organization, society or corporation, whose professed purpose or one of whose purposes is to bring about any governmental, industrial or economic change within Canada by use of force, violence or physical injury to person or property, or by threats of such injury, or which teaches, advocates, advises or defends the use of force, violence, terrorism, or physical injury to person or property, or threats of such injury, in order to accomplish such change, or for any other purpose, or which shall by any means prosecute or pursue such purpose or professed purpose, or shall so teach, advocate, advise or defend, shall be an unlawful association.
The subsequent subsections provided for the means of proof and the presumptions. After the election of 1935 there had to be the payoff. The Minister of Justice smiles. I am going to cite as evidence in that regard the words of Mr. Meighen, who was accepted by the hon. gentleman as an authority on this subject, because he quoted from him, but abstracted a few lines to meet his own purpose. I do not 'know whether he read the rest of the speech, but he put violent hands on one portion and left his hands off other portions.


Mr. Garson:: On a point of privilege, Mr. Speaker, I think I should put on the record that I quoted the whole of Mr. Meighen's speech that was relevant to the point I was discussing.


John George Diefenbaker: It has been said that some can quote scripture to suit their own ends. My hon. friend quoted Mr. Meighen but he did not quote his words from the same page, page 619 of the debates of the Senate for June 20, 1936, where he said:
This bill repeals section 98, it is true, but in another section it restores section 98, or the full effect of it, after the repeal. To certain persons, some of them well-intentioned, but principally to the communists whose votes it was necessary to secure by a promise of the repeal of section 98, the government by this bill gives the repeal with one hand and from them it takes it back with the other.
That is in the second paragraph after the words quoted with approval by the Minister of Justice.


Stuart Sinclair Garson: I wonder if I might ask my hon. friend a question? If Mr. Meighen was right in the statement which my hon. friend has just quoted, then why is my hon. friend supporting the present amendment?


John George Diefenbaker: If my hon. friend will wait, I will carry on the argument, and I will ask him this.


Stuart Sinclair Garson: Answer my question first.


John George Diefenbaker: I will come to his point, because I can understand how he feels when,

having abstracted a few lines out of the record, he deliberately left out the pertinent portions thereof.


Stuart Sinclair Garson: Is that a pertinent portion?


John George Diefenbaker: I now come to the change that was made. Section 98 was repealed and a new subsection was added to section 133, as follows:
Without limiting the generality of the meaning of the expression "seditious intention"-
That is in connection with prosecutions for sedition.
-everyone shall be presumed to have a seditious intention who publishes, or circulates any writing, printing or document in which it is advocated, or who teaches or advocates the use, without the authority of law, of force, as a means of accomplishing any governmental change within Canada.
Section 98 was removed, and in place of it a presumption of guilt was created under the law of sedition against anyone who in any way supports or advocates the changing of the government of our country by force.


Stuart Sinclair Garson: "By force." .May I ask a
question at that point?


John George Diefenbaker: Yes.


Stuart Sinclair Garson: Does my hon. friend support his leader's resolution objecting to that section he has just been quoting?


John George Diefenbaker: What I object to is that, having secured the removal of section 98, as Mr. Meighen said, by promises; having secured votes and then removed section 98, you created another section-and I am accepting the minister's argument-under which there is a presumption of guilt when any person or organization advocates, either in writing-


Stuart Sinclair Garson: Are you against that?


John George Diefenbaker: Wait a minute-either by word or in writing advocates a change of government by force. Now, what about the discharge by the minister of his responsibility? I am accepting his argument that the law is sufficient today. Why should seven foreign language newspapers in Canada, which go beyond the realm of freedom of speech, some of them advocating openly a change of government by force, be allowed to exist within this land with complete impunity so far as the government is concerned? Why is it that when communists travel the length and breadth of Canada and preach the doctrine of force, the section is not used? Why does it remain in mothballs? If it were used, many of those who with impunity are advocating a change in the constitution and the government of the country by force would be subject to prosecution and conviction. Section 133 as amended places the onus of
55946-147J
Communist Activities in Canada responsibility on the accused. Is it used? In fifteen years it has been used twice. In fifteen years there have been only two prosecutions, while communism continues its work.
Even the Secretary of State for External Affairs (Mr. Pearson) over a year ago said that some change was needed in the criminal law. I am not going to advocate a change in the law.


Stuart Sinclair Garson: Hear, hear.


John George Diefenbaker: I am going to ask the
government and the Minister of Justice to take the law and use it in Canada in order to meet wrongdoing and to see to it that wrongdoers shall not attempt to undermine the government of the country by advocating force.


Stuart Sinclair Garson: I want to make sure I understand my hon. friend's argument.


John George Diefenbaker: All right.


Stuart Sinclair Garson: Is it his argument that under the subsection to which he has been referring it is now possible to prosecute and convict these newspapers without passing the resolution moved by his leader? Is that his argument?


John George Diefenbaker: My hon. friend is exactly in that position. That was his defence. We do not need amendment of the law and I am taking his argument.


Stuart Sinclair Garson: Is it your argument?


John George Diefenbaker: I am not enforcing the law. I want to tell you if there was a minister of justice over there who was not exhibiting as to this matter some of the attitudes the minister assumed in connection with the millers, we would not have the communism and communist activities that we have in various parts of this country. I am taking his argument and using it to show that under section 133 prosecution is possible and conviction is possible, for under that section the accused lost the right to defend except by going on the witness stand and himself answering the presumption that was raised against him.


Stuart Sinclair Garson: If my hon. friend will permit me, I am having a great deal of difficulty getting answers. Does my hon. friend agree with that argument?


John George Diefenbaker: I am agreeing with my hon. friend; I am using his argument.


Stuart Sinclair Garson: Then if my hon. friend agrees with that argument will he say how many times prosecutions were initiated under section 98 while Mr. Bennett's government was in power? If he does not know I will tell him.

Communist Activities in Canada


John George Diefenbaker: There were prosecutions under section 98 during Mr. Bennett's administration; Buck, and those associated with him.


Stuart Sinclair Garson: One.


John George Diefenbaker: And the Evans case in British Columbia.


Humphrey Mitchell: Perhaps my hon. friend will let me ask a question. He puts me in mind of looking for a black cat in the dark without a candle. This question of Mr. Bennett and the prosecutions under section 98 has been raised. If my hon. friend will read the record I think he will find that those prosecutions were carried on by Mr. W. H. Price, then attorney igeneral of Ontario, who was responsible for the enforcement of law and order in this province at that time.


John George Diefenbaker: Well, Mr. Speaker, you know if you throw a stone into a group of livestock, the one that yells is the one you have hit. I am not going to be deflected from this point, because I have something more to say. To the government of this country I say you have not used your powers; you have played with this problem under the law. The Minister of Labour (Mr. Mitchell) asks about the prosecutions in 1932 or 1933.


Humphrey Mitchell: From 1930 to 1935.


John George Diefenbaker: I have a booklet in my desk which came out today, issued by the mounted police; I was trying to locate it while I was being interrupted. This is an old argument, and I was just waiting for that interruption; that is why I have the book here. It is called "Law and Order in Canadian Democracy", issued by the king's printer. It deals with the whole problem. The other day the Minister of Justice (Mr. Garson) was echoing the words of the Prime Minister (Mr. St. Laurent) when he said, in effect "Oh, we cannot do anything; the provinces have the responsibility." I ask this question. What is the organization in this country that investigates communists and their activities? It is the Royal Canadian Mounted Police. They have the organization; they operate every day of the week. I am informed they have every dangerous communist in this country of whom they have knowledge right under their thumb. They are the people who have the information. Does the Minister of Justice, who is in charge of the R.C.M.P., turn over to the provincial attorneys general each month a record of the activities of the various communists in their provinces? I am not going to ask him to deny that, but I know if he told the facts he could not say that was being 

done. Certainly the law is enforced by the agencies of the provinces, but those who lay the informations are members of the Royal Canadian Mounted Police. They start proceedings; then the administration of justice is carried on by the province. Yet the minister tries to get away with the specious argument that the provinces have responsibility for this, when he has all the agencies under his control and he is not acting. What about the mounted police?


Stuart Sinclair Garson: On a point of privilege Mr. Speaker, I just want to correct a statement made by the horn member.


John George Diefenbaker: The minister can correct my statements later.


Stuart Sinclair Garson: It was a statement about myself.


John George Diefenbaker: The other day I listened to the Minister of Justice making statements that were contrary to the facts, and I did not rise to deny them then; I waited for my opportunity.


Mr. Deputy Speaker:: If it is a point of privilege-


Stuart Sinclair Garson: My hon. friend said-


Some hon. Members:: Sit down.


Mr. Deputy Speaker:: The hon. member who has the floor may not be interrupted without his consent except on a point of privilege.


Stuart Sinclair Garson: My point of privilege was this. My hon. friend asked me a question. It may have been a rhetorical question, but I would like to answer it.


John George Diefenbaker: I have asked the minister one question ever since last November, and we have not had an answer to it yet. Why did you hide the report on the millers?


Stuart Sinclair Garson: If my hon. friend is going to attach so much importance to my not answering questions I should like to mention-


Mr. Deputy Speaker:: Order. Is the minister still raising a point of privilege?


Stuart Sinclair Garson: As I say-


John George Diefenbaker: Mr. Speaker-


Stuart Sinclair Garson: If my hon. friend is going to attach so much importance to questions asked in the course of a debate I would like to answer his question, and my answer is this. As my hon. friend well knows-


Some hon. Members:: Order.


Mr. Deputy Speaker:: Order. The hon. member for Lake Centre has the floor.


John George Diefenbaker: I do not mind those jacks in the pulpit, Mr. Speaker, but at the

moment I am completing an argument; and if the Minister of Justice thinks that by means of interruptions, contrary to the procedure of this house, he is going to dissuade me from quoting from this book-


Stuart Sinclair Garson: On a point of privilege, Mr. Speaker, I want my hon. friend to withdraw that remark.


Mr. Deputy Speaker:: Order.


Some hon. Members:: Withdraw.


John George Diefenbaker: My hon. friend built an edifice of fallacy in his speech; he said, in effect, "We cannot act; the provinces must do so." I repeat that he has the agency under his control, the R.C.M.P., which operates everywhere in this dominion and has all the information. Does he ask them to lay charges? If he did, those charges would be carried on by the attorneys general of the provinces affected. What is the authority of the mounted police? I read from this booklet to which I referred a moment ago, under the heading "Functions and Limitations of Police Forces":
The R.C.M.P., the federal police force, is headed by a commissioner who reports to a minister of the crown who is designated "minister in control of the force." (The present minister in control of the force holds the portfolio of Minister of Justice.)
Primarily this force is charged with the enforcement of all federal statutes anywhere in Canada, but by special arrangement with Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, and Prince Edward Island, it acts as the provincial police in those six provinces.
Is there any wrongdoing in those six provinces, any activity on the part of communists?


Mr. Gardiner:: The provincial police say that; it is the same police force.


John George Diefenbaker: Are there activities in the other provinces? In every case if information is furnished to the provincial attorneys general, or an information is laid, then the procedure is to prosecute through the provinces. Why is that not done? Why is the law not enforced? In section 133, subsection 4, you have a presumption of guilt; you put it in the law, why not enforce it? There used to be criticism of section 98 on the ground that it placed an onus on the accused; yet the same thing was done in section 133, subsection 4.
My mind goes back to 1944 and 1945. I ask the minister, why do you not enforce the law? Having regard to what communism has done generally in other countries, without entering into a witch-hunt which I join with the minister in condemning, with all the evidence available, and there must be evidence available when one sees the activities
Communist Activities in Canada of the exposed part of the iceberg, to use an analogy that was used today, why is the law not enforced? I well remember the interview given by Tim Buck on June 26, 1944, in which he said:
... in an interview that his recent invitation to Prime Minister Mackenzie King to join forces with his party had been "misunderstood."
"I merely suggested to him," added Mr. Buck, "that if his legislation become liberalized-and spell that with a small T-that if he played down our alley now, we might throw our weight his way when the House of Commons is split many ways' after the next election."
What did Mr. McLean, the Liberal organizer, say at that time? These are things that are in the record.
The Liberal party welcomes co-operation from everyone in Canada in putting into effect Liberal principles and policies, because we are sure that these policies are the only real answer to the problems which face Canada-
That was the answer of Mr. McLean, the director of the federation. Then I remember the by-election in Grey North in that year. These men came out of the internment camp into the election. I ask why it is that in a period of fifteen years there have only been two prosecutions. Why, in the last four or five years, when the onrush of communism has become apparent everywhere in the world, when its activities within our own nation have been intensified-and all I am doing is asking for information-under those circumstances, the Minister of Justice hides behind the smokescreen he has created in order to explain why the law, strong as he says it is, has not been enforced. I feel, sir, that the law as it stands, if carried out, would bring results. I do not come before this house to prove untrue to the things in which I have always believed. I agree with the members of the government in so far as the outlawing of communism is concerned. Experience has proven that method to be unsuccessful where it has been tried-in Russia, Czechoslovakia, Italy and Switzerland. It was tried in Russia for seventeen years; communism was outlawed in Czechoslovakia, and in Italy for seventeen years under Mussolini. In Switzerland, it was outlawed for a period of several years. Outlawry is now to be tried in Australia. I believe the time has come in this country when the people are asking for action.
I think the time has come to try inlawry in this country in so far as those who would undermine by force are concerned. Where there are overt acts, where there are outspoken words, where there is, on the part of those who undermine, a declaration that they intend to destroy our system of government by force, surely the time has come, not for evasion on the part of a government, not

Communist Activities in Canada for grandiloquent speeches on the evils of communism, but for a declaration of the intention of the government to enforce the law. We have had too much experience under the present Minister of Justice with laws not being enforced when he, under the direction of the Minister of Trade and Commerce (Mr. Howe), felt that the law should not be enforced. The attorney general of this country has the responsibility of carrying out the law. The minister quoted from the Right Hon. Mr. Meighen that the transition from section 98 to section 133, in effect, still left the onus upon those who openly speak in favour of overt acts against the state. Then, sir, I suggest this to the minister. If what he says is correct, that the law is sufficient, then let him translate the effect of that declaration into action. Certainly if the law is sufficient it is being enforced in a way that no communist has anything to fear. Law on the statute books is only as strong, and only as powerful, as the will of the Minister of Justice to enforce it. He and the Prime Minister say the law is sufficient. I say enforce it; if not, bring it up to date.
Utilize and enforce the law as it is, and assure the people of Canada that our country shall not be undermined by those who have nothing to fear from the traps of prosecution, to which the Prime Minister referred. Declarations have their place. Laws are important on the statute books. When communists can go throughout our country advocating the undermining of our country by force, carrying newspapers with them to the same effect, I think the time has come to start enforcing the law-under law and not outside the law, to the end that wrongdoers will find they will be given an opportunity in this country, loving the iron curtain as they do, to be behind iron bars when they overtly break the law.


Mr. Solon E. Low (Peace River):: Mr. Speaker, I should like to take a few minutes of the time of the house to say how we view the amendment that is now before us. But before I do, I should like to make a few comments on the general subject of the discussion. During the debate, and I think it has been a worth-while one, a good many things have been said about communism. No one has yet described this evil thing, which is loathesome to me, in terms that are too strong to suit us. We despise it. We have fought communism out into the open ever since we were an organization. Some of us have fought communism since shortly after the first great war when communistic cells began to spring up like mushrooms in all the countries of the world.
[Mr. DiefenbakerJ
We think that communism could have been destroyed in the shell in 1917, but perfidious men were responsible for nourishing it and spreading it from its infancy. That, however, is not the subject of discussion. We have kept the spotlight on communism ever since, in every single way that we could. In the early days of our organization we used to think that our efforts were somewhat in vain because we did not get much response; but now we rejoice to think that so many Canadians have become aroused to the dangers inherent in communism and the threat that it offers to the security of our country and the individuals who compose it.
For quite a number of years we have realized that communism is a way of thinking, a state of mind. Because that is so, it is quite obvious to me at any rate that it is something that cannot be banned by an act of parliament or by the proclamation of any officer of government. It is only when that state of mind is translated into action which may be a threat to the security of the nation that we can get at it through process of law.
By a good many speakers in this debate it has been said that communism has declined in Canada. I think the Prime Minister (Mr. St. Laurent) made that statement, as well as others I have heard. Perhaps that is so. I suppose the actual number of registered communists in Canada may have declined; it may be considerably smaller than it was a few years ago. But let me point out, Mr. Speaker, that it is not so much those who are registered as communists who constitute the danger to our security. The greater threat comes from fellow travellers and sympathizers. There may be a good many of them in our country, many more than some people suspect. That proved to be the situation in the United States, and I do not think that the United States is much different from Canada.
I have in my hand a report that appeared in the Citizen of Wednesday, May 3, under dateline New York and under the headline "Only 55,000 Reds but 500,000 'Travellers' in U.S." This is a report of a speech given by director J. Edgar Hoover of the Federal Bureau of Investigation when he spoke before some organization down in the United States. He said this:
. . . the United States has only about 55,000 communist party members, but their real strength lies in 500,000 fellow-travellers and sympathizers ready to do their bidding.
Hoover made his estimate of the number of card-carrying members of the country's force of traitorous communists and of their sympathizers, at a masonic gathering last night.
Hoover's estimate of the communist party membership was in line with recent reports that the party had dwindled since the war from a previously estimated 75,000 or 100,000.

He said the subversives are a real danger to the U.S.-despite their relatively small numerical strength-and he predicted that their influence will be destroyed.
Let us hope, Mr. Speaker, that Mr. Hoover's last declaration, that they will be destroyed, is a statement of fact.
What are we to do about subversive organizations and forces in Canada? We have in this country other subversives than communists. I have wondered a good deal just what we should do. I cannot say in full or in explicit terms what should be done to protect our country against these subversive forces. I would not attempt to outline a comprehensive formula or program, but I believe that I have some ideas which, if applied, would certainly go far toward lessening the dangers.
I think that perhaps the first and most important thing for us to do in this country, at least to start with, is to get an understanding of some things. There is no use in trying to fight a force that we do not understand. There is no use in trying to do things about this whole dangerous situation unless we have a thorough understanding of the soil in which communism and other subversive doctrines thrive.
I think that one of the conditions which provide food for communism is this. Any time you find widespread throughout a country or amongst a people a callous disregard for human life and suffering, that state of mind provides food for communism. During the war every country that was involved trained its young men to take a human life with as little compunction as if they were swatting a fly. They trained them into that state of mind. Hence, when the war closed, in practically every country over the earth there was a callous disregard for human life and for human suffering. Both sides in the struggle so trained their young men, so that one was no worse than the other. I say, therefore, in such circumstances, how could there help but develop a disregard for suffering and a decline in the value which is placed upon human life?
Let us not forget, Mr. Speaker, that years of training into that state of mind does not sublimate in one year or in five years. It takes a long and careful process of unlearning, followed by a good many years of education in the art of human relationships; in that art wherein high value is placed on human life and human rights; in that art wherein human souls are lifted, in the mind of man, to a dignity and respect much higher than we have ever known before. It seems to me that communism, which thrives in a climate of callous disregard for life and human suffering, would decline in a new atmosphere in which human beings are valued highly.
Communist Activities in Canada
One way to eradicate communism therefore would be for our people to emphasize in their educational systems that a very high value must be placed upon healthy, happy, free and vibrant human beings, no matter what their colour, their race or their creed may be. If we are to do this then our whole approach to Canadian living must be permeated through and through with spiritual leaven. I was agreeably pleased and surprised to hear so many participants in this debate refer to the necessity of a return to the things of the spirit. Communism is Godless materialism rampant. We Canadians, I think, ought to take stock. Our idea might be just as materialistic as the one we are fighting; and I am convinced that it is not possible to launch an offensive against communism and these other subversive doctrines that can win in a cold war unless we dispel the fog and the delusion under which we seem to have fallen.
I think that envisioned, at least in the wording of the amendment that is before us, is the expression of that delusion. No antiprogram will ever turn the marxists in any country. That ought to be clear. A positive overriding ideology, encompassing the full play of spiritual forces, will turn them. I have seen it. I wish I had time to tell you of some of the observations that I was privileged to make in Germany where an organization called-I think it could be more correctly called a movement - "Moral rearmament" worked amongst the miners and the steel workers, many of whom were communists, fascists and nazis. I personally witnessed some of these people coming to a realization that they had been following a Godless materialism, and when they approached their whole problem of living with a spiritual outlook they began to find a new vibrancy and satisfaction in living, and they turned from communism and joined in a movement and tried to influence their fellow communists to discover the art of satisfied living.
I am in agreement with the Prime Minister (Mr. St. Laurent) when he says that one of our major tasks now is to make democracy work as it ought to work in the interest of individuals. If democracy is rehabilitated, strengthened and made to work as it ought to work, then I am satisfied that communism will not be a serious threat to our peace and our security. Mr. Speaker, never forget this: Strengthening democracy must include the provision of satisfactory and workable cushions for our economy against a depression. I wonder, Mr. Speaker, if it has ever occurred to hon. members to ask themselves what would happen throughout the democracies of the world if Stalin suddenly should
2314	HOUSE OF
Communist Activities in Canada declare a reversal of his policy of recent years. If he should say to the people of the world: "Look, we have not wanted to conduct an imperialistic cold war; what we want is peace, and we will enter into a pact of peace for fifteen years". Well, of course at first we would not believe him, because thus far we have found no truth in him or in any of his following; so we might not take his word for granted to start with; but after a while we probably would.
A prominent Progressive Conservative posed that very question in a small group where I found myself just a few days ago. The smartest thing that Stalin could do today would be to declare that he and his country were seeking peace, and if he were to reverse his policy and enter into pacts of- peace for a period of say fifteen or twenty years. Why do I say that? Because it would throw the democracies into a tailspin. The minute that they have to take care of the production of their countries without drawing off the cream of it for war purposes, how long do you suppose it would take them to get into a depression? Do not forget that Stalin is longheaded, and he knows that. Stalin and his Russians are going to take the action that will be best designed to spread Russian communism over the whole world. Let us do some thinking about it.
What would we do if we did not have to spend the $400 million or $500 million that we are now spending in preparation for war? If we are to meet this threat, Mr. Speaker, and really make democracy work, as the Prime Minister says it must be made to work, then we have to seek ways of expanding production for use and not destruction.
Second, we have to seek ways of closing the gap between the gross national production and the national income of our people so that they can buy and use the goods we produce. And third, we have got to seek fair trading and peaceful co-operation with all the nations of the earth, and help them out, as far as we possibly can, out of the abundance of our production.
Communists, that is, the trained agents of Moscow, want depression in the democracies because they know that their cause will grow best in the soil of unemployment, of want and of misery. Mr. Speaker, while speaking of a depression and unemployment, let us not overlook this fact, that as unemployment spreads in any country the first people to take action against it are the communist organizers. Let us not overlook that, and if we want to make communists in Canada, the best way to do it is to disregard these young men who, even if it is seasonal, are forced out of work by unemployment.
[Mr. Low.J

Just over a week ago I had an experience which I value very highly. I was invited by an organization called "The Canadian convention of unemployed workers" to go down and address them. I made as much inquiry as I could about them, and I found that some of the names were communist. But that did not deter me, for this reason: I wanted to see for myself exactly what their techniques were, and also see just exactly who appeared. So I went down. Unfortunately I was the only one from parliament who did go. I am not blaming hon. members; I can understand why those who were invited did not go. But I will tell you this, that when I went into that hall on Bank street south I saw a picture I shall not soon forget.
Scattered around the hall were small tables. Seated around those tables in threes and fours were young men-very young, in the main-and old men who, in the main, were quite old. But scattered among them were these smoothies who had probably been trained in Moscow, down to the finest technique of a magician. They were treating these young men and girls, and the older men, to coffee, cokes and hot dogs. In other words, they were catering to the comforts of the inner man, and posing as the friends of these young people.
It is much easier to think of a man as your friend if he is helping you to fill your stomach 

especially if that stomach has not been accustomed to being filled. It is much easier to think a man is your friend if he sits down to chat with you and to give you a word of encouragement; even if they are lies, the young fellow does not know.
Because I went early I was privileged to watch the procedure for about forty minutes, with the result that I got a pretty good eyeful before I was asked to' speak. I heard the organizer of this gang read to them for their approval the submission they were going to make on behalf of the unemployed in Canada to the Prime Minister of Canada. I hold a copy of it in my hand, and at that time I marked it so that I would be able to turn quickly to those things I wanted to say when I was given the chance to speak.
Finally I was called to the platform, and I spoke to them. I knew these were innocent young fellows, worthy Canadians perhaps, who had just been sucked into this thing by these trained operators. To those young men I said, "Are you interested in placing your case before the authorities?" They said that of course they were. Then I said, "All right; I can assure you that there are a great many people in Canada who are in sympathy with the problems you face; but you could not have undertaken a procedure better designed

to get your case thrown out than the procedure you are now following." I then turned to their brief and pointed out how intemperate the language was, and how it was designed to arouse and to inflame, rather than to convince.
All the time these young people were listening, the fellows at the table were furious. Had it not been for the fact that these young people were there and were sympathetic to what I was saying, I might have been conked on the head and dragged out. However, that did not bother me, because I say these young men and women who are caught in the toils of these communist agitators and organizers are worth saving; and the only way they can be saved is to get the truth to them. That is why I say: any time we are invited to speak to these people, for heaven's sake let us go and speak to them and tell them the truth, no matter how many people there may be who disagree with us.
We must watch what is going on among the unemployed. In the years to come the most obvious manifestation of communism and communist activities will be found among those unfortunate ones in our population who have no work, and who have not incomes sufficient to meet their needs. It appears that the communists in our country have failed to take over Canadian labour unions. They tried hard enough. But, having failed in that direction, I am satisfied that the communists are turning their attentions to the unemployed. They have made it one of their major tasks to organize the jobless from coast to coast, and to inflame them and make them sympathizers and fellow travellers. Well, we know how to take care of that situation. I hope to God, Mr. Speaker, that we will have the courage to do what we know is right. We must see to it that these fellows, these smoothies, do not have a chance to organize very many.
1 have not mentioned by any means all the things we should do, nor do I intend to. But may I add just this word in closing, that we must exercise the utmost vigilance. I do not need to repeat to the members of the House of Commons that vigilance has always been and always will be the price of freedom. Communism and these other subversive doctrines are designed to fake away men's freedom, and to enslave them. For that reason every Canadian must be alerted to vigilance of the kind we have never exercised in our lives before.
I believe I am speaking what is in the minds of the people of Canada generally when I say that the people want the utmost vigilance on the part of those who are entrusted with government, and those who are
Communist Activities in Canada entrusted with the application of the law. I say the people of Canada are demanding the most vigorous and yet-let me emphasize this-the most just prosecution of any seditious or overt actions which might threaten the security of our people, no matter from what direction those overt acts may come, whether it be communists or fascists or anybody else. We cannot just single out the communists, because perhaps there are others who are just as bad.
The Canadian people are demanding that those who are responsible for conducting the government of this country shall prosecute with vigour and yet with the utmost justice any act that is seditious or designed to render insecure our state or our country or any of its people. But I think the amendment of the leader of the opposition (Mr. Drew) is not worded so as to state that purpose. As a matter of fact I had quite a hard time to figure out what it did mean. I think, though, the amendment moved by the leader of the opposition has served a useful purpose. It has certainly alerted parliament to the dangers of communism, subversive doctrines and other organizations which may be plotting to overthrow the state. I believe further that it has alerted the Canadian people to a greater degree than at any time since I have been a member of the House of Commons.
I believe it is good occasionally to arouse our people to the dangers that lurk unnoticed among us. So I compliment the leader of the opposition upon having moved his amendment. However, now that it has served its purpose, and because the wording is indefinite and does not state specifically what it wants done, I suggest that the house give the leader of the opposition authority to withdraw his amendment so that we may get on with other business.


Mr. W. F. Carroll (Inverness-Richmond):: Mr. Speaker, I agree with those who have said that it is well that the leader of the opposition (Mr. Drew) should try to focus public opinion in Canada on the evils of communism. For that reason I think we have not misspent the few hours that have been occupied in discussing this matter. I have followed the debate fairly well. I am not going to suggest whether or not the laws of Canada are sufficient to deal with this menace that has been over our heads for the past fifteen or twenty years. I am going to suggest some things that might be done to allay the ravages of communism in Canada. I practised law in a town in Cape Breton many years ago. In 1915 certain frustrated young men organized something like a Fabian society. Before the first war ended there

Communist Activities in Canada became the head of that organization, a gentleman who I think introduced the tenets of communism in our part of the country.
Time went on, and eventually he was taken before the courts for having in his possession seditious literature which had been used to teach the young people and many of the older people of the town about the great thing that communism was. That man was sent to the penitentiary for two years for sedition. The purpose accomplished was that the school in which this literature was being used was disbanded. At that time I happened to be a member of the House of Commons, and a petition was presented to the house to obtain a ticket of leave for this man. I was one of those who went to the then minister of justice and suggested to him that he should grant the prayer of the petition and give this man a ticket of leave. I think that was a good thing because up till that time his role was that of a martyr to a glorious cause.
In my younger days when I went to college we had, in the third year of our undergraduate studies, a professor who gave us a course of eighteen lectures on communism as a philosophy. It is too bad that other institutions of learning in Canada have not followed that example. At that time communism of course was not looked on as a world-wide scheme of domination, or anything of that kind. I well remember our grey-haired professor suggesting to his class that the day was coming when this force of communism, which had not then spread to Russia, would in the end attempt to dominate the world. A few years later, when I had earned sufficient money to go to Dalhousie law school, I came in contact with another splendid professor there who was professor of international law. I do not know if there are any others in the house who went to Dalhousie university in those days. Dr. Weldon taught us international law, and one of the points he always dealt with was the danger of communism in international relations.
Coming back to the town where I practised law, Glace Bay, communism was fairly common there. Many of those who were interested in the movement were not really communists. They just thought they were communists. They did not understand the doctrine of communism. If the hundreds of them who joined the movement had known what communism actually was they would no more have gone to these meetings where communism was taught than they would have gone to a leper asylum.
The same college in which I was taught the evils of communism undertook a program in the mining and steel working districts of Cape Breton. They organized at their own cost

what was known as an adult education program. They organized clubs, generally in the industrial centres, to deal with adult education. Organization was carried on from the economic standpoint in order to teach the old and the young something about economics, and how to help themselves by the co-operative movement. Those two things were joined together. I believe, Mr. Speaker, that movement did more to remove communism from that area, to the extent that it is removed, than all the criminal statutes and laws that can be put on the statute books of Canada, whether or not they can be enforced.
My own idea is that there should be a new religious crusade in Canada. All religious denominations should co-operate to carry on such a crusade as to awaken the minds and the hearts of the people to the evil influences of communism, not as an economic force at all but as an anti-Christian force. The great and small universities of Canada should also co-operate. Unfortunately, if reports are true, I am afraid that many of our universities are following a course of economy. I believe that there should be co-operation between local governments and the dominion government so far as universities are concerned. I believe that universities should be forced to organize and co-operate in this regard instead of having a situation where certain professors say: Oh, that is all right, and they allow their students to have communistic political meetings and so on.
Since the debate on this matter commenced I have had a conversation with a well-meaning man who has some ideas about communism. Of course he is not a member of the house. He said to me that it is turning back the hands of the clock not to let communists or anybody else have freedom of speech in Canada, a free press and everything else. He said, "Look what they are doing in England". I do not understand the expression "turning back the hand of the clock" as he does. I do not think the hands of the clock should be turned back so far as the matter of time is concerned. Neither do I think the hands of the clock should be turned back so far as eternal truths and verities are concerned. It is often pointed out that England is doing this and England is doing that. England took good care to turn back the hands of the clock so far as freedom was concerned when they cut off the head of Charles I. They turned back the hands of the clock in another sense when they did away with capital punishment for the theft of a loaf of bread. I do not want the hands of the clock turned back in that sense, but neither do I want the hands of the clock to remain as they were either in England or in this country.

We are all proud of the glorious institutions that came from the old land. We are all proud of the constitution that was given us by Great Britain. We are all proud of the just laws that came to this country from England. But I for one, Mr. Speaker, as a Canadian citizen am not content to maintain here the freedom they have in the old land as far as communism is concerned. I do not believe it is the right of any Canadian citizen to put forth the tenets of communism in any public place, through the newspapers or otherwise. If those tenets are properly understood I believe that is a criminal offence today.
I am not going to participate in the discussion as to whether this amendment is proper or whether we have sufficient legislation already. As I said before, I believe this discussion will serve a good purpose, and I believe the leader of the opposition (Mr. Drew) is to be congratulated on having brought this subject forward so that the people may focus their attention upon this evil thing. I understand this is not the first time the hon. gentleman has had something to say about communism. I believe that some years ago some articles appeared in Maclean's magazine coming from the pen of the leader of the opposition, which should have brought to the people of this country an awareness that I am afraid many of us do not have even yet of conditions in Russia and of the forces of communism. I tried to get copies of those articles the other day, but could not.
A moment ago I mentioned a crusade. That crusade should not be conducted in the manner of the old crusades, with iron blades and swords; it should be conducted with the keen blades of logic and Christian ethics. But I have one other suggestion to make. When I was on the bench of Nova Scotia I was faced one morning with a habeas corpus proceeding in connection with seventeen men who were being returned from western Canada to their former homes overseas. No objection was taken to the actual proceedings, that is to the face of the papers. The application was for habeas corpus and certiorari in aid; and they took the ground that the persons who were being returned to their own countries had done nothing in Canada and there was no reason why they should be sent away, since they had been brought here as immigrants, and so on. I thought it well to give the Royal Canadian Mounted Police an opportunity to show what these people had been doing in this country, and there came to the witness stand a member of that force of whom many no doubt have heard. He had spent some time in the communist organizations in western Canada, while still a member of the
Communist Activities in Canada R.C.M.P. but unknown to the members of those organizations. On that occasion he outlined to the court practically the whole communist organization, and proved that most of the men for whom habeas corpus was being sought had been connected with those organizations.
I needed no further evidence; though the case went to the Supreme Court of Canada, those men were sent overseas. I am going to suggest to the Department of Justice and the government that every known communist in this country who is not a Canadian citizen be sent back to the countries where communism is rampant. That could be done by co-operation between the Department of Justice and the immigration department. This is the only reason why the other day I thought I should take part in this debate. I do not want to make this a personal matter in connection with the case I am bringing to the attention of the government, but I would not be at all surprised if the people connected with some of those newspapers mentioned by the leader of the opposition the other day were communists, and not Canadian citizens, and this would be one way of dealing with this matter.


Mr. Clarence Gillis (Cape Breton South):: Mr. Speaker, I am not going to take much time because I think practically everything has been said that can be said. I believe the leader of the Social Credit movement (Mr. Low) put his finger on the main problem in his discussion of the matter. Lip service is not going to cure the trouble; neither can it be cured by legalistic means.
I would not have risen at all but for the fact that the last speaker provoked me into doing so. He cited a case in his own community in 1915 as proof that you cannot handle a problem of this kind by regular legal means; and that is my reason for taking part in this discussion. I disagree completely with the hon. member's statement that at that time a group of frustrated young men formed the Fabian society. I would remind the hon. member that his former leader, Right Hon. Mackenzie King, was a member of the Fabian society at one time. It was a non-political organization formed to study the economic problems of the country and work for reform within their respective communities. I would also remind the leader of the opposition (Mr. Drew) that the late Gordon Harrington, who became Conservative premier of Nova Scotia, was also a member of that society.
The hon. member also referred to James B. McLaughlin, who later on went over to the communist party, and said that he was arrested because he was found with seditious literature. That statement was incorrect. I

Communist Activities in Canada happened to be there at the time and know the facts. I went through that struggle, and I believe the hon. gentleman was a member of the house at that time. In that case the miners came out on a sympathy strike with the steelworkers. The international president of the mine workers expelled the executive board, and the statement that McLaughlin was taken, up for was this: When it came to a matter of law versus the hunger of women and children, so far as he was concerned he was on the side of the hungry. If you will recall, at that time there were some four or five hundred thugs on horses who indiscriminately rode down women and children in a subway-


William F. Carroll: May I ask the hon. gentleman to what year he is referring?


Clarence Gillis: I am referring to 1921 and 1923.


William F. Carroll: I may tell him that I had occasion to look over the literature that was found in Mr. McLaughlin's possession.


Clarence Gillis: But that was not why he was picked up. The reason the miners entered that struggle-I was a miner and McLaughlin was the secretary-treasurer of the organization-was that four or five hundred thugs on horses indiscriminately rode down the women and children who were coming from church. It was because of a statement McLaughlin made in connection with that incident that he was arrested and sentenced to five years in Dorchester penitentiary.
I want to bring to the hon. member's attention that, during the course of the trial, Attorney General O'Hearn admitted that perhaps the case was not quite in order. He said that there was a time when it was a crime to tell the truth, and that was when it might inflame the people. I just wanted to set the record straight on that question. The Fabian society was not a body of frustrated young men. I knew many of them personally, and I always considered them the leaders in the community. As I said before, this business of attempting to suppress communism by legalistic means is practically impossible.
I should like to ask my legal friends in the house this question. Suppose the government took the stand that it was going to outlaw communism in this country, I do not suppose there is anyone in this house, or in the Royal Canadian Mounted Police, who could prove that anyone was a communist. It would be necessary to prove that he was a member of the organization. Every communist of any importance in this country today is instructed not to carry a card, or any means of identifying himself with the


party. If Tim Buck were arrested tomorrow, and were made to stand trial as being a member of the communist party, how could his membership in the party be proven? It cannot be done. In my opinion, there is no way of combating communism except in the manner suggested by the leader of the Social Credit party. There are 400,000 unemployed in this country. Every one of those boys is a potential communist. Unless ways and means are devised of giving them something to do, or of maintaining them while they are unemployed, we shall not find the answer to communism. If that is not done the organizers and1 the "smoothies" to whom the hon. member for Peace River (Mr. Low) referred can convert these men to their doctrine. These men will not say they are living in a democratic country, or that they have freedom, when they have not the right to work and the right to 'live as decent citizens. They are fertile soil for communist propaganda. This problem of unemployment must be solved.
Yesterday I suggested to the Minister of Labour (Mr. Mitchell) that the unemployment insurance supplementary benefits be extended for a month. The minister said that unemployment is decreasing. It is not decreasing, and the department's figures show that it is not. There are no greater employment opportunities today than there were a month ago. If the problem is allowed to continue in that way, then we are handing over that body of men to the communist party. The causes of unemployment have to be removed. Another problem is the refusal of employers in this country to permit trade union organizations. In the gold mining industry in the north, the employer stands with a stick over the head of the worker denying him the right to organize and enjoy collective bargaining. Today our greatest instrument against communism is the trade union movement. In both congresses they are fighting the communists; they are throwing them out and placing them in a position where they cannot do their work. Still the employer refuses his employees their democratic right in industry, which would permit them to take their place in these congresses and carry on the fight against communism in that way.
I do not want to delay the house, Mr. Speaker. The member for Rosetown-Biggar (Mr. Coldwell) and three of our group have spoken. I agree with practically everything that has been said by them, and I merely entered the debate because the hon. member for Inverness-Richmond (Mr. Carroll) provoked my thoughts on a point about which I do not believe he was quite accurate.


Mr. A. L. Smith (Calgary West):: I shall be quite brief, Mr. Speaker. I intend what I say to be aimed at bringing this matter down to a point of reality. I am not going to enter into any discussion as to whether or not the statutes which we have today are sufficient. I have had considerable experience with this crime called sedition, and have on occasion had some part in finding quite a number of persons guilty of that crime. I am sorry that in this debate there has arisen any suggestion as to the division of responsibility, or a passing of responsibility from one set of authorities to another.
I say that for this reason. Sedition, under the old section 98 or any new legislation which may be proposed and passed, necessarily has to do with the security of the state, and the security of our form of government, from which necessarily flows the freedom and security of our way of life. I do not think it is sufficient for anyone to say this is not the business of the dominion. The enforcement of the law and the Criminal Code rests with the provinces, but that has not been so in many instances where the government itself has felt that action was necessary. For example, I know personally that counsel are engaged and paid for by the dominion government in prosecuting cases under the Combines Investigation Act, or under those sections of the code which to my mind roughly do the same thing as the act itself. That was done because our way of doing business was threatened, because competition had been stifled. Under those circumstances, the dominion government-I am not saying a political word-as an entity has gone into the courts and taken charge of prosecutions of that kind.
Some time ago I referred to the royal commission, or the spy trials, as they are called. The dominion government, and more power to them, had no hesitation in taking two judges from our supreme court bench, in retaining the best available counsel, or in retaining the whole structure of the Royal Canadian Mounted Police on that investigation, and subsequently accepted responsibility and directed those prosecutions. What for? For the very same purpose that we are talking about now. A great many fancy expressions are used which are really meaningless, Mr. Speaker. For more years than I can remember, I had been told of the great danger of driving communism underground. Physically, of course, that is impossible. From a mental standpoint or from the activity standpoint, I was much interested in what was said by the hon. member for Cape Breton South (Mr. Gillis) a moment ago, to the effect that if you arrested Tim Buck today you
Communist Activities in Canada would have difficulty in proving that he was a communist because, although you have his many admissions, you have not a recent one. What is that but being underground? Let us stop this nonsense of filling ourselves full of fear of driving something underground when it is underground now, just as far underground as it can possibly get.
Where do I go from there? What inference do I think may be fairly drawn from the many things said here, one or two of which I have said myself? I think every member of the House of Commons must make up his mind on one thing first. Is this thing here? Is it a menace? May this cold war lead to a fighting war? Do we believe that it may? I do, and I have no hesitation in saying so. That being so, personal safety and the preservation of one's life is certainly still nature's first law. As I am one of those who believe that all we read of the cold war is a matter of gaining time for some other kind of war, and as I believe the great idea of Moscow is to dominate this continent, I am proud to be one of those who will say: "I will do everything I can-and I will not have great regard for the niceties of phrasing-to fight that thing which in time may attack my children and my grandchildren." That is my view of what is going on at the present time. And I am not pleased-let me put it that way- with some of the niceties that we have been debating.
Let us just take a look at what appears in tonight's Journal. I will not read this in extenso, Mr. Speaker, but I do not know how many have seen it. The heading is "Red Dean Predicts Red World" and the article reads in part as follows:
Soviet might and manpower will smash the western democracies if war comes, Rev. Dr. Hewlett Johnson, the Red Dean of Canterbury, this morning told the Journal. He is a self-avowed communist.
The Red Dean said further:
1.	War was imminent.
2.	The democracies didn't have a chance of surviving, "not a dog's chance.''


Mr. Sinnoli:: Put him in the clink.


Arthur Leroy Smith: That goes on
for two columns. It should be read by everyone in this house. I think it is about time that that hairy old goat was either put in jail or put in his favourite spot. I am going to mention names. I say the same thing about this man Endicott whose father was put up at my own home many times years ago when attending a Methodist conference. But to think that we are going to sit back-complacently, if you like-and permit that sort of thing to go on without taking advantage of

Communist Activities in Canada what law we have is a mistake; and if we have not got enough, let us get a law to take care of blackguardism like that.
Any man in Canada, be he a Canadian or not, who recognizes and believes in some authority greater than that in his own country, I would certainly put in jail or put back in his favourite spot; and God rest his soul after that if these Russians ever got hold of him. We have got to put teeth in our law. I know that is an old expression. But as members of the House of Commons, let us make up our minds on this question: Is this thing real? That man quotes Stalin again and again in this interview as to what he thinks of it. He does not think war is imminent but it is inevitable. If it be true- and I am perhaps stupid enough to think that it is-that this cold war is a stalling for time for the shooting war that this beast of Moscow is going to let loose on this world when it suits him, he will have his Red Deans and his Endicotts commanding the fifth column legions right here in the Dominion of Canada.
No, Mr. Speaker, we cannot just sit back. We cannot just say, "This will wear itself out; it will wash away with the purity of our motives. It will wash away because we are going to grubstake them, we are going to sleep them and so on." That is nonsense. This is a bitter force being prepared to be unleashed upon us. We have done the best we can in the league of nations. Everywhere we have done the best we can, giving away and giving away; and at the same time giving away innocent souls in Europe and in Asia. So far as I am concerned, this is my reaction-and I think we would be all in agreement-on reading stuff like this, and as to believing it as coming from a man of God. Perhaps I should apologize for having used that expression; perhaps I should say from a man who assumes to be a man of God. In an interview the other day Endicott told our own Secretary of State for External Affairs (Mr. Pearson) that Pearson goes on making war in his own way. Surely there is some pride left in us. Surely we do not need to take that. Surely we should put these rabble-rousing cutthroats where they belong-and that is in jail-or send them to some other country which, let me pray God, may be a long distance from here.


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


Some hon. Members:: Question.


Mr. Speaker:: The question is on the
amendment. Shall the amendment carry?


Some hon. Members:: Carried.


Mr. Coldwell:: Question.


Mr. Speaker:: Those in favour of the amendment will please say "yea".


Some hon. Members:: Yea.


Mr. Speaker:: Those opposed will please say "nay".


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion, the "nays" have it.
And more than five members having risen:


Mr. Speaker:: Call in the members.


James Garfield Gardiner: Mr. Speaker, either as a matter of privilege or on a point of order let me say that, in view of the rule, I think there ought to be a bell in this building loud enough so that I can hear it in my office.


Mr. Speaker:: I shall bring the representation of the minister to the attention of the Sergeant-at-Arms. Is the house ready for the question?


Mr. Bryce:: Mr. Speaker, may I call it six o'clock?


Mr. Speaker:: The hon. member for Selkirk.


Mr. Fournier (Hull):: Mr. Speaker, the purpose was just to call three items, which would be put off until nine o'clock. The intention of the government is to answer the questions concerning mail service to certain people in the country. We have been endeavouring for two weeks to get to that statement. If the hon. member had no objection, we would like to call those items.


William Scottie Bryce: I have been waiting for two weeks to raise this question. It is too big to bring up on a question of privilege, and I have to straighten out this matter, for the benefit of the western farmers. I will be only about ten minutes.
At six o'clock the house took recess.
Harrison.
Hellyer Helme Henderson Henry Herridge Hetland Hosking Huffman Hunter James Jones Kent Kickham
Kirk (Antigonish-
Guysborough)
Knight Knowles Lafontaine Langlois (Berthier-
Maskinonge)
Langlois (Gaspe)
Lapointe Leduc Lefrangois Lesage Little Low
MacDougall Maclnnis MacKenzie
MacLean (Cape Breton
North and Victoria)
MacNaught Macnaughton McCubbin McCulloch McCusker Mcllraith
McLean (Huron-Perth)
McWilliam Masse Matthews Mitchell


Mr. Speaker:: I declare the amendment lost. Before putting the question on the main motion'may I say that several times during this session members have entered the chamber after the question has been put and have voted, not having heard the question. I thought I should bring the rule to the attention of the house because the irregularity was brought to my attention a few minutes ago when a division was being recorded.
I did not interfere at that time because it is set forth in the rule that a point of order raised during a division should be fettled after the division has been completed. That provision is found in citation 94 of Beau-chesne's third edition. I would also remind hon. members of citation 89 in the same edition which reads as follows:
When the question is put, a member must be in his seat or else his vote cannot be recorded.
I would also remind hon. members of standing order 12(2) which states:
When Mr. Speaker is putting a question, no member shall walk out of or across the house, or make any noise or disturbance.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.


[Stage Direction]
Bill No. 85, to incorporate Ukrainian National Federation of Canada.-Mr. May-bank.
Bill No. 18, for the relief of Doris Joan Guest Rigg.-Mr. Winkler.
Bill No. 19, for the relief of Cora Elizabeth Jamieson Southam.-Mr. Winkler.
Bill No. 20, for the relief of Audrey Brenda Holmes Burnett.-Mr. Winkler.
Bill No. 21, for the relief of Barbara Edna Brownrigg Johnson.-Mr. Winkler.
Bill No. 22, for the relief of Aili Katriina Salokannel Martel.-Mr. Winkler.
Bill No. 23, for the relief of Velma Elizabeth Buchanan Lowson.-Mr. Winkler.
Bill No. 24, for the relief of Gladys Harriet Hassall Thom.-Mr. Winkler.
Bill No. 25, for the relief of Elisabeth Mavis Cann Jousse.-Mr. Winkler.
[Stage Direction]
Private Bills-Divorce
Bill No. 26, for the relief of Eric Lacate.- Mr. Winkler.
Bill No. 27, for the relief of Dorothy Margaret May Harris McCormick.-Mr. Winkler.
Bill No. 28, for the relief of Sigrid Denston Day.-Mr. Winkler.
Bill No. 29, for the relief of Beatrice Campbell McClay.-Mr. Winkler.
Bill No. 30, for the relief of Catherine C. Goodrow Rogers.-Mr. Winkler.
Bill No. 31, for the relief of Miriam Roberta Weir Caryer.-Mr. Winkler.
Bill No. 32, for the relief of Marjorie Frances Murphy Cozzolino.-Mr. Winkler.
Bill No. 33, for the relief of Mary Thomson Cadieux.-Mr. Winkler.
Bill No. 34, for the relief of Veronica Pearl Faulkner MacKenzie.-Mr. Winkler.
Bill No. 35, for the relief of Elizabeth Hampshier Atyon Reilley.-Mr. Winkler.
Bill No. 36, for the relief of Sybil Elliott Karr Boulanger.-Mr. Winkler.
Bill No. 37, for the relief of Mary Kennedy Dunn Anderson.-Mr. Winkler.
Bill No. 38, for the relief of Albert Ernest Curtis.-Mr. Winkler.
Bill No. 39, for the relief of Annie Swales Barber.-Mr. Winkler.
Bill No. 40, for the relief of Rebecca Catherine Pitts Duquette.-Mr. Winkler.
Bill No. 41, for the relief of Edith Mary Stone Ryan.-Mr. Winkler.
Bill No. 42, for the relief of Pearl Greenspan Abramovitz.-Mr. Winkler.
Bill No. 43, for the relief of Harry Rudner. -Mr. Winkler.
Bill No. 44, for the relief of Dorothea Joan Lawrence Gamble.-Mr. Winkler.
Bill No. 45, for the relief of Walter St. Andre Bawn.-Mr. Winkler.
Bill No. 46, for the relief of Alison Hamilton Brown Weldon.-Mr. Winkler.
Bill No. 47, for the relief of Hazel May Wilkie MacLeod.-Mr. Winkler.
Bill No. 48, for the relief of William Gordon Cascadden.-Mr. Winkler.
Bill No. 49, for the relief of Romeo Lefebvre.-Mr. Winkler.
Bill No. 50, for the relief of Kathleen Veronica Thompson Davidson.-Mr. Winkler.
Bill No. 51, for the relief of Joseph Arthur Winsorlow Brisebois.

Mr. Winkler.
Bill No. 52, for the relief of Margaret May Tuck Reicker.-Mr. Winkler.
Bill No. 53, for the relief of Mabel Kearley Budgell.-Mr. Winkler.
Bill No. 57, for the relief of Zina Sarah Fletcher Tannenbaum.-Mr. Winkler.
Bill No. 58, for the relief of Fred Marcus.- Mr. Winkler.
Bill No. 59, for the relief of Belva Rubin Bercusson.-Mr. Winkler.

Bill No. 60, for the relief of Reginald E. Martin.-Mr. Winkler.
Bill No. 61, for the relief of Dora Moore Holland Towers.-Mr. Winkler.
Bill No. 62, for the relief of Betty Ben-ditsky Kursner Kobernick.-Mr. Winkler.
Bill No. 63, for the relief of Elizabeth Goodman Goldberg.-Mr. Winkler.
Bill No. 64, for the relief of Helene Eugenie Hortense Holmes Said.-Mr. Winkler.
Bill No. 65, for the relief of Amanda Doris Drachler Segalowitz, otherwise known as Amanda Doris Drachler Selton.-Mr. Winkler.
Bill No. 66, for the relief of Florence Druckman Oliver.-Mr. Winkler.
Bill No. 67, for the relief of Albert Gedeon Martin.-Mr. Winkler.
Bill No. 68, for the relief of Brandel Avru-tick Cutler.

Mr. Winkler.
Bill No. 69, for the relief of Freda Geraldine Rodgers.-Mr. Winkler.
Bill No. 70, for the relief of Hattie May Dawson Wood.-Mr. Winkler.
Bill No. 71, for the relief of Marie Yvonne Bouchard O'Rourke.-Mr. Winkler.
Bill No. 72, for the relief of Ethel Margaret Murphy Watson.

Mr. Winkler.
Bill No. 73, for the relief of Clifford Willis Collins.-Mr. Winkler.
Bill No. 74, for the relief of Alfred Beatty Harris.-Mr. Winkler.
Bill No. 75, for the relief of Claire Jeanne D'Arc Sagala De Montignac.-Mr. Winkler.
Bill No. 76, for the relief of Nora Maria De Montignac Des Jardins.-Mr. Winkler.
Bill No. 77, for the relief of Rita Annie Wylie Morrow.-Mr. Winkler.
Bill No. 78, for the relief of Olga Veleky Stepanovitch.-Mr. Winkler.
Bill No. 79, for the relief of Beatrice Norma Sabbath Finestone.-Mr. Winkler.
Bill No. 80, for the relief of Adele Kuznetz Paquette.-Mr. Winkler.
Bill No. 91, for the relief of Jessie Ferguson Deans McKenzie.-Mr. Winkler.
Bill No. 92, for the relief of Daisy Muriel Smallcombe Devaney.-Mr. Winkler.
Bill No. 93, for the relief of Stella Burns Herdman Elder.-Mr. Winkler.
Bill No. 94, for the relief of Ethel May Alice Turnbull Colligan.-Mr. Winkler.
Bill No. 95, for the relief of Effie Irene Collier Newman.-Mr. Winkler.
Bill No. 96, for the relief of Phyllis Anne England McNab.-Mr. Winkler.
Bill No. 97, for the relief of Martha Jean Brooks Markell.-Mr. Winkler.
Bill No. 98, for the relief of Kathleen Zawitkoska Symianick.-Mr. Winkler.
Bill No. 99, for the relief of Jeannine Martineau Masse.-Mr. Winkler.
Bill No. 100, for the relief of Betty Borman Archambault.-Mr. Winkler.

Bill No. 101, lor the relief of Edwin Dawson.-Mr. Winkler.
Bill No. 102, for the relief of Mavis Barker Billingham.-Mr. Winkler.
Bill No. 103, for the relief of Roland Gour. 

Mr. Winkler.
Bill No. 104, for the relief of Margaret Elizabeth Taylor Clarke.-Mr. Winkler.
Bill No. 105, for the relief of Sylvia Singer Mepham.-Mr. Winkler.
Bill No. 106, for the relief of Mabel Kathleen Baxter Simons.-Mr. Winkler.
Bill No. 107, for the relief of Vittoria Minotti Mastracchio.-Mr. Winkler.
Bill No. 108, for the relief of Dent Harrison. -Mr. Winkler.
Bill No. 109, for the relief of Margaret Mahajahla Aitken Schoch.-Mr. Winkler.
Bill No. 110, for the relief of Esther Spector Gelfand.-Mr. Winkler.
Bill No. Ill, for the relief of Sophie Roth Pliss.-Mr. Winkler.
Bill No. 112, for the relief of Gertrude Howard McWilliams Rubin.-Mr. Winkler.
Bill No. 113, for the relief of Remenia Bertha Duguay Briggs.

Mr. Winkler.
Bill No. 114, for the relief of Blanche Naomi Greenlees.-Mr. Winkler.
Bill No. 115, for the relief of Leslie William McNally.-Mr. Winkler.
Bill No. 116, for the relief of Jacqueline Marie Scully Sirois.-Mr. Winkler.
Bill No. 117, for the relief of Phyllis Christina McLeod Daly.-Mr. Winkler.
Bill No. 118, for the relief of Winnie Florence Clitheroe DuVal.-Mr. Winkler.
Bill No. 119, for the relief of Muriel Elizabeth McCurry Welham.-Mr. Winkler.
Bill No. 120, for the relief of Betty Margaret Slinn Metivier.-Mr. Winkler.
Bill No. 121, for the relief of Fanny Abram-owitch Mergler.-Mr. Winkler.
Bill No. 122, for the relief of John Wood. -Mr. Winkler.
Bill No. 123, for the relief of Olivia Mary Tipping Morris.-Mr. Winkler.
Bill No. 124, for the relief of Mable Veronica Askin Williamson.-Mr. Winkler.
Bill No. 125, for the relief of Christina Rachel MacLeod Nicholson.-Mr. Winkler.
Bill No. 126, for the relief of Anne Hal-perin Perelmutter.-Mr. Winkler.
Bill No. 127, for the relief of Phyllis Rochlin Rabinovitch.-Mr. Winkler.
Bill No. 128, for the relief of Mary Kay-bridge Goulbourn.-Mr. Winkler.
Bill No. 129, for the relief of Muriel Alice Mary Westgate.-Mr. Winkler.
Bill No. 130, for the relief of John Elliot Cumming.-Mr. Winkler.
Private Bills-Divorce

Mr. H. W. Winkler (Lisgar) moved: that the following bills be read the second time:
Bill No. 136, for the relief of Ethel Bell Lifshitz.-Mr. Winkler.
Bill No. 137, for the relief of Martin Matthew Waagemans.-Mr. Winkler.
Bill No. 138, for the relief of Elaine Ruby Cooper Pierre.-Mr. Winkler.
Bill No. 139, for the relief of Gertrude Toulch Standard.'-Mr.Winkler.
Bill No. 140, for the relief of Thomas Gordon Williams.-Mr. Winkler.
Bill No. 141, for the relief of Ethel Lerner Baker.-Mr. Winkler.
Bill No. 142, for the relief of Robert Earl Skinner.-Mr. Winkler.
Bill No. 143, for the relief of Chasia Berger Wolf.

Mr. Winkler.
Bill No. 144, for the relief of Henry William Askew.-Mr. Winkler.
Bill No.	145,	for	the relief	of	Leman
Makinson.-Mr. Winkler.
Bill No. 146, for the relief of Rose Anna Levesque Kirkland.-Mr. Winkler.
Bill No. 147, for the relief of Douglas Barrymore Stone.-Mr. Winkler.
Bill No. 148, for the relief of Nancy Doria Evan-Wong Meade.-Mr. Winkler.
Bill No.	149,	for	the relief	of	Louise
Elizabeth Garner Mitchell.-Mr. Winkler.
Bill No. 150, for the relief of Vivian Pearl McCrea Gunning.-Mr. Winkler.
Bill No. 151, for the relief of George Bruce Lancaster.-Mr. Winkler.
Bill No. 154, for the relief of Lillian Soper Pearce Smith.-Mr. Winkler.
Bill No. 155, for the relief of Antoinette Carriere Lepine.-Mr. Winkler.
Bill No. 156, for the relief of Marjorie Blythe Shore Marriott.-Mr. Winkler.
Bill No. 157, for the relief of Norman Harold Lucas.-Mr. Winkler.
Bill No. 158, for the relief of Blanche Irene Aurore Schryer Batryn.

Mr. Winkler.
Bill No. 159, for the relief of Leah Judith Godfrey Green.-Mr. Winkler.
Bill No. 160, for the relief of Phyllis Martin Payne.

Mr. Winkler.
Bill No. 161, for the relief of Geraldine Estelle Leduc Brunet.-Mr. Winkler.
Bill No. 162, for the relief of John Allen Young.-Mr. Winkler.
Bill No. 163, for the relief of Laura Kathleen Potter Stewart.-Mr. Winkler.
Bill No. 164, for the relief of Edna Hannah Keene Ley.-Mr. Winkler.
Bill No. 165, for the relief of Ada Friedman Mendelsohn.-Mr. Winkler.
Bill No. 166, for the relief of Ann Mitchell Rabinovitch.-Mr. Winkler.

Alberta Natural Gas Company
Bill No. 167, for the relief of Ernest Joseph Poirier.-Mr. Winkler.
Bill No. 168, for the relief of Maria De Gre-goria Zarbatany.-Mr. Winkler.
Bill No. 169, for the relief of Jean Paul Ver-ret.-Mr. Winkler.
Bill No. 170, for the relief of Gladys Eileen Hungate Norman.-Mr. Winkler.
Bill No. 171, for the relief of Marie-Anne Alice Lalonde Campey.-Mr. Winkler.
Bill No. 172, for the relief of Sadye Gasn Blidner.-Mr. Winkler.
Bill No. 173, for the relief of Lera Mary Rombough Kirkey.-Mr. Winkler.
Bill No. 174, for the relief of Micheline Lor-anger Major.-Mr. Winkler.
Bill No. 175, for the relief of Jane Letitia Hardie Ball.-Mr. Winkler.
Bill No. 176, for the relief of Russell Mowbray Meredith.-Mr. Winkler.
Motion agreed to and bills read the second time.


Mr. Speaker:: These bills are referred to the standing committee on miscellaneous private bills.



ALBERTA NATURAL GAS COMPANY

[Stage Direction]
The house resumed, from Monday, May 8, consideration in committee of Bill No. 7, to incorporate Alberta Natural Gas Company- Mr. Maybank

Mr. Dion in the chair.
On section 1-Incorporation.
Mr. Drew:: Mr. Chairman, in the few minutes that I was speaking on the bill last night I had referred to the provisions of the Electricity and Fluid Exportation Act passed in 1907 and still the law governing the exportation of gas or other power from Canada. I had read the two sections directly affecting this discussion, sections 5 and 6, just before adjournment last night. I had pointed out that under those sections no person or corporation may construct any pipe line which has as its purpose the export of power, electricity or any fluid, without a licence granted by the government of Canada. It is in relation to that very clear provision of the Electricity and Fluid Exportation Act that I should like to read briefly from the statement of the Prime Minister on Friday, May 5, as reported at page 2228 of Hansard.
These are his words:
Parliament last year determined that this matter would be one to be turned over to the board of transport commissioners; and for the government to attempt to usurp the functions of the board of transport commissioners would be contempt of the will of parliament expressed in the Pipe Lines Act.
Further, on page 2229 the Prime Minister said:
By that statute parliament placed jurisdiction and responsibility for considering the whole question upon the board of transport commissioners.
[Mr. Winkler.l
I can only conclude that the Prime Minister was speaking without adequate consideration, because the words I have quoted are directly contrary to the actual situation. The bill passed last year, under which the present bills are brought before parliament to incorporate pipe line companies, did not by any stretch of the imagination place the whole jurisdiction and responsibility in the hands of the board of transport commissioners. That has been very definitely decided outside this parliament since that act was passed so hastily, with so little information and so little understanding of its effects, when it came before this house last spring. As hon. members who were present at that time will recall, and as hon. members who have been listening to this extended debate for some time, some of them very impatiently, will remember, one of the companies that received incorporation by statute was the Interprovincial Pipe Line Company. That company sought authority from the board of transport commissioners to construct a pipe line which among other things would have provided for the export of gas and oil. On September 12 of last year the board gave its judgment on that application, and I wish to read into the record the latter part of that judgment, which has a bearing on any clear understanding of what is the actual relationship of the board of transport commissioners to this whole question of final authority over the routing of the line and the export of gas and oil. The judgment states:
It will be necessary for the Interprovinclal Company to have from the governor in council a licence to construct a pipe line which will carry the oil outside Canada and (2) that it will be necessary for the Imperial Oil Company to have a licence for the export of oil.
The acting deputy minister of the Department of Trade and Commerce was represented at the hearing by the assistant deputy minister of that department, and he indicated positively to the board that the Department of Trade and Commerce favourably considered the proposed pipe line and furnished the necessary recommendations. Here are Mr. Master's words:
"Mr. Chairman, I wish to state now definitely that any application that is required for the export from the Department of Trade and Commerce will be issued by the department-any permit that is required-and that the department favours the project in accordance with the applications. I wish to make that a positive and definite statement.
The Chief Commissioner:	Have you any comments, Mr. Coyne, with respect to that assurance?


Mr. Coyne:: No.
The Chief Commissioner:	I suppose that covers
the licence to construct to the border, the two licences?


Mr.   Master@: Yes, both."
This board therefore approves the application and a formal order to that effect (the said line to be completed on or before the 31st day of October, 1951) will issue as soon as certified copies of said licences have been filed with the board's secretary.

That judgment was perfectly clear. The board of transport commissioners have no authority to approve or otherwise where export is involved until, under section 6 of the Electricity and Fluid Exportation Act, the government has granted an appropriate licence and approved the project. With that judgment of September 12 before them the government dealt with this subject on September 13, the following day. This is a certified true copy of the minutes of that meeting of the committee of the privy council:
The committee of the privy council have had before them a report from the Minister of Trade and Commerce representing:
That under the provisions of the Electricity and Fluid Exportation Act, revised statutes of Canada, 1927, chapter 54, no person shall, without a licence, construct or place in position any line of wire or other conductor for the exportation of power, or any pipe line or other like contrivance for the exportation of fluid:
That an application has been received from Interprovincial Pipe Line Company of Edmonton, Alberta, to construct a pipe line for the export of crude oil to connect at the border of Canada and the United States of America at or near Gretna, Manitoba, with a pipe line to be constructed in the United States:
That, in the opinion of the minister, the construction of the pipe line by Interprovincial Pipe Line Company is in the national interests of Canada.
The committee, therefore, on the recommendation of the Minister of Trade and Commerce, advise that under the provisions of the Electricity and Fluid Exportation Act, a licence, in accordance with the form attached hereto, to construct a pipe line to connect at the border of Canada and the United States of America at or near Gretna, Manitoba, with a pipe line to be constructed in the United States, be granted to Interprovincial Pipe Line Company of Edmonton, Alberta, accordingly.
Having regard to the statement by the Prime Minister on Friday last that it would be contempt of the will of parliament if the government sought to exercise some control over this matter, let me read the licence that was issued by the deputy minister of trade and commerce in accordance with that decision:
Pursuant to order in council-of the-day of-
I am simply placing the form on record. -Interprovincial Pipe Line Company, carrying on business in the city of Edmonton in the province of Alberta, is hereby licensed to construct a pipe line for the exportation of crude oil, the said line to connect at the boundary of Canada and the United States of America at or near Gretna, Manitoba, with a pipe line to be constructed in the United States-
These are the words I wish to emphasize. -as shown on a plan filed with the Department of Trade and Commerce on September 10, 1949. This licence covers the construction of one pipe line with an inside diameter of pipes of approximately 177/u inches . . .
Then it goes on with various details as to the type of pipe line, the location, and
Alberta Natural Gas Company as to this line being carried through Saskatchewan and Manitoba to Superior, Wisconsin. The point I should like to make, and that I should like to impress upon the members of this house, is that before the board of transport commissioners was in a position to consider the exercise of its authority the government had before it a plan showing where the line was to go, and it was the government that approved the actual route and location of the pipe line. They issued that certificate and recommendation upon which the board of transport commissioners acted. For that reason, it is quite clear from the record of the proceedings in the case of the Interprovincial Pipe Line Company, which obtained its authority under the very act to which the Prime Minister was referring, that it is the executive of this parliament which has the real authority to say where a pipe line will go, and under what terms it will be constructed, where any question of export arises.
It was only after these steps had been taken that the board of transport commissioners finally acted on this matter. It was on Thursday, September 15, 1949, that they issued the following order. I shall quote the body of that order dated September 15, 1949, and I do so because this completes the actual transaction which gave the Interprovincial Pipe Line Company the authority to proceed.
Upon hearing the application at the sittings of the board held in Ottawa, September 8 and 12, 1949, in the presence of counsel and representatives for the applicant, the province of Alberta, the Department of Trade and Commerce, the Canadian Pacific Railway Company, the city of Port Arthur and the board of trade of Fort William, . . .
It is ordered that leave be, and it is hereby, granted to the Interprovincial Pipe Line Company to construct a pipe line for the transportation of oil from a point in the vicinity of the city of Regina, in the province of Saskatchewan, to a point in the vicinity of the village of Gretna, in the province of Manitoba; the said pipe line to be constructed and completed on or before October 31, 1951.
That order was signed by Mr. Archibald, chief commissioner of the Board of Transport Commissioners for Canada.
In the event that -there be any suggestion that this procedure related only to the Interprovincial Pipe Line Company, I would point out that exactly the same procedure was followed when the Westcoast Transmission Company Limited made application to the board of transport commissioners. On September 21 the board announced that it could not deal with the application on the ground that permission to export would be required from the federal authorities if the pipe line were to be built, in view of the fact that export was an incident of the running of this pipe line. Therefore we have this as an established

Alberta Natural Gas Company practice. We know that these applicants in each case contemplate the export of gas or oil, or both, no matter what arrangement may be made for the construction of a pipe line within Canada and the use of that gas and oil, or both, in Canada. That leaves in the hands of the government the ultimate responsibility for the actual decision, although in the sequence of time the last order which is made is the order made by the board of transport commissioners. But as has been decided in the case of the Interprovincial Pipe Line, which did ultimately receive authority to construct its pipe line, and as in the case of the Westcoast Transmission, which did not receive authority, the board of transport commissioners made it clear beyond any shadow of a doubt that the government must exercise its judgment under section 6 of the Electricity and Fluid Exportation Act.
In view of the repeated suggestions which have been made, first of all by the Minister of Trade and Commerce (Mr. Howe) and other ministers when this bill was in second reading, that we should just let it go through second reading and trust to the committee, which denied the full information when it did get there, and now that it has passed there the Prime Minister tells us we should let it go to the board of transport commissioners because they are the ones who can deal with it, it is interesting to go back to see how different an opinion was held on earlier occasions by another prime minister of this government. This subject of the effect of the Electricity and Fluid Exportation Act was under consideration in this house on March 10, 1938. At that time the then prime minister of Canada had introduced a bill, which was Bill No. 21 of that session, and which was approved by the House of Commons on March 25, 1938. That bill was passed for the purpose of bringing the control of export in detail before the parliament of Canada. Actually, that bill did not come into effect. It did not pass the Senate. I might explain that it was not one of those rare occasions when the Senate has exercised authority of this kind, but the bill did not proceed because of a letter received from Mr. Cordell Hull, then secretary of state for the United States. This letter informed the government of Canada that, with circumstances as they were at that particular time, it was not the intention of the government of the United States to press for the export of power to that country. There were reasons which were obvious in relation to the date of the bill itself why both countries needed all the available electric power they had.
It is interesting to read the views expressed by the prime minister of those days, whose

opinions have been acclaimed on many occasions by those who are now so openly making this, in effect, a government bill. Mr. King is reported at page 1196 of the Hansard of that session to have read into the record a quotation from the Ottawa Citizen; and the Ottawa Citizen of May 5, 1925, to which he referred had this heading which is very significant in the light of the discussion that has taken place here. This was the heading: "Places Interest of Canada First on Power Issue". Then the Citizen of May 5, 1925, quoted by Mr. King in 1938, had this to say: Premier King Says This Chief Consideration in Reaching Decision on Export Question.
Deputation Urges Carillon Scheme.
Prime Minister Says It's National Problem.
Cabinet to Discuss It.
That the future of Canada would be the first consideration in the question of permitting the export of electrical energy to United States was stated by the Prime Minister yesterday afternoon in replying to a large and representative delegation from the the municipalities bordering on the Ottawa river. The delegates came to urge the administration to grant permission to export power fVom the proposed development at Carillon . . .
The Prime Minister replied that the problem which the government had to consider was not local to the Ottawa valley, but had its national, international, and interprovincial viewpoints. The government had only one desire, namely, to further the public interest. When private interest could be helped without injuring the public interest, it was desirable to help it also.
The main question for the government was to decide for the public interest, and in the export of power it was necessary to see that the future of the country was not prejudiced in any way.
It surely is significant and interesting, Mr. Speaker, that the prime minister who preceded the present Prime Minister (Mr. St. Laurent) expressed an opinion which was condensed into these words: "Places interest of Canada first on power issue". That is exactly the view that has been stressed in the discussion that has taken place here since these bills originally came before the house. From the very first day that these bills were given consideration it has been made clear that the only purpose of the debate and of the extension of that debate is to continue to urge that, before these bills are passed, there should be written into the bills, or that there shall be a clear and unequivocal undertaking by the government in relation to its exercise of power under the Electricity and Fluid Exportation Act, that the interests of Canada will first be served, that it will be a Canadian route and that Canadian requirements will be protected for all time in the future before we commit ourselves to an export of power which becomes a vested interest outside Canada which cannot lightly be withdrawn at any future date.
A great deal of concern has been expressed about the possibility that if there is delay gas

and oil may go into the northwest American states from other Canadian sources. We in this parliament represent not only the communities from which we are elected. Collectively, we represent Canada as well; and collectively our interest should at all times be related to that broad concept of the nation which we seek to serve. But let us remember that while we most certainly want to see the legitimate export of oil and gas from Alberta which is consistent with their long-term advantage in that province, we should be much less concerned with the danger of someone else supplying gas in the northwestern United States than we are with the danger of the future requirements of a growing Canada not being met at some time in the distant future.
One of the points to which I referred, and which should be clearly understood in this discussion, is that if we start exporting power it is not like selling so many bushels of wheat, so many tons of coal or so many feet of lumber. When we start to export gas, then communities set up their public services related to the quantity which they receive; and any withdrawal of that gas affects those communities in a manner which could seriously reflect upon our good faith if at some future time we found ourselves forced to withhold from our friendly neighbours that gas which was the basis not only of the building of homes and the provision of services but of the construction of industries which may employ thousands of men. It is in that sense that I speak of it as a vested interest. I do not use the word in any improper manner, in so far as the purpose is concerned. It is an interest which becomes so deeply vested in the users of that gas that we would almost be in the position of being called upon to restrain our own use before we withheld that use from a neighbour to whom we had assured that supply.
In all these discussions we should have before us figures which leave no doubt that any conceivable demand of Canada twenty-five years from now or fifty years from now can be met from our available resources; because power, whether it be electricity, gas or oil, is the most basic and the most fundamental of all raw materials that we possess. We may withdraw nickel, copper or iron from the soil. We may refine it and send it in bulk to the United States, to the United Kingdom or to any other country in the world; and we have received the money for what we have produced. It would be a good thing, of course, if we manufactured the finished product in its final form, in every case. But as to power, we are not only
Alberta Natural Gas Company exporting a commodity, something that comes from the soil; we are exporting the thing which in turn produces products of other kinds. We are exporting the power with which the wheels of industry can be turned and with which the great chemical plants can reduce the coal, the salts and the other resources into the finished products which today have their value in every part of the world. If there is one raw material which we should handle with the utmost care, which we should make sure is going to be preserved for Canadian use first of all and to whatever limit we can use it in an expanding economy, it is power, whether it be electricity, oil or gas.
Since the government must make the decision, since the government must pass on a plan, since the government must have a map, must know what is going to be done both in location and in quantity before the board of transport commissioners can deal with this at all, I submit, Mr. Chairman, that before this house is called upon to vote on bills of this kind the government should take the house into its confidence and fully disclose to us what its plans are, and what responsibility it is going to assume. Anything else is an evasion of that relationship and responsibility to the house about which the house should exercise its own authority no matter to what party any member belongs.
The government is only the executive of this house, and the executive owes it to the members from whom it draws its authority, the members whose confidence it must command, and whose confidence it should be able to command without any mere party adherence, to give to them, and particularly to those who habitually support it, that information which makes them more than rubber stamps in an important case of this kind.
We have been told on a number of occasions that the government itself is greatly anxious to see that hon. members are able to express their opinions; that they should not be denied the opportunity to express their opinions. But hon. members were denied an opportunity to get the information to which they were entitled when this bill was before the committee a short time ago, and hon. members are not being given an opportunity now to express their opinions with any of the knowledge that gives a discussion that exercise of judgment which it should be possible for hon. members to exercise before they give parliamentary authority to these bills.
It is very interesting how personal some of the ministers seem to feel about these bills, which every now and then they claim to be strictly private bills. As will have been noticed from the proceedings that I have read,
2328	HOUSE OF
Alberta Natural Gas Company the authority of the government was exercised, as it is to be exercised if it is exercised at all, on the recommendations of the Minister of Trade and Commerce. Today's Vancouver Sun announces the arrival of the Minister of Trade and Commerce, and contains a very interesting headline, which I quote:
Minister recommends unusual source for official information.
Under that heading which suggests that the official information was to be sought in other than strictly formal channels-


Mr. Knowles:: Is this where they usually get their information?


George Alexander Drew: In view of the occupation of the hon. member who has just spoken on other occasions I would not speak as an expert in this instance. The Vancouver Sun goes on in its afternoon issue with this report:
Federal cabinet minister C, D. Howe, queried Monday night in regard to his stand on the natural gas pipe line to British Columbia, curtly told Vancouver newspaperman to "Go to hell.'*


Louis Stephen St-Laurent: Is that the unusual source?


George Alexander Drew: That appears under the headline to which I have referred. I continue:
The angry retort came five minutes after the Canadian trade and commerce minister disembarked from a T.C.A. North Star at Vancouver international airport.


An hon. Member:: A North Start


George Alexander Drew: Yes, a North Star; probably that is why he was so angry. I continue with the quotation.


Mr. Macdonnell (Greenwood):: Apparently he lost his temper.


George Alexander Drew: I continue:
"Don't talk to me any more" he added, as he turned his back on the newspapermen and walked away.
Reporters stepped up and asked Mr. Howe if he would like to grant an interview then or wait until morning.
"No, it's all right", he said. "What would you like to know?"
"What is your stand on the pipe line to British Columbia, Mr. Howe?" a reporter asked.
Immediately Mr. Howe's face darkened.
"Go to hell," he said. "Don't talk to me any more. We've talked enough about that back east."


Stanley Howard Knowles: Obviously he lost his temper; did he lose his reputation, too?


George Alexander Drew: That is the end of the quotation. I do not know whether he meant "pipe lines", or the location to which he referred when he said: "We have talked enough about that back east"; but, Mr. 

Chairman, this is more than a rather simple and forceful exposition of the manner in which the Minister of Trade and Commerce deals so briefly sometimes with the problems of the day. This is the way in which the minister who must assume ultimate responsibility in this matter-subject to the approval of the government, which he usually obtains, as the Minister of Justice knows- deals with those people in British Columbia who are so greatly concerned about the location of this pipe line.
Now, Mr. Chairman, it was an unusual place to suggest that the information should be obtained; but the fact is that if anyone here has access to that particular locality it will ibe the first place anybody has got any real information from, because we have not got it here. I do not know whether the government is waiting for the information to come from that source or not; but most certainly if the government have the information they are not taking the house into their confidence; nor are they taking the people into their confidence, whose interest is the final interest of this parliament and of its executive who serve them with the conveyance of full knowledge to those for whom they act.


An hon. Member:: That is not where they told you to go, is it?


George Alexander Drew: It is extremely interesting to find that even when the Minister of Trade and Commerce does suggest to hon. members who so slavishly follow him that he knows where to get the information, they are not prepared to follow his advice.


Arthur Leroy Smith: There are three prizes for dumbness, and the hon. member who interrupted gets them all.


George Alexander Drew: These bills deal not merely with the construction of pipe lines, not with just the transmission of gas and oil; they deal with power, from which there could be tremendous development in this country.
When I hear the concern which has been expressed in the house at certain times by those who seem to think they have gained some information from some source other than that mentioned by Mr. Howe, then we find that their concern seems to relate to the fact that we may have a great deal of this power here in Canada.
That same concern was expressed when the new hydroelectric development started in

British Columbia. That same concern was expressed when the hydroelectric development was started in Ontario. That same concern was expressed when the great electrical development took place in the province of Quebec, which has the greatest reserves of electrical energy in Canada. And in every single case what appeared to be unconsumable surpluses have been fully absorbed in the expanding productive capacity of that country.
If the electric energy produced right across this country

in the maritime provinces, and in Quebec, and in Ontario, and in Manitoba and in the prairie provinces, and British Columbia-had been exported to the United States under long-term contracts, we would have found ourselves in a position where we could not easily have withdrawn that power; and we also would have found ourselves in a position where the enormous industries based upon that power would not have been constructed here.
One of the reasons why this country became one of the greatest armourers of the last war was that we had this power available, and because skilled industry had grown up upon the use of that power, with the realization that further power would be available in the years ahead.
Now we are dealing with another type of power, but a type of power which, if it is properly conserved, can be just as important to the future of this country as electricity has been in the past and is in the present. The possibilities in Alberta and British Columbia challenge the imagination of every Canadian who realizes what the possibilities are. If all the oil and gas available in Alberta alone were used for industrial and chemical production here in Canada, always with the hope that there will be gas and oil in Saskatchewan and Manitoba as well, millions of Canadians would find new employment in the years ahead. And upon the basis of that power alone there could be a new population of several millions of people in that part of western Canada.
The figures I am using are in no way an exaggeration. Perhaps it would be well for us to remember that both Ontario and Quebec have more than doubled their population since they started the development of their electrical energy. And what has happened there on the basis of that type of power can happen in Alberta and British Columbia as well. And in many ways there are advantages and opportunities which were not available at that time in Ontario and Quebec. In Alberta and in Manitoba are some of the greatest deposits of coal in the world. This coal is of extremely
Alberta Natural Gas Company high b.t.u. content, although of a sufficiently friable type that in many cases they are regarded as unsuitable for shipment over long distances. I am not saying that that is so; but I do say that that opinion is held in many cases.
But those coals are of the type that can be used for liquefaction and for conversion into all the many chemical and synthetic products which have already been developed in Europe, and were particularly developed in Germany in the years before the war. And if we want one place where our expenditures in research foundations and, in research generally in Canada can find new uses for our resources and new uses for this power, then it is in the application of the discoveries that had already been made in Germany several years ago, and the utilization of our vast coal resources along with this power that is available.
Then, there are minerals, there are clays and there are salts, all of which are waiting to be developed by energetic people, with power of this kind available for industries that can be built. But if we are going to have the kind of industries that can be built, then the thing we have to assure is that there will be not only the basic requirement of power but also an enormous reserve for the future.
If people are going to come in and spend $50 million, $75 million or $100 million on plants-and when I use figures of that kind I am using them with knowledge of investigations that are being conducted right now for the possible use of those resources in that area-if investments of that kind are going to be made, then the thing they have to,be sure of is that as their production develops and new chemical processes emerge from research which, in every case, call for a higher use of power-whatever that power may be- then they must be able to plan 25 or 50 years or more ahead to know that through all that time, and longer, there will always be a surplus of power of that same kind available to them.
Then, in dealing with a subject of this kind, and on that scale, I believe members of this House of Commons, and particularly those on the government side, should say to our executive, to the government, "You have the authority; the board of transport commissioners has no authority or power-"


Joseph-Alfred Dion: Order.


George Alexander Drew: "-to settle policy."

Feed Grains


Joseph-Alfred Dion: Order. It is nine o'clock. Shall I report progress? *
Section stands.
Progress reported.



FEED GRAIN


[Stage Direction]
The house resumed consideration of the motion of Mr. Fournier (Hull) for committee of supply.
William Scottie Bryce: Mr. Speaker, as I said before six o'clock, I wish to discuss a matter of great importance to the western farmer, the eastern farmer and feeder, and myself. Two weeks ago, while speaking in the budget debate, I referred to the profit being made by dealers in feed grains in the eastern provinces. Evidently my remarks have been misunderstood, because I have clippings here from the Winnipeg Tribune and the Winnipeg Free Press, and many other papers, commenting on what I said.
The report in the Winnipeg Tribune is much shorter, and is a statement by Mr. Stanley Jones, president of the Winnipeg grain exchange. This newspaper report, which I shall read, is headed "Jones Denies Speculator Hike on Feed Grains." The article goes on to say:
Stanley Jones, president of Winnipeg grain exchange, said Tuesday it is "completely wrong" to blame speculators on the exchange for the high price of feed grain in Ontario.
His statement was issued in reply to a speech in the House of Commons Monday by William Bryce (C.C.F.-Selkirk). Mr. Bryce said there was a difference of $240 a carload last week in the western selling and eastern buying prices for oats. He blamed "speculation."
Mr. Jones said $240 a car is about 12 cents a bushel, and "apparently Mr. Bryce would have it appear that speculators profited to this extent. No. 1 feed oats were quoted by dealers at Toronto last week, on April 18, at $63.14 per ton or $1.07g per bushel, basis delivered most Ontario points. This price is after deduction of freight subsidy rebate of $6 per ton or about 10J cents per bushel. All shippers must buy their supplies from the wheat board, and purchases were made on the Winnipeg grain exchange on that date at 991 cents per bushel in store Fort William. The net cost of delivering to most Ontario points, including balance of freight and loading costs, is 71 cents per bushel. This, added to the purchase price of 991 cents, makes a total cost of $1.061-leaving a possible profit of 1 cents per bushel, or $12.50 per 2,000 bushel car- not $240 as stated by Mr. Bryce. Mr. Bryce should retract his statement since it has no foundation in fact."
I do not need to read the Winnipeg Free Press report as it is similar to that of the Tribune with the exception that it is attributed to the grain trade and not to Mr. Jones. Let me read what I said at page 1813 of Hansard so that I will not be misunderstood any more. I said:
If you compare the amount the western farmer receives for his oats, about $32.35 a ton at the

elevator, and the $76 a ton the hon. member says farmers in his constituency are paying, there is a big difference. To my way of thinking the difference is much too great. I agree that the eastern farmer is paying too much, but I am sure the hon. member will agree that the western producer is not receiving too much. The situation is much the same with respect to barley; but let us deal for a moment with oats, which at last week's prices would cost approximately $59 a ton at Fort William. The freight to points in the vicinity of Montreal or Ottawa would be an additional $2.40. Loading would cost $1.50. Bags would have to be provided, but since they can be used several times, an allowance of $2 per ton for bags should be sufficient. This would give a total of $63.72 per ton at any point in my hon. friend's constituency. Taking the figure at an even $64, when my hon. friend pays $76 the difference is $12 a ton or $480 on a forty-ton car of oats. It would be a good thing if the eastern farmer would check into this and see if someone is not charging more than the traffic should have to bear. On Friday of last week I checked Ottawa prices, and found that wheat, in bags to the farmer, was $74 a ton, oats were $70 and barley was $69. I also checked the Montreal figures and found that wheat was $71, oats $70 and barley $69.
Taking oats again as an example, the price at both Montreal and Ottawa was $70, which, leaves a profit of $6 per ton for the handling of a ton of grain. In other words, on a forty-ton car there would be an allowance of $240 for handling 800 bags of oats, which seems a good profit. I have known dealers in the west who were satisfied to handle oats at 10 cents a bag, and make money. Fluctuations in the market will also cause the dealer to charge the highest price in order to safeguard himself, but if we had steady set prices he could certainly cut down on his margin of profit.
On page 1815 I said:
I started out, Mr. Speaker, to try to show our eastern farmers and feeders that we farmers in the west are not charging them too much for our feed grains. The price is fair and reasonable. I have shown that there is a margin of $240 per car on Montreal and Ottawa prices. Surely grain could be handled more cheaply than that. If the dealers cannot do better than that, I suggest to them that they should set up a co-operative and get service at cost; then if you pay too much for your feed, you will get it back in patronage dividends. That is the solution to the problem; get your co-operative to handle your feed.
In concluding, I want to assure hon. gentlemen who have spoken in this debate on this subject of feed grain prices that the western producer is anxious to have the eastern trade, but he does not like to be accused of charging too much for his grain when that is not the case; and I hope I have proved to them that the producers are not getting too much. Even if the west again increases her hog production, there will always be in the west more feed grains than we can use. We realize that the eastern market is our best outlet for our feed grains, and we do not want to lose it.
At no place have I been discussing speculators' profits. I have been dealing with dealers' profits in eastern Canada. I said that oats to the dealers were costing $63.72. Mr. Jones said oats were $63.14. Therefore there is only 58 cents between his price and my price. His price is cheaper than mine and allows the dealer still more profit. When giving the figures in th'e house I gave the approximate figure of $59 a ton at Fort William. The freight paid by the dealer, $2.40,

and the loading commission, et cetera, would cost $1.50, and then there would be about $2 for bags, making an approximate price of $64 per ton. The grain trade, however, has supplied the actual figures which have been published in the Free Press. They are as follows:
No. 1 Feed Oats, April 18
	$ per $ per bushel short ton	
Canadian wheat board lakehead		
sale price 	
Profit made on sale to eastern	.991	58.529feeder	[DOT] 00|	.3677Total lakehead price to eastern	feeder 	1.001	58.897Elevator charges 	.021	1.691Broker's commission 	.00 x	.147Net freight charges 	.0408	2.40Total price	(most Ontario points) 	1.07|	63.135Mr. Jones ends his statement by	saying:Mr. Bryce should retract his	statement	since it
has no foundation in fact.
I have nothing to retract, Mr. Speaker. It is unfortunate that Mr. Jones made his statement before he read mine in Hansard, or he would never have made the statement to the paper that he did. When I spoke before I only rose to defend the western farmer. When I heard hon. gentlemen complaining about high prices paid for feed grain, when I heard them blaming the western producer for charging too much, I made inquiries and found that oats were selling at $70 per ton in Ottawa and Montreal. If you take either Mr. Jones' figures or mine, there is still $6 between what the dealer pays and the price at which he sells. If you take a forty-ton car of oats at $6 per ton, you have a profit of $240; you cannot get away from that. The hon. member for Russell (Mr. Gour) quoted a figure at $76 a ton. This would give the dealer $480 for handling a forty-ton car of grain. I said the dealers were taking a greater profit than they should and the western producer was being blamed for the high prices. If there is to be any retraction, Mr. Speaker, I think it should be by Mr. Jones, since no doubt he jumped to the conclusion that, if I were speaking on grain prices, judging from my past record I would be damning the grain speculators on the Winnipeg grain exchange.
When I spoke I only rose to defend the western farmer and show that I thought the dealer was charging too much for the services rendered. I still think $6 per ton or $240 per car is too great a profit, and it is not the fault of the western producer. I made the suggestion previously that the government should conduct an inquiry into the profits of feed dealers. The government is paying this money in subsidizing freight rates to help the 55946-148
Feed Grains
eastern farmer and feeder so he may compete in the world's markets with his pork, poultry, cheese and eggs, and it should be the duty of the government to see that those it is planning to help are not exploited by unscrupulous dealers.
The Winnipeg Free Press came back with another editorial in which they were quite fair to me. They said:
Mr. Bryce strongly repudiated any imputation that he was suggesting western farmers should take less for their oats; his remarks were quite the contrary. He also pointed out that the government freight subsidy on oats meant that the eastern dealers never paid more than $2.40 a ton freight east of Fort William, regardless of where they were landed.
The same editorial contained the solution suggested by the grain trade:
Trade reaction to Mr. Bryce's charges of profiteering by feed dealers retailing to Ontario and Quebec farmers was this:
If the eastern consumer feels he is paying too much for feed grains to the private dealer, he has an obvious recourse-the open market for coarse grains. He can either arrange purchase himself and look after details of shipment, or a broker would be eager to handle the transaction for him at a charge of approximately one-half cent per bushel.
I can assure hon. members that this is not the solution to the problem. We have had that system too long. The system we have now may not be perfect, but it is much better than anything we had before, and I hope we do not go back to the old method.
I want to mention one more thing before I conclude. I have in my hand a clipping from the Stonewall Argus of May 3, 1950. This is a column under the title "The world of wheat" by H. G. L. Strange, and the article is headed "Growing Discontent". It concludes in this way:
The whole matter is becoming complicated by the dissatisfaction of eastern feeders who complain about the high prices they have to pay for coarse grains. Mr. William Bryce, member of parliament, recently asked the government to set up a board to investigate the whole matter of the purchase and sale of western grains.
Nowhere did I ask the government to set up a board to investigate the whole matter of the purchase and sale of western grains. What I did say appears at page 1815 of Hansard:
Perhaps the best thing to do is to have the government check the eastern prices. They are paying $6 to $23.80 per ton subsidy at different points to enable the feeder to get grain at his local point at a reasonable price in order to compete in the production of hogs, poultry and cheese. I am sure that all western farmers will support the eastern farmers in a demand for an inquiry into eastern feed prices. It would clear the air and expose anyone who is taking more profit than he deserves for the services he renders in the feed situation.
I hope I have made clear to hon. members my object in rising this evening. To the grain

Winnipeg Postal Employees exchange people I would say not to jump to conclusions before reading what I really did say.



WINNIPEG POSTAL EMPLOYEES


Stanley Howard Knowles: Just before you leave the chair, Mr. Speaker, there is a matter on which I wish to say a few words. It may seem to some to be a small grievance, but it is the kind of grievance that is most annoying to the people who suffer its consequences. The matter about which I wish to say just a word is set out very clearly in certain answers to questions I placed on the order paper, those questions and answers appearing on page 837 of Hansard for March 16, 1950. They relate to the observance of civic holiday, as far as the postal employees in the city of Winnipeg are concerned.
It so happened that in 1948, for the first time in recent years at any rate, the employees of the post office in Winnipeg were given the day off with pay. They dared to believe that at long last they were being put on the same basis as the employees of the post office here in Ottawa, who for a number of years have had civic holiday as a holiday with pay. But lo and behold, when civic holiday came along in August of 1949, these post office employees in Winnipeg were denied the holiday with pay. Some were given leave to take the day off and although their pay cheques for that month were not decreased as a result, they were made to pay back what they received for that holiday from the overtime they accumulated during the Christmas rush.
On taking up this matter with the Postmaster General (Mr. Rinfret) by correspondence I received an interesting reply, to the effect that the Postmaster General had found it necessary to deny that holiday with pay to those employees in Winnipeg last August by virtue of a directive from the Secretary of State. That led me to ask these questions which appeared on Hansard for March 16, and the answers make it clear that in 1946, 1947, 1948 and 1949 the employees of the post office in Ottawa were given civic holiday as a holiday with pay. Those same answers make it clear that in Winnipeg they did not get it in 1946 or 1947; as I have already pointed out, they got it in 1948 and they thought that at last the discrimination against them was ended, but in 1949 they were again denied that holiday with pay.
It seemed very clear from the answers the Postmaster General had to give to my questions that this was a matter of discrimination. It is not .the most important matter one could raise in this house; just at


the moment the people of Winnipeg are not worrying about holidays, because they are literally in a state of siege and working very hard against the flood waters of the Red river; but it is one of those things that are very annoying.
One of my questions on March 16 looked to the future, and was in these terms:
Have any steps been taken to eliminate discrimination in this matter?
The answer to that question was:
The question is under consideration by the government, and a definite decision will be made prior to the observance of civic holiday next summer.
I have two requests to make in connection with this matter, and the reason I felt it necessary to raise this before Your Honour leaves the chair, although we are going to deal with post office matters when we get into the committee of supply, is the fact that it has been made clear that the Acting Postmaster General (Mr. Lapointe) is going to deal almost exclusively with this question of the denial of the use of the mails to certain people. The two points that I have raised before by letter, without yet getting satisfaction, and the two that I now repeat, are quite simple: In the first place, I feel that these employees are justified in asking that the situation of last August be rectified, and that they be compensated for the day that they were forced to work last August, in lieu of not receiving the holiday as did their fellow post office employees in the city of Ottawa. The same request applies in the case of those who had the day off but had to make up for it at Christmas.
The other request is in terms of the future. I urge the government to make a decision soon, and to announce it as early as possible, as to what the policy will be with respect to civic holiday this year, and in future years. Surely, if it is possible to grant the civic holiday as a holiday with pay to post office employees, and other civil service employees, here in the city of Ottawa, and I think it should be, it is only fair that the same holiday with pay should be granted in other cities where civic holiday is declared for that city as a whole. I dare to believe from the answer that was given to me that that consideration may result in favourable action so far as the future is concerned. I hope so, and I hope the announcement will be made soon. But I want to say to the Acting Postmaster General and through him to the Postmaster General that the employees concerned will not be satisfied unless there is also a rectification of the discrimination against them in connection with Hvic holiday last August.

c:
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.



DEPARTMENT OF NATIONAL HEALTH AND WELFARE

[Stage Direction]
215. Departmental administration, $859,720.
Item stands.

[Stage Direction]
288. Departmental administration, $350,605.
Item stands.

[Stage Direction]
269. Departmental administration, $1,373,625.
Stuart Sinclair Garson: Mr. Chairman, the matter of the protection of the mails from being used for schemes devised or intended to deceive the public is one of considerable importance. From one standpoint it affects certain rights of individual brokers, and of course no government wishes to deal unfairly with them. From another standpoint it affects the efficient workings of a free society; for I submit, sir, it is important to a free society that the integrity of its methods in raising risk capital for the development of its natural resources should be protected from any corruption by fraud.
Not only the Roman law but every civilized law that has yet appeared in history has set forth a conception of property as being a natural right, and not a mere concession of the state. That being so, one of the most important functions of the law is to promote diffusion of property. Such diffusion is one of the most effective bulwarks of free society. The law, therefore, should be used for the protection of the small investor, who on the one hand can ill afford to lose his capital, but on the other, because he usually lacks both the breadth of investment experience and expert advice, is so often fair game for the unscrupulous.
Moreover, another aspect of this matter is that the unsurpassed reputation of Canada throughout the world for honesty and fair dealing, which has been so dearly purchased by us through long years of honourable conduct on the part of Canadian citizens, should not be besmirched or impaired by a few people for selfish and dishonest reasons. Therefore, when the member for Eglinton raised the question in the house as to the propriety and the validity of the postal regulation which had been made by the Postmaster General, he raised a matter which is a serious one, and which deserves careful and serious consideration.
Unfortunately at that time, as I then indicated to the house, the general counsel for the Broker Dealers Association had just written a letter to me dealing with these 55946-148a
Supply-Post Office
postal regulations, and which I had not had the opportunity to consider. The suggestion was made that on the next occasion on which we went into committee of supply a careful examination of the remarks both of the leader of the opposition and of the member for Eglinton, but more especially of the considered representations in writing of the general counsel for the Broker Dealers Association, would be placed before the members. I think that, because the statement made by Mr. McTague in the form of a letter addressed to me as the Minister of Justice is a considered, careful statement of the whole position of the broker dealers, and on that account is perhaps a little more thorough than mere extemporaneous efforts could be, the fair way to deal with these representations and to lay this matter before the members is to read the first points which Mr. McTague makes in this letter, and then read the reply to the first point, and so on. In that way we could dispose of the matter. Then I would hope that, if time permitted, I might deal finally with some of the observations made by the leader of the opposition and the member for Eglinton.
The letter from Mr. McTague is dated 220 Bay street, Toronto, April 26, 1950. The first point has had fairly lengthy treatment, and he starts it in this way:
As counsel for the Broker Dealers Association of Ontario and acting only in that capacity and not for any individuals concerned, I wish to put before you certain submissions with respect to the action of the Post Office Department stopping the mails to people in, or remotely associated with, the security business here in Toronto.
In the first place, my submission is that under the rule of law, to which we lawyers continually pay lip service, the procedure followed in the Post Office Department is totally without justification.
The powers of the post office generally in so far as they appear to be relevant to the matter alleged to be involved here are, I think, to be found in the Post Office Act, section 7 (d), permitting the making of regulations-
He sets out the whole section, but I shall just refer to those matters which are relevant to the subject under discussion.
-regulations "for marking on the covering of letters, circulars or other mailable matters suspected to concern illegal lotteries, etc. . . or concerning schemes devised or intended to deceive or defraud the public, for the purpose of obtaining money under false pretences, whether such letters, circulars or other mailable matter are addressed to or received by mail from places within or without Canada, a warning that they are suspected to be of a fraudulent character, and for returning such letters, circulars and other mailable matter to the senders".
In other words, Mr. Chairman, that is the statutory authority for two regulations, Nos.

Supply-Post Office
204 and 206, which Mr. McTague proceeds to set out in his letter in another paragraph commencing as follows:
The relevant regulations pursuant to section 7 (d) appear to be 204 and 206, reading as follows:
I shall not bother to read No. 204 in full, although I hope with the approval of members that Mr. McTague's letter to me of April 17, 1950, might be published in Hansard, as an appendix, along with my reply to Mr. McTague dated May 2.


The Deputy Chairman:: Order. Has the Minister of Justice the unanimous consent of the committee to put on Hansard as an appendix the letters to which he has referred?


Some hon. Members:: Agreed. .
(For text of letters, see appendix, pages 2347-49.)


Stuart Sinclair Garson: Regulation 206 reads as follows:
The Postmaster General has power, under the statute, to mark or cause to be marked upon the covers of letters, circulars, or other mail matter suspected to concern schemes devised or intended to deceive or defraud the public for the purpose *of obtaining money under false pretences, whether such letters, circulars or other mail matter are addressed to or received by mail from places within or without Canada, "suspected to be of a fraudulent character", and to return such letters, circulars or other mail matter to the senders.
I might interject again that the so-called orders complained of here consist of actions taken to mark these mail matters and return them to the senders under this regulation 204 passed pursuant to section 7 (d) of the act.


Mr. Fleming:: You mean regulation 206.


Stuart Sinclair Garson: Yes, regulation 206. My hon. friend is quite right. Then Hon. Mr. McTague goes on:
I think you will agree that it is trite law that the regulations cannot be extended beyond the authority given in the statute to make them. For the purpose of my submission to you I am not arguing that these regulations go beyond the statutory authority for them, but I do submit as strongly as I can that the deputy Postmaster General has gone far beyond what is provided for in the regulations or the statute in the most arbitrary way.
Without any warning whatever, and on the strength of representations made by the United States Post Office Department at the behest of the United States Securities and Exchange Commission and entirely ex parte, without the persons suspected having an opportunity to be heard, the mails have not only been arbitrarily cut off, but have been required to be forwarded to Ottawa where they are held for an indefinite period without any commitment or statement of intention to prefer any charges in the courts. Not only that, but in separate hearings of aggrieved persons before the deputy Postmaster General, their mail has been released upon the exaction of undertakings that they will not further deal in specified securities, or that they will agree to modify the language and

terms of circulars sent in the future. The whole procedure is in substance a conviction by the deputy Postmaster General without a hearing, punishment by cutting off the mails and the exaction of undertakings as a condition on which the penalty will be suspended.
If there is anything in the Post Office Act justifying such procedure, I am unable to locate it. In addition to that, I cannot conceive of any government putting forward legislation to justify such action by way of amendment to the Post Office Act, and I cannot conceive of any parliament enacting such legislation if it were put forward.
That is Hon. Mr. McTague's first point upon behalf of his client. The answer to this point is as follows:
I have your letter oi April 17 with reference to the action of the post office in stopping the mails of certain brokers. You are acting as counsel for the Broker Dealers Association and not on behalf of any of the persons against whom the "stop" order was directed.
I have inquired as to what took place. The order, which was made with the approval of the Postmaster General and therefore may be regarded as made by him, was to the effect that all mails addressed to or coming from the above (persons named) are to be intercepted and sent specially by first mail to the administration branch, Ottawa. It was stated that this action was being taken as a result of evidence received indicating that the mails were being used for the purpose of obtaining money under false pretences. I am informed that contrary to what you state in your letter the order. was not made at the behest of the United States Securities and Exchange Commission.
The action was taken under the authority of paragraph (d) of section 7 of the Post Office Act which authorizes the Postmaster General to make regulations "for marking on the covering of letters, circulars or other mailable matter suspected to concern" . . .
Then I go on and repeat the provisions of that subsection, and I indicate that "the mailable matter is marked 'nontransmissible' instead of with a warning that it was suspected to be "of a fraudulent character". I continue:
This marking was regarded as less injurious. The matter is returned to the sender.
My information is that each of the brokers named in the order was engaged in the sale of the securities of a single company. The "stop" order was made only after a careful examination was made by experienced officials of the literature which these brokers were circulating, making claims which were so extravagant and untrue as to raise a reasonable suspicion in the mind of the Postmaster General that they related to schemes intended to deceive or defraud the public, for the purpose of obtaining money under false pretences.


Donald Methuen Fleming: Will the minister permit a question?


Stuart Sinclair Garson: Yes, surely.


Donald Methuen Fleming: He refers to experienced officials. Were those officials of the Post Office Department or officials of the justice department?


Stuart Sinclair Garson: They were not of the justice department.


Donald Methuen Fleming: There was no reference in that matter to the justice department for an opinion as to whether there might be any question of deceit?


Stuart Sinclair Garson: No. That is quite right.
Then my letter to Mr. McTague goes on:
I cannot discover any illegality in this procedure. The statute calls on the Postmaster General to refuse the use of the mails to persons whom he reasonably suspects of using the post office facilities to defraud the public. The only question is whether the Postmaster General had reasonable grounds for his suspicion. From the facts when they are disclosed I think you will have to agree that the Postmaster General did have good grounds for his suspicion.
And at the conclusion of my remarks tonight the Acting Postmaster General (Mr. Lapointe) will give some of those grounds in certain cases to members of the committee in order that they may judge as to whether there were any reasonable grounds for suspicion.
The second point which Mr. McTague makes starts out in this way:
Mr. Turnbull-
That is the deputy postmaster general.
-seems to take undue comfort, in my opinion, in the Literary Publications case, I think it is, in British Columbia (58 C. C. C. 385), in giving him the right to do anything and considering that whatever he does is not reviewable by the courts. He does not seem to realize that the court in that case simply held that there was a right to exercise a discretion under the statute and the discretion having been duly and properly exercised, the courts would not review it. That case concerned an action for damages following an acquittal after a prosecution under the Criminal Code. It appears to me to be no authority for the proposition that the Post Office Department can legislate through the process of administration and in fact set up what amounts to a star chamber. I recall hearing a careful speech made by yourself on the rule of law with many references to the admonitions of Coke to King James. In this affair it is McTague humbly putting forward the same type of admonition to Turnbull through your good self as an understanding intermediary, I hope.


George Alexander Drew: Who is writing this?


Stuart Sinclair Garson: Mr. McTague.


George Alexander Drew: To you?


Stuart Sinclair Garson: Yes. He goes on:
There just cannot be two standards of fraud, one laid down by the courts and a different and private one by the Post Office Department. The Post Office Department has not, as yet, attained judicial status. It appears by its recent actions merely to assert that very untenable position.
The answer to that point is as follows:
Perhaps it should be remarked in this connection-
I say to Mr. McTague in my letter.
-that none of the brokers has seen fit to take action against the Postmaster General alleging wrongful action on his part, a remedy which the court of
Supply-Post Office
appeal of British Columbia held, in the case of Literary Recreations Limited v. Sauve C. C. C. page 358, to be open to a person against whom such an order has been made.
In other words, in the very case which Mr. McTague is quoting in his letter it was indicated that persons offended by a wrongful order had a right of action against the Postmaster General. My letter to Mr. McTague continues:	.
The next point made by you is that the post office cannot "legislate through the process of administration and in fact set up what amounts to a star chamber."


George Alexander Drew: Who is saying this? Is that you?


Stuart Sinclair Garson: I am saying this to Mr. McTague:
I am afraid I do not follow this contention since it appears to me that the Postmaster General was doing precisely what the statute authorized and required him to do.
Mr. McTague's third point is this, and I quote from his letter:
As you know, I have had a rather wide experience in the security business.
And he is quite right in saying that. Mr. McTague was one of the most distinguished security commissioners that the province of Ontario ever had. He continues:
It is my opinion, and I have comparatively recently put my opinion in writing for the benefit of the United States securities and exchange commission, that no provincial legislature has power to control or regulate international or interprovincial trade in securities. While I know of no case directly dealing with securities on the proposition, it has been laid down in reference to other commodities more than once that there is no such power in the province. I make* brief reference to the Natural Products Marketing Board case in British Columbia.
On this third point I replied in my letter as follows:
You point out that the province has no power to control or regulate international trade in securities. That is certainly true where the post office is the medium used for carrying on the international trade in securities. But I suggest that it follows from your statement that in this case the Postmaster General is the proper official and the only official who is legally qualified to exercise such control under section 7, subsection (d), of the Post Office Act.
The fourth point of Mr. McTague's letter is stated in these words:
The only jurisdiction which can validly enact legislation to control and regulate the sale of securities internationally and interprovincially is the Canadian parliament. If the policy of enacting such legislation is determined upon the government can readily put forward a statute and take its responsibility in that regard. If it does not care to accept such responsibility, surely it should not permit or even tolerate the setting up of a securities commission de facto, but certainly not de jure under the present act within the Post Office Department. Yet that is exactly what is being done at the present time.

Supply-Post Office
My answer to this fourth point is as follows:
You contend that parliament has not set up a "securities commission de facto" within the Post Office Department. I entirely agree with this contention. The Postmaster General's job is not to operate a securities commission. The Postmaster General's duty is to see that the post office facilities are not used to defraud the public. While his efforts to this end may result in protecting investors against the purchase of fraudulent securities, this result is purely consequential and is not, primarily, his responsibility. Under the law, his statutory duty and responsibility is to maintain the efficiency and reputation of the postal services which he directs. It is for this purpose that he is empowered to stop mail which he suspects is being posted for fraudulent purposes.
Mr. McTague's fifth point is as follows:
At this time there is no law in Canada prohibiting the sale of securities in the United States by circular or otherwise. If the circular is considered to be fraudulent under the laws of Canada let prosecution be brought in the criminal courts, but let us still maintain the fundamental principle of the rule of law and once again abolish star chamber methods from which already too many innocent people have suffered greatly.
To stop the mails and ruin people in business on the evidence of circulars, telephone conversations and other gossip, which have taken place many months ago, seems to me a most extraordinary procedure.
I am forwarding a copy of this letter to the Right Honourable the Prime Minister and of course also to Mr. Turnbull.
The answer to this fifth and last point, as set out in my letter to Mr. McTague, is as follows:
As to the question whether criminal proceedings should be instituted, it is not the Postmaster General's duty to prosecute persons guilty of criminal offences. I do not need to remind you that it is the attorney general of the province who enforces the criminal law. The Postmaster General's duty is to take appropriate actions where he has reasonable grounds for suspecting that the mails are being used for fraudulent purposes.
In conclusion, I think I should say that where the state operates a public utility such as the post office, a railway or a radio station there is not thereby conferred upon each citizen an absolute right to utilize the utility, but a conditional right only, the condition being that there should be no abuse. The utility must be operated strictly for the public benefit. The government officials operating the same should have at least as wide powers to protect the public against abuse as the private owners of a public utility would have to protect their patrons. In the case of the post office, parliament has seen fit, in order to protect the service against abuse, to authorize the Postmaster General to refuse the use of mails if he has reasonable grounds for suspecting that a person is making an improper and fraudulent use of them. I am informed that this provision is one of long standing having been introduced in the act by Sir John A. Macdonald in 1889; that it has been beneficially invoked' hundreds of times throughout the intervening years; and that similar provisions will be found in the post office statutes of other free countries.
Notwithstanding these facts, the government is quite open-minded with regard to this section and the powers created under it. For many months before this order was made, the government had been engaged in preparing the first general revision and consolidation of the Post Office Act since 1922.
	'
In this connection, it has been giving special attention to sections such as section 7 (d) which vest rather wide powers in the Postmaster General. We are inclined to think from the consideration which we have given this matter so far that the experience of our own post office and the post offices of other free countries over the years indicates that the power under section 7 (d) should be retained. We are also inclined to think, however, that it might perhaps be advisable that a summary appeal should be provided from the order of the Postmaster General to the courts; and that upon the hearing of this appeal the appellant should have the right to adduce any relevant evidence in addition to that upon which the Postmaster General based his order. The appellate tribunal should have power either to confirm or discharge the order of the Postmaster General. Pending the hearing and disposition of such appeal, however, the Postmaster General's order should remain in effect and should also, of course, remain in effect if confirmed by the court appealed to.
We can well understand that the organization which you represent will have well-informed views upon this subject matter and if it wishes to present a brief on any of the matters under the Post Office Act in which it has an interest, I can assure you that the government will be glad indeed to give its representations the most careful and thorough consideration.
Now, so much for the points raised in a careful and systematic manner by Mr. McTague. I might spend a little time now upon the points raised by hon. members in this house.
Dealing first of all with the remarks of the leader of the opposition (Mr. Drew) on April 15 last, as set out at page 1562 of Hansard, where he is reported as saying this:
I wish to ask the Minister of Justice whether he has given consideration to the extent to which the Post Office Department is usurping the authority and responsibilities of the Department of Justice in acting as a court by making decisions as to the guilt or otherwise of certain people using the mails of Canada.
Now, I am not too clear as to the precise point the hon. member is making in that language, but I think I can answer all possible meanings that could be given to it by making two or three simple statements of fact.
In the first place I would point out that the Postmaster General cannot in this case be usurping the authority of the Minister of Justice, since the powers which are invoked here in this case are clearly those which the act vests in the Postmaster General and not in the Minister of Justice. And therefore in using those powers, whatever he is doing he cannot possibly be usurping the functions of the Minister of Justice.
Then, secondly, I point out that neither the Department of Justice nor the Post Office Department has the authority or the responsibility to act as a court, either by making decisions as to the guilt or otherwise of certain people using the mails of Canada or, indeed, in any other way.

Thirdly, I would point out, repeating what has already been said, that in connection with the postal orders under discussion and under criticism by the opposition it is the statutory duty of the Postmaster General, pursuant to section 7(d), where he considers that there are reasonable grounds lor suspecting that mail matter coming under his charge concerns a scheme intended to defraud the public and is being sent through the mails, to make these orders that are under attack.
In this connection, I do not think it can be emphasized too strongly-having regard to the reference by the leader of the opposition to courts, and to other suggestions which were made that these people should be prosecuted- it cannot be emphasized too strongly that the Postmaster General decides nothing as to the guilt or innocence of these persons. He decides only whether or not there is reasonable ground for his suspicion that the postal service is being wrongfully used. And if he suspects upon reasonable grounds that the postal service is being wrongfully used, then he has the power to make these orders which are under debate.
Suggestions have been made, notably by the hon. member for Eglinton (Mr. Fleming), that the Postmaster General, in acting as he did, usurped-I do not know whether that is the word the hon. member used; in fact I do not think he did use that word, but his meaning was clear-that the Postmaster General in making these orders was usurping or interfering with the functions of the securities commissioner of the province. The hon. member put it this way at page 1638 of Hansard:
We have laws to deal with such cases. We have the Criminal Code, and, as to the rights between broker and client and the measure of responsibility that those engaged in the purchase and sale of stocks owe to the public, we have in all provinces- we certainly have in Ontario-securities laws and securities officials. This case may be, and no doubt is, one for the securities commission of the province of Ontario, which has ample power to deal with brokers who are carrying on their business in violation of the law without due regard for honesty in business dealings.


George Alexander Drew: Whose statement is that?


Stuart Sinclair Garson: It is the statement made by the hon. member for Eglinton in this house. This statement continues:
Therefore in my submission it is not necessary for the Post Office Department to undertake to make laws in substitution for the Criminal Code of Canada as enacted by this parliament, and in substitution for the laws of the province in relation to regulation of transactions involved in the purchase and sale of stocks and the control and regulation of the activities of those engaged in that business.
Supply-Post Office
This argument, as I shall show, is quite incorrect. I have already shown that the Postmaster General has the undoubted power under the Post Office Act to make orders such as those under discussion. I submit that the exercise by the Postmaster General of such powers as those under the Post Office Act is no interference at all with the authority of the provincial securities commission. Indeed, it is the discharge of a completely separate and distinct duty.
In discharging his duties the Postmaster General is not bound by the decisions of any provincial securities commission, nor does the law permit him to abrogate his responsibilities and functions in favour of a provincial securities commission, because it is a well established fact and principle, with which I am sure the hon. member for Eglinton would be the first to agree, that in exercising discretionary power an administrative officer must make his own decision and must not accept the decision of another person. The Postmaster General of course may have recourse to the provincial securities commission or to any other reliable source for materials upon which to make up his mind; but so far as the actual making up of his mind is concerned, he must do it quite independently of any provincial commissioner or of any other source of information that he may have.
And, sir, the point upon which he has to make up his mind is not as to whether or not the dealer should be licensed, nor as to whether or not trading in a certain stock or other security should be permitted. The point which the Postmaster General must decide is the simple one of whether or not there are good grounds for suspecting that postal privileges under the Postmaster General are being abused.
The second point in this connection I should like to make is that, quite unlike the provincial securities commission, the Postmaster General is not in any way concerned about the intrinsic value of the security that is being dealt in, except in so far as that intrinsic value of the security may create in his mind a legitimate and well-founded suspicion that the mails are being used to defraud. The Postmaster General's only duty is to concern himself with false and fraudulent representations made through the mails in respect of the sale of the security.
I think I should emphasize in this connection that while the provincial securities commission-and I am sure the hon. member for Eglinton knows about this, and will agree with it-license the dealer and approve of the security, and pass upon the prospectus, the provincial securities commission does not

Supply-Post Office
ordinarily or necessarily pass upon or even see a great deal of the advertising and sales literature put out by the brokers. They do not necessarily know whether that sales literature is true or false, objectionable or otherwise.
Moreover, as the Hon. Mr. McTague points out in his letter, one of the great problems of any provincial securities commission- and especially in cases such as we are discussing here, which involve the sale of Canadian securities internationally, in to the United States-the great problem of a provincial securities commission in respect of such traffic is that it has, according to Mr. McTague, who should know, and who is an expert in the field, no power whatever to control or regulate international or interprovincial trade in securities. Therefore when the hon. member for Eglinton says, "We certainly have in Ontario securities laws and securities officials, and this case may be and no doubt is one for the securities commission of the province of Ontario, which has ample power to deal with brokers who are carrying on their business in violation of the law", he is making a statement that is quite incorrect. It is incorrect because most of the transactions upon the basis of which the Postmaster General made the orders which are under debate, and under criticism by my hon. friend, concern interprovincial and international trade in stocks. As to this trade-and I am sure my hon. friend will agree with me upon reflection-the provincial securities commissions do not exercise any authority for the excellent reason that they have no power to do so. Their powers are intraprovincial powers. Moreover, not only have they no power to do so but the provincial legislatures have no constitutional authority, according to Mr. McTague, to clothe provincial securities commissioners with such power.
Thus, if these powers which the Postmaster General has invoked in the present case are not used in proper cases, which we contend the present ones to be, to prevent the misuse of the mails in interprovincial and international trade in stocks, there are no provincial powers of any kind that can be invoked to prevent such misuse. Thus, far from the Postmaster General having overridden or ignored the authority of the provincial securities commissions or invaded the field of provincial rights, as seemed to be implied by the remarks made by members of the opposition, the Postmaster General has instead merely prevented the misuse of the post office, which is his responsibility. In the cases which we are considering he has done this, for the most part, in cases with which,

according to the Hon. Mr. McTague, neither the provincial securities commissions nor the provincial legislatures had power to deal.


Donald Methuen Fleming: Let us say some of the cases.


Stuart Sinclair Garson: My hon. friend, the Acting Postmaster General, can speak more accurately on that point than I can. I doubt, however, if there are any purely intraprovincial cases, but I am merely dealing with the law. The Acting Postmaster General will deal with the facts. I think I should add, lest there be any misunderstanding, that no one should infer from what I have just said that the Postmaster General has not power, in relation to the use of the mails for the sale of stocks wholly within any province, to make such an order as we are now discussing. He has that power also, but there is the difference that in most of the cases we are discussing he has the power to make this order in respect of trafficking in stocks internationally and interprovincially, which is beyond the jurisdiction of the provincial securities commissions.
That comprises all the legal points which arise in this connection. My hon. friend, the Acting Postmaster General, will outline the facts upon which some of these orders were based in order to give hon. members information as to whether there were reasonable grounds for the exercise of the Postmaster General's discretion.


Mr. Lapointe:: Mr. Chairman, my colleague the Minister of Justice has set forth the legal position in this matter of fraud orders issued against certain corporations and individuals. His statement to the house clearly establishes that the Postmaster General is empowered to prevent the mails from being used for fraudulent purposes. To this power given the Postmaster General by parliament there is a corresponding duty to prevent His Majesty's mails from being used as an instrument of fraud. The intention of parliament to protect His Majesty's mails in this regard was so definite that the Postmaster General is empowered to take the necessary preventive action when he has justifiable and reasonable grounds to suspect that the mails are being used to perpetrate fraud.
Therefore, in my estimation the point at issue is: Was the Postmaster General justified in taking action as he did in the specific cases which are before us and which are being discussed tonight? If I may, Mr. Chairman, I should like to dispose immediately of the imputation that the action of the Postmaster General of Canada was taken solely at the behest of United States authorities, and was based otherwise only on a few circulars, rumours and gossip generally in

the brokerage field. As the bulk of the circulars in question were addressed to citizens of the United States it was only natural that the majority of the complaints received came from United States citizens. I feel sure it will be conceded that they had a right to protest against questionable actions by Canadian citizens or by persons operating in Canada just as I am sure that the Postmaster General had not only the right but also the clear duty to take appropriate action.
I want to emphasize that we did not issue fraud orders at the behest of the United States government or of its officials. Nor did we take the word of United States authorities as to these transactions about which complaints had been received. We obtained affidavits together with circulars and other material. We went further than that. Appropriate inquiries were made, investigations were carried out and expert advice was sought. I can assure hon. members who are interested in this matter that in every case the Postmaster General had good and sufficient reasons for believing that the mails were being used for fraudulent purposes.


George Alexander Drew: May I ask a question? When the Acting Postmaster General says that expert advice was sought will he indicate the nature of the expert advice to which he refers?


Hugues Lapointe: If the leader of the opposition will permit me to carry on with my statement, which is quite short, I think he will find the answer to his question. It is not my intention, Mr. Chairman, to analyse tonight every single case where prohibitory orders have been issued, but I believe it would be useful to outline some of the methods used, and to quote from some of the literature issued. I have here the -case of one company dealing in oil stocks, and using the services of a broker. Circulars issued by this broker-dealer and distributed by mail included the following statements:
This company holds leases on a quarter section in the Redwater Bruederheim area between acreage held by Imperial Oil. In addition, the company holds fifteen well sites in the Lloydminster field, which has been growing at a phenomenal rate in the past two years. Since the astounding results at Leduc, Lloydminster and Redwater-and I'm convinced that the holdings of-
This particular company.
-hold the promise of profits and fortune such as we have often dreamed about and hope to share.
Again I quiite:
This I believe is one of the greatest chances at a fortune that has ever been offered to you. Here, I believe, is your chance to make $25 grow to $1,000 55946-149
Supply-Post Office
-$250 grow to $10,000. Only now are the tremendous possibilities being realized-and we are getting in at the right time.
The dealer continues:
In my last letter I told you that the experts estimate Redwater's recoverable oil reserves at 30,000 barrels per acre. As the holdings of this company in the Redwater-Bruederheim area comprise a quarter section (160 acres) that's sufficient to drill four wells, which, assuming comparable results, would work out to a potential of 4,800,000 barrels of oil. At the current wellhead price of $2.68 per barrel, the gross money value on this basis would be $12,864,000.
Competent authorities of the government of Alberta, in which this property is situated, state that instead of this material being called literature it should be called sucker bait, as the property of this company is strictly wildcat and is unproven. The suspicion of fraud lies in the extravagant and misleading claims. Although the literature refers to the Redwater area, the company has no property in that rich field but only in the Bruederheim or Lloydminster area. To talk about the Redwater-Bruederheim area, again according to the testimony of these officials, is sheer nonsense; and the holdings of this company in the Lloydminster area hold even less than a gambler's chance of rich reward.
These again are not the statements or opinions of the Postmaster General or of his officials; they are the recorded views of responsible officials of the Alberta government. The implication that the acreage is in the Redwater field is misleading, and is suspected of being intended to deceive. The information given in these circulars and letters shipped by the broker-dealer is not in accordance with fact. These are the grounds on which, in this case, the Postmaster General reasonably believed that the mails were being used with intent to deceive and defraud.
I have another case here, Mr. Chairman, of another company selling oil stocks in Alberta, using the services of two brokerage firms. The circulars issued in regard to this company by implication endeavour to link the properties with those of producing properties in the Leduc oil field. Statements are made with the intent of making believe that the wells drilled in this area are successful, to greatly enhance the company's assets. A few of the statements made concerning the possibilities of this- company are as follows:
There appears little or no doubt that all of the sixteen wells scheduled for this quarter section will be commercial producers.
The company has every expectation of being able to look forward within the near future to eighteen producing oil wells.
Although No. 5 well has been delayed, it is only a few feet from No. 3 producer and there is virtually no doubt that it will be equally successful.

Supply-Post Office
The large amount of proven oil reserves below each of these wells has greatly enhanced the company's asset position.
Today these shares are backed not by just a few acres of grazing land but by ten successfully drilled wells of which three are producers and the others are to be put into production as soon as possible-over ten thousand acres-fifteen square miles-of potentially rich oil leases and reservations.
Thus you can see that no longer is this company a "chance" or a speculation.
Many other similar statements could be quoted. So much for the claims; what are the facts? All the rights in one of the fields exploited by this company are rank wildcat. No wells have ever been started near this acreage. The company has drilled a few dry or duster wells in the Lloydminster area. Some of the other wells are not commercially successful. Others have produced water when pumped, are worthless and must be abandoned. The three wells which are producing are pumped; that is, the oil does not flow but has to be pumped. The broker-dealer exploits this information by giving it an improper twist in order to mislead his clients. He indicates that the pumps are to control the flow, whereas in fact such wells as this company has producing do not flow; they must be pumped to get the oil, not to control it.
Again, the foregoing are not the statements of the Postmaster General or of his officials; they are the recorded views of impartial, competent and reliable officials of the Alberta government. The Postmaster General, I think, was justified in concluding that the mails were being used with intent to deceive or to obtain money under false pretences, and in acting accordingly. There again I think the facts speak for themselves.
Another gentleman who had his licence to operate as a broker cancelled by the Ontario securities commission continued to promote his own enterprises, selling his own stock direct instead of through a broker. This is the gentleman, incidentally, who forfeited $50,000 bail in the United States. Not at all abashed by the reasons which prevented him from acting as broker, he has made a great virtue out of necessity and now proudly proclaims in his literature that he employs no brokers and therefore all the money goes to the development of the property.
I believe, Mr. Chairman, that the few examples I have cited are sufficient to .establish the unquestionable right of the Postmaster General to conclude that the mails were being used for schemes and devices intended to deceive or defraud the public. In some cases certain individuals may have been used as fronts for the real transgressors, but the fact that they were associated with the offending

concerns and allowed their names to be used in the literature made it necessary to include them in the prohibitory order.
Much has been said about the Postmaster General usurping the rights and functions of the securities commission of Ontario. I believe this point was dealt with satisfactorily by my colleague, the Minister of Justice; but, as he pointed out, with the best intentions in the world the securities commission of Ontario could not act in these cases because it lacked jurisdiction. That does not mean, however, that it has not been aware of what has been going on, and has not regretted this situation. It is interesting to note what the commission, through its chairman, had to say on this matter in a report dated February 3 of this year:
It is not necessary to labour the fact that all aspects of trading outside the province have been a grave concern over a period of years since certain promotional houses have been financially able to use the mails extensively in soliciting inquiries or subscriptions for securities.
He adds:
In my view these facts afford a glaring example of over-reaching. They further demonstrate that dealers may readily resort to tactics outside Ontario as suggested in the notice of September 6. 1949, which they would not consider employing in Ontario where chances of detection would be much greater.
Before I conclude, Mr. Chairman, there is one point I wish to touch upon, and that concerns some of the remarks made by the member for Eglinton to the effect that a statement was made by the deputy postmaster general that he did not care what the Supreme Court of Canada, or any other court, might say about the matter. In other words, that power was given to him under the act and the regulations, and h would use those powers without the slightest regard for what the courts might say. This, Mr. Chairman, is a serious accusation. I have looked carefully into the matter, and find that the alleged statement is incorrect. At no time did the deputy postmaster general say anything of the kind. He is well aware that the power under the act is given to the Postmaster General, not to the deputy postmaster general. He placed all the relevant facts before the Postmaster General, who authorized the issuance of these prohibitory orders. All that has been said on this subject by anyone connected with the Post Office Department, from the minister down, is what has been pointed out here tonight, namely, that the law gives the Postmaster General the power to act, and that his right to do so has been upheld by the court, including the supreme court of British Columbia. To twist that statement into an assertion that the deputy postmaster general does not care what the courts might say is a misrepresentation made to the hon.

gentleman, which I have no doubt he accepted in good faith, but which he repeated without too much regard for his responsibility.
I now come, Mr. Chairman, to a statement made by the leader of the opposition on April 5, to the effect that the action taken had the effect of preventing the receipt by some people of securities and other documents to which they were entitled. I have no doubt that here again such information was given to the leader of the opposition, and that he accepted it in good faith, but that is not the case, Mr. Chairman. In every case where the companies represented that they had certificates to deliver for shares or securities bought and paid for, they were permitted to mail out such certificates. It would seem that some hon. members who are so deeply concerned in this matter are constantly trying to create the impression that some law is being flouted by the Post Office Department. In his statement the leader of the opposition used the words of the Globe and Mail I believe, and stated that the post office had set itself up as a court, presumably in defiance of the law. Let me again point out, Mr. Chairman, what has been made clear, that the law giving the Postmaster General power to act is explicit and unassailable. It confers on the Postmaster General not only the right but the responsibility to make sure that the post office facilities are not used as instruments of fraud. It has been on the statute books for more than sixty years, during which time it has been invoked repeatedly to prevent the perpetration of fraud and the irregular use of the mails.
It may be that the great majority of the members have never been aware of the existence of this section of the statute, and the regulations enacted thereunder. Certainly some of the remarks in this house, and some of the comments in the press, would indicate that many people were not aware of the exact purpose of this legislation which, in the words of Sir John Macdonald under whose government it was passed in 1889 as my colleague the Minister of Justice mentioned, was intended to give the Post Office Department the power to determine what was and was not deemed desirable under this act, and to prohibit the circulation of dangerous and improper articles. May I say that, in the light of such experience as I have so far been able to acquire, I am inclined to believe that the statutory power and the broad authorization given to the Postmaster General, as previously explained, may still be considered necessary when the taking of immediate action is of essential importance for the protection of the public. It is only fair, however, that the aggrieved party should 55946-149J
Supply-Post Office
be given the opportunity of submitting expeditiously reasons why the order complained of should not be maintained. For the present, and at least until some more effective means have been found of protecting His Majesty's mails from being used against the public interest, I submit, Mr. Chairman, that this parliament and the public of Canada should hesitate to cast aside this old statutory provision which has rendered such excellent service in the past.


Alphonse Fournier: I move that the committee rise and report progress.


George Alexander Drew: Mr. Chairman, we have had enough railroading on things of this kind.


Alphonse Fournier: Just a moment; two weeks ago the leader of the opposition stood up and made a statement, or put questions to the government, and we had no opportunity of putting a statement of our side of the question on the record before we got into committee. Then a speech was made by the hon. member for Eglinton, and he put his case before us. The Minister of Justice told him he would give him a reply later. I have been trying for two weeks to have these statements put on the record, and I called the item for the post office. I announced last night that we had a few bills to put before the house. This is not the last day of the session, and there will certainly be plenty of time to rebut or answer these statements. I move the committee rise and report progress.


George Alexander Drew: Mr. Chairman, the motion that has just been made is entirely inconsistent with the representations that were made to me by the minister who has just spoken. There was no occasion to wait for two weeks if it was intended to present the facts in this way, and then stop discussion at that point. The positively ridiculous statements that have been made by the Minister of Justice and the Acting Postmaster General, and they are ridiculous, are statements that could have been made any day before the orders of the day were called.


Some hon. Members:: Order.


Alphonse Fournier: Last night when 1 announced the business of the house for today I said that we would hope to take up certain small bills, and I gave the numbers of those bills some time during the evening. It is now ten-thirty, and I do not know why the leader of the opposition does not wish to co-operate to this extent. I am not making a request.


George Alexander Drew: The minister has made a statement which now necessitates that I state what he repeated to me, not in the statement

Supply-Post Office
to the house. He explained that the reason he was not bringing this up before the orders of the day were called was so that it could be discussed.


Alphonse Fournier: When I moved two weeks ago that we go into supply, I said that we would call the post office, and, on the first item, we would have a discussion regarding the denial of mail service to certain people, and that is where I stopped. Now, there is no misrepresentation in that.


Mr. Casselman:: Then the minister said he would not have a statement made on the orders of the day, because it would not be fair, owing to the fact the opposition would not have any opportunity of discussing it and he would, therefore, move to go into supply and take up the Post Office Department so that there would be an opportunity of discussing the matter then.


Alphonse Fournier: I think the hon. member is correct, but that is not misrepresenting what we had in mind. A statement has been made on the calling of the first item for the Post Office Department by the two ministers. You have seen us report progress on the first item and then continue at another sitting. I do not see how the gentleman-


Donald Methuen Fleming: Why should this not be discussed now?


George Alexander Drew: Without developing any heat on this, Mr. Chairman,-


Some hon. Members:: Oh, oh.


George Alexander Drew: -and without precipitating a situation in which charges properly can be made, let us see what the situation is. The Minister of Justice made a statement. In the ordinary course of events it would have been proper for that statement to have been dealt with without anybody raising any objection; but the Acting Postmaster General followed that with another statement. Now an attempt is made to end this discussion with as erroneous an impression as could possibly be given to this committee left by the statements made by the two ministers.


Alphonse Fournier: You know, Mr. Chairman, that I would never try to leave an erroneous impression on the committee.


George Alexander Drew: Perhaps you do not know how erroneous it is; but I can assure you it is erroneous as left by the two ministers.


Alphonse Fournier: That is a matter of opinion.


Mr. Sinclair:: This motion is not debatable.


Alphonse Fournier: No, it is not debatable; but I should like to co-operate with the leader of the opposition.


George Alexander Drew: Then let us go on until eleven o'clock.


James Sinclair: Then you are breaking the rules of the house.


Alphonse Fournier: I have a minister here ready to go on with some small bills. I do not see what harm is done to the hon. member if we just postpone the discussion. You will have time to prepare a better speech.


Donald Methuen Fleming: Will the minister permit a question?


Alphonse Fournier: Yes.


Donald Methuen Fleming: What did he mean when he said last night at the adjournment of the house, as reported at page 2300 of Hansard:
If we are successful, we will call three departments, post office, national health and welfare and public works. For some time we will discuss the question of the denial of mail service to certain persons, which was brought up before.
Is the minister going to say that discussion in the house means affording an opportunity for discussion to government ministers and denying it to members of the opposition? Statements have been made here tonight that reflect on members of the opposition; and in ordinary decency and fair play, Mr. Chairman, they should not now be denied an opportunity of replying to them.


Some hon. Members:: Order.


Donald Methuen Fleming: To persevere in this way, as the minister is attempting to do, is in effect to throttle free discussion in the committee.


Louis-René Beaudoin: Order.


Donald Methuen Fleming: I ask the minister not to do this sort of thing, in fairness to his own reputation.


Alphonse Fournier: I said "for some time we will discuss the question", and I understand that we did start the discussion. I am sure you gentlemen will continue the discussion. For tonight I am really asking you to let us study one of the bills announced under the name of the Minister of Resources and Development.


George Alexander Drew: Before we go any further I should like, for clarification, to ask a question of the Minister of Public Works in relation to the remark he has just made.


Alphonse Fournier: No-


George Alexander Drew: Oh, no questions either!


Alphonse Fournier: If I do not withdraw this motion that the committee rise, I do not think we can discuss particular questions at this stage.


Louis-René Beaudoin: Mr. Fournier (Hull) moves, seconded by Mr. Gardiner, that the committee rise, report progress and ask leave to sit again.


George Alexander Drew: It is the old steamroller.


Donald Methuen Fleming: A shocking procedure.


George James McIlraith: Look at your unparliamentary language in Hansard tomorrow.
Item stands.
Progress reported.


George Alexander Drew: On a point of order, may I address the chair?


Mr. Speaker:: On a point of order?


George Alexander Drew: On a point of order. The Chairman has just reported progress on the basis of a motion which was not put to the committee.


Alphonse Fournier: I moved, Mr. Speaker, that the committee rise, report progress and ask leave to sit again.


Mr. Speaker:: When shall the committee have leave to sit again? Next sitting of the house. Next order of business.


George Alexander Drew: We will know now how much we can rely on any assurances that are given.


George James McIlraith: Look at your language in Hansard tomorrow.



PUBLIC LANDS GRANTS ACT


Hon. Robert H. Winters (Minister of Resources and Development) moved: the second reading of Bill No. 12, respecting grants of public lands.


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


George Alexander Drew: What is the explanation of the bill?


Robert Henry Winters: By this bill it is proposed to revise and combine the provisions of two existing statutes, namely, the Public Lands Grants Act and the Ordnance and Admiralty Lands Act. The purpose of this revision is to bring these laws up to date, to drop sections which have become obsolete and to consolidate the remaining provisions into one measure. In addition, several sections of the Dominion Lands Act are embodied in this proposed consolidation. Other sections of the Dominion Lands Act are included in the territorial lands bill. Upon the passing of that bill the Dominion Lands Act will be repealed.
The Public Lands Grants Act as it now exists is in the nature of a residuary measure granting power to the governor in council to
Public Lands Grants Act dispose of or deal with lands for which no other authority exists. The three main sections of the present Public Lands Grants Act have been carried into the proposed new act. These three sections deal with (1) the use of words of limitation in crown grants; (2) powers of the governor in council; and (3) authority for the execution of leases.
The first of these sections is broadened; as it presently stands, this section applies only to the provinces of Ontario, Manitoba, Saskatchewan and Alberta, the Northwest Territories and Yukon Territory. The purpose of the amendment is to make the sections applicable to all provinces that have abolished words of limitation.
The second section gives the governor in council power to make regulations for the disposal of lands, to prescribe a tariff of fees and to fix a rate of interest to be charged on rent and purchase money. The last of these three sections authorizes the minister having control of the lands to sign leases. The essential feature	of	the	Ordnance	and'
Admiralty Lands Act is preserved in the proposed bill. This is to the effect that all lands; required for the defence of Canada are not to be sold but may be used or occupied in such manner as the governor in council directs.
The provisions	of	the	Ordnance	andAdmiralty Lands	Act	requiring that	suchcrown lands be divided into class I and class II are dropped.	By	this	separation	into
classes, a distinction was made between public lands, the title to which could be conveyed by the crown, and those public lands in respect to which there could be no conveyance of title. The bill now before this house removes the necessity for maintaining these classes.
At the present time the only provisions relating to the correction of letters patent are in the Dominion Lands Act and these provisions apply only to the Northwest Territories and Yukon Territory. If letters patent for land in a province contain some error, it is often necessary to obtain a quit claim deed and issue another grant. The provisions relating to the correction of letters patent are therefore included in this bill in a revised form to make such provisions of general application and to prevent such delay and! expense.
A new section provides that no title in public lands shall be acquired by prescription, that is to say, by long uninterrupted usage. Title by prescription has been abolished in many provinces and the old law of prescription has no practical application today.
Upon the passing of this bill and the territorial lands bill, the Ordnance and

Public Lands Grants Act Admiralty Lands Act, the Public Lands Grants Act and the Dominion Lands Act will be repealed.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
Sections 1 and 2 agreed to.
On section 3-Crown grant to convey fee simple.
James MacKerras Macdonnell: I note the difference in wording from the previous section. Will the minister explain just what the impact of the provincial laws, if any, is on the section as it now stands. It seems prima facie to override provincial law.


Robert Henry Winters: This is just bringing the federal statute into conformity with provincial practices.


Mr. Wright:: I am not a lawyer. I notice that the explanation here reads:
The purpose of the amendment is to make the section applicable to all provinces that have abolished words of limitation.
What does "abolish words of limitation" mean? Can the minister explain?


Robert Henry Winters: I understand that words of limitation are such as are commonly found in a discharge, namely, "heirs, executors, administrators and assigns". These are commonly know as words of limitation.


James MacKerras Macdonnell: I should like to know a little more about it as well, because it seems to me that it is a very radical departure from the previous one. We should like to know whether this wording has been considered and approved by the Department of Justice.


Robert Henry Winters: Yes, that is correct.


[Stage Direction]
Section agreed to.
On section 4-Sale or lease of public lands.
George Alexander Drew: What is the effect of clause 4?


Robert Henry Winters: Mr. Chairman, this clause gives the crown the right to effect the disposition of public lands.
With respect to paragraph (b) of clause 4 I should like to make the following comment: As indicated in paragraph (a) of section 4 of the bill, it is intended that the governor in council shall have authority under section 4 to authorize only the disposition of public lands "for the sale, lease or other disposition of which there is no other provision in the law"; but while this limitation is made clear in paragraph (a) by the words which I have quoted, it is not made clear in paragraph <b) and on consideration it has been decided that the limitation expressed in paragraph <a) should also be expressed in paragraph (b).


It is therefore proposed that paragraph (b) of section 4 be amended by inserting the word "such" immediately before the word "public" in the second line.
I would ask one of my colleagues to move the amendment.


Stuart Sinclair Garson: I so move.


George Alexander Drew: Just what type of lands does this actually refer to?


Robert Henry Winters: It refers to all types of land not otherwise covered by other acts; and this specific wording is made so that there will be no conflict with war assets, or as it is now called, crown assets disposal corporation. In addition to crown lands administered under the National Parks Act and the Canada Forestry Act, the Department of Resources and Development controls some 350 parcels of both ordnance and admiralty lands and other public lands. The majority of these are located in the eastern provinces, there being about 200 in Ontario and 100 in Quebec.
Many of these properties were acquired for defence purposes years ago and are either no longer required or are to be retained for future use. Owing to the nature of the crown's title, careful investigations are necessary before they can be sold or leased. In the past eighteen months 101 leases have been granted bringing an annual rental of $10,346 and 251 outright sales and agreements for sale have been completed from which the revenue amounted to about $200,000.
In addition to the foregoing, the department administers mines and minerals underlying several hundred parcels of former soldier settlement lands situated for the most part in the western provinces. As these are cleared by the Department of Veterans Affairs, leases of the petroleum and natural gas rights are offered at public competition. The revenue from these competitions since October, 1949, when leasing commenced, amounts to $54,725.


George Alexander Drew: The minister has spoken about public competition for these leases. Is there any assurance in this bill that these lands will be publicly offered for sale before they are disposed of?


Robert Henry Winters: I would suggest to the leader of the opposition that that is covered by section 4, which gives authority to the governor in council to make regulations with respect to the disposal of land.


George Alexander Drew: I am asking the question for a purpose. Certain lands have been disposed of without any offer for sale, where there

was no opportunity for competitive bidding. I think that in any legislation we now deal with by way of amendment or otherwise there should be the clear provision that there shall be no disposition without the property being offered publicly for sale, and I would hope that an amendment would be included in this bill accordingly.


Mr. Knight:: Paragraph (b) reads:
Make regulations authorizing the minister having the control ... to sell, lease or otherwise dispose of them . . .
What about timber on these lands? Is there any authority to sell or lease timber rights on certain lands without selling the land itself?


Robert Henry Winters: I am told, Mr. Chairman, that in a practical sense it does not apply, because there is little or no timber on the land in question. But if and where there is timber it is covered in the general definition of the land.


Robert Ross (Roy) Knight: Since the minister has given the definition of public lands as lands not already covered by other acts I suppose I need not ask whether national parks are included in these public lands.


Robert Henry Winters: That is correct, sir; the answer is no.


Mr. Hodgson:: How are the sales made of these public lands? Are they put up for competition?


George Alexander Drew: No, just sold to their friends.


George James McIlraith: Can't you grow up?


Robert Henry Winters: If that remark of the leader of the opposition was recorded, I think it should be stricken from the record or withdrawn.


George Alexander Drew: I want some information as to what measure of protection there is. I have made a suggestion to the minister that he iholude in this act, or offer to include, an amendment that would assure that properties to be sold are to be put up for public auction. The way to deal with that remark is to offer to make that amendment; because I know and the minister knows public lands have been sold without tenders being called.


Robert Henry Winters: That is not the kind of advice we have to take at this time. I suggest that the leader of the opposition is sliding away from the point, as he usually does. If that remark is in the record, then it should be withdrawn.


Louis-René Beaudoin: Unfortunately here at the table I could not hear the remark supposed to have been made by the leader of the opposition.
Public Lands Grants Act


Robert Henry Winters: The remark was that these lands were given to "their" friends. Obviously-


George Alexander Drew: No; use the right words. "Sold"
was the word.


George James McIlraith: You didn't say "sold".


Robert Henry Winters: My memory is as good as the hon. member's.


Louis-René Beaudoin: I should like to have an exact interpretation of the words used. One says the word was "given" and the other says "sold". In any event, whether it was "given" or "sold" it implies a certain favouritism of which, of course, the leader of the opposition would not want to accuse the Minister of Resources and Development. I am sure if there is any offensive expression or word which in the opinion of the Minister of Resources and Development should be withdrawn, the leader of the opposition would want to modify it.


George Alexander Drew: Mr. Chairman, the time has come to end any pretence that there is discussion here of affairs in this house. I made the proposal to the minister that there should be included in this act an amendment which would carry out the very words he used in regard to certain of these properties, but not all of them. The suggestion was that there be an amendment to this act which would provide that all public properties of this kind will be sold only where the sale is advertised and where there is an opportunity for public bidding. If the minister accepts that, then he disposes of any question in regard to this.
I pointed out before, and I repeat, that public lands have been sold without such public bidding. I am suggesting this, and I do commend to the minister the consideration of such an amendment which would prevent the possibility of anything of that kind happening.


George James McIlraith: What about the remark
about friends-giving to friends?


Louis-René Beaudoin: Do I take it that the explanation given by the leader of the opposition corrects whatever expression was used before?


George James McIlraith: It does not come near it.


Mr. Maclnnis:: On the point of order raised by the Minister of Resources and Development, unless the statement made by the leader of the opposition was made directly to and reflected upon the minister, I do not think there is any violation of the rules of the house. As I heard it, the expression was "sold to their friends", not "to his friends". That would mean friends of the government.

Public Lands Grants Act While the government may not like it, I think it is neither here nor there. Whether the statement was justified or not is another question; but I do not think it is in violation of the rules of the house when in debate.


Louis-René Beaudoin: In all these cases I always try to secure agreement between the parties concerned. I have not made any ruling yet, because I did not hear the remark myself. I should imagine however that explanations have been given on both sides, and I thank the hon. member for Vancouver East for his kind remarks and his co-operation. I think we might proceed with debate. Shall the amendment carry?


Robert Ross (Roy) Knight: The minister bridled a bit at the remark of the leader of the opposition- and I do not blame him, because I have no doubt that the minister is quite innocent of any malpractice. But from the point of view of taking any holier-than-thou attitude, I would remind him that the reason for my question has to do with timber on these public lands and as to whether public lands can, under any circumstances, be defined as national parks. Because I should like to remind the minister that many years ago there were certain timber leases granted, as the Minister of Justice well knows, in connection with a national park in the province of Manitoba. I understand that that lease is still in operation. When I inquired about it some years ago we were told by the government that it would go on as long as there was a stick on the place fit to cut. The result was that the company to whom it was leased have got the timber and the people of Canada got the stumps.
I hope that situation has ironed itself out. I hope the timber has now been all cut, and I hope the government is not going into any reforestation scheme to sell timber on that particular land for the purpose of the company. Perhaps the minister, if it comes under his department, could give us a word about that. My fear was that there might be a repetition of that sort of thing.


Robert Henry Winters: Would the hon. member say where and when the lease to which he refers was granted?


Robert Ross (Roy) Knight: I have not the particulars here; but my former colleague, the then member for Dauphin, Mr. Zaplitny, brought it out on various occasions in the house. It is on record in Hansard.


Robert Henry Winters: It must have been before 1930, because there are at the present time no timber limits in the park to which he refers.


Major James William Coldwell: The point is that while the lease was granted some years ago, it seems to have been a lease almost in perpetuity. I think that was the discussion. There seemed to be no way of ending it. This company possessed the lease which was granted some years ago-perhaps prior to 1930. It seemed to have the right, and there was no way of ending it. But surely there must be a way of ending it. I see the hon. member for Dauphin is in his seat; perhaps he could throw some light on the matter.


Mr. Ward:: Mr. Chairman, I do know something about the timber land that was discussed in the house some few years ago. If the former member for Dauphin had wished, he could have obtained the facts.


Major James William Coldwell: He did; and they were not denied in the house.


William John Ward: Well, if they were not denied, then someone did not know the facts.


Major James William Coldwell: The facts were given on the floor of the house, by the government.


William John Ward: The facts are-


Louis-René Beaudoin: Order. It being eleven o'clock shall I report progress?
Section stands.
Progress reported.



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow we will continue with this Bill No. 12 respecting grants of public lands. Then we will take up, if time permits, the following bills: Bill No. 81, respecting crown lands in the Yukon Territory and the Northwest Territories; Bill No. 90, to amend the Northwest Territories Power Commission Act; Bill No. 83, to amend the Precious Metals Marking Act, 1946; Bill No. 179, to amend the Research Council Act.


Donald Methuen Fleming: No place here for the discussion of the Post Office.


Alphonse Fournier: When do you want it?


Donald Methuen Fleming: Tonight, at the right time; none of that hit-and-run stuff.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.

[Stage Direction]
POST OFFICE-DENIAL OF THE USE OF MAILS Text of Correspondence between Mr. McTague and the Minister of Justice
WHITE, BRISTOL, GORDON, BECK & PHIPPS BARRISTERS & SOLICITORS

[Stage Direction]
Hon. Charles P. McTague, K.C.,
220 Bay Street, Toronto 1, Canada, April 17th,	1950.
The Honourable Stuart Garson,
Minister of Justice,	.
Department of Justice,	*
Ottawa, Ontario.
Re: Broker Dealers Association.
As counsel for the Broker Dealers Association of Ontario and acting only in that capacity and not for any individuals concerned, I wish to put before you certain submissions with respect to the action of the Post Office Department stopping the mails to people in, or remotely associated with, the security business here in Toronto.
In the first place, my submission is that under the rule of law, to which we lawyers continually pay lip service, the procedure followed in the Post Office Department is totally without justification.
The powers of the Post Office generally in so far as they appear to be relevant to the matter alleged to be involved here are, I think, to be found in the Post Office Act, Sec. 7 (d) permitting the making of regulations, "for marking on the covering of letters, circulars or other mailable matter suspected to concern illegal lotteries, so-called gift concerts, or other illegal enterprises of like character, offering prizes,, or concerning schemes devised or intended to deceive or defraud the public, for the purpose of obtaining money under false pretences, whether such letters, circulars or other mailable matter are addressed to or received by mail from places within or without Canada, a warning that they are suspected to be of a fraudulent character and for returning such letters, circulars or other mailable matter to the senders".
The relevant regulations pursuant to Sec. 7 (d) appear to be 204 and 206, reading as follows:
204-"If it be established to the satisfaction of the Postmaster General that any person is engaged or represents himself as engaged in the business of publishing any obscene or immoral books, pamphlets, pictures, prints, engravings, lithographs, photographs or other publication, matter or thing of an indecent, immoral, seditious, disloyal, scurrilous or libellous character or in the business of an illegal lottery, so called gift concerts, or other similar enterprise offering prizes or concerning schemes devised or intended to deceive or defraud the public for the purpose of obtaining money under false pretences, or in the business of selling or in any wise disposing of counterfeit money or what is commonly called "Green Goods," or of drugs, medicines, instruments, books, papers, pamphlets, recipes, prescriptions, or other things with the object or with the pretended object of preventing conception or procuring abortion, and if such person shall, in the opinion of the Postmaster General, endeavour to use the Post Office for the promotion of such business, or if it be established to the satisfaction of the Postmaster General that any persons are using, or endeavouring to use the
Post Office for any fraudulent or illegal purpose, then, in any such case, it is hereby declared that no letters, packet, parcel, newspaper, book or other thing sent or sought to be sent through the Post Office by or on behalf of or to or on behalf of such person, shall be deemed mailable matter."
206-"The Postmaster General has power, under the statute, to mark or cause to be marked upon the covers of letters, circulars, or other mail matter suspected to concern schemes devised or intended to deceive or defraud the public for the purpose of obtaining money under false pretences, whether such letters, circulars or other mail matter are addressed to or received by mail from places within or without Canada, 'suspected to be of a fraudulent character,' and to return such letters, circulars or other mail matter to the senders."
I think you will agree that it is trite law that the regulations cannot be extended beyond the authority given in the statute to make them. For the purpose of my submission to you I am not arguing that these regulations go beyond the statutory authority for them, but I do submit as strongly as I can that the Deputy Postmaster General has gone far beyond what is provided for in the regulations or the statute in the most arbitrary way.
Without any warning whatever, and on the strength of representations made by the United States Post Office Department at the behest of the United States Securities and Exchange Commission and entirely ex parte, without the person suspected having any opportunity to be heard, the mails have not only been arbitrarily cut off, but have been required to be forwarded to Ottawa where they are held for an indefinite period without any commitment or statement of intention to prefer any charges in the courts.	Not only that, but in
separate hearings of aggrieved persons before the Deputy Postmaster General, their mail has been released upon the exaction of undertakings that they will not further deal in specified securities, or that they will agree to modify the language and terms of circulars sent in the future. The whole procedure is in substance a conviction by the Deputy Postmaster General without a hearing, punishment by cutting off the mails and the exaction of undertakings as a condition on which the penalty will be suspended.
If there is anything in the Post Office Act justifying such procedure, I am unable to locate it. In addition to that, I cannot conceive of any government putting forward legislation to justify such action by way of amendment to the Post Office Act, and I cannot conceive of any parliament enacting such legislation if it were put forward.
Mr. Turnbull seems to take undue comfort, in my opinion, in the Literary Publications Case, I think it is, in British Columbia, (58 C.C.C. 385), in giving him the right to do anything and considering that whatever he does is not reviewable by the courts. He does not seem to realize that the court in that case simply held that there was a right to exercise a discretion under the statute and the discretion having been duly and properly exercised, the courts would not review it. That case concerned an action for damages following an acquittal after a prosecution under the Criminal Code. It appears to me to be no authority for the proposition that the Post Office Department can legislate through the process of administration and in fact set up what amounts to a Star Chamber.
[Stage Direction]
I recall hearing a careful speech made by yourself on the rule of law with many references to the admonitions of Coke to King James. In this affair it is McTague humbly putting forward the same type of admonition to Turnbull through your good self as an understanding intermediary, I hope.
There just cannot be two standards of fraud, one laid down by the courts and a different and private one by the Post Office Department. The Post Office Department has not, as yet, attained judicial status. It appears by its recent actions merely to assert that very untenable position.
As you know, I have had a rather wide experience in the security business. It is my opinion, and I have comparatively recently put my opinion in writing for the benefit of the United States Securities and Exchange Commission, that no provincial legislature has power to control or regulate international or interprovincial trade in securities. While I know of no case directly dealing with securities on the proposition, it has been laid down in reference to other commodities more than once that there is no such power in the province. I make brief reference to the Natural Products Marketing Board case in British Columbia.
The only jurisdiction which can validly enact legislation to control and regulate the sale of securities internationally and interprovincially is the Canadian parliament. If the policy of enacting such legislation is determined upon the government can readily put forward a statute and take its responsibility in that regard. If it does not care to accept such responsibility, surely it should not permit or even tolerate the setting up of a securities commission de facto, but certainly not de jure under the present act within the Post Office Department. Yet that is exactly what is being done at the present time.
At this time there is no law in Canada prohibiting the sale of securities in the United States by circular or otherwise. If the circular is considered to be fraudulent under the laws of Canada let prosecution be brought in the criminal courts, but let us still maintain the fundamental principle of the rule of law and once again abolish Star Chamber methods from which already too many innocent people have suffered greatly.
To stop the mails and ruin people in business on the evidence of circulars, telephone conversations and other gossip, which have taken place many months ago, seems to me a most extraordinary procedure.
I am forwarding a copy of this letter to the Right Honourable the Prime Minister and of course also to Mr. Turnbull.
Sincerely yours,
C. P. McTague.
Ottawa, Canada, May 2, 1950
The Honourable Charles P. McTague, K.C.,
220 Bay street,
Toronto 1, Ontario.
Dear Mr. McTague:
I have your letter of April 17 with reference to the action of the post office in stopping the mails of certain brokers. You are acting as counsel for the Broker Dealers Association and not on behalf of any of the persons against whom the "Stop" order was directed.
I have inquired as to what took place. The order, which was made with the approval of the Postmaster General and therefore may be regarded as made by him, was to the effect that all mails addressed to or coming from the above (persons named) are to be intercepted and sent specially by first mail to the administration branch, Ottawa. It
was stated that this action was being taken as a result of evidence received indicating that the mails were being used for the purpose of obtaining money under false pretences. I am informed that contrary to what you state in your letter the order was not made at the behest of the United States Securities and Exchange Commission.
The action was taken under the authority of paragraph (d) of section 7 of the Post Office Act which authorizes the Postmaster General to make regulations for marking on the covering of letters, circulars or other mailable matter suspected to concern . . . schemes devised or intended to deceive or defraud the public, for the purpose of obtaining money under false pretences, a warning that they are suspected to be of a fraudulent character and for returning such mailable matter to the senders. The mailable matter is marked, "Non-Transmissible" instead of with a warning that it was suspected to be of a fraudulent character. This marking was regarded as less injurious. The matter is returned to the sender.
My information is that each of the brokers named in the order was engaged in the sale of the securities of a single company. The "stop" order was made only after a careful examination was made by experienced officials of the literature which these brokers were circulating, making claims which were so extravagant and untrue as to raise a reasonable suspicion in the mind of the Postmaster General that they related to schemes intended to deceive or or defraud the public, for the purposes of obtaining money under false pretences.
I cannot discover any illegality in this procedure. The statute calls on the Postmaster General to refuse the use of the mails to persons whom he reasonably suspects of using the post office facilities to defraud the public. The only question is whether the Postmaster General had reasonable grounds for his suspicion. From the facts when they are disclosed I think you will have to agree that the Postmaster General did have good grounds for his suspicion.
Perhaps it should be remarked in this connection that none of the brokers has seen fit to take action against the Postmaster General alleging wrongful action on his part, a remedy which the court of appeal of British Columbia held, in the case of Literary Recreations Limited v. Sauve, 58 C.C.C. p. 358, to be open to a person against whom such an order has been made.
The next point made by you is that the Post Office cannot "legislate through the process of administration and in fact set up what amounts to a star chamber." I am afraid I do not follow this contention since it appears to me that the Postmaster General was doing precisely what the statute authorized and required him to do.
You point out that the province has no power to control or regulate international trade in securities. That is certainly true where the Post Office is the medium used for carrying on the international trade in securities. But I suggest that it follows from your statement that in this case the Postmaster General is the proper official and the only official who is legally qualified to exercise such control under section 7 subsection (d) of the Post Office Act.
You contend that parliament has not set up a "securities commission de facto" within the Post Office Department. I entirely agree with this contention. The Postmaster General's job is not to operate a securities commission. The Postmaster General's duty is to see that the post office facilities are not used to defraud the public. While his efforts to this end may result in protecting investors against the purchase of fraudulent securities, this result is purely consequential and is not, primarily,

his responsibility. Under the law, his statutory duty and responsibility is to maintain the efficiency and reputation of the postal services which he directs. It is for this purpose that he is empowered to stop mail which he suspects is being posted for fraudulent purposes.
As to the question whether criminal proceedings should be instituted, it is not the Postmaster General's duty to prosecute persons guilty of criminal offences. I do not need to remind you that it is the attorney general of the province who enforces the criminal law. The Postmaster General's duty is to take appropriate actions where he has reasonable grounds for suspecting that the mails are being used for fraudulent purposes.
In conclusion, I think I should say that where the state operates a public utility such as the post office, a railway or a radio station there is not thereby conferred upon each citizen an absolute right to utilize the utility, but a conditional right only, the condition being that there should be no abuse. The utility must be operated strictly for the public benefit. The government officials operating the same should have at least as wide powers to protect the public against abuse as the private owners of a public utility would have to protect their patrons. In the case of the post office, parliament has seen fit, in order to protect the service against abuse, to authorize the Postmaster General to refuse the use of mails if he has reasonable grounds for suspecting that a person is making an improper and fraudulent use of them. I am informed that this provision is one of long standing having been introduced in the act by Sir John A. Macdonald in 1889; that it has been beneficially invoked hundreds of times throughout the intervening years; and that similar provisions will be found in the post office statutes of other free countries.
Notwithstanding these facts, the government is quite open-minded with regard to this section and the powers created under it. For many months before this order was made, the government had been engaged in preparing the first general revision and consolidation of the Post Office Act since 1922. In this connection, it has been giving special attention to sections such as section 7 (d) which vest rather wide powers in the Postmaster General. We are inclined to think from the consideration which we have given this matter so far that the experience of our own post office and the post offices of other free countries over the years indicates that the power under section 7 (d) should be retained. We are also inclined to think, however, that it might perhaps be advisable that a summary appeal should be provided from the order of the Postmaster General to the courts; and that upon the hearing of this appeal the appellant should have the right to adduce any relevant evidence in addition to that upon which the Postmaster General based his order. The appellate tribunal should have power either to confirm or discharge the order of the Postmaster General. Pending the hearing and disposition of such appeal, however, the Postmaster General's order should remain in effect and should also, of course, remain in effect if confirmed by the court appealed to.
We can well understand that the organization which you represent will have well-informed views upon this subject matter and if it wishes to present a brief on any of the matters under the Post Office Act in which it has an interest, I can assure you that the government will be glad indeed to give its representations the most careful and thorough consideration.
Yours truly,
Stuart S. Garson.
[Stage Direction]
Wednesday, May 10, 1950