1950-06-26

[Stage Direction]
Third and final report of special committee on radio broadcasting.-Mr. Maybank.


Hon. Paul Martin (Minister of National Health and Welfare):: Mr. Speaker, I wish to table regulations made under the Old Age Pensions Act.


Mr. Stanley Knowles (Winnipeg North Centre):: Will the minister say whether the regulations he has tabled deal with matters of substance, and whether they were approved by the interprovincial committee on old age pension regulations?


Paul Joseph James Martin: That depends upon what is regarded as a matter of substance. I think my hon. friend and I had better look at the regulations and refresh our memories in the matter.


Stanley Howard Knowles: The minister had better speak for himself.



QUESTIONS

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

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


Mr. Mcllraith:: The information asked for in this question is not available in the form in which it is asked for, but there is a considerable amount of related information available in a publication which I am sending to the hon. member. That will be supplemented by further information that may be available, but it is not possible to answer the question as it stands, and I suggest that it be dropped.


Mr. Diefenbaker:: Is there any reason why parts 1 and 2 could not be answered? Those statistics should be available.


George James McIlraith: The statistics of convictions are kept on a yearly basis for the year ending September 30; the information is compiled for the year ended September 30, 1948. The publication I am sending the hon. member-


Stanley Howard Knowles: What is the title of the
publication?


George James McIlraith: "Statistics of Criminal and Other Offences for the Year Ended September 30,	1948." The information for the year
following has not yet been compiled, and in any event the information is not compiled in the way asked for in the question; it is compiled on the basis of the time of trial. As to the third question, the information as to suspension of licences is not available.
I might add that since nine o'clock this morning I tried to reach the hon. member a great many times and was not able to do so. The whole question of the form of preparing statistics on criminal offences is now being studied with a view to changing the method.


John George Diefenbaker: I would ask that the question be allowed to stand until I have an opportunity to discuss it.


Mr. Green:: Why does the year end on September 30?


Mr. Speaker:: Stand.


John George Diefenbaker: I notice this question was answered by the Department of Trade and Commerce. Would not that information be in the Department of Justice?


Mr. Garson:: I would think not. The compilation of this information, which is taken from the records of the provincial attorneys general departments, is carried on by the bureau of statistics, as I understand it, which, as my hon. friend is aware, comes under the Department of Trade and Commerce.
"full employment"


Mr. Noseworthy:: 1.	What is the government's definition of full employment?
2.	Has the government considered the setting of a specific target in terms of the number or percentage of the labour force unemployed, above which special action might be taken to increase employment?
3.	If so, what is the result of such consideration?
4114	HOUSE OF
Questions
Mi. Mcllrailh:
1.	The government has no rigid statistical definition of full employment. The term is to some extent elastic. In general, it reflects a condition in which all persons wishing to work are able to find jobs, but with reasonable allowance made for those who, for seasonal or other reasons, are in between or changing jobs.
2.	Yes,
3.	A rigid target in terms of a single objective is generally considered oversimplified and unrealistic, particularly for an economy like that of Canada. Any single national target might overlook the important problem of regional and local unemployment which may be considered serious even when the national average is low.
The government directs its over-all economic policy so as to create, as far as possible, an economic atmosphere favourable to the maintenance of high employment. In addition, in the event of dislocations of national consequence resulting from changing patterns of demand, the government would take special measures to ease the necessary adjustment.
The level of unemployment at which special measures should be adopted, and the extent and character of such measures, would depend on the nature of the unemployment problem and the general economic conditions prevailing at the time. The government feels that the complexity of the factors involved in maintaining a high level of employment in Canada calls for a flexible rather than a rigid or mechanical approach.


CANADIAN NATIONAL RAILWAYS
Mr. Diefenbaker:: 1.	When the Canadian National Railways or the government of Canada took over the assets and liabilities of the Canadian Northern Railway, did such assets include the oil and mineral rights of the said Canadian Northern Railway in the provinces of Saskatchewan and Alberta?
2.	If not, in whom were the said rights vested at that time?


Mr. Chevrier:: The Canadian National Railways advise as follows:
1.	Yes.
2.	See answer to No. 1.


WINNIPEG GRAIN RESEARCH LABORATORY
Mr. Winkler:: 1. How many persons are employed by the grain research laboratory, under the board of grain commissioners at Winnipeg, Manitoba?


2.	What are their names and respective salaries or wages?
3.	How much space is required for this service, and what is the rent paid for such space?


Mr. Mcllrailh:: 1.	35.
2.	See statement below.
3.	7,177 square feet; $13,239.60 per annum.
Board of Grain Commissioners for Canada Grain research laboratory staff
Annual salary
Name	rate
Anderson, Dr. John Ansel		$6,900
Hlynka, Dr. Isydore	 5,040
Meredith, Dr. William Ogilvie
Swinton	 4,740
Aitken, Thomas Robert	 4,440
Irvine, Dr. George Norman ....	3,480
Cunningham, Dr. David Kenneth 3,480
Levi, Iser	 3,480
Bass, Edwin Jerome	 2,580
Dempster, Cecil John	 2,580
Templin, Paul Rieff	 2,580
Pauli, Allan	 3,840
Hlynka, Kassian	 3,480
Fisher, Major Harry	 3,180
Martens, Victor	 2,880
Bettner, Robert Edward	 2,580
Capewell, Albert Thomas	 2,460
Ponting, Henry John	 2,340
Black, Hugh Campbell	 2,160
Reichert, Theodore Joseph	 2,160
Waugh, John	 2,340
Bradley, John William	 2,040
Cheale, Robert James	 2,160
Wilson, Lawrence Emerson		2,160
Le Seelleur, Gordon Cabot	 2,160
Rerie, Kenneth Jack	 1,860
Glenday, Donald Alexander

	1,680
Hill, Chester Ermon	 1,680
Keating, Ralph Patrick	 1,680
Dalik, Mrs. Dorothy Evelyn

	1,800
Kuzina, Fred Donald	 1,590
Kilborn, Reuben Henry	 1,800
Wagner, Herbert	 1,980
McLeod, Miss Edith Lavina

	2,220
Balban, Miss Mary	 1,680
Chrzanowski, Miss Lucy	 1,500
Total salaries: $94,710.


UNEMPLOYMENT
Mr. Noseworthy:: 1.	Has the government taken any action designed to counteract the recurrence of seasonal and/or regional unemployment next winter?
2.	If so, what is the nature of such action?


George James McIlraith: The government does not
subscribe to the view that a precise program which would adequately deal with an unemployment situation can be formulated until

the nature and extent of the whole unemployment problem becomes apparent. The government is prepared at all times, so far as is consistent with other necessary objectives of efficiency and economy, to adjust its expenditure operations so as to counteract any significant increase in seasonal and regional unemployment.
Seasonal unemployment has always been a factor in the Canadian employment picture. Given the extremes of our climate and the buying habits of the Canadian public, some variation in activity from one season to another can scarcely be avoided in many industries. The extent of such seasonality in recent years has not been considered a serious threat to national well-being so long as the demand structure underlying our economy remains firm.
With respect to regional unemployment, conditions in all sections of Canada are kept under review so that the government may adapt its regular program, or take special measures when considered necessary in the national interest, to counteract unemployment. For example, projects have been authorized for the maritime region with a lower priority rating than elsewhere in Canada. Also, in making up their expenditure program, departments have been directed to bear in mind the recurrent unemployment problem in the maritimes.


PURCHASES BY GOVERNMENT OR CANADIAN NATIONAL RAILWAYS FROM VARIOUS COMPANIES
Mr. Knowles:: 1.	Has any department of the government or the Canadian National Railways made any purchases during the past three years from (a) the Northwest Brass Company: (b) the Dominion Wheel and Foundry Company; (c) T. McAvity and Sons; (d) the Montreal Locomotive Works; (e) the Canadian Locomotive Works; (f) the Canada Car and Foundry Company; (g) the Bird-Archer Company?
2.	If so, who are the principal stockholders and bondholders in each case?


Mr. Bradley:: Mr. Speaker, I would ask
that the first part of this question stand. I point out to the hon. member for Winnipeg North Centre that the information asked for in the second part of the question is not within the records of government departments. Therefore I suggest that it be dropped.


Mr. Speaker:: Dropped.


Frederick Gordon Bradley: The first part of the question stands, Mr. Speaker.


Stanley Howard Knowles: Let the whole question stand. You can make your reply to both parts of the question when you answer it.
Questions


Frederick Gordon Bradley: It does not make any
difference.


Mr. Speaker:: Stand.


AERIAL PHOTOGRAPHY
Frederick Gordon Bradley: Mr. Speaker, I should like
to refer to a question asked by the hon. member for Melfort (Mr. Wright) which was answered on May 25. The answer given at that time is to be found at page 2827 of Hansard. It was incomplete, and I should like to table the answer now.


Mr. Wright:: 1.	What firms received contracts for aerial photography work in the three western provinces in 1949?
2.	What price was paid for the work done?
3.	Were these contracts let by tender?
4.	Have any contracts for aerial photography work been let in the province of Saskatchewan for 1950?
5.	If so, who are the contractors and what is the price to be paid for this work?
6.	Were tenders called for these contracts?


Frederick Gordon Bradley: So far as the Department of Agriculture is concerned:
1.	In 1949 two air survey companies were given contracts for contour mapping. They were:
(1) Aero Surveys Limited, Vancouver, B.C.; (2) Photographic Surveys Corporation, Toronto, Ontario.
2.	Aero Surveys Limited
To supply maps on a scale of 200 feet to the inch with a contour interval of 3 feet: Photography, $0.08 per acre; Mapping, $0.85 per acre; Spot heights, $6.50 per 160 acres.
Photographic Survey Corporation
(a)	To supply maps on a scale of 200 feet to the inch and 3 foot contour interval: Photography, $0.05 per acre; Mapping, $1.09 per acre.
(b)	To supply maps on a scale of 200 feet to the inch and 5 foot contour interval: Photography, $0.05 per acre; Mapping, $0.86 per acre.
3.	Yes. The rates charged by each company are comparable because it was necessary for P.F.R.A. to supply considerably more ground control data to Aero Surveys Limited than to Photographic Surveys Corporation.
4.	No.
5.	See answer to No. 4.
6.	See answer to No. 4.
So far as the Department of Mines and Technical Surveys is concerned:
1. Survey Aircraft Limited, Vancouver; contract for approximately 12,212 square miles in Manitoba and Saskatchewan.

Inquiries of the Ministry
Arctic Air Lines Limited, Edmonton; contract for approximately 12,947 square miles in Saskatchewan and Alberta.
Air Surveys Limited, Edmonton; contract for approximately 10,740 square miles in Saskatchewan.
2.	Survey Aircraft Limited, $48,979.55; Arctic Air Lines Limited, $55,741.96; Air Surveys Limited, $48,067.87.
3.	Yes.
4.	Yes.
5.	Survey Aircraft Limited, Vancouver; approximately $15,093.60.
Air Surveys Limited, Edmonton; approximately $61,221.60.
6.	Yes.
So far as the Department of National Defence is concerned:
The Department of National Defence did not make any contracts for aerial photography work in the three western provinces in 1949.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. George A. Drew (Leader of the Opposition):: I should like to direct a question to the Prime Minister or the Secretary of State for External Affairs. In view of the extremely serious situation which has developed over the week end in Korea, and the action of the security council of the United Nations, in which all of us are so deeply interested, will the Prime Minister or the Secretary of State for External Affairs inform the house as to any details which will be of assistance to us in appreciating the situation so far as Canada is concerned?


Hon. L. B. Pearson (Secreiary of State for External Affairs):: Mr. Speaker, I am not able to give a very full report on this matter at the present time. Information is continuing to come in. As hon. members know, we do not have our own representative in Korea; therefore for our information we rely on our representative at the United Nations, who is in close touch with the United Nations agencies concerned with this matter, and on friendly governments who are represented in Korea itself.
It appears, however, from the information which is now available that an unprovoked aggression has been committed by the forces of the government of North Korea, which we have not recognized, against the government of the republic of Korea. Information which would substantiate that statement has been

received by the United Nations secretary general from the United Nations commission stationed in Korea which has reported on this incident to Lake Success. As a result of that report, as hon. members know a meeting of the security council was called yesterday. At that meeting a resolution was passed by unanimous vote, nine to nothing, with Yugoslavia abstaining and the U.S.S.R. of course absent. Possibly I might put the resolution on record. It reads as follows:
The security council.
Recalling the finding of the general assembly in its resolution of 21st October, 1949, that the government of the Republic of Korea is a lawfully established government "having effective control and jurisdiction over that part of Korea where the United Nations temporary commission on Korea was able to observe and consult and in which the great majority of the people of Korea reside; and that this government is based on elections which were a valid expression of the free will of the electorate of that part of Korea and which were observed by the temporary commission; and that this is the only such government in Korea";
Mindful of the concern expressed by the general assembly in its resolutions of 12th December, 1948, and 21st October, 1949, of the consequences which might follow unless member states refrained from acts derogatory to the results sought to be achieved by the United Nations in bringing about the complete independence and unity of Korea; and the concern expressed that the situation described by the United Nations commission on Korea in its report menaces the safety and well-being of the Republic of Korea and of the people of Korea and1 might lead to open military conflict there;
Noting with grave concern the armed attack upon the Republic of Korea by forces from North Korea;
Determines that this action constitutes a breach of the peace,
I. Calls for the immediate cessation of hostilities; calls upon the authorities of North Korea to withdraw forthwith their armed forces to the thirty-eighth parallel;
n. Requests the United Nations commission on Korea
(a)	to communicate its fully considered recommendation on the situation with the least possible delay;
(b)	to observe the withdrawal of the North Korean forces to the thirty-eighth parallel;
(c)	to keep the security council informed on the execution of this resolution;
III Calls upon all members to render every assistance to the United Nations in the execution of this resolution and to refrain from giving assistance to the North Korean authorities.
That is the resolution passed by the security council yesterday. I feel certain that it will commend itself to all members of the house, and I hope that as a result of the intervention of the United Nations some effective action may be possible in this very difficult situation to restore peace to that area, having in view, as the security council itself has stated, that the action taken by the North Korean forces constitutes a breach of the peace, and in spite

of any reports we may receive to the contrary seems to have been an action of unprovoked aggression.


Mr. Graydon:: Are there Canadian missionaries and others in Korea? If so, is there anything the Canadian government can do to protect their interests or safety at this time?


Lester Bowles Pearson: We have been looking into that matter already to see what we can do to protect, if protection is needed, Canadian nationals in Korea. We have not exact information as to the number, or indeed whether there are any Canadians in the area affected, but as soon as we receive that information we will take whatever steps are open to us to safeguard them to the best of our ability.


Gordon Graydon: Are there Canadians on the United Nations commission in Korea?


Lester Bowles Pearson: There are Canadian members of the secretariat of the United Nations commission on Korea. Those three Canadians are there now, and there is one Canadian married to a member of the secretariat. We have been in touch with the secretariat as to their welfare, and we have been told they are in no immediate danger.


Howard Charles Green: If I may ask the minister another question, do these events alter the attitude of the government toward the setting up of a Pacific defence council?


Lester Bowles Pearson: No, Mr. Speaker. Nothing I have learned about this situation in the last forty-eight hours would alter any opinion I may have had previously about the desirability at this time of setting up a Pacific defence council along the same lines as the North Atlantic council.


[Stage Direction]
On the orders of the day:
Mr. H. O. White (Middlesex East):: I should like to direct a question to the parliamentary assistant to the Minister of Agriculture, arising out of the serious decline in the production of Cheddar cheese for export. The daily production of one factory alone decreased from 26 to 17-


Some hon. Members:: Question.


Harry Oliver White: You will get it. Will the government reconsider its requisition order and increase the price for export cheese to conform to the price for concentrated milk, in order to retain for Canada the export market in the United Kingdom?
Inquiries of the Ministry


Mr. Robert McCubbin (Parliamentary Assistant to the Minister of Agriculture):: Mr. Speaker, I am quite well aware of the situation to which the hon. member for Middlesex East has drawn my attention. I admit that in some districts of western Ontario the concentrated milk people are taking some of the milk that formerly went to cheese factories; but any change that might be made is a matter of policy which will be announced in due course.



COMBINES INVESTIGATION ACT


[Stage Direction]
On the orders of the day:
John George Diefenbaker: should like to direct a question to the Minister of Justice, following press notices to the effect that a commission is to be set up with a view to making recommendations concern-ings the Combines Investigation Act. I would ask the minister whether it is a fact that such a commission is to be set up.


Stuart Sinclair Garson: It has been and still is my intention to make an announcement in this connection as soon as the personnel of the commission is completed. Three of the four we propose to appoint to the commission have already agreed to accept that appointment, and at the present time we are in communication with the fourth. As soon as the personnel is completed, an announcement will be made.


John George Diefenbaker: Then may I ask the
minister what the commission is to do?


Stuart Sinclair Garson: It might be preferable for me to cover that question more fully in the announcement to be made in due course; but for the present I may say that after he had been in his position for some time the new commissioner under the act, Mr. MacDonald, represented that in view of the consideration that has been given this subject, particularly since the war, in other jurisdictions such as the United States, it would be desirable to appoint a commission to examine the act and see if it could be made more satisfactory and more workable than it is at present. I think my hon. friend is referring to the statement which appeared in the Montreal Gazette, and I should emphasize the fact that no specific proposals or ideas will be submitted to the commissioners. They will be perfectly free to consider in an objective manner whether they think anything can be done, and if so, to state what in their judgment should be done.



CANADIAN NATIONAL RAILWAYS

[Stage Direction]
Inquiries of the Ministry
Mr. Smith (Calgary West):: I think it is an excellent idea to appoint a commission to do exactly nothing; so far we have had every other kind.



CIVIL SERVICE


[Stage Direction]
On the orders of the day:
Mr. J. T. Richard (Ottawa East):: I should like to ask the Secretary of State whether any further representations have been received from organized groups in the civil service with respect to hours of work during the summer, and whether further consideration will be given the change which the civil servants have proposed.


Frederick Gordon Bradley: So far as I am aware, no representations have been made since the order was issued. If any are made, presumably they will be considered when they are received.



POSTAL SERVICE


[Stage Direction]
On the orders of the day:
Arthur Leroy Smith: I had intended to direct this question to the Postmaster General, but perhaps in his absence it can be answered by the Minister of Justice. The question arises out of a dispatch appearing in the Toronto Daily Star of Saturday last, to the effect that all postal privileges of the Calgary Stampeders football club and T. L. Brook, as president, have been suspended until at least July 14. It also advises that the use of the mail for lottery purposes is contrary to postal regulations. Since it is a well-known fact that the Criminal Code of Canada provides ample machinery for the punishment of persons conducting lotteries, why has this bureaucratic, arbitrary, arrogant and stupid procedure been adopted?


Some hon. Members:: Order.


Mr. Speaker:: Orders of the day.


Some hon. Members:: Answer.


Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, I do not think that is a question that requires any answer in this house.


Gordon Graydon: The Stampeders should have an answer.


Louis Stephen St-Laurent: If the Stampeders require an answer they should have their question put in more proper form.



PRINCE EDWARD ISLAND


[Stage Direction]
On the orders of the day:
Mr.  W. Chester S. McLure@Queens: With the change-over to diesel engines on the island division of the Canadian National Railways, which includes Prince Edward Island, I would ask the Minister of Transport to keep in mind the understanding that there will be no layoff of men as a result.


Lionel Chevrier: I shall be glad to bring the matter to the attention of the Canadian National Railways.

The house in committee of supply, Mr. Dion in the chair.
DEPARTMENT OF NATIONAL DEFENCE Defence forces-
202. To provide for the defence forces of the navy, army and air services, and to authorize total commitments for this purpose of $579,301,670 including authority, notwithstanding section 29 of the Consolidated Revenue and Audit Act, to make commitments for the current year of $438,178,000 and commitments for future years of $141,123,670 against which commitments it is estimated that actual expenditures in 1950-51 will not exceed, $384,932,304.


George Alexander Drew: Mr. Chairman, this covers the bulk of the items of the department. When it was last before the committee a number of questions were asked in regard to certain details. Some time has since elapsed, and in the intervening period events of considerable importance have emphasized the necessity of considering these estimates with due regard to their significance as related to our present situation in a very troubled world.
If there was any atmosphere of unreality surrounding the discussion of defence estimates up to this point, it- must have been removed by the events of the past forty-eight hours.
Mr. Chairman, I shall wait until the various conferences that are taking place in the chamber have resolved themselves to some conclusion.


The Chairman:: Order.


George Alexander Drew: We now have seen events take place which we hope will have a satisfactory solution. It must be the immediate hope of every member that the action of the United Nations, which has been taken so promptly, will result in the explosive conditions which developed in Korea being remedied, because on the one hand it would protect people who have been attacked without justification, and

on the other hand it would retain and strengthen public opinion behind the United Nations.
One of the things which has been emphasized with the greatest force in the sudden
developments of Saturday last is that those nations which hope to preserve their freedom must have defence forces in being, as was indicated only a few weeks ago by the Secretary of State for External Affairs. There is general agreement that the only hope of preserving peace is that the nations which are joined for the defence of freedom shall be able to act whenever freedom is threatened. Korea is not covered by the Atlantic pact; nevertheless Korea is a direct responsibility of the United Nations, within the framework of which the community of Atlantic nations has been carrying forward its efforts to preserve peace. Today there are no little nations far away. Today Korea is closer to us in terms of transportation time, in terms of information which can be flashed by wireless and by cable, and in terms of direct impact upon our own future, than was Poland in September, 1939. At that time there was no direct access to Poland by the western allies. There was little direct communication; there was in fact no way in which the western nations could exercise any direct and immediate influence upon the course of events in Poland in September, 1939.
Today it is impressed upon all of us that what we are considering when we examine the estimates of the Department of National Defence is survival in a world in which war is becoming a matter of obliteration. Therefore the first consideration that should be in our minds in examining these estimates is the results that are to be produced by these estimates in terms of armed forces in being, ready to go into action, should such a dreadful necessity arise. There is no reason why any hon. member of this house should back away from the recognition of the fact that the only way we can preserve peace, the only way we can prevent such occurrences as are taking place today in Korea and are taking place in so many other countries in the past few years, is for Canada and other nations in the Atlantic community to demonstrate clearly to the aggressors in the Kremlin that we are ready. We should demonstrate that any move on their part against us, or against any one of the member nations, can be dealt with by an armed force that is ready to be used. That is the test, and it is upon that basis that we have expressed our hope that peace can be preserved. The first question that we should ask ourselves in examining these estimates, which are lumped substantially in a single
Supply-National Defence
item, No. 202, is what armed forces in being are to result from the money that is to be spent.
We know that Russia, is working by every device in her power for revolution in countries that are believed to be ripe for revolution, and seeking to pave the way for revolution in countries where that might not seem an immediate prospect, as in Canada, but where it is believed that at some distant date it may become an immediate possibility. The Russians are also working for the destruction of our economic system by such trade arrangements as will undermine our trading arrangements; by the depression of prices which will interfere with the strength of our economy generally, and by the disruption of our economic structure internally through infiltration into particular fields of our economic and social life. We have been seeing a new kind of war. We talk of cold wars and hot wars, but they are all wars of aggression. The Russians have demonstrated that the first stage can be just as effective in reaching their objectives as the second stage. Undoubtedly they will delay the employment of any overt acts within that second stage as long as they are meeting with success in the first stage.
It would appear that the attack in Korea on Saturday does suggest the possibility that they are ready to contemplate entering the second stage. No thoughtful person can be in any doubt that the government of northern Korea did not launch that attack without the full authority of the Kremlin, without the advice of the Kremlin, and without military assistance from their general staff. Therefore we must examine these events, and the implication of the seriousness that they convey to us of possible changes in policy at the Kremlin. The year 1950 may well be the most significant and critical one in the history of modern man; it may well decide whether all the hopes of those who met at San Francisco five years ago this spring are to turn to ashes, or whether they are to reach vigorous and effective fulfilment as a result of action taken by the United Nations at this time.
The estimates before us cover 1950 and the first months of 1951. We therefore examine them in relation to these events and with the perspective which they give to everything that may result from the expenditure of the money we are now being asked to supply to the Department of National Defence. No one should hesitate to examine the present situation in terms of the most exact reality. No one should hesitate to examine our situation in this country, which is one of the

Supply-National Defence signatories to the Atlantic pact, in the perspective we now have as a result of these recent events. What is our position today? It is easy to be beguiled into a feeling of comfortable assurance by impressive demonstrations-and they are impressive-unless one examines them against the broad background of the reality with which we are confronted.
When we see the members of our armed forces, we have reason for pride in the evidence of training, of discipline and of spirit that is shown by every one of these young men and women in the navy, the army and the air force. When we see any of the naval, army or air demonstrations we can only be impressed by the skill, the evidence of training and the high measure of discipline with which the duties assigned to these services are carried out. Nevertheless we must examine each of these demonstrations in proportion to the task that lies before us. When we consider how many active service squadrons we have in being, ready to take their part, we can only form an impression of their ability to share in the joint responsibility which we all now share when we consider how many squadrons of different types there are in the Russian air force and in the air forces of the nations which serve the orders of the Kremlin. When we see displays of the forces of the army, the same question must present itself; and so it is when we see displays of our naval forces, no matter how impressive they must be.
In the very nature of the rigid secrecy which Russia seeks to place around her own country and around all the satellite nations, exact figures are difficult to obtain, even for those with access to all the most secret intelligence information. Nevertheless, in responsible publications there have appeared figures based upon information which can be obtained from time to time and which probably does bear some reasonable relationship to the.reality of the moment. From time to time Russians who have been in all the widely-separated, parts of Russia have found their way out of that country through Berlin, and on other frontiers, and their information does become available. Whether these figures are exact or not, there have been published recently in the United States statements to the effect that at the present time the Russian air force has in being squadrons with some
9.000	jet fighters alone; also squadrons with thousands of bombers, and squadrons with at least 10,000 transports, and probably a great many more. There are also reliable estimates that their production, at a minimum, is
10.000	planes a year and probably far beyond that, with all the satellite areas under their control.
From reliable information made public through the periodical magazines and the press, we have the fact that the Russian army is made up of forces in being with at least
2,600,000	men organized into 130 airborne and infantry divisions at least, and 30 armoured divisions at least. These 160 divisions are the Russian divisions alone. In addition to that are all the divisions organized in Poland, Roumania, Hungary, Bulgaria, Czechoslovakia, China, and the other satellite nations. As a result of the technical assistance, to say nothing of the capital plant which the Russians were able to obtain by their occupation of eastern Germany, we also know that their submarine production is at a high level; that they probably have at the moment at least 300 of the most modern submarines, and that their production is constantly being accelerated.
It is against the reality of figures such as these that we must consider what is happening here and what is happening in the other free nations. We have seen magnificent demonstrations of aerobatics, of formation flying, and of other air skill carried out with Vampires of the late war type. We have seen demonstrations carried out with other aircraft. But the question that presents itself to each one of us now is this: How many squadrons have we in being equipped with fighters of the most modern kind ready to go into action against any enemy which might present itself? We know the answer. We know that we are still preparing, and that the equipment of our squadrons with the most modern type of fighter aircraft is still some distance away.
Again, in the case of our naval forces, the Minister of National Defence has stated, and stated correctly, that at the present time they are nearer to being on an active service basis than any of our other forces. But again their strength and their capacity to assume our share of the responsibility under the Atlantic pact must be measured in proportion to figures of this kind.
The same is true of our army formations. We have one brigade group and other units of various kinds. Even there we must ask how fully that brigade group is armed to carry out its responsibility as an active force in being.
There can be no question about the training of the men, no question about their skill, no question about the spirit in which they carry out their tasks. The question is, have they the equipment that makes them, by the most modern standards, an active service force in being?
In all this I am not suggesting for one moment that Canada can or should at any

time contemplate the possibility that it alone can meet the onslaught of the one aggressor that threatens our freedom and the freedom of other nations. Nevertheless, under the broad terms of the joint responsibility which is implicit in the Atlantic pact, we must ask ourselves how close we are to having those forces in being which will take their share as part of one combined team whose strength will be such as to deter the Russian aggressors simply by evidence of immediate and effective strength.
We still can be greatly impressed by the efficiency with which these tasks are carried out. Last Thursday many hon. members had the opportunity to see the demonstration of fire power at Petawawa. Petawawa is one of the finest artillery camps in the whole world, if not the finest. In general layout, in area available, in facilities for fire training, it is probably not exceeded by any other artillery camp anywhere. Those who saw that demonstration of fire power saw highly efficient gunners under highly efficient officers showing what can be done with artillery weapons, both in accuracy and in massing of fire power. From speaking to those who saw that demonstration I know that it did convey an impression both of efficiency and of strength. It is certainly no reflection of any kind on the men who carried out those tasks so efficiently to recall that this was a relatively small demonstration with 1945 equipment, and this is 1950. We all know that the equipment of 1945 and the gunpower of 1945 were extremely effective at that time. But today we must examine any demonstration of this kind in terms of the most modern equipment, and we must seek to ascertain whether the very large appropriations we are making are providing our armed forces with the most advanced equipment, with the most advanced instruments, with the most advanced system of communication and air co-operation, so that the force in being is one which is established and equipped in terms of the world conditions and the world realities that we are called upon to face.
I repeat that from the estimates before us we do not know, and there is no way in which we can know, what part of this tremendous expenditure is being devoted to the acquisition of the most modern equipment, how much of it is going to produce armed forces in being on an active service basis with regard to the fact that we must not only be armed and equipped as well as the Russians, but, because of our smaller numbers, that our arms and equipment in every branch of the services must be far beyond theirs and in keeping with the superiority of our industrial technique and our industrial production.
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Let us see what we obtain from the estimates. We are dealing with a single item covering $384,932,304 out of a total of $425 million to be voted. A substantial part of that is for pay and allowances, civil salaries and wages, other fixed charges, and a number of details of a strictly administrative character; but the bulk of that figure is not made up of items of that kind. In what are described as details on page 168 of the estimates we find these bulked under such uninformative wording as, under the heading "Navy":
General-
Acquisition, construction, purchase, maintenance, repairs, rentals and operating expenses of properties.
We know of course that many of these properties are service properties which form an essential part of our actual service requirements. Then we have:
Personnel supplies and services; stores and equipment.
There are other general terms after "Stores and equipment." There are similar items under the heading "Army" and similar items under the heading "Air." Instead of giving the details, these items are worded in the most general terms to embrace practically the whole field of our defence requirements, outside of wages, salaries and other fixed charges. These amount to extremely large totals. In the case of the navy, the items under "General," which are described in such all-embracing terms as those which I have mentioned, amount to $58,265,022. The so-called details under the heading of "General" in the case of the army amount to a total of $59,183,144. The general items under air, again in the same broad and general terms, amount to $126,164,221. The total of these general items under the heading of navy, army and air is $243,612,387. That is a huge sum.
That amount will not be challenged by the people of Canada, nor do I think it will be challenged by any member of this house. But what should be sought by the members of this house and by the people of Canada is a great deal more information than they now have as to what lies behind these broad and general terms and what we may expect in the way of military forces being ready to play their part under the terms implicit in the Atlantic pact. We have been told by the Secretary of State for External Affairs, who was only repeating in this house what had been said by the representatives of other governments ocupying similar positions, that no longer can any nation which hopes to preserve its peace expect to be able to prepare behind the ramparts of sacrifices of some other nation.

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He was stating a clear and simple proposition that in the reality of warfare that we face today the only way we can hope to preserve the peace is to regard this situation with all the cold reality which it demands and to say to ourselves that we cannot hope to let nuclear forces be developed into larger forces behind the ramparts of the sacrifices of other nations which would bear the first impact of war of the modern type. When one examines the figures we have before us, which I am inclined to think the intelligence branch of the government will say are below rather than above the reality of the Russian strength, he must recognize our position when aircraft can fly thousands of miles and return to their bases after dropping their bomb loads, or, perhaps even more dangerous, dropping their loads of armed men.
I can only repeat the request I have made of the Minister of National Defence on the two earlier occasions when these estimates were before us, that he give us information and, through us, give the people of Canada information so that we may know what our position actually is. The people of this country will support this government in every effective step that is necessary to preserve the peace for which the people have paid so great a price. Having paid that price the people have the right to know, in much more detail than they know today, what armed forces in being will result from the expenditures that are to be made this year, and what we can actually expect our armed forces to be ready to do as one of the members of that great community organized together in the cause of peace, whose preparations are only for the purpose of preserving peace.
It is with that thought in mind, and only with that thought in mind, it is with the knowledge of the dreadful reality with which we are confronted today, that I repeat my request that the Minister of National Defence give us the kind of information that is available to the people of the United States, where secrecy is surely just as important as it is here; to give to us the kind of information which is available in other countries which have joined with us in the great work of preserving freedom for mankind.


Hon. Brooke Claxton (Minister of National Defence):: Mr. Chairman, I am sure that hon. members will agree with a great part of what the leader of the opposition has said. If I may say so, he is going over familiar ground, because much of this has been said before in this house by himself and others, and by other leaders of the democratic countries. He has put fairly and squarely before the committee the great desirability of the North Atlantic treaty nations having the greatest possible
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forces in being with which to deter aggression, or, should an emergency arise and aggression take place, to defend themselves and defeat the aggressor. With that objective everyone in this house, and I am sure everyone in the country and all the people of the north Atlantic countries, are in agreement.
The defence ministries of the twelve countries are doing what they can with the resources put at their disposal to secure that result and to make as great progress as they can. But this is by no means an easy task. It is one which cannot be accomplished by means other than the resources which are made available out of the national production of each country and voted by parliament. In our case, as I have said, we are seeking $425 million for defence in the year 1950-51. I do not suggest that this sum will provide us with as much in the way of forces in being as we should like to have.
The question, as I have suggested on every occasion when these estimates have come up, is whether or not the money appropriated is being spent in the right way as between the navy, army, air force, and defence research, and whether or not it is being spent in the right proportions as between personnel, equipment and property. That is the problem of defence planning, and it is by no means an easy problem, here or anywhere else.
I appreciate the generous references made by the leader of the opposition to the officers and men of the armed forces. As he said, we have reason to be proud of them and to be impressed by their skill and the evidence of training and high level of discipline. I have probably seen more of our armed forces than anyone else in this country since the war, and I must say it has been impressive to see the progress that has been made in all directions since 1946.
The leader of the opposition asks whether that progress is being made along sound lines. I can only express my opinion based on information and advice I have, not only from the chiefs of staff and other advisers of the government, but also from my discussions with my opposite numbers in other countries, and with many of their chiefs of staff. It is my opinion that, given our geographical position, our role in defence and the resources put at our disposal, we are spending the money on sound lines.
If I may go over old ground again for a minute or two, I should like to refer to what the positions and roles of the services are. Taking the navy first, its role is obviously antisubmarine work-the protection of our coasts and shipping against submarines and mines. We have as large a number of vessels in commission as we can operate with the

$82 million made available for the navy, and at the same time do the essential work of constructing the nine new vessels which are now under way. There are 41-5 per cent of our naval personnel at sea. That is a very high proportion, higher than we had during wartime. I believe it is higher than any other country, and possibly it is too high because in a sense we may be too operational for the strength and resources of the navy. Nevertheless, because of the way in which the post-war organization of the navy has been proceeded with, we have managed to attain that result.
As evidence of what I have said, there is the fact that it is planned that six vessels are to take part in the largest peacetime cruise ever to be undertaken by the navy. The Canso, Sioux and Athabaskan will leave from Esquimalt on the 11th of July, 1950, and the Magnificent, Huron and Micmac from Halifax on the 23rd of August, 1950. They will first visit Londonderry, where they will engage in extensive antisubmarine and other operations in co-operation with ships and aircraft of the Royal Navy. In this voyage will be involved 195 officers and 1,875 men, and on the Magnificent there will be three squadrons of her aircraft. In the course of the voyage the ships will visit several of the North Atlantic treaty nations. The object of the voyage is first to obtain extensive training in an extended sea voyage; second, to familiarize officers and men with the waters and ports of the friendly nations with which we are co-operating; and third, to co-operate with the fleets and ships of several of these nations, including the United Kingdom particularly.
Therefore the exercise will be a marked demonstration of the capacity of the ships and men of the Royal Canadian Navy to operate under realistic conditions involving extensive operations of the type which they would have to undertake if there should be another emergency.
Again I join the leader of the opposition and the Secretary of State for External Affairs in emphasizing that our ships and other forces will never be used for any purpose other than to deter aggression and to defend ourselves and our allies.
If we are to have more ships operational, it can only be done by making more money available, and that can only be done by taking it from the air force, the army, what is allotted for defence research, or from other sources of revenue of the government as a whole. We do not know any other way of doing it. The same thing applies to the other services.
Turning to the air force, our object is to build towards an operational force of over
Supply-National Defence twenty active and auxiliary squadrons. As hon. members know, at the present time we have two squadrons equipped with Vampire Mark Ill's in the active force, and several in the auxiliary force. As the leader of the opposition quite properly points out, the Vampire Mark III is a very good operational aircraft of a type which came into active operation after the end of the second world war. They are still one of the best aircraft for army co-operation that there are anywhere, but they have not the speed and the armament of some later types. They are still front line service aircraft, however, in the countries which use them.
To supplement and replace them as they are used, we have been working on the production of the CF-100 and the F-86. Each of these is of its type the leading aircraft of any we know of having corresponding characteristics. We were not able to produce them before because they did not exist. We are pressing on with the production of the F-86, and with the development and production of the CF-100, as rapidly as that can be done. The primary role of our air force is to assist in the defence of North America. We believe our air force is adequate for that purpose at the present time, in co-operation with forces of the United States that would be properly employed in that task, particularly in Alaska in the northwest and in Newfoundland in the northeast. We do not suggest it will be adequate for that purpose if it remains at its present size. Therefore we are developing it as fast as we can to make it constantly more operational.
In this connection, as I have announced before, though I do not think I have mentioned it in the house, toward that end we expect to have a squadron of our air force undergoing operational training in the United Kingdom early in 1951, and further squadrons successively engaged in training there and possibly in other North Atlantic treaty nations in rotation for periods of several months at a time. That will be the supplement or complement of the training we provide on this side for North Atlantic treaty nations in aircrew and army. In our case, however, we shall be sending squadrons of officers and men, and probably ground crew as well as aircrew, who are fully trained operationally, and who will be sent over there for further training in larger formations, in working in co-operation with United Kingdom forces and in familiarization with the terrain on the other side of the Atlantic. We expect that as time goes on this will become a very important branch of our air force activity.

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Howard Charles Green: Are these to be fighter squadrons exclusively?


Brooke Claxton: Fighter squadrons at present. We are already having training flights of transport aircraft to the other side whenever the opportunity presents itself, so that quite a good proportion of our transport command not only have wartime experience of flying in all parts of the world, but also a great deal of peacetime experience, and they have shown a really first-class record of transport and performance. As I pointed out before, about the only test in connection with the operational work of an air force is the number of man-hours per month flown in comparison with other forces, and I am glad to say that our record compares very favourably, in proportion to total strength, with those of the United Kingdom and the United States.
With regard to the army the position is perfectly plain. At the present time we have not, and are not aiming immediately to get, any greater forces actually ready to fight at the dirop of the hat than the brigade group. That is perfectly evident from everything that has been, said and from the state of training of the reserve forces. Should the need for anything additional develop, then again it must be done either at the expense of some other service or by the provision of more money from the treasury of Canada, which in view of the demands of other government departments I suggest can only come out of the pockets of the Canadian people. That brigade group, we estimate-and it is only an estimate on the basis of all the information available-is adequate to deal with the type of attack that might be made on Canada in the foreseeable future, again having regard to what we know of the possible forces of both enemies and friends and how those forces would have to be employed.


Howard Charles Green: Is the brigade group up to war strength?


Brooke Claxton: As I explained when the house was in committee before-and, perhaps I should not have given the information, but I did-it is at about eighty per cent of strength. We do not expect that it will ever be right up to war strength, because there is a constant flow of men from it, either through discharge or through appointment to other units such as courses, schools and so on; and there is a constant flow in from the courses and schools. In addition to the brigade group there are in training in the courses and schools enough men, if put immediately and directly into the brigade group, to bring it up to strength; but there will never be a time when it is

completely up to strength. I do not suppose any unit is ever up to strength in that sense, just as no unit is ever fully trained in the strict sense of the word. Training is continuously going on; there is no moment at which training does not go on.
In addition to the brigade group, as hon. members know we have a very considerable administrative and training staff. The last time these estimates were under consideration I was asked as to the personnel employed at national defence headquarters, and today was about to rise and give the information when the leader of the opposition rose. There the total as at May 31, 1950, was 4,029, broken down into a total of 972 officers, 991 men and 2,066 civilians, including 184 who are members of the defence research board. In addition there are considerable staffs at command and area headquarters. I am trying all the time to reduce the proportion of our forces employed in that way, just as similar efforts are being made in other countries. Their experience is exactly the same as ours. We have tried to compare our figures and our results with those of the United States and the United Kingdom, and we find that we have about the same proportion of civilians to service personnel, a rather smaller proportion of officers, and about the same proportion of what might be called overhead to operational troops. We are never satisfied with the proportion of overhead, and are constantly endeavouring to reduce it. In that connection I might add that the establishments of all types of units in the three services were reviewed over the past two years by teams representing the department, the service concerned, the civil service commission, and the treasury board. That did not result in any considerable reduction, despite the efforts of the agencies of governments concerned. Frequently when we have had reviews of establishments by experts, either from outside the government or from within, it has not resulted in a reduction.
As to the employment of other [personnel, I should like to give all the information possible to hon. members; but of course here I am faced with the fact that, as the leader of the opposition has said, the Soviet union surrounds itself and its armed forces with rigid secrecy. In these debates and in statements outside the house I have tried to give information which would not affect the national security but would correspond closely to that given in other countries. I have followed this matter with the closest possible attention, and I wish hon. members could see the kind of debates that take place on defence in the United Kingdom, There they had four days on defence estimates out of twenty-three. This is our fourth day

Over there in their debates detailed information is seldom sought or given. The debate is of a general character, and as a rule the minister concerned speaks only once or twice giving general replies to the questions that are put.
Reference has been made to the committee on estimates in the United Kingdom. A subcommittee is set up to deal with defence estimates, but it has not made a report this year. The House of Commons passed the appropriation with respect to defence without having before it any report from the committee on estimates. As hon. members who are familiar with it know, the committee on estimates deals largely with the form of the estimates and matters of that kind, never with policy; in fact consideration of questions of policy is expressly excluded in the terms of reference of the committee. Now let me tell hon. members in a general way that we have in the administrative and training staff across Canada the personnel necessary to administer and train, first of all the active forces, then the reserve forces, and particularly the officers for the active and reserve forces.
At the moment we have in training for the army alone a total of 3,090, of whom 374 are undergoing general military training; 1,143 are for active force units; 18 are for reserve corps-these figures were given before summer training for the reserve forces had begun-124 are for command contingent officers training corps, and 1,431 for university officers training corps.
We have in the various schools and static units across Canada a total of approximately 16,000 officers and men. This group is necessary because it has the most important job of training the reserve army as well as the active army. Altogether there are 255 active units and 524 reserve units. If the details of the estimates are examined, it will be found there are relatively small amounts of money set down for the reserve army. This is because these items cover only pay and allowances of personnel, transportation of personnel and repairs and maintenance of armouries carried out locally. Those figures do not include any amount for the active forces or for equipment; yet a large part of the role of the active forces is the training and equipping of the reserve units.
I was asked by the leader of the opposition on this and other occasions if we could not give greater details of the defence estimates than we are giving. We shall be very glad indeed to give any details that can possibly be given. As has been intimated on other occasions, the Department of Finance, the treasury officials and the Auditor General have had the form of the estimates under consid-
Supply-National Defence eration, as has this department. I should like to point out that the details given for the defence estimates on page 168 are much more complete than those given in the year 1947-48, when all the details appeared on something less than a page. At that time we were developing the post-war organization, and it was exceedingly difficult to estimate accurately for the following year. The details for this year will be found at pages 168 to 174 of the estimates. Those details are, I believe, more complete than those given for the last year before the war, 1938-39, subject to one exception, that for 1938-39 details are given concerning the civilian employees involved. There are several pages covering civilian employees in the different categories. It did not seem to the officers of the Department of Finance, treasury, and ourselves that that had any significance or usefulness; therefore the details were not given this year. They are, however, available if any hon. member wants them at any time. Subject only to this qualification, the form of the estimates and details given is much more complete than for the estimates of 1938-39. If we can properly give more information that will be useful, then we shall try to work in that direction.
In this connection I should like to say that I do not know of any information given about defence in the United Kingdom or Australia or any countries of the commonwealth which is more complete than that given in this house. From my examination of the statements, and from my following of the debates in other parliaments, I believe we give much more information than any of those countries. With regard to the United States I believe that if hon. members will follow the matter closely they will see that in the actual debates in congress, as in the proceedings before congressional committees, no more detailed information is given than is given here. What creates the impression of more information being given there is information which comes from sources outside of congress, which frequently has no official authority accredited to it, though it may come from some authoritative sources. I suggest in all sincerity that when we are charged with not giving information comparable to that given in other countries, an examination of the facts will show we give just as much as any other country, except possibly the United States and I believe that even in that case we are in a position to compare favourably.
We have had three days of general discussion, including a fourth day when defence matters came up on a motion to set up a committee; therefore this is really the fifth day upon which we have been dealing with defence. Throughout that period I have been

Supply-National Defence ready to answer questions, and I shall be only too happy to do so if hon. members will put them.


Mr. Hees:: Mr. Chairman, as a member of the active reserve of the armed forces, and having attended Petawawa military camp for the last three years, I agree with everything the minister and the leader of the opposition have said about the excellence of the training which is given the militia branch of our armed forces. It could not be improved upon. But something the minister said I believe is of vital importance to this house, and that is that the funds which this house is willing to vote for defence for the coming year will not make us as well prepared for any eventuality as we should like to be. The minister said that if we desire more preparation for the army, shall we say, we have to rob the air force and the navy; and if we want more preparedness or more equipment for the air force, we have to rob the other branches of the service. What this committee and this country want to hear from the Minister of National Defence is an indication as to how much money is needed to bring the forces of this country into such a position that we shall be able to deal with aggression from outside and take our place as a member of the North Atlantic alliance.
After hostilities have started-if they do- in which we find ourselves involved, if we are not sufficiently prepared either to defend ourselves adequately or to take an honourable position as a member of the north Atlantic alliance, as we have pledged ourselves to do, the minister cannot come to us and say: If you had voted me the funds, I would have been able to see to it that you were properly prepared. He and his department and this government are the people who have the knowledge on which to say what we require, on June 26, 1950, to prepare ourselves for attack from outside or to take our proper place in the north Atlantic alliance. I say to the minister that what this committee wants to hear before this session is over, in order to make these estimates mean anything, is not what it will cost to give us semi-preparedness, but what, in his greater knowledge than is available to the members of this committee and to the people of this country, he thinks are the appropriations that are needed to give us the preparedness that we require today to fulfil our duties, as a party to the North Atlantic pact, in defending this country or in quelling aggression wherever it may take place.
The minister should bring these figures before the committee and let this parliament decide, on behalf of the people of Canada, whether or not the people are willing to

foot the bill to give this country the kind of preparedness which the Minister of National Defence has implied should be considerably greater than the estimates now before us provides for the armed forces of Canada. I am asking the minister to let this committee know, today, or certainly before parliament closes, what funds are necessary to give us the preparedness which, as of June 26, 1950, in the light of the latest developments in international affairs, this country is entitled to with respect to its armed forces.


Brooke Claxton: I am sure, Mr. Chairman, that I voice the views of all members on this side of the chamber in welcoming the hon. member who has just taken his seat and in congratulating him most heartily on having made his first speech. As we all know, he had a good record of active service with the forces during the war, and also with the reserve forces. I am sure that his contribution to the work of the house in this and other fields will be extremely valuable.
With regard to his question, I may say that it is a fair and proper one, but, in view of the present state of the world, it is one which cannot be answered with a single figure. I can say that if another $200 million were voted by parliament for defence, only a small part of it would go into personnel, and a large part of it would go into equipment. In the first instance that equipment would be an acceleration of our aircraft production program; in the second place, an acceleration of our shipbuilding program, and in the third place, the commencement of a program of replacement of some of the armour and armaments of the army. But possibly more useful than spending the whole of any such sum of money on our own equipment would be to spend it on equipment of other North Atlantic treaty countries. If he asked me how much it would cost us to ensure our safety at this time, then I can tell him that the figure would be large; because, as everyone knows, the deficiencies in equipment of the North Atlantic treaty countries are great indeed. If we had a large sum of money added to our estimates at this time we would undoubtedly give most serious consideration to making the best possible defence use of that money by building equipment and giving it or transferring it, on terms of one kind or another, to our allies in the North Atlantic treaty. That having been done, we would be better prepared than we are today in the place where we should be better prepared than we are today.	[DOT]

With regard to our own defence, we believe that, given conditions as they are at the present time, we have enough forces to deal with any situation that might arise here. The only other point, then, is this: Is the amount of $425 million that we are spending on defence enough to enable us to see that we carry our fair share of the load under the North Atlantic treaty? It is the belief of this government that it is enough, and that it is a proper proportion. In proportion to population, on a per capita basis, it is more than any other country of the British commonwealth is spending, except the United Kingdom; and on a per capita basis I believe it is more than any other country under the North Atlantic treaty is spending, except the United States and the United Kingdom.
On other bases of comparison, it is more than a good many of the countries concerned are spending, either as a proportion of national product or as a percentage of national budget, although some of the countries of Europe are spending more. But when we include with the $425 million some of the other items that might properly be allocated to defence under the accounting systems in force in one or other countries-such as, for example, married quarters built for defence personnel by Central Mortgage and Housing Corporation; some part of the cost of civil aviation and navigational aids; some part of the cost of the R.C.M.P., and one or two other similar matters-the figure can be built up to something over $500 million. The other expenditures to which I have referred are not made in the Department of National Defence; they are made by other departments. The only amount we can spend this year is $425 million. But having regard to our resources, our needs, our capacities and our responsibilities, we believe that on any basis the amount we are spending today represents a fair contribution towards collective security.


Howard Charles Green: There is one question I wish the Minister of National Defence would deal with today, namely, whether he believes the events which are happening now in Korea call for any change in the plans of the Department of National Defence of Canada. From his remarks thus far this morning I take it that he believes these events do not require any change in Canada's policy, and with all my heart I hope that he is correct. But it does seem to me that the potentialities of this unprovoked attack, obviously instigated by the U.S.S.R., are very serious, and that they may well be more serious for Canada than for any other country in the world.
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I should like to know whether the minister believes that Canada should take any action, in view of this step taken today, which seems to make the cold war a very hot one. I heard the announcement on the radio this morning at nine o'clock that the United States commander in Alaska had alerted his fighting squadrons there. The report went on to say that this was a routine order, and it may have been; but surely Canada cannot afford to take chances.
I should like to know whether Canada is in a position to put fighter squadrons into action in the northwestern part of our territory on short notice; whether we are in a position to protect our airfields in northwestern Canada, should an attempt be made to seize them; and whether we are in a position to put a coastal patrol over the Pacific coast, to protect that coast against hostile submarines.
In his remarks in the last few minutes the minister emphasized time and again Canada's obligations under the North Atlantic treaty. He said that if we were spending more money for defence it would probably best be spent in providing equipment to other nations who have signed the North Atlantic treaty. Mr. Chairman, the North Atlantic treaty does not apply in any way whatever to this trouble in Korea. I read now from the preamble of the treaty. Referring to the nations who signed the treaty it says:
They seek to promote stability and well-being in the north Atlantic area.
They are resolved to unite their efforts for collective defence and for the preservation of peace and security.
They therefore agree to this North Atlantic treaty.
In article 5 we find that there is no obligation whatever upon any nation party to this treaty to come to the aid of another nation if the attack comes in the Pacific. The article read's:
The parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all.
But if trouble comes, if this is the beginning of a hot war that we are having today, then an attack will certainly be made across from Siberia into Alaska and into northwestern Canada, and Edmonton, for example, which is the most exposed city, would almost certainly be bombed without warning if the hostile planes could not be stopped. I am afraid that the minister is placing too much emphasis on the North Atlantic treaty and on the north Atlantic where we have the Russians stopped, and is paying no attention, or very little, to this grave development across the Pacific. I would ask him to let us
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Supply-National Defence know exactly what he thinks should be done, or whether he thinks nothing should be done, about this attack on southern Korea.
One further thing I would ask him to explain is what co-operation there is today between Canada and Australia and New Zealand with regard to defence questions. We have co-operation, and I think it is to be praised, with the United Kingdom and the United States; but our sister nations of Australia and New Zealand are not parties to the North Atlantic treaty. They were not allowed to join because they are not in the north Atlantic area. If trouble comes in the Pacific we shall certainly need their help, and I believe there should be the closest military co-operation now with both of these nations. Both of their peoples are fighting peoples. They have stood beside us in two world wars, and there are no finer fighters on earth. Canada should be working in the closest co-operation with Australia and New Zealand. I should like to know whether any attempt is being made by Canada to bring about that co-operation. I am confident that Australia and New Zealand would be only too glad on their part to co-operate. They have been pressing for a Pacific defence pact similar to the North Atlantic treaty. So far their pleas have gone unheeded, and today the Secretary of State for External Affairs said that Canada did not feel that the development in Korea made it any more necessary than before for her to take the lead in advocating a Pacific defence pact. That was a great disappointment to me, because I think the situation is such that we need a Pacific defence pact, and we need it quickly, primarily because Canada is the nation that is going to suffer most if this becomes a world war. We are going to be attacked over our northwestern frontier, and probably the northeastern as well, and certainly our shores on the Pacific are apt to be under attack from submarines.
We are facing a very grave situation. I hope this afternoon the Minister of National Defence will give us the assurance that he realizes the danger to Canada.
At one o'clock the committee took recess.
The committee resumed at three o'clock.


Brooke Claxton: When the committee rose the hon. member for Vancouver-Quadra had raised two points with which I should deal. He expressed the hope that there would be close co-operation with the defence forces of Australia and New Zealand. Canada has a liaison officer in Australia. I visited both countries in 1948, met their defence minis-

ters and several of their chiefs of staff and visited several of their main defence establishments. Only three weeks ago the minister for air of Australia was here. A considerable number of their officers have visited us, and so far as I know there is no way in which co-operation has been sought by Australia or New Zealand which we have not followed up completely. I do not know of any way in which there could be more useful co-operation at this time.
The hon. member spoke about the possible effect of the developments in Korea on our defence plans. As he said, this is a grave development, and we shall watch it with the closest attention. In consequence of this development some changes will have to be made. For example, if the situation continues to look serious, we certainly could not continue with plans for the voyage of the ships to European waters to take place at the time I mentioned. That kind of thing would have to be carefully watched. I do not think it would be helpful to the situation if I said anything more at this time. As I say, it is being carefully watched, and if any developments should give rise to the need for action or change, that action will certainly be taken.
The hon. member mentioned other matters which it seemed to me were questions of external policy rather than of defence. Since the Secretary of State for External Affairs is here, it occurred to me that he might deal with them.


Lester Bowles Pearson: Mr. Chairman, the matters brought up by the hon. member for Vancouver-Quadra were really concerned with external policy and might have been dealt with more effectively on the estimates of the Department of External Affairs, more particularly his reference to a Pacific defence pact, about which I had expected to speak when my estimates were under consideration.
I should not like any hon. member to infer, from what I said this morning in answer to the hon. member's question about developments in Korea and the effect of that on a Pacific defence pact, that we in the government are not just as much concerned about the security of the Pacific as we are about the security of any other area in the world. As the hon. member said, if there is trouble in the Pacific, Canada will be affected just as quickly as if there were trouble in the Atlantic. But the form of collective security which might be appropriate for the north Atlantic region might not be appropriate in the present circumstances for another region, particularly the Pacific region. I do not want to go into this now in any great detail, because no doubt it will come up later. The hon. member will of

course realize that the arrangements which were worked out in connection with the North Atlantic pact took a good deal of time and preparation and careful negotiation among all the governments. All the governments concerned with the arrangement were unanimous as to how the matter should be dealt with. We have not that situation in the Pacific. It is true that some countries in the Pacific would welcome the same kind of regional defensive system-


Howard Charles Green: Which ones, may I ask?


Lester Bowles Pearson: The hon. member mentioned Australia and New Zealand this morning.
I am aware that statements have been made by representatives of the government of Australia which would indicate support for some kind of Pacific defensive alliance or Pacific pact. The position in New Zealand is not yet quite as definite, and even in the case of Australia I would point out it has been indicated that a general Pacific defensive pact of the type we have in the north Atlantic might not be the most suitable at this time for that area, because there are certain countries which have already indicated that they would not be able to participate at this time in that kind of general, if I may call it that, regional collective system. The United States has taken that position; India has taken that position; the United Kingdom has taken that position.
The most recent statement I have seen which was made by the minister for external affairs in Australia seemed to visualize a narrower form of defensive system, where certain states in the Pacific agree among themselves that attack on one would be attack on the others. But then you get in the position of excluding from that arrangement certain other states which might wish to come into the system. So the situation is not nearly as clear-cut as it is in the case of the countries in the north Atlantic area.
I should like to repeat however that this does not mean that we are not aware of the importance of collective defensive measures in the Pacific just as we are in the north Atlantic. We are also quite aware that developments in the Pacific at this time centring around Korea might make this a most realistic matter for consideration.


Mr. Low:: Mr. Chairman, I was not able to be here before one o'clock, because there was a committee meeting which I had to attend, but I am advised that in replying to questions asked by the hon. member for Broadview the minister stated, or rather left the impression with the committee, that he required something in the neighbourhood of $200 million more to make it possible for him
Supply-National Defence to build adequate defences for Canada. I am not sure that that is the exact implication of his words, but at any rate it was something of the kind. The impression was left by the minister's words that parliament had refused to grant the minister sufficient funds so that he could be prepared.
If those things are true, I should like to ask the minister to tell this committee just who it is that has refused to give him enough funds so that he can adequately prepare the defences of this country. I should like him also to tell hon. members whether or not he has asked parliament for sufficient funds to prepare the defences of this country. I may be misinformed, but if I am not, there is just one thing I should like to have clear. If parliament has ever been asked for an additional $200 million, or any other sum, for the purpose of preparing adequate defences for our country at this time, then I can assure him it is not the Social Credit group that has refused it. I think it should be made known whether it is treasury board or any group in this house that has done so. What we of the Social Credit group are trying to keep in our minds so far as the defence of Canada is concerned is not so much what it will cost us to defend ourselves at the moment, but what it will cost us if we do not prepare our defences as they ought to be prepared.
I think we all recall what happened the last time that hostilities broke out, how ill-prepared we were, and how difficult it had been to jar loose the government of the day to spend more money on defence preparations, or anything else for that matter in order to move things along even in the economic field. Having in mind the present situation in Korea and southeastern Asia, where anything could develop quickly, I am wondering whether the minister and his department are going to be strangled by our being so niggardly as to refuse them what they require to make certain that we are not caught in the same position as that in which we found ourselves in 1939.
I think the minister and the government know the position that we take with regard to the provision of sufficient funds at any time to take care of our needs. We have always been mindful of the taxpayers, just as treasury board has been, but we have looked1 at the business of finance quite differently. I want the minister to know that even now, with all the money he is preparing to spend for defence, we have not yet begun to realize anything like our potential of production. If we have not, all that is required is the complete stimulation of development in the field of production to get what he needs. The Social Credit group urge the

Supply-National Defence minister to ask parliament for whatever he needs, and we will support his requests in so far as he will make known to us what his needs are. Of course we want to be shown exactly what the needs are, and we want as much information as we can get; but we are not going to choke him off in any way.
Furthermore we want the minister to know that we think the country is capable of producing all that is required in order to protect us from being placed in jeopardy at any time. Let us not fail at all times to keep in mind the cost to us and to humanity if we are not adequately prepared when and if difficulties arise. I think we have to keep that in our minds at this time. I should like the minister to make it clear whether or not the information I got as to this morning's proceedings was correct.


Brooke Claxton: I appreciate the attitude of the hon. member for Peace River. As he has opened the way, I may tell him at once that I did not make any such suggestion. What I said was that if we had an extra $200 million for defence, in my view a large part of that amount would be spent on equipment rather than personnel. In other words the deficiencies that we and other countries under the North Atlantic treaty have are in the first place in the field of equipment, and second, in personnel. But all of us have deficiencies, and we are working to overcome them. If we were to have a war this year, $425 million would be a small amount compared with what we would be seeking from parliament. We would probably be seeking an unlimited blank cheque, if we were certain to be engaged in a war, in order to put the whole economy to work in the quickest possible time for the purpose of devoting as much as possible of our total effort to war. In the second world war that resulted, as we know, in our being able to devote more than fifty per cent of our total economy to wartime effort. That was a large proportion in any country. If we did that today we would cripple our country. We would be doing exactly what the communists want us to do. Consequently it is necessary for us to strike a balance between what might be needed, what might be desirable, and what we think it is proper and useful to do. Defence expenditure must be regarded as in the nature of an insurance premium. We may not be paying enough, or we may be paying too much, all depending on the calculation of the risk.


Solon Earl Low: Does the minister think we are spending enough?


Brooke Claxton: Having regard to the situation as I know it, and from what I have

been told, I feel we are spending as much on defence at this time as we can properly spend out of our national income. In consequence of developments resulting from what took place on Saturday, I might have to come back and say that the situation has changed, but up to that date it is the view of the government that this is the right amount for us to spend at this time. It is being spent in the best way we know how. It is being spent to build up progressively forces which will be the best means of defending Canada immediately and of contributing to the defence of our allies should an emergency arise.


Mr. Adamson:: I should' like to refer to the F-86 fighter now being purchased. I do so in order that the minister may have an opportunity to say something on the whole question of jet aircraft, which is one of such vital importance to this country. There has been and is today considerable controversy about the F-86, not only here but also in the United States where it was designed. I understand that even as late as last week a further modification was made in the design of this interceptor. I bring that to the minister's attention so that he may have an opportunity to make a statement about this aircraft.
I also want to say a word about the Canadian jet aircraft industry. Not only has it done a magnificent job for Canada, but in many ways it leads the world. The British magazine Flight is my authority for saying that the CF-100 and the C-102 are the leading aircraft of their types in the world. The CF-100, a fighter bomber, will shortly fly the Atlantic. It has tremendous speed and hitting power. I understand that the C-102, a jet transport, will shortly fly the Pacific, and is the leader in its class in the world. I also understand that the design, and certainly the construction, of this aircraft are largely of Canadian origin.
I should like to quote what was said before the United States senate investigating committee concerning aircraft, and particularly air transports. I am quoting Mr. Robert Ramspek, executive vice-pres-dent of the air transport association, who had this to say concerning the performance of Canadian and British jet passenger aircraft:
. . . Mr. Ramspek declared that the U.S. could not even come close to matching their development. He said that as far as he knew, there were not even any plans for a transport which might compete with the Avro Canada jet lines. He further warned that American domestic air lines would have to buy foreign jet transports ...	'

Mot only this witness, but Admiral DeWitt Ramsey also said the same thing with regard to jet air transport in the United States, it seems to me we are basing our first line air support on a United States designed plane, the F-86, which as far as one can gather has had numerous growing pains and has been recently modified. On the other hand the British Meteor, the new Vampire, and the Hawker Interceptor have recently demonstrated tremendous superiority over all known or published jet interceptor planes and particularly, I understand, either the Meteor or Vampire recently broke all world speed records for aircraft of any type.
I bring this to the attention of the minister and the committee because if there is one thing in which Canada is leading the U.S.A. at the present time it is in the design and construction of jet aircraft. I was amazed when I saw the number of firms co-operating with Avro, De Havilland and Vickers in the production of the new types of aircraft, and the wonderful job being done by Canadian industry throughout, not only from the manufacturing point of view but with respect to design. So I wonder if the minister would care to make a statement on the decision of the department to concentrate on this interceptor.


Brooke Claxton: I appreciate and agree with
what the hon. member for York West said about the aircraft industry and its contributions in this'field. With respect to the relative merits of the F-86 and other aircraft, I endeavoured to deal with this question on June 8, at page 3377 of Hansard, where I referred to similar charges and the fact that I had just returned from watching a demonstration which included the F-86 at Eglin field before the president, the defence secretary and the chiefs of staff of the United States. At that time I read to the committee captions from a book of photographs we were given on that occasion which referred to the F-86 in these words:
The North American F-86 "Sabre," first line operational fighter of USAF tactical fighter groups, is paced by the North American B-45 "Tornado," jet light bomber. The "Sabre," fully armed, holds the world's speed record of 670 plus.
These photographs were issued by the United States air force, and are in accordance with the facts as disclosed to us. We know of no aircraft in its field with characteristics comparable to the F-86, and which is at the same stage of development and production.


Mr. Harkness:: This morning the minister
had something to say about the form of the estimates, which I have been asking about for the last couple of years. He said that in the
Supply-National Defence details at the back of the book there was considerably more information than had appeared in 1947 and 1948. That is quite correct, but the question I asked previously was whether the estimates for this department would be put back in the form in which they appeared before the war, the form in which the estimates of nearly all other departments appear, with separate votes for each major item. The fact that more detailed information is given today than two years ago does not meet my criticism as to the form in which these estimates are presented. We have one estimate here which takes in all the defence expenditures except those in connection with defence research, pensions and a few things along that line. In theory, at any rate, we should be in a position here to move that any item, whether for the army, the navy or the air force, which we thought was too little or too large, should be increased or reduced. As these estimates are now presented, however, that cannot be done. I believe it would make for a better discussion of these matters if the votes were split up as they were before the war, and as other departments present their estimates, in order that parliament would be able to exercise its right to cut down any particular item which might be considered too large. Last year the minister told me that consideration would be given to putting these items back more or less into their pre-war form, and I wonder if he has anything further to say on that point now.


Brooke Claxton: I have in my hand a copy of the estimates for the year ending March 31, 1939; and from a close examination I would say that in the primaries, where we have now two items covering the defence forces generally and defence research, there were twelve or thirteen items in 1938-1939. In the details which follow at page 168 this year, and at page 131 in 1938-39, the information given is quite comparable.
There are great advantages, from the point of view of defence planning during this period, in having the notes grouped. I have already explained the reasons for this to the committee, and I do not want to go over it again. However, certainly we shall look into the matter once more, as we are constantly looking into these things. Perhaps with more experience since the war and the possibility of more accurate forecasts, also given a more static condition, if that is brought about, we can divide the vote as the hon. member suggests. I am told the tendency in other places is to do as we have done, and I can put the reason for that in a word. At the present time we have a defence program which costs the people of Canada some $425 million. As I explained, this is the amount,
4132	HOUSE OF
Supply-National Defence recommended by the government and approved by paliament, of the insurance premium we will pay for defence. Defence is a matter in which it is difficult to allocate contracts and secure deliveries in peacetime exactly at the time you want them. There are constant modifications of equipment, and twenty-eight- per cent of the total expenditure is on equipment. Then a very large proportion goes into construction, and it is difficult indeed to complete planned construction by March 31 of any particular year. On that account, if we were held down precisely to votes which could only be encumbered for contracts to be completed within the year without the possibility of transferring from item to item, then we would find ourselves with a considerable part of our defence program handicapped and curtailed, because we know we cannot complete it this year but we do not know exactly what part we will not be able to complete. We would find, instead of getting on with our defence as we are doing, we would have completed about 90 per cent of the job by the end of the year if we are held to the detailed items.
I am told that other countries have had the same experience, and we are watching them with great interest. I feel certain it could be possible to give greater details about certain things, but I would not be sure it would be in the interests of the country, or that it would be exactly what parliament wants, if the primaries were divided to any greater extent.


Douglas Scott Harkness: Mr. Chairman, I realize it probably makes defence planning easier if all defence expenditure is in one vote, but for that reason it makes parliament's control of defence expenditures less complete than it would otherwise be. I doubt whether in peacetime this principle of having everything lumped in one vote is good. Just as an example, it might be the wish of parliament to spend 50 per cent of the money voted on the navy, and split the rest up between the army and the air force. With the whole sum being in one vote, the government can spend practically nothing on the navy, and spend the whole thing on the air force and army. I am not suggesting that would be done, but it is a possibility. It seems to me that if this vote were split into three for the various services it would give parliament a better control of expenditures.


Mr. Fulton:: I should like to ask the minister a question or two with regard to the details shown on page 168. First, I should like to make some comments about the breakdown. In the detail which we are given under departmental administration for the navy,
[Mr. Claxton.l

army and air force, there is a substantial item, in most cases running into several million dollars, for sundries. In the detail those sundries are said to include printing and stationery, postage, and miscellaneous items. According to the public accounts for 1948-49, the items making up these sundries were given in some detail, and none of them amount to as much as $2 million or $3 million. Will the minister say whether it would be possible, and whether he will agree in future years, to give some break-down of the sundry item instead of just indicating some of the things which go into it? He could say how much the department estimates the expenditure on printing and stationery will be, and how much for postage. Then we would know that. When they do get down to some of the small things-one time I believe in one department we had laundry mentioned-they could more properly be described as sundries, and not set out in detail. I do not think it is proper accounting to ask us to approve an item as we have under departmental admini-istration of $783,000 for sundries. Can the minister say whether that will be done in another year?


Brooke Claxton: I would certainly be glad to discuss that with the officers; that is one of the heads we believe capable of further break-down. There are others which I may as well mention, such as maintenance and construction of properties; different types of equipment, and so on. We believe that we could give further details now with some accuracy and without too much curtailment. I can give a break-down of sundries if the hon. member wants it.


Edmund Davie Fulton: Will the minister do it for this item of departmental administration?


Brooke Claxton: Yes. They are given in the public accounts, as the hon. member knows There is printing, stationery and office equipment, $126,000; communication services, $50,000; book of remembrance, $17,000; transportation, $3,000; government officers guarantee fund, $8,600; legal fees and patent applications $4,000; miscellaneous expenses, $5,000; miscel laneous expenses, $2,000; training e'quipmen and films, $20,000; then, unallotted, $338,277 that is the sundries; directorate of public rela tions miscellaneous expenses, $5,000; inspec tion services toy contract to meet urgen requirements, $200,000; contingencies, $5,000 The total is $783,827.


Edmund Davie Fulton: I appreciate that to do tha under every heading would perhaps expan< the volume of the estimates, but I think tha should be done in future years. I wa glad to hear the minister say-


Brooke Claxton: We shall certainly pick out the major items if we can.


Edmund Davie Fulton: There is an amount asked for civil servants, salaries and wages. In other departments it is possible to get a break-down of the personnel administering the department. I am not asking for anything like a war establishment of the personnel in the army, navy, and so on, but for departmental administration. It seems to me there would not be any prejudice to security if the various personnel engaged at headquarters were broken down so we could see how many there are and what is paid. Could that be done in future years?


Brooke Claxton: That information was given on June 9 at page 3462 of Hansard, in reply to a question by the member for Nanaimo. As you can see it occupies the best part of one column in very fine print. There is no difficulty about giving that information, but we have approximately 23,000 civilians in the department.


Edmund Davie Fulton: At headquarters?


Brooke Claxton: No, all . the information for headquarters has been, given. If it were given for all the permanent and temporary civil servants, properly so-called, it would run into a great number of pages. I do not know that it would mean anything to hon. members, but if it is felt it would be desirable to give it for Ottawa national defence headquarters, I am sure we could give consideration to that.


Edmund Davie Fulton: The next thing I should like to know is whether it would be possible to set up the estimates in such a way that we could see how many military personnel are engaged at headquarters, and their pay and allowances, for the army, navy and air force personnel. Could it be included in departmental administration? As I understand, at present the pay and allowances for the army, including those persons at headquarters, are included under "pay and allowances, army". The same is true for the navy and the air force.


Brooke Claxton: I appreciate the point. As the hon. member says, all pay and allowances for the officers and men of the three services are found in pay and allowances for the three services, and not under administration. The number of those involved at headquarters I gave this morning. Because of the way in which the books are kept, it would not be possible to pick out the pay and allowances of these officers without looking at the accounts for each separate one at some given date. That could be done, but it would cost a great deal to get the information. I do not 55946-261 i
Supply-National Defence know what use it would be, but it would be possible. The books are not kept in such a way as to permit that to be done without a special operation.


Mr. Higgins:: I have one specific point to raise with the minister concerning the runways at Gander airport. I spoke to the minister about the necessity of lengthening them before, and he informed me, as far as I remember, that they were quite adequate. I understand that the minister proposes to visit Newfoundland shortly and that he will likely land at Gander airport. If he does soi I should like him to make a little investigation himself and to do a little bit of questioning.
The information I have at the present time is that all last spring the Boeings either had to overfly or had to land at Goose. The airways have now been temporarily repaired. Sections have been taken up and they have been filled in and resurfaced; but the runways at Gander look like a mosaic patchwork. The Boeing aircraft are unable to use these runways at any time at any temperature over 40 degrees. That means that if they land and the temperature is not right they have to wait till night or wait until the temperature goes down. The necessity for lengthening the runways is a most important consideration. Even in the past two weeks Boeing aircraft, after many tries, and not being able to get off the ground, finally had to unload fifteen hundred pounds of cargo.
While the department administering Gander is of course the Department of Trade and Commerce, nevertheless I feel that the minister must be vitally interested in this matter, especially in view of the significance of recent events which may make the use of Gander airport by large bombers a matter of urgency. I think it is important that the minister should take that situation into consideration because if those facts are correct -and from the information I have received, I have no reason to believe otherwise-the airport at present cannot be used by large planes.


Brooke Claxton: I shall be glad indeed to do that. Following the hon. member's previous question, I myself made inquiries and found that Gander is Nat present adequate to handle all Canadian 'aircraft. But as he says, I hope to visit the airport after the adjournment. One of the purposes of the visit is to see the progress being made on the defence installation and the reserve army units. 1 am sure the Minister of Transport will not object to my viewing Gander, and I shall be glad to report to him on my return.

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Edmund Davie Fulton: Is the minister able, amongst other things in the detail here, to pick out for us the amount which he is asking for, under these sundries under navy, army and air force, specifically for recruiting and to give us the comparative figures of expenditure for 1949-50?


Brooke Claxton: Recruiting expense under
sundries?


Edmund Davie Fulton: Yes.


Brooke Claxton: The amount provided for in the present estimates is $500,000. The amount spent in 1949-50 is approximately $1 million.


Edmund Davie Fulton: Is that $500,000 for all three services?


Brooke Claxton: For all three services.


Edmund Davie Fulton: In each sundry item under the main services you have recruiting expenses?


Brooke Claxton: Yes. I can give them.


Edmund Davie Fulton: Is there a break-down there?


Brooke Claxton: That is right. I can give them to you. There is $100,000 for the navy, $200,000 for the army.


Edmund Davie Fulton: That would be $200,000 for the air force, then?


Brooke Claxton: Yes.


Douglas Scott Harkness: Several times in the past, particularly last year, the minister has made the statement that the cost per man in the services is $2,600. I have never been quite clear as to what is meant by that statement. Does that cost cover his pay and allowances, food, uniform and housing only, or does it also cover the weapons with which he is equipped, and the overhead? Exactly what is the meaning of that statement?


Brooke Claxton: It includes pay, allowances, pension provision, food, medical services and hospitalization, personal transportation, and some other minor items. Generally it includes everything that would be equivalent to his pay or salary if he were a civilian. It includes nothing for accommodation and nothing for weapons.


Douglas Scott Harkness: It does not include housing?


Brooke Claxton: No.


Douglas Scott Harkness: When we were discussing this item about two weeks ago, the minister gave us a break-down of the civilian personnel at defence headquarters, as he indicated a few minutes ago, and stated that the increase in this item for general administration was due to an increase in inspection services to quite an extent. There are two

items particularly as to which I could not understand why, because of increased inspection services, there would be an increase. One is stores and equipment, where the increase is from $13,500 to $136,900; and the other is the item of maintenance, repairs and operating expenses of property, which is increased from $10,000 to $97,500. There is an increase of about ten times in each case in those two items. I wonder if the minister would explain why that is?


Brooke Claxton: May I ask the hon. member again for the reference?


Douglas Scott Harkness: It is on page 168, under details of services, departmental administration. The third item down is maintenance, repairs and operating expenses of property; and the fourth item down is stores and equipment.


Brooke Claxton: The increase from $10,000 to $97,500 for inspection services is largely accounted for because the inspection services have taken over from the defence research board the proving ground in the Yalcartier area. This item therefore is sought to cover that additional expenditure for inspection services. There will be an over-all decrease in the cost of defence because, through this transfer of functions from the defence research board to the inspection service, there will be a reduction in personnel. With regard to stores and equipment, the increase from $13,500 to $136,900 is almost entirely due to equipment: laboratory, gauges, chemicals, proof material and replacement of vehicles for inspection services, owing to their increased activities, which are due to the fact that we are buying more equipment.


Douglas Scott Harkness: You havh another item there of travel, transportation, freight and express. I should like to know how much of that travel item is entirely for the civilian employees of defence headquarters. None of the expenses of officers of the three services who are employed at headquarters and who travel is included in this item. That will be included in a separate item?


Brooke Claxton: That is correct.


Douglas Scott Harkness: What is the amount for travel of the civilian employees?


Brooke Claxton: That is all civilian. The amount of $242,250 for 1950-51 is travel, et cetera, for the inspection services.


Douglas Scott Harkness: The item says: "Travel, transportation, freight and express." What is the amount that is actually travel?


Brooke Claxton: The amount for travel is $237,500 for that year, and for freight and express $4,750.


Douglas Scott Harkness: It is practically all travel?


Brooke Claxton: That is right.


Edmund Davie Fulton: Will the minister give us the main headings of the increase in sundries? He gave me a break-down of what the sundries are, but they are increased from $186,000 to $783,000. Is that also accounted for by this inspection service business? If so, what are the main headings under which the expenses are increased?


Brooke Claxton: The increase was almost entirely due to increased inspection. The unallotted amount of $338,227 is almost entirely provided for inspection services, and then there is an item of $205,000 expressly for inspection services, let by outside contracts.


George Harris Hees: I think everybody in this country has come to realize the possibility, although we would hate to think that it ever could be a probability, of an attack on this country by land forces of an aggressor. At the present time, so far as I can see, we have a brigade group which could repel such an attack or make an attempt to repel such an attack. But I do not feel that a force of that size would have any appreciable effect on the kind of force that would be thrown against this country if such an eventuality developed. It seems to me, with my limited knowledge, that it would take a force of at least the size of an armoured division to do any sort of a jab in repelling such an attack.
I do not think anybody would argue that it would take less than six months from a standing start, with no interference, to prepare an armoured division both from the point of view of equipping it and getting the men into the ranks and training them before an armoured division could go into action. Will the minister tell the committee what the plans of the Department of National Defence are for getting a force into the field in less time than six months to repel the possible invasion of this country if at any time an enemy should suddenly strike?


Brooke Claxton: This has been gone into a good many times. We do not estimate that there is any possibility of any attack on Canada except by an airborne force; and we believe that under existing conditions such a force could be dealt with, if it got to Canada, by an airborne brigade.
I do not know whether hon. members know how many aircraft it takes to make an airlift of an airborne brigade. It runs into hundreds. That being so our calculation is-and it is a calculation based on an estimate of risks, as all war planning must be-that the risk we have to meet is not that of an all-out attack on us but something that will be
Supply-National Defence launched with the view of panicking our people to deploy more of their forces here than they should. We believe if we start doing that we will be doing just what the only potential enemy wants before he ever lifts his finger to attack us.
Exercise Sweetbriar will, I believe, be found to show that the forces we have, if our estimate of the situation is right, are the right kind of forces to deal with such an attack.


Douglas Scott Harkness: 
Brooke Claxton: The decrease is due to the employment of a total of 6,331 civilians in all classes as against a total of 6,636 in 1949. Therefore it is due to a definite drop in the number of personnel involved, namely, 305. We have not found it possible to do much in the way of putting' civilians in service positions at headquarters yet. It is a difficult operation, and I think probably the navy will be the service in which it is least easy to do it because of the particularly technical nature of its work. The decrease is due in part to economy in administration. I should say also that a very big proportion of those employed in the navy are prevailing rate employees in the dockyards, and that number fluctuates from month to month with the amount of work. As of the 31st day of March, when these figures were taken, the number employed there was 2.306 in Halifax, 1,777 at Esquimalt and lesser numbers at other places.

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Edmund Davie Fulton: I should like to ask the minister a question with regard to the properties for the three services which I understand -and; I am proceeding on this basis-do not include houses being provided as accommodation but would probably include merely barracks and such other defence buildings, storage depots, and so on. The items under the navy, army and air force read:
Acquisition, construction, purchase, maintenance, repairs, rentals and operating expenses of properties.
There are many millions in each case. Can the minister tell us, firstly, what is the inventory value of the defence properties exclusive of houses which we now have, and how much is spent under these three headings of acquisition, purchase, maintenance and so forth? Ini other words, how many new properties are we developing this year, how many are we purchasing this year, and how much are we spending for the maintenance of existing ones?


Brooke Claxton: We have no inventory of the value of properties in the Department of National Defence. A great many of them have been in the department from confederation when they formed part of the property of the crown. For example, in Quebec we have the old citadel and numerous other properties. With regard to the expenditures on properties outside of those made by Central Mortgage and Housing Corporation we have under "acquisition, construction and purchase of properties" the following:
Royal Canadian Navy Reserve	 $	160,000
Navy General	 5,183,000
Navy total	 $ 5,343,000
Canadian Army Reserve Force and
C O.T.C	 1,913,000
Canadian Army General	 10,402,000
Northwest Territory and Yukon Radio
System	 160,275
Northwest Highway	System	 650,000
Army Total	 13,125,275
R.C.A.F. Reserve	 $	100,000
R.C.A.F. General	 13,945,279
Northwest Staging Route	 800,000
R.C.A.F. Total	 14,845,279
Grand Total	 $33,313,554
For maintenance and repair of properties the total is $16,601,905 and rental of buildings and properties, $960,432.


Edmund Davie Fulton: Has a decision yet been reached for what I am sure will be a small item in this large total to provide for a drill hall for the Rocky Mountain Rangers with headquarters at Salmon Arm, which drill hall was burned down about six months?


Brooke Claxton: That is one of the places receiving consideration, but I regret that there

is no express provision here for that building. As the hon. member will see, we have provided $1,913,000 for the construction of reserve accommodation. How much of that is proceeded with and where will depend on when the plans can be made and the contracts let. We do propose this year to begin a modest program of reserve armoury accommodation at the places which seem to need it most.


Douglas Scott Harkness: Under navy there is an
item of $2,304,900 for travel, transportation, freight and express. I presume that would be entirely travel by land and would not include travel in ships of the navy?


Brooke Claxton: That is right. It might include some marine transport for naval personnel proceeding to England to take courses. If there are no navy ships available we must pay their passage by sea.


Douglas Scott Harkness: How much of that would be for travel, leaving out transportation, freight and express?


Brooke Claxton: The total for travel and
transportation is $1,189,900; freight and express, $415,000.


Douglas Scott Harkness: Would that include the cost involved in men going on leave?


Brooke Claxton: Yes. For example, the largest single item is for an estimated more than 2,000 personnel to be transferred from coast to coast at a cost of $101 each. There is over $200,000 right there.


Douglas Scott Harkness: I was .wondering whether it would include the cost of men going on leave because it seems to be quite a large item for travel by land by naval personnel.


Brooke Claxton: That is right, but it is due
largely to the fact that our naval establishments are on the east and west coasts of the country. Whenever a man is transferred from one to the other he must go right across the country and there is no way to send him except by air or land.


Douglas Scott Harkness: I notice that a large part of the increase in the vote for the Royal Canadian Naval Reserve is made up by the pay and allowances item, from which I would assume that it is expected there will be a considerable increase in the number of the naval reserve. If that is so I am glad it is taking place. Can the minister tell us the estimated increase?


Brooke Claxton: This vote is based on an
estimated strength of 4,500 which would be averaged throughout the year. It represents an increase from the present figure of 3,619 at May 31 of this year, so there is an increase of something under 900.


Douglas Scott Harkness: Is it anticipated that new stations will be set up in the coming year?


Brooke Claxton: No, we are intending to go through this year with the 21 that we have, that is the 20 we had before the entry of Newfoundland plus H.M.C.S. Cabot which was established upon the entry of Newfoundland into confederation.


Douglas Scott Harkness: Could the minister tell us what buildings were acquired or constructed during the last year, and in particular if a building for recreational purposes and a laundry building were constructed at Esquimalt?


Brooke Claxton: Neither building has been
constructed. It is planned to complete the construction this year of a new permanent barracks at Halifax and also to do a considerable amount of construction at Dartmouth. There is no express provision for Esquimalt as yet. I have seen the list of priorities and have discussed the situation with the chief of the naval service and I assure my hon. friend that the laundry building, the new barracks and other buildings at Esquimalt are high on the list.


Edmund Davie Fulton: The minister told me a few moments ago that there was no inventory of the defence buildings. Do I understand from that that when a building is constructed or otherwise acquired it is not carried on the defence department's books? It seems to me that such a building should be reflected in the assets of the dominion.


Brooke Claxton: The hon. member's assumption is quite correct. There is no capital entry in respect of defence properties.


Edmund Davie Fulton: Why not?


Brooke Claxton: It is not government policy with regard to any department that I know of. I am afraid that is really a matter for the Minister of Finance, but that is my information.


Douglas Scott Harkness: What proportion of the $9,900,000 in the naval vote is for that purpose? You read the figures in a hurry, and it was rather difficult to catch them.


Brooke Claxton: 


Douglas Scott Harkness: I take it that is all for construction on the west coast.


Brooke Claxton: No. The largest single item is at Dartmouth, Nova Scotia.


Douglas Scott Harkness: I meant the east coast. The construction of these other buildings recommended at Esquimalt will have to wait until this other construction is finished? Is that the situation?
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Brooke Claxton: Until it is started. We feel that the needs for this other construction are gfeater than on the west coast.


Douglas Scott Harkness: Under the next item which deals with personnel supplies and services, food supplies, and so forth, can the minister tell us whether the deficiencies in personnel equipment, clothing and so forth, which were outlined in the Mainguy report, have now been made up, and what the situation is in regard to these items?


Brooke Claxton: The deficiencies are being made good. I have not had any shortage of issue clothing or equipment for new entries reported to me since six months ago.


Douglas Scott Harkness: I take it that the deficiencies have been made good. You said they were being made good, and if you have not had any reports of deficiencies for six months then I presume they have been made good and there are none.


Brooke Claxton: We are proposing to spend a total of $1,816,400 on clothing and personnel equipment. Looking at the details of that amount, it is almost entirely for clothing, and the amounts would indicate to me that they are for normal supplies rather than large amounts to make good deficiencies.


Douglas Scott Harkness: Can the minister tell us how much of the amount of $5,700,000 is for food, and what it costs per day at the present time to feed a man in the navy?


Brooke Claxton: The food for all three services is now an identical ration, and I believe it to be the best ever issued to forces anywhere. The cost varies with each contract according to the amount tendered. At the present time it is running about $1 per man per day.


Douglas Scott Harkness: As to the next item, stores, equipment and so forth, it is up from $27 million to $38 million. Can the minister tell us what is the cause of the bulk of that increase? Is it because of new ships which are to be completed and paid for this year or is it mainly for other items of equipment?


Brooke Claxton: Yes, it is. The largest amount is for signal and wireless stores. The additional amount for that purpose is about $3,500,000.


Douglas Scott Harkness: I could not hear the minister.


Brooke Claxton: The additional amount sought for signal and wireless stores is approximately $3,500,000. There is an amount of $5 million for armament stores, which is largely rearmament of existing vessels and similar changes. For acquisition and addition of ships we propose to spend $9,775,000 against

Supply-National Defence $7,150,000 voted for 1949-50. There is also a slight increase for naval and aircraft stores.


Douglas Scott Harkness: How many new ships coming under this amount do you expect to have come into service this year?


Brooke Claxton: We have contracts let or arranged for nine ships including an Arctic transport icebreaker, three antisubmarine vessels, four minesweepers and a gate vessel. None of the ships will be completed this year with the possible exception of the gate vessel, which is the smallest of the nine. Next year will see the completion of some of the minesweepers. The completion of the others will depend on the progress made by the yards, and also on the most difficult problem of what modifications will be made.


Douglas Scott Harkness: Some of this money is for payments on these nine ships?


Brooke Claxton: Yes, the $9 million is all for payment in respect of the year 1950-51. The total program involves over $35 million.


Edmund Davie Fulton: Under each service there is included in the sundries item an amount for communication services. Does that mean what other departments call telegraph, telegrams and telephones, or is that a special communications service of the defence department?


Brooke Claxton: It is telegraph and telegrams.


Edmund Davie Fulton: Does the department maintain its own communication system operated by the Royal Canadian Signals?


Brooke Claxton: Yes, indeed. We have an interservice signal system with a network covering pretty well all of Canada. I think the service extends for a total of about 35,000 miles. It is also in communication with ships at sea and with other countries of the commonwealth. It is a completely integrated triservice system without overlapping, the navy army and air force each contributing some part to it. On occasions such as the Fraser valley floods, as the hon. member will recall, the Winnipeg floods and washouts in the maritimes, it has handled all commercial traffic when the commercial signal services could not carry on.


Edmund Davie Fulton: Is the cost of that charged under this communication heading?


Brooke Claxton: No. It comes out of the general vote.


Edmund Davie Fulton: Under each appropriate
service?


Brooke Claxton: Yes.


Edmund Davie Fulton: Is that used for the ordinary requirements of the defence department or is it kept especially for emergencies?


Brooke Claxton: It is used from day to day for the ordinary requirements of the defence department, and also for some messages for other government departments.


Edmund Davie Fulton: What I really wanted to ask, and will ask now, is whether it is used to the maximum for the ordinary routine business of the department so as to keep the charges made by commercial companies down to a minimum.


Brooke Claxton: Yes, indeed.


Mr. Fraser:: Where is the steel for these nine ships being purchased?


Brooke Claxton: In Canada.


Gordon Knapman Fraser: All in Canada?


Brooke Claxton: There will be some special sizes, shapes and pieces that it will be more economical to get from the United Kingdom, but the great majority comes from Canada.


Gordon Knapman Fraser: It was reported in the press some time ago that some of it was coming from Germany. Is that so?


Brooke Claxton: No.


Gordon Knapman Fraser: I sun glad to hear that.


Douglas Scott Harkness: Could the minister tell us the situation with respect to our naval aircraft at the present time?. Have we secured any of the newer types, or are we still operating with the types that were current at the end of the war? Where are our replacements coming from? Are we making any in Canada, or are they coming from Great Britain or the United States?


Brooke Claxton: We are still using aircraft which were either in existence or coming into production at the end of the second world war. They are Sea Fires, Sea Furies and Avengers. We do not make any in Canada, but those we now use are modified and repaired in this country. We do not plan on making any in Canada at the present time; and whether or not we will replace those now in use will depend upon the policy adopted with respect to the naval air arm and also upon developments in other countries. Only now are the United Kingdom and the United States commencing the production of post-war types of naval aircraft. We believe the situation will see a good deal of development in the next two or three years, and we believe the best course to follow for the present at least is to carry on with the equipment we have.


Douglas Scott Harkness: Under the item of fuel costs for ships, aircraft and mechanical equipment

I see the estimated expenditure is down some $700,000. This would seem to indicate that it is proposed to spend less time at sea this year than last year. This morning the minister indicated that a naval exercise is to be held which will take squadrons from both the east and west coasts over to Great Britain, and that those were to be the largest naval manoeuvres in which our vessels have taken part since the war. Having that in mind one would think the time spent at sea would be increased this year, but this reduction of $700,000 in fuel costs would appear to indicate the contrary. Would the minister explain that?


Brooke Claxton: This apparent reduction is entirely due to an overestimate last year. When those estimates were prepared fuel oil was approximately $4 per barrel. For the current year we are estimating on the basis of fuel oil at approximately $2.80 per barrel, which more than accounts for the decrease shown.


Douglas Scott Harkness: Then when we come to the army we find that civil salaries and wages are down, as was the case in the navy. Is that for the same reason, that they have been reducing the staff and, wherever possible, replacing officers at desk jobs with civilian personnel? If so, to what extent has that been done?


Brooke Claxton: This reduction is due to an overestimate in 1949-50. We found that by economizing we were able to get along with five hundred fewer civilians than the number for which provision had' been made. Here again we are trying to reduce the number of officers at headquarters, and there has been a very substantial reduction this year.


Edmund Davie Fulton: I am pleased to see a reduction in the amount under travel, transportation, freight and express. Was that because of an overestimate last year, or is it anticipated that there will be a curtailment in these expenditures this year?


Brooke Claxton: The largest single factor contributing to the reduction is a decrease in the cost of posting personnel, amounting to $1,500,800. That is due to the fact that as we went through the post-war organization period we got more and more personnel to the right places at the right time. Also we are tending to increase the period of posting, to a minimum of two years.


Edmund Davie Fulton: Would this Item include the
transportation costs in connection with such things as Exercise Sweetbriar and other schemes or exercises, or does this only cover such things as leave, postings, duty journeys and so on?
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Brooke Claxton: This would include the portion of the transportation in connection with Exercise Sweetbriar not handled by the motor vehicles of the army itself or by the R.C.A.F. We had to transport a considerable number of personnel either by train or by commercial aircraft, and that cost would be included here.


Edmund Davie Fulton: Then would the minister give us the actual expenditures under this heading in 1949-50?


Brooke Claxton: For travel and transportation for the active force the expenditure in 1949-50 was $2,687,820.87. The cost of freight and express was $1,993,099.57.


Douglas Scott Harkness: Under the item dealing with the Canadian army reserve force, would the minister tell us the percentage of strength of the reserve force at the present time? That would give us a general idea of the strength of the reserve force in relation to what it would be if it were up to full strength. I know of one' battery, for instance, which is at about 75 to 80 per cent of strength. I know of another one which is only about 10 to 15 per cent of strength, and I should like to know the general percentage for all units in the reserve.


Brooke Claxton: It is rather more than 50
per cent.


Douglas Scott Harkness: Then could the minister tell us how many reserve army personnel went to camp last year? Often the paper strength of these reserve units is not a very good indication of the real strength or effectiveness. Quite often a considerable number of people appear on only two or three parades during the year, but they are carried on the paper strength and receive pay for the parades they attend. If you can get the number of people who have gone to camp it is a much better indication of the training a reserve unit has completed. When the minister gives that information perhaps he will also tell us what percentage of the reserve unit strength that amounts to. I think it might be helpful if we had that information as well.


Brooke Claxton: 10,002 went to camp in 1939.


Douglas Scott Harkness: What is the official strength? I think the minister gave that earlier?


Brooke Claxton: At present it is about 44,000.


Douglas Scott Harkness: That is a little less than 25 per cent?


Brooke Claxton: Yes.


Douglas Scott Harkness: During consideration of
these estimates a few weeks ago, in speaking of the reserve units the minister said they now had all the equipment that they required, and all that they could handle. In some
4140	HOUSE OF
Supply-National Defence cases that may be true, but in other cases I do not know that it is true. I should like to cite a specific example to the minister and invite his comments. 1 refer to a particular heavy ack-ack regiment of which I know. This regiment has one radar set, and its establishment calls for eight radar sets. The set which the regiment has is a Mark III, with a range of about 60,000 yards. This is the type of set that was used in the early part of the war, and which is now obsolete. This same regiment has four guns, and its establishment of course is 24.
The regiment consists of three batteries, and each battery is supposed to have eight guns. Apparently each battery has one gun, and there is one extra you might say. It seems to me that a distribution of armament of that nature is not sufficient to carry on proper training. These heavy ack-ack guns fire as a troop of four, particularly if they are being used for ground shooting which is one of their roles. It would seem to me that four guns for a regiment of that sort are not sufficient. It is not as good a distribution of guns as we had before the war in the reserve artillery batteries. At that time the one battery of which I have knowledge had four guns. This makes one wonder whether the provision of equipment to reserve force units, particularly those of a technical nature, is sufficient to carry out training.
In addition to commenting on that particular situation can the minister tell us-perhaps for security reasons he does not wish to do so-how many up-to-date radar sets for use with these heavy ack-ack guns we have in Canada; in other words, whether we have up-to-date radar sets which could be distributed to these heavy ack-ack regiments if required. If we have any of these up-to-date sets, why is it' that at least one per regiment has not been distributed so that the personnel can get training on them?


Brooke Claxton: It happens, Mr. Chairman, that I know the number of heavy ack-ack guns that we have in Canada, and I shall be glad to give that information to the hon. member privately. We believe that we have possibly more than we require, and we are considering making some available to other countries. The reasons for not issuing more than one to some units-


Douglas Scott Harkness: Is the minister speaking of guns or radar sets now?


Brooke Claxton: Guns. I assume the hon. gentleman is stating the facts correctly, and the reason is that there frequently is not the personnel or space to use more than one. There are large numbers in mobilization reserve, and if any unit can use any gun or


any equipment that we have, then that equipment is under the control of the local G.O.C. or area commander who can issue the equipment without any difficulty at all. No case has been brought to my attention of any lack of such equipment.
With regard to our radar equipment on such guns being modern the hon. gentleman is substantially correct. There is more modern equipment, although what we have works well. It would cost $180,000 to apply modern equipment to each one of those guns, and we have thought that that amount of money could be better spent at present, in view of the possible developments in antiaircraft work which might make that expenditure undesirable. It is a question of balancing whether we should do that now or do something else. We have decided to postpone that expenditure and do something else which we regard as more urgent. As hon. members know, the largest part of our expenditure on new equipment is for new ships for the navy, and aircraft for the air force.


Douglas Scott Harkness: If I might just follow that up, the minister says there is plenty of this equipment. All the unit has to do is to apply for it. I happen to know that the unit did apply, but did not get it. I recall particularly a personal experience I had along that line about two years ago when I was still commanding a reserve regiment. I had an extremely difficult time getting S. P. guns. I knew the S. P. guns were here; nevertheless we were only issued them on the basis of one per battery which was almost useless for any sort of tactical training. It was only useful from the point of view of learning gun control and things along that line. You need at least two S. P. guns working together to give any training at all to the members of a troop or battery as to how those guns would be employed. I can assure the minister that I had extreme difficulty, in fact my second in command was turned down in regard to getting these guns. I had to take it up personally with N.D.H.Q. before we secured an increase in the allotment. I know from personal experience that frequently units cannot get an increase of equipment which they consider necessary. I would suggest that this situation should be looked into, and the reserve units should be canvassed by means of a questionnaire to commanding officers to ascertain what they think their needs are.
Of course the facilities to take care of the equipment must be considered. I know there is quite a bit in what the minister says. In some places there are no facilities for garaging or otherwise looking after and

repairing certain equipment. In a considerable number of places those facilities do exist, and I think some units could do with more equipment than they have been issued, particularly weapons.


Brooke Claxton: I would be very glad to follow up the suggestion the hon. member has made. It happens that in the autumn of 1949, at the beginning of the training period, either the chief of the general staff, one of the senior officers at defence headquarters or myself attended meetings of all the reserve associations of the army reserve forces. One of the questions we put to them was, "Are you satisfied as regards equipment?" No one suggested that he was not. I think I have read all the resolutions of the twelve associations, and I do not believe that a single one of them deals with the problem of equipment. I have been assured there is no shortage for the reserve forces, but I shall be glad to follow up the hon. member's suggestion.


Douglas Scott Harkness: I am not suggesting there is any shortage. I believe this equipment is here, particularly the items I mentioned, the heavy ack-ack guns and the S. P. guns. We have them here, but they are not out in the hands of the different units that could use them.


Edmund Davie Fulton: While we are on the subject of the reserve army, I should like to follow that up with the minister for a moment or two. I want to speak about the number of men who go to camp, because it is very difficult for a reserve unit to do any tactical training, which is perhaps the most important kind of training, when it only has a small number of men at camp.
I was speaking to a member of a reserve unit just now, and he tells me that in some cases they have to make up composite companies for schemes with a platoon from here and a platoon from there. That is not satisfactory training at all. He told me the difficulty is that in most cases the men are willing to go but it is not convenient for their employer to let them go at the time the camp is being held. I know this matter has been discussed previously and I do not want to go into it again in any detail. I should like the minister to say, if he can, what progress is being made in encouraging employers to make it possible, for their employees to go to camp, and to compare the percentage which went to camp this year of the total strength of the reserve army, which worked out to 22 per cent, with the percentage which went to camp last year and to say whether there is any improvement in this matter or not.
55946-262J
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Brooke Claxton: With regard to the efforts made, to persuade employers to allow reserve personnel to go to camp, I think we have had great success. Appeals to employers: not only have these been made through their associations like the Canadian Chamber of Commerce, the Canadian Manufacturers Association and so on, with which I have corresponded directly, which have been most co-operative, some of which have passed resolutions urging their member organizations to do this. Also for the third consecutive year I have addressed a letter personally to all leading employers in Canada asking them to support the reserve army. This year we sent out some 3,300 such letters and there has been only one unfavourable reply. The support is very good indeed. However, many concerns such as, for example, the steel companies which have round-the-clock operations, find it difficult to make the adjustments necessary to permit men to go to camps who want to go. The figure of 10,000 represents a substantial increase over last year. It meets to a considerable degree our objective in that it consists largely of officers and N.C.O.'s. The figure for last year was 7,092.


Edmund Davie Fulton: What was the percentage of
the strength that figure represented?


Brooke Claxton: That was against 38,000. This year it is 10,000 out of 44,000. It seems to be about the same or a little better. The type of training at these camps, as I think everyone recognizes, is different in character to what it was before the war. The administration is done entirely by the camp administrative staff. The men arrive and spend their full time at camp in intensive training in much the same way as they would do if they were attending a corps school. I think those who saw the demonstration at Petawawa last week can appreciate that it would form part of a good training. Also, where it is possible, units are encouraged to drive up with their own equipment, and some of them have driven up with their own guns. We plan to fly a considerable part of reserve personnel to camp so as to save their time. I must say the response from the men themselves is most encouraging. I go to as many camps as I can, and I find that they are enthusiastic. They have to be, in order to give up their own time, as many of them do. But they are doing a great service and we are doing everything possible to encourage them.


Mr. George:: I am sorry that I missed part of this discussion, owing to the fact that I had to attend a meeting of another committee. From what I have heard since I came in, however, I am led to believe that there is a

Supply-National Defence great misunderstanding or lack of apprehension of what the reserve army is doing. First of all, we have had no trouble in getting personnel to camp. There may be two or three men who cannot get away because of their occupation-as the minister says, in such companies as steel companies, foundries, et cetera. I know of the odd man who cannot get away. But on the whole we have 100 per cent co-operation from employers.
With regard to training, as most of you know by now, I am second in command of the 8th Princess Louise New Brunswick Hussars. We have been spending a terrific amount of money for the last two years. Two years ago we started to add up for ourselves what we were getting for this money, and we found that we had a great number of men partially trained but that we had nobody fully qualified. That situation applies not only to our own unit but to many others. So in order to show some results, we thought we should qualify tradesmen. An armoured unit is composed probably of more tradesmen than is any other type of unit. I am subject to correction there, but in any event we have a high percentage of tradesmen. To go with week-end training and local training, we ran several courses of ten days' duration to finish up the qualification of tradesmen. We now have 117 tradesmen qualified. Those were qualified by an active force trade test board; they are now fully qualified and are drawing trades pay along with their pay and allowances, the same as the active forces.
With regard to summer camp, I think the abject is to exercise these tradesmen who are now qualified and those who have partly qualified. In other words, our whole object is to produce a regiment fully qualified and able to take the field. The criticism was made a moment ago that composite companies had to be made up in order to exercise tactically at camp. That is not the purpose of camp, as I understand it. As the minister said, it is more a corps school. I would hate to see this change. We can exercise companies locally but at summer camps we have the best instructors and the best facilities and I think it would be a great mistake not to exercise our men in the trades in which they are qualified.


Douglas Scott Harkness: In connection with this matter of getting men to go to camp, it so happens that I had a conversation with a reserve force officer in Ottawa here yesterday, and whom I met by chance. He made the complaint that it was difficult; in quite a number of cases, personnel in his unit who worked in the civil service either were not able to get away or were discouraged from

going because it was going to make it awkward in their respective offices. According to his story it was intimated to some of these people:	All right, they were entitled
to go to camp under the rules, but if they went to camp, when it came time for certain promotions which might be in the offing, as far as they were concerned they might find themselves in difficulty. If that sort of thing prevails to any extent in the civil service- and I think it applies only to a limited number of cases-then it is a thing which the Department of National Defence and the government should make sure is eradicated so that there will be no question about people being able to go to camp because of, we will say- and perhaps this might be the right word- intimidation within their department of the civil service. I do not know whether anything definite can be done by the minister.


Brooke Claxton: What the hon. member has described is directly contrary to the policy of the federal government as expressed by the governor in council.


Douglas Scott Harkness: Yes, I know it is.


Brooke Claxton: Instructions have been given to all government departments accordingly. If such a case of intimidation or implied intimidation ever occurs, then I think it would be the duty of every hon. member to-and I am fairly sure any hon. member who had the evidence would-mention it to me or ventilate it here. It has never been brought to my attention. If any such case does occur, I hope hon. members will bring it to my attention.


Douglas Scott Harkness: As to the acquisition and construction of buildings and properties for the army, of the $22 million which is to be spent this year, how much is for housing?


Brooke Claxton: It would take a few minutes to pick the items out of the lists so as to total the amount for housing, but the total would not be very much. We are not doing defence housing at other than the most isolated localities. C.M.H.C. is doing all. the ordinary housing for the defence department. But included in this year's estimates would be a number of relatively small items to finish up existing contracts and to provide for housing at isolated centres.


Douglas Scott Harkness: One other question about the cadet service: I see the estimate for that is down. I hope it does not mean that the cadet services are being curtailed.


Brooke Claxton: No, there is no decrease in activities. The number of cadets provided for, the amount of training and the amount of payments of grants and for instructors are on the same basis. The decrease is explained

largely by the decrease in the amount provided tor travel and transportation where there was an overestimate of $128,884 last year.


Edmund Davie Fulton: Can the minister say to what extent there is repair by civilian contracts of vehicles, weapons and technical stores under this heading of stores and equipment? I was wondering why R.C.E.M.E. cannot do it all.


Brooke Claxton: For the reason that they have more work than they can handle now. We have some 22,000 motor vehicles in the armed forces, and a good many of them are getting well on in years, so that they involve a good deal of repair work. At all the main centres R.C.E.M.E. has more than it can handle and work is allotted to civilian contractors.


Douglas Scott Harkness: Under sundries I see "Education of dependent children." I presume that is for children in isolated areas, or something of that sort. Can the minister tell us to what extent the department has provided educational facilities for children?


Brooke Claxton: Where there are no educational facilities available such as at Shilo, Borden, Barriefield, Rivers, Chilliwack, Churchill and Whitehorse we have provided some sixteen primary schools to look after 2,200 children of service personnel, and that is the only way we can do it. We regard it as a good and proper way of looking after a natural need.


Mr. Macdonnell (Greenwood):: When the minister says there are no educational facilities at Barriefield, does he realize that that is practically in the shadow of Queen's university in Kingston?


Brooke Claxton: Also I might say the Royal Military College, the National Defence College and the Staff College, but they are not very well equipped to deal with children from five to eleven or twelve years of age.


Douglas Scott Harkness: If I remember aright I think the defence department put up a school in Calgary right opposite Currie barracks, as a matter of fact, after some considerable discussion with the city as to whether the city should build the school on adjacent property or whether the army should operate there. I thought that because of the fact that this was probably the general policy the army would operate their own schools wherever there were a considerable number of servicemen. I wonder whether from what the minister says I am to take it that it is not the policy, and that it is only in isolated areas that the schools are being built? Can the minister tell us why it was done in Calgary?


Brooke Claxton: My recollection is that when we started the school there it was outside
Supply-National Defence the municipal limits. Speaking from recollection again we could not persuade the municipality to extend its service there, so we had to do it. Subsequently arrangements were made whereby the work was undertaken by the municipality on our making a payment to the city of Calgary of $400. I am speaking from memory now, and I am subject to correction.


Mr. Knight:: Is the school in Churchill in the military camp or on the townsite?


Brooke Claxton: At the military camp.


Edmund Davie Fulton: Can the minister give us an explanation of the item at the bottom of page 173:
Less-estimated amount required for commitments nominally to fall due during the fiscal year.
I cannot quite understand it as it is set out in the estimates. I am not asking for a breakdown. Can the minister explain what it means?


Brooke Claxton: It is the amount we collected for aerial service from other government departments.


Edmund Davie Fulton: I am sorry; I have the wrong page. I meant page 172.


Brooke Claxton: I beg your pardon. That is explained by reference to the main vote at page 31. The commitment authority is $438,178,000 as shown in item 202, and that corresponds with the total of $438,178,000 as shown in the details on page 172. Then there is deducted from that the amount of the current year's commitment authority of $53,245,696, corresponding to that amount shown on page 31, reducing the amount to the cash appropriation of $384,932,304, which is the figure shown for item 202.


Edmund Davie Fulton: I agree with the minister that the figure $384 million odd is shown, but I do not understand what the reason is why this $53 million odd is deducted. In other words I do not understand the explanation given at the bottom of page 172, and there is no explanation of the figure given at page 31. Why is this $53 million deducted?


Brooke Claxton: The amount of the actual cash appropriation for national defence not covered by other items is $384,932,304. In order to enable the department to make commitments in respect of the current year notwithstanding section 29 of the Consolidated Revenue and Audit Act, provision for this additional amount of $53,245,696 is made.


Douglas Scott Harkness: I remember a vote in some other department, I think resources and development, in connection with roads in the Yukon. Can the minister state whether this

Supply-National Defence northwest highway, or the Alaska highway as it is usually known, is completely under control of the army and whether the army is wholly responsible for its maintenance?


Brooke Claxton: It is entirely under the army.


Douglas Scott Harkness: The item for aerial photographic survey is reduced from $709,033 to $533,380, which would indicate that the number of squadrons used in this work is being reduced. I have always felt that these aerial photographic squadrons did an extremely useful work, not only during the war but since the war as well. They have mapped a large part of the country and I wonder why their strength is being reduced. I think this section of the air force has a greater practical use in time of peace than almost any other component and it would be a pity if it were cut down.


Brooke Claxton: I would quite agree with my hon. friend, if there were the same need as existed before. We have been able to accelerate the program over the last three years so that in each year we have been able to photograph almost a million square miles. The number of man-years which it is estimated will be needed in 1950-51 is 206 as against 305 provided for 1949-50. .


Douglas Scott Harkness: What does "man-year"
mean?


Brooke Claxton: The average number of men that would be employed for a full year if they were employed, over that period. The work is gradually being completed and I hope we will see another sharp reduction next year because the need will no longer exist to the same extent. In other words, we have largely covered Canada by aerial photography and have turned over the photographs to the Department of Mines and Technical Surveys for mapping. As we reduce the amount of aerial photography required we plan to convert some of the squadrons engaged in that work to other operational work such as aerial reconnaissance and bombing.


George Alexander Drew: Mr. Chairman, before this item passes I want to point out that the questions that have been asked have been in a general way based upon the necessity of seeking to obtain information which is not present in the details. I can only express my regret, with the changes that have taken place in our relationships with other Atlantic powers and with the events that have occurred so recently, that there should be no indication that it is the intention of the Department of National Defence to adjust its affairs in accordance with these extremely important changes.
IMr. Harkness.]
At the moment there is nothing that anyone can do to obtain information which is essential except to ask the type of general questions which have been pressed for. In spite of the fact that we have gained nothing in that respect during the present session I can only express the hope that when the house meets next year we will then have the estimates presented in a way which can be understood and that those estimates, to whatever extent is practical, will follow the same pattern as the estimates of other departments so that they can be examined in the same measure of detail. When I say that it is hoped they can be examined next year, that is always subject to the hope that this condition which has become so serious may not demand a much earlier consideration by the house of the problem we are discussing.


[Stage Direction]
Item agreed to.
Defence forces-	[DOT]
203. Defence research and development, subject to allocation by the treasury board, and to authorize total commitments for this purpose of $27,983,161 including authority notwithstanding section 29 of the Consolidated Revenue and Audit Act, to make commitments for the current year of $24,925,361 and commitments for future years of $3,057,800 against which commitments it is estimated that actual expenditure in 1950-51 will not exceed $23,925,361.
Mr. Herridge:: I do not know whether the minister has seen the article, but in the last issue of the Montreal Standard there is a news report under a byline of Ottawa. There is an article by Gerald Waring, entitled "White Elephant in the Arctic." In brief this article points out that in 1945 certain arrangements were made between Canada and the United States for the installation of long-range aerial navigation stations in the north and that something over $50 million has been spent on those stations. It is stated that these stations have been found to be entirely unsuccessful and that the whole thing has had to be abandoned. Canada is said to have paid a fairly large proportion of the $50 million which was expended.
Secondly, the article states that a great portion of the supplies were flown in by air at great expense during the first year, but then during the second year they were taken in by water transport at much less expense. The suggestion is that all the equipment should have been taken in by water. The article is said to be based on certain defence forces information.
I should like the minister to inform the committee if there is any basis for what is stated in this article and why, if great saving could have been made by the use of water transport, this equipment was flown in by air. Surely if this article is correct I think

it can be argued that this house should be told this sort of thing directly and not have to get information from the press with regard to such large expenditure which apparently was a mistake on the part of those directly concerned with defence research.


Brooke Claxton: I have seen the article and
also I am generally familiar with the situation. What happened was that in 1945 and 1946 the United States and Canadian authorities felt that it would be desirable to establish a chain of loran stations in the far north. This method of obtaining navigational fixes has proved successful in places farther south. The initiative in this regard was not taken by the Canadian government, but we co-operated. This method of obtaining a fix had never been tried in the far north.
It involved the measurement of signals sent out thousands of miles in millionths of seconds. By sending out a message to an aircraft from a tower and measuring the time of the "echo" from that tower with the time of an echo from two or three other stations it may be possible by measurements running into the millionths of seconds to determine the exact position of the aircraft. As I said, this has been successful in other parts and there was no way of telling whether it would be successful in the far north until it was tried there.
It was tried, and while there was a moderate degree of success it was not considered sufficiently reliable all the time to justify its continued operation at very considerable cost in peacetime. Conditions might change at some future date or there might be developments in the art itself, to justify its resumption. At the time it was considered very urgent that these stations should be established. A considerable amount of work was done by airlift. That airlift was largely supplied by the United States. We did not have the aircraft to do the whole job. A relatively small proportion of the expenditure was due to our using Canadian aircraft. My information is that it would have been possible to supply them by ship but this would have meant a year's delay which was not considered desirable.
The decision to discontinue the use of these stations was made only recently. As a matter of fact I sent to the United States authorities, in accordance with our arrangements, a draft of a statement to be made jointly by us announcing the discontinuance when, through some source or other, the statement appeared in the Standard to which the hon. member has referred.
The cost to Canada of the whole operation was nothing like the figure suggested in the article. It is not possible to segregate the
Supply-National Defence cost because air force equipment and personnel were used from their general resources. A large percentage of the material, transportation and equipment was supplied by the United States.
In terms of defence the cost was not a very great sum, and there was no way of arriving at the decision not to do it unless we tried it. It proved unsuccessful because of ionospheric and other conditions which make radio communication exceedingly difficult. In the whole area running north from James bay through Hudson bay and spreading out to the northwest particularly, radio communication is probably more difficult than anywhere else in the world owing to electrical disturbances and other causes which we are investigating all the time. Without trying the experiment, it was not possible to ascertain that it would not work. The effort was made, was partially successful, but not sufficiently so to justify its continued use in peacetime.


[Stage Direction]
Item agreed to.
Pensions and other benefits-
214. Government's contribution to the permanent forces pension fund. $10,799,600.
Mr. Noseworthy:: Mr. Chairman, I should like the minister to give a short explanation of this item, particularly as to the differentiation made in the payment of pensions to retired officers with more than ten but less than twenty years' service. I have had considerable correspondence from officers in that category living in my constituency. I understand a considerable number of officers in that class were retired after 1945. The feeling among many of them is that those who were retired were men who secured their commissions during the war while most of those who were retained in the forces were in the professional class, that is, graduates of military college. Can the minister tell us how many with more than ten but less than twenty years service have been retired since 1945 and the numbers of professional and non-professional soldiers? I should like to know how many were men who received their commissions in the field and how many were professional soldiers, graduates of military college.
My information is that those with more than ten but less than twenty years' service are broken down into three categories. First, there are those who were discharged as medically unfit and who receive full pension. Second, there are those who have reached the prescribed age for their rank. There is some uncertainty as to whether the date of retirement is the date the bill was passed, the date they were discharged or the date the

Supply-Trade and Commerce bill is to be proclaimed. The third group consists of those who have not reached the prescribed age and who are subject to a reduction of one-third in their pension.
A number of cases have come to my attention of men with seventeen, eighteen or nineteen years' service who have had to take a one-third reduction in their pension. There is also some question as to why the date of June, 1944, was accepted. These men are men who were in the permanent forces before June, 1944. There appears to, be considerable discrimination between those who were in the permanent forces before that time and those who have been taken into the forces since then. The former will lose one-third of the pension, while those who have joined since June, 1944, will probably be entitled to full pension upon retirement. Will the minister give us a statement in explanation of that situation?


Brooke Claxton: I am familiar with the case the hon. member has raised, but the figures have not been kept in such a way as would enable me to answer his question. To do so it would be necessary to ascertain the number of officers who have gone on pension since 1945 and put them into the categories that he mentidned. That would be quite a job, but I am sure we can secure the information for the hon. member. We should be able to do so within the next couple of days.


Joseph William Noseworthy: Is my analysis of the situation correct so far as the three groups are concerned?


Brooke Claxton: As to the groups it is correct, but with regard to the rates obtained by the various groups and the reasons there are three, some supplementary information will have to be given.


[Stage Direction]
Item agreed to.
DEPARTMENT OF TRADE AND COMMERCE General administration-
423.	Departmental administration, $482,875.
James MacKerras Macdonnell: We all know in a general way that the minister's department covers a lot of territory. He has a great many things under his charge. Without leaving it to a series of questions as we go along, is the minister prepared to give us a broad view of the responsibilities under his charge? For example, I have here an alphabetical list of the activities of the department. It begins with the agricultural commodities branch and runs on through the economic research and development branch, and so on. Without going into detail, is the minister prepared, as a preliminary to the estimates and by way of assistance to us in understanding the whole situation, to use this

alphabetical list and outline the duties of his department? As a matter of fact the list is to be found in the departmental telephone directory in alphabetical form and in a more comprehensive way than I have ever seen it anywhere else. It will take some time, but if the minister will see fit to go through the list it will give members of the committee a better idea of the scope of the work of the department, the minister's responsibilities, and the relation of the various activities that are going on. If I may expand for a moment, there is a reference to the industrial development branch. Then a page or two later there is an industry and merchandising division; and of course I realize that merchandising is a thing by Itself.
I have explained my point, and I wonder if the minister would do as I suggest, going right through and giving us a short account of the activities of each branch of his department. Let me illustrate what I mean. Under "Economic research and development" we have several headings. The first is information, which I presume is a general item under the direction of Mr. Skelton. Then we come to trade policy; then to organization and services; the economic research division, divided into three subdivisions which include area studies, industry studies and private and public investment. Then there is the economic forecasting division; the industrial development division, and so on. I hope I have made my point clear, so perhaps the minister will give us the story of the department, following down the line and explaining to us what each branch does.


Right Hon. C. D. Howe (Minister of Trade and Commerce):: I shall endeavour to explain the department as my hon. friend suggests. The annual report for 1949 has just been tabled, and I shall follow the headings as there set out. If my hon. friend has a copy of that report he may be able better to follow me.


James MacKerras Macdonnell: I should have, perhaps, but I have not.


Clarence Decatur Howe: First is the administration branch, which is similar to the administration branch of every department. It includes the deputy minister and. two assistant deputies, and the accounting and administrative branches common to most departments; the personnel division; the central pay office; the staff training and welfare section; the records division, and various activities which come under the heading of general administration;


James MacKerras Macdonnell: Would the minister prefer that I withhold any questions until he is through?


Clarence Decatur Howe: I would be glad to have my hon. friend ask any questions he wishes.


James MacKerras Macdonnell: The minister just mentioned two or three headings, including a welfare division. Do I understand he is passing over that without comment? I should like to hear something about it.


Clarence Decatur Howe: It is the staff training and welfare division. Examinations are held for various services, for instance the trade commissioner service. Certain applicants are accepted; then they are given a course of training which takes them to various parts of Canada under the guidance of experienced trade commissioners. They are given a thorough training in the work they will undertake when they go to foreign fields.


James MacKerras Macdonnell: What is the significance of the word "welfare"?


Clarence Decatur Howe: The division also looks after the welfare, for example, of our trade commissioners in all parts of the world. When you have commissioners in the Belgian Congo, or South Africa, or in the Far East, the welfare of the staff becomes rather a problem. A branch of the training and welfare division keeps records of postings and how commissioners are getting on.
Then there is the trade commissioner service itself. We have trade commissioner offices in forty-six countries throughout the world, and that'number is increased as world conditions permit. They are the eyes and ears of Canadian business. They report back trade possibilities in their territories for Canadian commodities, report on' trade conditions, and so on. In that connection there is a weekly publication called Foreign Trade which has a wide circulation in Canadian industry and which summarizes the reports of trade commissioners from all localities. It mentions openings for Canadian exports that have been drawn to the attention of the department by the trade commissioners, and in general provides up-to-date information to those interested in the export of Canadian products.
Then we have the commodities branch which deals with metals, timber and raw materials generally, except grains, which are handled in a separate branch. This branch is divided into an export division and an import division. The work of the export division, of course, is obvious. It works with the trade commissioners in finding openings, and with Canadian industry in calling, the attention of exporters to those openings abroad for Canadian products. The import division works with our trade commissioners to find markets in Canada for commodities offered abroad
Supply-Trade and Commerce that are required by the Canadian economy. This branch was opened at the end of the war and has proved extraordinarily useful in helping to balance our trade, particularly with the sterling area and European countries. It has been useful to Canadian manufacturers and Canadian industry generally by finding sources of materials in short supply in this country.


James MacKerras Macdonnell: To what
extent are these services availed of? Could the minister give us the percentage of importers, whether importers for sale or industrialists who need materials, who act through the Department of Trade and Commerce, and what percentage act individually?


Clarence Decatur Howe: It is impossible to say with any degree of accuracy, but I do know that Canadian industry is very much in the habit of dealing with both divisions. It is seldom that an officer of a representative industry comes to Ottawa without calling on both divisions. Both are very active, and are considered very useful.
Then the commodities section deals with such things as surplus foods such as potatoes, canned salmon, and so on; anything in the way of food that requires to be marketed abroad. It also deals with chemicals, machinery, metals, mineral products, wood and wood products, textiles and leather, and general products.


James MacKerras Macdonnell: Would that apply to exporters to the United States? I am thinking now of wood products, for example.


Clarence Decatur Howe: Oh, certainly; it refers to exports to all countries.


James MacKerras Macdonnell: The newsprint industry, for instance, would be acting under its own steam, would it not?


Clarence Decatur Howe: Very likely; nevertheless the newsprint industry keeps in very close touch with the department. Seldom a day goes by that some problem is not placed before the department by the newsprint industry. We were particularly active following the curtailment of shipments to the British dominions and the United Kingdom, and we were very active in connection with exports to South America, straightening out the problems of the industry. This branch is the channel of communication between industry and government as far as exports of raw materials are concerned.
Then there is the transportation and communications division, a service to traders keeping them advised of changes in shipping rates, changes in restrictions having to do

Supply-Trade and Commerce with the shipment of goods, and so on; quite an active branch. Then there is the wheat and grain division, which acts as a liaison between the government and the wheat board and the board of grain commissioners. It keeps the government informed on their activities, and is the line of communication with the government for special problems requiring government decision or governmental action. The board of grain commissioners is an operating division in that it operates certain grain elevators in western Canada. That board also regulates the movement of grain, while the wheat board is charged with the selling of all wheat, oats, and barley that are marketed in the western division.
The economic research and development branch works with the bureau of statistics from which it obtains up-to-date information. It works independently in compiling that information, and forecasting the economic :hanges that would seem the probable result from recent trends, looking not more than one year in advance. This work was commenced in the department of reconstruction, and has been perpetuated in the Department of Trade and Commerce. It has been found a very useful service by all government departments, and the forecasts prepared by that branch are used by the Department of Finance as well in preparing the annual budget. I have been amazed by the accuracy of the forecasts prepared by that division. I may say that I have never had to apologize for any of the forecasts I have given. I believe hon. members may have noticed the great accuracy with which the budget figures have been forecast.


James MacKerras Macdonnell: We will all agree that you have never apologized, in any event.


Clarence Decatur Howe: I believe my hon. friend has not been so fortunate. The depression he has predicted for so many years has not yet arrived.


James MacKerras Macdonnell: No, I never prophesy.


Clarence Decatur Howe: That is the economic research and development branch.


Agar Rodney Adamson: Who is the senior officer in charge of that branch?


Clarence Decatur Howe: Mr. Alexander Skelton. The same branch prepares an industrial analysis forecasting capital investment for one year ahead. In that connection it compiles a questionnaire which is sent out to some 2,800 industries in Canada. Area analyses are prepared, that is the forecast of employment within any area that is thought to be in a

doubtful position. It also prepares a capital investment analysis, and gives assistance in the establishment of new industries.


James MacKerras Macdonnell: Can the
minister give us an illustration of any particular studies, let us say in the maritimes, and the forecast there?


Clarence Decatur Howe: Yes, an area study was prepared for the New Glasgow area during the past year. As a result of that study certain public works that had no particular priority, except from the point of view of employment, were undertaken in that area. An area study was made of the Sydney area and also the city of Quebec area; that is part of the work of that branch.


Mr. Gillis:: Could the minister inform the house of the results of those studies?


Clarence Decatur Howe: The result has been that steps were taken that brought about a great improvement in employment down there. My hon. friend may have noticed it if he has been home recently.


Clarence Gillis: It is not noticeable in the figures.


Clarence Decatur Howe: The best test of which I know is that I have relatives down there, and they are not able to find anyone who will work in the gardens or do any work of the kind which seems to be readily available.
The commercial relations and foreign tariffs division is the division that keeps all the particulars on the tariff situation. It represents Canada at tariff meetings at home and abroad. [DOT] Its officers represented Canada at Annecy, and before that at Geneva. They will represent Canada in the tariff discussions which are to take place this autumn at Torquay.


James MacKerras Macdonnell: What then is the relationship between the Department of Finance, say, and the minister's department? I suppose it is the tariff board, an official from that board who goes to these conferences?


Clarence Decatur Howe: The finance department ' is
responsible for the domestic tariffs, Canadian tariffs, and the Department of Trade and Commerce is responsible for representations concerning foreign tariffs. The two work in close liaison.


James MacKerras Macdonnell: At these
meetings we are not represented solely by the Department of Trade and Commerce?


Clarence Decatur Howe: 
James MacKerras Macdonnell: Can the
minister give us some instances of things which are still controlled?


Clarence Decatur Howe: Yes, a good many manufactured items are not allowed to go behind the iron curtain.


James MacKerras Macdonnell: Is that our
control or theirs?


Clarence Decatur Howe: Our control; our exporters are not allowed to ship uranium to Czechoslovakia, for instance; that is an extreme case.


James MacKerras Macdonnell: I understand about strategic materials, but does this affect other ordinary materials as well?


Clarence Decatur Howe: There are very few items today upon which export control remains.


James MacKerras Macdonnell: Will the
minister tell us the things that cannot be shipped?


Clarence Decatur Howe: Live hogs, and I believe certain precision instruments.


Clarence Gillis: With the hon. member's permission, I should like to follow up one question with the minister. A few moments ago he said that economic surveys had been made in certain maritime areas, such as Sydney and New Glasgow. As a result of those studies employment had improved greatly-


Clarence Decatur Howe: Not as a result of our studies.


Clarence Gillis: -to such an extent that his relatives could not get gardeners. Perhaps they did not pay the last one. However, that is not what I wanted to say. In addition to the general economic survey, the minister did conduct a personal survey about a year ago, and it is about that I wish to question him. It concerns an airport, which is not only a
Supply-Trade and Commerce matter that affects the civilian population, but one that is of importance from a defence point of view. When the estimates of the Minister of National Defence were before the house, I questioned him as to what that department was prepared to do to improve the Dartmouth airport to the point where it could accommodate larger ships. Nothing over 60,000 pounds is allowed on that airport at the present time. When his estimates came in first, the Minister of Transport said that, as far as that problem was concerned, it was one for the Minister of National Defence. Then the Minister of National Defence, in discussing the matter with me on his estimates, said that as far as he was concerned he would take another look at it but he thought the responsibility was in the hands either of the Department of Transport or of the Department of Trade and Commerce.
I wish the minister could give us some definite answer. It is a matter of great concern to the community. T.C.A. have no landing field there as such for planes like the North Star. It is a large centre without airport facilities in the regular way. It is in bad shape as far as defence is concerned because it can land only the smaller ships. The minister made a survey personally a year ago, according to statements I have seen in the press, accompanied by the then senior member for Halifax who has now gone to the other place. At that time the minister thought that the establishment of a new airport-and I am speaking from memory of what I read in the press statement-or the spending of an additional $8 million or $10 million to make a new airport was not the thing to do, but he thought that any money that might be spent could be used in extending the Dartmouth airport to serve the dual purpose of T.C.A. and defence. I wonder if the minister could give us some answer with regard to that matter because that would be something practical arising out of a personal survey on the part of the minister. ' As to the other regular economic survey as' pertaining to the maritimes, I do not think anything has come out as yet. Can the minister bring us up to date on that Dartmouth airport proposition'


Clarence Decatur Howe: I was in process of answering a question asked by the hon. member for Greenwood. I will, however, interrupt that in order to answer this question. My hon. friend mentioned three ministries interested in the administration of Dartmouth airport, and was kind enough to mention Trade and Commerce.
I might say that our interest is a minor one. As I understand it, Dartmouth airport is adequate for the services it is called upon
<150

Supply-Trade and Commerce to perform at this time. My hon. friend has said that it is not adequate for North Star planes. That is quite true. But it is not intended that North Star planes should use that airport. Ottawa airport is not adequate for North Star planes and the North Star planes do not use Ottawa airport.
We cannot make every airport adequate for North Star planes at this time. We have Sydney and Moncton, two emergency airports in Nova Scotia that are adequate for North Star planes; and as my hon. friend knows, we have three airports in Newfoundland for that purpose: Goose, Gander and Stephenville. As far as I know, Dartmouth airport is adequate for T.C.A. traffic. We have recently installed instrument control for the approaches, and the operating conditions there are considered to be favourable at this time. I presume that extension of the runways will be made from time to time but I think there is no urgent need for an extension at the moment.


Clarence Gillis: At least that is a definite answer. Your reply is that, as far as you know, there is no immediate necessity to extend the airport, it is not the intention to provide a new one, and things stay as they are for the present.


Clarence Decatur Howe: As far as the Department of Trade and Commerce is concerned, the airport is entirely adequate for the operation of DC-3 transport planes. If a different type of equipment comes into use, the Department of Trade and Commerce will act for T.C.A. in pressing the government to make the required improvements. But at the moment, as far as the Department of Trade and Commerce is concerned, the accommodation is adequate.


Clarence Gillis: Thank you.


James MacKerras Macdonnell: Might I
remind' the minister that he has not yet given me the list of articles the export of which is prohibited.


Clarence Decatur Howe: The export of which is prohibited from Canada?


James MacKerras Macdonnell: Yes.


Clarence Decatur Howe: This list may not be up to date but there are certain precision instruments, being gauges, balancing machines, measuring machines or testing machines as used for laboratory or scientific purposes; atomic energy equipment and components, radiation detection equipment and components. There are radioactive substances, radioactive elements; radioactive isotopes; ores and concentrates of uranium and thorium including pitchblende, uraninite, carnotite, monazite. There are products such as manufactured

articles containing uranium or thorium. Then there is beryllium, gallium, rare earth metals, zirconium; arms, ammunition, implements or munitions of war; military, naval or air stores. Then there are certain goods originating outside Canada which are prohibited in the country of their origin and which are not allowed to be exported from this country for that reason. There are certain other commodities but, without checking back on the last order in council which released a number of these commodities from export control, I would not like to put that list on Hansard.


James MacKerras Macdonnell: I take it that most of those are strategic materials?


Clarence Decatur Howe: Yes.


James MacKerras Macdonnell: Did you say
that live hogs cannot be exported?


Clarence Decatur Howe: That is right.


James MacKerras Macdonnell: Why can
they not be exported?


Clarence Decatur Howe: The fundamental reason of course is that we have a bacon contract with the United Kingdom which we are anxious to fill. It has been the practice since the first bacon contract was signed with the United Kingdom that live hogs cannot be exported from Canada except for purebred hogs which are shipped to authorized countries for breeding purposes.


James MacKerras Macdonnell: Earlier in the day the Minister of National Defence said something which I took to mean that it might be quite on the cards for us to export munitions of war. I may have taken him up in the wrong way.


Clarence Decatur Howe: All these things can be exported by permit. That is why we have the export permit branch.


James MacKerras Macdonnell: Yes.


Clarence Decatur Howe: Anything can be exported if the exporter can get a permit for its export.


James MacKerras Macdonnell: I presume the minister will deal with imports later?


Clarence Decatur Howe: Yes. There is the emergency import control division. That was an emergency program, as my hon. friend knows, instituted in 1947 as a step towards righting the exchange balances.


James MacKerras Macdonnell: Can the minister give us a list of the chief articles that are prohibited and that are on that list?


Clarence Decatur Howe: Automobiles, a great list of machinery items, practically all capital goods from hard currency countries.


James MacKerras Macdonnell: Does that mean that all British automobiles that come in here come in under special permit?


Clarence Decatur Howe: No. They come in freely. It is only the scheduled countries that are affected; that is, the hard currency countries.


Howard Charles Green: What about the goods that are not kept out for dollar reasons, such as rice? The minister mentioned rice a few minutes ago. Is it still subject to import control?


Clarence Decatur Howe: It is a hold-over from an international agreement. It will come off very shortly, probably by September 1.


Howard Charles Green: It is coming off this year?


Clarence Decatur Howe: Yes.


Howard Charles Green: It seems unfair to prevent importation.


Clarence Decatur Howe: This is the last of the foods that are under import control. There are certain times for taking these things off, and the proper time would be September 1.


Howard Charles Green: Are there any other commodities besides rice which are subject to import control?
Mr.'Howe: No.


Howard Charles Green: For reasons other than emergency legislation?


Clarence Decatur Howe: No, rice is the last of the import controls. We hope to clean the list up very shortly.
Then there is the publicity division. It has charge of the various publications of the department. There are a great number of publications, particularly those connected with the-


James MacKerras Macdonnell: Has the minister skipped steel and timber controls?


Clarence Decatur Howe: They have been abolished.
Then there is the fairs and exhibitions department which has charge of the trade fair and various Canadian exhibits at fairs outside this country. Then there is the exhibitions commission. The standards branch has charge of weights and measures, the Precious Metals Marking Act, the Electricity and Fluid Exportation Act, the National Trade Mark and True Labelling Act, the Electricity Inspection Act, Gas Inspection Act, and the Weights and Measures Act.


Howard Charles Green: Is the priorities division still functioning?


Clarence Decatur Howe: No. The department is responsible for certain crown companies: the board of grain commissioners; Canadian Arsenals; the Canadian Commercial Corporation; the
Supply-Trade and Commerce Canadian wheat board; Crown Assets Disposal Corporation; the dominion bureau of statistics; dominion coal board; Eldorado Mining and Refining Company; Export Credits Insurance Corporation. The Fraser valley diking board has been disposed of, but we now have instead the Red river diking board. Then there is the industrial defence board; the Polymer Corporation and the Trans-Canada Air Lines.


Howard Charles Green: Is the atomic energy division under the research council?


Clarence Decatur Howe: Yes, it is under the research council. My list includes the national research council and the bureau of statistics.


James MacKerras Macdonnell: What about the research foundation?


Clarence Decatur Howe: Any research foundation would be inside the national research council.


James MacKerras Macdonnell: Is that not under the minister?


Clarence Decatur Howe: Yes, the national research council and the atomic energy control board.


Gordon Knapman Fraser: The minister used to have a real estate branch in Trade and Commerce. Is that still functioning?


Clarence Decatur Howe: Yes, part of the general administration.


Gordon Knapman Fraser: What does it do?


Clarence Decatur Howe: It buys and sells real estate.


Gordon Knapman Fraser: What for, the Department of Trade and Commerce, or what?


Clarence Decatur Howe: It is charged with the settlement for real estate that we acquired during the war years. It also acts for the Crown Assets Corporation in disposing of real estate.


Gordon Knapman Fraser: It does that instead of War Assets?


Clarence Decatur Howe: It acts for War Assets. War Assets have the responsibility but they use this branch a bit. The branch is down to one man and a stenographer.


Mr. Hatfield:: Will the minister tell me how long the wartime import control board is to function? How long is it going to continue? What commodities can we import from the United States? No customs officer seems to know.


Clarence Decatur Howe: It is a long story, and I do not know that I can tell it. A good many commodities are administered by the Department of Finance. Consumer goods are administered by the Department of Finance. Only capital goods are administered by the Department of Trade and Commerce. There is a
4152	HOUSE OF COMMONS
Supply-Trade and Commerce very long list of commodities that my hon. friend cannot buy freely from the United States without a permit.


Heber Harold Hatfield: I know that. Should not a person be able to know what he can buy? I call up a man and he tells me that I can import a certain article. I buy the article, and it is held up here by customs. A man here tells me that I cannot import it. Mr. Rogers, who was in the finance import branch, told me. He has gone out of that branch. I did not have it in writing; I had it orally with him.


Clarence Decatur Howe: Mr. Rogers was an officer of the Department of Finance. I take it that my hon. friend is having his trouble with the Department of Finance, that is, the wartime prices and trade board.


Heber Harold Hatfield: That is the trouble, he has been moved out of that position now.


Clarence Decatur Howe: We have our troubles as well.


Heber Harold Hatfield: What I should like to know is what we can import and what we cannot. Should there not be a published list?


James MacKerras Macdonnell: Could the minister not give a prediction at least?


Clarence Decatur Howe: All these lists have been tabled in the House of Commons; but I will endeavour to have them compiled into one list and table it before the end of the session if that will help my hon. friend.


Heber Harold Hatfield: They change all the time.


Clarence Decatur Howe: I know, but we all have to keep posted on these matters. That is why the citizens have representatives in parliament, so that their representatives can advise people just what the changes mean.


Gordon Knapman Fraser: But you never tell them.


James MacKerras Macdonnell: He has found a use for the opposition; that is something.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
James MacKerras Macdonnell: There are one or two points which the minister did not cover in his statement this afternoon. Could he tell us something about exhibitions, particularly the Toronto trade fair?


Clarence Decatur Howe: There is a commissioner of exhibitions who is charged with the responsibility of the trade fair at Toronto and Canadian exhibits at trade fairs throughout the world, such as the British trade fairs at

London and Birmingham, those on the continent, as well as certain exhibits in the United States. It is his responsibility to advertise Canadian goods wherever the department thinks it is appropriate to advertise by way of exhibits.


James MacKerras Macdonnell: As I recall, when the trade fair in Toronto was started the minister was quite conservative, if I may apply that word to him, in his estimate of what it might accomplish. In the light of the last one would the minister say a word as to just what progress has been made?


Clarence Decatur Howe: It would be more convenient to deal with this subject under the item that follows, but as the hon. member has asked the question I shall answer it now. The first trade fair was considered a success for a first fair. In my opinion the second fair was not as successful as the exhibitors did not seem to be as well satisfied as those who had exhibited at the first fair. The third fair was an outstanding success. There was a great range of exhibits and practically all the exhibitors with whom I talked-I think I talked to most of them-seemed quite happy about the results. It seems to me that it has been amply demonstrated that the fair is a first-rate piece of trade promotion. I think it can be considered an annual event, at least as long as the present trend continues.


James MacKerras Macdonnell: Would the minister rate it just as high vis-a-vis the United States as vis-a-vis the European countries? Do, we get proportionately as high a number of exhibitors from the United States? Does the minister attribute the improved condition as far as Europe is concerned largely to the exchange depreciation brought about last September?


Clarence Decatur Howe: The trade fair was never aimed particularly at the United States. As my hon. friend knows, the exchange situation has led us to encourage the diversion of purchases from the United States to the soft currency countries. However, there were a great many buyers from the United States at the last trade fair. Currency devaluation had the effect of bringing sterling area and European prices into competitive line with the prices of other countries and in that way devaluation has had an effect. It was useless for some lines to be shown here before devaluation.


James MacKerras Macdonnell: Were the exhibits from the continent of Europe just as numerous as those from the United Kingdom?	.


The Deputy Chairman:: I would point out that item 429 deals with exhibitions generally and item 430 with the Canadian international trade fair.


Mr. Charlton:: Has the minister the most recent figures of trade with the United Kingdom and the United States, divided as between industrial and agricultural products?


Clarence Decatur Howe: The cumulative figures January
to May are as follows:
United States
Exports	 $736,900,000
Imports	 817,100,000
Adverse trade balance, $80-2 million.
United Kingdom
Exports	 $184,700,000
Imports	 149,400,000
Favourable trade	balance	 35,300,000
Remainder sterling area
million
Exports	 $81-8
Imports	 73-5
Favourable trade balance	 8 3


John Alpheus Charlton: Could the minister divide those figures as between agricultural and industrial production?


Clarence Decatur Howe: It can be done, but I have not the figures with me. They have just been published and the breakdown has not been prepared although I may have it before the evening is over.


Gordon Francis Higgins: On the minister's return from England a little while ago he announced that he had had talks with respect to the sale of iron ore and expected that the results would be made known shortly. Can he enlighten the committee on that matter? In the past two or three days the Minister of Fisheries announced that the Department of Trade and Commerce was negotiating for new markets for salt codfish. Can the minister enlighten us on that matter as well?


Clarence Decatur Howe: It is perhaps a day or two early for me to be able to set my hon. friend's mind completely at ease, but as a result of the talks I had while in England, and subsequent talks that are now current in England, before the week ends I hope to be able to announce a sale of 300,000 tons of iron ore to the United Kingdom for delivery in 1950 coupled with 700,000 tons of iron ore for delivery in 1951.


Gordon Francis Higgins: Great news.


Clarence Decatur Howe: Perhaps my hon. friend can claim credit for that.


Gordon Knapman Fraser: That is very kind of you.


Clarence Decatur Howe: So far as fish is concerned, I am not ready to make an announcement.
Supply-Trade and Commerce Those talks are not finished, but there again I think there will be good news before the week is out.


Herbert Wilfred Herridge: I should like to ask the minister whether he discussed the question of the sale of Canadian apples in the United Kingdom market while he was over there.


James MacKerras Macdonnell: They are not food.


Clarence Decatur Howe: That subject was very thoroughly discussed while I was in England, and it is being discussed at the moment. The indications are quite hopeful.


Mr. Fulford:: I should like to ask the minister whether any progress has been made in improving our trading position with the British West Indies.


Clarence Decatur Howe: Canadian trade with the British West Indies was the subject of a great deal of discussion when I was in England, and is the main topic of discussion in the trade talks that are now current. There again these estimates are being discussed about two or three days too soon. I am sure that the recent discussions will open the British West Indies to Canadian produce to a considerable extent. Before the end of the week I hope to make an announcement that will be very helpful to Canadian industry and Canadian agriculture.


George Taylor Fulford: That is most gratifying. Since I spoke on the subject on April 24 in the budget debate, I have received letters from firms in Canada and the British West Indies. I have received newspaper clippings from the British West Indies and even a letter from a British member of parliament. I had no idea it was such a live issue. I realize that the West Indies are not satisfied with the present condition. Last week I had occasion to speak to members of the commonwealth press conference, editors and owners of various newspapers, and they were all of the opinion that a solution must be found, that the West Indies wanted further trade. I know that what the minister has just said will be gratifying not only to Canadians but to all the colonies comprising the British West Indies.


Mr. Browne (St. John's West):: The minister seems to have such a general knowledge of all subjects dealing with trade that I am sure he will be able to answer the question I am going to ask, although I am not .certain that it comes directly within his department. My question has to do with the progress that has been made in the development of the great discoveries of iron ore in the territory adjacent to the border of Labrador and Quebec. I understand the difficulties there are in

Supply-Trade and Commerce the development of that property, but I should like to know whether the minister is in a position to say what progress is being made.


Clarence Decatur Howe: Mr. Chairman, that development is a private enterprise, and just how much information I should give the committee is questionable. Therefore I do not think I will give very much. As my hon. friend knows, five important steel companies of the United States are interested in financing the development at the moment. I know that plans are being prepared for the railway that will serve the property, for the power plant that will deliver power to it, and for the harbour development to serve the property. Beyond that I do not think I can give any information.


John Alpheus Charlton: At page 268 in the details I see that there are fifteen fewer employees under this item than there were last year, and salaries are approximately $2,300 less. Is the smaller number of employees because of less work or is it simply a case of somebody else doing the work?


Clarence Decatur Howe: The department has dropped certain controls such as timber control, priorities control, and steel control, and as a result a number of high-priced employees have left the department. That explains the drop.


John Alpheus Charlton: Those employees will be listed in the various branches. This item simply deals with departmental administration.


Clarence Decatur Howe: As my hon. friend knows, the department is an amalgamation of trade and commerce and reconstruction and supply, and certain positions that were in the department organization last year have been dropped.


John Alpheus Charlton: Will the minister explain the item of $8,000 for sundries? I believe there are three items for sundries each of $8,000.


Clarence Decatur Howe: It is a general catch-all item for matters that are too small to set forth in detail. There is nothing very alarming about it. I thought we were discussing ministers' salaries. Is the minister's salary carried? I am anxious about that.


Gordon Graydon: That is statutory. The minister must be under a wrong impression. The statute many years ago gave him that so nothing we can do can take it away. He should not have such fear.


Gordon Knapman Fraser: That is one thing he does not control.


[Stage Direction]
Item agreed to.

General administration-
424.	Commodities branch, including assistance in the development of markets and the procurement of supplies, and contributions as detailed in the estimates, $574,460.
James MacKerras Macdonnell: I want to draw the minister's attention to the wording of item 424 and ask him to give a little further explanation. It reads:
Commodities branch, including assistance in the development of markets-
I understand that.
-and the procurement of supplies-
I am not so clear about that.
-and contributions as detailed in the estimates.
Will the minister say a word about the procurement side of it?


Clarence Decatur Howe: The commodities branch
includes the import branch. The import branch is a sub-branch of the commodities branch.


James MacKerras Macdonnell: Is it procurement of supplies for public purposes?


Clarence Decatur Howe: It is to assist private enterprise to procure supplies abroad.


[Stage Direction]
Item agreed to.
General administration-
425.	Trade commissioner service including payment of compensation to trade commissioners for damage to and loss of furniture and effects, under regulations approved by the governor in council, $2,052,859.
William Joseph Browne: Can the
minister tell me about the representation that is given the province of Newfoundland? Before confederation we had trade commissioners in London, Portugal, New York, and I believe in the West Indies. Has that been taken over by the federal government?


Clarence Decatur Howe: Yes; the personnel of the Newfoundland service have been absorbed into the trade commissioner service of the Department of Trade and Commerce. Instead of having representation in four or five countries, Newfoundland now has representation in forty-six countries.


John Alpheus Charlton: What is the total number bf foreign service officers?


Clarence Decatur Howe: There are ninety-five trade commission offices in forty-six countries.


John Alpheus Charlton: There are only 113 employees altogether. Are ninety-five of those trade commissioners? The details show that twenty-five are foreign service officers. Are there ninety-five trade commissioners?


Clarence Decatur Howe: Trade commissioners and
assistant trade commissioners. Sometimes in

a country we will have the trade commissioner's office in the capital, and an office headed by an assistant trade commissioner in another important city.


John Alpheus Charlton: Then on page 270 there is
an item of $184,000 for travel and removal. Does that mean for travelling expenses to and fro on the part of these trade commissioners, and moving their families?


Clarence Decatur Howe: Yes, and their furniture.


John Alpheus Charlton: That requires $184,000?


Clarence Decatur Howe: Yes.


John Alpheus Charlton: If each of them moved once a year that would mean more than $2,000 each.


Clarence Decatur Howe: It costs far more than $2,000 to move a trade commissioner, his family, his furniture and household goods from Canada to South Africa, we will say.


Mr. McLure:: Are these trade commissioners allowed to do a barter business? I am thinking of France at the moment. We could ship quite a quantity of furs to that country if our trade commissioners would barter them for the wines and liquors France has to offer. Why not make such a trade, so we would have a market for our furs? They are quite willing to do that, but it is hard to get these trade commissioners away from their golf and the other things at which they are enjoying themselves; and they do not like this barter business, though it is the only business that is worth while at the present time when taxation steps in to prevent trading or where money values are different. Would it be all right to follow that up with some of them and see if we cannot arrange some barter business?


Clarence Decatur Howe: The trade commissioners do not overlook any possibility of arranging barter transactions. If the opportunity is there it is called to our attention and to the attention of those in this country who may be interested in such barter business. The trade commissioner does not do barter business himself; he does not buy for his own account, as you can imagine. When my hon. friend speaks of taking the trade commissioners away from their golf, I believe the work of [DOT]a trade commissioner compares very favourably with that of a member of the opposition in this parliament, and I wish my hon. friend would keep that in mind.	-


Winfield Chester Scott McLure: Would the minister repeat that statement?


Clarence Decatur Howe: I said the work and attention to business of a trade commissioner would compare very favourably with that of an opposition member of parliament.
Supply-Trade and Commerce


George Alexander Drew: Getting a little impatient, aren't you?


Clarence Decatur Howe: Not impatient; I do not like to hear our trade commissioners slandered.


George Alexander Drew: That was a very silly statement.


George James McIlraith: Did you hear the statement by your own follower?


[Stage Direction]
Item agreed to.
General administration-
426.	Publicity and advertising in Canada and abroad, $201,315.
Gordon Knapman Fraser: What film is this $10,000 for?


Clarence Decatur Howe: Is my hon. friend asking about the reduction in the film vote?


Gordon Knapman Fraser: I wanted to know what films
were being made this year, and whether the work was being done by the national film board or a commercial company.


Clarence Decatur Howe: Any films we have made are
produced by the national film board.


John Alpheus Charlton: In the details at page 270 I see an item of $50,000 for advertising in Canada and abroad, as compared with $95,000 for last year. Then there is $35,000 for booklets, an increase of $10,000 over last year. There is $10,000 for films, to which the hon. member for Peterborough West referred, as compared with $30,000 last year. But in the first item of general administration there is an amount of $40,000 for trade promotion at home and abroad. What was the reason for transferring that $40,000 from publicity and advertising to administration?


Clarence Decatur Howe: The first item represents the
cost of looking after groups from abroad who come here to promote trade. It is not an advertising expense; it is what might be called a hospitality expense. The second item is an advertising expense, and there is a reduction this year. We thought that with the advertising that went on in connection with the trade fair we could afford to reduce the ordinary departmental advertising, and we have planned accordingly.


John Alpheus Charlton: Does that $40,000 under the administrative item have anything to do with trade fair advertising?


Clarence Decatur Howe: No. The advertising item we
are now considering is for departmental advertising, in connection with any matters the department believes should be drawn to the attention of the public, such as changes in regulations and so on. The promotion of trade item is not an advertising item.


John Alpheus Charlton: I do not think the minister
quite understood my question.

Supply-Trade and Commerce


Clarence Decatur Howe: I cannot hear you, for one
thing.


John Alpheus Charlton: On page 270 there is a
reduction of $45,000 under advertising in Canada and abroad, as compared with last year. I asked the minister the reason for that reduction, and whether it was accounted for by the $40,000 under administration.


Clarence Decatur Howe: No, the two items are not related. The $40,000 item covers such things as the cost of the trip to the United Kingdom by the deputy minister, trade commissions abroad, tariff expeditions abroad and so on. The other is for advertising in publications and newspapers. There is a reduction in the latter item, which, as I have said, is made possible by the advertising incidental to the trade fair, which was paid for by the trade fair and which we think warrants a cut in the usual advertising appropriation.


John Alpheus Charlton: Then there is a reduction of $20,000 in connection with films. Is that because the minister feels films are not doing the job, or perhaps because more films were made last year? What films were made last year for the $30,000, and what are proposed this year for the $10,000?


Clarence Decatur Howe: This is not to pay for the making of films. It is for making the sound tracks in foreign languages; and for distributing films made by the film board or other agencies of government. The distribution of films on trade matters is undertaken by the Department of Trade and Commerce.


John Alpheus Charlton: Then this is not to pay for the production of films, but for transporting them around the' country?


Clarence Decatur Howe: This is the cost of translating them into foreign languages and preparing them for distribution in foreign countries.


Gordon Knapman Fraser: Where your trade commissioners distribute them?


Clarence Decatur Howe: Yes.


John Alpheus Charlton: Who paid for the films?


Clarence Decatur Howe: They have been paid for. Some of those produced in the past may have been paid for by the Department of Trade and Commerce. Others have been paid for by the national film board. They are out of the library of government films, chosen because they, have some significance in the country to which we send them.


Gordon Graydon: An item slipped by while I was out, and I wanted to ask the minister just one question without enlarging upon it. I am told by a prominent agriculturist in this country that there is a large market awaiting Canadian butter in Venezuela. I wonder if
the minister has any information on that, or whether his department has made any recent investigation into the possibilities. If that were so it would be a great, boon to butter producers here, who are faced with pretty heavy competition and the prospect of rather low prices in some instances.


Clarence Decatur Howe: Mr. Chairman, we have moved butter to Venezuela, and we hope to move more. Our prices are somewhat out of line with those competing in the market, but I assure my hon. friend we shall lose no opportunity to sell butter in Venezuela.


[Stage Direction]
Item agreed to.
General administration-
427.	Economic research and development branch, including the conducting of investigations and reporting upon commercial relations and foreign tariffs, and the development of Canadian industry, and a contribution of $6,300 to the International Customs Tariffs Bureau, $442,480.
James MacKerras Macdonnell: Will the
minister add a word to what he said this afternoon on the question of the relationship between the tariff board and the Department of Trade and Commerce in connection with the whole question of commercial relations and foreign tariffs. The minister did mention it this afternoon, but I was not too clear on the division. On the face of it, it looks as if there might be a duplication. I should like to have it explained to me.


Clarence Decatur Howe: Mr. Chairman, the tariff board acts as adviser to the Minister of Finance regarding domestic tariffs, that is tariffs placed on goods entering Canada. The branch we are discussing, the economic research branch, commercial relations division, deals with tariffs applied by foreign countries against Canadian goods. I think that is the distinction. There is no overlapping.


James MacKerras Macdonnell: It is two
sides of the same coin, so to speak. The minister did say this afternoon that the very able head of the tariff board does take full part in trade discussions. Perhaps there is nothing more that need be said about it, but surely the subject does not divide itself sharply into two unrelated parts, foreign tariffs and domestic tariffs. They seem to be part of one problem.


Clarence Decatur Howe: We endeavour to make it one problem. The officers of the Department of Trade and Commerce interpret foreign tariffs to Canadian business, and obtain the views of Canadian business on foreign tariffs. This department takes a leading part in any discussion of foreign tariffs, such as have been current in recent years at Geneva and Annecy.


Heber Harold Hatfield: Mr. Chairman, I understand the United States tariff commission is now taking evidence about the importation of Canadian potatoes into the United States, which evidence is to be presented at Torquay this autumn. Will the minister state whether we shall have a representative at Torquay who will be posted concerning the importation of fruits and vegetables from the United States, so that he can present an argument against shutting out potatoes going to the United States?


Clarence Decatur Howe: Mr. Chairman, the tariff commission of the United States is taking evidence in the United States, and our trade officials are taking evidence in Canada. The hon. member will appreciate that a meeting such as Torquay is a meeting for trading. We expect that our delegation will be able to hold their own against the American delegation in discussing the tariff on potatoes entering the United States. In any case, we are endeavouring to see that they are as well prepared as possible.
While I am on my feet permit me to present my hon. friend with an up-to-date list of articles that can and cannot be imported into Canada. This is not a list prepared by the government, but a list prepared by the Cahadian Manufacturers Association. I will send it across to my hon. friend.


Heber Harold Hatfield: I shall be glad to have that list, and at the same time I should like to draw to the minister's attention a case concerning a manufacturer in the United States who built a plant at Montreal. He arranged to bring supplies from his plant in the United States to Montreal, thinking he could bring them in without any restriction. He found he was unable to do so, so last Wednesday he called me to see if I could help him. He is a competitor of mine, but I told him I would give him what help I could. We went to see the officials, and the first man we approached told us he would give this man a permit for enough supplies to last him two months, after which time he could get supplies in Canada. That was on Wednesday, June 21. On June 22, this official wrote a letter to the manufacturer at Lachine informing him that he could not bring in the supplies. The plant was ready to commence operations, and there were about fifty employees hired. This official, after telling his stenographer to send the permit to Rock Island so that it would be there in time for the goods to leave, wrote a letter stating that the chief officials of the board had turned down his 'application.
Supply-Trade and Commerce
This morning I took up the question again, and the official told me he was still ready to allow the goods to enter. I cannot understand why he wrote the letter of June 22.


Clarence Decatur Howe: May I ask the hon. member if the man to whom he refers is an officer of the Department of Trade and Commerce?


Heber Harold Hatfield: The matter has to do with trade and commerce, but the official is the assistant to the deputy minister of finance.


Clarence Decatur Howe: The hon. member is asking me a question about matters of which I have no knowledge.


Heber Harold Hatfield: It concerns import control.


George Harris Hees: Could the minister tell us something of the results obtained so far by the committee under the chairmanship of Mr. James Duncan, of the Massey-Harris Company, Toronto, which was set up some time ago to promote better trade relations between Great Britain and this country?


Clarence Decatur Howe: I would point out that the committee of which Mr. Duncan is chairman is a businessmen's committee set up by private enterprise. From my knowledge of its work, I can say it is obtaining excellent results. I believe the comparative trade figures for 1950 and 1949 would indicate that. Someone at least has brought about a great improvement, and I give full credit to the Duncan committee.


Winfield Chester Scott McLure: While we are discussing this matter of tariffs, I should like to mention again a matter I mentioned earlier. I see by the press that we are about to negotiate with the United States concerning tariffs. There is one industry that has been nearly ruined by taxation and tariffs, and that is the fur industry. I might say that the United States is the only country that puts up an excessive barrier against silver fox furs. Today the tariff is 37J per cent ad valorem. If the minister is to negotiate for lower tariffs or new concessions, I believe this is one matter that should be brought to his attention. While we allow furs from the United States to enter Canada duty free, the United States imposes a 37 J per cent ad valorem duty. At one time it was up to 50 per cent, but it was reduced a little. I should like the minister to make a note of that, and have his officials discuss it with the United States customs officers.


Clarence Decatur Howe: Mr. Chairman, industry across Canada has been invited to send in briefs covering any tariff reductions they hope to get. Those briefs are being studied. I have not the position of the fur industry in mind, but I shall take note of my friend's suggestion and look into it at the first opportunity.

Supply-Trade and Commerce


Howard Charles Green: In that connection, Mr. Chairman, what is the effect on Canada of the cancellation of the reciprocal agreement between the United States and Mexico? Apparently we are likely to lose some trade because we can no longer get benefit by reason of the favoured nation clause.


Clarence Decatur Howe: It affects Canada indirectly. The United States have denounced their reciprocal trade arrangement-that is, their trade arrangement with Mexico-for the reason that they assert that Mexico has discriminated against Canadian trade.


Howard Charles Green: Against American trade, you mean; you said Canadian trade.


Clarence Decatur Howe: Against American trade, yes. It will have a repercussion on Canada with regard to two items of which Mexico is the principal supplier. One is lead and the other is cattle. The items are down for discussion at Torquay in September and it is hoped that the Canadian position can be corrected at that time. If he asks me what items will be affected as a result of the action taken by the United States, those are the two principal items that will affect Canada.


Howard Charles Green: Will the effect on lead be quite considerable?


Clarence Decatur Howe: It restores the duty. The present duty of one and a half cents a pound will go to three cents a pound.


Howard Charles Green: Is that considered serious?


Clarence Decatur Howe: It is quite a bit.


Howard Charles Green: What about oil? Is that not affected also?


Clarence Decatur Howe: It might affect our position if we were an exporter of oil, but we are not, so our position is not affected.


Howard Charles Green: One other question I should like to ask on this item has to do with the lumber trade between the Pacific coast and Great Britain. Apparently the British are buying less and less lumber all the time. Within the last two weeks they have called for tenders on another order which is for only 200 million board feet, to be shared between the west coast states and British Columbia. Apparently British Columbia this year has sold to the United Kingdom 167 million board feet, and they will be sharing with Washington and Oregon in this new order for 200 million board feet; whereas in 1949 British Columbia sold a total of 345 million board feet and in 1939 sold practically one billion board feet. What is the position with regard to that trade? Is Russia cutting in? Is it likely to continue small or what are the prospects?


Clarence Decatur Howe: As I have stated before, Mr. Chairman, the trade cannot sell Canadian exports twice. The Canadian exports have been going to the United States, attracted there by the abnormally high prices. Prices today are much higher than prices at any other time since the war. My. hon. friend mentioned 2 million board feet.


Howard Charles Green: Two hundred million board feet.	.


Clarence Decatur Howe: Yes, 200 million board feet. As I understand it, it is 2,000 standards, which is 400 million board feet. I think British Columbia can have all that order if they will quote a reasonable price. I do not think they can expect to get the American price; but they can certainly have it if they quote anything like the price which they applied to earlier exports to the United Kingdom.


Howard Charles Green: Is not the purchase price of that lumber to be paid out of ECA funds?


Clarence Decatur Howe: Yes.


Howard Charles Green: Under those circumstances it
would be unlikely that British Columbia would get the whole order, would it not?


Clarence Decatur Howe: British Columbia could have
had all the previous orders. They actually took only 75 per cent but they could have had it all had they been able to handle it. They only quoted on part of it. If British Columbia quotes on all this order and quotes a reasonable price, there is no doubt in the world but that all of the order will be placed in British Columbia.


Howard Charles Green: Is Russian lumber cutting in
on the British market?


Clarence Decatur Howe: Russia has always had a good
share of the British market. I think its proportionate share at the moment is less than in the pre-war years; but it is shipping some lumber into the British market.


James MacKerras Macdonnell: I understood the minister to say a moment or two ago that this denunciation of the trade treaty between the United States and Mexico might affect the tariff on Canadian cattle. Am I right in thinking that one of the few results that we got after the Geneva discussion of 1947 was a reduction in the tariff on cattle? I thought that was a definite bargain which would not be affected by anything else.


Clarence Decatur Howe: The Geneva agreements covered the light and the heavy-weight cattle. The treaty with Mexico covered the medium-weight cattle; and the immediate effect, if the treaty is denounced, is to take away the tariff concession that arises to Canada, out of the agreement between Mexico and the United

States, on medium-weight cattle. Naturally the item is down for discussion at Torquay, and I have every reason to believe that medium-weight cattle will be brought under the general agreement on tariffs and trade.


James MacKerras Macdonnell: Can the minister say something on the news item-I think I saw it in the New York Times of Sunday-to the effect that the hoped-for removal of administrative restrictions in the American tariff is not likely or that the bill before congress is not likely to be passed this year? Can the minister comment on that matter? I understand that in some ways administrative restrictions are more important than the actual tariffs.


Clarence Decatur Howe: The bill in question is still
before a committee of the United States congress. I would not want to take responsibility for saying it will not be passed, and I am sure my hon. friend would not. That is a matter for the United States congress, I think.


[Stage Direction]
Item agreed to.
General administration-
428.	To provide for expenses of the industrial defence branch, $60,197.
John Alpheus Charlton: Will the minister explain to the committee just what are the duties of this industrial defence branch.


Clarence Decatur Howe: This estimate covers the requirements of the industrial defence board and the share of defence planning which falls within the sphere of the Department of Trade and Commerce.
P.C. 1739 of April 20, 1948, sets out the duties and functions of the industrial defence board, originally set up in the Department of National Defence but transferred to the Department of Trade and Commerce by P.C. 1166 of March 15, 1949, as:
(a)	to advise the government of Canada and the Minister of National Defence on all matters relating to the industrial war potential of Canada;
(b)	to prepare and keep up to date a plan for industrial production in the event of war;
(c)	to arrange for such liaison between the naval, military and air forces of Canada, the Canadian Ordnance Association, Canadian Arsenals Limited and other agencies and industries as will ensure an understanding of defence needs and the active co-operation required to meet such needs;
(d)	to encourage the standardization of specifications and industrial practices;
(e)	to advise on the location of industries and on the development, procurement, inspection, storage and distribution of material and equipment and the maintenance of reserve stocks.
Supply-Trade and Commerce


John Alpheus Charlton: The number of employees is nine, and I take it that all those employees are not travellers. The total salaries of the branch are $26,000 and the travelling expenses are $15,000. Surely all the nine people who are employed in this branch are not travelling around the country all the time.


Clarence Decatur Howe: The director of the branch has been to Europe three times for extended periods. He left for Europe this afternoon, to represent the government on the Atlantic pact conference. My hon. friend thinks that he can travel to Europe, spend a month or two there and get back without considerable cost. I assure him that that is not the case.


John Alpheus Charlton: Would this travelling expense amount be all for one man?


Clarence Decatur Howe: No; all the officers of the department are required to travel. Frequent conferences are held in Washington, extending over considerable periods. Various committees of the defence planning board travel there. My hon. friend laughs, but I assure him it is not possible to walk to these conferences. If an officer is sent over to Washington he must travel there, must stay at a hotel and must travel back, and all that costs money.


John Alpheus Charlton: I wonder whether the
Minister of Trade and Commerce is giving passes. Perhaps that is the reason for all the deficit on the Trans-Canada Air Lines.


[Stage Direction]
Item agreed to.
Exhibitions-
429.	Exhibitions generally, including a contribution of $1,000 to the international bureau of exhibitions, $284,184.
William Joseph Browne: Can the
minister tell us how many exhibitions Canada took part in, in 1949, and how many this year? I was in Milan last year. Was Canada represented in the Milan exhibition last year? I notice an improvement in sales to Italy last year.


Clarence Decatur Howe: The Canadian government
exhibitions commission provide exhibits for all government purposes. Nineteen exhibits were constructed and four others were in the course of construction at the end of the year. Of the nineteen ten were displayed at nineteen events abroad and nine displayed at some thirty events in Canada.


William Joseph Browne: Can the
minister explain the Canadian ones? Did he say nine cities?


Clarence Decatur Howe: I am told that the domestic exhibits are normally prepared for other departments. The Department of Trade and Commerce has a service which other departments may make use of if they wish. If the

Supply-Trade and Commerce Department of Agriculture has a display at certain centres they sometimes call on the Department of Trade and Commerce to arrange the exhibit.


William Joseph Browne: Did you
have an exhibit in Milan in 1950?


Clarence Decatur Howe: Yes, we had an exhibit at Milan in furs, and we later were in process of moving that exhibit of furs to Lille, France.


[Stage Direction]
Item agreed to.
Louis-René Beaudoin: Perhaps I should point out that there is a further supplementary item, namely, item 781, which is related to the items which we have just carried. It reads:
Exhibitions-
781. Exhibitions generally-further amount required. $15,000.
The details are found at page 14 of the further supplementary estimates. Shall the item carry?


John Alpheus Charlton: Hold everything.


William Joseph Browne: Can the
minister explain why he needs this $15,000? Is it generally, or is it for some new exhibition?


Clarence Decatur Howe: The $15,000 was for the exhibition at Lille that I spoke of a short time ago. Canada's participation had not been arranged at the time the main estimates were brought down. I suggest, Mr. Chairman, it may be simpler to take the supplementaries after we finish the main items.


Louis-René Beaudoin: Shall we carry item 781 now, or allow it to stand?


[Stage Direction]
Item agreed to.
Exhibitions-
430.	Canadian international trade fair, 1950, including authority, to refund from revenue deposits received for contracts for space (revote $115,000), $602,000.
Stanley Howard Knowles: Will the minister comment on the comment with respect to this item made by the Auditor General? I am sure the minister has heard of the memorandum which the Auditor General submitted to a committee of the other place and also to the public accounts committee of this house. In that memorandum he refers to a number of items in the estimates which have the effect of legislating, and in particular he points out that that legislative effect is brought about in some cases by varying the provisions of some other statute.
With respect to item 430 the Auditor General points out that this varies the provisions

of the Consolidated Revenue and Audit Act respecting the treatment of revenue. As I understand it the Consolidated Revenue and Audit Act requires that all moneys received by the government or any agency thereof are received by the receiver general, and if there is any money paid out, even if it is a deposit to be paid back, it is in turn paid out of the general exchequer. Apparently item 430 is worded in such a way as to give the department the authority to refund from the revenue it receives, in connection with trade fairs, money covering deposits. Has the matter been discussed between the minister and the Auditor General, or what defence has the minister to offer for departing from the usual practice in this case?


Clarence Decatur Howe: It would be impossible to foresee the extent of the refund of deposits. A deposit is made to cover Canadian duty on the exhibit ahead of the re-export of the exhibit. Certain reasons are advanced why an exhibitor will re-export rather than sell the exhibit in Canada, and it is the practice to refund his deposit if the product is reexported.
It is ordinary business practice. An exhibitor deposits certain money with the trade fair board for certain purposes, and this item gives the board the permission to refund after the purpose of the deposit has been served.


Stanley Howard Knowles: In that instance, the cheque is made out and signed by somebody representing the trade fair directly rather than by the comptroller general, as is the case with other refunds or payments that are made?


Clarence Decatur Howe: That is true.


Stanley Howard Knowles: The minister says that is the situation. But I am calling his attention to the fact that the Auditor General does not approve of the practice.


Clarence Decatur Howe: I am aware of that, but the amounts are not large. It is a small amount in total, and to ask parliament to vote a sum to cover refund of deposits by exhibitors I think would be complicating a very simple situation.


James MacKerras Macdonnell: A waste of time even for the opposition.


Clarence Decatur Howe: Yes.


Heber Harold Hatfield: Is this trade fair carried on
in the interest of Canada or in the interest of Europe?


Clarence Decatur Howe: My hon,. friend can be assured that it is carried on in the interests of Canada. If it were not in the interest of Canada it would not be carried on.


Mr.. Fraser:: This year there is a charge of $82,000 for rental. There was no charge last year. Did the city carry it last year?


Clarence Decatur Howe: There was a charge last year, but perhaps it does not appear in the items that we have. The $82,000 is paid to the Toronto exhibition commission for rental of the buildings used by the fair.


Gordon Knapman Fraser: Then there is $38,000 protective and other services.


Clarence Decatur Howe: Yes.


Gordon Knapman Fraser: I wondered whether Toronto paid for the police last year, and you have to pay for them this year.


Clarence Decatur Howe: No; we pay for the protection service inside the grounds supplementary to the ordinary police service that we get from the city of Toronto.


Gordon Knapman Fraser: It is put in differently this year.


Clarence Decatur Howe: I presume so, yes.


Winfield Chester Scott McLure: The minister should give us a little statement regarding this international trade fair. I have now attended, I think, three of these fairs in Toronto and the third seemed to be a wonderful fair. It is great advertising for Canada and provides a place for the interchange of commodities of the different countries. It would appear from this item that it is going to be continued for another year. This would be an opportune time for the Minister of Trade and Commerce to make a statement as to what this fair is doing in the interests of Canadian and foreign trade.


Clarence Decatur Howe: The 1950 Canadian international trade fair ended on June 9. The merchandise of 2,247 manufacturers and producers from 33 countries, including Canada, was shown during the previous two weeks. It will be appreciated that as yet it is too early to get final costs and revenues, but from present figures available it would appear that the costs are $835,000 and the revenue $442,000, an estimated net cost of $393,000.
The number of business visitors who were registered as being in attendance is 35,364. While the majority of these were from Canada, there were business representatives registered at the fair from many countries. While no effort is made by the Canadian government exhibition commission to secure exact figures from the individual exhibitors as to the business conducted at the fair, judging from the comments volunteered by a number of the exhibitors there is no doubt this fair has been the most successful of the three held to date.
Supply-Trade and Commerce
The fair has several purposes. It enables Canadian buyers to view the work of many countries and compare the products of one country with another. The limiting factor on the number of buyers who attended the fair was the hotel accommodation in Toronto and vicinity. The fair permits Canadian manufacturers to compare their products with those of other countries and also to compare Canadian prices with those of other lands. It brings many visitors to Canada who are potential customers for Canadian products. I found the Canadian exhibitors just as enthusiastic about the results obtained from the fair as were the other exhibitors, particularly those from the United Kingdom.


Winfield Chester Scott McLure: I am glad to hear the minister make that statement. I attended the fair and I think it is a wonderful institution. If the house is sitting when the next fair is on I think it should close for two or three days to give all hon. members an opportunity to attend. One could see only a portion of the exhibits in a day but it gave a good impression of what industry was doing in other countries. It was a marvellous sight to see all these countries showing their wares and offering them for sale, and incidentally making a number of sales.


Mr. Jones:: There are two items at the bottom of page 272 I should like the minister to explain. One item is for $171,500 to cover the construction, erecting and dismantling of booths. The amount voted last year was only $43,770. Then there is an item of $131,000 for advertising, which is a reduction of almost $100,000 from the item of $230,000 of last year.


Clarence Decatur Howe: In regard to the first question I can only say that we spread the cost of constructing, erecting and dismantling the booths over two years. The actual annual amount was about the same for each year. With regard to advertising, we- feel that the fair is now established and not quite as much expenditure in that field will be required. In earlier years efforts were directed toward attracting exhibitors to the fair but we feel now that exhibitors in all parts of the world know about the fair. The intention is to concentrate next year more on attracting buyers and we think that the amount required for such advertising can be reduced.


James MacKerras Macdonnell: Will the minister enlighten me on one point? Under this item 430 the ampunt for this year is shown as $620,000, as compared with $422,000 last year, or an increase of $180,000. Then in the line below is an amount covering the Canadian international trade fair, 1949, $624,000, which is shown as a decrease in the right-hand column.

Supply-Trade and Commerce


Clarence Decatur Howe: The two figures for last year should be added together. The amount appropriated last year was considerably more than the amount that will be appropriated for the next year. I think the gross amount appropriated last year was around $900,000.


[Stage Direction]
Item agreed to.
Standards division-
431.	Administration, including administration of the Precious Metals Marking Act, $106,050.
Stanley Howard Knowles: Has the minister had brought to his attention a resolution passed by the Canadian Chamber of Commerce asking for the establishment of certain standards with respect to shoes and footwear? May I ask if anything has been done to meet that suggestion?


Clarence Decatur Howe: My hon. friend will recall that parliament passed a bill last year providing for Canadian standards. Standards are being established but I am told that the standards for boots and shoes have not been established up to the moment.


Stanley Howard Knowles: May I express the hope that now that the matter has been drawn publicly to the minister's attention he will ask his departmental officials to dig up that resolution, have a look at it and see whether there is hot something that could be done in connection with this matter. After all, it comes from the minister's own friends 'and I too think there is something- in it.


Clarence Decatur Howe: Could I have the privilege of naming my friends and offer the same privilege to my hon. friend?


Stanley Howard Knowles: I thank my hon. friend for naming me as his hon. friend in the course of that interchange. For future reference may I ask if the administration of the Trade Mark and Design Act comes under this branch?


Clarence Decatur Howe: Yes.


James MacKerras Macdonnell: Is there any revenue derived under this item or is it all outgo?


Clarence Decatur Howe: This branch takes in more revenue than it expends.


James MacKerras Macdonnell: Could we know what the revenue is? I suggest that we deal with these four items together.


Clarence Decatur Howe: The electricity and gas inspection services took in $534,003.77.


James MacKerras Macdonnell: Is that all you can make out of it?


Clarence Decatur Howe: Gas inspection, $122,403.60, and electricity export duty, $431,895.38. The weights and measures division took in

$472,510.28. Against that there were expenditures for administration. If my hon. friend will take these down I think he will find they balance out fairly well. Expenditures for administration were $88,394,52; electricity and gas inspection, $463,227.61; laboratory expense, $33,019.94; and weights and measures inspection, $512,539.74.


Douglas Scott Harkness: Can the minister tell us what the gas inspection service does? I come from a town which has used gas almost universally for a long time, and I have never heard about the inspection service. What does it do?


Clarence Decatur Howe: It is required that every gas meter be inspected and stamped by the federal government once every six years, I think it is.


Heber Harold Hatfield: Why is the importation of scales prohibited?


Clarence Decatur Howe: Imported from where?


Heber Harold Hatfield: The United States.


Clarence Decatur Howe: Scales are imported under
licence from the United States and imported freely from soft currency countries. The process is a part of the emergency exchange conservation regulations.


Stanley Howard Knowles: That is not your department.


Heber Harold Hatfield: I bought a set of scales in the United States for $70. I had to pay $130 for the same type of scales made by the same company in Montreal.


[Stage Direction]
Item agreed to.
Dominion bureau of statistics-
437.	Census of population, including contribution of $3,543 to the inter-American statistical institute committee on the 1950 census of the Americas, $1,278,838.
Stanley Howard Knowles: How much of this item is for next year's census? Can the minister say how preparations are proceeding for that census and what will be its total cost?


Clarence Decatur Howe: The figure for expenses in connection with the 1951 decennial census of population and agriculture is $987,075. I think that is the principal item. There is another item of $7,500 for a census of distribution. The estimate of expenses for the 1951 census is, about $1 million.


[Stage Direction]
Item agreed to.
Wheat and grain division-
438.	Salaries and other expenses, $26,450.
Mr. Fair:: I should like to say a few words about this item. It involves a little matter of nearly $600 million belonging to the wheat growers of the prairie provinces. It has given me and the wheat growers of the west

quite a lot of concern since the British wheat agreement was made some three or four years ago. Earlier this month we were able to get a statement from the Minister of Trade and Commerce to the effect that the British government does not intend to make good anything in connection with the "have regard to" clause in the British wheat agreement. Tonight I hope he will tell us what the government intends to do to make up the western farmers' losses, and I hope he will not tell us that the government feels that the farmers have not any money coming to them, because at least some members of the government are not of that opinion.
Under the contract we supplied Great Britain with wheat in 1946-47 at $1.55 a bushel, and the average price of class II wheat, which can be called by any name you wish but I call it class II wheat because we are dealing with wheat sold by the Canadian wheat board and for which they received payment, was $2.43 a bushel. That involved an average loss of 88 cents a bushel on the wheat sold to Great Britain. In the 194-7-48 crop year we supplied wheat to Great Britain at $1.55 a bushel, and the Canadian wheat board was able to sell class II wheat to its different customers at $2.88 a bushel, or a loss to the Canadian wheat grower of $1.33 a bushel. In the third year of the contract, the 1948-49 crop year, Great Britain paid us $2 per bushel while the average price for class II wheat was $2.23 per bushel, meaning a loss of 23 cents a bushel, or more than $400 million for the three crop years.
During the same period we supplied millers with wheat so that the people of Canada could eat cheap bread, at a cost to the farmers of approximately $124 million. Those two sums total $524 million up to the present time, and we expect that there will be further losses on the present crop year. What they are I am not prepared to state. Since I do not want to be contradicted by the Minister of Trade and Commerce or anybody else I have used approximate figures, because actual figures are not very easy to obtain. We may be told that the Canadian wheat growers are not entitled to any compensation. To prove my case I want to quote from page 1971 of Hansard for March 24, 1949. The house was dealing at that time with the Agricultural Products Act. Near the bottom of the second column we find that the Minister of Agriculture had this to say:
Along with that consideration I couple the fact that it is due to the farmers of this country that we have legislation such as this on our statute books throughout the transitional period in order that the house may see to it that the whole population of
Supply-Trade and Commerce
Canada pays back some of what my hon. friends over on the other side of the house have been talking about ever since this debate began.
Ever since this house held its first sitting in this session, member after member has been getting up and saying: Why should the farmer carry the whole load? What I am saying to this house tonight is that the government does not believe that the farmer should carry the whole load.
I ask the committee to take particular note of that statement made by the Minister of Agriculture. He went on to say:
We have arrived at the time when, unless we are going to make an effort to have Canada carry part of the load, we must throw our farmers on other markets and put them in the position of having to take a lower price than they can get under these contracts, and a lower price than they ought to be able to get in Canada, because of what they have done over the past seven or eight years. When we put that emergency alongside of the other emergency, then I say that there is every reason in the world for passing this piece of legislation which has in it only one section of importance, which says that this kind of legislation should be continued for another year. During that year we hope we may be able to do at least some of the things Canada ought to do in order to express appreciation of all that the farmers did throughout the war, and since.
The Minister of Agriculture has made several statements about these losses. I should like to refer to what he had to say on December 10, 1949, when discussing his estimates. He was referring at the time to a speech he made to the London chamber of commerce in December, 1948. At page 3079 of Hansard he had this to say:
The trend of the article is to call attention to the fact, not in this country but over in Great Britain, that it is a pretty difficult task for twelve million people to undertake to feed, half feed or twenty-five per cent feed, fifty million people in Great Britain. If that is what is being suggested, then I am quite prepared to say that if it is going to be done it cannot be done by the farmers alone.
For that reason I say the Minister of Agriculture, even if he has no support in the cabinet, is willing to admit and has admitted that the farmers of Canada should not carry this whole load by themselves. I have said that it is not the business of the farmers to demand that Britain make good any further losses. That should be a matter between the British government and the Canadian government. The Minister of Trade and Commerce and his officials were over there earlier this month. They were told by Sir Stafford Cripps and his officials that Britain had fulfilled its share of the contract, and on behalf of Canada the minister stated that they agreed with that pronouncement. So I feel the remainder of the responsibility lies directly upon the dominion government.
Time after time we on this side of the house have asked the government to give us some statement in connection with those losses. Tonight I hope the minister will tell
4164	HOUSE OF
Supply-Trade and Commerce us what the government intend to do about that matter. The farmers of the west feel that they did a fairly good job during the war. They worked long hours; they worked hard, and then had their products taken over by the government and in some instances sold' at give-away prices. Now they demand some compensation for what was done in the past. Many of us felt that we would have a guaranteed market at guaranteed prices for at least seven or eight years to offset the losses accepted under those wheat agreements and in connection with the sale of other products, but at present we find practically no protection, no guaranteed markets and no guaranteed prices. Our wheat is being sold under the international wheat agreement, and in that I find very little protection for our farmers. So I believe the time is now at hand, since the period ends on July 31, for the government to come through with what the farmers really believed they intended to do; that is, make up the losses suffered under the contracts with Great Britain and through the sale of our wheat at prices which were kept low in order that we might maintain price control and a low cost of living in Canada during the war and for some years after.


Mr. Argue:: I agree with the sentiments that have been expressed by the hon. member for Battle River. Because of government policy over the past number of years the farmers have made a real sacrifice for the benefit of the Canadian consumer, and also for the benefit of our best export customer, Great Britain. I agree with the hon. member when he says the government has some obligation to take care of at least part of the loss that has been incurred, and a continuing obligation over the years ahead to give the farmers stability. I know the Saskatchewan farmers' union and the Alberta farmers' union had a conference with the minister last week, during which they presented a brief which dealt with two main points. The first was that the government had an obligation to make up some of the losses sustained by farmers who have sold their wheat since 1945, and also a continuing obligation to guarantee reasonable prices in the future. I should like to ask the minister if the government has reached a decision as to what additional payment might be expected over and above whatever amount is left in the wheat pool fund. Did the minister hear my question?


Clarence Decatur Howe: Yes, I heard it.


Hazen Robert Argue: And if a decision has not been reached I should like to know if the matter is still under consideration and whether a decision will be reached soon.


Clarence Decatur Howe: My hon. friend is talking about-


Mr. Dewar:: I should like to make a short comment before the minister replies. I agree with some of the remarks of the hon. member for Battle River and the hon. member for Assiniboia; but they both paint a lurid picture in which they make out that the farmer of western Canada is destitute. I cannot agree with that.


Robert Fair: Mr. Chairman, that is something the hon. member has drawn from his imagination.


Austin Edwin Dewar: Kindly let me finish. I allowed you to go on; now let me talk. I have listened to you fellows for the last four months. You are like a bunch of jacks-in-the-box; whenever anyone tries to say anything you jump to your feet. Now let me say a word. I do not want anyone to get the idea that I have not the interests of the western farmer at heart just as much as any one of you.


Robert Fair: Better express it, then.


Austin Edwin Dewar: If you will be quiet long enough I shall do so. Do not forget the position of the western farmer in 1939. At that time the average farmer had a mortgage on his farm; he was heavily in debt; he had no car, and no machinery. Look at his position ten years later.


Stanley Howard Knowles: Who was in power then?


Austin Edwin Dewar: Never mind; certainly it was not the C.C.F. Ten years later we find the western farmer in a pretty solid position. He has paid off his mortgage; he has a reasonable quantity of good machinery and a car too in which to take the odd little holiday. The hon. member for Assiniboia spoke of the Saskatchewan farmers' union pleading with the government-


An hon. Member:: Not pleading.


Austin Edwin Dewar: I get a great kick out of these fellows over here, Mr. Chairman. I sit and suffer; and I say "suffer" advisedly-


Stanley Howard Knowles: You mean you sit and slumber.


Austin Edwin Dewar: -and listen to them for six months, but they have not the courtesy to let someone else speak without interruption. I cannot say what I have in mind at the moment or I will be called to order, but I really feel sorry for their intelligence.


Mr. Sinnotf:: That will hold them.


Austin Edwin Dewar: Nothing will hold them; they do not know any better.


Stanley Howard Knowles: If we did not interrupt, you would have nothing to say.


Austin Edwin Dewar: There is the hon. gentleman who has spoken about eight hundred times, who bobs up like a jumping jack. Never in my life have I heard anyone who knew so much about so little and had so much to say about it. There is nothing mentioned in this house on which he is not an expert. The hon. member for Assiniboia spoke of the period from 1940 to 1945. I quite appreciate that farm prices were not too high, but we must not forget that all prices in Canada were fixed, and relatively speaking during the war years the farmers were reasonably well treated.


Hazen Robert Argue: I said in 1945.


Austin Edwin Dewar: You mentioned the money that was owed up to 1945.


Hazen Robert Argue: I said from 1945 on.


Austin Edwin Dewar: I quite agree that the price was not high, but neither were the wages of the average industrial worker. In 1945 and 1946 the question of a fair price for wheat was under discussion, and it will be recalled that the wheat pools and farm organizations throughout Canada were quite happy and quite ready to agree on a five-year price of $1.55 per bushel. I believe the minister will back me up in that. All right; we have gone on these last few years, and at the present time the price to the farmer is fixed at $1.75 a bushel for all the wheat he will have delivered during the five crop years ending July 31. I should like to suggest to the minister that, in view of the fact that our freight rates in western Canada are rising because labour wants more money, when the government starts discussing the winding up of this wheat board operation they will consider giving the farmer an additional fifteen cents per bushel. I am not going into the figures like the hon. member for Battle River, and suggest' there is $600 million; that is a mythical sum.


Mr. Johnston:: Just for my information, how much is it?


Austin Edwin Dewar: Knowing as much as you let on you know, you ought to know that without my telling you.


Charles Edward Johnston: You just don't know.


Austin Edwin Dewar: You know, when I look at the hon. gentlemen over there who let on they know so many things, I feel sorry for them.


An hon. Member:: What are you talking about?


Austin Edwin Dewar: You would not know; you have not reached that state of maturity.


Charles Edward Johnston: I just asked one simple question. Give me an answer to it.
55946-263i
Supply-Trade and Commerce


Austin Edwin Dewar: I am asking the minister
through you, sir, to consider giving the farmer of western Canada an additional fifteen cents a bushel. I quite appreciate that if at the time of the wind-up we are not going to have fifteen cents in the general pot, or whatever you want to call it-


Heber Harold Hatfield: Why not twenty-five cents?


Austin Edwin Dewar: The hon. member would be all ears if potatoes were being discussed. If it were going to mean a dollar for him but nobody else, he would be all ears. As I was saying we had an agreement with the United Kingdom, and on February 28 I suggested that, in view of the United Kingdom's position, they were shrewd traders. Nothing has happened up to the present to lead me to believe that the United Kingdom is all it is cracked up to be. I know some hon. members will sing the praises of Great Britain for what she has done for the colonies, and what she has done for the commonwealth. I repeat that anything Great Britain is today, or has been in the past, is what the colonies have made her. Do not ever forget that. In view of the type of government, and the class of individual that is running the country in Great Britain today-


Clarence Gillis: What is the matter with it?


Austin Edwin Dewar: You just keep quiet.


Clarence Gillis: What do you know about it?


Austin Edwin Dewar: Just as much as you do, which is nothing. In view of the class of individual, and in view of the fact that the government of the United Kingdom made an agreement and has not lived up to it, I suggest to the hon. minister that when the wheat is sold he give consideration to some adjustment by virtue of the "have regard to" clause. Great Britain paid higher prices to other commonwealth countries, in fact to all other countries. Canada lived up to the agreement, and by the same token I feel Great Britain should live up to the agreement. There is no denying it. I trust that this government, of which I am proud to be a member,-


An hon. Member:: Since when were you a member of the government?


Austin Edwin Dewar: I am no rubber stamp like' some of the outfit over there. I have no doubt the minister will suggest that if we deeide-to add a few million dollars of subsidy to* what is paid to the western farmer, the eastern taxpayer is not going to be happy about it. I quite appreciate the fact that the eastern, taxpayers are not going to be happy about it.. There is one thing I do not want anybody tor forget, and I want to emphasize it, that is the prosperity of the east is predicated entirely on the prosperity of the west. Let no one forget that. Every day of the year

Supply-Trade and Commerce the three western provinces produce $2 million out of the top six inches of soil. The members from Alberta can talk about oil, but it means nothing in comparison to our agricultural production. We do not want anyone to forget that the farmer of western Canada is one of the greatest buyers in the world, as well as one of the greatest producers in the world. About ninety per cent of the money the western farmer receives for his production is spent in eastern Canada. If the minister does suggest the taxpayer in eastern Canada might be put out, I want him to bear in mind what I have said. I also want him to bear in mind that, as a member of the Liberal party and a supporter of the government from western Canada, we have full confidence in the Minister of Trade and Commerce.


Robert Fair: I should like to tell the minister that the hon. member, whose main contribution throughout the session has been to shout the word "carried", has suggested that I have used figures that are not accurate. I shall inform him that I am using a report of the Canadian wheat board, for the crop year 1948-49, and I have complete confidence in that board. My figures will be found to be correct.


Austin Edwin Dewar: If my only contribution has been to shout "carried" during the past session, it has been far more than the contribution of any hon. gentleman of his party. If he thinks he can cram anything down my throat-I assure him I will take any member of his party on, individually or collectively.


Joseph-Alfred Dion: Order. I wish to remind hon. members that we are dealing with item 438. Shall the item carry?


Hazen Robert Argue: No, Mr. Chairman, I wonder if the minister will answer the question I asked him as to whether the government is considering raising the final price to $2 per bushel as requested by some farm organizations?


Clarence Decatur Howe: Mr. Chairman, I have listened to some strange explanations of the position of the government in connection with the five-year pool. It seems to me that some hon. members have lost sight of the fact that Canada went to Britain attempting to obtain an insurance policy covering the sale of wheat for four years; that the agreement entered into was supposed to be a protection to the farmers. My hon. friend speaks of the government sacrificing the farmers. I find it difficult to understand that language, although I have heard it so often perhaps I am getting used to it. The receipt of grain under the five-year pool will end on July 31 next. As soon as that grain is sold

a settlement of the pool will be made, I hope some time in October. I believe that is as soon as it can be made. A great effort will be made to make the settlement within this calendar year, as I have promised the house before. When the final returns for the pool can be ascertained a settlement will be made, and the members of the house as well as the general public will be advised what that settlement is. At the moment I am not in a position to discuss it. I am sure my hon. friend knows less about the situation than I do, and I can assure him he is in no position to discuss it.


Hazen Robert Argue: I am not asking the minister to tell me what the final settlement will be. All I am asking is this. Is the government considering making a final settlement over and above the actual cash surplus on hand in the five-year pool at the end of July?


Clarence Decatur Howe: The government will consider a supplementary payment at the time that it is making a settlement of the five-year pool. All considerations will be taken into account at the one time.


[Stage Direction]
Item agreed to.
Wheat and grain division-
439.	To provide for the Canadian government's annual assessment for membership in the international wheat council, $25,577.
Mr. Wright:: With respect to item 439, the matter to which I wish to refer has to do with the inspection department of the grain board under the Canada Grain Act. I have had a number of complaints recently of the quality of western feed grain being shipped to eastern Canada. I know the standards that are required for the various grades when we sell, for instance 3 C.W. oats and No. 1 feed oats and 3 C.W. barley or No. 3 barley. If the report's that are received from the purchasers in eastern Canada are correct, there must be mixing of those grades somewhere between the time they leave the country elevator in western Canada and the time they reach the farmer in eastern Canada. It is my understanding that under the Canada Grain Act there are certain standards for various grades of grain, as regards both in-turn standards and out-turn standards being shipped from Port Arthur and Fort William. I would ask the minister if the standards for the grades of, let us say, 3 C.W. oats as they are sold on the farm are the same standards as are used for that same grade as sold to eastern buyers.
I understand that the standards are practically the same and that, if mixing takes place, it is most likely that rt takes place after the grain has been bought by the eastern dealers, and that it is mixed before it is

sold to the farmer. I think we should have some assurance from the minister with respect to these grades.
Just recently, for instance, a man came to me and said that a shipment of Argentine oats that had been brought into Canada just recently was of a better quality than a similar grade of Canadian oats. If our standards are maintained, or if the grades are maintained on those oats that are sold in western Canada until they reach eastern Canada, I know that our grades will compare favourably with the standards of oats or any other feed grain grown in any other part of the world. If there is mixing taking place, I think we should be able to find out under this item where it is taking place, and I think it should be stopped.


Clarence Decatur Howe: I might say incidentally that the hon. member's friend who told him the quality of Argentine oats was better than that of Canadian oats perhaps did not have the facts to back up that statement, because no Argentine oats have been delivered in this country as yet. That shipment is not due until July 15. So my hon. friend can tell him that perhaps he does not know what he is talking about.


Percy Ellis Wright: He had samples.


Clarence Decatur Howe: I can say, however, that
Argentine oats do not rank with Canadian feed oats in quality. They are well below that grade. However, the standards of feed grain are exactly the same in western Canada as they are in eastern Canada. As it passes through the board facilities, the grain is inspected at the lakehead, using exactly the same standards that apply as when the grain is bought in the country. If the grain is shipped to a board elevator in the east-that is the board of grain commissioners' public elevator-the standard of shipment out of that elevator is exactly the same as the standards in western Canada. But my hon. friend will appreciate the fact that the board of grain commissioners has no control of grain once it passes into distribution in the province of Ontario. Its handling is then a matter for provincial legislation. We have not the complementary provincial legislation in Ontario that we have in the three western provinces. Therefore anything could happen to the grain from the time that it passes out of the board's facilities into the system of distribution.


Percy Ellis Wright: That is exactly the answer I
expected the minister to make, and I think that is correct. If there is mixing taking place with respect to this grain, I think that it takes place after it reaches the province of Ontario here and after it goes out of the hands of the board of grain commissioners and out of the hands of the wheat board. It is up to
Supply-Trade and Commerce the eastern provinces themselves to set standards for their feed grain which will protect their own farmers.


James MacKerras Macdonnell: Will the
minister say something about the international wheat council which we pay $25,000 to belong to? Just what have been its duties in the past and what can we expect from it in the future?


Clarence Decatur Howe: The international wheat council is the regulatory body that administers the international wheat agreement. The wheat agreement came into effect only on July 31 last. The council administers all international transactions. All transactions under the agreement are registered by the council. The council notifies participating countries when they have taken up their full quota. If any exporting country wishes to put grain, as it has a right to do, under the agreement, the allocation of that grain is made by the central council. It is an important administrative body in the world grain trade and one in which Canada is glad to claim membership.


James MacKerras Macdonnell: Does our
British agreement go through it?


Clarence Decatur Howe: No. That agreement is registered under it, but the agreement with Britain was a bilateral one that carried over from the days before the international agreement. After July 31, all our transactions will be made through the council instead of by bilateral agreement.


[Stage Direction]
Item agreed to.
Canada Grain Act-
440.	Administration, $124,190.
Harry Oliver White: The minister will recall that one May 31 I was asking some questions with regard to an extension of the Canada Grain Act to apply in southwestern Ontario. The growers and I appreciate what the minister had to say at that time with a view to extending it at the next revision of the Canada Grain Act. Since that time I have found that certain things have already been done in southwestern Ontario under the Canada Grain Act, and it would appear that it would apply in that area without any amendments or changes to the act. I am just going to draw this to the minister's attention. I am referring to the statement of the minister in answer to a question of mine on May 31, as reported at page 3035 of Hansard:


Clarence Decatur Howe: It includes white beans, so-called.
Soybeans are graded by the province of Ontario, assisted by the Department of Agriculture of the federal government. It is questionable whether the

Supply-Trade and Commerce board of grain commissioners would have the constitutional authority to grade grains which are grown and consumed in the one province. The board of grain commissioners handles grain that moves in interprovincial traffic or for export.
He doubted whether it would apply in domestic trade. Then on page 6 of the annual report of the board for the year 1938, the following statement appears:
Inspection Services in Western Ontario
In response to requests from the corn growers of western Ontario on September 15, the board opened an office in Chatham and inaugurated voluntary inspection service in this region for the purpose of grading com and other grain grown.
Then on page 8 of the annual report of the board of grain commissioners for the year 1942, we find this statement:
Grading of Soybeans and Flax
Under order in council P.C. 2799 dated April 10, 1942, the Canadian wheat board was authorized to purchase soybeans, and requested the board to make provision for the grading thereof.
After discussions with representatives of the producers and handlers, the board prepared specifications for the different grades of soybeans and these were authorized by order in council P.C. 6125, dated July 16, 1942.
To give you some idea of what is being handled through the Chatham office, the eastern grain division reported that at Montreal there were 1,590 cars inspected; at Toronto, 2,033 cars inspected; while at Chatham there were 8,337 cars inspected. That will give some idea of the volume of business there. I hope that he will look into the desires of the growers in southwestern Ontario, and make the Canada Grain Act applicable to that area. Will the minister give us an answer to that at least?


Clarence Decatur Howe: I am aware that the board of grain commissioners inspect eastern grain, but I understand such inspection is voluntary. That is, any shipper can have his grain graded by the board of grain commissioners if he wishes, or not, if he does not wish to.
I understood the remarks of my hon. friend were applied to compulsory grading of eastern grain. As I understand the situation, it is not compulsory; it is voluntary. It is a service the board of grain commissioners offer if anyone wishes to take advantage of it. Is that correct?


Harry Oliver White: It would not be too difficult to make it operative in western Ontario. They would not have to amend the grain act to do that.


Clarence Decatur Howe: We would have to get the permission of the province of Ontario. I doubt whether we have the constitutional jurisdiction to impose compulsory inspection in Ontario.


Harry Oliver White: You work on that, and I will also.


Clarence Decatur Howe: Yes, quite.


Robert Ross (Roy) Knight: Can the minister give a brief definition of the duties of the board of grain commissioners?


Clarence Decatur Howe: This is the definition in my book: For necessary services provided under the provisions of the Canada Grain Act in connection with the supervision and handling of grain from delivery at country elevators to delivery to vessels for export, including the licensing and bonding of elevators and grain dealers; sampling, inspection and grading of grain; setting of standards or grades of grain; weighing the grain at terminal elevators; registration of warehouse receipts; collecting and collating grain statistics; maintenance of grain research laboratory and collection of fees for services rendered.


Robert Ross (Roy) Knight: I was wondering what effect the creation and operation of the wheat board would have upon the duties of that board. I mean whether it would lessen their work or make it greater.


Clarence Decatur Howe: I doubt whether it has any effect one way or the other. The wheat board is a marketing organization; whereas the board of grain commissioners is a licensing organization.


Robert Ross (Roy) Knight: How many assistant commissioners are there, and where are they situated?


Clarence Decatur Howe: There are three commissioners, as my hon. friend knows, stationed in Winnipeg, and there are assistant commissioners at Vancouver, Calgary, Saskatoon and Fort William.


Stanley Howard Knowles: When this item was up for discussion on December 10 of last year I had a few words with the minister concerning the question of the five-day week for employees working under the board of grain commissioners in the inspection offices associated with the railway yards in Winnipeg. The minister may recall that 1 pointed out to him at that time that these people are civil servants, and that they were concerned as to why, in view of the general five-day week in the civil service during the summer, they were not given a five-day week last summer. I took it up with the minister in the middle of December although that was not an opportune time to talk about conditions in the summertime. He did point out to me then, however, that the matter was under consideration. Obviously there were certain difficulties, but I gathered from what he said -and I read it again today to check on it-

that it was a point that should be looked into and perhaps something could be done about it one way or the other. Can the minister say whether arrangements have been made for the five-day week for these inspection employees this summer?


Clarence Decatur Howe: No arrangements have been made. The trouble is that the board of grain commissioners is a servicing institution, and it must provide service whenever the services are 'required. It is something like the post office in that respect. My hon. friend knows that the post office does not have a five-day week either because it is required to give service on six days. No plan has been worked out-in fact I think it would be unreasonable for the employees to expect that they will have a five-day week in the busy season of their operation. Perhaps if they had asked for the five-day week in April or May, or particularly in March or April, it would be quite easy to work out. But the summer season is the busy season in the grain business. I am told that it has not been found possible to work out a five-day week for employees of the commission.


Stanley Howard Knowles: That is substantially what the minister said when I raised this question on December 10 last, except that at that time having said that he thought it was difficult to work out a five-day week in the summertime he said that something might be done by way of time oft at another time of the year in lieu of the five-day week in the summertime. I may say that that word from the minister was greeted by the employees with the hope that by this time some plan, even an alternative one, might have been devised.


Clarence Decatur Howe: If the employees would bring forward a plan that would apply to the off season of the board, not the busy season, I am sure it would receive consideration.


Mr. Quelch:: Can the minister say whether or not the decision of the board of grain commissioners to reduce or to degrade Red Bobs wheat down to No. 3 was the result of criticism by the foreign customers?


Clarence Decatur Howe: Yes. Many complaints were received from abroad that the quality of wheat being shipped as No. 1 northern from the west coast was not up to the quality of the same grade being shipped from the east coast. That complaint was traced down and it was found that the Red Bobs were responsible. I believe Red Bobs are being degraded from No. 1 to No. 3.


[Stage Direction]
Item agreed to.
Supply-Trade and Commerce Canada Grain Act-
441.	Operation and maintenance, including inspection, weighing, registration, etc., $2,328,536.
Robert Ross (Roy) Knight: To what extent are these government elevators being used for the purpose for which they were created? That is to say, what is their percentage of efficiency? I do not know whether that is the correct term. What percentage of their capacity is being used? I want to draw to the attention of the minister-I have done it before-the fact that the government elevator at Saskatoon is a very fine building and has a capacity of 5J million bushels. In the last number of years since I have been a member of this house there has not been enough grain put through it to keep the machinery from rusting. I should like to know for example how much money the operation of that elevator has been costing the taxpayers of this country, and whether there is any means by which it can be used more. Now that there is a change in the market situation -it is an ill wind that blows no one good- I hope that in the future that elevator may be used more. Perhaps the minister would comment on these various questions.


Clarence Decatur Howe: I can assure my hon. friend that the elevator is being used exactly for the purpose for which it was built. I know the purpose for which it was built, because I was associated with the board of grain commissioners when it was built. It was built as emergency storage and it is being used for that purpose. When the grain backs up so that it cannot be handled through the normal export channels-I mean the normal channels that move grain from the farm to market-* then interior storages are filled, and interior terminals are very handy for that purpose. That is the purpose for which they were built, and that is the purpose for which they are being used. But my hon. friend would not expect me to subordinate the marketing of grain to the use of any storage in elevators. The grain must move to market expeditiously; it must be put in position so that it can be sold without any side interests being concerned, and that is being done. I think perhaps the elevators will be used this year because there seems to be a promise of an exceptionally large crop. If that large crop does develop, as I believe it will, these interior storage terminal elevators will be used for the purposes for which they were built, emergency storage.


[Stage Direction]
Item agreed to.
[Stage Direction]
Supply-Trade and Commerce
Canada Grain Act-
442.	Canadian government elevators, including equipment (revote $144,628), $741,085.
James MacKerras Macdonnell: Where are these elevators located and do they appear anywhere as a government asset? I have not been able to find them in the statement given us by the Minister of Finance, although I have not read it through as carefully as I might have. Will the minister give us some information as to their capital value and as to just what this item covers?


Clarence Decatur Howe: It covers the handling of grain at elevators at Calgary, Edmonton, Moose Jaw, Saskatoon and Lethbridge. The board also administers an elevator at Port Arthur which is under lease at this time to a grain company. Under the peculiar system used by the government in these matters, the receipts from these elevators go into a different account and do not appear in these estimates.


James MacKerras Macdonnell: Why don't you change that?


Clarence Decatur Howe: It would reduce the size of the estimates considerably if we did, but that does not come within my jurisdiction.


James MacKerras Macdonnell: Were they built by the government?


Clarence Decatur Howe: Yes.


James MacKerras Macdonnell: Will the
minister tell us how much revenue there actually was under this quaint system of accounting?


Clarence Decatur Howe: Since these elevators have been built they have returned a profit which has completely amortized their cost. I happen to know that although that fact does not appear in this item. The total grain handled last year amounted to 3,031,809 bushels, of which 2,227,703 bushels were handled at the Calgary elevator. The net result of the operations for the fiscal year ending March 31, 1949, was a deficit of $222,565.11, as compared with a deficit of $131,282.90 in the previous fiscal year. When there is no emergency the handlings in these elevators are quite small, but once we have a surplus crop, the elevators earn money very rapidly. Over the years they have proved a profitable investment.


Mr.   Baler@: I want to commend the minister for the reply he made to the hon. member for Saskatoon. I live close to that elevator the hon. member spoke of and I know that the western farmer is pleased that that elevator is not full all the time. That indicates that our wheat is moving.


[Stage Direction]
Item agreed to.

Terminable services-
444.	To provide for the liquidation of contracts, including commitments of previous years related to the acquisition of assets operated by the Department of Reconstruction and Supply or an agency of the Department of Reconstruction and Supply: and for miscellaneous and unforeseen expenses, $250,000.
James MacKerras Macdonnell: Is this a case where one government department is buying from another?


Clarence Decatur Howe: This covers the remainder of the job of liquidating war contracts. There are several cases before the exchequer court which have not been decided. We spent only a small proportion of the $400,000 appropriated last year and this is carried over in order to dispose of contracts that had to do with the department of munitions and supply and which were entered into during the war years.


[Stage Direction]
Item agreed to.
Terminable services-
445.	To provide for production and transportation subsidies on steel and iron under such terms and conditions as may be approved by the governor in council, $2,000,000.
Howard Charles Green: Will the minister explain this item?


Clarence Decatur Howe: This is part of the transition of the wartime steel structure into peacetime and it is hoped that this will be the last time this item will appear as we expect to liquidate the subsidy situation by March 31 of next year. Through these subsidies we have been able to integrate the steel capacity of Canada and use it to the maximum. We did it first to overcome a difficult supply problem and we are doing it now in order to have the full use of these facilities, at least until the end of this year.
The assistance policy has had a pronounced effect on prices with the result that Canadian prices are lower than Pittsburgh prices, something unknown in pre-war years. Low prices for steel have played an important part in stimulating industry, both for internal distribution and export. At the present time we pay for the movement of semi-finished steel from Sydney to Hamilton and from Sault Ste. Marie to Hamilton, the purpose being to make sure that that semi-finished steel is produced to full Canadian capacity in the first place, and finished in Canada, in the second, place, in order to make full use of all the finishing capacity in the country.


Howard Charles Green: Has the government any plans in mind for increasing steel production in Canada and building up a balanced and complete iron and steel industry? I ask that because of two developments that have

occurred, the one at Steep Rock, Ontario, where it is expected within a few years they will be producing 7 million tons of iron ore a year, and the other the development in northern Quebec and Labrador. From what appears in the press it would appear that big changes are about to take place in the iron and steel industry of this continent. I have here a dispatch which appeared in the Financial Times of June 23 which reads:
American Steel Industry to be Revolutionized by New Iron Ore Sources
Huge deposits being opened up In Ungava-Labrador and in Venezuela will mean move of steel plants to Atlantic seaboard: speeding up in New Quebec-Labrador project important.
I am not in position to state whether or not that report is accurate, but it would appear that there are tremendous possibilities for Canada. I wish the minister would state whether there is as yet any government policy for the increase of our iron and steel production. For example, will it be possible to use this Canadian iron ore to increase the production of steel on Cape Breton island, and would it be possible to erect steel plants along the St. Lawrence river. What does the minister think are the possibilities brought about by this immense body of ore in northern Quebec and Labrador as well as the development at Steep Rock? To a layman it would appear that Canada is on the threshold of a tremendous development largely because of these resources and I would like the minister to give us some information as to just what the future may hold for Canada in this regard.


Clarence Decatur Howe: The Canadian steel industry
has more than doubled in the last ten years and it continues to expand. New blast furnace capacity is at present being built in Hamilton and a new finishing mill is being installed at Sault Ste. Marie. The industry never stops expanding. It attempts to take care of Canadian requirements, and I am sure that it will succeed in doing so. As I say, great strides have been made in the last several years. The policy of the government has been to make that development possible. We helped the industry by subsidy over a difficult period, and the reason that we are stopping the subsidy at the end of this year is that the transition is being made, plants are getting into balance, and we think government-assisted interchange of primary steel between plants will no longer be needed for this year. We have been net importers of iron ore through the years. We are coming into the position of a net exporter, for which I am very happy, and the larger the exports are after the needs of Canadian industry have been supplied the happier I shall be.
Supply-Trade and Commerce


Gordon Graydon: Would the minister care to
comment upon the statement he made last fall in which he indicated that the discoveries of large iron ore deposits in Quebec and Labrador in all probability would mean that the St. Lawrence deep waterway project was going to be started very soon. I have not his exact words, but I know that was the effect of the statement he made. Will he indicate to the committee whether, in his opinion, it is likely to have that development?


Clarence Decatur Howe: My hon. friend knows the difficulty about starting the St. Lawrence development. He knows that we signed a treaty to do our part many years ago, and we are waiting for the United States to sign a treaty. As soon as it is signed the work will commence. I think what I suggested in my earlier discussion was that the iron ore in Labrador will create large tonnage traffic in the opposite direction from the present flow of traffic in the St. Lawrence canals, and that balanced traffic should be an inducement to assist in the financing of the waterway.


Agar Rodney Adamson: The iron ore has to be
smelted in the upper lakes region.


Gordon Graydon: Have you made any represensations to the United States government?


Clarence Decatur Howe: I have indeed, and I have the assurance of several members of their cabinet that it is the wish of the administration that this legislation be enacted. I feel sure an effort will be made to obtain the legislation while the present administration is in power.


Howard Charles Green: Is there anything in the suggestion in the Financial Times that the United States steel industry is likely to move to the Atlantic coast?


Clarence Decatur Howe: I would not believe it on the
strength of the say-so of the Financial Times.


Howard Charles Green: Is there a possibility of that
happening? Is that the trend, not only because of Canadian iron ore but also because of the Venezuela ore?


Clarence Decatur Howe: I have in mind that it costs at least three times as much to build a steel plant today as it did in pre-war days. I doubt very much if even a country as wealthy as the United States could do away with the steel plant in Pittsburgh and build a new steel plant on the Atlantic coast, with no greater inducement than a lower freight rate on its iron ore.


Clarence Gillis: The decrease of $5,750,000 in that one item is quite a sizeable amount. What I should like to find out is whether all of the $7,750,000 was spent last year?


Clarence Decatur Howe: Yes, practically all.

Supply-Trade and Commerce


Clarence Gillis: How was it allocated between the three operating companies, Algoma, Dosco and Stelco?


Clarence Decatur Howe: It was not allocated to companies. It was paid out largely as a freight subvention. If steel moving to Hamilton was bought f.o.b. Sydney the government paid the transportation, and it was sold at the Sydney price f.o.b. Hamilton. It is like the coal subvention which is paid to the railways. I am not sure that the steel subvention was paid directly to the railway, but that was the effect of it. It was the rail rate that was subsidized rather than any particular company. Last year there were certain scrap subsidies. Companies that had to go abroad for scrap, or had to go into uneconomical areas, were subsidized for their scrap movements. In other words, if prairie scrap had to be moved to Hamilton or Sault Ste. Marie, or foreign scrap had to be moved into Sydney, it was subsidized, but the scrap subsidies were suspended at the end of the last fiscal year.


Clarence Gillis: I had a return on the subsidy that Dosco received, and it was somewhere in the neighbourhood of $1,500,000. None of this money was used for plant expansion at all?


Clarence Decatur Howe: No.


Clarence Gillis: And you think $2 million will be adequate to subsidize the movement of steel?


Clarence Decatur Howe: Yes, we think so.


Clarence Gillis: I am interested in this item because I am interested in steel, which is one of the basic industries of Nova Scotia, With regard to what the hon. member for Vancouver-Quadra had to say about the possibilities of steel in the future on the Atlantic seaboard. I am not very much impressed with the forecast that the iron ore deposits in Newfoundland are going to benefit Canada to any great extent. I made up my mind on that point in 1947 when the present Postmaster General was piloting a bill through the house to grant rights to certain exploration companies not only to explore deposits in Quebec and Labrador but also to develop railroads, bus lines, hotel facilities and so on over the period of the next ten years. I made up my mind then that, so far as Canada was concerned, she was selling her future rights to the ore in those areas.
There were a couple of members who tried to tell the house at that time as best we could that all we were doing was granting a franchise to Canadian companies fronting for United States capital. The tie-up with United States companies such as M. A. Hanna, National Steel and others was quite apparent.

If you will go deep enough I think you will find that the stock in Canadian steel companies is largely held in the United States. If we are going to tie the two countries together in that way it is all right, but I opposed that kind of thing at that time as a Canadian who wanted to see Canadian resources developed for Canadians. I think you are three years too late in hoping that the great ore deposits of Labrador and Ungava will mean very much to us.
I believe that there will be a swing of some of the United States companies to the Atlantic seaboard. I know that at least one company is establishing a large fabricating plant in the eastern states. Unless there are drastic changes in our thinking on that matter, I think we are too late so far as iron ore and the future of steel production in Canada is concerned. We have already sold our rights for a period of ten years at least. I was wondering why there should be such a sharp drop in this item because if a subsidy of $1,500,000 to Dosco was necessary last year to transport its raw steel to central Canada the other steel companies are not going to get very much out of the $2 million. About all that Dosco is doing is producing raw material and shipping it to Quebec and Ontario for processing to be sent somewhere else. I know that a subsidy is necessary to move steel from eastern to central Canada, and I was wondering if the cut was not a little too drastic.


Clarence Decatur Howe: My hon. friend says if the material is exported no benefit to Canada ensues. Aluminum is a raw material produced in Canada, of which 95 per cent or possibly 97 per cent is exported.


Howard Charles Green: That is manufactured, is it not?


Clarence Decatur Howe: Well, it is smelted, just as copper is smelted.


Howard Charles Green: Bauxite is the raw material.


Clarence Decatur Howe: And that is imported into the country. The only thing the aluminum company uses in this country is water power; everything else is imported. It is said that we export our power in the form of aluminum; but that industry supports some twenty-five thousand employees, and we receive about $20 million a year in taxes. There we have an industry that has spent a few hundred million dollars in the Saguenay district and is prepared to do the same thing on the west coast. So 1 do not think there is any great loss to the country because of the fact that 97 per cent of the aluminum coming from that plant is exported.
In the same way you might say the Nor-anda copper mine is a perfect example of

the loss of Canadian resources. I suppose 70 per cent of the copper coming out of that mine goes out of the country. Nevertheless it is the centre of a great industrial population, and I cannot see that because the primary copper is largely exported from the country my hon. friend should say that an industry of this kind is of no benefit to Canada. The development of the Labrador iron ore deposits will create a source of that product in Canada, which will be available to Canadians if it is required. After all, Canada owns that resource, whatever the source of the money going into its development. As long as it is situated in Canada that resource belongs to this country and is subject to our law, whether emergency or ordinary legislation. I would call the attention of my hon. friend to the fact that about $250 million of somebody's money has to be invested in that operation before a hundred tons of ore are delivered at seaboard. In other words $250 million has to be invested before there is any return whatever from the property. Does my hon. friend suggest that an investment of that amount in an undeveloped area of Canada is not good for the Canadian economy? If he does, I must say I cannot agree.


Clarence Gillis: I did not say this industry was of no benefit. At the same time, if we are just planning to continue to be hewers of wood and drawers of water for the United States, we are not thinking very far ahead. I am not satisfied with that. The aluminum industry, as a straight exporter of raw materials, may bring in $80 million or $180 million a year, but I think we should at least make a start in building an industry that will process our own raw materials in our own country. I believe we should regard it as a trust to develop this country to the best of our ability, thinking in terms of the coming generation.
I am not satisfied with the automobile industry. We have steel, copper and all the materials that go into the manufacture of an automobile. We are exporting these materials to the United States, and in Canada we have plants which are assembling automobiles. If I go to Windsor or Oshawa to buy a car, I pay from 35 to 50 per cent more than it costs in the United States. What is wrong with our making a start, somewhere in this country, on building up a Canadian automobile industry, and knocking off that tariff which is put on at the border to protect those who are exporting raw materials from this country? I think that is wrong. While we may be getting something out of the materials we are sending out of the country, we are not getting as much as we would if we had an industry that would process our own raw materials.
Supply-Trade and Commerce
I am thinking in terms of that steel plant at Sydney, which produces a third or a fifth of Canada's raw steel. As a nation we are not losing anything on that operation because there are fabricating plants in central Canada; but that material is exported from the maritimes and processed in this part of the country, and then if we want to use some of the finished product down there we have that long freight haul to contend with, which adds to the cost. I want to see a tinplate industry built around that plant at Sydney. I believe the sheet mill that was operating during the war should have been continued, because we are importing ninety per cent of our steel plate from the United States, and there are all kinds of possibilities for small investments in the maritimes to build an industry around that mill.
Fertilizer is another matter. I know the minister remembers that during the war, through the department of reconstruction and supply, he spent quite a bit of money in research at that plant in connection with fertilizer. The research has been done, and I believe it should be possible to establish a fertilizer plant where we had one previously. That plant was moved out. Instead of a plant there, we are subsidizing the freight cost on fertilizer moving to the maritimes, and then when the farmer gets it he must pay an exorbitant price.
I am not being critical of the minister; perhaps during the period through which we have gone it was necessary to do things that way; but no one can convince me that we did right by handing over the leases for the Ungava and Labrador resources, after we had done the exploration work for ten years. It seems to me $250 million would have been a small investment to protect the future of this country in that area. I do not believe it could not have been obtained in this country. I believe that with the proper encouragement and sales talk by dominion and provincial authorities, that money could have been found as risk capital. In the final analysis, it seems to me that whole project could have been financed through the Bank of Canada. During the war when the minister of munitions and supply, who is now the Minister of Trade and Commerce, wanted a munitions plant put up, or a gun factory, he did not think about the cost. He just decided it had to be done; he asked if we had the material and the people to operate it, then supplied the credit to put up the plant and get it going. He did an excellent job, and I believe he could have done the same thing in connection with this Ungava development. I am sure $250 million could have been found in this country, but we have sold the birthright of

Supply-Trade and Commerce future Canadians in that area and one of our basic industries will be undeveloped, because I am convinced that the future of steel is on the Atlantic seaboard; and we have lost control of it.


Clarence Decatur Howe: My hon. friend suggests that Canada does nothing to develop a steel industry here, that we are simply hewers of wood and drawers of water for the United States. I suggest that Canada built her steel industry and had other people as hewers of wood and drawers of water. There was no iron ore in Nova Scotia when the Dominion Steel plant was built. You had to go to Newfoundland, a foreign country, for your ore. There was no iron ore on the Canadian side of the great lakes when the great steel industry at Hamilton and Sault Ste. Marie was developed. All that ore was obtained from the other side of the great lakes. In other words the United States were the hewers of wood and drawers of water for Canada, as far as iron ore was concerned, until two or three years ago. On balance it is probably supplying us with more iron ore today than we are giving it. I have never heard public men in the United States complain of being hewers of wood and drawers of water for Canadians. They were very glad to sell us their surplus iron ore, just as I think we are very glad to sell them our surplus. Certainly we will have a steel industry that will be based on the requirements of this country, and our steel men will be delighted to put in the capacity to the full extent they are able to sell the product. They always have been, and they will continue to be. If we can develop a greater capacity for the iron ore, we will be delighted to sell it abroad just as we sell our wheat, and a good many other raw materials. We are not hewers of wood and drawers of water for Europe just because we sell our surplus wheat in Europe. I think that applies to any of our raw materials, whether it be iron ore, copper, lead, zinc, or anything we produce in quantities above what we are able to consume in this country.
My hon. friend speaks of the automobile manufacturers being assembly plants. I would suggest to him that approximately 80 per cent of the automobiles made by the three principal companies in Canada are Canadian products. In the vicinity of those automobile plants, he will find a great many subsidiary plants that are making parts for these automobiles. If they are assembly plants, then they are assembling materials that are 80 per cent Canadian finished.


Howard Charles Green: Would it not be possible for Canada, because of these huge deposits of iron ore, to develop a steel industry which could
IMr. Gillis.l
export steel? Could we not produce steel which would form a foundation upon which we could provide jobs for many millions more people than we have at the present time? Could we not only meet our own requirements, but also export steel and bring more people here because of this resource?


Clarence Decatur Howe: I do not know where we would find an export market for any great volume. Every country tries to be self-sufficient in steel. We could not export to Great Britain, or to the continent.


Howard Charles Green: What about Asia?


Clarence Decatur Howe: What part of Asia would my friend suggest, and what would they use for money?


Howard Charles Green: Over the long run?


Clarence Decatur Howe: Over the long run we may try to do it, but I think today if we look after our Canadian requirements for steel we are taking care of the market that is open to us.


Howard Charles Green: If the St. Lawrence waterway is built, will that mean there will be new steel plants on the Canadian side of the great lakes, lake Ontario or lake Erie, or would practically all that iron be used on the United States side at the present steel ports? Will it mean any development of a steel industry in Canada, or will it merely mean the sale of the raw iron to the United States, replacing the iron ore from the Mesabi range?


Clarence Decatur Howe: Mr. Chairman, a prudent manufacturer makes what he thinks he can sell. He does not ordinarily worry about the raw materials, so long as he can get them at reasonable prices. That is the easy part, but the difficult part is to sell the product he undertakes to manufacture. I can tell my hon. friend that if there is any Canadian entrepreneur who thinks he can sell more steel than he is selling at present, the chances are that he will make it because that is where his profit comes from. My hon. friend is just as competent as I am to decide how much more steel a manufacturer is capable of making. I hope he is not suggesting that we should process in Canada every ounce of iron ore produced in Canada?


Howard Charles Green: No one is suggesting that.


Clarence Decatur Howe: That is the result of your "Canada first" argument.


Howard Charles Green: If we are going to get into this "Canada first" argument, it will be a real one. I am not arguing that all of Canada's iron ore should be turned into steel in Canada. I quite agree that the surplus must be sold. But here we have these tremendous discoveries, and I am hoping that they can be the cause of a tremendous development in

Canada, and the magnet which will attract a great many people to our shores. What worries me is whether that is the objective of the government or whether the only objective is to sell iron ore to the United States?


Clarence Decatur Howe: The government shares your hope.


Howard Charles Green: I am glad that they do. They are waking up at last, perhaps.


Mr. Black (Cumberland):: I know the people of Nova Scotia appreciate the subsidies that have been paid out in recent years to assist m the movement of coal and iron from Nova Scotia. I am in agreement with my fellow member from Nova Scotia, the member for Cape Breton South, that we should encourage the processing of these raw materials in Canada. That is one of the main complaints of the people of Nova Scotia, and it applies to what has been done under this subsidy. Our steel and iron produced in Nova Scotia are largely shipped in crude form to places in central Canada. We should have the refining plants near the source of production in Nova Scotia, so that we would derive greater benefit from these resources. I do not know what price is paid, probably $40 or $50 per ton for this crude steel, whereas it would be worth several hundred dollars per ton in finished form. In Nova Scotia and Cape Breton there is a large surplus of labour. Many of the younger people have not been able to get employment. If these crude iron materials were processed in our locality, it would give a great volume of employment.
In any event, it is a fact that the large portion of this material has been shipped away during the war years and since, so I suppose we have to be thankful for what has been done. I should like to ask the minister if he has any misgivings as to the importation of steel into Canada, owing to cheaper labour and depreciated currency in European countries? That would make it difficult for our own steel and iron companies to compete with these importations from Europe. I .feel the European industry has now reached the point where it is about to menace the manufacturers in Canada.


Clarence Decatur Howe: Mr. Chairman, there is no indication at present that Canadian industry is not well able to compete with European competition. Dosco has no difficulty competing with British steels in the British Columbia market, and that has always been a competitive area for the Canadian steel industry. Dosco has taken several orders away from European competition entirely on a price basis. The prices quoted are the Canadian f.o.b. price plus the water freight from Dosco to the west coast. The reason we have been cutting down
Supply-Trade and Commerce the subsidies, and plan to do away with them entirely at the end of this fiscal year, is that conditions are coming back to normal. For some years it was impossible to ship by water freight owing to the scarcity of tonnage and high freight rates. Today freight rates are back to normal, and there is ample tonnage. The markets that were normal markets for Dosco are opening up under conditions similar to those prevailing before the war. We feel that we have bridged over the transition period and allowed the steel plants to function as they did in pre-war days.


Agar Rodney Adamson: Can the minister say where the steel for the pipe line came from in British Columbia? That was something that was brought out in the committee.


Clarence Decatur Howe: The pipe line from where?


Agar Rodney Adamson: The oil pipe line.


Clarence Decatur Howe: From Alberta to the lakehead?


Agar Rodney Adamson: Yes.


Clarence Decatur Howe: All the 16-inch pipe was made in Welland of Canadian steel. Unfortunately that is the upper limit of capacity for the plant and therefore the 20-inch pipe had to be bought in the United States or fabricated in the United States, although all the steel plate that Canadian manufacturers could supply was made in Canada and shipped over to the United States for that purpose.


Howard Charles Green: Is that for the portion of the
pipe line which is laid in the states as well or only for the portion laid in Canada?


Clarence Decatur Howe: No, the portion that is laid in Canada.


Percy Chapman Black: I should like to
ask the minister whether, if the subsidy that was paid for transporting steel from Nova Scotia could have been applied toward the processing of that steel in Nova Scotia instead of shipping it to steel plants and other plants in central Canada, it would not have resulted in building up those processing plants in Nova Scotia. I understand that a considerable portion of the subsidy was paid to transport this material from Nova Scotia to central Canada to be processed there rather than in. Nova Scotia. The question I ask is this, and I repeat it. Could not that subsidy be applied towards assisting in the erection of plants in Nova Scotia to do the processing and thus avoid shipping this raw material to; central Canada?


Clarence Decatur Howe: .Up until a few months ago this subsidy was applied to the shipping of finished steel from Dosco into central Canada. In other words, when conditions were abnormal we changed the geography of Canada to the extent of placing the Dosco plant in Montreal

Supply-Trade and Commerce as far as marketing in Canada was concerned. We absorbed the freight rate on the finished product between Sydney and Montreal. As I say, that procedure has been discontinued for the reason that distribution of finished material is taking its normal pattern now. The distribution of semi-finished steel from Dosco to plants owned by Dosco in other parts of Canada has been discontinued. The only subsidies that are now being paid are on semi-finished materials that Dosco are not able to finish, for the reason that they have not the capacity to do so; that material includes certain slabs, billets and certain pig iron that are surplus to their finishing capacity. We pay a subvention on that material to transport it to plants under different ownership who have surplus finishing capacity, and allow it to be converted there and to be put into channels of trade without raising the price of other materials being converted in the same plants.


Percy Chapman Black: As I understand, large payments were made in the way of subsidy to bring a considerable tonnage from Nova Scotia as far as Hamilton so that it could be processed there.


Clarence Decatur Howe: A fair tonnage, yes.


Percy Chapman Black: I was asking why the subsidy could not apply to encouraging the establishing of processing plants in Nova Scotia-we have suffered from that situation for years and years-rather than be a subsidy to move the raw material as far as Hamilton, for refining and processing there.


Joseph-Alfred Dion: Shall the item carry?


Some hon. Members:: Carried.


James MacKerras Macdonnell: No. I
should like to ask a question.


Percy Chapman Black: I should like to get an answer.


Clarence Decatur Howe: Of course a good deal of the company's money and a good deal of the government's money was spent in enlarging the facilities in Nova Scotia both for primary steel and for finished steel. A good many mills were enlarged. New blast furnaces were installed. Just how far that procedure can go is limited by the profitable markets that can be found for the finished steel in normal times. That is a matter for the management to decide. I do not think any government can decide that. But we were simply taking care of the transition from a state of war to a state of normal distribution in the steel industry.


James MacKerras Macdonnell: Following the question asked by the hon. member for Cumberland, may I ask if it is not true that during the last war the coal industry, the steel industry, in fact the whole Sydney situation, to some extent suffered because of the, let us say, strategic necessity? At any rate, they did not derive the same benefits as did central Canada from the development they had. I think the hon. member for Cape Breton South spoke about a fertilizer plant coming to an end during the war. Is that correct?


Clarence Decatur Howe: No fertilizer plant that I know of came to upper Canada from Nova Scotia during the war.


Clarence Gillis: No, not during the war. It was quite a long time before the war.


Clarence Decatur Howe: When I was still a boy, I think.


James MacKerras Macdonnell: No, not as
long ago as that. I was there when it was working.


Clarence Gillis: In 1932.


James MacKerras Macdonnell: The minister has been given some new powers. Not all of us helped him to get them, but he has them at any rate; and we are later running into the situation where in spite of ourselves the government is going to have influence on development. It seems to me that it would be a proper thing to bear in mind the needs of the east coast as suggested by the hon. member for Cumberland.


Clarence Decatur Howe: I can assure all hon. members that the government will go much further in developing industry in the less industrialized areas than it will in the industrialized areas. We have done things for industry in the maritime provinces and for industry in the prairie provinces that we would not think of doing for the same industry in Ontario or Quebec.


Agar Rodney Adamson: The minister spoke of blast furnace capacity. Has he any information or any estimate of what the increase in blast furnace capacity in the 'basic steel industry is likely to be in the next year or two?


Clarence Decatur Howe: I think there is another 800 tons a day going up at the moment.


Agar Rodney Adamson: Where? At Hamilton?


Clarence Decatur Howe: In Hamilton.


Agar Rodney Adamson: And at the Soo?


Clarence Decatur Howe: No new blast furnace capacity at the Soo; new finishing capacity at the Soo.


[Stage Direction]
Item agreed to.
[Mr. Howe.l

Terminable services-
446.	To provide for research and development of jet engines and aircraft, $1,600,000.
James MacKerras Macdonnell: If there is no security reason against giving the information can the minister tell us just where this research work is to be done?


Clarence Decatur Howe: Yes. That work is being carried on at A. V. Roe in Toronto.


Gordon Graydon: In Malton.


Howard Charles Green: Peel county.


Clarence Decatur Howe: In the suburbs.


Gordon Graydon: Toronto is a suburb of
Malton.


Agar Rodney Adamson: In the annexed suburbs.


[Stage Direction]
Item agreed to.
Special-
447.	To reimburse the Canadian Commercial Corporation for expenses incurred in purchasing materials, supplies and equipment, etc., on behalf of the Department of National Defence, under chapter 51, statutes of 1947, $900,000.
Howard Charles Green: This item is to reimburse the Canadian Commercial Corporation for certain expenses. Does that corporation let contracts for housing for the forces?


Clarence Decatur Howe: It lets contracts for houses if it is instructed to do so by the Department of National Defence. If the project is being handled by Central Mortgage and Housing Corporation with their funds-then that corporation lets the contract.


Howard Charles Green: Why are arrangements not made by Central Mortgage and Housing Corporation to have these houses built? I asked a question, which will be found at page 3985 of Hansard, concerning 25 houses built at Fort St. John, British Columbia. The answer shows that they were built by Poole Construction Company, Limited, of Edmonton, at a cost of approximately $15,500 apiece, that there were no tenders called for, and that it was a negotiated contract. Then in the answer the reasons are given that there was urgency and that this firm was considered' to be the only one that could carry on the work and so forth. That seems a tremendous price for houses, and I am wondering if these houses could not be built by the Central Mortgage and Housing Corporation at a much lower cost than by the Canadian Commercial Corporation letting out contracts of that type.


Clarence Decatur Howe: I do not know whether my hon. friend is familiar with Fort St. John. Carpenters and contractors in that area are not too plentiful. These were prefabricated
Supply-Trade and Commerce houses, as I recall them, purchased in the Calgary area, I believe, and shipped in over the highway and erected by Poole Construction Company at Fort St. John. Everything had to be moved in over the highway. The transportation costs were a very big factor. My hon. friend may be shocked at the disparity in price between the cost of erecting houses in Calgary and erecting the same houses in Fort St. John, but I am not because it is all a matter of transportation.


Howard Charles Green: They were built in midwinter, I think.


Clarence Decatur Howe: Yes.


Howard Charles Green: Would it not be more economical to have these houses built under the direction of Central Mortgage and Housing Corporation whose business it is to build houses?


Clarence Decatur Howe: There has been a trend that way. Practically all houses built today for the army are being built by the Central Mortgage and Housing Corporation. Central Mortgage and Housing have their own problems. Sometimes they are not able to take on a rush job.


James MacKerras Macdonnell: I want to ask the minister a question with regard to the operation of Canadian Commercial Corporation. I observe that they did about $221 million of business and had 84,600 contracts, which, if my arithmetic is sound, would mean that the average contract was somewhere between $2,000 and $3,000. That would mean presumably that a very large number of the contracts would be for very much larger amounts, so that it would seem that though they have a large number of contracts of quite trifling amounts, and that would entail a terrific amount of work. Is that necessary?


Clarence Decatur Howe: I agree with my hon. friend that it entails a lot of work. But when you have an army base that army base has to be supplied with milk, bread and all the amenities. Someone has to buy it. It happens to be the job of the Canadian Commercial Corporation to do that work, and therefore there are a great many small contracts mixed with a good many large ones.


James MacKerras Macdonnell: I am not going to pursue it. I have a feeling that if the minister examined it he would find that somehow it did not need the 84,000 contracts. I will not pursue it further. I want to ask one further question. Does the minister happen to have his report there? On the second page paragraph 3 reads:
Toward the end of the fiscal year the corporation assumed active administration of responsibilities

Supply-Trade and Commerce devolving upon the Minister of Trade and Commerce in respect of the security of classified information emanating from the Department of National Defence.
And so on. Will the minister explain the nature of that duty? If I understand it, it does not seem to be a natural duty for a commercial corporation to assume.


Clarence Decatur Howe: It is the duty of the Canadian Commercial Corporation to choose its contractors; and the responsibility of making sure that these contractors and plants are approved for secret information was placed on the Canadian Commercial Corporation. Prior to the Canadian Commercial Corporation being asked to do that, the army decided that. The army simply said: "That is your responsibility; you are just as able to get the information as we are, and we will place that responsibility for secrecy on the corporation."


James MacKerras Macdonnell: Would I be correct in assuming that it is done in the same way that any government department, let us say the film board, used to satisfy itself as to the soundness of its employees; in other words, it did not set up a staff of its own.


Clarence Decatur Howe: The corporation has a small security staff. The security of a plant involves technical matters that some officers of the government must have knowledge of, and that knowledge is placed in the hands of the Canadian Commercial Corporation.


James MacKerras Macdonnell: I do not
know whether this is the proper place to ask the question, but the minister can tell me. I suppose the reason there is no item in the minister's estimate for the export credits insurance is that they are separate and carry on business on their own?


Clarence Decatur Howe: Just like any other crown company, they have capital of their own. Unless they get in trouble there is no reason for them to call on the government for any funds. As a matter of fact they do not usually.


James MacKerras Macdonnell: I am going to ask the minister why we need to put up, as we will this year, considering the interest on the money we have given to the export credits, $289,000 to insure people when I would have thought that they ought to pay the cost of what they are getting.


Clarence Decatur Howe: This is simply an interim situation. Accounts which have become overdue are written off, which I think my hon. friend, who is familiar with this matter will say is prudent bookkeeping. They are written off so far as the balance sheet of the company is concerned, just as bad debts are written off in the accounts of any well-managed corporation. But there is a recovery item to be


considered. As a matter of fact many commercial debts in Argentina were written off when that statement was prepared. These debts have since been paid, and a statement of the company today, instead of showing a deficit, would show a substantial profit. But unfortunately the past overdue accounts have exceeded the profits that come from business that turns out well. But I will say this to my hon. friend. That corporation was established to assist the Canadian exporter in trading around the world. If the company breaks even and makes no profit I will say that it is a success. However, the corporation has already had a profit and built up a substantial reserve even out of profits. This is the first year that it has ever found it necessary to turn in an annual report showing its earning position in red figures.


[Stage Direction]
Item agreed to.
Special-
448.	To reimburse the Canadian wheat board for the estimated expenses to be incurred from August 1, 1949, to July 31, 1950, the administration of delivery quotas and permit regulations, etc., $125,000.
John Alpheus Charlton: Is this a further cost of the wheat board?


Clarence Decatur Howe: Yes, it is a cost of services that the government to date has assumed. The quotas for country elevators were installed as a means of making it possible to market all grains, including coarse grains as well as wheat. In the past it has been the custom for the government to pay the cost of that and certain other services that are not performed directly as part of the operation of marketing wheat but had wider implications which it was felt the government should assume. But I can say that the fact that the board is now marketing oats and barley and other coarse grains for government account has rather changed the position and provision was made in the last amendment to the wheat board act which will provide that these charges should be met from the revenue of the board.


John Alpheus Charlton: Can the minister answer the question now regarding the amount of oats coming in from the Argentine? I understood one boatload has come in and another one is on the way. What are these oats to be sold for in this country?


Clarence Decatur Howe: I have answered that several times. It is a private transaction. I understand a private grain merchant in Canada has bought one shipload of oats from the Argentine. The oats have not arrived in this country yet. I was told they were due here about the middle of July. I know of only one cargo. There may be other cargoes, but I do not attempt to keep track of every

private transaction that occurs in industry in this country. I have told my hon. friend all I know about this transaction.


[Stage Direction]
Item agreed to.
Dominion coal board-
449.	Administration and investigations of the dominion coal board, $101,040.
Some hon. Members:: Eleven o'clock.
Item stands.
Progress reported.



MISCELLANEOUS PRIVATE BILLS

[Stage Direction]
Seventh report of standing committee on miscellaneous private bills.-Mr. Winkler.

Mr. Fournier (Hull):: Tomorrow the estimates of all departments are ready for consideration, but we hope to call the following departments: trade and commerce, post office, resources and development, secretary of state, fisheries, national revenue, mines and technical surveys and justice.


Mr. Fleming:: In that order?


Alphonse Fournier: The first four in order, trade and commerce, post office, resources and development and secretary of state.


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

[Stage Direction]
Defence forces-
202.	To provide for the defence forces of the navy, army and air services, and to authorize total commitments for this purpose of $579,301,670 including authority, notwithstanding section 29 of the Consolidated Revenue and Audit Act, to make commitments for the current year of $438,178,000 and commitments for future years of $141,123,670 against which commitments it is estimated that actual expenditures in 1950-51 will not exceed $384,932,304.
203.	Defence research and development, subject to allocation by the treasury board and to authorize total commitments for this purpose of $27,983,161 including authority notwithstanding section 29 of the Consolidated Revenue and Audit Act, to make commitments for the current year of $24,925,361 and commitments for future years of $3,057,800 against which commitments it is estimated that actual expenditure in 1950-51 will not exceed $23,925,361.
General services-
204.	Grants to military associations, institutes and others, as detailed in the estimates, $202,850.
205.	War museum and erection of headstones in Canada, $48,340.
Supply
206.	Battlefields memorials, $64,930.
Pensions and other benefits-civil pensions-
207.	Robert Allen, $193.
208.	Walter Pettipas, $516.
209.	Florence Walker, $360.
210.	Michael Mountain, $420.
211.	Mrs. Mary Whittington, $200.
212.	Mrs. Eleanor F. Nixon, $1,288.
213.	To authorize in respect of members of the Royal Canadian Air Force on leave without pay and serving as instructors with civilian training organizations operating under the British Commonwealth Air Training Plan who were killed, payment to their dependents of amounts equal to the amounts such dependents would have received under the pension act as amended had such service as instructors been military service in the armed- forces of Canada, less the value of any benefits received by such dependents under insurance contracts which were effected on the lives of such members of the Royal Canadian Air Force by or at the expense of the civilian organizations, $9,138.
Militia Pension Act-
214.	Governments' contribution to the permanent forces pension fund, $10,799,600.

[Stage Direction]
A-Department-
General administration-
423.	Departmental administration, $482,875.
424.	Commodities branch, including assistance in the development of markets and the procurement of supplies, and contributions as detailed in the estimates, $574,460.
425.	Trade commissioner service including payment of compensation to trade commissioners for damage to and loss of furniture and effects, under regulations approved by the governor in council, $2,052,859.
426.	Publicity and advertising in Canada and abroad, $201,315.
427.	Economic research and development branch, including the conducting of investigations and reporting upon commercial relations and foreign tariffs, and the development of Canadian industry, and a contribution of $6,300 to the international customs tariffs bureau, $442,480.
428.	To provide for expenses of the industrial defence branch, $60,197.
Exhibitions-
429.	Exhibitions generally, including a contribution of $1,000 to the international bureau of exhibitions, $284,184.
430.	Canadian International Trade Fair, 1950, including authority to refund from revenue deposits received for contracts for space (revote $115,000), $602,000.
Standards division-
431.	Administration, including administration of the Precious Metals Marking Act, $106,050.
432.	Electricity and gas inspection services, including administration of the Electricity and Fluid Exportation Act, $502,520.
433.	Laboratory, $48,740.
434.	Weights and measures inspection services, $604,595.
Dominion bureau of statistics-
435.	Administration, $173,315.
436.	Statistics, including contribution of $7,087 to the Inter-American Statistical Institute, $3,483,102.
[Stage Direction]
Supply-Trade and Commerce
437.	Census oi population, including contribution of $3,543 to the Inter-American Statistical Institute committee on the 1950 census of the Americas, $1,278,838.
Wheat and grain division-
438.	Salaries and other expenses, $26,450.
439.	To provide for the Canadian government's annual assessment for membership in the international wheat council, $25,577.
Canada Grain Act-[DOT]
440.	Administration, $124,190.
441.	Operation and maintenance, including inspection, weighing, registration, etc., $2,328,536.
442.	Canadian government elevators, including equipment (revote $144,628), $741,085.
Terminable services-
443.	Emergency import control-salaries and other expenses, $224,115.
Salaries and other expenses-
444.	To provide for the liquidation of contracts, including commitments of previous years related to the acquisition of assets operated by the Department
of Reconstruction and Supply or an agency of the Department of Reconstruction and Supply; and for miscellaneous and unforeseen expenses, $250,000.
445.	To provide for production and transportation subsidies on steel and iron under such terms and conditions as may be approved by the governor in council, $2,000,000.
446.	To provide for research and development of jet engines and aircraft, $1,600,000.
Special-
447.	To reimburse the Canadian Commercial Corporation for expenses incurred in purchasing materials, supplies and equipment, etc., on behalf of the Department of National Defence, under chapter 51, statutes of 1947, $900,000.
448.	To reimburse the Canadian wheat board for the estimated expenses to be incurred from August 1, 1949, to July 31, 1950, the administration of delivery quotas and permit regulations, etc., $125,000. A-Department-
Exhibitions-
781. Exhibitions generally-further amount required, $15,000.
[Stage Direction]
Tuesday, June 27, 1950