1952-06-04

Mr. J. A. Blanchette (Compton-Fronienac):: I should like to take this opportunity to inform the house of a visit made last week end by a group of hon. members to the province of Nova Scotia, as guests of the Halifax board of trade. Forty-seven members of this house, thirty-nine of whom were accompanied by their wives, took advantage of this kind invitation to see some of the outstanding points of interest in the vicinity of Halifax.
We arrived in Halifax on the evening of Friday, May 30, and were welcomed officially by Mayor R. A. Donahoe. The following morning was the beginning of a most interesting and busy day which included a visit to the Halifax shipyards where a delightful luncheon was served. The naval dockyard, a fish plant and the fisheries research station of the Department of Fisheries were of great interest to us, as was the two-hour tour of the harbour in the minesweeper H.M.C.S. New Liskeard.
On Saturday night we were the guests of the provincial government at a banquet held in the Nova Scotian hotel, with the lieutenant governor, the Hon. J. A. D. McCurdy, and Premier Angus Macdonald as our hosts. A reception was held after the dinner at the Ashburn golf club.
On Sunday morning we had the opportunity of attending the historic churches of Halifax and then we were graciously received by His Honour the Lieutenant Governor and Mrs. J. A. D. McCurdy at government house where luncheon was served and we were privileged to look through this stately residence.
On Sunday afternoon following a scenic tour through Chester and Lunenburg, we were treated to a real maritime lobster dinner by the town of Lunenburg, the Lunenburg board of trade and the United Maritime Fishermen Limited of Halifax.
I must say that this two-day visit was most valuable as a means of getting better acquainted with a part of Canada which 55704-182J
many of us have all too little opportunity to know as well as we would like. The importance of Nova Scotia and the other maritime provinces to the rest of Canada cannot be exaggerated, and I wish, firstly, that more hon. members had been able to participate in this tour, and secondly, that we had had the time to see much more thar, was possible in this all-too-brief week end.
I am sure that I speak on behalf of all the members who participated, in extending the warmest thanks to Brigadier H. V. D. Laing, C.B.E., E.D., president of the Halifax board of trade, Mayor Donahoe of Halifax, and all those who contributed so much to making our visit interesting and enjoyable. Special thanks are also due to the hon. members for Halifax (Mr. Dickey and Mr. Balcom) for their share in making possible this visit to a most beautiful and, as we can all testify, a most hospitable province.



VETERANS AFFAIRS

[Stage Direction]
Second report of special committee on veterans affairs.-Mr. Mutch.

Mr. Deputy Speaker:: I wish to lay before the house a report from the civil service commission in connection with a certain employee of the House of Commons.



QUESTIONS


Mr. Murphy:: To what countries did Polymer Corporation Limited ship products in the years 1949, 1950 and 1951, and what was the total amount in dollars to each country in each year?


Mr. Dickey:: In view of the fact that Polymer Corporation Limited is in commercial competition with other suppliers, it is not considered in the national interest to give information on sales to other countries.


YUKON RIVER
Mr. Pearkes:: 1.	Is the government building a dam on the Yukon river above Whitehorse? If so, for what purpose?
2.	What is the estimated cost of such dam?

Questions
3.	Did the British Yukon Navigation -Company at any time build a dam at, or in the same vicinity?
4.	If so, was freight from Whitehorse to Dawson and Mayo then transported by river boats operated by the British Yukon Navigation Company?
5.	Was the said dam used by said company to hold back water in the lakes above the dam to be released in the early summers and so lengthen the period of navigation on the Yukon river?
6.	Is the bulk of freight now transported by road in the Yukon?
7.	Is early navigation on the Yukon river still a
necessity?


Mr. Fournier (Hull):: 1.	(a) Yes. (b) To aid navigation.
2.	$260,440.
3.	Yes.
4.	Yes.
5.	Yes.
6.	The road from Whitehorse to Dawson will not be completed for some time. Heavy freight and passenger traffic will require the maintenance of a satisfactory water route.
7.	Yes.


CANADIAN NATIONAL RAILWAYS
Mr. Dube:: 1.	Have any instructions been given for drawing of plans for a new Canadian National station and freight shed at Edmundston, New Brunswick?
2.	Is it the intention of the Canadian National Railways to build a new station and freight shed at Edmundston, New Brunswick?
3.	If so, when?


Mr. Benidickson:: 1.	Plans have not been prepared for a new station. Plans are in course of preparation for a new freight shed.
2.	A new freight shed is to be constructed. The construction of a new station concurrently is not contemplated.
3.	It is anticipated that construction of the new freight shed will be started late in 1952.


HEALTH AND WELFARE FOOD AND DRUG DIVISION
Mr. Lennard:: 1.	Is the new proposed building for the food and drug division of the Department of National Health and Welfare to be completely air-conditioned?
2.	If not, for what reason?


Mr. Marlin:: 1.	No; it is proposed to have only the animal wing air-conditioned.
2.	The reason for not installing air-conditioning in the whole building is essentially one of economy. The department considers air-conditioning to be necessary in this climate only where the conditions of temperature and humidity significantly influence the results of experiments and the volume of space to be regulated is too large to be handled by
[Mr Pearkes.]
laboratory equipment such as small chambers in which temperature, humidity and air flow may be controlled.


FARM LOAN BOARD
Mr. Stuart (Charlotte):: 1.	How many farmers, by provinces, have requested assistance from the farm loan board, from January 1, to December 31, 1951?
2.	How many of the applications received were approved by the board?
3.	What was the total amount of loans, by provinces, for the same period?


Mr. Abbott:: The accounts of the Canadian farm loan board are maintained on the basis of the fiscal year ending March 31.
1.	British Columbia, 302; Alberta, 274; Saskatchewan, 936; Manitoba, 274; Ontario, 740; Quebec, 453; New Brunswick, 152; Nova Scotia, 75; Prince Edward Island, 129; Newfoundland, 4.
2.	1437.
3.	British Columbia, $331,200; Alberta, $411,900; Saskatchewan, $1,195,300; Manitoba, $508,800; Ontario, $981,750; Quebec, $370,150; New Brunswick, $169,400; Nova Scotia, $81,800; Prince Edward Island, $185,100; Newfoundland, $3,000.


FISHERIES LOAN BOARD
Mr. Stuart (Charlotte):: 1.	How many fishermen, by provinces, have requested assistance from the fisheries loan board, from January 1, to December 31, 1951?
2.	How many of the applications received were approved by the board?
3.	What was the total amount of loans, by provinces, for the same period?


Douglas Charles Abbott: The accounts of the Canadian farm loan board are maintained on the basis of the fiscal year ending March 31.
1.	Quebec	 2
Nova Scotia	 1
Prince Edward	Island	 1
2.	One.
3.	Prince Edward Island, $800.
ANNUITY CONTRACTS Mr. Knowles:
1.	How many individual annuity contracts were taken out during each of the following months: March, 1948; April, 1948; March, 1949; April, 1949; March, 1950; April, 1950; March, 1951; April, 1951; March, 1952; April, 1952?
2.	For how many persons enrolled in groups were annuity contracts taken out during each of the months indicated in question No. 1?
3.	What was the rate of interest used in computing annuity contracts during each of the months indicated in the answers to questions Nos. 1 and 2?


Mr. Cole (Verdun-La Salle):: March	April
1948 	
1,054	1,5651949 	
524	4981950 	
518	4281951 	
404	3571952 	
386	652March	April1948 	
6,624	2,5281949 	
2,468	1,3071950 	
1,307	1,2541951 	
1,928	1,2241952 	
835	7153.	March 1, 1948, to April 18, 1948 inclusive, 4 per cent; April 19 to April 30, 1948, 3 per cent; March and April, 1949, 3 per cent; March and April, 1950, 3 per cent; March and April, 1951, 3 per cent; March, 1952, 3 per cent; April, 1952, 3J per cent.


BONAVENTURE, QUE., WHARF
Mr. Courlemanche:: 1.	Has any work been done since April, 1952, on the wharf at Bonaventure, county of Bonaventure, Quebec?
2.	If so, was such work awarded by contract, or by day labour?
3.	If by contract, what is the amount thereof?
4.	If by day labour, who is the foreman?


Mr. Fournier (Hull):: 1.	Yes.
2.	By contract.
3.	$13,200.00.
4.	Answered by No. 2.


ST. CHARLES DE CAPLAN, QUE., WHARF
Mr. Courlemanche:: 1.	Was any work done on the wharf at St. Charles de Caplan, during the year 1951-1952?
2.	If so, was the work done by contract or by day labour?
3.	If by contract, what was the amount thereof?
4.	If by day labour, who was the foreman?


Mr. Fournier (Hull):: 1.	Yes.
2.	By day labour.
3.	Answered by No. 2.
4.	Samuel Arsenault.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Diefenbaker:: 1.	From how many camps or establishments have thefts of armed services' property or stores been discovered in the past month?
2.	What are the locations of the camps or establishments in which the alleged thefts took place, and what is the estimated value of the thefts in each case?
Questions



ARMED FORCES


Mr. Diefenbaker:: 1.	Have tenders been called by the Department of Defence Production, during the past six months, for kit bags for the army, and chefs' caps for the armed forces?
2.	If so, what was the quantity to be tendered for in each case?
3.	Have the tenders of any tenderer been accepted? If so, what are the names of the successful tenderers?




Mr. Lennard:: 1.	How many contracts have been let from January 1, 1951, to May 1, 1952, for the building of officers' messes for the defence forces?
2.	To whom were they let?
3.	What is the value of each contract?
4.	In which localities are these buildings being erected?



MOTIONS FOR PAPERS


Mr. Couriemanche:: For a copy of the payrolls and a statement of materials purchased in connection with the work done on the wharf at Bonaventure, county of Bonaventure, Quebec, from April, 1952, to date.



ST. CHARLES DE CAPLAN, QUE., WHARF

Henri Courtemanche: For a copy of payrolls and a statement of materials purchased in connection with the work done on the wharf of St. Charles de Caplan, county of Bonaventure, during the year 1951-1952.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. Alistair Stewart (Winnipeg North):: Mr. Speaker, I should like to direct a question to the Minister of National Revenue. Since I have not given him notice of it, perhaps he will take this as notice. Does the announcement of a coast-to-coast hook-up by private radio stations next Monday imply any change of policy on the part of the Canadian Broadcasting Corporation?


Hon. J. J. McCann (Minister of National Revenue):: I shall give an answer to the question at a later date.



MARTIAL LAW IN SOUTH KOREA


[Stage Direction]
On the orders of the day:
Mr. Angus Maclnnis (Vancouver East):: Mr. Speaker, in the absence of the Secretary of

Canadian National Railways State for External Affairs (Mr. Pearson), I should like to ask the Prime Minister a question. It was mentioned in the newscast ait one o'clock today that certain nations engaged with us in Korea had protested the action of President Syngman Rhee. Has Canada associated herself with those other countries?


Right Hon. L. S. Si. Laurent (Prime Minister):: Mr. Speaker, I will have to inquire from the department just what official action, if any, has been taken and what official information, if any, we have about the action of other nations associated with us in the Korean campaign.



INQUIRY FOR RETURNS


[Stage Direction]
On the orders of the day:
Mr. F. E. Lennard (Wentworth):: I should like to ask a question of the parliamentary assistant to the Minister of Defence Production. On May 15, six questions of mine were passed as orders for returns. These were in connection with defence production. Will the parliamentary assistant advise me when I may expect some action in view of the fact that several of these questions-one in particular'-can be answered within the hour?


John Horace Dickey: Mr. Speaker, the orders for returns are in the course of preparation. I might advise the hon. member and the house that in order to make complete answers to these returns it is necessary for us to communicate with all the district offices across Canada and to get the figures from them.



CANADIAN NATIONAL RAILWAYS


Hon. Lionel Chevrier (Minister of Transport) moved: the second reading of and concurrence in the amendment made by the Senate to Bill No. 192, respecting the construction of a line of railway by Canadian National Railway Company from Terrace to Kitimat, in the province of British Columbia.


Mr. Green:: May we have a statement on the effect of the amendment?


Lionel Chevrier: Mr. Speaker, in the other place, in considering this bill, it was decided to strike out the last section of the bill, which was the section which purported to absolve the railway from any damages arising because of non-fencing; it also relieved the railway

from the obligation to fence this line all the way from Kitimat to Terrace. The government has no objection to that amendment.


Howard Charles Green: Mr. Speaker, the opposition are glad to approve of the amendment. We tried to get a similar amendment put through when the bill was before the standing committee on railways, canals and telegraph lines, but were unable to do so. Fortunately the Senate has been able to overcome the difficulty.


[Stage Direction]
Motion agreed to, amendment read the second time and concurred in.


Lionel Chevrier: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to provide, among other things, that the Minister of Finance (a) shall release the Canadian National Railway Company from certain claims by Her Majesty in exchange for preferred stock of the company; (b) shall release the Canadian National Railway Company from certain other claims by Her Majesty in exchange for an obligation of the company in respect of which interest shall not be payable for a period of ten years commencing on January 1, 1952; (c) shall, out of the consolidated revenue fund, from time to time purchase additional preferred stock of the Canadian National Railway Company to provide a portion of the money required for additions and betterments of the Canadian National Railways system; and (d) shall transfer to the Canadian National Railway Company all the shares of the Canadian National Railway securities trust that are held, by him in exchange for no par value shares of the Canadian National Railway Company.


Howard Charles Green: Mr. Speaker, will the minister make a statement on this resolution?


Lionel Chevrier: Mr. Speaker, I was going to raise again the point which I raised once before and which the Prime Minister (Mr. St. Laurent) discussed the other day on his resolution concerning the library. It was that I be allowed to make my statement in committee of the whole. The statement is not a lengthy one. The advantage of making it in committee of the whole is that questions can be asked on the various pertinent parts of the resolution.


Mr. Graydon:: They could be asked, anyway.


Mr. Mulch:: Not on the resolution.


Lionel Chevrier: That is the point that I should like to avoid raising, if I could, because there is in this house a substantial opinion with regard to the interpretation of standing order 60.


Gordon Graydon: Mostly on one side of the house, is it not?


Lionel Chevrier: No, it is not. From the interpretation of that section, it would appear that really what we are discussing now is the motion that Mr. Speaker do now leave the chair, and the debate would be not so much on the merits or demerits of this resolution as on the negative aspect of it, whether or not members were against it, leaving it to the discussion in committee of the whole to deal with the merits or demerits.
Again may I say that I do not want to spend any time in discussing a matter of procedure; but when the Prime Minister raised the point the other day, he asked that some consideration be given to it so that perhaps at a later date a ruling might be given in the matter. I am still in the hands of the house. If the house feels that I should make the statement now, I will do so.


Some hon. Members:: No.


Lionel Chevrier: For my part, I think the better time to make it would be in committee of the whole.


Howard Charles Green: Mr. Speaker, the practice in this house for many years has been that a motion of this type is debatable with Your Honour in the chair. There has been no change whatever in that position. If there is to be a change made then it should be done by way of a revision of the rules rather than by way of a minister coming in here on one resolution and saying that there should be no debate with Mr. Speaker in the chair and then another minister coming in the following day and without raising any question at all making a statement which is followed by a debate. We are not consenting to this motion being put and Your Honour leaving the chair without debate and I would ask the minister to make a statement in the usual way.


Mr. Knowles:: Mr. Speaker, we should like to be sure whether the Minister of Transport (Mr. Chevrier) is merely requesting the house to let the debate take place in committee or whether he is contending on a point of order that no debate is permissible at this time. If he is making the latter contention I certainly would have something to say about it. If he is merely requesting that we should deal with it in committee as a matter of convenience and it is not taken as a surrendering of our undoubted right, as I see it, to have a debate at this stage, that would be another matter.


Lionel Chevrier: I was asking that I be allowed to make a statement in committee of the whole and I was also making the point, not that there be no debate now but that there was some ground for saying that the debate
Canadian National Railways should be on the motion that Mr. Speaker do now leave the chair and not on the merits of this resolution until such time as we are in committee of the whole.


Mr. Speaker:: I have given some consideration to the construction of standing order No. 60 and standing order No. 38. I could dispose of the matter now so far as I have made up my mind from my own research. It has been my practice to hear any representations which hon. members might like to make on any point of order, especially when it is likely to be an important ruling, and I have no intention of departing from that procedure. If it would not take too long at this time I would be glad to hear representations that hon. members might like to make. The hon. member for Vancouver-Quadra (Mr. Green) has stated his opinion and if there are other views to be expressed perhaps it might be advisable to hear them now and I could make my ruling either now or at a later date.


Gordon Graydon: Mr. Speaker, with great
deference I suggest that you make your ruling at a later date because I think this comes upon members generally as rather a surprise.


An hon. Member:: No.


Lionel Chevrier: It was raised before.


Gordon Graydon: May I still voice my opinion in the chamber. I just wanted to express my opinion. It seems to me that the way the minister put it would be a pretty dry and hollow debate as to whether Your Honour should leave the chair. I do not know that there are many arguments pro or con that could be made with respect to a matter of that kind. Surely the substance of what is before the house is involved in the motion that you leave the chair. It seems to me that in the normal course of events the minister ought to make a statement as he has been doing all through these years. I do not think that we should embark now upon a policy of chiselling away and chipping off the rights that parliament has with respect to these matters. There should be no harm in leaving it as it is. I do not think we can afford to be too technical and I hope the minister will not attempt to take that course at this time.


Louis Stephen St-Laurent: Mr. Speaker, as I raised the question the other day I must protest against the suggestion that I am trying to "chip" away any of the rights of parliament. I merely asked His Honour the Speaker to consider the terms of standing order No. 60 which says that the consideration of the merits of this resolution shall not take place except in committee of the whole. This is a motion for the Speaker to leave the chair and the rule

Canadian National Railways states that the consideration of and debate on the resolution "may not be presently entered upon but shall be adjourned till such further day as the house thinks fit to appoint; and then it shall be referred to a committee of the whole house before any resolution or vote of the house do pass thereon."
It does seem to me that without chipping away any of the rights of parliament it would be appropriate at this time to have His Honour the Speaker express his view as to what this standing order means. I never suggested that there should not be any debate on the motion that the Speaker leave the chair, but I do suggest that that debate should not be upon the merits of the resolution which is to be considered in committee of the whole.


Gordon Graydon: May I ask the Prime Minister what the debate would be about if we did not use as a basis the substantive motion that is being moved at this time? After all, how can you have a debate on whether the Speaker shall leave the chair if you do not deal with the merits of the issue before the house? That is why I said I thought it was chiselling and chipping away, but I take the Prime Minister's explanation that it is not.


Louis Stephen St-Laurent: I said that there should not be any protracted debate unless there are members who think that the matter suggested is so futile that it is not worth while setting up a committee. That is the only matter to be considered now, because it is in committee of the whole house that the merits of the proposal have to be considered.


Gordon Graydon: Why was this matter not raised before in the House of Commons? This is the first time.


Louis Stephen St-Laurent: I understand that it was raised before. An attempt was made on one occasion to amend the proposal on the motion that the Speaker leave the chair and the Speaker decided that it could not be amended but that the motion that he leave the chair could be debated. Practices do grow up and the hon. member for Vancouver-Quadra (Mr. Green) makes them into standing orders which cannot be departed from. For instance, one practice that has grown up is that, when we are in committee of the whole on a bill, the whole bill is discussed on the first section, I think that is a practice that sometimes leads to unnecessary and repetitious debate in the house. I think all hon. members feel that we spend more months doing the business of parliament than should really be required. Perhaps if we adhered more strictly to the standing orders and did not introduce and extend practices which in time are regarded 
as rules we would be able to deal quite sufficiently and fully and somewhat more expeditiously with the matters that have to be dealt with by the house.


Howard Charles Green: If this question is to be decided by Your Honour then I suggest that some time be given to the opposition parties to enable them to go into the standing orders and decide the best way in which their arguments should be made to Your Honour. There can be no doubt that if the Prime Minister's suggestion were adopted we would be taking away one occasion for debate on a measure. As I said a few moments ago, that right of debate has been in existence for many years and I do not believe it should be taken away without such change being given the most careful consideration.
During the present session we have had ministers time after time introducing resolutions and getting up and making statements upon request without raising any objection. I think the Prime Minister has been the only minister who has raised this point during the present session. I do not think that it is fair that it should be decided without being given the most careful consideration. After all, this is an abridgement of what we consider to be the rights of parliament.


Louis Stephen St-Laurent: I think the suggestion that there be time to allow members to consider what arguments they should make to the Speaker is a reasonable one. I would not want to object to that. My sole desire was to have it clearly established what was the real effect of standing order 60, and I do not want to have it decided on my view of it. I want to have it decided on what is the proper construction of it, and if the hon. member feels that he would like to have further time I think that would be a reasonable suggestion. I know that the hon. member for Winnipeg North Centre is ready now to submit his views.


Stanley Howard Knowles: Hear, hear.


Mr.   Si. Laureni@: Perhaps it might be helpful to the hon. member for Vancouver-Quadra, as I know it would be helpful to me, to hear those views.


Douglas Charles Abbott: Come on, Stanley.


Gordon Graydon: By invitation.


Stanley Howard Knowles: I accept the Prime Minister's invitation. I believe I heard some hon. members suggesting that I do not need such an invitation, and that is true because the Prime Minister raised this point some days ago when we had before us the resolution preceding the bill respecting the national library. I have had the opportunity, as Your Honour has had, to do a bit of research on the matter. The

first point I should like to make is that when one looks at the wording of standing order 60 one should not gloss over the words, "and then it shall be referred to a committee of the whole house". It should not be assumed from that wording that there is no debate at that stage. Indeed, what we have before us is in effect a motion to refer this matter from the house itself to a committee of the whole house. There is no question, as the Prime Minister himself has said, but that such a stage is debatable. I intend to bring forward other arguments which perhaps are not quite so involved as is the question of trying to interpret these words, but I submit that the words of standing order 60 make it clear that this is a debatable stage.
May I point out that you have to read standing order 60 in conjunction with standing order 38 (1) (a) which reads as follows:
The following motions are debatable:
Every motion (a) standing on the order of proceedings for the day (except government notices of motion for the house to go into committee at a later date).
Everyone knows what that exception refers to. It refers to government notices of motion on the day when a minister stands up and announces he has the approval of the Governor General. Apart from that exception, it is clear that every motion standing on the order of proceedings for the day is debatable. That is what we have today, a motion standing on the order of proceedings for the day, and it is clearly debatable.
Further evidence that this motion is debatable is found at page 164 of Beauehesne's third edition. On that page under citation 435 we have a very lengthy dissertation under the heading "Procedure on money bills is as follows". I do not intend to go into it at length, but it is one of those places where Dr. Beauchesne has spelled out the procedure very clearly and gives the procedure for the first day, second day and third day. Under "second day" we find No. 6 which reads:
Minister moves that Speaker leave the chair for house to go into committee of the whole on the resolution.
Then No. 7 reads:
Speaker puts question on motion. (Debate allowed.)
In other words, there is no question about it. Beauchesne says clearly that debate is allowed at this stage.
The next point I wish to make arises out of something that the Prime Minister said, namely, that this matter has been under consideration. I have on my desk Votes and Proceedings for three different days containing the reports made by committees that have discussed procedure in days gone by. The first one is for Friday, March 3, 1944. The 55704-183
Canadian National Railways committee on procedure of that year made certain recommendations regarding standing order 60 the purpose of which was to avoid debate at that stage, indeed' to avoid that stage itself, where the main purpose of a bill was other than financial and where its financial aspect was merely subsidiary. My point is that a reading of the recommendation made in 1944 will make it clear that that committee had no doubt that the stage we are now discussing was debatable. The same thing happened in 1948.


Mr. Speaker:: Order. I hesitate to interrupt the hon. gentleman but all hon. members who have spoken today seem to be of the opinion that the motion is debatable. I might say that I too am of that opinion, and unless there is some objection it is unnecessary to give me any further views on that aspect of the question. The problem which concerns me is the extent to which debate should be allowed at this time. This question has been before the house at different times, and since standing order 38 was put into effect it has been ruled that the motion is debatable but that the resolution, which I might say is different from the motion, is not amendable.
At that time the Speaker was the Hon. J. A. Glen. He ruled that debate should be directed to the negative of the motion. I remind hon. members that the motion before the house is not a resolution but is a motion that the Speaker do now leave the chair etc. Mr. Speaker Glen ruled-and his ruling has never been reversed-that the debate should be directed to the negative of that motion. As I say, the question which has given me some concern is the extent to which I should allow debate when that motion is put. If any hon. members would like to direct their remarks to that aspect of the subject I shall be glad to hear them.


Stanley Howard Knowles: I certainly was coming to that aspect of the subject-


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order.


Stanley Howard Knowles: -because as a matter of fact the points I was about to raise would have led in a moment or two to the very ruling that Mr. Speaker Glen gave on February 23, 1942. Perhaps you will permit me a moment longer to refer to the other two reports made by committees on procedure. One was on June 25, 1948, and the other was on the 13th of December, 1951. The report on June 25, 1948, actually recommended that the whole debate at this stage be done away with and that the motion that Mr. Speaker leave the chair pass without debate. My

Canadian National Railways point in directing attention to that is that the committee recognized, as Your Honour has now suggested, that there is no question at the moment but that debate is allowable at this stage. The question in Your Honour's mind is merely as to the extent of that debate. It so happens that the report of the committee made on June 25, 1948, was not adopted so that stage of debate was not abolished; in other words, it still stands. The report made on the 13th of December, 1951, did not contain any recommendation in respect of debate at this stage but it did include it in part 3 of the committee's report as one of the steps that might be considered, namely, having Mr. Speaker leave the chair at once, on a resolution preceding a money bill, without question put. My contention is that in a sense the whole question is sub judice. It is being considered by the committee on procedure, and I submit that it is unfair for a question being considered by that committee to be settled in the meantime by a ruling upon a point of order raised by the Prime Minister.
Now, Mr. Speaker, as Your Honour has pointed out, and as the Prime Minister has indicated, on February 23, 1942, the member for Bow River (Mr. Johnston) had moved an amendment to a motion at this very stage. What happened? The then prime minister, Mr. King, raised two points of order. His first point of order was that the motion was not amendable at that stage. His second point of order was that there should not be any debate at that stage at all. The debate on these points of order was participated in by the then prime minister, by the late Mr. Hanson, by the present member for Vancouver East (Mr. Maclnnis) and by two or three others. The Speaker of the day reserved his ruling until after the dinner recess and, when he made his ruling, he ruled that the motion was not amendable, as Mr. King had argued, but on the second point he differed with Mr. King. Indeed, he ruled quite clearly that the motion was debatable at that stage. He pointed out that standing order No. 38 had been brought in subsequent to standing order No. 60 and that therefore if there was any conflict one had to go by standing order No. 38.
Having said clearly that this was a debatable stage, he did say as Your Honour has suggested, and I quote from Hansard of February 23, 1942, at page 800:
What extent may be allowed in the debate is a much more difficult problem. All that is asked of the house is that the Speaker leave the chair for the house to resolve itself into committee of the whole.
The debate, therefore, must be directed to the negative of that motion, that the resolution should


not be submitted to the committee of the whole, for, as I have pointed out, no amendment at this stage can be in order.
In my judgment the debate should be general, with no reference to details, all of which can be discussed in committee, and on the bill which follows the resolution.
In other words there is no question but that debate is allowable and likewise there is no question but that general debate is allowable.


Mr. Speaker:: Order. Did Mr. Speaker Glen not say at that time that debate should be directed to the negative of the question?


Stanley Howard Knowles: I read that very paragraph. I read three paragraphs of the ruling and I read in particular the paragraph which Your Honour has just asked me about.


Mr. Speaker:: That was the ruling which he made.


Stanley Howard Knowles: I will read it again:
What extent may be allowed in the debate is a much more difficult problem.
Your Honour has said the same thing.
All that is asked of the house is that the Speaker leave the chair for the house to resolve itself into committee of the whole.
The debate, therefore, must be directed to the negative of that motion, that the resolution should not be submitted to the committee of the whole, for, as I have pointed out, no amendment at this stage can be in order.
In my judgment the debate should be general, with no reference to details, all of which can be discussed in committee, and on the bill which follows the resolution.
I submit that ten years' practice since the ruling made by Mr. Speaker Glen should be taken into consideration. The house has found it impossible during the past ten years to have one-sided debate. Nothing could be more impossible. I submit that if it is in order for one member to get up and say that Mr. Speaker should not leave the chair, surely it is all right for another member to get up and say that the Speaker should leave the chair.
I submit that that aspect of Mr. Glen's ruling has not been carried out because it has been impossible to permit speakers to oppose a motion without permitting others to speak in favour of it.
As to keeping debate to the strict terms of the motion, that the Speaker should leave the chair, obviously such a matter could not be the subject of debate-the actual moving of the Speaker from the chair down to somewhere else-but surely what is before us is the reason for the motion that the Speaker leave the chair. The reason Mr. Speaker is asked to leave the chair is so that the committee of the whole can consider a certain resolution. I suggest that unless we hear the pros and cons, and surely we are entitled to

the pros and cons, there is no point in having debate at all. I submit it should be one or the other: either at this stage debate should be abolished as the 1948 committee proposed, or, if debate is allowed, it should be on whether or not it is desirable on the part of the house for Mr. Speaker to leave the chair so that we may consider a particular resolution. Surely the subject matter of the resolution itself is involved in discussing the pros and cons of this motion that Mr. Speaker leave the chair, since he is to leave it for a clearly stated purpose.
As I said a moment ago, this whole question being one that has been under consideration by three procedural committees- and, by the way, it was included in the agenda of the procedural committee for this year-it should not in the meantime be decided by Mr. Speaker being asked for a decision before that committee has had a chance to make a recommendation back to the house.


Louis Stephen St-Laurent: Does the hon. member for Vancouver-Quadra (Mr. Green) feel that he should have time to consider and submit arguments?


Howard Charles Green: Yes.


Louis Stephen St-Laurent: Perhaps the house will find that is reasonable, because this is a matter of considerable importance. I do not think the hon. member for Winnipeg North Centre (Mr. Knowles) is seriously suggesting that the Speaker should not interpret the rules as they stand, even while a committee is considering what changes to the rules if any are required.
The first thing to ascertain, as the basis for a decision as to whether there should be a change, is what the rule without a change actually means, and I think the house would be glad to have after further consideration or whatever further argument may be advanced about the interpretation, the opinion of Mr. Speaker on that question. If that were agreeable to the house we would provide another opportunity on another resolution for the hon. member for Vancouver-Quadra to submit his views to Mr. Speaker before he makes his ruling. Perhaps with that, and in view of the statement I made the other day while the Speaker was in the chair, the house today would agree that the Minister of Transport (Mr. Chevrier) make his statement while the house was in committee. There would be no prejudice to the proper interpretation of the order one way or the other. If the house preferred, however, that he do make his statement while 55704-183J
Canadian National Railways the Speaker is in the chair, I do not think we should take more time about it until we have reached the point where we are going to have all the debate ended and an expression of opinion by Mr. Speaker upon it.


Howard Charles Green: I suggest without prejudice to any of us that the Minister of Transport make his statement now.


Lionel Chevrier: This resolution has to do
with the capital structure of the Canadian National Railways. The national railway system is comprised of some eighty active companies falling under two main groups, that is, the Canadian National group which includes the old Grand Trunk, the Grand Trunk Pacific, the Grand Trunk Western and the Central Vermont. The other group is the Canadian Northern group which includes companies comprised in the Canadian Northern system.
In addition to the two major groups, the national system includes the Canadian government railways, the operation and management of which have been entrusted to the Canadian National Railway Company, and whose income statements are consolidated with those of the national railways.
In 1937 the capital structure of the national company was revised by the Canadian National Railways Capital Revision Act, 1937. This act did not deal with the large funded debt in the hands of the public but was a revision of the financial relationship between the government and the Canadian National Railways. As between the government and the railways that act provided for the elimination from the balance sheet of the national railways of certain amounts relating tc accumulated losses in operation and interest charges. Some worthless capital stocks were also written off on the basis of arbitration awards. A corporation known as the Canadian National Railways Securities Trust was created by the 1937 statute for the purpose of taking over and preserving the priority claims of the government against the Canadian Northern, Grand Trunk and Canadian National Railways for loans and accrued interest.
The question of further revision of the capital structure of the national railways which was dealt with in part by the capita: revision act of 1937, was referred in 1948 tc the royal commission on transportation. The commission was directed to review the capital structure of the Canadian Nationa! Railway Company and report on the advisability, or otherwise, of establishing and maintaining the fixed charges of that companj on a basis comparable to other major railways in North America.
2898	HOUSE OF
Canadian National Railways
In the brief submitted by the Canadian National Railways to the royal commission it was urged that-
To achieve comparability of fixed charges with other major railways but excluding relief in respect of the lines operated in the public interest, that portion of the bonded indebtedness of the Canadian National as is held by the government should be converted to equity capital. To provide the relief required in respect of the lines operated in the public interest, the publicly held bonded indebtedness of the Canadian National should be assumed in whole or in part by the government or alternatively relief should be provided by such other action as can best be adapted to the needs of the situation.
The royal commission considered at length the problem of the capital structure of the national railways, and the proposal for recapitalization made by the national company. The recommendations of the commission are found in chapter VI of the commission's report and are briefly summarized as follows:
1.	That the Canadian National Railways Oe reimbursed annually by the government Eor the operating losses of the Newfoundland railway and steamship services, and also Eor capital expenditures in respect of the said railway and steamship services.
2.	That government loans totalling |>743,661,000 at December 31, 1949, be concerted into three per cent income debentures m which interest would only be paid if earned and would not be cumulative.
3.	That the shares of the securities trust row held by the government be turned over :o the national company in exchange for an ;qual number of shares of the company.
4.	That after payment in the first place of ;he interest charges on debts due to the public, the national railways be allowed to iccumulate out of earnings in each year a [DOT]eserve or "something to come and go on".
5.	That after payment of the interest on he debts due to the public, and the setting iside of the reserve, an amount equal to hree per cent on the outstanding government [oans, or the balance of the earnings, whichever is the lesser, be paid to the government.
6.	That losses, if and when realized, should >e charged against accumulated reserves and lurpluses. If no reserves or surpluses are tvailable, such losses be reimbursed by the 'ovemment to the company.
7.	That any capital required to finance the :ompany be obtained from the sale of bonds o the public and income debentures to the ;overnment.
8.	That surplus earnings, if any, after pay-nent of the aforesaid charges, be dealt with it the discretion of the directors of the ompany.
The recommendations of the royal com-nission have been carefully studied by an


interdepartmental committee comprising representatives of the government departments and agencies most immediately concerned. On the basis of this committee's report the government proposes to introduce a measure which is outlined in the resolution before the house.
There are four parts to the resolution. First, it is proposed to release the Canadian National Railway Company from certain claims in respect of outstanding government loans in exchange for preferred stock of the company. This proposal follows from the second recommendation of the royal commission. The terms of this part of the resolution indicate a divergence from the second recommendation of the royal commission, and it is considered that issuance of preferred stock by the national company in exchange for a release of indebtedness to the government is a more realistic way of dealing with the problem.
The second part of the resolution deals with certain obligations of the company to the government which will be interest free for a ten-year period from January 1, 1952.
The third part of the resolution indicates the method of future financing of the company to provide for additions and betterments.
The fourth part of the resolution is intended to implement the third recommendation of the commission, that the shares of the securities trust be turned over to the national company in exchange for an equal number of shares of the company.
Hon. members who are familiar with the complex nature of the capital structure of the national railways will appreciate the effort that has been spent in trying to find a capital structure that would not impose too heavy a burden on the railways and at the same time would give the railway management and employees sufficient incentive to meet all fixed charges and show a healthy surplus at the end of the year's operations. The measure which will be introduced if this resolution is approved is designed to accomplish that purpose.
I believe at this stage, Mr. Speaker, I should state that when the measure which this resolution precedes has received second reading, I then propose to move that it be referred to the committee on railways and shipping, owned, operated and controlled by the government.


Howard Charles Green: We thank the Minister of Transport (Mr. Chevrier) for the statement he has just made on this resolution, Mr. Speaker. It will be very helpful in considering the merits of the measure. This afternoon I do not propose to say anything about the actual financial

structure of the company, because that will be dealt with by my colleague the member for Greenwood (Mr. Macdonnell), who is by way of being a financial expert-I say that without prejudice-and much better qualified to deal with that aspect of the subject than I am.
However, I would point out to the minister, and to the house, that the official opposition are glad to give whatever help is possible, particularly having in mind the personnel of our Canadian National Railways. We believe that they are entitled to encouragement in their work, and that something must be done to deal with this capital structure. We are agreed that if a reasonable measure can be enacted it will give those Canadians who are serving us in the national railway encouragement to go on and promote the efficiency of the line. In that way, of course, the measure would be of benefit to the nation at large. We are agreed also that when the bill receives second reading it should be referred to the special committee on government-owned railways and shipping. It would seem that would be the best committee to deal with the bill, because the members of that committee have been accustomed to reviewing the financial situation of the railway each year.
When this resolution gets into committee, I would hope that the minister will give us further details. There will be various questions asked by members of the opposition; for example, we would like to have a further comparison of the proposals now being made by the government with the recommendations of the Turgeon commission. As the minister pointed out, that commission made eight recommendations which are found on pages 196 and 197 of their report. We ask him to deal fully with each one of those recommendations, showing how this new plan of the government compares with the suggestions made by the commission. The minister has not given those details in the statement which he has just made. In view of the fact that the Turgeon commission went into this whole question so carefully and made such a detailed report, we believe that the committee of the house is entitled to have a further comparison made by the minister.


Mr. W. Ross Thatcher (Moose Jaw):: The
members of this group are certainly, as a whole, sympathetic to the principle of the resolution which is before us. The purpose, if I understand it correctly, is to scale down the top-heavy debt structure of the Canadian National Railways and put it on a financial basis which is realistic.
We welcome this resolution because we do not believe that the original debt obligations which were assumed by the Canadian
Canadian National Railways National Railways were fair to the company. Many critics of the Canadian National Railways have suggested that it has not paid its way because it is publicly owned, and therefore not efficiently operated. That is certainly not the case. As all hon. members know, the system started out as a series of private companies. Those private companies got into financial difficulties, and were on the verge of bankruptcy. The federal government deemed it in the national interest to take them over to prevent bankruptcy. However, in so doing, the government did not pare down the debt obligations, and so the Canadian National Railways started out as a publicly-owned system with debts I believe of more than $800 million as a carryover from the old private systems. That situation has become worse through the years, because, through government policy, the Canadian National has been forced to take over other lines which were not showing a profit for one reason or another. Thus, ever since its inception, the Canadian National has been saddled with an impossible debt structure. It could not possibly show a profit except during a war, or under some other abnormal condition.
We think such a situation is not sensible; we think it is bad for morale as far as the employees are concerned, and as far as the public generally are concerned. We think it is essential that the success or failure of current operations of the Canadian National should be made clear, and not be obscured as they are today. We are not sure from this resolution whether the bill which the government is contemplating goes far enough, but we hope that it does and that it is going to be realistic.
A short time ago many Canadians wondered about the wisdom of appointing Donald Gordon president of the Canadian National Railways. Many people knew that he had not had much railroading experience. Indeed Mr. Gordon himself admitted that his only railroad experience was riding on a passenger train. But today those doubts are disappearing. Canadians are now paying tribute to the job that Donald Gordon is doing. I suppose that this resolution is a direct result of the vigour which he has shown in facing the financial problems of the Canadian National. Certainly he has made remarkable progress in solving that knotty problem, because apparently the government is adopting many of the views which he expressed.
We think, Mr. Speaker, that this bill should put the financial structure on a realistic basis. Having done that, we then feel that the Canadian National should then be operated efficiently and economically from the point of view of the taxpayer. I think
2900	HOUSE OF
Canadian National Railways it is fair to say that in the future, if this debt structure is realistic, the Canadian National should be expected to pay its way; that is, except on those lines that are taken over in the national interest for expansion or development. In view of our larger population, and in view of our development of natural resources which is going on at the present time, the Canadian National should be able to operate on a profitable basis after the passage of this legislation. We therefore will support this bill.


Mr. J. M. Macdonnell (Greenwood):: Mr. Speaker, I should like to add a few words to' what has been said. I think that everyone agrees that there is a problem here which we wish to see solved. The problem is to try to -nake the structure of the Canadian National Railways, in. the words of the hon. member :or Moose Jaw (Mr. Thatcher), realistic.
The problem is of course 35 years old or nore, and various attempts have been made ;o grapple with it. Those of us whose nemory goes back further than we like to admit recall that immediately after the first war there was a great period of questioning about the railway, whether it could go on at all or not. Then of course the same situation arose in the early 1930's during the depression when the Duff commission made a report.
I think it is desirable for us to remind aurselves that the lines included in the Canadian National at the present time consisted of lines originally owned by both the Government and private individuals. For example, we have the Intercolonial and the National Transcontinental, formerly owned oy the government. On the other hand we rave the Canadian Northern system of lines ind the Grand Trunk Pacific which were privately owned. These I think are the chief components of the railway.
We all recognize, too, that there are two irguments which can be used. There is one argument which says we must have regard :o history; that not a cent should be written aff; that is, that the balance sheet should continue to show the whole background of ;he operation. I think that is a strict and rather rigid approach to the matter. It has this great disadvantage. While it is stated in the Turgeon report that the changes made in the capitalization do not really affect operation in a very real sense they do affect operation, because we know that morale affects operation, and that when men are carrying a toad which they feel can never be borne comfortably it does affect them. We all recognize that it is discouraging for men to have to come along year after year and show a deficit. Therefore I think everyone
IMr. Thatcher.]

feels that an adjustment should be made. The only question is, how much and in what way?
I should like to read one or two brief comments from the Duff report, because I think it is interesting to see just what has been the attitude, going back over the years, I shall read briefly from page 30 of the Duff report.
I should like to say first of all about this report that we owe a great deal to the men who made it, because they made it at a time of great discouragement; they made it at a time when, many people thought .that it was impossible for two railways to continue as separate entities. The report which they made had a great deal to do with the fact that they have been so maintained; and it is a great blessing to the people that they have been. Instead of having one monopoly- and what an overwhelming monopoly it would have been.

controlling all the railways of this country, we have had two competing lines, and it seems to me that the competition has been much more effective, much more real and much more healthy perhaps than one could have anticipated. It has been all to the good.
I read now briefly from page 30 of the report of the Duff commission, which came out in 1932:
It has been suggested in view of the excessive. capital liabilities in relation to the earning power of the system . . .
That is the national system.
. . . they should be reduced to an amount which would more nearly approximate the earning power of the railway. The net operating income (i.e., the amount available for interest and dividends) of the Canadian National system for the period 1923 to 1931 inclusive averaged $24,414,447 per annum. This figure would require adjustment if adequate provision were made for depreciation. It is obvious that on this basis of earnings the capital liabilities would require a very drastic writing down.
That was the statement made by a group of able businessmen who studied the matter at that time. I continue:
And while this commission is of opinion that it must be frankly recognized that a very substantial part of the money invested in the railways comprised within the Canadian National system must be regarded as lost and that its capital liabilities should be heavily written down, they do not consider that the time is opportune to deal with this important matter.
I think the commission was wise in that, because they had the sense to know that we were going through a period then which was one of acute and abnormal depression, and so I think they were wise to leave the matter over.
I should like to read briefly also from the recommendations which they made, and which I think have been very important in the

railway history of this country. I read from page 63:
For the sake of clarity certain main considerations which have been present to our minds are here stated-
(i)	The identity of the two railway systems should be maintained.
(ii)	The management of the National Railways should be emancipated from political interference and community pressure.
(iii)	Machinery should be provided for co-operation between the two systems for the elimination of duplicate services and facilities and the avoidance of extravagance.
It is pertinent to remark there that, in fact, an effort has been made in that direction and not without results. To continue:
(iv)	The attainment of a scale of economies which will bring the burdens of the National System within reasonable dimensions and effectively check extravagant and costly operation.
(v)	Reasonable protection for the privately-owned undertaking against arbitrary action by the publicly-owned undertaking which might unfairly prejudice the interests of the privately-owned undertaking.
It seems to me that by and large those recommendations have been fairly well carried out. That report came out in 1932; and in 1937, when the present Minister of Trade and Commerce (Mr. Howe) was minister of transport, a further step was taken by legislation, when a very considerable easement was given to the national railways. At that time a total reduction was made by writing down of capital stocks, by the elimination of loans which had been applied on deficits, and by the elimination of accrued interest on loans. There was a total of $1,167,426,690.08 that was written off at that time. At the same time the then minister of transport made one or two observations which I should like to read. Speaking of the measure- and I am reading from page 181 of the report of the Turgeon commission-he said:
This is a measure to authorize, along constructive lines, reasonable adjustment ol the present unbalanced and excessive capitalization of Canadian National Railways. The adjustment confines itself to the relationship between the government and the railway and does not deal, in any way, with the funded debt of the railway in the hands of the public.
I understand that that is true of the present proposal also, but that we shall learn later when we are in committee. I continue to read from the statement made in 1937 by the then minister of transport:
As between the government and the railway, the plan preserves in full all capital sums invested by the dominion in the railway: any amounts to be eliminated relate to losses in operation and interest charges. Worthless capital stocks are to be written off on the basis of arbitration awards.
That brings us up to the Turgeon report and to the proposals which are now before us. As has been already said by my colleague the hon. member for Vancouver-Quadra (Mr. Canadian National Railways Green), the Turgeon commission studied this matter carefully. Since 1937 there have been good years and bad years with the national railways, but the burden has accumulated and we are now faced with an attempt to introduce a realistic principle into the situation. I should like to read briefly from what the Turgeon commission itself says as to the aims which they considered should be before those engaged in proposing a new capitalization. I read from page 196 at the top of the page:
The problem seems to resolve Itself into a search for a capital structure which would not impose too heavy a fixed charge burden in bad years but would ensure that a reasonable portion of surplus earnings would be paid to the owners as a return on invested capital in good years.
I digress there for a moment to remind the house, Mr. Speaker, of the rather anomalous situation that we have, where the same person is owner and creditor or proprietor and creditor. This fact does create a difficult situation. I think we have always got to bear that fact in mind. When we are looking at a measure to change the capital structure of the railway I think we should bear in mind the fact that we, the people of Canada, occupy both those roles. Hence, when we are considering what shall be debt and what shall be shareholding, that aspect should not be absent from our minds. I continue to read from page 196 of the report of the Turgeon commission:
A revision of the capital structure or fixed charges of the Canadian National Railways should make provision for the following:
(1) Some relief from the present heavy fixed charges so that deficits will not be experienced under efficient management when normal revenues are obtained.
That seems to me to be a sensible objective. It is much easier to state it in general terms than it is to put it into figures; but it does seem to be a clear objective with which any fair-minded man would agree, namely, that under efficient management, with normal revenues, there should be a possibility of earnings. Let us remind ourselves that since the Turgeon report was written the law has been changed to the effect that the railway will now pay income tax if it has taxable earnings. I continue to read from the report:
(2)	The accumulation out of earnings, when available, of some reserve, or what has come to be known as "something to come and go on" to provide for additions and betterments.
(3)	The payment to the government of the balance of the earnings, or some substantial portion of that balance, after interest charges on debts to the public and provision for a reasonable reserve.
I hope, Mr. Speaker, that I have succeeded in putting before others, as I have tried to put before myself, the problem that we face. The minister has already indicated that, in the measure which is to come before us, the

Canadian National Railways recommendations of the Turgeon commission have been in part accepted and in part not accepted. When we get into committee I would hope that the minister may be able to give some more detail beyond the purely general statements we have in this resolution. In the second place, I would hope that he would be able to give some indication of the principles which were followed by the committee of government departments which, I understand, considered the matter before this measure was prepared. What is its relation to the report of the Turgeon commission? The Turgeon commission gave certain illustrations of how they thought their recommendations would work out. The minister has indicated that there has been considerable departure. Among other things I hope that the minister will be able to give some further figures today. In any event, I hope he will be able to tell us in some detail what yardstick they applied and what we are to apply in our own minds in trying to assess the measure.
There is just one other question that I should like to ask before I sit down. I think the minister has indicated that the publicly held indebtedness is not touched. I want to ask about this special company that was set up in 1937. I always forget the name of it. I refer to the securities trust which was set up for the holding of special securities which it was desired to keep alive. I want to be further informed as to just why that extra company is needed. Is it feared that, unless there is a separate company to hold these securities, in some way or another there may be a merging and the priorities of the Canadian National Railways may be lost? If that is not the reason, then why do they need to have this complication which makes it so much more difficult? I remember, Mr. Speaker-as I think you and also the minister will-that when we asked Mr. Donald Gordon about it in committee, he rather laughed and said he thought there was only one man in the world who understood what it really was for. Unfortunately he has retired from the Canadian National service. If that is true it may be like the man who was asked by his professor to explain electricity and who replied that he had known once, but had forgotten. The professor said, "What a pity, the only man in the world who ever knew has forgotten." I do not know whether we are in that position with regard to the securities trust, but that is one question I ask now by way of anticipation. And finally I do hope the minister will be able to assist us by advising what basis of approach was used in the resolution now before us.


Stanley Howard Knowles: Mr. Speaker, my remarks at this


stage will be brief. As has already been indicated, we welcome this resolution. Indeed, for many years we have been urging the revision of the capital structure of the Canadian National Railways. We are glad also that in addition to his usual readiness to answer questions when we get into committee on the resolution the minister has agreed that after second reading the bill will be referred to the committee on government-owned railways and shipping.
As has been indicated by others who have spoken, the reason this measure is so welcome is that we feel it has been most unfair to the Canadian National Railways to have to operate on the basis of an unrealistic capital structure. We feel that the deficit position which has been characteristic of Canadian National operations has' been unreal and it is only fair that there should be a new structure so that the system will be able to indicate a true picture of its operations.
While approving of that aspect of the measure it seems to me that this is an opportune time to suggest to the minister that he should also deal with another aspect of Canadian National matters. We have spoken of the unrealistic position of the company; we have spoken of unfairness; we have spoken of its deficit position. May I now remind the minister of the unrealistic position of a great many retired employees of the Canadian National Railways and the tragedy of their deficit position. He may be amused at my raising the subject again, but he knows that I will keep on raising it.
I suggest to him that human beings deserve just as much consideration as capital structures. I feel that it would be a proper move on his part to deal with this other problem at the same time. He may well tell me that pension adjustments cannot be included in this bill for technical reasons, but this is a problem that certainly could be dealt with by the government in the form of supplements in the estimates, particularly in so far as it concerns the more than 3,000 retired employees whose pensions are only $25 a month. I suggest that this pension problem should be dealt with at the same time as this change in capital structure is being made.


Mr.  W. Chester S. McLure@Queens: Mr. Speaker, I am not going to speak at length about this resolution but it seems strange to me that just when this resolution is coming up before the house all members should have received a letter from London, England, with regard to the railroads of a few years ago. No doubt the minister has received one of these.


Lionel Chevrier: No, but I am listening carefully to the letter.


Mr. McLure:: This letter is from 47 Fleet street, London, England, is dated May 20, and is signed by Francis Brandon Lacy, Fellow of the Institute of Bankers. It is a rather long letter and it is probably not advisable to put it on the record of the house. It has reference to the Grand Trunk Railway of Canada and its subsidiaries. These people make a definite offer at which they are ready to sell their certificates. I thought I would just mention this at the resolution stage and find out what the minister's opinion is on the matter.


Mr. G. M. Murray (Cariboo):: Mr. Speaker, I think that this is a very forward step in connection with the railroads of Canada. Up in the northwest we feel that in Mr. Donald Gordon we have a progressive man who is well qualified for the important position he occupies. We feel that all he needs to make a tremendous success of this operation is the wholehearted support of parliament and the sort of legislation being suggested here.
I think there are other improvements that could be made in respect to the Canadian National Railways. There is room for a man from British Columbia, preferably northern British Columbia, on the board of directors. It is regrettable that there is no director representing that great northwestern area.


Mr. Hees:: Whom have you in mind?


George Matheson Murray: There are many able men in Edmonton, Vancouver, Prince Rupert, Kamloops and those progressive, lively new centres of Dawson Creek, Grande Prairie, Grimshaw and Yellowknife. These places are surging with life and are producing great wealth. Some of the areas are denied the advantage of a modern railway service.
The town from which I come is fifty miles from a railroad. We are serviced by air and by motor trucks, but it is unthinkable that a rich farming area like that, with lumbering, mining and everything that makes for freight for transcontinental railways should be deprived of rail service.
If I were vice-president I would overhaul all these things. If some of my hon. friends think that there is a shortage of talent I would not mind acting in that capacity. But it might be bad news for our friends in Ontario and Quebec because I would suggest pulling up some of the unnecessary lines in the east where the C.N.R. has a transcontinental line within a few miles of another transcontinental route. We see trains leaving
Canadian National Railways the terminal at the same time and duplicating the service. Probably they are half empty, but they must continue to operate.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


James MacKerras Macdonnell: First of all I should like to ask whether we may have any figures to enable us to work on and fill out the resolution, particularly paragraphs
(a)	and (b).


Lionel Chevrier: I have been asked a number of questions. I am afraid that if I answered them fully I would be infringing the rules of the house but I will answer them as completely as I can and give the information which I know the committee wants while still trying to abide by the rules. First of all I should say I am highly pleased that the opposition favour the principle of the resolution and believe that the capital structure of the Canadian National Railway Company should be scaled down considerably in order to afford relief from that burden. It has been suggested that I might give a more detailed explanation of the four parts of the resolution and also compare it, if at all possible, with the proposals of the royal commission on transportation. I will do both as best I can.
Paragraph (a) of the resolution recommends that the Canadian National Railway Company shall be released from certain claims by Her Majesty in exchange for preferred stock of the company. The amount the royal commission recommended should be granted as relief was $743,661,000 as of December 31, 1949. Without mentioning the amount which will be found in the bill, it is very close to that figure. There is a little difference between the two amounts, and the main difference is that instead of recommending that the government accept income bonds bearing an interest rate of 3 per cent in respect of the cancellation of this debt the bill will provide, as the resolution states, that the government accept in lieu thereof 4 per cent preferred stock.


Wilbert Ross Thatcher: Will those be cumulative?


Lionel Chevrier: No, they will not.


Howard Charles Green: Why was that difference made?


Lionel Chevrier: I think they were non-cumulatdve in the report of the royal commission.


James MacKerras Macdonnell: They were income bonds.


Lionel Chevrier: Yes. They are on the same basis in this resolution except that instead of accepting an income bond the government will accept 4 per cent preferred stock. If I may go on from there, the second part

Canadian National Railways of the resolution recommends that the Minister of Finance shall release the Canadian National Railway Company from certain other claims by Her Majesty in exchange for an obligation of the company in respect of which interest shall not be payable for a period of ten years commencing on January 1, 1952.
The royal commission dealt rather extensively with relief from the indebtedness incurred because of the assumption of the operation of the Newfoundland railway, and stated that the Canadian National Railways should be reimbursed annually both for the capital expenditures it would have to make in respect of that railway and also the operating losses, if any. Paragraph (b) of the resolution is not in any way connected with the Newfoundland railway. Certainly it is not in the resolution and certainly it will not be in the bill, but a substantial amount additional to that which I indicated earlier will be given as relief to the Canadian National Railways, and in exchange for that substantial amount the Canadian National Railways will give an obligation. That obligation will be free from interest for a period of ten years and free from payment of capital for a period of twenty years. In other words with respect to part (b) of the resolution, which provides for the granting of relief in a substantial sum, there will be a moratorium for ten years so far as the payment of interest is concerned and for twenty years so far as the payment of principal is concerned.


James MacKerras Macdonnell: Does the minister mind being interrupted for questions as we go along? Is it a fact that the minister said the figure with respect to (a) is approximately the same as the $743 million?


Lionel Chevrier: Yes.


James MacKerras Macdonnell: The minister points out that there is to be 4 per cent preferred stock as against 3 per cent income bonds.


Lionel Chevrier: Yes.


James MacKerras Macdonnell: I suppose the minister's argument would be that the income rights in respect of an income bond, indeed your legal rights, are not terribly different because you only get the payment that is earned.


Lionel Chevrier: That is right.


James MacKerras Macdonnell: Therefore you have no right of enforcing your security if that were desired as long as you get what-aver is earned. As I understand it, the situation is that you are proposing to take 4 per cent preferred stock which means that
fMr. Chevrier.]
your rights in the way of income are higher, 4 per cent instead of 3 per cent. Is that correct?


Lionel Chevrier: That is correct.


James MacKerras Macdonnell: On approximately the same amount of money you are to get 4 per cent instead of 3 per cent. What you lose, for whatever it means, is that you do not have anything in the way of a mortgage on the property. You are a proprietor instead of a creditor.


Lionel Chevrier: That is right.


James MacKerras Macdonnell: It seems to me with regard to (a) that if anyone has to make up his mind the thing to do is balance those two kinds of things. I can imagine if this were a private company that was going to finance in the open market it would be much better not to have bonds because it would give you a better credit position. It is not clear to me offhand that it makes much difference in the case of a company that is financed by the government, but I pass that by. The minister has given us full information. With respect to paragraph (b) the minister has explained that instead of following the recommendation contained on page 196 of the Turgeon commission report whereby the railway was to be reimbursed annually for operating losses on the Newfoundland railway and also for annual capital expenditures, it is now proposed-and I find this difficult to understand-to give in lieu a capital amount under (b) or rather to give relief by releasing the company from certain other claims by Her Majesty instead of the benefit recommended to be given in the Turgeon report. Is that correct?


Lionel Chevrier: There is always a disadvantage in answering yes or no to questions of this character. Mind you, what I am attempting to do is explain the resolution in greater detail as I go along and at the same time give some of the differences between the formula established here and that recommended by the royal commission. I do not think it is fair that an opinion should be expressed before one hears the whole story. I was attempting to show what the resolution meant.


James MacKerras Macdonnell: I will wait until the minister is through.


Lionel Chevrier: Perhaps I might be allowed to go on.
I do want to make it clear that neither the resolution nor the bill relates this additional relief in (b) to the Newfoundland railway. It is additional relief to the amount mentioned'in (a).

Then under clause (c) the Minister of Finance-
-shall, out of the consolidated revenue fund, from time to time purchase additional preferred stock of the Canadian National Railway Company to provide a portion of the money required for additions and betterments of the Canadian National Railways system;
I think the formula of the royal commission is set out in 4 and 5 of their recommendations, namely:
4. That after payment in the first place of the interest charges on debts due to the public, the Canadian National Railways be allowed to accumulate out of earnings in each year a reserve or "something to come and go on," such reserve to be not more than the lesser of: (a) one-third of the income after providing for all charges and deductions from income except interest on the company's obligations, or (b) the balance of the income after payment of interest on debts due the public.
The royal commission put the matter of additions and betterments on net income, net earnings; and the recommendation in (c) is that the Minister of Finance be allowed to purchase each year additional preferred stock, the proceeds to be used towards additions and betterments of the Canadian National Railways, amounting to a fixed percentage of the fixed gross receipts of the Canadian National Railways; and that money will be put into a fund to be used by the Canadian National Railways for the purchase of additions and betterments. In exchange for sums of money used by the Canadian National Railways to finance those additions and betterments, the Minister of Finance will accept 4 per cent preferred stock of the Canadian National Railways.
Paragraph (d) in the last part of the resolution provides that the Minister of Finance-
-shall transfer to the Canadian National Railway Company all the shares of the Canadian National Railway securities tru~t that are held by him in exchange for no par value shares of the Canadian National Railway Company.
I think that disposes of the question the hon. member for Greenwood raised earlier when he asked: What is going to become of the Canadian National Railways securities trust? Why do we need it? Well, it will be indicated later on, when we get to another phase of this discussion, that the Canadian National Railway securities trust will disappear and will no longer take the part in the proprietors' equity share of the Canadian National Railways that it is doing today.


James MacKerras Macdonnell: I shall find it very difficult to object to that.


Lionel Chevrier: I should perhaps qualify that statement with this remark. I still hope it will have the approval of my hon. friend, and I think it will.
Canadian National Railways
The Canadian National Railways securities trust will become a subsidiary of the Canadian National Railways itself, and all these collateral securities that are now held by the Minister of Finance will be turned over to this subsidiary of the Canadian National Railways for safekeeping or other disposition.
I have attempted as I went along to make comparison between the recommendations of the royal commission and the formula that we have here. It is impossible to give a dollar and cents comparison between the two. In other words, if I were asked how much more generous are the royal commission recommendations than is this formula that we propose now, I do not think I could answer.
I think it would be a difficult question to answer because in some instances the formula now presented is, I think, more acceptable than the recommendations of the royal commission. In other words, I believe the formula which is proposed here, and which will be set out in the bill, is far simpler, far easier to understand, and I think better for the railway in the last analysis.
I have been asked something about the principles that were followed in this resolution and in this measure. Well, the principles followed in this measure and in the bill which we will see later are the same as the principles which the royal commission followed, if you can call what the royal commission followed "principles". When one reads the recommendations of the royal commission carefully one sees that what the royal commission did was to give an historic analysis of the capital structure of the Canadian National Railways; what had been done to relieve it by virtue of the 1937 act; some of the statements made by the then minister of transport before the committee on railways and shipping and how they should be applied at that time; the argument of the Canadian National Railways as to this great burden of fixed charges which are not comparable to the fixed charges of the Canadian Pacific Railway, for instance, and other class 1 railways of the United States.
The royal commission goes over all that field and then makes a number of observations. It makes recommendations that are very helpful and very good, but I do not know that they follow any principle. I am not able to say they follow a principle of finance because my experience in that field is very limited; but I do not think they do follow a rigid pattern. In any event, what we are attempting to do here is lay down the same kind of general principle that was laid down by the royal commission.
I was asked also what yardstick was being followed. Well, the yardstick is that which

Canadian National Railways was in part indicated in the statement I made earlier. There is to be no relief as to the debt in the hands of the public. There is to be relief in respect of the debt held by the government; in other words, by government loans. When we get into another stage I can give details of what the position was on the 31st December, 1951, for instance, and how the formula will apply to that financial position.
An adjustment in the funded debt held by the government is really the yardstick which was used by the royal commission and relief for future capital indebtedness, as shown, is the one which is being followed in this measure. I do not think it is possible at this stage to have the kind of discussion that will give all the details which hon. members want. I wish I could give them. I have tried now to be as specific as I can without infringing the rules of the house; and I will be in a position, of course, to give details when we are on second reading of the bill.


James MacKerras Macdonnell: I appreciate the minister's answer very much but there are one or two questions which, if they could be answered, would help. Perhaps some of them could be noted, and if they cannot be answered now they may be answered later. On page 182 of the Turgeon commission report there is a reference to what was done in 1937 and it would appear that there was a clearly defined principle at work there. It was to write down-well, really to write off what had been lost or, in other words, to accept the situation. I shall not pursue the matter further now, but perhaps the minister would make a comment on that when we get into committee, and let us see how far the present plan corresponds to what was done at that time.
My second question is under (b). Paragraph
(b)	merely says:
-shall release the Canadian National Railway Company from certain other claims by Her Majesty

Does the minister feel he can give us any indication of the amount, because that would be a help in considering this in connection with the Newfoundland matter. I am not forgetting what the minister said, that we should not tie them in too tightly.


Lionel Chevrier: I can answer the question, but it is really an infringement of the rules. If the hon. member will look at the Canadian National Railways annual report, page 24- that is the report with which we dealt in the committee on railways and shipping-he will find that the total funded debt as of December 31, 1950, amounted to $615,197,035.


James MacKerras Macdonnell: That is in the hands of the public.
(Mr. Chevrier.]


Lionel Chevrier: That is in the hands of the public. The debt to the government of Canada, that is loans made by the government to the railway, amounted to $857,573,774. The total of those two will amount to $1,472,770,809, and what paragraph (a) is wiping out is half of that. With reference to paragraph (b), I cannot answer the hon. member's question unless I give the amount, and I cannot answer it in the way I have used to answer paragraph (a).


James MacKerras Macdonnell: I shall not press the matter. We will get it later. There is one question with regard to paragraph (c). I was not clear about the portion. I believe the minister did indicate just how the portion which is referred to in line 3 of paragraph
(c)	should be arrived at, but I did not quite understand it.


Lionel Chevrier: It is expected that the money which will be provided under (c) for additions and betterments will not be sufficient to pay for all additions and betterments, that is if we use what the Canadian National Railways have been requiring in the last few years as the criterion. What will happen is that any amount short will have to be voted by my colleague the Minister of Finance in the finance and guarantee act which he brings down each year.


James MacKerras Macdonnell: Then I misunderstood. I thought a proportion was being laid down now as a guide, but you tell me that what will happen is that whatever is needed from time to time will have to be voted as in the past.


Lionel Chevrier: No, the hon. member misunderstands me. When paragraph (c) is spelled out, it will provide for a specific portion, which will be a certain percentage of the gross revenue of the Canadian National Railways in each fiscal year. That is a fixed amount, so that will be the extent to which the Minister of Finance will purchase shares of the preferred stock of the Canadian National Railways so the railway might pay for betterments to that extent.


James MacKerras Macdonnell: The question that remains, then, is the one we discussed a moment ago, as to the relative advantages of preferred stock and income bonds. In this case we are going to become proprietors instead of creditors, in the same way and to the extent that we take this preferred stock?


Lionel Chevrier: That is right.


James MacKerras Macdonnell: Is there any situation which will exist as between the interstate commerce commission and the railway or any of the constituent companies, by which they will have to qualify their

accounting practice before the United States interstate commerce commission, and will that affect the bookkeeping of the railway?


Lionel Chevrier: The hon. member will recall that at the last session of parliament we did make an amendment to the Railway Act whereby we authorized the board of transport commissioners to bring in a uniform practice in accounting. The accounting, I take it, which the board of transport commissioners would like to bring into effect is that which is now in operation under the interstate commerce commission. There is no doubt that those parts of the Canadian National Railways that are in the United States are subject to the accounting regulations of the interstate commerce commission. Those parts that are not in the United States follow the procedure which has been followed by the present auditing firm, but it is the intention to make the practice uniform.


Wilbert Ross Thatcher: Will the minister state
whether the president of the Canadian National has indicated to him that if this plan is proceeded with in the future, and under normal circumstances, the Canadian National will show a surplus on most occasions?


Lionel Chevrier: I think I can safely say that the president of the Canadian National is quite delighted with this plan, and should it be found necessary to have him give evidence before the committee I am sure he will be pleased to so state.


Wilbert Ross Thatcher: Perhaps the minister could answer this question at this stage. If this plan had been in effect during the last fiscal year, can the minister state how much the Canadian National would have saved in interest charges?


Lionel Chevrier: About $23 million.


Howard Charles Green: Mr. Chairman, there are one or two points upon which I am not clear. First of all, dealing with paragraph (c) which provides for additions and betterments, I understand from the minister that there is to be an amount, based on a certain percentage of the gross revenues of the company, advanced by the government each year to help pay for additions and betterments. In return for that money the government will get preferred stock bearing interest at 4 per cent. Is it intended that money will also be raised from the public as well? I ask that because recommendation No. 7 of the Turgeon commission seems to contain a statement that such should be the practice. Recommendation No. 7 reads:
That any capital required to finance the company, in addition to funds provided from operations and
Canadian National Railways
payments made under the provisions of paragraph 6 above, be obtained from the sale of bonds to the public and income debentures to the government.
It would appear that instead of taking income debentures for the proportion advanced by the government, preferred stock bearing interest at 4 per cent will be taken. Is it the intention that the balance of the money required for these additions and betterments will come from the sale of bonds to the public by the railway company?


Lionel Chevrier: I cannot answer that question; that will depend upon what the position is. It may well be that there will be a surplus when this formula gets into operation, and if there is then the hon. member's question is answered. On the other hand, if there should be a deficit I presume the ordinary financing practice of the Canadian National will obtain, namely they can borrow money from the government as they have done in the past or they can borrow it through the issue of public bonds.


Howard Charles Green: There may still be borrowing from the public?


Lionel Chevrier: There may still be, yes.


Howard Charles Green: I must admit I do not understand clause (b). It provides that the company shall be released from certain other claims in exchange for an obligation on which there will be no interest paid for a period of ten years, and the minister has added, "on which no repayment of principal will be required for twenty years." He tied that up in some way with the first recommendation of the Turgeon commission which deals with losses on the Newfoundland railways.


Lionel Chevrier: I tried to guard against that very thing.


James MacKerras Macdonnell: The minister mentioned it, though.


Howard Charles Green: It is pretty hard to connect the two. What are these other claims for which these obligations are to be accepted? Is that an annual matter, an annual claim, or are they claims which exist at the present time?


Lionel Chevrier: If my hon. friend remembers the procedure of the 1937 act, he will recall that there was set out in a schedule so many millions of dollars of securities that were being exchanged for securities trust shares, and in another schedule an additional amount of securities. Well, the same procedure will be followed here. The amount mentioned in (a) of the resolution will be represented by schedule A which will cancel indebtedness to the government in the amount I explained to the hon. member for Greenwood. Similarly with reference to (b) of the resolution. There will be a schedule B to the

Canadian National Railways bill, which will set out in detail the amount of loans to the government which will not be wiped out, but for which the Canadian National Railways will give in exchange an obligation to pay that amount, a fixed amount, upon which there will be a moratorium for interest for ten years and a moratorium for capital for twenty years. Clause (b) is much simpler than (a), but I would have to spell it out in figures to make it clearer, and I hesitate to do that now.


Howard Charles Green: The other claims referred to in clause (b) are claims which are in existence at the present time.


Lionel Chevrier: That is right.


Howard Charles Green: This clause does not apply to future obligations?


Lionel Chevrier: No, it does not; all this applies to past obligations.


Howard Charles Green: Is that true also of (c)?


Lionel Chevrier: No.


Howard Charles Green: Clause (c) applies to future obligations?


Lionel Chevrier: Quite. Clause (c) will be preferred stock purchased by the Minister of Finance in exchange for a note or an obligation which the Canadian National Railways might want to give for the percentage of the gross revenues of that fiscal year.


Howard Charles Green: And the moneys are to be used for additions and betterments to be made in the future?


Lionel Chevrier: Yes, and to be deposited in an earmarked fund for that purpose.


Howard Charles Green: One other question. Is it the intention that this measure will put the Canadian National Railways in the position of being used as a yardstick for the setting of freight rates? At the present time I understand that the Canadian Pacific Railway is used as that yardstick. Will the result of this measure be that the Canadian National Railways will be used instead of the Canadian Pacific Railway as the yardstick for setting the rates?


Lionel Chevrier: Well, in so far as I can ascertain, the Canadian Pacific Railway will remain the yardstick by which rates will be fixed under the jurisdiction of the board of transport commissioners. This bill does not change that position. It would be for the board of transport commissioners to determine whether or not they want to use another yardstick. Whether they will or not, I am not in a position to say, but it is their responsibility.


James MacKerras Macdonnell: I have been thinking over (b) since the minister and I discussed it a moment ago, and there is one observation I am going to make which is not a question. I make it in passing. I find it an odd way to arrive at the amount. I am going back to (a) for a second. I find it an odd way to arrive at the amount in (a), which I understand is arrived at by taking the public indebtedness and the indebtedness to the government and dividing it by two. However, I am merely mentioning that in passing. There may be some reason that will become clear later.
Remembering that under (b) the minister cautioned us against getting too deep into Newfoundland, he at least directed our attention to it by mentioning it. I do want to ask this. I presume that every effort has been made in making these recommendations to get as clear a view as can be of the future operating position of the railway. I assume that the Newfoundland situation has been taken in, and that full regard has been had of the possible operating losses there. I do not know whether a change of gauge arises there or anything of that kind. My question is: Are we to take it that the government considers they have made up in some way to the Canadian National Railways for the decision not to pay any regard to recommendation No. 1? I will repeat it. I want to know whether the government, in ignoring recommendation No. 1, has taken into account the Newfoundland situation and if it is, so to speak, fully incorporated in the government's thinking with regard to this recommendation?


Lionel Chevrier: I would say the answer to that is yes.


Howard Charles Green: The minister will notice that on page 198 of the report there is a recommendation that a policy be followed with respect to new lines which are not going to be profitable similar to that recommended for the Newfoundland railway. Has this recommendation been taken into consideration also?


Lionel Chevrier: Not in so far as this formula is concerned.


Howard Charles Green: What about the provision in the report for the setting up of a reserve by the railway? Is that left to the management of the railway, or is any provision made in this bill which will enable-


Lionel Chevrier: It is covered in (c) of the resolution. That is the object of the (c) part of this resolution.


Howard Charles Green: The object is to enable them to set up that reserve?


Lionel Chevrier: Something to come and go on, yes, for additions and betterments.
Resolution reported, read the second time and concurred in.
Mr. Chevrier thereupon moved for leave to introduce Bill No. 308, to revise the capital structure of the Canadian National Railway Company and to provide for certain other financial matters.
Motion agreed to and bill read the first time.



UNEMPLOYMENT INSURANCE ACT


Hon. Milton F. Gregg (Minister of Labour) moved: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the Unemployment Insurance Act, 1940, to increase certain rates of benefit under the act; to reduce the number of waiting days before the receipt of benefit; to extend the period of entitlement for supplementary benefits; and to make provision for certain administrative changes.


Mrs. Fairclough:: Will the minister make a statement?


Milton Fowler Gregg: With your permission, Mr. Speaker, I will make a brief statement at this time.
This resolution will form the basis for a bill which will provide for a number of amendments to the Unemployment Insurance Act. Of these amendments five are of a good deal of importance and the remainder are designed to improve the routine administration of the act.
One of these five main amendments is related to the administration of the national employment service. This amendment provides that there shall be no discrimination because of racial origin, colour, religious belief or political affiliation in referring workers seeking employment. This will now establish the principle of fair employment practices in the statute.
The first of the four important amendments related to insurance will provide an increase in benefits for certain classes. The present maximum benefit for a person with a dependent is $21 a week, and the amendment will provide for raising this to $24 a week, with comparable increases in other benefit rates.
The second insurance amendment provides for a reduction in the period known as waiting days. As the act now stands the waiting period consists of eight days; that is, not counting that one non-compensable
Unemployment Insurance Act day. This period will be reduced by the amending bill to five waiting days; that is a reduction from eight to five.
Also there is an amendment that will permit the commission to make regulations to provide that, where a benefit year terminates while the insured is unemployed and he qualifies for a further period of benefit, the waiting period in the new year may be deferred.
The new legislation will also extend by fifteen days the period of supplementary benefit so that it may be paid from January 1 to April 15 in each year. At present supplementary benefit is payable from January 1 to March 31 in each year.
The foregoing amendments affecting the insurance fund have all met with the endorsa-tion of the unemployment insurance advisory committee which is charged with the responsibility of reviewing the status of the fund from time to time and making recommendations in regard to it. These amendments will not cause any increase of payments into the fund on the part of employee, employer or government.
The remaining amendments are introduced with a view to clarifying the existing law,, facilitating operation of the unemployment insurance program, and protecting the fund. They are more or less routine in nature and, with minor exceptions, have no particular significance from the viewpoint of the general public.
I shall be glad to make a further statement later, on this resolution or on the bill, Mr. Speaker.


Ellen Louks Fairclough: Mr. Speaker, it goes without saying that I am greatly pleased with the amendment which is being made to the employment service section of the act with regard to antidiscrimination. I compliment the minister, and I hope it will be highly successful. While it cannot be described as operative in all fields, nevertheless it signifies the intention of the government to recognize this problem, and I am greatly pleased that it has been put in this section of the act.
With regard to the increase in rates of benefit, which the minister has told us will be raised at the top level from $21 to $24, it is interesting to note the condition of the unemployment insurance fund as of April 30 of this year in comparison with its condition a year ago. As of April 30 of this year I am informed that the fund stood at $782,231,826.91 compared with $672,760,902.75 on April 30, 1951, an increase of $109,470,924.
As to this increase, Mr. Speaker, of course one is reminded of the increased contribution

Unemployment Insurance Act that was put into effect a year and a half ago-in July of 1950, I believe it was- whereby both employer and employee contributed an additional 1 cent per day to cover the cost of paying supplementary benefits under part II of the act. I believe the government did not match that contribution; that was purely from the standpoint of the employer and employee. I would ask the minister whether that is correct.


Milton Fowler Gregg: Yes.


Ellen Louks Fairclough: Looking back over the years during which this fund has been accumulating, it is interesting to notice that up until the end of March, 1951-the end of the ten-year period-the fund had accumulated until it reached approximately $664,500,000. This is an average of $66,458,037 per year, with a low of approximately $44 million and a high of $82 million. Yet in the twelve months ending April 30 of this year the fund has increased by $109,470,000, or an increase of about 25 per cent over the very highest figure by which the fund had increased during the preceding ten years.
When one takes into consideration the fact that the two cents per day addition to the fund must have been responsible for a part of the increase, it would appear that even the increased unemployment and the demands which were made upon the fund this year have not been any particular drain on the reserves. When one also takes into consideration the fact that everything it is necessary to buy today has increased in price,
I am sure the increase in benefits which the minister has announced is on the low side. If I am not mistaken, some of the labour organizations were advocating an increase of about 50 per cent. While the government may have thought that figure high, nevertheless I feel that the slight increase which has been made of $3 on the $21 basis, or about one-seventh, can scarcely be dubbed handsome. I am sure the fund will not suffer by reason of this slight increase.
With regard to the increase in rates, I am a little bit disappointed that the minister did not announce some scheme for taking care of at least a portion of that group which have come to be known as unemployed employables, and of which I spoke at some length a year ago, at the time of the introduction of the labour estimates. As reported at page 2688 of Hansard of May 4, 1951, in describing these people I said:
There are many in this class of unemployed employables who never have been insured. Then there are those who are insured and who, when unemployment hits them, find that they have insufficient contributions to benefit. Regardless of the fact that they may have been paying into this fund for years, they will find that within the limits


of the act, in the period to which they must have reference, they just happen to have an insufficient number of stamps in their book to enable them to apply for unemployment insurance benefits. There are those who fall upon particularly evil days and who receive unemployment insurance benefits but are forced to accept them for a length of time which eventually exhausts the benefits which are due to them.
I realize that the fund can scarcely be expected to take care of those who have never been covered by unemployment insurance, but I do feel that those who have been engaged in insurable employment should have some provision made for them under this act. I trust that the minister is not going to let this matter drop but will inquire into that particular phase before long so that some provision may be made in the Unemployment Insurance Act to care for those who are engaged in insurable employment.
I feel that the increase in the benefits, even in this small way, is bound to be of advantage to the individual and to the municipality about which I shall speak later. The municipality must eventually carry the load caused by any shortcomings in benefits paid under unemployment insurance schemes.
No doubt the reduction in the number of waiting days has been brought about because of the representations made by labour organizations and by various members in this house. The statutory eight days, with one non-compensable day, making nine in all, has worked some hardship on those applying for benefit, but I would draw to the attention of the minister the fact that in many cases even this period is stretched out to as long as three weeks. Whether the fault lies with the department or with the applicant is always a matter of conjecture, but the fact remains that any lengthening of the period causes considerable distress to the applicant and his family. There again the municipality has to step into the picture to ease the load on the applicant until such time as funds become available in the ordinary course of events.
I urge upon the minister that in the studies which are being made special emphasis be placed upon streamlining the operations in the district offices so there can be a more efficient handling of applications and an earlier payment of benefits to applicants. That will need to be looked into particularly now that the time is to be shortened to five days. I presume there would still be one noncompensable day, making it a working week which the applicant must wait before he receives benefits. Any delay in the office places extra strain upon the economic resources of the worker who is unemployed.
I was interested to find that the period of entitlement for supplementary benefits has

been increased by fifteen days. In studying these amendments I could not fail to be impressed with what has happened this year, when we have had the greatest amount of unemployment for a considerable length of time. The pattern of unemployment in Canada is that the peak occurs in the second week in February, but this year the peak of unemployment was two months later.
Using the only source available, registrations for work, it is interesting to note that for the week of February 8, 1951, which was the second week in February, the registrations totalled 303,700. This was 5-83 per cent of our labour force, which was bordering on what we consider to be an unhealthy situation. Two months later this year, on April 3, 1952, the number of unemployed was 385,100 or 7-39 per cent of our labour force. No doubt the fact that the unemployment peak had shifted to a later period when we might expect that construction work and farm demands would have some effect influenced the minister in extending the period of entitlement for a few more days. Whether or not the fifteen days which he has allowed will be sufficient to take up the slack remains to be seen.
In addition to the registrations for employment obtained from the district offices there are those who do not apply at the employment offices and those who are on short time. This latter class has assumed large proportions this year. I do not think any figures are available to indicate just what is the size of this group, but I know that in my own town there are many people on short time, especially in the textile mills and the home appliance factories. It was very difficult to ascertain the extent of this part-time work because of the manner in which various firms computed their periods of employment. Some of them are on an hours per month basis and some are on the basis of a day's work and so on; therefore it was most difficult to arrive at a figure which one could quote. Nevertheless the general picture was not too good, particularly in the industries I have mentioned.
Those who are on part-time do not participate in unemployment insurance benefits to the extent of those who are unemployed. While there is some relief this semi-unemployment has contributed greatly to the load carried by the municipalities. You cannot have a serious impairment of the earning capacity of any group without at the same time having a threat to the economy of the country. I feel that in discussing the unemployment situation cognizance should be taken of this group which I believe is fairly large in all industrial centres. I refer to those
Unemployment Insurance Act on short-time, working either fewer days per week or fewer hours per day.
The minister has indicated certain administrative changes which will be made. I should like to draw to his attention once more the case of the married woman who comes under the regulations provided by section 5 (a) (1). Ninety days are required to re-establish benefit rights. This has been the subject of considerable discussion by labour organizations. Some have advocated that the ninety days be wiped out completely, others have asked that it be reduced to sixty days. I must say that I can recognize the difficulties which would be attendant upon removing this period entirely because in many cases it is very difficult to assess the intention of the individual. Nevertheless I feel that the reduction could be made to sixty days. That would be sufficient time to determine the intention of the applicant to remain in employment. It would safeguard the department in that respect and still reduce the number of days to the point where there probably would not be undue hardship upon those who would be affected.
I believe the day is fast approaching when all these discriminations!, shall we call them, against women in employment will be removed and we will have one set of rules which will apply to everyone. Apparently that time is not yet here and we have to move forward step by step as the occasion provides. I urge the minister to reconsider the representations made to him from different sources and to reduce the ninety days to at least sixty as a start and see how it works out. After it has been in operation for a while surely it will be apparent whether or not advantage is being taken of the leniency.
I said a while ago that I had hoped these amendments would provide some assistance in the field of unemployed employables. While I did read a part of what I said a year ago in this regard, I should like to emphasize once more that this is a problem which affects the municipalities acutely. Every year when we get into what is recognized as the unemployment period in the middle of winter, when the boats cease to operate, construction comes to a standstill and other such things happen that throw men out of work, welfare offices within the municipalities feel the shock. If as in this year and in 1950-I believe that was the last year which was serious, although not as serious as 1952-the appropriations made by municipalities to look after these people are overrun and additional appropriations are required, then the municipalities begin to worry very much about what the final outcome may be. While they can usually see the end in sight for the current season, nevertheless the knowledge is there that there may

Unemployment Insurance Act well come a time when the load will be so great that they will be unable to bear it. I believe it should not be left until in sudden panic a municipality is forced to make a plea to the provincial and federal authorities for aid before this matter is ironed out. I think it is a problem which is with us year after year, and it should be recognized by the federal authorities.
While I realize there is some case for saying that there should be provincial participation, nevertheless it should not be too difficult to achieve some sort of co-operation with the municipal and provincial authorities as a result of which the heavy load which hangs over their heads each year could be lightened to some extent. Certainly the fear of ultimate disaster could be removed by means of the co-operation which they may be led to expect.
There is one other major amendment to the act which I had hoped the minister would introduce this year. Last year when we were talking about unemployment insurance on the estimates- I made the suggestion that the commission should be enlarged by the addition of a woman member. I had hoped the minister might give that suggestion serious consideration -and do something about it. I realize that because of the nature of the composition of the commission it is difficult to achieve this end without appointing an extra commissioner, but I believe there is a very real need for a woman member on the commission. I ask the minister to give the matter serious consideration and see whether the act cannot be amended to provide for four commissioners instead of the present three, and to provide for the manner by which that additional appointment shall be made and by whom.
There are many problems that present themselves to a commission with jurisdiction over the working people of the nation in which the voice of a woman with long experience in employment would be of inestimable value. At this stage of the resolution I urge the minister to give serious consideration to this matter with a view to taking steps shortly to increase the membership of the commission by the appointment of a woman thereto.


Stanley Howard Knowles: Mr. Speaker, my first word in speaking to this motion will be to congratulate the minister on the announcement he made that the bill to be based on the resolution will include a fair employment practices provision. This is in keeping with legislation that many -of us have been seeking for a long time. It is in keeping with the desire of the labour movement of the country, and I am sure the


provision he has announced will receive the hearty endorsation of all members of the House of Commons.
Likewise we welcome the increase, slight though it is, in the amount of the benefits payable under the Unemployment Insurance Act.
Having handed out one bouquet, I also commend the minister for the fact that despite the procedural debate we had earlier today he has told us one of the amounts to be provided in the bill with respect to the new benefits to be paid. Sometimes we have arguments with ministers as to whether or not they should give us such information at the resolution stage. Ten years ago there was no question about it. We always got that information. I feel it is rather unfair to parliament that there should be such occasions when we plead with a minister to give us that information and he refuses it to us. Then we listen to the news at night and hear it over the radio because in the meantime the bill has been introduced and given first reading although we have not yet seen it. At any rate the Minister of Labour (Mr. Gregg) did not hesitate to tell us that the increase is to the amount of $24 a week in the top bracket, and that there will be corresponding increases for other categories.
As the hon. member for Hamilton West (Mrs. Fairclough) has already pointed out, welcome though any increase in this benefit is, this amount falls considerably short of what the labour congresses had hoped would be the increase. I have before me the briefs presented this year by the Trades and Labour Congress of Canada and the Canadian Congress of Labour. I note that the Canadian Congress of Labour expressed the hope that the increase would be commensurate with the increase in the cost of living since the last scale was established. An increase of $3 certainly does not cover that. I note that the Trades and Labour Congress of Canada expressed the hope that the increase would be not less than 50 per cent. On that basis we should have had the married benefit increased to something over $30.
When anyone from this side of the house greets an increase with the comment that it should have been more, there are those on the government side who say that we never take any other stand, and they suggest it is not an altogether responsible one. May I point out in this connection that the Canadian Congress of Labour has done some research into this whole matter. Indeed, a very interesting article entitled "The Congress and unemployment insurance funding" appeared in the May issue of The Canadian Unionist which is the official journal of the Canadian Congress of Labour. In this article the

author, Mr. Andras, stated the position of the congress rather succinctly by quoting in his opening paragraph from a statement made by Professor John S. Morgan which appeared in Canadian Welfare for September, 1949. The quotation reads as follows:
A plan, which operates on a comparatively short term financial basis ol ten years, with reserves sufficient to cover two years of benefit payments, is socially a sounder instrument of policy than a fund which piles up reserves against every possible contingency at the expense of current benefits and coverage.
The article to which I am referring goes on to point out that the issue that has to be faced in a matter like this is whether to pile up sufficient reserves to cover any emergency across several decades or whether to have regard to the rights and benefits to be obtained by the people who are currently paying into the fund. In other words, the problem is to deal with an insurance fund on as much of a pay-as-you-go basis as possible.
The Canadian Congress of Labour points out, as has the hon. member for Hamilton West, that the fund has grown tremendously; and perchance it is overfunded. Indeed, it is understood that the present fund was set up on the basis of 1921 to 1931 experience in Canada, experience which has become outdated. As a result of the fund having been set up on that basis and as a result of there now being such a large amount in it, the Canadian Congress of Labour expresses this viewpoint:
In the opinion of the Canadian Congress of Labour, the present fund is more than solvent. It has reached, or is reaching the position where additional reserves are merely frozen assets. Under the circumstances, the congress believes that the insured population is entitled to a "dividend" since it has been overinsured. Probably the most welcome kind of dividend would be an increase in the benefit rate.
So I submit, Mr. Speaker, the Canadian Congress of Labour, the Trades and Labour Congress of Canada and those of us in this house who have been expressing the same view are being quite responsible when we suggest that the basis upon which the fund has been established would now make possible larger increases in the benefits than have been announced by the minister. One *dares to hope further consideration might be given to this point as we proceed with the legislation.
Likewise we welcome the reduction in the number of waiting days. In the minister's language the period has been reduced from eight days to five days. In our language it has been reduced from nine days to six days, there being one non-compensable day. The labour congresses have urged that the waiting period be reduced progressively and even-
Unemployment Insurance Act tually eliminated altogether. They have also urged changes in respect of non-compensable days. Further consideration should be given to these points. A matter of a few days may not seem important to some people, but the average worker's income is such that he is living very close to the line. When he becomes unemployed he is up against it. In the circumstances we feel there is a strong case for eliminating the waiting period altogether. Now that we are moving in that direction we hope further consideration will be given to that point at later stages of this very resolution and the bill to be based on it.
Likewise we welcome the fact that there has been a slight extension of the period during which supplementary benefits can be paid.
Now, Mr. Speaker, there are two or three other matters that have not been covered so far as the minister's announcement would indicate. One of them was mentioned by the hon. member for Hamilton West when she raised the problem of the employable unemployed. It can be argued, of course, that theirs is a different position in some respects at any rate from those who are covered by the fund; but the problem is a related problem and we feel that federal responsibility for that problem should be recognized. Indeed, I remind the minister that the labour congresses have pressed for wider coverage by taking more categories of workers under the provisions of the Unemployment Insurance Act. We hope further consideration will be given those two related matters; on the one hand, federal provision for employable unemployed and, on the other hand, including under the provisions of the Unemployment Insurance Act a larger sector of the workers of this country.
With respect to the administrative changes which have been suggested by the resolution, we too hope something will be done with regard to the discrimination against married women. As the minister knows, this change came about as the result of a change in the act that was made in the early part of 1950, although the actual regulation did not come into effect until later that year. We have had discussions both public and private with regard to this matter, and some of us still feel that as the regulation now stands a special requirement is made of married women that is not made of any other category of claimant under the Unemployment Insurance Act. We feel this matter of discrimination should not be carried forward. Indeed, at this time, when the minister is introducing a fair employment practices provision, he should carry out the spirit and intent of that provision by eliminating this discrimination against married women.

Unemployment Insurance Act
Another matter we have raised from time to time in this corner is the problem of people who are on unemployment insurance benefits and become ill while they are drawing those benefits. As the minister no doubt knows, from having studied the debates on unemployment insurance which have taken place over the past number of years, this matter has been discussed frequently and at considerable length. Some of us had hoped on two or three occasions that the previous minister of labour had been won over to our point of view. Unfortunately no change was ever made and the situation still is that if a person qualifies for unemployment insurance benefits and is drawing those benefits but takes ill, he is struck off benefits even though there may be still no work for him.
Many a worker has had the experience of sending his wife down to collect benefits for the week he was ill and finding that was a mistake, that somehow or other he should have hobbled down there himself. We feel that something even wider than this is socially desirable, namely a health insurance program including sickness benefits; but what I am suggesting at the moment is that unemployment insurance should not be denied people who are unemployed and drawing benefits merely because they happen to take sick, particularly at a time when there is still no work for them. It is possible that the broad section of the resolution making provision for certain administrative changes may include something along that line. If not, I hope that as we proceed in our discussion of this measure we will get consideration of this point at this session. I can cut short my remarks on this phase of the matter by asking the minister to have the previous debates on this point studied. I am sure if he does study those debates closely he will realize the strength of our argument.
I hope he will do something about it at this session.
There is one other matter to which I should like to draw the minister's attention with respect to administrative changes. As he knows, earlier this session I tried to have tabled a document referred to as circular letter No. 19. It turned out that if such a document does exist it is only in the form of a proposed letter, and therefore could not be tabled. Later the minister did table circular letter No. 18 which is in effect. This is a document that covers, in a general way, the functioning of the national employment advisory committee, together with the regional and local committees. I understand that consideration is being given to a


change in the way in which those various committees, national, regional and local, function.
At the present time these committees function by a method which enables reports and messages to go from the local committee to the regional committee, and on up to the national committee; it also enables reports and replies to travel the other way. The proposal under consideration, as I understand it, is that the whole set-up be altered so that the local committees are denied that ready access to the regional and national committee which they have enjoyed. In some quarters it is felt that such a change would result in denying to those advisory committees the part they are now playing in the whole national employment scheme, which is part of the unemployment insurance program. Those who are against this proposed change feel that it puts too much power in the hands of the civil service side of the national employment service, and does away with the advantages to be gained by having these national, regional and local advisory committees.
As a matter of fact I was glad when the minister, in pointing out that he could not table circular letter No. 19, indicated that the reason was that it was not yet in effect. My purpose in speaking about it now is to express the hope that, in the form in which it was apparently drafted, it will not be put into effect; and that an effort will be made to retain the advantages of the national, regional and local advisory committees as they are now established and functioning.
There are several other matters, Mr. Speaker, with which we can deal when we get into committee on the resolution or on the bill. Generally speaking we are glad to have the changes that are being made, but we hope the suggestions we have offered will be given favourable consideration by the minister.


Gordon Graydon: I shall detain the house for only about a minute and a half, Mr. Speaker. In connection with this resolution I only want to say that I believe it is a high tribute to the hon. member for Hamilton West (Mrs. Fairclough), our only lady member in the house, for her persistence and skill in connection with the question of fair employment practices in Canada. She has been a mighty crusader on this point. If the opportunity arises later this session her bill, which is now on the order paper, will be before the house. I want to commend the minister for having an open mind with respect to the splendid representations which have been made by the lady member for

Hamilton West. It shows what a constructive member of parliament may be able to do in connection with these matters.
I want to add my word of praise for the splendid work which she has done in this connection. I should like also to endorse, if I may, the proposal she has made, which seems to me altogether reasonable and one which is overdue so far as government policy is concerned. Her proposal related to the appointment of a woman member to the unemployment insurance commission. The hon. member may feel that she is alone with respect to this advocacy because she is of that sex, but I believe she will find support for her proposal on all sides of the house. I would suggest to the minister that, among other things, the resolution stage of a measure is for the purpose of allowing suggestions to be made to the government. The minister will earn additional commendation from the house if he will incorporate in his legislation the proposal the hon. member for Hamilton
Unemployment Insurance Act West made so eloquently a few moments ago If he does so, he will have strong support from parliament in general. I hope I have been within my time limit.


Mr. Johnston:: The hon. member who just spoke may be within his time limit, but he carried the debate up until six o'clock. It does not leave the rest of us much time, and I do not think I could say what I desire to say within the time that remains. May I call it six o'clock, Mr. Speaker?
On motion of Mr. Johnston the debate was adjourned.



BUSINESS OF THE HOUSE

Mr. Fournier (Hull):: Tomorrow we will take up the estimates of the following departments: resources and development, national health and welfare, labour, and fisheries.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, June 5, 1952