1952-06-23

Mr. Jean Francois Pouliot (Temiscouata):: Mr. Speaker, I greatly regret to have to rise on a question of privilege which concerns an article published in the Armstrong Advertiser on May 29, 1952, and written by the hon. member for Yale (Mr. Jones). It reads as follows:
Rail extension queried
Mr. Pouliot, Liberal member for Temiscouata, was the only one injecting a sour note when the bill to extend the Canadian National Railway at a cost of $10 million to Kitimat was under discussion. He claimed that British Columbia already had more mileage of railway per one thousand inhabitants than any other province. (Statistics proved such not the case).
Here is the record, Mr. Speaker; I am reading from page 118 of the standing committee on railways, canals and telegraph lines:
By Mr. Pouliot:
Q. Mr. Fairweather, you are welcome. Will you please tell me what is the mileage of the railways in British Columbia compared to the province of Quebec by thousand people?
A. Well, I am sorry, sir, I cannot give that offhand: I would be pleased to figure it out.
Q. Well, I will tell you, it is three to one-three people out of one thousand in British Columbia have a line of railway-I mean both railways, compared to one in the province of Quebec.
That is what I said. I will tell the hon. gentleman of whom I am exceedingly fond to be more careful in the future.


Mr. Jones:: Mr. Speaker, I am sorry if the hon. member misread my statement. I took it from the Hansard. If it is checked, I think you will find that it is correct.


Jean-François Pouliot: I would ask the hon. gentleman not to take anything for granted. Let him look at the record again.



SUPPLEMENTARY ESTIMATES, 1952-53

[Stage Direction]
A message from His Excellency the Governor General transmitting supplementary estimates for the financial year ending March 31, 1953, was presented by Hon. Douglas Abbott (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, I desire to lay on the table the annual report of Eldorado Mining and Refining (1944) Limited' for the year ended December 31, 1951, in English and in French.
The annual report of the subsidiary company, Northern Transportation Company Limited, will be available from the printers later this week and will be tabled as soon as ready.



PRIVATE BILLS


Mr. H. W. Winkler (Lisgar) moved:: That standing order 105 respecting the posting of private bills be suspended for the remainder of the session.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Bill No. 364, to incorporate the Canadian
Shipowners Mutual Assurance Association.- Mr. Macnaughton.
Bill No. 365, to incorporate Ogdensburg bridge authority.-Mr. Fulford.
Bill No. 367, for the relief of Meryl Elman Kluger Schreiber.-Mr. Winkler.
Bill No. 368, for the relief of Janusz Juljan Borzecki.-Mr. Winkler.
Bill No. 369, for the relief of Perley John Walden.-Mr. Winkler.
Bill No. 370, for the relief of Louis Jules Fabry.

Mr. Winkler.
Bill No. 371, for the relief of Kathleen Anne Bentley Hainsworth.-Mr. Winkler.
Bill No. 372, for the relief of Ethel Mc-Cready Thomas.-Mr. Winkler.
Bill No. 373, for the relief of Lois Edith Laffoley Kelly.-Mr Winkler.
Bill No. 374, for the relief of Evelyn Helen Cowell Varrin.-Mr. Winkler.
Bill No. 375, for the relief of Marion Helen Hawes Gordon.-Mr. Winkler.
Bill No. 376, for the relief of Winnifred Isobel Bassett Yuill.-Mr. Winkler.
Bill No. 377, for the relief of Eileen May Walker Cole.-Mr. Winkler.
Bill No. 378, for the relief of Frank Ashworth.-Mr. Winkler.
[Stage Direction]
Questions
Bill No. 379, for the relief of Margaret Galbraith Hardie McCall.-Mr. Winkler.
Bill No. 380, for the relief of Goldie Nato-vitch Molson.-Mr. Winkler.
Bill	No.	381,	for	the	relief	of	Norma
Veronica Besner Roast.-Mr. Winkler.
Bill No. 382, for the relief of Catherine Anna Regan Herdt.-Mr. Winkler.
Bill No. 383, for the relief of Errol Alexander Edgley.-Mr. Winkler.
Bill	No.	384,	for	the	relief	of	Marie
Marguerite Eugenie Lucie Prevost Lalonde.- Mr. Winkler.
Bill	No.	385,	for	the	relief	of	Myrtle
Meloche Reath.-Mr. Winkler.
Bill	No.	386,	for	the	relief	of	Eileen
Margaret Smith Bates.-Mr. Winkler.
Bill No. 387, for the relief of Selim Jean Malakie, otherwise known as Solomon Malacket.-Mr. Winkler.
Bill No. 388, for the relief of Ruby Lydia Donnelly Champion.-Mr. Winkler.
Bill No. 389, for the relief of Edna Edith Lily Caron Gourdie.-Mr. Winkler.


Hon. Lionel Chevrier (Minister of Transport) moved: the first reading of Bill No. 366 (from the Senate), to incorporate the Belleville harbour commissioners.
Motion agreed to and bill read the first time.



QUESTIONS


Mr. Diefenbaker:: 1.	Has Jean-Paul Caille, Enrg., of Montreal, received any payments from the Department of Public Printing and Stationery in each of the years 1950, 1951 and 1952?
2.	If so, how much has been paid in each of these years, and since the 31st day of March, 1952, and to date?
3.	What is the nature of the business operated, and what is the address?
4.	Were contracts awarded by tender during the said period?
5.	If so, on what dates, and for what amounts were bids made in pursuance of advertised tenders?


Mr. Bradley:: In so far as respects the Department of Public Printing and Stationery:
1.	Yes.
2.	1950-51, $228,050.42; 1951-52, $219,620.00; 1952-53, (to date) $47,514.91;
3.	Manufacturer's agency, 10372 Grande Allee, Montreal, Que., and Ste. Adele en haut, Que.
4.	Yes.
5.	Tenders are not generally advertised. The department maintains a catalogue of the

various stationery items carried in stock, showing the price at which they are bought. These prices are maintained up to date through the process of competition, and orders are placed with various suppliers at the catalogue price, which is shown on orders. Tenders for articles not listed in the catalogue are circulated amongst known suppliers of the required articles. The above firm was successful in the following competitions:
March 14-50, $388.80; April 28-50, $3,330.00; May 18-50, $1,080.00; May 18-50, $1,230.00; May 18-50, $417.50; May 30-50, $23.95; June 7-50, $1,337.40; June 7-50, $1,300.00; June 7-50, $596.00; June 7-50, $472.00; July 3-50, $460.00; August 29-50,	$2,505.00; August 29-51,
$4,507.90; February 12-52, $2,368.00; February 12-52, $3,582.00.


MAIL DELIVERY IN BATHURST, N.B.
Mr. Robichaud:: 1.	Has a survey been recently made in the town of Bathurst. New Brunswick, with a view to installing a house to house mail delivery in the said town?
2.	If so, has a report been made as a result of this survey?
3.	Are arrangements being made to instal this house to house mail delivery in the town of Bathurst, New Brunswick?


Mr. Langlois (Gaspe):: 1.	Yes.
2.	Yes.
3.	No. Not at present as requirements have not been met.


QUESTION PASSED AS ORDER FOR RETURN
DEFENCE PRODUCTION
Mr. Green:: 1.	Who are the officers on loan from business and industry to the Department of Defence Production, holding various positions as listed on page 156 of the estimates for the fiscal year ending March 31, 1953?
2.	From what firms are they respectively on loan?
3.	Are living allowances payable to any of these officers?
4.	If so, to which officers, and in what amounts?



BUSINESS OF THE HOUSE


Hon. Alphonse Fournier (for the Prime Minister) moved:: That on Wednesday, June 25, 1952, and every Wednesday thereafter, and on Saturday, June 28, 1952, and every Saturday thereafter, until the end of the present session, the sittings of the house shall in every respect be under the same rules as are now provided for other days under the special order passed Friday, June 13, 1952; and also that the order of business and procedure on Saturdays shall be the same as on Thursdays.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. W. F. Carroll (Inverness-Richmond):: I should like to direct a question to the Minister of Fisheries. Is it the intention of the department to extend the lobster fishing season in that part of Nova Scotia known as Inverness-Richmond, for which an application has been made?


Hon. R. W. Mayhew (Minister of Fisheries):: It is the intention of the department to extend the lobster fishing season in area 7, the area referred to by the hon. member, to Saturday, July 5, 12 o'clock midnight.


Mr. McLure:: I should like to ask a question of the Minister of Fisheries. Has any decision been made with regard to the extension of time in connection with lobster fisheries in Prince Edward Island?


Robert Wellington Mayhew: I gave an answer only a few moments ago. The intention is to extend the season to midnight on July 5-that is, five days.



ST. LAWRENCE WATERWAY INQUIRY AS TO DISCUSSIONS WITH UNITED KINGDOM

[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question
to the Minister of Transport? Is the minister in a position to make a statement to the house on the week-end news reports concerning discussions with the United Kingdom respecting the St. Lawrence seaway development? Are these discussions at a private or at a government level?


Lionel Chevrier: I did see the reports in a number of papers to the effect that contractors in the United Kingdom were most anxious to help in the development of the St. Lawrence seaway project, but personally I have no knowledge of any official offer being made. I think that what the newspaper report indicated was simply that in case it were possible for the province of Ontario and the federal government to proceed, the one with the power development and the other with the navigation facilities, there was being offered to the Canadian government equipment which might be used for both power and navigational facilities. Beyond that I am not able to comment. I think it is a newspaper statement more than an official offer; but if one were made it would be carefully considered.
Inquiries of the Ministry CIVIL SERVICE SUPERANNUATION ACT



INQUIRY AS TO RETROACTIVE PROVISION

[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: May I direct a question to the Minister of Finance? Would it be possible for the minister, before this session ends, to make a statement as to whether or not the amendments to the Civil Service Superannuation Act, which have been put off until the next session, will include a provision making the terms of those amendments retroactive to whatever date would have been the effective date had the bill been brought in at this session, as was indicated in the speech from the throne?


Hon. Douglas Abbott (Minister of Finance):: It would not be possible to do that, Mr. Speaker.


Douglas Charles Abbott: Perhaps I should supplement the answer I gave the hon. member for Winnipeg North Centre. It is possible that some of the changed provisions of the Civil Service Superannuation Act could be made retroactive, but I think it is unlikely that all of them could be.



GERM WARFARE


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: should like to ask a question of the Secretary of State for External Affairs. Has his department received any legal opinion from the Department of Justice, which apparently was asked for it some five weeks ago, relative to whether or not proceedings under the Criminal Code can be taken or will be taken respecting the statements made by James Endicott as to germ warfare.


Hon. L. B. Pearson (Secretary of State for External Affairs):: This question was raised last Friday, and the Prime Minister (Mr. St. Laurent) said at that time that it was still under advisement.


John George Diefenbaker: And it has been for six weeks. One would think they could get an answer in that time.



TAX AGREEMENTS


Douglas Charles Abbott: the second reading of Bill No. 347, to authorize the government of Canada to enter into agreements with the governments of the
3548	HOUSE OF
Tax Agreements with Provinces provinces pursuant to which, in return for compensation, the provinces agree to refrain from levying certain taxes for a limited period.
He said: Mr. Speaker, as I explained at the resolution stage, the purpose of this bill is to authorize our entering into agreements with the provincial governments to make certain payments to them in return for the rental from them of certain tax fields for a further five-year period. I have also made it clear that the new agreements will be in substantially the same form as those which have been in effect with eight provincial governments during the past five fiscal years.
I believe the house would think it appropriate if I should now make a statement recalling some of the background and explaining the essential features of the new agreements.
It will be recalled that following protracted negotiations in 1945 and 1946, tax rental agreements were entered into with seven of the then existing provinces, that is, with all provinces except Ontario and Quebec, and later when Newfoundland entered confederation in 1949, a similar agreement was entered into with that province. Under these agreements, the details of which were the outcome of lengthy discussions, the provinces undertook not to levy during the five calendar years 1947 to 1951, or allow their municipalities to levy, personal income taxes, corporation income taxes, other taxes on corporations, or succession duties. In return for this undertaking, the federal government agreed to make rental payments during the five corresponding fiscal years-that is to say, the five fiscal years ending March 31, 1952- determined on the basis of certain formulae arrived at in joint discussions with the provincial governments. These rental payments were to be such as to guarantee to the province a fixed minimum level of payments, but this guaranteed minimum was to be adjusted upward to take account of national economic growth and increased provincial population. In practice, the actual payments made to the various provinces during the five years of the agreement exceeded by very substantial amounts the guaranteed minima.
Another feature of the old agreement involved the levy by each agreeing province of a tax of 5 per cent on corporation income earned within its jurisdiction. The purpose of this provision was to allow any non-agreeing province to tax its corporations up to this level without subjecting them to a tax burden higher than that being paid by corporations in the agreeing provinces.


In keeping with the same purpose, the federal government has so shaped its own succession duty program as to allow a credit up to one-half of the federal duties for duties paid to a non-agreeing province, and there has also been a standing offer to non-agreeing provinces to allow a credit against federal personal income tax up to 5 per cent for a personal income tax imposed by any nonagreeing province. Neither of the non-agreeing provinces has chosen to take advantage of this latter credit.
Before proceeding to discuss the provisions of the new agreement, I would like to express my own general satisfaction with the conditions that have prevailed in federal-provincial tax relations during the post-war period. Those provinces which entered into agreements have, I believe, been well compensated for renting certain of their tax fields to us and have been assured against the possibility of drastic declines in the yield of these important fields of direct taxation. This has enabled them to plan their own programs with greater assurance and has undoubtedly improved their credit in the financial markets. At the same time, a level of efficiency in over-all tax administration has been achieved hitherto unknown in this country. Furthermore, the non-agreeing provinces have shown a restraint in employing their taxing powers which has contributed in no small measure to achieving a national system of taxation which is almost free of overlapping administration and conflicting jurisdiction.
As already indicated, the old agreements with eight of the ten provinces expired on March 31 last. In anticipation of this event, the federal government called a conference in Ottawa in December, 1950, of all provincial governments to consider the terms of new agreements for the ensuing five-year period.
In return for the same provincial undertakings as in the old agreements, the federal government offered to provide guaranteed minimum payments at a level considerably higher than under the old agreements. I shall come to the details of this offer in a moment or two. These proposals were considered at the conference in discussions which were marked by the utmost cordiality but no final decisions were taken and the provincial representatives undertook to give the proposals further consideration.
During the course of 1951, I received certain counter-proposals from the provinces, all of which were given the most serious consideration and many of which we were able to accept. By means of discussion with representatives from individual provinces following which any changes were made known to all

the provinces, we have now succeeded in arriving at a basis of agreement which represents only a modification in detail of the proposals made to the 1950 conference. It is to implement this basis of agreement for which authority is requested in this bill. Up to the present time the indication is that at least the same eight provinces with which we have had agreements for the past five years will be entering into new agreements for the next five years.
With this general background, I shall now turn to a more detailed discussion of the main provisions of the proposed new agreements.
I shall deal first with the provincial undertakings, The provincial governments and their municipalities will, as in the old agreements, refrain from imposing personal income tax, the corporation income tax, the so-called corporation taxes-i.e. taxes on places of business, paid-up capital, etc.-and succession duties.
As in the case under the old agreements, any province has the option of retaining its succession duties if it so chooses, in which case, of course, there is provision for an offsetting reduction in its compensation. Actually, none of the provinces with which we have concluded agreements has accepted this alternative.
A change of some substance which was announced some time ago is that the agreeing province will no longer be required to levy a 5 per cent corporation tax. As explained in my budget speech, we are accomplishing the same general purpose by adding the 5 per cent tax-or practically all of it-to the federal rate and allowing a credit up to 5 per cent on corporation income earned within a nonagreeing province.
Under the old agreement, the agreeing provinces retained the full right to levy charges on their natural resources and to impose income taxes on mining income or on logging income. The federal government also undertook to allow a deduction for such provincial taxes from income subject to its corporation tax. These arrangements will be continued under the new agreement.
Provisions relating to the obligation of the federal government to pay compensation to the provinces are much more complicated and I must ask the house to bear with me in this rather involved exposition.
The guaranteed minimum payments under the new agreements are, with the exception of one additional formula, basically those of the expiring agreements adjusted upwards to a higher level. The old guaranteed minimum payments were established, by election of each province, on the basis of two general
Tax Agreements with Provinces alternative formulae. The relative advantages of these I discussed in detail when I introduced the 1947 legislation and I will not review them at this time.
Briefly, it might be said that one of these, through emphasis on a per capita payment, gave more prominence to the factor of fiscal need. This formula was as follows:
1.	$15 per capita on the 1942 population of the province, and
2.	the amount of the statutory subsidies payable to the province in 1947.
This option was most favourable for Nova Scotia, Saskatchewan and Newfoundland.
The second formula was designed to give more emphasis to the tax potential of a province. In it there were three elements, namely:
1.	50 per cent of the province's revenue from personal income taxes, corporation income taxes and corporation taxes, in the year 1940 as established for the purposes of the wartime tax agreements;
2.	$12.75 per capita on the 1942 population of the province; and
3.	The amount of the statutory subsidies payable in 1947.
This formula was more advantageous for all other provinces with the exception of Prince Edward Island for which a special guaranteed minimum payment of $2,100,000 was fixed.
In the proposals made at the 1950 conference, the federal government offered new guaranteed minimum payments on the basis of these formulae adjusted upwards by the ratio of change in provincial population and per capita gross national product between the year 1942 and the year 1948. In general, this "upping" of the payments to the 1948 basis had the effect of increasing the minimum payments by about 50 per cent. However, at the same time to meet the position of certain provinces which had argued that greater emphasis should be given to the element of tax potential, a new alternative formula was suggested.
The components of this new option were as follows:
1.	The estimated yield of a personal income tax at 5 per cent of 1948 federal rates applied to 1948 incomes in the province;
2.	The yield of a tax of 8J per cent on corporation profits earned in the province in 1948. This rebate of 8J per cent, I might explain, is taken as a fair measure of the corporation tax potential and takes account of the gross or specific taxes traditionally levied by provinces on corporations as well as taxes on corporate profits;

Tax Agreements with Provinces
3.	The revenue received by the province from succession duties in a recent 3-year period; and,
4.	Statutory subsidies payable to the province in 1948. In actual application, this formula proved to be of benefit only to the province of Ontario.
As a result of provincial representations subsequent to the conference, minor modifications in the calculation of the adjustment between 1942 and 1948 have been accepted, but essentially the new guaranteed minima are those offered by the federal government in December, 1950. To conclude this aspect of the matter, therefore, I will, with the permission of the house, place on Hansard a table showing the guaranteed minimum payments under the old agreements and the guaranteed minimum payments that will form the basis of agreements that will be authorized under the bill now before us.


Mr. Speaker:: Has the minister the permission of the house?


Some hon. Members:: Agreed.


Douglas Charles Abbott: The table follows:
Guaranteed Minimum Payments
	Under old	Under proposed new
	agreements	agreements
Newfoundland 	. $ 6,208,765	$ 9,174,624Prince Edward Island .	. 2,100,000	2,977,015Nova Scotia 	. 10,870,140	15,348,220New Brunswick 	. 8,773,420	12,576,093Quebec 	. 56,382,127	85,080,466Ontario 	. 67,158,027	101,801,370Manitoba 	. 13,540,038	18,634,954Saskatchewan 	. 15,291,490	20,026,085Alberta 	. 14,227,882	20,985,710British Columbia	. 18,120,124	29,647,487Total 	. $212,672,013	$316,252,024
Let me emphasize that the amounts I have included in the table are only the guaranteed minimum payments below which no actual payment may fall regardless of prevailing economic conditions or changes in population. The actual amounts payable in a given year -which, incidentally, we call the adjusted annual payments-are the result of calculations by which these guaranteed minimum payments are increased to give effect to national growth, as measured by the gross national product per capita, and to provincial growth, as measured by the provincial population.
Under the old agreements, the adjustment for these factors has been calculated as the average of ratios for the three years preceding

the year of payment in relation to the base year 1942. This three-year averaging had the effect of bringing greater stability into the adjusted payments by spreading out the effect of a sudden change in economic conditions. It has been represented to us, however, that in a period of very rapid growth such as we have been experiencing, the three-year averaging process may slow down unduly the increase in provincial revenue at a time when fairly rapid increase in those revenues may be needed because of rapid growth of provincial population. In order to meet this argument, we proposed in the December 1950 conference to provide in the new agreements for an averaging calculation based upon a two-year period rather than upon a three-year period. Subsequent representations have indicated that even this adjustment was not believed by some governments to be flexible enough, and early this year, in a letter to all the provincial governments, I proposed that a province should have the option of choosing either an adjustment based on a two-year average or one based simply on the data relating to the one year prior to the year of payment. In a period of expansion, the one year calculation obviously will result in a considerably higher immediate payment to provinces and perhaps it is not surprising, therefore, that all provinces so far have elected to accept this option.
Under the new agreements, therefore, the adjusted payments which we will make to any agreeing province, in each of the five fiscal years beginning with this fiscal year, will be based on the ratio of per capita gross national product and of provincial population in the year preceding the year of payment compared with the new base year, namely, 1948. To illustrate the effect of this new adjustment process, I would like, with the consent of the house, to place on Hansard a table comparing the guaranteed minimum payments that will be authorized for each province under the bill with the amount of the adjusted payment, as presently estimated, that will be payable in the first fiscal year of the new agreement, namely, 1952-53.
Perhaps I should add that the adjusted payments shown in this table include the statutory subsidies payable to the various provinces.


Mr. Speaker:: Is that agreeable to the house?


Some hon. Members:: Agreed.


Douglas Charles Abbott: The table follows:
Payments Under the 1952 Agreement
		Adjusted
	Guaranteed	Payment
Province	Minimum	1952-53Newfoundland 	$ 9,174,624	$ 12,291,593Prince Edward Island..	2,977,015	3,915,671Nova Scotia 	15,348,220	20,150,413New Brunswick 	12,576,093	16,624,628Quebec 	85,080,466	115,003,725Ontario 	101,801,370	137,173,274Manitoba 	18,634,954	24,760,084Saskatchewan	20,026,085	25,570,643Alberta 	20,985,710	29,368,527British Columbia	29,647,487	41,376,383Total 	$316,252,024	$426,234,941
Another point of some significance to which I should call attention is that under the new agreements the adjusted payments to be made in respect of any one year will be paid in quarterly instalments within the fiscal year -June 30, September 30, December 31 and March 31. Under the old agreements the quarterly payments began on September 30 of the calendar year and the last one was made on June 30 of the following year. The house will note that, as a result of this change, the agreeing provinces will receive during the fiscal year 1952-53 the final or June 30 quarterly instalment in respect of the last year of the old agreement, and, in addition, the four quarterly instalments of the first fiscal year of the new agreements. This change was made possible by greater promptness in securing our estimates of gross national product and provincial population and is one which naturally is valued highly by the agreeing provinces.
Another change of minor significance is that in the new agreements the gross national product concept which we will use in calculating the adjusted payments will be that of gross national product at factor cost rather than gross national product based on market prices. This new concept has the advantage of eliminating indirect taxes levied in Canada, an element which reflects primarily the relative intensity of use of certain tax sources at any one point of time rather than the level of economic activity.
A feature of the 1947 legislation that will be continued in the future is the payment to the provinces of one-half of our corporate income tax collections, less certain deductions, from companies engaged in the generation or distribution of electric energy, gas or steam, in respect of their income derived from such generation or distribution. Under the authority of the existing act, payments have been made to all provinces whether or not they had entered into a tax rental agreement. In respect of incomes of the three
Tax Agreements with Provinces years, 1947 to 1949 inclusive, these payments totalled approximately $9,600,000. These are the only years for which it has as yet been possible to make payments. In view of the more precise determination of income derived from this class of public utility companies from the specified type of activities provided for under this year's amendments to the Income Tax Act, the payments to be made to provincial governments in respect of the next five years will, of course, vary somewhat from what those payments would have been had the old methods of calculation been followed.


Mr. Adamson:: May I ask the minister one question about the new method of estimating gross national product at factor cost. How much higher will that be?


Douglas Charles Abbott: I cannot answer that now, but I shall get the information and have it available when we are in committee.


Mr. George A. Drew (Leader of the Opposition):: Mr. Speaker, when the motion was before this house that it was expedient to introduce this measure I placed on record my opinion in regard to the unsatisfactory situation which is created by the extension of these agreements with no assurance that we will at some point tackle the fundamental problem which makes it necessary to have agreements of this kind. The Minister of Finance (Mr. Abbott) has pointed out that the new agreements which will be implemented through the provisions of this legislation will be in substantially the same form as earlier agreements. This will simply mean that the agreements entered into in 1942 as a temporary expedient in time of war are to be carried forward still further into the years of peace with no assurance that the unsatisfactory relationship so clearly set forth by the Rowell-Sirois commission and by other committees which have 'examined this subject will be changed in any way. The Minister of Finance (Mr. Abbott) has said that he is gratified with the measure of agreement there has been in dominion-provincial relations in the taxation fields. He has pointed out that the non-concurring provinces have shown what he described as restraint in avoiding duplication of taxation and administration. He also referred to the fact that there had been further conferences between representatives of the dominion government and the provinces with regard to this subject but that no final decisions have been reached. Those words could be used without change over and over again- "no final decisions have been reached".

Tax Agreements with Provinces


Douglas Charles Abbott: I was referring to the conference of December, 1950, and only to that.


George Alexander Drew: I realize that. I repeat that those words could be used over and over again with respect to the meetings that have taken place in connection with this general subject of taxation-"no final decisions have been reached." The important decisions that need to be reached are decisions with regard to a system of taxation which will restore to the provinces that measure of independence in taxation which is an essential requirement of the effective functioning of the federal system. So far as this measure is concerned, it is the only way by which agreements can be carried forward which must be carried forward in some form by many of the provinces until some more satisfactory method of allocation of taxes is found.
When this has been pointed out on earlier occasions, an attempt has been made, without any justification in fact or from the record, to say that certain provinces have sought to retain special advantages and that it is because of the selfish attitude on the part of certain provinces that over-all arrangements have not been made. At no point in these discussions has there been a recognition on the part of the federal government that the objections that have been made, not only by the provinces which have not signed agreements but also by the provinces which have and which have indicated they had no other choice from the financial point of view, were made because there is a question of principle involved which is of very great concern not only to those interested in the provincial field of legislation and administration but also to all of us who believe in the federal system and in the continued strength of that system.
The decisions that have been sought by those provinces that have not agreed have not so much been decisions with respect to the amount of money involved as they have been decisions as to a satisfactory readjustment of taxing methods in Canada which will on the one hand avoid duplication and on the other hand give to the governments which must exercise their responsibility in the field of legislation and administration some measure of discretion with respect to taxation which will give them the real authority over the field of legislation and administration conferred upon them by the British North America Act. Those who have expressed concern with regard to the absence of any evidence of new arrangements at this time have done so with a great deal more than the amount of the payments in their minds. The simple question before us is whether the constitution is of any importance.

Is it of any importance to us that we retain the real genius of our federal system in this country? Is it of any importance that we carry forward the basic principles which were inherent in the type of federal system adopted in this country in 1867?
There are some of us who think that it is of vital and fundamental importance that the strength of the federal system be retained by a proper allocation of taxation which will go hand in hand with the other responsibilities. Those who are fearful of centralizing power in the hands of the central government remember what history teaches us where the government that taxes is not the government that spends. That can apply to a handing over of taxation rights by the central government on the one hand or by provincial or state governments on the other. Over and over again federal systems have been weakened and have collapsed where there was too great centralization of taxing power in the hands of the central government. There are also those who remember that one of the contributing factors in the weakness of the German democratic government set up after the first world war was that the central government under the Weimar constitution had become dependent upon the state governments for a substantial part of its tax resources. History teaches us the importance of imposing at the same time upon a government which spends the responsibility for being answerable for its taxation.
If the government that spends is not the government that taxes there is a loss of direct responsibility to the people both by the government which taxes for another government and also by the government that receives. The dangers of that situation may not emerge quickly. Certainly over the years that has been the situation. The measure before us simply extends an unsatisfactory situation and tends to centralize control over provincial activities in the hands of the dominion government. The best evidence of that is the fact that more and more representatives of the provincial governments and representatives of the municipalities, which are the statutory emanations of the provincial authorities, are coming here to seek special arrangements to deal with this and that problem which ordinarily could be dealt with by the provincial governments if they had that flexibility of taxing power which the full strength of the federal system demands.
One of the reasons that some concern has been expressed about the extension of grants by the dominion government in fields which are normally within provincial jurisdiction is that the experience in the past has been, where these grants are extended, that

dominion activities in these fields constantly expand until the original allocation of authority under the B.N.A. Act has been very substantially changed in actual practice.
Many people who are anxious to see education carried to the very highest possible level in every part of Canada have expressed concern about the grants for education by the dominion government, not because they are anxious to see any restraint imposed upon the ability of the local authorities to advance education in every way that is within their power, but rather because they see the possibility of a trend to place under the dominion government, no matter what political party may form that government, some measure of supervision and control which would go hand in hand with grants of that kind-such as was not contemplated by our constitution. I have supported the request for grants to our universities and I have done so because I believe that our universities perform a great national service and that in addition to the ordinary problems of education there is the necessity for an expansion of higher education, particularly in the technical fields, as part of our general plan of development and national defence. I have expressed those views on earlier occasions and shall not repeat them. Nevertheless, 1 do see dangers if this tendency should increase.
In the same way I supported the idea of a national library, although it is conceivable that there might be an argument about whether libraries are exclusively under provincial jurisdiction, ones that go beyond the extent of a parliamentary library. I do see the desirability of having a national library where the great traditions of our country may be preserved, encouraged and expanded; nevertheless I see dangers there, related to the subject now under discussion, unless we keep constantly in mind why it is important that the federal system retain that clear allocation of responsibility which preserves the vitality of a system in which unity is in itself largely the result of the extent to which diversity is maintained under that federal system, along the lines laid down in 1867.
To illustrate what I mean, I can see the danger that unless the fundamental principles inherent in our federal system are constantly recognized and preserved there might be a tendency for some to suggest the creation of a department of education under the dominion government. Perhaps it might be called a department of education and culture. When we have seen the extension of the activities of other departments which carry on activities so intensively in the provincial field, .1 think all of us should be
Tax Agreements with Provinces greatly concerned about the possibility of there being any extension of those activities in a manner that would distract attention from the fact that it was considered wise to leave under the provincial governments and provincial legislatures certain clearly defined responsibilities in certain clearly defined fields. I would hope that we would not see this tendency extended. I would hope that we would not see any suggestion to extend the central authority over education or over other matters which are now under the authority of the provincial governments, and which should remain there unless a change by agreement between the dominion and provincial governments is made in regard to any of those subjects at any time.
Changes can be made simply by invasion of a field without agreement being necessary, and that has already occurred on certain occasions. I mention this in relation to the bill now before us because I do wish to emphasize the fact that we should be expressing some concern today and some regret that we have no assurance that the conditions which have made agreements of this kind necessary for some of the provinces-and I recognize that necessity-are not going to be brought to an end, and that there will be that balanced system of taxation which will restore the full authority of the provincial governments in those fields that were intended to be fully under their direction and responsibility.
From what I have said it will be clear that I intend to support this measure because there is no alternative before us. I would point out that every province in this country has in the past indicated its willingness to enter into rental agreements of a satisfactory nature provided that there were assurance that this whole subject would be fully examined and that an effort would be made to seek a solution of the problems which have made those agreements necessary. I once again point out that these agreements were stated by this government in the first place to be temporary expedients in time of war, an attempt to meet for the time being an unsatisfactory situation emphasized by the Rowell-Sirois report; and I do hope that there may be greater success and greater determination to find a real solution to this problem.
We need to tackle the whole combined problem of taxation in Canada-dominion, provincial and municipal. The municipal problem is in many ways at the moment perhaps the most serious of all. The municipal problem is one which arises in different ways in different provinces. Each province has

Tax Agreements with Provinces its own municipal system under its own municipal laws. Each province has its own provisions for delegating the powers of taxation to the municipalities. Not one of us should overlook the extent to which there are increasing appeals by the municipalities directed to the dominion government for assistance in meeting their problem.	.
If our federal system were working as it should, there need be no appeal at any time from any municipal authority to the dominion government. Under the federal system it was intended that their relationship be a direct relationship with the provincial government. They are under the provincial government both for their legislative authority and for their administrative arrangements. That relationship should be continued. It will interfere with those relationships if they become dependent upon the dominion government for supplementary grants to assist them in meeting those obligations which are so close to the daily lives of our people.
In saying that I am remembering, and emphasizing, that it will be only through arrangements that will give to the provincial legislatures and to the provincial governments the powers they really should have that this situation can be met effectively. Our provincial governments and our municipal governments have been emphasizing the extent to which they need greater flexibility of taxation. From the domestic point of view I think there are few problems of greater importance or of greater urgency than that of taking the appropriate steps to inquire into our whole system of taxation. I think there should be conducted, under an arrangement approved by the dominion government and the provincial governments, an inquiry which will seek to advise the dominion, provincial, municipal and independent taxing authorities, with an effort made not only to simplify our taxing methods, to avoid duplication wherever possible, to reduce taxes in any way that they can be reduced at this time, but also to find a way in which the taxes will bear upon our people most lightly at a time when they are bound to bear heavy taxes in any event.
It is not only the burden of taxes that affects individuals and business in this country; it is the impact of particular forms of taxation. That matter should also be examined. I almost hesitate to make the suggestion, in view of the fact that the government have shown such an unwillingness to consider royal commissions except when it happens to be for some purpose which they themselves bring forward; nevertheless I suggest that a royal commission should hear evidence from experts in the dominion,

provincial and municipal fields, as well as independent experts from this country and from outside of Canada, in order that such a commission might make recommendations that would be helpful to both the dominion and the provincial governments.
As this measure is passed which will make it possible for the dominion government to enter into agreements which I understand have been approved by eight of the ten provincial governments, nevertheless I hope the government will recognize the need for tackling this over-all problem of taxation at the earliest possible date so that duplication may be avoided, taxes may be reduced wherever that is possible, the different levels of administration may have flexibility of taxation, and the impact of taxation itself may be in such a way that it will increase the general efficiency of production throughout Canada in every way it can. This is a time to urge that this be done, and to express once again the fact that we are called upon to pass this legislation and to see these agreements renewed for another five years without any assurance that this problem is really going to be tackled.


Stanley Howard Knowles: Mr. Speaker, when we had before us the resolution preceding the introduction of this bill, I indicated that we would support this measure. That is our position. Despite any shortcomings there may be in the situation owing to the fact that an overall agreement has not yet been reached, we feel that this legislation certainly goes in the right direction.
It is our contention-as I pointed out on June 17, and therefore I do not need to repeat it today-that our primary concern in these matters should be not for the alleged rights of any of the governments of this country but rather for the rights of the Canadian people. We feel that any taxation arrangement akin to the set-up that we had in Canada prior to the war makes for terribly inequitable taxation. Such a system results in the situation that those who happen to be in parts of the country into which the wealth produced in other parts of the country is channelled are able to escape the taxation they should pay. After all, we are Canadians first, not citizens of particular areas in this country. It seems to me that the most important field in which we should express our Canadianism is in the economic field by an attempt to achieve as fair a distribution as we can of the wealth that is produced by the Canadian people from coast to coast.
Although we regret that an over-all agreement has not yet been reached, although we

regret that there has not yet been worked out a plan that will satisfy all of the governments concerned, and although we hope that that might yet be done, nevertheless we would not want to retreat by one iota from the position that has been attained by such agreements as have been signed between the federal government and eight of the provinces. We shall therefore support this measure.
The leader of the opposition (Mr. Drew) today once again expressed his concern for restoring to the provinces what he referred to as that independence in taxation which he regarded as an integral part of the federal system. We feel that more important than the independence of taxation which some provinces might like to have is the desirability of all of the provinces having the financial capacity to discharge their obligations to the Canadian citizens residing within their borders. A few provinces may have enjoyed that financial capacity under the kind of set-up that we had prior to the war, but certainly all provinces did not have that financial capacity. They approach enjoyment of that financial capacity under these agreements. As 1 have already said, we feel that that consideration is a much more important one than is the proposal that every province should enjoy complete independence in the field of taxation. It is our view that there are various aspects of taxation, and that there are many other aspects of public policy, by which the people in the provinces retain the control over their provincial governments. There is still plenty of room for testing the responsibility of provincial governments to the electorate in the various provinces. In fact we have had some recent examples where that responsibility has been well tested. Some were tested and found satisfactory; some were tested and found wanting. Therefore, Mr. Speaker, for these reasons and as I have already indicated, we shall support this measure.
There was one reference in the remarks of the leader of the opposition with which we agree, namely, the fact that one of the most difficult problems in the field of taxation in this country at the present time relates to municipal taxation. That is a matter beyond the control of the federal parliament; that is a matter that calls for negotiations between the various provincial governments concerned and the municipalities which are their creatures; but we feel that something is terribly needed in that field as well. Indeed, it is because of the situation in that field that there is given added impetus to
Tax Agreements with Provinces the proposal that we have made from time to time, that there should be federal aid for education.
At the present time the cost of education for the most part is levied against real estate, which we feel is unfair, for it does not accord with the principle of taxing according to ability to pay. It would be out of order for me to pursue the question of federal aid to education under this motion, but I do bring it in, in passing, to emphasize both the need for a revision of the taxation arrangements as between the provinces and the municipalities, and also as to the need for federal aid in this important field of education.
The leader of the opposition had a fair amount to say on the question of education, particularly with respect to the grants to the universities by the federal government. It is also to be noted that he has given support to the motion of my colleague, the hon. member for Saskatoon (Mr. Knight), with respect to the granting of financial assistance to the various provinces for the purpose of equalizing educational opportunity across Canada. He has given that support both in speeches that he has made and by his vote, for example, on April 21 of this year, as reported at page 1463 of Hansard. In fairness to him I must admit that when he spoke on the question he expressed certain misgivings, and he tied that support to his ideas about dominion-provincial taxation arrangements; but nevertheless I think that it was an expression of his best judgment when on April 21 he voted for that motion for federal aid for education. In other words, Mr. Speaker, it seems to me that we have there a recognition by the leader of the opposition of the principle which underlies these agreements, namely, that in a country like Canada, and as part of our federal system which we all support, it is essential that there be some central body with sufficient taxing authority to be able to tax the wealth of this country wherever it is made and redistribute it on a basis of fairness to the people of Canada, no matter in what part of the country they may live.
Because we believe that the rights of the people of Canada to the best that our economy can make possible are superior to the rights of individual governments, either provincial or federal, we support this measure.


Mr. Solon E. Low (Peace River):: Mr. Speaker, I remember when the first taxation agreements were negotiated between the dominion and the provincial governments we were given assurance that after the war the process of negotiating further extensions of the agreements would be terminated; that is,

Tax Agreements with Provinces that these transfer agreements would be only-temporary expedients. If I remember correctly, there were two important reasons given for the negotiations to start with. If I remember rightly the first of these was that there had to be some assurance of what the minister has called a restraint in applying taxation measure across the country so that fairness would result, particularly in wartime.
The second reason, if I remember rightly, was to put into the hands of the federal government those authorities and powers which would make it possible for us to conduct a strong and vital war effort. Well, I supported the negotiations of the first agreements because I felt that there must not be confusion in taxing matters within Canada if we were ever to put on a war effort that would be successful and that would terminate in victory for our side. I did say at the time we were negotiating the first agreements that I thought the federal government should be a little more honest in their statements. I felt that when these agreements were negotiated the federal government itself would never want to surrender whatever authorities were given over by the provincial governments. I think my fears were well founded. If I had been a betting man then I likely would have said that I bet my last shirt that those authorities and powers transferred to the federal government under the agreements would never be returned to the provinces and I believe that subsequent events have proved that my fears certainly were well founded.
At the present time we are considering an extension of the agreements for another five years. With the procedure calling the provinces together and negotiating with them in detail all parts of the agreements which had not worked out satisfactorily in the past, and revising those parts of the agreements which have become intolerable, let us say, I have no quarrel at all. I have no protest against the procedure. The provinces that did negotiate seem to be quite well satisfied with the results of their negotiations, and the details of the new agreements as outlined by the minister this morning seem to me to be perfectly acceptable, and I have heard no protest from any one of the provinces that has indicated its readiness to enter into a new agreement.
Of the provisions of the present agreements, so far as they relate to my province, I certainly have no criticism. The amount of the payments, the application of the principle of guaranteed minimum payments to the provinces, is a good provision. I think it is quite acceptable to all those provinces that have negotiated. Of course to Ontario and Quebec the principles do seem to be unacceptable.

With the provision of the adjustment payment basis I find myself in agreement. It seems to be fair. I have nothing to protest against in that regard. Perhaps I can best sum up what I feel about the bill in this way, that it is only the modification; it provides only for the extension of the present agreements on a modification basis; that is, it provides for modifications of previously negotiated agreements, but it does not in any way get down to a permanent solution of the great problem that confronts the governments of Canada, namely, a final decision on the allocation of taxation powers that could be concluded finally and for, let us say, a reasonable number of years ahead.
I think that this matter of having to come back every five years and renegotiate on the basis of agreements that were entered into temporarily to begin with is not a good thing, and I do not believe that the minister himself likes it at all. I believe in the federal type of union in this country; I think it was developed to fill a real need. In a country such as ours I doubt very much whether we could ever have satisfactory government under a unitary system. I doubt very much that we could ever have satisfactory government under a unitary system; there is too much diversity; it is too big a country. There are too many local problems to make that unitary type of government possible. And so I say I believe in the federal system as it applies to Canada. I believe in the arrangement as it was originally worked out by the fathers of confederation. I do believe that it was sound, and that the allocation of powers under the terms of the British North America Act was wise.
What I would like to see is some form of final agreement on the matter of a taxation policy as between the dominion and the provinces, settled in such fashion as to maintain the balance between the provinces on one hand and the federal or central government on the other. I would like to see that balance carefully preserved, because it was worked out by the fathers of confederation in an exceedingly wise manner, in my judgment.
Therefore we most certainly must be careful in anything we do that tends to modify the balance that was established. And in my judgment, having the federal government assume authorities that have been considered provincial for so long does interfere with that balance. It places in the hands of the central government undue authority over local governments.
I am not a centralizer; I do not believe in centralization. Obviously the hon. member for Winnipeg North Centre (Mr. Knowles)

has certain ideas with respect to the centralization of power in the federal government. I do not believe it is wise to take government too far from the people. The grass roots of democracy is right down in the municipality. That is where I think we should begin to decentralize, and see to it that the municipalities have sufficient authority to take care of the needs of the people right in the municipality. They are the people who know how to administer the affairs that touch their lives directly.
I am thinking now in terms of such things as health schemes and hospitalization. There is a tendency in this country to remove these things from the municipality, and to centralize their administration in the provincial governments. Now there is a move to try to centralize that sort of thing in the federal government. Well, it just will not work-that kind of centralization.
I think it has been amply demonstrated in this country as in others that there are things, things that touch the lives of the people very closely, which ought to be left exclusively to the administration of the municipalities in Canada.


Stanley Howard Knowles: The administration, yes.


Solon Earl Low: That is true. The point I make is-


Stanley Howard Knowles: There is no argument about that.


Solon Earl Low: Within the scope of my
experience, any time the central government has been prevailed upon to make contributions by way of financial assistance for those things that are administered by municipal and provincial governments, it has insisted upon having a hand in the administration. That is not good. To my mind that is the great danger of the centralization movement.
I say this, that there is no reason why the federal government should not be able to come to the assistance of the provinces, and perhaps indirectly through the provinces to the municipalities, without insisting upon having a hand in that direction and also in the administration. For example I cannot understand why it is necessary, if the federal government is to take part in the cost of education, that it should insist upon setting up what may be called virtually a ministry of education in the federal field. That in my judgment is stupid, in the extreme.


Stanley Howard Knowles: That would be the basis upon which you voted for the resolution of the hon. member for Saskatoon (Mr. Knight).


Solon Earl Low: Yes; I voted for the resolution of the hon. member for Saskatoon on this basis, that the federal government ought to
Tax Agreements with Provinces be prepared to make contributions toward educating the boys and girls in this country, with no strings attached. Those contributions should be handed over to the provincial governments to be administered where the education is to be administered, under the constitution-and not in any way on a basis of giving the federal government authority to interfere or to impress upon the provinces its ideas of policy. I think we have always stressed carefully that whenever federal grants are called for, if they are to be made at all they should be made upon a basis of a complete hands-off policy.


Stanley Howard Knowles: Would the hon. member permit a question? Would he indicate the difference between the federal government turning over out of federal revenues money to the provinces for purposes of education, without attaching any strings thereto, and turning over federal moneys to the provinces for other activities, provided it likewise leaves the administration of those activities to the provinces. Are they not on all fours?


Solon Earl Low: I think they are.


George Alexander Drew: In view of the fact that the hon. member for Winnipeg North Centre has made some comments about my remarks, may I ask if he means by that that the federal government should exercise control over education in the provinces, where grants are made for education?


Stanley Howard Knowles: If I may be permitted to answer the question of the leader of the opposition (Mr.- Drew), asked during the speech of the hon. member for Peace River (Mr. Low), the answer is very definite-and it has been placed on the record repeatedly -that we insist that there be no interference of any kind on the part of the federal government with provincial administration of education. That has been made clear in the resolution of my colleague the hon. member for Saskatoon, and in all of our speeches an the question of federal aid for education. No one has any doubt about that point at all. My question was: If we on this side of the house-the leader of the opposition and those of us in this group, and the hon. member for Peace River-take that stand with respect to education, why can we not take the same stand with respect to other matters?


Solon Earl Low: I would say there is no good reason why we should not take the same stand with regard to other matters. In fact, that is the stand I am taking-exactly that. But when we talk about centralization and taxation powers for the purpose of redistribution, so that the people of the country can share equally in the good things Canada
3558	HOUSE OF
Tax Agreements with Provinces has to produce-well, then, we get into a type of theoretical discussion which, I am afraid, has no termination at all.
It looks to me as though we are getting onto pretty dangerous ground when we talk about the centralization of taxing powers in the federal government, on that basis. I think there has to be a completely new approach to the whole matter of revenue. I would like to look at it more from the point of view of revenue than of taxation.
Somehow or other, in discussions of this kind, it would appear from what we say that we think there is no other way of getting revenue, except through taxation. But that is not true; that is not true, by any means. I think there is one government at least in the Dominion of Canada that has proven quite definitely that there are other sources of revenue.


Mr. Sinclair:: Out of oil wells, though. We cannot all have them.


Mr. Wylie:: Jealousy will get you nowhere.


Solon Earl Low: We are using that as a means of obtaining revenue; but I would say once again to the hon. member for Coast-Capilano (Mr. Sinclair) that you cannot begin to compare an $89 million industry, and its power or ability to provide revenue, with a $525 million industry, such as he has in British Columbia. You cannot put them on the same basis.
Let me point out that out of the $89 million industry last year in Alberta we obtained much more revenue than did British Columbia from the $525 million industry, an industry based upon resources belonging to all the people out there.


James Sinclair: The hon. member is comparing royalties and leases which in no way affect corporation taxation.


Solon Earl Low: The same thing would be true with respect to the oil industry. There are large corporation taxes paid just the same as in the lumber industry, and there are the same types of wages and salaries paid and dividends and profits. What I am getting at is that I think it is a wrong approach to consider taxation as the only source of revenue for a government. It is not. The sooner we realize that it is not, the sooner we are going to come to some new arrangement as between the various governments of Canada so that the responsibilities allocated to those governments by the British North America Act can be discharged fully by the respective governments.
I think we shall have to change our approach. I say that the revenues which the


provinces need to discharge the responsibilities placed upon them by the British North America Act ought to be made available. They can be made available. Anyone who says that they cannot is denying that this country can produce in tremendous quantities. The amount of revenues to be obtained by all governments in Canada is limited only by the extent of the resources we have, manpower resources and natural resources, and our ability to get labour and effort applied to those resources. That is all. What we need to do is to approach this whole matter of revenues for governments from the point of view that what we must get into the hands of the various governments is revenue to enable them to discharge their responsibilities under the constitution.


Mr. Macdonnell (Greenwood):: Would the
hon. member think it was a good thing if, by some happy accident, let us say by finding out that crown lands produced a terrific amount of revenue, a government found itself depending less and less upon taxation? Does he not think it is sound that a government's revenue should come from taxation? Is not that the chief hold that the citizen has on a government in calling it to account? Supposing, for example, a government did not need to tax at all; would not that create a very unsound situation?


Solon Earl Low: It is pretty hard for me to assume that any government would ever get into the position-


James MacKerras Macdonnell: I once heard a conversation between two men, evidently from Alberta, where one expressed some hope that Alberta might be able to do away with taxation altogether.


Solon Earl Low: I cannot conceive of a condition under which a provincial government would not have to use taxation, if not continuously at least periodically. It will be a long time I suppose before we see governments doing away completely with the power to tax. But I think it is possible for governments, provincial governments particularly, to apply the minimum of taxation and attempt to secure the bulk of their revenues from other sources. I believe that that is possible. As a matter of fact I think we are demonstrating that in the province of Alberta.


James MacKerras Macdonnell: And desirable?


Solon Earl Low: I think it is desirable; I do not think there is any doubt about the desirability.


Mr. Hansell:: It would still have the power.


Solon Earl Low: I would point out to the hon. member for Greenwood that although a provincial government might not be applying

taxation measures, it would still have the authority to tax. That authority should be kept by the provinces. It should be remembered that the resources from which a province might obtain large sums of money are expendable. They are resources that eventually will play out and when they do the province would of necessity have to go back to the imposition of certain taxation measures which it may have abandoned in the meantime.


James MacKerras Macdonnell: What a
wonderful time the government would have in the interval.


Solon Earl Low: I am not so sure. One thing we have to have in our mind is that no principle can be said to be absolute. I believe the hon. member for Greenwood will agree with that. What I am speaking of this morning is this:	I think that if we approach
this whole matter of dominion-provincial relationship so far as finance is concerned from the point of view of getting into the hands of the provincial governments, and through them to the municipal governments, the amount of revenue which they require to carry out their responsibilities under the constitution, we will be doing a whole lot better job than if we just think in terms of taxing powers, having to tax here or tax there.
It seems to me that the revenue which any province needs at the present time has to be assured to it and should be assured for years ahead. I do not believe it is possible for us to give them a feeling of stability by merely extending taxation agreements for five-year periods. I do not think that that is possible nor is it desirable.
I should like to see some permanent solution to this whole question. The sooner we do what the leader of the opposition, in the final minutes of his address this morning, said we should do, namely, review the taxation system and how the various taxes impinge upon the various governments, review them to see if there is not some way of coming to an agreement by which the provinces will know that certain taxation fields are exclusively theirs and certain taxation fields are exclusively the dominion's-approaching the whole matter from that point of view and reaching a final agreement and conclusion as soon as possible-the sooner we will be able to establish our provinces and our municipalities on some basis of stability and permanency.
I am concerned, as I said in the beginning, with preserving in our federal system a balance which shall not be subject to undue centralization or undue decentralization. On the other hand, we realize that there must be a strong central government as well as
Tax Agreements with Provinces strong provincial and local governments. That is desirable. It is that balance which I think we ought to try to achieve.
The leader of the opposition spoke of attempting to preserve the vitality of our federal system. I think perhaps it can best be described as vitality in a country like ours with its diversity of resources, diversity of conditions, a land that extends from the Atlantic to the Pacific. It seems to me that one of the important things we have to do is to lay down a set of policies and conditions under which we can guarantee that the vitality of our country shall never be diminished or depleted.
I think decisions have to be made soon on a more permanent basis. While we are prepared to accept the principle of Bill No. 347 which is now before us, I do not want it to be assumed that we are permanently in agreement with the idea of an extension of taxation agreements every four or five years. That is not adding to the possibility of stability in our country in any respect. We support the bill for the time being, but we do ask that the government of Canada which controls the financial policies of the whole country make every effort to come to some final allocation of powers and authorities in the financial field which will guarantee that the provinces and municipalities will have the wherewithal to take care of the responsibilities placed upon them by the British North America Act.


James MacKerras Macdonnell: Mr. Speaker, I agree with those who have said we will support this measure. I just want to underline one or two things that have been said already. I think there is no doubt that we all agree with the remark that has been made that we are all federalists. We do not believe in a unitary form of government. I think it was the Right Hon. Ernest Lapointe who said that the dominion after all was the child of the provinces and not vice versa. There are two things which I think are clear. First of all we are taking what was an emergency measure and perpetuating it. When I say "perpetuating it" of course I know we say that it is temporary. I think we admit it is an expedient, but after something goes on for five, ten or perhaps fifteen years it is not so very temporary and it becomes very difficult to unscramble the omelet. I think we all admit as an academic proposition that it is sound that those governments that spend money should raise the money they spend. However, we have departed a long way from that principle. Eight of the provinces have found it a comfortable and apparently a comforting thing to do.

Tax Agreements with Provinces
I have often reminded the house that we have been passing through very prosperous years when the goose has been hanging high and the provinces have received grants which I presume were very satisfactory to them. So the thing has gone along, but nevertheless I do not think anything has happened to cast doubt on that principle. If I remember right it was strongly asserted by, among others, one who was very well known in this house, the present premier of Nova Scotia.
There is one other thing I want to say. Even in spite of provincial satisfaction which seems fairly widespread, we do see one place where our present system is not really giving satisfaction, and that is in the case of the municipalities. I take it that the municipalities were not and could not be present at the discussions which took place because after all the municipalities are creatures of the provinces, and it would be almost, if not wholly, impossible to carry on discussions with them at large. Nevertheless there remains the problem that the leader of the opposition (Mr. Drew) mentioned, and it seems to me it is a very real one. I should just like to say that in my opinion we should remind ourselves when we are doing this that, in spite of its wide acceptability, we are infringing upon a principle which I do not think has ever been satisfactorily set at nought in argument. We say we are doing it temporarily but as the years go on it is going to become harder and harder to make a change without great disturbance. There are some indications now, notably in the municipalities, that we have not solved the problem so far, and I should not wonder if, before the final solution comes, we may find, as people find so often, that we have to go back to accepted principles.
Mr. G. M. Ferrie (Mackenzie h Mr. Speaker, I want to say a few words with respect to these tax agreements. I am sure that western members agree with the principle one hundred per cent. We hear a great deal about the centralizing of taxation but in a country like ours it is very hard to get away from it. The wealth produced in the western provinces is not taxable. It is the taxable dollar that you have to take into consideration, and that taxable dollar goes to eastern Canada. The taxable dollars accumulate in the place where commodities are bought. We buy goods from eastern Canada and the profits are made in eastern Canada. It is impossible for the governments of western Canada to tax those dollars. I say that all should come within the scope of the agreements in a federation of this kind. It unites the whole of Canada. We have a big industrial area in Ontario and


Quebec and then an agricultural area east and west of the two industrial provinces.
The agricultural areas must have some form of taxation that will help them and that form of taxation is controlled now by the dominion government. The provincial governments have no right to enter that field of taxation. Even if they had, the head offices of the big industries are in eastern Canada and the governments of the agricultural areas still could not tax them. The system in effect at present in some of the provinces is being condemned. That is most unfair. In the last provincial election the premier of Saskatchewan was going around the country condemning the action of the federal government so far as the moneys paid to them are concerned. I do not know what it would amount to now but before the taxation agreement was entered into all the province of Saskatchewan could collect in the form of income tax, corporation taxes and succession duties was $4,500,000. If they had the opportunity to tax today about all they could possibly collect would be double that amount. One has to take into consideration the amount of wealth produced in that province which should be taxable but cannot be because it goes out of the province. Let us say that they would have got $8 million today if they had the power to tax. The federal government is taking care of the taxing and in doing so is giving the province of Saskatchewan $26 million.
The distribution of that $26 million has prevented Saskatchewan from falling into a depression. If we in Saskatchewan as an agricultural province did not have the benefit of the grant from the federal government we could not possibly enjoy a standard of living that would compare with any part of the industrial areas of Canada. We could not tax real property in order to secure the amount of money the provincial government should have to do the job it has to do. The only way we can secure a fair distribution of the taxable dollar is under the system now being followed by the federal government. We in the west are very pleased with the way the federal government has taken hold of this matter. It is agreed that we would like to have more money but I think it is the duty of those who receive the money to give some praise to the man who has to collect it. In many parts of the country he is being condemned for high taxes. The people are paying taxes but they are having the money paid back to them and receiving services so there should be no kick coming. I wish to congratulate the

minister on the job he has done. I hope he will carry on and give us more instead of less.


Agar Rodney Adamson: Mr. Speaker, I have listened to the complaints of the west with respect to this matter. May I say that the one hope of having a geographically balanced economy for Canada is the industrialization of the west. Industrialization of the west can take place only through the development of natural resources other than farm resources. I only hope that the citizens of the three western provinces will try to forget wheat and try to remember that a great part of three western provinces is under the Pre-Cambrian shield and that a great part is now potential oil country of the greatest magnitude. Until such time as we can go farther in the west in producing natural resources other than farm produce we will not have a truly balanced economy.
There is just one other matter that I wish to bring to the attention of the minister. I have mentioned it before and I do so now very briefly because I think it is important. I refer to the matter of succession duties. Succession duties were brought in as a war measure simply and solely. They were an invasion of the provincial field but were justified as a wartime measure. To my mind collection of succession duty by the federal government is an invasion of provincial autonomy.


Some hon. Members:: Hear, hear.


Agar Rodney Adamson: I have said it before but I feel that succession duties have an unfortunate result. They tend to [DOT] centralize industry in the hands of a few large corporations. When one of the owners of an individual or family corporation dies, succession duties very frequently result in the corporation being liquidated or sold to a larger corporation in the same field. That is a bad thing, Mr. Speaker, because it not only has the effect of centralizing industry in one or two larger plants but it destroys smaller industry.
I realize that small industry has been very prosperous and has been booming recently, but throughout the years if the principle persists and if succession duties are levied at extremely high levels the result will be to centralize power in the hands of a few large corporations.
At one o'clock the house took recess.
The house resumed at three o'clock.


Mr. J. H. Blackmore (Lethbridge):: Mr. Speaker, I had not intended to participate in
Tax Agreements with Provinces this debate until one or two things said by the hon. member for Greenwood (Mr. Macdonnell) made me feel that probably it ' was in order that I should make one or two brief comments.
The hon. member for Greenwood spoke as though it was easy money that was going out to the provinces as a result of the agreements now under consideration. I had the impression that the hon. member for Greenwood had not given adequate weight to the amount of money that was being taken from the provinces by these agreements and the amount of money that had been taken from the provinces every year for generations, before it was conceived that an agreement such as that which is now before the house was an appropriate thing for the dominion government to consider and to adopt in cooperation with the provinces.
My attention was also somewhat arrested by the remarks of the hon. member for Greenwood in reference to assistance to municipalities. I will grant that one of the great difficulties we have in Canada is that of providing to the municipalities adequate purchasing power in order to enable them to discharge the responsibilities which properly rest upon them, and must so rest; but the same difficulty is being found in respect of each province even in spite of the excellent arrangements-as I think we can fairly call them-which the minister has announced and for which the dominion government is certainly worthy of credit which I freely give.
I think the hon. member for Greenwood would be interested in knowing what the province of Alberta is doing in respect of providing assistance to municipalities. This year the Alberta government had an income of $116 million. Of that amount of money she is paying out to the municipalities just under $29 million in order to help them in financing the responsibilities they have. A good deal of that money-not a great amount, but a reasonable amount-is being provided to municipalities in such a way as to encourage the municipalities to keep their taxes down. I do not know of any other province in Canada that had been following that policy before Alberta began it. It therefore is a real credit to the present administration in Alberta that this sort of measure is being applied. I do not think I will comment on that matter particularly because we are all anxious to get along with the business in hand.
Some of the things that Alberta is doing for the municipalities are as follows: Fifty per cent of the gasoline tax has been made


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


James Sinclair: I, like the hon. member for Lethbridge (Mr. Black-more), had little intention of entering this debate. It was not, however, the hon. member for Greenwood (Mr. Macdonnell) who provoked me to enter but rather the leader of the opposition (Mr. Drew). I see he is not in his seat at the moment; I hope he will be coming in very shortly.
As far as these tax rental agreements are concerned, I think there is very general agreement in the eight signing provinces that these agreements have been good business for the provinces concerned. It is certainly the opinion of citizens of those provinces, both in their capacity as businessmen paying corporation taxes, and as individuals paying personal income tax. I think I can go so far as to say that perhaps the businessmen in the two non-signing provinces would not be averse to paying just 5 per cent corporation tax provincially instead of the 7 per cent they pay in these provinces which have not signed these agreements. If that were all I had to say about these matters I would sit down.
However, the speech made by the leader of the opposition at the resolution stage of this debate was so extraordinary that I think some attention should be paid to it. If hon. members will look at page 3361 of Hansard, at the bottom of the right-hand column, they will find a paragraph which I will describe as the most skilful pussy-footing ever conducted in this House of Commons. So that hon. members can form their own opinion I am going to read this paragraph:
Either we believe in the federal system or we do not. * No one in the House of Commons or outside of it needs to become hysterical or to suggest that we are treading on sacred ground if anyone should assert the proposition that he believes in unitary government in this country. That argument has been made before and it will be made again. There are those who sincerely believe that Canada would be better off with a single government.
Then he goes on to imply that the federal government are those who believe that; that they believe in an all-powerful central government; that they assert that they have all the knowledge and brains in the country. For example, he says:
This government-


James MacKerras Macdonnell: May I ask the
page?


James Sinclair: I continue; page 3362:
This government may think it is in a better position to exercise judgment in regard to important matters than are some of the provincial governments. If that is their opinion, most certainly they are free to assert it; and anyone should accept that opinion as an expression of individual belief or the collective belief of this government.

Tax Agreements with Provinces
The Minister of Finance immediately interjected and made it quite clear that that was not the view of the government; that it had never been the view of the government. I began thinking to myself, why is the leader of the opposition taking such pains to state the obvious, that in this country everybody is free to say whether he believes in the federal system or in the unitary system; and who was getting hysterical about it? The hon. member for Greenwood himself in today's debate a little earlier said that we all in this country believe in the federal system of government, that it is in our constitution, and that ours is a vast country spread over 4,000 miles, over very many geographical and economic regions. Obviously, we must have a strong central government and an able, efficient local administration in these different regions. We know that every public figure in Canada with one exception has realized that. Who is the one exception? This exception was Colonel George Drew, lecturer and writer of the period from 1935 to 1941. He of course is now the leader of the opposition. He still lectures us but he is not writing.
I realize too that the hon. gentleman made another plea to this house in the budget debate, a very interesting plea. This will be found on page 1794 of Hansard when he appealed to the house somewhat along these lines: Surely all of us have said some things at some time which we would rather not have said. No person in Canada has said more things that he would rather forget than the leader of the opposition. He appealed to us at the bottom of page 1795 to forget those old speeches. All they did, he said, was to sow discord and disunity.
But not in the country. It certainly sows discord and disunity in the Tory party for Tories in some parts of this country to be reminded of what Colonel George Drew, lecturer and writer, said, and what Premier Drew of Ontario said on national issues. We all realize what a difference there is between his appeals and his performances. He asks us to forget old speeches, then issues that great little Tory pamphlet which has been circulated all over Canada, featuring the remarks made by ministers in this house, casual asides, not considered statements of government policy but truncated little asides made in the heat of debate, stripped of any context. Then he implores us to forget the public statements he has made in the past.
Well now, I am going to look back on some of the speeches he has made, not casual asides but considered speeches on his views. We all know in this house that nothing gives the leader of the opposition (Mr. Drew) greater pleasure than to quote his old

speeches back to us, so I am going to flatter him by also quoting him. The thing we must remember is to distinguish between George Drew the lecturer and writer in the period between 1935 and 1941, and Premier Drew of the immediately following period. In his speech on this resolution, despite his earlier plea to forget old speeches, he has referred back to a speech by Colonel Ralston in 1940 and to one by Mr. Ilsley in 1941. He also quoted from his own old speeches of that period. I therefore feel free to read from the position taken in public addresses by Colonel George Drew between 1935 and 1941; and he assured us in an early debate that these speeches are his very own; they were not speeches prepared by Rod Finlayson.
Here is an interesting paragraph from a speech in London, Ontario, as reported in the Toronto Star of February 23, 1935:
For Canada, harassed by debts, labour troubles, and conflict in company, insurance and labour laws, Col. Drew saw in one strong central government the solution, instead of an utterly mad jig-saw puzzle of ten conflicting governments. If we were starting all over again who would be crazy enough to set up ten governments in Canada?
By 1936 he had moved on in his speeches to this theme of centralization of government, as he went back and forth across the country. This is what he said before the Toronto board of trade on November 10, 1936; as reported by the Toronto Globe:
Canada must eliminate the costly inefficiency of ten governments doing, in most cases, the job of one, or else sink in the rising tide of fascism.
He was not even a good prophet. I have seen no rising tide of fascism in this country which he predicted.
Then, again in Toronto on December 10, 1938, as reported in the Montreal Gazette:
The way to get back to the ideals of confederation, to the ideal of a strong central government, is for Ontario as the largest province to sit down and say to Ottawa:
And this is Mr. Drew speaking for Ontario:
We have acquired rights it was never intended we should have. We have duplicated services. We propose to hand back to you all things of necessarily national character and retain only those things necessary for the good functioning of local government.
And again, speaking at Sudbury on January 20, 1939, as reported in the Toronto Star:
Legislation to end Ontario government services which duplicate those of other jurisdictions was promised here last night by Col. Qeorge A. Drew if he heads the provincial administration.
Declaring national unity to be the greatest single issue in Canadian public life in that it would promote development and create employment, the Ontario Conservative leader said at the present time "ten men throughout Canada are being paid to do one job." He instanced the insurance and companies departments of the federal government and the nine provinces.

Then he came down to Halifax; he was really covering the country from coast to coast, to give the Canadian people his views on the absolute necessity for powerful, central government. By 1941 he was really in his stride when, speaking before the bar association at Halifax, he said, as reported in the Halifax Herald of April 25, 1941:
"What we need greatly is to look at government from a business viewpoint," he said, "paralleling methods that a private business with a head office and nine branches would employ to promote more efficiency. Preservation of a nation's integrity must come from a strong centralization feeling," Colonel Drew continued. Canada's main problem was its decentralized government system, and the speaker declared, "solution of that problem would insure continuance of the national structure."
That is quite extraordinary in view of his recent speeches in this house. Next we have his statement before the dominion-provincial conference, the first report he made as premier of Ontario to a dominion-provincial conference, in which he said:
Decentralization of services provides the best assurance that the flexibility, vigour and efficiency of public administration will be preserved.
What a difference! What happened in this country between those statements made in 1941, when Colonel Drew was advocating a central office and branch offices; something like the Timothy Eaton form of government, with a powerful head office and branch offices all over the country just to take orders.
Why do we see this sudden change when we come to the dominion-provincial conference, this change from powerful centralization to complete decentralization. There was no change in the country in this period; it was the same Canada. There were the same provinces, with the same powers. Our national and provincial problems had not changed, and for the most part we have had the same government. The only change, of course, was that Colonel George Drew the lecturer and writer had become Colonel George Drew, premier of Ontario, in the interval.
Many people who listened to him in those days at these many public functions may have been persuaded by his eloquence and glamour to believe in centralization. When this metamorphosis from George Drew the lecturer and writer to George Drew the premier came about and he changed his views, where did that leave these people, his converts? They did not become premiers, too. What was responsible for the change? He had become a big frog in a small puddle, and was very anxious to have that puddle expanded by placing more power with the provinces. I am sure hon. members will remember the story of the frog in Aesop's fables who saw a jackass and wanted to be 55704-225i
Tax Agreements with Provinces as big as the jackass, so inflated himself up to those dimensions, finally blowing up. Premier Drew, too, wanted to inflate the importance of his position as premier of Ontario. He did not want to head one of his earlier branch offices. And that I think, is the real reason for the basic change from the great national advocate of centralization who, after a five-year speaking campaign suddenly-in one brief year-becomes the great advocate of decentralization, of giving more power to the provinces.
Now, I have said this in all kindness. In expressing these views he was very careful to preface his speech by saying "Let us not get hysterical because other people may have different views." That is quite true. If a mature mind has mature views which he expresses, and sticks to them, we must respect him. But what always puzzles us is the sudden turnabout position of Colonel George Drew, a mature man making a lot of serious speeches on a grave problem. When he made these speeches on centralization he was certainly mature physically, let me put it that way; but he has not yet told us what was responsible for his sudden about-face, from a doughty advocate of a powerful central government to being the champion of decentralization.
Let me turn now to the actual tax agreements and the points which have been raised about them. The first and the most important point is that the whole problem is based upon a formula which takes into consideration first of all the population of the country and its gross national product, what all the people in this country are producing, as Canadians.
The second important point is that these tax rental agreements are all optional. No province is obliged to sign. The provinces have gladly agreed to re-sign now that they have found this is a good way of doing business, advantageous to them and to the country. I need only remind the leader of the opposition that Mr. Anscomb, his chief lieutenant in British Columbia-he is just a lance-corporal now-was so delighted with the new agreement that he rushed back and made a public announcement before telling the cabinet. The hon. member for Peace River earlier expressed the satisfaction of the Alberta government with the way these tax rental agreements have developed. Then there is another reason, which was put forward by the hon. member for Winnipeg North Centre (Mr. Knowles), when he said that this is not a matter of ten warring kingdoms waging battle with some central kingdom, but that it is a Canadian problem affecting just the Canadian people who live in ten provinces.

Tax Agreements with Provinces
When you speak of a province you are not speaking of those politicians who, for the moment, form a provincial government. You are speaking of the Canadian people who live in one of our ten provinces. We have rich provinces with great natural resources and, on the other hand, we have some poor provinces who have little in the way of great natural resources. These resources do not belong to the provinces; these resources are the heritage of all the Canadian people no matter where they may live. These resources are entrusted to the provinces for management, but in the end, as I say, they are the heritage of all the Canadian people and all the people are entitled to benefit from them. These agreements make this possible.
Let me give you an example. In my province we have the greatest lead-zinc deposit in the world in the fabulous Kimberley mine. Last year the company operating that deposit paid about $40 million in corporation income tax to the federal government. That was the people's share of the profits made from mining that resource in British Columbia. As such all the people of Canada are entitled to receive some benefit from that, and when the federal government collects the tax and thus spreads it back amongst all the provinces, all the people do get benefit.
Timber is another great resource in British Columbia. The largest of our timber operations in its annual report published earlier this year reported a profit of $31 million, on which they paid $16 million taxes. That was what they paid under the corporation tax of 52 per cent. We, the people of Canada, are the major shareholders in every successful industrial operation in Canada when we take 52 per cent of their profits as taxes. Again, that resource does not belong to the people of British Columbia, it belongs to all the people of Canada; yet only the federal government can tax these profits for all the other nine provinces. There are similar resources in other provinces, although of course there are provinces which are deficient in such resources, the wealth from which can be shared by all provinces through these agreements.
The second point, which I think is a more important one, is this master of business taxation. I am going to turn to the Timothy Eaton Company, since the leader of the opposition at one time thought the best way to conduct the government of Canada was to have one strong central office with ten branch offices. Eaton's is a good example of a concern with a head office in Toronto but doing business throughout the length and breadth of Canada. We all know that indignation has been shown at various times in different municipalities by local stores which have their


own staffs and which pay local salaries and local taxes when chain or departmental stores open up a little order office, pay few local taxes or salaries but take business away from local stores. Their main profits are recorded in their head office in Toronto and are beyond the reach of either the municipality or the province, other than Ontario, to touch.
Timothy Eaton did not set up business with the idea of avoiding taxation. He set up his company in the best way he could for commercial reasons and they pay full taxes, but our tax distribution under provincial control does not put those taxes back in the areas where the profits were earned. The federal government can tax them and share the taxes back with the other nine provinces. The same thing is true of a firm like General Motors which has centralized all its operations in Oshawa. Assuming that one-tenth of their product is sold in British Columbia, it follows that one-tenth of their corporation profits should be taxable in British Columbia, that one-tenth of the income tax paid by their workmen should go to British Columbia. But because Oshawa is beyond that province, under a system of provincial taxation that is not possible. If there were ten General Motors plants across the country, one in each province, there would be no problem, but General Motors have found it profitable to have this centralization of business here in Ontario. When the provinces rent their direct tax fields to the federal government they do receive back a share of the profits earned in their province.
These tax rental agreements afford an opportunity of equalization, because the federal government does tax all industry in Canada and does spread out all those tax resources among the signing provinces and can thus give the provinces their fair share of the profits made by Canadian corporations from their operations throughout Canada and through export.
A third point which is important to us in the western provinces is that these tax rental agreements do give us some return for the benefit of the protection which the Canadian parliament has given for many years, particularly to the industries of Ontario and Quebec. I am as much a free trader as anyone, but it is quite true that in a growing country like Canada an infant industry may require a measure of protection until it can get on its feet. That protection is really at the expense of the consumer. When such an industry in Ontario and Quebec because of this protection can sell its goods in the west and make profits it is beyond the reach of those western provinces to tax those profits, but it is not beyond the reach of the federal government. In our powers of taxation in

the way of income tax, corporation tax and succession duties we do get for all Canada our fair share of those profits and by means of these tax rental agreements we spread that fair share across the country.
As the hon. member for Mackenzie (Mr. Ferrie) pointed out, when Saskatchewan gave up the right to collect income tax, corporation tax and succession duties the best they could ever do in those fields was $4,500,000 a year. This year they are going to get $25 million from the federal government as tax rental. Even if their tax collections had doubled in the years 1939-40 down to today they are still getting far more than they could ever have hoped to collect in that province. Yet all they are getting is a fair share of the national wealth through the taxes paid by those concerns and individuals who have done well in this Canada of ours, a share based on population and national production.
We talk a lot about autonomy. The charge is made that these tax rental agreements are stripping autonomy from the provinces. I think there is a far greater freedom for the provincial government in Saskatchewan having $25 million revenue from income tax, corporation tax and succession duties to devote to provincial purposes than having $4,500,000 which was the best they could collect before this plan was inaugurated.
If there was any sign of earmarking these rental payments from the federal government to the provincial governments for specific purposes then there would be some justification for this cry. We are not stripping autonomy from the provinces when the provinces are free to use these large payments in any way they think is best fitted for their purposes within their own province. We have heard the cry that we should earmark federal funds for education, for helping the municipalities, for assistance in roadbuilding and so on, but the moment we do that we will be stripping down provincial autonomy. The best way is the way we are doing now, that is, to turn over these sums, $162 million in all this year, to the provinces for them to spend within their sphere of responsibility as they see best.
There is another important factor in the fact that the provinces are relieved from the burden of collecting these three taxes. They are also relieved from the problems that would be created by varying levels of taxation. It is one of the anomalies of our taxation system that the poorer a province is the higher they must make their taxation rates. The rich province with great industries is able to have low tax rates while the poorer province, as I say, must have higher tax
Tax Agreements with Provinces rates which in turn discourage industry from establishing in those provinces, which continues the disparity between rich and poor provinces. Through these tax agreements we have done away with eight different levels of taxation in the eight signing provinces; there is now just one federal level of taxation.
We have removed the cost of double administration, of having provincial tax offices and federal tax offices doing the same work. We are helping the taxpayer and corporations by removing the necessity for keeping two sets of books, one for the purpose of provincial taxation and the other for the purpose of federal taxation on different bases.
There is just one adverse effect which was pointed out directly by the hon. member for Mackenzie and indirectly by the other hon. members. Since the federal government is doing the major tax collection job for the eight provinces we are centralizing just one thing-centralizing all tax criticism on the head of the Minister of Finance (Mr. Abbott). The provinces are thus enabled to escape almost all criticism. A provincial leader may feel free to go around his province belabouring the federal government, especially the Department of Finance, for the heavy level of taxation, never mentioning the fact that we are collecting his province's share of the succession duties, the corporation tax and the personal income tax. However, the Minister of Finance and this government are quite willing to put up with that penalty because they know that these agreements are in the best interests of the Canadian people.
However, the payments under the tax rental agreements are only part of the benefits flowing from the tax rental plan. The only hon. member who has mentioned the other benefits promised in the green book proposals of 1945 is the hon. member for Winnipeg North Centre (Mr. Knowles) who referred to it in his excellent speech at the resolution stage. If all the provinces yielded these tax fields we promised to do more than share tax revenue with the provinces. We promised that if they would all sign we would enter the social security field by way of family allowances, old age pensions, health grants and health insurance. While all the provinces have not signed-the two major provinces with the largest tax fields have not signed- we have done a great deal toward carrying out those obligations which were mentioned when this tax rental scheme was brought up for renewal in 1945, even though these proposals were contingent on all provinces signing.
There are other large financial grants, not to the provincial governments but to the people of the provinces, through family allowances, through the new old age pension plan;

Tax Agreements with Provinces to the hospitals through hospital grants; to the provincial governments through the trans-Canada highway grants-entering fields which are really provincial fields- and through the recent grants to universities; under all of which we are sending almost $800 million over and above the tax rental payments into those provinces out of the federal treasury, again to ensure uniform appreciation by all Canadians of the wealth of this country. It is certainly a program which has met with great approval across the country. It is true we do not give all this aid to the provincial governments; family allowances and old age pensions go direct to the people. That is the point the hon. member for Winnipeg North Centre made. The agreements with eight of our provinces do not mean that we are giving aid to the provincial governments but to those Canadians who live in those provinces so that they will have the same opportunity as Canadians who live in any other province.
If these things like family allowances and old age pensions were back purely in the provincial field, as the leader of the opposition would apparently like, we can well imagine the very great difference in standards between the family allowance paid in Ontario, with its concentration of industrial and commercial interests, and that which could be paid in a province like Newfoundland. Yet the old people of Ontario and Newfoundland and the young people in those provinces who receive family allowances are all Canadians entitled to the same benefits. I think that real national unity has been achieved in these eight provinces by the fact that they have signed tax rental agreements. Because of that it has been possible to go ahead with many of these programs. I see the hon. member for Winnipeg North Centre bouncing up and down. It is true that it has not yet been possible to go ahead with health insurance but we have gone a long way in other respects in view of the fact that the two major provinces have remained outside the scheme.
With respect to this matter I want to refer now to another instance of opposition by the present leader of the opposition to this program of redistribution of wealth through the federal tax revenues. I am going to turn to page 1803 of Hansard for May 1. I say that most Canadians thoroughly approve of this scheme which has enabled us to have uniform distribution of national wealth to the children of Canada no matter in what province they may reside, to the old people of Canada, to the hospitals of Canada and to the universities of Canada to the amount of $800 million a year all told. Here is the real root of the opposition of the leader of the
[Mr. Sinclair.l
opposition to the tax rental scheme. I am quoting now from his famous radio broadcast of August 9, 1944, which is to be found at the page of Hansard to which I have referred. This is not a heated aside made in debate, later regretted; it is a carefully considered and prepared statement which was broadcast in the province of Ontario. It reads as follows:
This family allowance bill is an obvious bribe ... there is every reason why it should meet with approval in Quebec where there was a very important election approaching . . . Millions of dollars from the pockets of the people of Ontario will go to the province of Quebec under this measure . . . The people of Ontario will be asked to pay nearly half of the $200 million which will be needed as the initial amount to put the Family Allowances Act into effect.
Our attitude toward any measure which takes money from the pockets of the people of Ontario for the special advantage of Quebec is based upon considerations which affect that province alone. You know what those considerations are.
I have never before heard the leader of the opposition when he was so coy as in that last line. I take it the considerations are that in Quebec there are more and bigger families than in Ontario, but every one of those French-Canadian children in Quebec is just as entitled to the same national family allowance as are children in the small families of Optario or any other province. There is the heart and root of the objection of the then premier of Ontario both to the tax rental program and to family allowances; he did not want to share the wealth of Ontario with any other Canadian. I want to be fair to him so far as family allowances are concerned. Since that speech in August 1944 he has of course swung around and now lauds this Liberal government policy. He made a curious defence of that speech in the house earlier this session when he defended it by completely ignoring it and quoting from another speech he made a year later. That is a very curious defence. However, he has now completely swung around and has at last seen the virtues of this great Liberal measure because on Monday, May 19, the Canadian Press carried across the country a report of an address by the leader of the opposition in Quebec. The report reads in part as follows:
Speaking in French, he told audiences here, at Normandin, Mistassini and St. Felicien that family allowances should be increased, even doubled.


Mr. Fleming:: There is not a word of truth in that.


James Sinclair: What a long way he has gone since the days when he classed it as a bribe to Quebec.


Donald Methuen Fleming: There is not a word of truth in that report.


James Sinclair: Mr. Speaker, the Canadian Press service extends from coast to coast, and everyone in the house or in public life knows that the usual lame excuse of any foolish politician whose tongue has outrun his brain is to throw the blame on the press and say that he was misquoted.


James MacKerras Macdonnell: Do you
believe it is true?


James Sinclair: Yes, I do, knowing the kind of statements the leader has made in the past.


Donald Methuen Fleming: You need your head read then.


Jean-François Pouliot: Arthur Meighen was always misquoted.


Mr. Browne (St. John's West):: So is the
hon. member for Temiscouata.


James Sinclair: In conclusion, I want to say that the tax rental agreements with eight of our provinces, associated as they have been with the old age pension plan, family allowances, health grants, trans-Canada highway grants and university grants, have gone a long, long way to equalize opportunity in this country for all Canadians no matter what province they may live in, and have spread the national wealth on a national basis and so strengthened both the provincial governments and the federal government. The plan will be on an even sounder basis when the two central provinces come into the scheme, and I hope that day is not far distant.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
On section 1-Short title.
Stanley Howard Knowles: May I ask the minister if it is the case that this bill when passed will give the government authority to enter into tax rental agreements not only with the eight provinces that have already indicated their willingness to do so but also with the other two provinces?


Douglas Charles Abbott: That is correct.


Stanley Howard Knowles: In view of the fact that the failure to reach over-all agreement did not stand in the way of proceeding with old age security under the new legislation we now have, can it be concluded that failure to reach an over-all agreement does not stand in the way of a nationwide program of health insurance?


Douglas Charles Abbott: I would not think one should necessarily make that assumption.


[Stage Direction]
Section agreed to.
Sections 2 and 3 agreed to.
Tax Agreements with Provinces
On section 4-Compensation payable.
James MacKerras Macdonnell: As I recall it the original calculation was based on the gross national product of 1942.


Douglas Charles Abbott: Under the old agreement, yes.


James MacKerras Macdonnell: This agreement is carrying everything forward five years.


Douglas Charles Abbott: It is to be 1948 so far as the guaranteed minimum is concerned.


James MacKerras Macdonnell: That is my question. Why is it 1948? The original year was 1942. The agreement moves on five years. Why does the year of calculation move on six years?


Douglas Charles Abbott: In considering the whole situation we came to the conclusion that 1948 represented a year in which business conditions were such that in increasing the original guaranteed minima to bring them up to the 1948 basis that was as far as the federal government felt it could properly go and give a guarantee to the provinces that these amounts would be paid no matter what economic conditions might be. 1948 was three or four years after the end of the war, and to a considerable extent conditions had levelled off by then. For this and other reasons it was felt that 1948 was the proper year.


James MacKerras Macdonnell: In other
words, apparently you felt free to take whatever year you liked regardless of whether it was five years from 1942 or six.


Douglas Charles Abbott: Quite so.


Mr. Gibson:: Would the minister say whether during the operation of these agreements the provincial governments have been reasonably fair with the federal government? It occurs to me that we have left quite a loophole here resulting in the federal treasury being deprived of money when we allow the provincial governments to set the royalties on their natural resources. After all, if they take it from us we do not get a chance at it in the form of income tax. I know that the government of British Columbia, for instance, when selling their natural resources to the logging companies pretty well assess what the probable profit in these logging operations will be and they will not allow you more than 20 per cent profit on your operation. They put up the stumpage value to take care of whatever profit there might be in excess of 20 per cent.


Douglas Charles Abbott: Speaking generally our relations with the provincial governments on the operation of these agreements have been most satisfactory.

Tax Agreements with Provinces
As my hon. friend is aware, there is a definition of a proper royalty in the agreement entered into with the provinces and therefore the federal government would be in a position to challenge any royalty which was in excess of what was proper and reasonable or prejudicial to the federal position.


John Lambert Gibson: The royalty would be different from the stumpage value on timber?


Douglas Charles Abbott: I think we are really talking about the same thing.


Agar Rodney Adamson: I think this clause might be the place for the minister to inform me of the difference in computation of the gross national product.


Douglas Charles Abbott: I do not know that I can give the exact difference. As my hon. friend is aware, the gross national product at factor cost eliminates indirect taxes in Canada but not depreciation, whereas at market price it includes both those items. The figure would therefore be lower than at market prices, but as long as you are relating like with like it does not make any difference in the practical operation of these agreements, so far as the provinces are concerned.


Agar Rodney Adamson: The term was new to me and that is why I asked about it.


Douglas Charles Abbott: It is one of these economic expressions.


Agar Rodney Adamson: Factor cost means the gross national product with such items as sales tax and it would also include royalties and stump-age dues deducted?


Douglas Charles Abbott: It would mean the gross national product less indirect taxes, but not less depreciation reserves. My hon. friend will realize that those might well be eliminated for calculations of this kind because as I mentioned in my opening statement, it does not seem appropriate to relate payments which may be made to the provinces to a particular level of indirect taxes which may be raised or lowered for reasons other than a desire to affect the total payments to the provinces. After consideration of the operation of these agreements over five years it was felt that the figure relating to the gross national product in the formula should be based on factor cost rather than market price.


Agar Rodney Adamson: Factor cost means the basic cost of production rather than the price received for the material?


Douglas Charles Abbott: Yes, I think that is a very good layman's or colloquial explanation.


James MacKerras Macdonnell: The minister referred to depreciation a moment ago and
TMr. Abbott.]

that prompts me to ask this question. Will there be any adjustment necessitated by that change in depreciation or is the amount involved not sufficient to make a difference?


Douglas Charles Abbott: I am informed that it is not significant compared to the amount of indirect taxes.


William Joseph Browne: I was not
here this morning when the minister spoke and I wonder whether these amounts which are going to be guaranteed for five years are higher than the provinces have received?


Douglas Charles Abbott: I put a table on Hansard showing the new minimum guarantees and on an average the figures are 50 per cent higher than the current minimum agreements. I also gave figures for the present estimated payments to each province. For instance for Newfoundland, the province in which my hon. friend is probably most interested, the guaranteed minimum is $9,174,624. The adjusted payment for the first year of the new agreement on the basis of present estimates would be $12,291,593. I put on Hansard a table showing the corresponding figures for all provinces.


The Chairman:: Shall the clause carry?


[Stage Direction]
Section agreed to.
Sections 5 to 7 inclusive agreed to.
On the title.
Stanley Howard Knowles: Before the title carries I wonder if I might ask a supplementary question following on the answer made by the minister a few moments ago.
He said that in his view it does not necessarily follow that failure to achieve an overall agreement does not stand in the way of a nationwide program of health insurance. Is it not correct to say that for a couple of years now the federal government has not given that as a reason for not going ahead with health insurance?


Douglas Charles Abbott: I do not think that I want to get into a discussion on health insurance, Mr. Chairman, in the committee stage of this bill. As Mr. Ilsley made it clear, in 1946, and I made it clear in 1947, they have nothing whatever to do with any other phase of federal-provincial relations. They neither prevent nor assure the implementation of such plans as health insurance programs. There is this difference, as my hon, friend appreciates. The question of health is one which is primarily provincial and there are constitutional problems as well as financial problems involved in the implementation of a health insurance plan. I am not prepared today to enter into any discussion of what may or may not happen to health insurance in future years.


Stanley Howard Knowles: 1 was not trying to involve the Minister of Finance in a discussion of health insurance but I was trying to get clear the relationship between the tax rental situation and the proposals that were made to the provinces at the conference in 1945. The minister now says that Mr. Ilsley made it clear in 1946 that the tax rental proposals were not to be regarded as on the same footing as the proposals of 1945. Nevertheless it has been a factor in the Canadian situation in the last few years that some of the measures which were proposed along with the taxation arrangements suggested in 1945 have since been implemented, and it appears to some of us that since failure to achieve an over-all arrangement did not stand in the way of universal old age security, it should not stand in the way of a nationwide program of health insurance.


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


Some hon. Members:: Now.


Stanley Howard Knowles: By leave.


Douglas Charles Abbott: the third reading of the bill.


[Stage Direction]
Motion agreed to, bill read the third time and passed.


Douglas Charles Abbott: the second reading of Bill No. 346, to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways system during the calendar year 1952, and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company.


Jean-François Pouliot: Mr. Speaker, I thank my colleagues who have been kind enough to give me this opportunity to express some views about the legislation now before the house. In the first place I will read my credentials to discuss that legislation.
(Translation):
Province of Quebec,
Municipal corporation of the county of Riviere du Loup.
At a general and quarterly meeting of the municipal council of the county of Riviere du Loup, held in its ordinary place of meeting (county town) of the said county, in the city hall at Riviere du Loup on Wednesday, 11th of June, 1952, at 10 a.m., the following resolution was passed:

Canadian National Railways
The members of this county council discussed the important issue of retaining in Riviere du Loup the Canadian National Railway shops, which is in the general interest of the whole county, as well as the complete overhauling of the Temiscouata railway line.
Reeve Jos. Rousseau, mayor of Saint Jean de Dieu, speaking on this subject, acquainted his fellow members of the county council with the encouraging remarks made in this connection by the Right Hon. Louis St. Laurent, Prime Minister, when waited upon by a delegation from Riviere du Loup at his office in Ottawa.
Consequently the members of the municipal council of the county of Riviere du Loup unanimously resolve to express strongly their support for the retention in Riviere du Loup of the aforementioned Canadian National Railway shops and the complete restoration of the said Temiscouata railway, because of its vital interest first of all to the city and because of its immediate benefit to the whole area.
Therefore, the council place their confidence in the Prime Minister, the Right Hon. Louis St. Laurent and are also counting upon his colleague, the Minister of Transport, Hon. Lionel Chevrier, and his other colleagues in the cabinet.
The council members would feel they were remiss if they did not approve the untiring work of our valiant and devoted M.P., Mr. J. Francois Pouliot, in these cases and we invite him to continue working towards the success of this matter. Carried.
Jos. Rousseau, Reeve
Paul E. Roy., sec-treas., C.M.C.
(Text):
Let us have a look at the past and the future financing of the C.N.R. Bill No. 308 and this one are the Siamese twins of high finance. The former one dealt with the indebtedness of the C.N.R. to the government and the public until December 31, 1951. The latter provides for unusual ways and means to brighten the C.N.R. picture during the calendar year 1952.
In virtue of Bill No. 308, the total indebtedness of the C.N.R. to the government and the public for loans made from 1938 to 1951 was reduced by one-half. In the second place, in consideration of that so-called release, the C.N.R. transferred to the government 736,385,405 dollar shares of preferred stock of the company bearing hypothetical interest of 4 per cent. In the third place, the initial stated value of the no-par value of the capital stock was reduced to $396,518,135.06. In the fourth place, the initial value of $1,218,642,195.27 of the 5 million shares of the capital stock of the securities trust was also reduced to $378,518,135.02. To summarize that piece of legislation, the government is holding in the first place $736 million of preferred stock bearing a problematic interest of 4 per cent; and in the second place, the company has acknowledged a moral debt of $775 million in common stock.
With operating revenues of $553 million in 1950 and $624 million in 1951, it might have been expected that the management could

Canadian National Railways have made both ends meet in 1952. I cannot understand the financial policy of the Canadian National Railways. In 1937, according to the old ways of Roman law, the debts were cancelled. One-half of them were cancelled again by legislation a few days ago. Yet here we- are seeing the C.N.R. going to borrow again formidable sums of money. My fear is that they are extravagant. That is easy to see by looking at the report so extravagantly printed as compared with that modest one of the C.P.R.
Before starting to discuss the bill before the house I should like to draw your attention, Mr. Speaker, to the fact that the stenographic report of the committee on railways and shipping has been tampered with. We had to wait quite a long time for the publication of the volume No. 4 of the minutes of proceedings and evidence of the railways and shipping committee. Many changes have been made in the stenographic report. Here is one at page 222:


Jean-François Pouliot: If the gross revenue of the railway
is $600 million, and if the government will buy 4 per cent preferred stock, that would be $18 million.
That figure should be corrected; it should be $24 million. To continue:


Mr.   Gordon@: That is right.


Jean-François Pouliot: Then it would mean that instead of paying for a deficit of $18 million, they will be buying shares in that amount?


Mr.   Gordon@: Well, now to follow up Mr. Macdonnell's question . . .
An important statement by the president of the railway has been struck out of the record at page B-22 of the stenographic report, namely "That is right." That was the answer of the president to my question and it does not appear in the printed report. I did not check all the changes; but that one shows that I was not so wrong when I asked a question about an oath being taken by the witnesses who appear before our committees.
Notwithstanding the cancellation of debts in 1937 and the most generous provisions of Bill No. 308, the C.N.R. again intends to borrow $342,890,990 in virtue of the legislation that is now before us. If the operating revenue in 1952 amounts to as much as in 1951 it means that the C.N.R. wizards will spend nearly $1 billion this year. Here are the figures: $624 million operating revenue of last year, plus $342,890,990 to be borrowed by this bill, making a total of $966,890,990. According to the above figures the operating expenses of the C.N.R. this year would amount to two and a half times those of the Canadian Pacific Railway. Last year they were $402 million. This is due in large part to the purchase of new equipment, to be paid for by borrowed money in virtue of this bill. The C.N.R. has purchased new equipment to the amount of $96 million. The C.P.R., with
fMr. Pouliot.]
net earnings of nearly $27 million last year,
did not dare to spend so lavishly on the purchase of new equipment.
The road and equipment property of the Canadian National Railways is assessed for more than $2 billion. The report does not mention the number nor the value of steam locomotives, but their number must be large and their actual value a real asset. Does the management intend to bury all the fine steam locomotives alive in scrap iron cemeteries? There was no inventory of the equipment in the Canadian National Railways report. The management should peruse the annual report of the Kansas City Southern Railway and of the Norfolk -and Western Railway, which are, I believe, the first and second most efficient railways in North America.
It is only fair to say that where diesels are ousting steam there is waste, owing to the need for both sets of servicing shops, steam and diesel. When Mr. Gordon was appointed I wondered why he did not borrow a man from the Kansas City Southern or the Norfolk and Western. Diesel locomotives cost $100,000 more than steam locomotives. There are 24 of 1500 to 1600 horsepower in the 1953 budget. At page 74 of the minutes of proceedings and evidence Mr. Gordon said:
For the five-year program which we have in mind, at the present trend of prices, it would cost us roughly about $95 million; and for complete dieseli-zation of the C.N.R. it would cost us about $500 million.
At page 71 Mr. Gordon said:
By the economies achieved we will pay off that expenditure in a period of ten years.
The five-year program was extended to ten years. At page 72 Mr. Gordon said:
It may be twenty years or twenty-five years before we have completely dieselized, but I say that inevitably there will be no steam locomotives as time goes on.
Dieselization is the fad of the C.N.R. for the time being, although Mr. Gordon said at page 78 of the report:
We are very interested in turbine development and are keeping closely in touch with the experiments which are going on. We are also closely watching an experiment which is going on between our research and development branch and McGill university which relates to the relative economy of oil-fired gas turbines and coal-fired gas turbines. That presents a real possibility and we are watching it with great interest.
It is possible to convert steam locomotives into turbine-propelled locomotives, and some research is being undertaken not only by McGill university but also by the department of technical surveys. It may mean that in future diesel locomotives will be outmoded and the railways will try some other locomotive. At page 92 I asked Mr. Gordon if he had attended the dinner of the engineering

institute where the main speaker was the Prime Minister. He said that he had not been there but that he had read the report of the Prime Minister's speech about atomic power. The Prime Minister said that as soon as the cold war is over we could expect atomic power to progress to the point of meeting civilian needs. Then I asked Mr. Gordon the following question:
I wonder if the management or the scientists who work for the railways and who are in touch with McGill university are also in touch with the atomic board of control? Are they?


Mr.   Gordon@: Mr. Fairweather, our vice-president
in charge of research, is a very extraordinary individual and he keeps very closely in touch with all these developments. About three months ago he attempted to explain atomic power to me and he managed to make me understand it, so I can assure you that he is very closely in touch with current developments in this field.


Jean-François Pouliot: This is only a preamble to what I
am going to ask you. Owing to Mr. Fairweather's learning and interest in scientific matters, can you foresee the date when diesel locomotives will be replaced by locomotives which will use atomic power instead of oil?


Mr.   Gordon@: I am afraid that is going too far
into the future for me to predict. But I will say this: that developments in the scientific world affecting the production of energy are something that we will always keep in touch with; and if it becomes a practical matter, we will have to deal with atomic energy just the same as we deal with diesel engines now. There is a constant stage of evolution, and there is no place where such developments are more apparent than in the transportation field, because energy is one of our most important factors.


Jean-François Pouliot: I take it that if atomic energy proves to# be practical, you will abandon all the diesel locomotives?


Mr.   Gordon@: It will depend on the economics of
the situation; but what we have to think about here is the cost involved in scrapping existing equipment, and what savings could be made. I think that we are much too far away from the practical appreciation of the costs involved to form any intelligent judgment about the matter yet.


Jean-François Pouliot: Well, do you consider it to be
possible?


Mr.   Gordon@: I do not rule out the possibility.
I do not rule out anything as being impossible.


Jean-François Pouliot: You cannot say then that it is impossible?


Mr.   Gordon@: No, I cannot.


Louis-René Beaudoin: Carried.
This is to be found at pages 92 and 93 of the report. I draw your attention to the fact that Mr. Gordon has said there there is constant evolution in matters of energy. But on June 19 the hon. member for Cape Breton South (Mr. Gillis) made a most interesting statement about a United States company which claims that it has put out a good type of coal-fired engine which compared favourably with the diesel. What I appreciate is the fact that the hon. member has stated in the house that the statement by Mr. Gordon to the effect that steam locomotives are no longer built is untrue. I agree with the hon.
55704-226J
Canadian National Railways member on that. He added that the Department of Mines and Technical Surveys was carrying on research to see if an engine using coal could not be developed to operate just as efficiently and economically as a diesel engine. He added that he thought Mr. Gordon could well have carried on his program from Toronto west to a certain point, and then could have gone rather slowly with dieselization east of Montreal. He referred to an important statement by Mr. Gordon to the effect that with that dieselization plan the Canadian National Railways would buy
280,000	tons of coal less from the maritime provinces than they do now.
I wonder if the government of Nova Scotia has been awakened to the results the miners of Nova Scotia would suffer if Mr. Gordon's ambitious plans are carried out. I congratulate the hon. member for the interest he has shown in the welfare of his constituents, and I was very much interested also to hear the comments of the hon. member for Cumberland (Mr. Black) on the same subject.
Hon. members will have seen in the press last month that in the United States a shipbuilding firm is laying this month the keel for the first American atom-powered submarine, which shows that atomic energy is a reality. Not only that, but Mr. N. R. Crump, vice-president of the Canadian Pacific Railway, stated in Vancouver on May 10:
"It is quite within the realms of possibility that within our time atomic engines may prove practicable and economical for commercial transportation", Mr. Crump said in an address to the 66th annual meeting of the Engineering Institute of Canada.	[DOT]
The days of the pioneer developer are not over, he said.
"The glamorous days of spanning a continent and laying rails through the Rocky Mountains may be gone, but the search for the quicker, safer and more comfortable and more economical means of transportation continues."
He found here a field for the skill, imagination and ingenuity of the engineers.
"As I visualize the future, major developments may be anticipated in all the four principal aspects of transportation-power, vehicle, way and communications.
"It is safe to say that nowhere else in the world has the engineer played so large a part in the development of a nation as in Canada."
Naturally, Mr. Gordon's dieselization program was approved by the editorial of the Globe and Mail; but it does not amount to much. According to those people we are in a period of transition. Why waste millions on costly experiments? I mean it is absurd to take for granted that the turbine locomotives and atomic engines will not displace the diesel locomotive in the near future.
With the money that is spent by the Canadian National Railways they publish

Canadian National Railways pamphlets. I have one which was issued this year, entitled "Quebec, La Doulce Province". At page 18, on the upper left corner, there is a beautiful photograph with the caption of Rimouski. On the upper right hand side of the page there is another picture of a settlement bearing the caption Riviere du Loup. In fact, it is the same as all that is done by the Canadian National Railways; they are not accurate. The picture of Rimouski on the left is that of Riviere du Loup. It is a very fine picture of Riviere du Loup. The picture described as Riviere du Loup is not at all that of Riviere du Loup. That is the way they do advertising in our part of the world. I ask the management if it was done on purpose; if not, the officials in their public relations office are not qualified to hold their positions.
Riviere du Loup is the place where Sir John A. Macdonald spent more than twenty summers while he was prime minister of Canada. Hon. Alexandre Taschereau, former premier of Quebec, has been living there for fifty years. At the present time the Prime Minister of Canada (Mr. St. Laurent) has chosen to have his summer place there. It is also the place where my distinguished colleagues, the Minister of Veterans Affairs (Mr. Lapointe) and the hon. member for Bellechasse (Mr. Picard) were born. All those who pass through Riviere du Loup know that it is a progressive city. I am proud to live there. It is unfortunate that the province of Quebec has always been snubbed by the Canadian National Railways management. I have been a member of parliament for many years-	.


Mr. Deputy Speaker:: Order. I ask the hon. member for Temiscouata to indicate to the house how he relates his remarks to the principle of this bill which has to do with the authorization by parliament of the provision of moneys to meet certain capital expenditures, and to authorize the guarantee of certain securities.


Jean-François Pouliot: I shall explain the situation to you. This bill is to implement the budget of the Canadian National Railways. If you will take the trouble to look at the bill you will see that the figures of the budget are included in the bill. In the budget is an enumeration of the work to be done this year by Canadian National Railways. In section 3 reference is made to additions and betterments, excluding new equipment, $23,014,271. There is also new equipment obligations incurred prior to 1952 that become due and payable in 1952, $93,647,760.


Mr. Deputy Speaker:: Perhaps I might
indicate to the hon. member that when I asked him the question I had looked at the bill and saw that the capital expenditures referred to are precisely those enumerated in section 3 of the bill. That is what he should relate his remarks to, and not what the management has done in Riviere du Loup or the province of Quebec.


Jean-François Pouliot: You did not let me finish my argument. I want to show that we have suffered injustices in the past and I hope they will be corrected this year with the moneys that are going to be voted for the Canadian National Railways. If I cannot lay my grievances before the house those wrongs will never be remedied. In order to obtain satisfaction this year from the Canadian National Railways I have to lay my grievances before the house. There is no other way.
When we were discussing Bill No. 308 the other day the Minister of Transport (Mr. Chevrier) raised an objection and I did not insist because that bill related to previous financing of the Canadian National Railways. This bill relates to present and future financing of the Canadian National Railways. My grievances could not have been remedied in the past. If they had, I would have no grievances to present today.
This is a matter for the future and I cannot do otherwise than to bring it before ihe house. I refer to the way in which from time immemorial we have been dealt with by the Canadian National Railways. I must do that in order to have these wrongs redressed this year. I hope I have made myself clear. I submit that I am perfectly in order in stating that in the past the management of the Canadian National Railways have snubbed the province of Quebec. There is no reason for that and I hope that this year they will recognize their responsibilities to my great province, and do better than they have in the past. That is my argument, and I hope I have been able to convince Your Honour.
I only want to say that two great newspapers of Quebec city, Le Soleil and L'Action Catholique, support my contention that the province of Quebec has not had a fair deal from the Canadian National Railways from time immemorial. I should like to refer to an answer given by the parliamentary assistant to the Minister of Trade and Commerce (Mr. Mcllraith) on May 15 to a question asked by myself as reported on page 2226 of Hansard. I think that proves the statement I have just made. He gives the railway

mileage per thousand inhabitants in the different provinces as follows:
Newfoundland	 2 0
Prince Edward Island	 2-9
Nova Scotia	 2-2
New Brunswick	 3-6
Quebec	 1-2
Ontario	 2-3
Manitoba	 6-2
Saskatchewan	 10-5
Alberta	 6-0
British Columbia	 3-3
The average is 3 0 per 1,000 inhabitants, and that shows that we have one-third of the average mileage in Canada. Then the mileage per 1,000 square miles of land area was given as follows:
Newfoundland		 4-9
Prince Edward	Island	 131-0
Nova Scotia	 67-3
New Brunswick	 66-8
Quebec	 9-2
Ontario	 28-8
Manitoba	 22-0
Saskatchewan		 36-7
Alberta	 22-7
British Columbia	 10-8
The average is 19-8, and in this case we have less than one-half the average. Surely we have reason for complaint. I brought up this matter before the committee on railways, canals and telegraph lines, and I should like to refer to a question which 1 put to vicepresident Fairweather of the Canadian National Railways on May 14, as follows:
Will you please tell me what is the mileage of the railways in British Columbia compared to the province of Quebec by thousand people?
Mr. Fairweather replied as follows:
Well, I am sorry, sir, I cannot give that offhand; I would be pleased to figure it out.
That information should be on the desk of all the officials of the Canadian National and the Canadian Pacific. On the same date, as reported on page 125 of the proceedings of the committee I said:
I will repeat before the minister what I have said in the first place, it is that the Canadian National Railways are snubbing the province of Quebec, they are giving us the cold shoulder and they treat us like country cousins.
I am most thankful to one of the brightest members of the press gallery, Mr. Douglas How, who wrote a most excellent dispatch. It was sent by the Canadian Press to all the papers that form part of that organization. In the Montreal Gazette of May 15 the article was headed "C.N.R. snubs Quebec, B. C. is unfair, Temiscouata M.P. tells Commons." The Trail Times published the same story on the same day under the heading, "C.N.R. Snubbing Quebec, B.C. unfair, Pouliot." The Montreal Star had this headline: "Pouliot back in old form at C.N.R. Kiti-mat hearing." Le Droit of Ottawa headed their
Canadian National Railways article this way: "Les chemins de fer natio-naux levent le nez sur le Quebec, declare Pouliot". The Fort William Times-Journal had this heading: "Fiery Pouliot claims C.N. unfair to Quebec." And so on and so on. I will not mention any more of them.
To show you how we are dealt with by the Canadian National Railways, there were day labourers who shovelled snow in the winter months, particularly in February, and their unemployment insurance books were sent by the railway to Campbellton. I tried to get them back. They could not collect any insurance, and my last information was that at Moncton they had 8,000 books of unemployed people.


Mr. Deputy Speaker:: I must inform the hon. member that he has exhausted his time.


Jean-François Pouliot: As I spoke immediately after the minister I am entitled to more than forty minutes.


Mr. Deputy Speaker:: Order. The hon. member claims that because he spoke immediately after the mover he is entitled to more than forty minutes. That is by virtue of standing order 37 which reads as follows:
No member, except the prime minister and the leader of the opposition, or a minister moving a government order and the member speaking in reply immediately after such minister, or a member making a motion of "no confidence" in the government and a minister replying thereto, shall speak for more than forty minutes at a time in any debate.
The general rule is that no member shall speak for more than forty minutes at a time in any debate except the Prime Minister, the leader of the opposition-


Jean-François Pouliot: I am not the Prime Minister.


Mr. Deputy Speaker:: -or a minister moving a government order and the member speaking in reply immediately after such minister.


Jean-François Pouliot: Yes.


Mr. Deputy Speaker:: I presume those two lines are the ones which, in the opinion of the hon. member, apply to his case at this time. He is referring to a government order having been moved by a minister or someone on his behalf and the member, in this instance the hon. member for Temiscouata, who speaks in reply immediately after such minister. May I tell the hon. member that at first sight in my view the word "reply" refers to an hon. member sitting on the opposite side.


Jean-François Pouliot: No, no.

Canadian National Railways


Mr. Deputy Speaker:: Order. The hon.
member may give his views after I am finished but at the moment I would ask him to listen to what I have to say. In my view the word "reply" has reference to the reply made by a representative of the opposition. In this case a government order was moved and no speeches were made. It may be argued that, the mover having risen in his place and having agreed to the chair putting the motion that the bill be read a second time, it is to be understood therefrom that he has said, "I so move". I would ask the hon. member to look at citation 294 on page 114 of the third edition of Beauchesne and especially at citation 288 on page 113 which reads as follows:
The member who makes a motion may give the name of his seconder who will, if necessary, lift his hat as evidence that he has intimated his consent, and the seconder will then be allowed to speak on the question. But if the seconder should rise and say only a word or two.-for instance "that he seconds the motion,"-he is precluded from again addressing the house.
In this case the mover, the Minister of Finance, did not say a single word. There were no speeches. Therefore how can any other hon. member offer a reply? If we are to understand from the chair putting the motion that the minister or someone on his behalf has said, "I so move" and that therefore he has spoken, then a member may stand up and offer a reply. In, my view that reply, according to standing order 37, is one that is offered by a member of the opposition and not by a member on the government side. I would also point out that the last paragraph of citation 294 reads as follows:
If a member who moves an order of the day should rise and say only a word or two,-for instance, "that he moves the order,"-he is precluded from again addressing the house; except if the order of the day be a substantive motion or the second reading of a bill, in which case he will be allowed a reply.
That provision takes care of the reply that can be made by the minister or someone on his behalf who has moved a government order. The point on which I should like to hear the hon. member is whether in his view he thinks the minister has spoken merely by consenting that the motion for second reading be put by the chair, and that therefore a reply can be offered. In the second place, if a reply can be made, then according to standing order 37 should it not be made by a representative of the opposition and not by a member sitting on the government side?


Jean-François Pouliot: The rule does not say that the minister shall make a two-hour speech in moving second reading of a bill which has to be replied to. It was the Minister of Finance who moved second reading. He chose
not to speak in explanation of the bill, which was not asked of him, and I rose to speak immediately after the motion was put. If I had not spoken perhaps the motion would have carried, but I will tell you that I appreciate the courtesy of the hon. members in the opposition groups who have given me the opportunity to speak immediately after the motion was put. More than that, I will tell you that the standing order makes no difference between government supporters and opposition members. We are all alike in the house and the same rule applies to opposition members as to government members. In addition, I do not know anything about the book from which you have quoted except the standing orders of the house. One of the authors of these compendiums told me one day that I had never quoted him in the house. I said, "Sir, it is for a very good reason. I have never read your book."
The rules of the house should be interpreted with fairness in order to give members the opportunity to say what they have to say. I submit it is not necessary for a member to make a long speech to afford the opportunity to the member who speaks after the motion is put to speak for forty minutes or more. I am not asking for the indulgence of the house. If you do not intend to reconsider your decision in the light of what I have said I will ask for a vote of the house, and even if I am alone I will not be displeased'. I must tell you that I am greatly surprised at the interpretation you have given in your ruling, and I hope you will reconsider your decision.


Mr. Deputy Speaker:: It does not happen very often that a member offering to reply to the mover of a government order is on the same side as the government. That is what struck me at first.
I am inclined to agree with the hon. member that the mover of a government order does not have to make a two-hour speech or a forty-minute speech in order to move the order. It is understood that when the motion is put from the chair the mover has said, "I so move". The minister may stand up and indicate to the chair by taking a bow that he does so move and one must understand that he has so moved. From that point on the Speaker puts the motion and an hon. member may stand up and offer the reply referred to in standing order 37. That is the interpretation I am, inclined at this moment to give to the standing order.
As I said, the point has not occurred before and it is difficult for me to decide. The hon. member for Temiscouata (Mr. Pouliot) will understand that I wish to be as fair as I can

under the circumstances to him or to any other hon. member. Perhaps I could take advantage of a practice which is very well recognized in this house; that when there is a point about which the Speaker is doubtful he may ask opinions of other experienced members of the house. I would appreciate it, therefore, if at this moment other experienced members of the house would comment on the interpretation I have given, and also on the views expressed by the hon. member for Temiscouata, about the meaning of the word "reply" and who should be entitled to take advantage of standing order No. 37 in the case of a reply. If no hon. members wish to offer opinions at this time I will have to make my own interpretation and decide now, and there would always be the recourse of appealing my ruling.


George Alexander Drew: I did not intend to make any observations in regard to the point raised. I do not recall it having been raised before and the only reason I rise now is because a decision on one occasion, as we have discovered, is apt to become a precedent for another.
As I conceive the rules in regard to debate they are related to the fact that under our system there is on one side the government and on the other side the opposition. As I understand the rules, when they use the term "reply" in response to a statement of the Prime Minister or a member of the government it is a reply by the opposite side of the house. With very warm regard for the hon. member for Temiscouata I nevertheless did not wish to have my silence taken as indicating that I was willing to accept the proposition that he is entitled to reply on behalf of the opposition. I am not saying that facetiously; I think that would be the result of such' an interpretation of the rule as. he puts forward. I think the very fact that the statement is made that the minister presenting the case for the government may exceed the time limit and that it may be exceeded by the member immediately following him in reply is related to our system of having two sides in this house. I do submit, with respect for the views of the hon. member who has sat here for so long, that the reply in this case is obviously intended to refer to a reply by some member of the opposition speaking in reply to a member of the government.


Stanley Howard Knowles: Perhaps I might say a word, Mr. Speaker, on the interesting point raised by the hon. member for Temiscouata and on which you, sir, have made certain comments. With great respect, I am not so sure in my own mind that it matters whether or not the minister moving the order makes a speech.
Canadian National Railways I cannot see that that would have any bearing on whether the member speaking in reply immediately after is entitled to the extra time allotted under standing order 37. If a ruling were to be made that because the minister had not made a speech therefore the first opposition member could not have additional time, we would get into the situation where the minister could easily prevent a lengthy speech from the opposition side of the house simply by making no speech at all when he moved the order. It seems to me it has to be taken, for granted that the minister moving the order, even if he does not avail himself of the right to speak, has spoken by the fact that he has made the motion.
I offer that comment with respect, sir, with regard to part of what Your Honour has said. Obviously I am in disagreement with that part of what you said.


Mr. Deputy Speaker:: I have already agreed
to that.


Stanley Howard Knowles: Then we are making headway.
The point raised by the hon. member for Temiscouata, as to whether he comes under the provision of standing order 37 wherein it refers to a member speaking in reply immediately thereafter, does raise a difficulty. If he, a member on the government side supporting the minister and supporting the bill, is to be regarded as a member speaking in reply, and if such a ruling were made, then in future if the Speaker in the chair at the time happened to see a government supporter as the second speaker, merely because an opposition member was a little slow in getting to his feet, we would have the result that two long speeches could be made on the government side, but no member on the opposition side except the leader of the opposition would have the right set out in standing order 37. That is one result of such an interpretation which would have to be considered. Obviously that would be unfair.
The other point I wish to draw to your attention is one that I have looked up since the matter arose. As a matter of fact I was not sure I would get it in time to be able to refer to it before you ruled; but in looking in Beauchesne's third edition, in the annotations following standing order 37, one finds in citation 219 a reference to a discussion which although not exactly the same does bear on the point now before us. It occurred in the House of Commons in 1929. I have sent to the library for the volume of Journals referred to in that citation and I have been looking through pages 394, 395 and 396 as suggested by the citation.
I find on that occasion the order before the house was a motion to go into committee

Canadian National Railways of supply. It had been moved by Mr. Robb and the first speaker was the then member for Winnipeg North Centre, my predecessor, the late Mr. Woodsworth. It appears that the Speaker on that occasion had stopped Mr. Woodsworth at the end of his forty minutes. He was asked, however, to reconsider his ruling and two days later he gave a revised ruling. The incident itself occurred on Wednesday, May 8, and the revised ruling of the Speaker of the day was given on May 10, 1929. It is a lengthy ruling which I shall not quote in full, and I want to make it perfectly clear in drawing attention to this that the situation was a little different because it was with respect to a motion to go into supply. Nevertheless in the ruling of the Speaker of that day there is this key sentence:
Therefore, Mr. Woodsworth, in order to speak longer than forty minutes, was bound to argue against Mr. Robb's motion.
There may be other rulings, but that is the only one I have been able to find and it certainly gives guidance to us today. The Speaker was attempting to interpret the meaning of the words "in reply". In fact a little earlier he said:
I have since given the most serious consideration to the interpretation of this standing order and as I said the whole question hinges on the meaning of the words "in reply" as they appear therein.
Your Honour today said the same thing. Mr. Speaker Lemieux went on to say this:
What is a reply? According to the King's English dictionary it is:-
"That which is said or written in answer to what is said or written by another; rejoinder; response."
Therefore, Mr. Woodsworth, in order to speak longer than forty minutes, was bound to argue against Mr. Robb's motion.
Then he went on to point out that since Mr. Woodsworth was opposed to the motion for Mr. Speaker to leave the chair for the house to go into committee of supply until he had had an opportunity to air the grievances which Mr. Woodsworth had in mind at that time, therefore he was opposing the motion. He thus qualified as the first member following the minister and speaking in reply thereto, in the sense that he was opposed to Mr. Robb's motion. On that basis Mr. Speaker Lemieux reversed his decision of May 8 and decided that under those circumstances Mr. Woodsworth should have been allowed to speak longer than forty minutes.
I leave it to you, Mr. Speaker, as to whether or not the provision should be interpreted any wider than that. Mr. Speaker Lemieux did not have before him a situation such as we have today where the first member following the minister is a government supporter. He did say, however, that Mr. 

Woodsworth was speaking in opposition to Mr. Robb's motion; therefore he was speaking in reply and had the right to speak for more than forty minutes. The question Your Honour has to decide is whether the speech by the hon. member for Temiscouata can be construed as a speech in reply within the meaning of standing order 37. The ruling to be made seems obvious, but I leave it to Your Honour.


Mr. Deputy Speaker:: Before I go any further, perhaps I might ask the hon. member for Temiscouata if he intends to vote against the motion for second reading of this bill.


Jean-François Pouliot: Mr. Speaker, I will express my opinion but I will accept no direction from anyone. I am a supporter of the minister, but I feel that this legislation should not be approved in toto. There is no ruling of a previous Speaker that will force me to say things that I do not want to say. My speech is one which is critical of the management of the Canadian National Railways to which we are lending more money. I am not going to say anything against the minister, his colleagues or the government; but I complain of the management of the Canadian National Railways. Is that enough, sir?


Mr. Deputy Speaker:: I asked the hon. member that question merely in order to make as sure as possible that the ruling that I am about to give will be fair. The House of Commons is composed of the government and the opposition and both have rights and functions. It seems to me that the standing order means the member of the opposition who, immediately after the minister who has moved a government order, speaks in reply, in criticism of the measure that has been moved. It seems to me that he is the one who is meant by the standing order.
May I consider for a moment or two 'the precedent that was quoted to us a moment ago by the hon. member for Winnipeg North Centre (Mr. Knowles). It appears that Mr. Speaker Lemieux, when he gave his own interpretation of this standing order and the words "in reply", understood that an hon. member, no matter what side of the house he may be on, who stands up immediately after the minister and argues against the measure that has been moved by the minister, within the terms of standing order 37 is allowed to speak for more than forty minutes.
From the remarks made by the hon. member for Temiscouata I did not gather that he was arguing against the principle of this bill. He said he was airing grievances and

that he had complaints against the management of the C.N.R.; but at no time in his speech could 1 discover that he was arguing against the principle of this bill and therefore arguing against its second reading. That is why I asked him that question-it was to enlighten me as to the trend of his argument-whether he was arguing against the second reading of this bill. Because if it was the case that he was arguing against the second reading of the bill, then he may be within the terms of the interpretation given by Speaker Lemieux and be entitled to speak for more than forty minutes.


Jean-François Pouliot: Mr. Speaker, on a question of privilege I will give you some confidential information. Before rising to speak after the motion was made, I went to see the financial critic of the official opposition, the hon. member for Greenwood (Mr. Mac-donnell), and asked him whether he was going to speak, because I wanted to speak for more than forty minutes. The hon. member for Winnipeg North Centre (Mr. Knowles) was not in his seat but I spoke to his leader who had no objection to my suggestion. I spoke to the hon. member for Cape Breton South (Mr. Gillis) who said he did not intend to speak. I also saw the hon. member for Peace River (Mr. Low). I asked him if he intended to speak and he said no. After all that, I rose.
I do not want to deprive the opposition of any right. I acted as a gentleman; I saw them and I asked them what they wanted to do. I would have asked the hon. member for Winnipeg North Centre if he had be'en in his seat, but he was not there. I asked his leader and one of his colleagues, and the leaders of other parties. I did not speak to the leader of the opposition (Mr. Drew). I do not know whether or not he was here. However, I spoke to the hon. member for Greenwood, as financial critic, and I asked him if he would allow me to rise after the motion was made. Now, sir, that is that.
I sat under Mr. Speaker Lemieux and I know where his rulings were manufactured. It is a most absurd thing to suggest that one should have to denounce the government in order to enjoy the liberties that we have under the standing orders of the house.


Mr. Deputy Speaker:: Order. Perhaps I should ask the hon. member not to indicate that anyone has suggested to him that he should vote against the government. The hon. member will understand that if the Speaker were to give rulings without at any time asking hon. members to provide any explanation of their views, perhaps the hon.
Canadian National Railways member would be the first one to object. Because I have asked the hon. member for his views on a certain point in order to make the fairest possible ruling, I hope he will not suggest that there has been any indication given to him by me, at least-, that he should vote against the government.
I should like to have this point made clear.
I think I have heard sufficient, and I am prepared to give a ruling.


Stanley Howard Knowles: Before you rule, Mr. Speaker-


Some hon. Members:: Sit down.


Mr. Deputy Speaker:: The hon. member for Winnipeg North Centre has the floor.


Stanley Howard Knowles: On a point of privilege, Mr. Speaker, I should like to say to the hon. member for Temiscouata that if he had approached me, as he said he approached the others, I might readily have agreed to unanimous consent being given for such time as he might feel he required; but I am sure he will agree with me that there is a wide difference between getting the consent of the house for a specific occasion and having a ruling made that can have serious consequences for the future. That is the point at issue at this time.


Mr. Deputy Speaker:: In my opinion a reply can be offered by any hon. member in this house provided that, by debating the measure which is before the house, he has shown that he is arguing against it. I do not take that from the speech of the hon. member, and therefore he was not speaking "in reply" within the meaning of standing order 37, as I understand it and as set out in the ruling of Mr. Speaker Lemieux which is to be found in the Journals of the house, volume 66, page 394. The hon. member having exhausted his forty minutes therefore cannot speak any longer.


Lionel Chevrier: I should like to rise at this point to answer some of the statements that have been made by the hon. member for Temiscouata. I am sure he will understand it is not because of the high regard that I have for him that I do rise at this point-


Stanley Howard Knowles: Or because of the lack of high regard.


Lionel Chevrier: Or rather because of the lack of high regard, as the hon. member has just pointed out.
When we were considering another measure the other day the hon. member made certain statements which I did not take too seriously because I did not think they were made seriously, and I made no reply. Today these charges have been repeated, and I

Canadian National Railways feel it is my duty and my responsibility, Mr. Speaker, to say something on this occasion. I will not repeat what was said in an earlier debate because I have no right to do so. Neither can I refer to what took place earlier in this debate because unfortunately I was not in the house. But there seems to be an opinion in my hon. friend's mind, rightly or wrongly, that certain questions answered by the Canadian National Railways are dissociated, to some extent, from the minister. I must say to my hon. friend, with all respect again to him, that I must take the responsibility in this house for any of the answers that are given by the Canadian National Railways. Of course it is his privilege to criticize those answers, as it is his privilege to criticize the management on this occasion. But the questions which have been answered by the management of the Canadian National Railways, as is their practice, are passed upon by me, and I must take responsibility for them. I must also accept my share of any criticism that is levelled at the management.
Then there seems to be a feeling in my hon. friend's mind that the Canadian National Railways has discriminated in some form or other against the province of Quebec. May I say to him, again with the greatest courtesy, that that statement is not factual. That statement is inaccurate, and I have reasons for saying that. It is not the policy of the management of the Canadian National Railways to discriminate against any province of the country. On the contrary, it is their policy and their responsibility to manage the affairs of the railway in the best interests of the system and in as equitable a manner as can be done for the benefit of the country. I do not think it is any criterion of discrimination to say there are fewer miles of railway in one province than in another. That of itself is not evidence of discrimination, because if one looks at it from another angle, the province of Quebec has benefited largely from the operations of the Canadian National Railways not only because the head office of that company is in that province, as is the head office of a subsidiary of the company, Trans-Canada Air Lines, but also because of large capital expenditures which have been made all across the country, of which the province of Quebec has received an equitable share.
With reference to the Temiscouata railway, at the last session of parliament the Canadian National Railways took over that railway in line with recommendations made by the hon. member for Temiscouata in this house and elsewhere. They have sought to bring the level of that line up to the level

of the Canadian National line. They may not have succeeded in doing that to the extent my hon. friend would have wished, but to a large extent the level of employment, the rate of wages and many other conditions that exist with reference to Canadian National employees generally were made to apply to the employees of the Temiscouata railway. Therefore I say to my hon. friend in as friendly a fashion as I can that while he has the right, as has any other hon. member, to complain about the management of the Canadian National Railways, still I think the management-in fact I am positive-has in no way discriminated against the province of Quebec.
I have confidence in the management of the railway and so has the government. I can only say it is true at times the management do make mistakes from time to time; they are not infallible.


Jean-François Pouliot: Hear, hear.


Lionel Chevrier: And they may have made the mistake-which I am not prepared to admit- that my hon. friend had in mind in the committee; but I say that the charge that there has been discrimination against one province in particular is certainly not tr.ue. I repeat that the management of the Canadian National Railways, in my humble opinion, are doing an excellent job and I trust they shall continue to do so.


James MacKerras Macdonnell: Most of what I want to say can be said in committee, Mr. Speaker. There are just one or two brief comments I wish to make. I do find that these figures give an indication which is somewhat inconsistent with some of the conversation which was had at the time the recapitalization bill was before us earlier. I shall refer to that more in detail. Having given that indication may I say that so far as I am concerned we may now go into committee.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
Section 1 agreed to.
On section 2-Definitions.
Jean-François Pouliot: This clause gives a definition of "national company" and "national railway system". What is important for hon. members to realize is precisely what the Minister of Transport has said at page 44 of the report. Referring to the members of the board of directors he said:
They are appointed by the governor in council to administer the affairs of the railway.
If during the sitting of the committee of the whole, or later on third reading, I refer to the

report it will be the report of the railways and shipping committee. Some people are under the impression that the Canadian National company is the management. In the report at page 2 there are pictures of the various officials of the railways. But they are not the company; they are the management. The only member of the company is the president, who has been appointed chairman of the board. It is not in his capacity as president of the railways but in his capacity as chairman of the board that he is a member of the national company.
I want that to be mentioned at the outset. It is important to realize that the directors who have been appointed by order in council form the national company. They are the Canadian National Railways. If action is taken against the railways they are the ones who are sued, as a body. That is all I have to say for the time being.


[Stage Direction]
Section agreed to.
On section 3-Capital expenditures authorized.
James MacKerras Macdonnell: In connection with the figure at the top of page 2, where it makes reference to $93,647,760, I wish to refer to what was said in the house by the parliamentary assistant to the Minister of Finance, as it is reported at page 3356 of Hansard. He gave first of all the two figures which appear at the bottom of page 1 in the bill. Then he goes on to give this figure of $93,647,760 for new equipment ordered prior to 1952. That, I think, is worked out by taking the votes in the two statutes of last year, computing the amount spent and then revoting the balance.
If I am correct in that I should like to pass on to a further comment. I have looked at the statutes of the first and second sessions of 1951, and I find authority given there to spend these amounts. There is no time limit put upon it, and I assume the very fact that this sum of $93,647,760 is put in here, some $66 million of which is a revote, is on the assumption that the legal position is considered to be that this authority has now lapsed and there must be a revote. I wish to be satisfied on that point, because I find nothing in the statutes setting it out. If that is so, I wish to be satisfied that there is no need of stating that these other authorities are at an end. Do I make myself clear?


Mr. Benidickson:: Yes. $66 million is a revote. But if my hon. friend will read the statement made at the resolution stage by the parliamentary assistant to the Minister of Finance he will recall that the parliamentary assistant pointed out then that it was the legal opinion of the justice officials that these grants had not lapsed, but that they thought
Canadian National Railways it was desirable to revamp the style of the annual financing act so that parliament would be in complete control again of everything outstanding relating to capital expenditures. We did have tag ends outstanding from the previous year. That is the reason something new is being done this year, to the extent that we are revoting items of the refinancing acts of last year which are unspent.


James MacKerras Macdonnell: I am still left in doubt. We call it a revote, but actually is it not an additional vote? There is nothing in the bill to indicate that it is a revote. So far as the bill is concerned we now have an authority which includes $64 million, or thereabouts, of what was authorized last year. Does the parliamentary assistant agree with that?


William Moore Benidickson: Yes.


James MacKerras Macdonnell: If that is so, are we not proceeding in a rather loose manner if, with the understanding in our minds that it is a revote, we actually give authority, which is in fact an additional authority, and thereby have legally available an additional amount of $64 million? If that is so-and I do not want to be arguing at length about a technicality-this would not seem to be a desirable way to legislate.


William Moore Benidickson: The hon. member for Greenwood will recall that last year two acts were found necessary. There was a new departure at that time from some of the previous legislative patterns, in that the supplies and delivery situation was very uncertain in respect of equipment of the magnitude of railway equipment. In consequence parliament was asked last year to authorize the railways to make commitments for equipment that it was not expected would be delivered within the legislative year.


James MacKerras Macdonnell: That was in June a year ago.


William Moore Benidickson: Yes. Some of that equipment has not been delivered. Rather than fail to remind parliament-and this is a reminder to parliament, as it is set out in the measure-that this commitment is still outstanding, and that there are deliveries under it still to be made, parliament is being given an opportunity, by a restatement of these amounts of money, to make a revote, just as it would revote items in the estimates.


James MacKerras Macdonnell: I appreciate that the parliamentary assistant has stated the position exactly. But I am still left with this question: Should there not be a section in the bill which says that authority is cancelled in respect of the amounts not used as set out in the two bills of last year? As it now stands, when we pass this bill we will

Canadian National Railways have $64 million extra. If I am correct in this, why do we not say that the preceding authority is cancelled?


William Moore Benidickson: Does not subsection 6 cover the point? It says:
No amount shall be spent for a purpose mentioned in this section in excess of the amount authorized by this section in respect of that purpose.
Then again, is it not sound law that a statute of this year would certainly succeed and have greater authority as well as replacement of a statute of last year dealing with the same items?


James MacKerras Macdonnell: I must say I would have thought, in connection with the statement last made by the parliamentary assistant, that if in fact we legislate for an additional sum of $64 million, without saying anything about what was done last year, we will have authorized $64 million additional. I note that subsection 6 says:
No amount shall be spent for a purpose mentioned in this section in excess of the amount authorized by this section in respect of that purpose.
Without setting myself up as an authority like the Department of Justice, I must say that argument does not sound very convincing to me. I do suggest and suggest strongly that in view of what the parliamentary assistant has said to the effect that the Department of Justice consider the authority does not lapse, there should be something in this measure which would have the effect of cancellation. After all, this will become more or less a pattern, to the extent that we are beginning something new.
I realize there are those in the house more competent than I am to express legal opinions, and I would be very interested to know if there are any in the house who agree or disagree with me. As I understand the present position we now have a stronger statement than I made first, in that the Department of Justice say that these do not lapse, and therefore that $64 million of what we are being asked to authorize is a duplication of authorities given last year. That is not good legislation, in my opinion, and I think it could be easily cured by an apt clause saying that this authority cancels the authority for $64 million contained in the statutes, I think it is chapter 45 of the first session and chapter 9 of the second session of 1951. I suggest that as a sensible way of dealing with it. Let me say that I have spelled out the figures with some difficulty and I think I now understand the situation.
I do put forward that suggestion as to the form of the legislation.


Mr. Green:: Could there not be included wording to the effect that a certain figure is a revote in the same way that those words are used in the ordinary estimates?


William Moore Benidickson: I think the language of the bill in that respect is quite clear. It says that the appropriation was not taken advantage of.


Howard Charles Green: What section is the parliamentary assistant referring to?


William Moore Benidickson: Section 3. All the
individual items are there. Take the item for additions and betterments; that is a revote, and I think that is clear from the language. It says:
Additions and betterments (excluding new equipment) obligations incurred prior to 1952 that become due and payable in 1952.
In other words those are not current budget items. Then the matter raised by the hon. member for Greenwood is covered as follows:
New equipment.
Obligations incurred prior to 1952 that become due and payable in 1952.
Those now require financing. They are distinct from the other items. They are within the 1952 budget; they are described as obligations incurred in 1952 that become due and payable in 1952.


James MacKerras Macdonnell: I am not
afraid that this money will be issued twice. I am simply trying to suggest a workmanlike bill by making it clear that the amount of the appropriation not used last year is cancelled. If the parliamentary assistant does not want to do that, then as far as I am concerned I would be prepared to let the thing go with the request that this matter be brought to the attention of the Department of Justice to consider whether such a cancellation clause should be used in the future.


William Moore Benidickson: This bill has had the
attention of justice and the clause which I quoted I think is clear for that purpose. I certainly assure my hon. friend it will be reconsidered for another year.


Jean-François Pouliot: Mr. Chairman, I listened to what the Minister of Transport said a moment ago about the way the province of Quebec has been dealt with by the management of the Canadian National Railways. I want to tell him that I have always drawn a distinction between himself and the management of the railroad company. I make other distinctions as well. What I complain of is the way eastern Quebec is dealt with by the Moncton officials. The best answer I could make to what the minister has said is to refer to a letter signed by nine members of parliament, all supporters of the government,

who have asked for an extension of the central region to the Matapedia river including the Gaspe peninsula. Each one of those members was dissatisfied with the management. They are all supporters of the government and no one was forced to speak against the government. They all signed that petition with enthusiasm in order to get rid of the control by Moncton over us.


Mr. Brooks:: Where did they come from?


Jean-François Pouliot: From Levis to Gaspe. I should like to tell the minister that when I complained of bigotry on behalf of the family compact of Moncton C.N.R. officials there were big headlines in the Moncton Times-Transcript and the Saint John Telegraph-Journal. Neither of those papers came to the defence of those men in its editorial. I hope the day will come when the whole of the province of Quebec will be under the central region. As long as we are under the control of Moncton we will always have trouble. After I made my complaint 1 received the following letter from Moncton under date of May 2:
You certainly hit the nail on the head when you called the C.N.R. Moncton railway officials bigots. The great majority are, and it is time someone should take action and see that a certain minority of the employees receive equal rights and promotion.
I am considerate and conciliatory of everyone, but I do want my people to be respected and dealt with fairly. I should like to refer to certain questions which I asked and which had reference to additions and betterments and new equipment which are covered by this section. Riviere du Loup is one of the old terminals of the Grand Trunk Railway. There were railroad shops there before there were shops at Moncton or anywhere else. Much of the difficulty we suffered was remedied by the present government, by the Prime Minister and the Minister of Transport. The minister must have noticed that in the first part of my speech on second reading I quoted verbatim a resolution passed by the county council of Riviere du Loup expressing gratification at what had been done by the Prime Minister and the Minister of Transport. Here are questions I put to the management of the railway and the answers I received. You will see that this is not the way members of parliament should be answered when they put questions on the order paper.
1.	What are the names and values of each of the pieces of machinery which were returned from the workshops of the Canadian National Railways at St. Malo, Quebec city, to Riviere du Loup?
Answer: Following the acquisition of St. Malo shop by the Department of National Defence in 1940 certain machinery was transferred to Riviere du Loup. From current records it is not possible to give the detailed information requested.
Canadian National Railways
2.	When did such transfer take place?
Answer: See answer to No. 1.
3.	What are the names and the respective occupations of the employees of the Canadian National Railways who were transferred back from St. Malo, Quebec city, to Riviere du Loup?
Answer: Current records do not contain the information necessary to answer this question.
4.	On what date did each of said transfers take place?
Answer: See answer to No. 3.
5.	What are the names and the values of each one of the pieces of machinery which were at the Canadian National Railways shops at Riviere du Loup (a) immediately after the transfer above referred to in paragraph 1 took place; (b) on May 1, 1952?
Answer: It is not the practice of the company to maintain historical records that would facilitate an answer to the first part of this question. Information as to present values is not available.
The minister would never have made such an answer. He is too well educated for that. Here is another one:
1.	Since 1923, what has been the total yearly amount of (a) advances and loans made; (b) guarantees given, by the government to the Canadian National Railways?
Answer: Financing for the Canadian National Railways has in each year since 1923 received consideration and approval by the government and is recorded in the statutes.
That is very bold. We are left to do our own work. We have no staff except the help of a stenographer. I went to the library and wanted some co-operation to get that information. No information was given. I continue:
2.	Since that date, what amount of the debt of the Canadian National Railways has been written off by the Canadian government?
Answer:	See answer to No. 1.
3.	Since 1923, what amounts have been spent in each province by the Canadian National (a) for the construction, maintenance and repair of the railway: (b) as capital expenditure for the construction, extension and installation of machinery in each of the erecting shops of the Canadian National?
Answer:	(a) The accounts of the Canadian
National Railways are not maintained in a way which makes it possible to segregate expenditures in the tabulation requested.
They only have to do the work. It is possible for them to do that.
(b) To endeavour to give this information would involve an examination of accounting records for the past thirty years and this could not be undertaken by the existing staff of the railway.
Imagine how bold they are. In the future I trust the minister will tell them to do otherwise when they answer questions. As a matter of fact they did, and I voice my appreciation to him. I received another answer in the form of a sessional paper of June 16 and it was very different. We made some headway with it. We have started to learn what the management is doing with the money voted by parliament. It is time to know what is being done. The question was as follows:
1. How many steam locomotives were repaired during 1951 in each of the Canadian National erecting shops?

Canadian National Railways Answer: The total number of steam locomotives repaired in all shops in Canada in 1951 was as
follows:
No.
Shop	Repaired
Moncton. N.B	 183
Riviere du Loup, Que	 57
Montreal, Que	 318
Stratford, Ont	 313
Transcona, Man	 253
Fort Rouge, Man	 133
Edmonton, Alta	 35
Port Mann, B.C	 28
Total	1,320
This information gives me at the same time an approximate idea of the number of locomotives owned by Canadian National Railways, which is mentioned nowhere in their report. They give a lump sum for the equipment but the number of locomotives is not mentioned as it is in the reports of so many railways. Last year there were 57 locomotives repaired at Riviere du Loup. I thank the minister for that information. Then there was this question:
3. Since January 1, 1952, how many steam locomotives have been sent to each erecting shop for repairs?
Answer:	The number of steam locomotives sent
to each erecting shop for repairs from January 1 to May 31 is as follows:
No. Underrepaired going and Jan. 1 to waiting
Shop	May 31	May 31Moncton. N.B	
95	27Riviere du Loup, Que	
26	6Montreal, Que	
148	46Stratford, Ont	
142	38Transcona. Man	
110	36Fort Rouge, Man	
46	35Edmonton, Alta	
33	5Port Mann, B.C	
16	5Total	
616	198
Then there was also this question:
5. During the period-
The period is April 15 to May 15, 1952.
-how many steam locomotives were sent to each of the Canadian National erecting shops for repairs?
Answer:	Between April 15 and May 15, 1952,
locomotives were sent to various shops as indicated
below:
Shop
Moncton, N.B	 25
Riviere du Loup, Que. (including 1 rotary
plow)	   3
Montreal, Que	 39
Stratford, Ont	 23
Transcona, Man	 18
Fort Rouge, Man	 6
Edmonton, Alta	 9
Port Mann, B.C	 5
Total	 128
Of that total Riviere du Loup had 3. Two others have come since, but the locomotives that were sent to Riviere du Loup were for repair No. 5, the most minor type of repair. It is just a matter of adjusting something,
[Mr. Pouliot.)
and these repairs did not provide enough work. I think that in a country like ours the shops of the Canadian National Railways should be given work in equal proportion. I understand that the Point St. Charles shops are larger than ours but there is no reason why the program which was prepared last year for the current year should not be put into effect on that basis. We should have had 66 locomotives to repair at Riviere du Loup, and there is no reason why we should not have them. I am ready to co-operate with the minister to the utmost, even to sacrificing the right to speak. I might have spoken against him if I had been allowed to speak, but I am not that type. I give him credit for what he does, but I continue to maintain my distinction between him and the president of the railway, and between him and the Moncton officials.
If I were to compare him to the Moncton officials it would be a gross insult to the minister. I hope the day is near when we of eastern Quebec will be on the same footing as the rest of the population of the province of Quebec and. will be together, instead of being under the domination of Moncton. I rely on the minister. He said he had helped the employees of the Temiscouata railway. Without his help and without the help of the Prime Minister we could not have gone anywhere. I hope they will continue in that good way and that they will find the right words, words of persuasion or of condemnation of those concerned, in order that there may be some progress in work that is going to be sent to Riviere du Loup. How is it that Riviere du Loup is left aside as a country cousin when there are shops that are no more important than Riviere du Loup-I mean those in Edmonton and Port Mann-which are maintained and given plenty of work all the time? It cannot go on like that.
The president stated before the committee that he was all for centralization, but how is it that there are two shops together at Transcona and Fort Rouge-within a radius of a few miles-and the Canadian Pacific Railway shop is close by? There are three railway shops within a very small radius while down home it is almost impossible to get anything.
Now, I rely on the Minister of Transport, I rely on the Minister of Veterans Affairs who was born in Riviere du Loup, on the Prime Minister who lives in Riviere du Loup, and on all our friends to see to it that Riviere du Loup is given by the Canadian National Railways a fair amount of work at present and in the future as it has been in the past. When I complain of the manner in which my fellow citizens of the province

of Quebec have been treated I mention the Moncton officials who curse the French Canadians, and I know they are not acting under the advisement of the minister when they do so.
Therefore, sir, I come to a happy conclusion. I could have finished my speech in ten or fifteen minutes on second reading but I am satisfied to have said what I wanted to say for the defence of my people. I protest against the useless expenditure of the Canadian National Railways. When I learned of the appointment of Mr. Gordon, having seen his signature on a dollar bill, I said, "Here is a man who will not need to borrow any money to manage the Canadian National Railways efficiently."
I hope this is considered in a spirit of conciliation and collaboration and that the wrong my people have suffered and are suffering now will be redressed at the earliest opportunity. I will thank the leader of the government and the Minister of Transport for what they do in that direction.


Alfred Johnson Brooks: I rise on a question of privilege. The hon. member has stated that the officials of the Canadian National Railways at Moncton did not treat his people in Temiscouata and at Riviere du Loup fairly because they were French Canadians.
I do not feel that it is necessary for me to rise in defence of the officials in Moncton except to say that I know at least 50 per cent or more are of French extraction. I think the minister will bear me out there. Also, the city of Moncton has practically 50 per cent or more people of French extraction and as far as our Acadian people and English-speaking people in New Brunswick and Moncton are concerned, we live very agreeably and happily together and we are very proud of that. We in the province of New Brunswick of French extraction and of English extraction have a very kindly feeling toward the people of Quebec. We have always looked upon them as our friends and I personally regret very much that the hon. member should make a statement of that kind in this house and say the people in the city of Moncton unfairly treated people in his part of the country and that he feels they did so because his people are French Canadians. That is very far from the truth indeed.


Jean-François Pouliot: That is not at all what I have said. I said they were cursing the French Canadians. With regard to the way we are dealt with I will send the hon. member a copy of my correspondence with the executive vice-president and my hon. friend will
Canadian National Railways see the way in which Riviere du Loup has been dealt with by Moncton. When I meet him personally I will tell him much more besides. He did not quote any editorial in defence of the Moncton officials. There was none in any of the three papers which have printed and given great publicity to what I have said. Moreover he must know of the Moncton officials that they are a family compact. They are not Liberal, Conservative, Social Credit or C.C.F.; they are shaking hands under the table-


Alfred Johnson Brooks: They are good Canadians.


William Moore Benidickson: On a point of privilege, I regret the need to interfere with this debate, but on the other hand the discussion at the moment relates to current operation and has nothing to do with capital expenditures of the Canadian National Railways.


Louis-René Beaudoin: As I understood the last remarks made by the hon. member, he was through.


William Joseph Browne: It is half a minute to six.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
William Joseph Browne: Mr. Chairman, just at six o'clock I was going to ask the person in charge of the bill-the parliamentary assistant at the present time-concerning the manner in which these amounts are going to be expended. But since six o'clock I have been looking at No. 2 report of the sessional committee on railways and shipping. I wonder whether he would correct me if I am wrong in my understanding that at page 132 under "Financial authorizations- 1952 requirements by regions, departments, etc." for Newfoundland and district, the amount shown there is the amount that would be spent out of the 1952 authorizations. At pages 134 and 135 there are also other amounts shown. At page 134 I believe is shown the equipment ordered in 1951 and which will be delivered after the 1951 fiscal year has expired in July.


William Moore Benidickson: Is my hon. friend, at page 134, referring specifically to 50 30-ton box cars which are specifically marked "Newfoundland"?


William Joseph Browne: Yes. That is right. Are they to be delivered in July? The parliamentary assistant should be in a position to say now that it is so near the end of the fiscal year.

Canadian National Railways


William Moore Benidickson: This equipment in column 1 has all been ordered and delivery is anticipated prior to July 1.


William Joseph Browne: Is that schedule being followed?


William Moore Benidickson: So I am advised.


William Joseph Browne: The reason I am asking is that it is quite notorious that the equipment on the railway is insufficient to handle the greater volume of traffic. I am wondering whether these two pages represent what are the needs or what are expected to be the needs within the next year or so. The other point I wanted to make is this. The one thing is where the money is spent and the other thing is where the equipment is going to be used. With regard to box cars and flat cars, is the management making any arrangements to have some of these, as many of them as possible, built in Newfoundland? They are a special kind of box car or flat car. They are not used elsewhere on the Canadian National Railways. I know that cars have been made in Newfoundland. Is the parliamentary assistant able to answer that question?


William Moore Benidickson: I have not any specific information on that matter. The hon. member knows that each year when this budget is considered by a parliamentary committee we have available some 25 or 30 senior officials of the railway, among whom are included operating people. That is the type of question that is usually asked and the kind of information that is usually extracted on that occasion. I am not able specifically to answer that question here. I will see that the hon. member's remarks are conveyed to the management.


William Joseph Browne: I was not a
member of the committee on railways and shipping; perhaps I was on some other committees and could not attend its meetings. I have looked through these reports, however, and I see nothing along that line. I was hoping the parliamentary assistant might be able to give me that information.


James MacKerras Macdonnell: I want to raise a question with respect to subsection (c) which gives authority to make capital expenditures not exceeding in the aggregate $50 million in the calendar year 1953 and so on. I draw the attention of the parliamentary assistant first of all to what was said by the parliamentary assistant to the Minister of Finance at page 3356 of Hansard, where that $50 million is referred to as an amount in payment for equipment. I draw his attention also to the budget presented to the committee in April last which says, at page 2:
Authority is also desired, to the Minister of Finance, to make advances to the extent of $50 million against new equipment . . .


William Moore Benidickson: It should include any capital requirement. I would point out to my hon. friend that for equipment alone, the bill provides some $81 million for equipment in the 1952 budget. Only a small portion of it-I think it is a little over $2 million worth-is actually expected to be delivered this year. The greater amount of it will likely be delivered between January 1 of the next calendar year and June 30, 1953. By then we usually are able to do some refinancing in this house.


James MacKerras Macdonnell: I do not
think that reply meets my point. As I understand it, and evidently as the parliamentary assistant to the Minister of Finance understood it, we are here to implement this budget. This is, I take it, the same figure of $50 million. It is perfectly clear in the budget presented to the committee and approved by it that this $50 million was against the equipment. Surely we cannot lightly change that and just say it is $50 million that we will use for what we like. What that committee approved was $50 million for equipment. I think the parliamentary assistant will agree that that is so; and if it is so, I suggest that this clause should be altered to agree with the budget.


William Moore Benidickson: I think my hon. friend will agree that this is $50 million to be applied for the purposes of the bill for that particular period. Anything that is appropriated under this provision has to be accounted for specially in the annual report to be presented to parliament next year. That is also part of the act and a full accounting' of it will be given.


James MacKerras Macdonnell: I do not
know whether or not we are at cross purposes, but as I see it that is no answer at all. This budget which is presented to a committee of the house and is approved by it either means something or it does not. As far as I am concerned we do not just toss $50 million about as lightly as that. Am I stating it correctly? Here is the budget from which I am reading, and it refers to $50 million against new equipment. And as I say, the parliamentary assistant to the Minister of Finance described it in the same terms in his speech the other day at page 3356 of Hansard. This is how the item is described:
Payment for equipment ordered but delivered in period January 1 to July 1, 1953.
That seems to me to identify it fully. If that is so then surely the basis, the very foundation, of this bill that we have is the budget of the Canadian National Railways,

which was presented and approved. If that is so, it seems to me this clearly must be altered.


William Moore Benidickson: My hon. friend is comparing the appropriate language of the section with the footnote to the budget reports which were received in the committee and which appear on page 129 of the railways and shipping committee report. I think he was quoting from the mimeographed document, but it also appears on page 129 of the official printed report of the committee. The wording is as he says: "$50 million against new equipment to be delivered in the spring of 1953 under the above authorization". I think we can accept that as being the purpose of the section.


James MacKerras Macdonnell: Wait a
minute. Is this going to be right or not? Let me state again what I have said. My understanding is that this legislation is founded on the budget. We are in entire agreement as to what this budget means. I do not think we should have to act on an understanding between ourselves. I think this section should follow the wording of the Canadian National budget. Obviously that is what the Department of Finance thought, because this was said in this house on June 17 by the parliamentary assistant to the Minister of Finance, and it follows exactly the language of this budget. Surely it would be the simplest thing in the world to make that section agree, and surely it ought to be done.


William Moore Benidickson: I think my hon. friend would be satisfied if the clause was amended.


James MacKerras Macdonnell: Will the assistant read it as it now will stand please?


William Moore Benidickson: After the word "incurred" insert "for new equipment". Would that define it?


James MacKerras Macdonnell: You are
going to insert that in line 4 of subsection (c) of section 3 (1).


William Moore Benidickson: That is right, "in discharge of obligations incurred for new equipment".


Mr. Harris (Grey-Bruce):: I so move.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 4 to 11 inclusive agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the bill be read the third time; now?
Immigration Act


Stanley Howard Knowles: By leave.


Douglas Charles Abbott: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



IMMIGRATION ACT


Walter Edward Harris: that the house go into committee to consider Bill No. 305, respecting immigration.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


Louis-René Beaudoin: Perhaps I should point out that this bill has been carefully considered by a special committee and has been reported with amendments.
On section 1-Short title.


Donald Methuen Fleming: I should like to make a brief observation in general. I think the minister will agree that the special committee to which this bill was referred after second reading has devoted very careful study to it. The committee held what I think may fairly be called some very intensive sittings last week; and as you have pointed out, Mr. Chairman, the bill is now reported to the house with a number of amendments.
May I say to the minister that he showed a willingness in committee on many occasions to accept suggestions from members of the committee. We do not always see that attitude reflected by ministers in the house or in committees, and when one finds that attitude displayed by a minister it is very refreshing indeed. I should like to make a comment on that fact now, Mr. Chairman, concerning the Minister of Citizenship and Immigration. I do not at all mean to convey the impression that the minister accepted all the suggestions that were offered, or indeed a number of amendments that were offered to the bill. Nevertheless it is indeed refreshing to find a willingness on the part of a minister to accept suggestions.
One other observation, Mr. Chairman: This is a very long bill. It runs to 72 sections and some 32 full pages. It was most appropriate, it seems to me, that a bill of this kind should go to a committee. It points the way, if I may say so, to a procedure which not only results in legislation being in better form when it comes back to the house, but in the legislation being better understood by hon. members; and it does save the time of the house. I am satisfied, Mr. Chairman, that this evening we will see that much time of the house, at a stage of the session when

Immigration Act
time is very precious, is saved by this measure having been referred to the committee.
One final observation. We still have not yet had at this session the opportunity for discussion or debate on immigration policies which I know many members feel is due. At other stages of the present legislation it was agreed that the bill was not the appropriate vehicle for the discussion of immigration policy. It is a bill that relates to the structure of the department and the functions of that department and its various branches. I again express the hope, as I expressed it several times in earlier stages of the consideration of this bill, that when the minister brings in his estimates there will be a discussion of immigration policy, and I hope that occasion will not be long delayed. This is one of the most important departments of the government. Immigration is a lively subject of discussion throughout the country; and it is most desirable that there should be an effective opportunity for adequate debate on the subject of an immigration policy. I say to the leader of the house, the Minister of Public Works, that I hope he will use his charm and authority to expedite the introduction in committee of supply of the estimates of the Department of Citizenship and Immigration.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
On section 3-Canadian citizens.
William Joseph Browne: The minister knows that sometimes in connection with persons of oriental origin there is some difficulty in the matter of identification. A person who claims to be a Canadian citizen may not be truly identified as such. Has the minister in his mind or at hand the requirements with respect to the identification of a person who has been a long time absent. I am thinking of the sort of thing that would be required by an immigration officer at, let us say, Hong Kong.


Walter Edward Harris: I do not recall
that we have had any difficulty in identifying Canadian citizens as such from Hong Kong or elsewhere. Everyone who is a Canadian citizen is on record in the citizenship branch. For that matter everyone who is a British subject is on record. We have had no difficulty identifying anyone as a citizen.


William Joseph Browne: Apparently the minister is not thinking of what I have in mind. I am thinking of a person born in Canada of a Chinese father, who has gone back to China, who during his minority lived in China, and then returned to Canada. Such person would not be registered as a Canadian

citizen. There would be a birth certificate, but would that be sufficient after an absence of, let us say, twenty years?


Walter Edward Harris: There would
be a certificate of the birth in Canada, and we would be glad to examine such a case. Again I must say that I do not recall any difficulty of this kind.


[Stage Direction]
Section agreed to.
On section 4-Canadian domicile-acquisition.
Mr. Pearkes:: Is this a change in the definition of domicile, and does it apply to a minor? My understanding is that, for the purposes of this act, Canadian domicile is acquired by a person having his place of domicile in Canada for at least five years after having landed here. Let us take the case of a boy of twelve arriving here and living for five years in this country, but whose parents might not have been Canadian citizens. Would he have acquired Canadian domicile?


Walter Edward Harris: This section is
the same as the one in the present act which reads:
Canadian domicile is acquired by a person only by having his domicile tor at least five years in Canada alter having been landed therein.
There is no change, although the wording has been altered to some extent.


George Randolph Pearkes: I think there is ambiguity. An immigrant might come to this country as a minor and live here for five years, making the claim that he was a person who had lived in this country for that length of time. Then he might go out of the country. Still he would not be granted Canadian citizenship, because his parents were not granted Canadian citizenship. I am thinking of a minor, but one who had lived five years in this country.


Walter Edward Harris: I hope the hon. member is not confusing domicile in the Immigration Act with domicile in the Canadian Citizenship Act.


George Randolph Pearkes: I may be doing that. I wish I could get the two straightened out.


[Stage Direction]
Section agreed to.
On section 5-Prohibited classes.
Donald Methuen Fleming: I wish to renew, on section 5, an argument I put forward in committee for some better definition of the expression found in line 29, "any crime involving moral turpitude". To most persons that expression suggests, in the first instance, offences of a type we have under the Criminal Code, and that are described particularly as crimes involving sexual offences. The minister indicated to us frankly in committee that the

expression "any crime involving moral turpitude" would mean, as to crimes committed in Canada, almost every crime if not indeed every crime under the Criminal Code.
I offer now an example-and it may be a rather extreme example-by way of illustration of what this may mean. Bear in mind, if you will, that when this expression is applied to a person in Canada, as the minister has indicated, it would be treated as the equivalent of practically any offence, whether an ordinary offence or an indictable offence under the Criminal Code. As applied to an act of some person outside of Canada, as the minister indicated, the department will interpret it to mean any offence that would be regarded as an offence against the criminal law, according to Canadian standards of criminal law.
I put this extreme case as indicating the need, both in this and in one or two other sections we will come to, for a much closer definition of what is meant. I take the case -because it is fairly obvious-of a person who comes to Canada from Ireland. It is discovered after he has been here one day short of the necessary five years required to acquire domicile that prior to his departure from Ireland he got into an argument with his neighbour over the fence, and poked the neighbour in the nose. That would be a case of common assault, assuming that there was no aggravation in the offence. The magistrate before whom the unhappy man was haled might take a light view of the offence, and, while it would be within his power to register a conviction, he might impose nothing more than a nominal fine or, indeed, he might direct a remand for sentence, or might suspend sentence.
After the individual in question has been in Canada four years, eleven months and twenty-nine days it comes to the attention of the immigration branch that this person was convicted of the crime of common assault before his entry into Canada. This immediately makes him subject to deportation. That is the law as created by the bill before us.
If the expression "any crime involving moral turpitude" is to be considered in the way the minister has indicated-and that is the way the department will construe the expression in the present act, because it is not a new expression-then this individual has rendered himself liable to deportation. I do not suggest the present minister is going to do anything so arbitrary or, indeed, so foolish as to direct the deportation of a man under those circumstances. But the fact of the matter is that under this bill he could. That individual is liable to deportation.
Immigration Act
I think when we are legislating we do not want to legislate in such a way as to make it possible to have a result as absurd as that.
I had proposed in committee that we should seek some better expression, some clearer definition of the sort of thing we have in mind, than this broad term "any crime involving moral turpitude".
In the light of the position taken by the minister in committee, and the decision of the committee, the bill comes back to us with this expression remaining in it. I want to record my view that this is a defect in the bill and that something much more definite in the way of a definition is required.


[Stage Direction]
Section agreed to.
Sections 6 to 10 inclusive agreed to.
On section 11-Special inquiry officers.
Donald Methuen Fleming: I should like to make an observation on subsection 3, clause (c) which permits the special inquiry officers to issue commissions or requests to take evidence in Canada. The committee has added the words "in Canada" and to that extent has narrowed the scope of the section in the original bill. But I wish to express the view that I sought to put forward in the committee about the care with which a power like this should be exercised.
There is no power in the present Immigration Act to permit any officer of the department to issue a commission to take evidence. As you well know, in legal proceedings in all the provinces the issue of a commission to take evidence is not something that is obtained as a right; it is something which the courts permit only where a sufficient case has been made out to justify it. For the first time this bill proposes to confer upon every special inquiry officer under this act the power to issue a commission to take evidence anywhere in Canada.
Something might be said for taking evidence in other parts of Canada for use in connection with deportation proceedings that are pending against an individual, but having regard to the position in which many of these persons will find themselves I think this is a power which should be exercised only in clear cases. Think of the position of an individual awaiting deportation. In the first instance, he may be suffering from the disability of language; he may understand neither English nor French. In the second place, he may be suffering from a state of confusion in which many immigrants find themselves when arriving in Canada. It seems to me that where evidence is being used against him which may result in his being deported the least he is entitled to is the right to have the witness cross-examined, to confront the witness face

Immigration Act
to face. That right should be most carefully preserved. The great difficulty about taking evidence on commission is that it may be taken far away from the place where the individual may be held while the deportation proceedings are continuing. He may be timid, he may be confused, and he may be unaware of his rights.
In such cases I think injustice could be done to the unhappy individual if any arbitrary use is made of the power to take evidence on commission. As I have indicated, the committee has circumscribed this power to the taking of evidence on commission within Canada only. But even with that limitation in many circumstances the power could be used to the detriment of the individual facing deportation proceedings. I urge upon the minister a very sparing use of such power.


Walter Edward Harris: We are quite conscious of what my hon. friend has said. This would be of advantage to the immigrant under certain circumstances. It is felt that we should have the power, but it will be used most sparingly.


[Stage Direction]
Section agreed to.
Sections 12 to 18 inclusive agreed to.
On section 19-Reports on persons in Canada.
Donald Methuen Fleming: I should like to make an observation with respect to subsection 1, clauses (e) (ii) and (iv). I have no quarrel with this section as it stands. It' requires that certain officials make reports to the Department of Citizenship and Immigration in certain cases, and there can be no objection to having reports made even in cases of a simple breach of the Criminal Code by any person within the ambit of the section. But the real rub comes in later sections which in a number of cases refer to section 19. Section 19, subsection 1 (e) requires that reports be made by the clerk or secretary of a municipality to the minister in the case of any person other than a Canadian citizen or a person with Canadian domicile-that means five years' domicile in Canada after being admitted-if such individual is convicted of an offence under the Criminal Code or, under clause (iv), was a member of a prohibited class at the time of his admissipn to Canada.
A moment ago I referred to section 5 (d) of the bill which refers to the individual who had been convicted of a crime in the country from which he had come, and I cited the case of common assault. Clause (iv) refers to persons in that category, as well as the
(Mr. Fleming.]
other categories referred to in section 5 because they- are all within the prohibited class.
This would mean that in a case similar to the one to which I referred, if the individual had less than five years of residence in Canada and happened to get into an altercation with his neighbour over the back fence in Canada, punched that neighbour in the nose and was convicted of the crime of common assault, he would bring himself within the scope of this section 19. It does not matter that the offence is not serious; it does not matter that the offence may not be viewed by the magistrate as being serious; it is sufficient that the magistrate enters a conviction. In that event a report must be made by the clerk of the municipality to the department.
As we will see in connection with some later sections, the effect can be very serious. In the case of an individual who may have four years, eleven months and twenty-nine days' residence in Canada, if on the evening-


William Joseph Browne: With good behaviour, too.


Donald Methuen Fleming: His record may have been immaculate in Canada, but the night before he completes his five years of residence in Canada in order to establish Canadian domicile he gets into an altercation with his neighbour over the back fence and commits-


Mr. Gauthier (Portneuf):: He should have waited until tomorrow.


Donald Methuen Fleming: -the rather simple offence of common assault and renders himself, as we shall see in a later section, liable to deportation. I express the view that I expressed earlier in connection with section 5. Legislation that could result in that absurd situation where the man could be deported is not legislation that a serious parliament should enact. I do not suggest that in a situation of that kind the minister would direct that the individual be deported; but the fact of the matter is that if the bill is passed in this form we are clothing the minister with power to direct the deportation of that individual in that situation. I say it seems to me that is not the way in which parliament should go about its task of legislating. This expression in 19 (1) (e) (ii), in so far as reference is made to it in a later section as being a basis for deportation, should in my submission be circumscribed so that use could not be made of it in the kind of case to which I have referred and many other cases that will naturally suggest themselves to hon. members.


Walter Edward Harris: I think I should add to what my hon. friend has said that under the present act there is no discretion in the minister not to deport a person under the circumstances he has described but in this bill there is discretion not to deport.


[Stage Direction]
Section agreed to.
Sections 20 to 27 inclusive agreed to.
On section 28-Decision after inquiry.
Donald Methuen Fleming: This is the section to which I made reference in what I had to say a moment ago with respect to section 19 of the bill. We see in subsection 3 of section 28 that deportation may be ordered by a special inquiry officer of a person who falls within the various clauses of section 19 to which I made reference. The minister has indicated in the comment he has just made that provision exists in the present act that makes the individual in the extreme case to which I have referred liable to deportation. He has said that discretion is created by the new bill in favour of the minister to exercise clemency-and I think most of us would say common sense-in a situation of that kind and permit the individual to escape deportation. However, I think we ought to go further than that. The fact of the matter is that if this legislation passes in the present form we are legislating to this effect, that the individual who on the eve of completing five years' residence in Canada after lawful admission commits the offence of common assault makes himself liable to deportation, and only exercise of a discretion by the minister permits that individual to escape deportation.
In my submission the grounds upon which the individual renders himself liable to deportation are much too extensive. They are much too broad. We should raise the floor in a case of this kind. I am quite in accord with the idea that the minister should have discretion in proper cases because there is going to be need of discretion being exercised in many cases if the law is to be written in terms as rigorous as some of those we have before us. The fact of the matter is that in my submission no individual who has given a good account of himself in Canada for the period I suggested, four years, eleven months and twenty-nine days, after being lawfully admitted, should be rendered subject to deportation simply because he commits what is nothing more than a very simple offence. It is not an indictable offence, and in the case I mentioned it might be under circumstances as to which the magistrate,
Immigration Act
while feeling he might be obliged to enter a conviction, would take anything but a serious view of what had happened. I cannot think that parliament, in proceeding seriously about its task of legislating with respect to this very important subject of immigration, wants to place anybody in a position like that, where he is dependent upon favourable exercise by the minister of his discretion under the act to escape deportation.


[Stage Direction]
Section agreed to.
Sections 29 and 30 agreed to.
On section 31-Where appeal allowed and how it is initiated.
Walter Edward Harris: There was some discussion at the close of our committee meetings as to redrafting subsections 4 and 5. We have been able to do that in the interval, and I would ask my colleague, the Minister of Veterans Affairs, to move:
That subsections 4 and 5 be stricken out of the present bill and the following substituted therefor:
(4) "The minister may in any case review the decision of an immigration appeal board and confirm or quash such decision or substitute his decision therefor as he deems just and proper and may, for these purposes, direct that the execution of the deportation order concerned be stayed pending his review and decision, and the decision of the minister on appeals dealt with or reviewed by him or the decision of the majority of an immigration appeal board on appeals, other than those reviewed by the minister, is final."


Mr. Lapointe:: I so move.


Donald Methuen Fleming: I may say that I think the wording the minister now proposes is a distinct improvement on the former wording of subsections 4 and 5 as they appear in the bill as reprinted.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 32 to 35 inclusive agreed to.
On section 36-Deportation.
Walter Edward Harris: We made certain amendments to sections 40 and 41 and as a consequence there should have been another amendment made to section 36. I would therefore ask my colleague to move:
That the following words be added at the end of subsection 1 of section 36: "or to such country as may be approved by the minister under this act."


Hugues Lapointe: I so move.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 37 to 39 inclusive agreed to.
[Stage Direction]
Immigration Act
On section 40-Liability for deportation where U.S.A. refuses to allow return.
Walter Edward Harris: I would ask my colleague to move an amendment to section 40 which would insert a subsection 5 reading as follows:
(5) Notwithstanding anything contained in this section, deportation costs shall not be paid by the transportation company concerned in respect of an immigrant who, upon his arrival in Canada, was in possession of a valid and subsisting immigrant visa required by this act or the regulations and issued to him, after the commencement of this act, by an immigration officer.


Hugues Lapointe: I so move.


Donald Methuen Fleming: Mr. Chairman, I would like to say at once that I welcome this amendment. I unsuccessfully introduced a similar amendment in the committee, but I may say to the minister that I am very glad he has seen fit to propose this amendment. Having regard to the change that has developed in the set-up in handling our immigration cases in the last generation, this amendment is necessary to do justice to those engaged in the transportation of immigrants.


Walter Edward Harris: May I say that this is not the amendment my hon. friend moved. It is different, although it is partially the amendment that he moved.


Donald Methuen Fleming: I was not suggesting it was the amendment in the same words. We would not expect the government, knowing it as we do, to accept an amendment or proposal in the same words; but I see in this amendment the principle for which I was contending and which I pressed for in the committee unsuccessfully. I welcome the amendment and congratulate the minister.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 41-Costs of detention of persons seeking admission to Canada.
Walter Edward Harris: I similarly ask that an amendment be moved to section 41, subsection 1 of which would read:
The transportation company that brought to Canada a person seeking admission thereto shall pay all costs of his detention, except in the case of an immigrant who, upon his arrival in Canada, was in possession of a valid and subsisting immigrant visa required by this act or the regulations and issued to him, after the commencement of this act, by an immigration officer.


Hugues Lapointe: I so move.


Donald Methuen Fleming: The same remarks.


Walter Edward Harris: The same remarks, Mr. Chairman.


Donald Methuen Fleming: The same reply, Mr. Chairman.


Louis-René Beaudoin: Perhaps I should say "the same question".


Howard Charles Green: Is the effect of this amendment to be that the government will have to pay for deportation of persons coming under the amendment?


Walter Edward Harris: The result, Mr. Chairman, is that the government will pay for more cases of deportation than it has up to the present.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 42 to 46 inclusive agreed to.
On section 47-Free transportation to immigration officers.
Walter Edward Harris: I also ask for amendment of this section by inserting at the opening of the section the following words:
Subject to section 11 (a) of the Aeronautics Act.
I should explain that under section 11 (a) of the Aeronautics Act there is a reference to free transportation on airplanes which places the decision in that matter in the hands of the air transport board.


Hugues Lapointe: I so move.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 48 to 68 inclusive agreed to.
On section 69-Loans to immigrants.
Mr. Catherwood:: On section 69, Mr. Chairman, I was not a member of the committee but I do feel that these loans to immigrants are very important. I would just like to ask the minister if it is the intention of his department to make use of these funds up to the $12 million which is the limit that may be expended for this purpose.


Walter Edward Harris: As I explained on second reading and at the resolution stage, this is giving statutory form to the vote which has been passed by the house for the last two years, for a revolving fund.


[Stage Direction]
Section agreed to.
Sections 70 to 74 inclusive agreed to.
Title agreed to.
Walter Edward Harris: May I express my thanks to all members of the committee who aided us so materially in improving the bill.
Bill reported, read the third time and passed.
[Mr. Lapointe.)



CANADA GRAIN ACT


Alphonse Fournier: that the house go into committee to consider Bill No. 246, to amend the Canada Grain Act.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


Louis-René Beaudoin: I should point out that this bill has been carefully considered by the standing committee on agriculture and colonization.
Sections 1 to 5 inclusive agreed to.


[Stage Direction]
Title agreed to.
Bill reported, read the third time and passed.


Hugues Lapointe: that the house go into committee to consider Bill No. 184, to amend the Pension Act.	t
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


Louis-René Beaudoin: May I point out to hon. members that this bill has been carefully considered by the special committee on veterans affairs and has been reported without amendment.
On section 1-Wear and tear of clothing on account of amputation.


Alfred Johnson Brooks: Mr. Chairman, while this bill was before the special committee on veterans affairs, as you have pointed out, and was reported without amendment, I might say that it was carried on division in that committee. This is an extremely important bill to a most deserving class of our war pensioners, namely the amputation cases. The reason it was carried on division was that many of the members of the veterans affairs committee felt that the increase provided by this bill with regard to clothing allowance was not enough.
I might point out, Mr. Chairman, that there has been no change in the allowances made to amputees for clothing since 1925. In that year, for any amputation of the leg above a Symes' amputation, so-called, the allowance for wear and tear on clothing was $54. Since 1925 twenty-seven years have elapsed. We all know of the great increase in the cost of clothing during that time. As a matter of fact, it was
Pension Act
pointed out to the committee that since 1925 the cost of clothing has increased by about 100 per cent or more. Many members of the committee felt that the allowance provided in this bill, namely a 33J per cent increase, was not sufficient and was not fair to these amputees.
In 1925 the allowance made to amputees other than those with Symes' amputations was $22; and with the increase of 334 per cent as provided in the bill this amount will be increased to $30. There were three classes dealt with. First there were those with other than Symes' amputations. The second class were those with amputations at or above the wrist; and the third class were those who had to use other appliances. It was pointed out that the wear and tear on the clothing of these classes was very great. There is extreme wear and tear on the clothing of amputees and those who have to wear these other appliances.
The $54 provided in 1925 was equivalent to providing an extra suit of clothes for these men. To provide an extra suit of clothes for those same veterans in 1952 costs in the neighbourhood of $80 to $100. Many of us felt that a larger amount should be allowed than that provided in the bill.
I should like to point out that of these leg amputations above the so-called Symes' amputation, there are 3,070. This was brought out in the evidence before the committee. The annual liability to the country before the proposed increase was $165,780. The increase as proposed in the bill will mean $55,260. As to those with arm amputations, we were advised in the committee by the witnesses from the department that there were 1,294. The present cost is $28,468, and the proposed increase would mean $10,352. As to those with other appliances, there were 2,452. The present cost is $115,244. The bill means an increase of $61,300. The total increase under this bill will be $126,912. I might say that the total cost at the present time for these classes of amputees and those who wear appliances is $309,492. If this amount were even doubled it would mean a cost of only $618,984 or not quite two-thirds of a million dollars.
I point this out to show that, with regard to this class of veterans and with regard to this particular allowance, the cost is extremely small. I felt, as did other members of the committee, that we could very well have doubled the amount of $309,492 and not made the cost very great as far as the country was concerned. It is hardly necessary for me to say that this is a most deserving class of veterans. They are the most helpless class of veterans that we have. As we

Veterans Legislation
know, their clothing is subject to tremendous wear and tear during the year. I simply call this matter to the attention of this committee because, as I say, when the bill was carried in the veterans affairs committee, it was carried on division, and those were the particular reasons upon which we divided in that committee.


[Stage Direction]
Section agreed to.
Sections 2 to 4 inclusive agreed to.
Title agreed to.
Bill reported, read the third time and passed.


Hugues Lapointe: that the house go into committee to consider Bill No. 191, to amend the Civilian War Pensions and Allowances Act.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.
On section 1-Schedules I and II.


Louis-René Beaudoin: May I point out that this bill also has been considered in the special committee on veterans affairs and has been reported without amendment.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Title agreed to.
Bill reported, read the third time and passed.


Hugues Lapointe: that the house go into committee to consider Bill No. 182, to amend the Veterans Benefit Act, 1951.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


Louis-René Beaudoin: I point out that this bill to amend the Veterans Benefit Act, 1951, has also been carefully considered in the special committee on veterans affairs and reported without amendment.
On section 1-Expiration.


Alfred Johnson Brooks: I might say that this bill was carried unanimously in the committee without any amendment; but I am rather surprised that hon. members who were not in the committee are not anxious to learn more about the bill.


Alphonse Fournier: They know you did a good job.


Alfred Johnson Brooks: Possibly that is true.


Mr. Mulch:: I think that is deserved.


[Stage Direction]
Section agreed to.
Title agreed to.
Bill reported, read the third time and passed.


Hugues Lapointe: that the house go into committee to consider Bill No. 183, to amend the Veterans Insurance Act.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


Louis-René Beaudoin: Perhaps I should say that this bill also has been considered carefully by the special committee on veterans affairs and reported to this house without amendment.
On section 1-Coming into force.


Alfred Johnson Brooks: It should be pointed out to the committee tha{ there was some objection to this bill, not to what it contained but to what it did not contain. It was felt by certain members that section 10 of the Veterans Insurance Act should be either amended or deleted. I brought this matter up when the resolution was before the house.
I should like to point out to the committee that under section 10 of the act, if an insured dies and the widow or beneficiary is entitled to a pension, then certain deductions are made from the insurance that is paid to the beneficiary. Considering the fact there is a very substantial insurance fund, and that these veterans have paid in sometimes for many years, it hardly seems fair that deductions should be made from the amount of insurance that is paid to the beneficiary.
We had hoped there would be another clause in the bill following section 1, that deleting section 10 of the act. I might say that this has been a recommendation of the Legion for quite a number of years. It is also a recommendation from other veterans organizations, but no consideration has yet been given to it by any committee that has been set up or by the government. I really think they have a just claim, and in fairness to the veterans I hope that section 10 of the act, while not considered at this session, will be considered at some future date.


[Stage Direction]
Section agreed to.

Section 2 agreed to.
Title agreed to.
Bill reported, read the third time and passed.


Hugues Lapointe: that the house go into committee to consider Bill No. 334, to amend the Army Benevolent Fund Act, 1947.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


Louis-René Beaudoin: This bill has also been reported to this house without amendment, by the special committee on veterans affairs, where it was considered and studied carefully.
On section 1-Interest.


Howard Charles Green: Will the minister give a brief explanation of this amendment?


Hugues Lapointe: There is very little I can add to what is in the explanatory note of the bill and to the remarks I made when the resolution was introduced. There are two purposes to the amendments as my hon. friend knows. One is to increase the rate of interest on the fund from 2J per cent to 3J per cent on the first $5 million monthly balance and 2| per cent on the balance of the fund. The second amendment is to permit the board to receive grants and bequests which are offered to the fund from time to time and which they have no authority to accept at the present time.


Howard Charles Green: Have any such bequests been made to the fund as yet?


Hugues Lapointe: I do not believe there have been any, but the fund has received inquiries as to the possibility of making such bequests. The second amendment also gives the board authority to receive repayments of grants which they have made. At the present time when a grant is made to a veteran, the act does not permit the board to accept repayment of that grant. The experience has been that many veterans, after they have received those grants and managed to get through the difficulties they were in, make an offer to the board to repay either the whole grant or part of it. The board does not accept it because under the present act the board would not benefit; it would fall into the consolidated revenue fund.


[Stage Direction]
Section agreed to.
Title agreed to.
Bill reported, read, the third time and passed.
War Veterans Allowance Act


Hugues Lapointe: that the house go into committee to consider the following resolution:
That the following amendments be made to Bill 181, intituled: "An act respecting Allowances for War Veterans and their dependents";
1.	That in paragraph (a) of subclause one of clause three the words: "sixty-five" be deleted and the word: "sixty" be substituted therefor.
2.	That subclause one of clause six be amended by inserting after paragraph (h) the following: "(i) interest on bank deposits and bonds and dividends on shares in the capital stock of any company to the extent of twenty-five dollars per annum from all such sources;" and by relettering the present paragraph (i) as paragraph (j).
3.	That subclauses two and three of clause thirty-one be deleted and the following substituted therefor:
"(2) Every person who, immediately prior to the coming into force of this act, was in receipt of an allowance under the War Veterans Allowance Act, 1946, may be paid an additional allowance equal to the amount that he would have been eligible to receive under this act in respect of the period between the first day of January, nineteen hundred and fifty-two, and the coming into force of this act, if this act, except section four, had been in force during that period, less any amount that he was eligible to receive under the War Veterans Allowance Act, 1946 in respect of that period.
"(3) Every person (a) who was awarded an allowance under the War Veterans Allowance Act. 1946, whose allowance was discontinued and was not being paid immediately prior to the coming into force of this act, for the reason that the amount of his income rendered him ineligible for the allowance, or (b) who, prior to the coming into force of this act, applied for an allowance under the War Veterans Allowance Act, 1946, but was not granted the allowance for the reason that the amount of his income rendered him ineligible for such an allowance, may apply for and be granted an allowance in respect of the period between the first day of January, nineteen hundred and fifty-two, and the coming into force of this act equal to the amount that he would have been eligible to receive under this act in respect of that period if this act, except section four, had been in force during that period, less any amount that he was eligible to receive under the War Veterans Allowance Act, 1946, in respect of that period".


[Stage Direction]
Motion agreed to, and the house went into committee, Mr. Beaudoin in the chair.
Howard Charles Green: Mr. Chairman, it is my understanding that this resolution contains the amendments which were approved by the special committee on veterans affairs. I presume the intention is to have these amendments considered when we are considering Bill No. 181. If that is so, there will be an opportunity at that time to discuss these amendments, together with the other provisions of Bill No. 181; is that correct?


Hugues Lapointe: That is right. There will be an opportunity to discuss these amendments during the section by section discussion in committee of the whole on the bill. When

War Veterans Allowance Act the resolution is adopted I intend to move that it be referred to the committee of the whole on Bill No. 181.


Howard Charles Green: These amendments will be moved to the bill as we come to the respective sections?


Hugues Lapointe: As we come to the various sections I shall ask one of my colleagues to move these various amendments.
Resolution reported, read the second time and concurred in.
Mr. Lapointe thereupon moved that this resolution be referred to the committee of the whole on Bill No. 181.


[Stage Direction]
Motion agreed to.

Hugues Lapointe: that the house go into committee on Bill No. 181, respecting allowances for war veterans and their dependents.
Motion agreed to and the house went into tommittee, Mr. Beaudoin in the chair.


Louis-René Beaudoin: This bill has been considered by the special committee on veterans affairs, and has been returned with an amendment.
On section 1-Short title.


Alfred Johnson Brooks: Mr. Chairman, this bill was before the committee for some days. While there was very little controversy in respect of the other bills passed by the committee, there was considerable debate and considerable controversy so far as this particular bill was concerned.
The committee will recall that when the resolution was before the house many weaknesses were pointed out, and they were again emphasized in committee. Unfortunately the amendments were not made along the lines we had hoped, and the weaknesses in the act when it went to committee are still there. This, I may say, is a matter of great disappointment to many members of the committee, as well as to veterans organizations Who presented the case to the committee on behalf of recipients of war veterans allowances. It is also a disappointment to all veterans across this country.
This is a most important bill. We had expected that the legislation before us in the special committee would have been before a committee on veterans affairs over a year ago. As a matter of fact we felt that when the Pension Act was being considered and amended, the War Veterans Allowance Act should have been amended as well. We were pleased, however, when at the last session

of parliament we were told there would be a war veterans committee at this session.
We had every reason to believe that this most important legislation would have been corrected this session. However, the bill as presented to the committee made very few changes in the act. One of the benefits of having the bill before us was that it was a consolidation, a feature which met with the general approval of all members on the committee.
There is one section in the bill which has given general satisfaction, and that is the provision allowing veterans to receive allowances during certain months of the year and to work in other months. It was felt, however, that the encouragement given to some other veterans was not sufficient.
We were very pleased to learn that veterans employed in different types of work are giving satisfaction. In that connection I should like to read from the report of the work of the Department of Veterans Affairs. At page 18 I find set out a summary of welfare services, where there is reference to the employment of veterans and to the satisfaction they are giving their employers. At page 18 I find this:
A review of the progress made during the year shows that the work of casualty rehabilitation and welfare has been efficiently carried out with many cases being closed as successfully re-established in civil life, and with fewer disabled veterans unemployed than ever before.
It has also been ascertained that the incidence of dismissal of disabled veterans from work on the grounds of inefficiency is negligible, thereby proving that placements have been soundly made in jobs where, notwithstanding the disability of the veteran, his courage and determination has enabled him to turn out volume and quality equal to those who are not disabled.
That is a statement which I know will give great satisfaction not only to members of the House of Commons but to all veterans across Canada. On the same page, the welfare services branch reports on the older veterans as follows:
The principal need of the older veteran in reasonably good health is steady, gainful employment and, when to obtain and retain such work becomes a problem, the branch is prepared to take an interest. In various ways the branch has stimulated the interest of employers and community groups in the value of the older veteran properly placed in employment and, in co-operation with national employment service, believes that substantial results have been achieved. During the year, national employment service recorded employment registrations by 45,756 older veterans and at March 31 the number unplaced was 9,519 as compared with 12,284 at the end of the previous year.
That indicates clearly to me, as I am sure it must to all hon. members, that not only is the older veteran capable of working in many instances, but also he is most anxious to get employment whenever it is possible. I

was interested in a report made by Mr. Ryder of the research department in which he pointed out that from a research made it was found that the health, of the older veteran was much better than had been expected. I do not know what the object of the research was, but he pointed out to our committee that men of the age of 55 years who were receiving war veterans allowance on account of some disability or on account of poor health had a greater death rate than civilians in the same age group. He pointed out also that the death rate of recipients of war veterans allowance 60 years and over was lower than that of the corresponding civilian age group. I think the inference which possibly was meant to be drawn was that the war veteran had not aged as much as had been expected due to his war service.
I think it should be brought out at this time that no such inference should be drawn. In the first place, as was pointed out in the committee, those men who are 60 years of age and over and who served in the first war were the best of the young men in the country at that time. They were more physically fit than any others; they were the cream of the crop, as it were. They were hardier than many of the men who were unable to pass the physical examination for overseas service and who on that account stayed home during the first war.
There is another argument that could be used for granting war veterans allowance. When these men came back from the first war they were not in the same position economically as were those who had stayed at home. As a matter of fact I believe the war veterans allowance was granted on that point as well. These men came back and found that there was not the employment for them they had expected. They found that those who had stayed home were well established and that it was more difficult for them to become rehabilitated. There is a great difference between the men who served in the first world war and those who served in the second.
Then again, no action had been made after the first world war to provide educational facilities as was done after the second war. Many of the men who came back took land under the soldier settlement board, and we know they had a very hard time. They went through two depressions and also the second world war, and it was more difficult for them to become established than it was for those who had stayed home.
This brings me to my criticism of the present act. We criticized the present act chiefly because it did not increase the ceilings to the 55704-227J
War Veterans Allowance Act extent we thought they should have been increased. Under the old ceiling a single man was permitted to earn $125 over and above his war veterans allowance while a married man could earn $250. Under the new ceiling, both single and married men are entitled to earn only $120 over and above their allowances. Instead of increasing the ceilings there has been a decrease in the cases of both the single and married man. We felt that there should have been an increase in both instances.
A number of cases were presented by the Legion where particular individuals would suffer. One case was that of the older veteran who possibly with the help of his wife or someone else was able to hold a position as janitor or do some job of that nature. The low ceiling would allow him to earn only an extra $120 a year; therefore it would be impossible for him to take a job of that kind. Then there was the case of the older veteran and his wife who might have a room to rent for perhaps $4 or $5 per week. Again he would be prohibited from doing this because of the low ceiling. There was also the case of the man who had been able to earn a retirement pension of from $20 to $50 a month. He would not be eligible because of the low ceiling. The worst case of all was the man with a disability pension, say 50 per cent. If this man was married and totally unemployable he would get very little assistance under the War Veterans Allowance Act; if he was single he would receive none at all.
It was felt that these few cases illustrated clearly the unfairness of leaving the ceiling or the permissible amount which the veteran was allowed to earn at only $120 per year. The matter was thoroughly discussed in the committee, and it is not necessary for me to dwell further on that point.
The second matter to which we objected strongly was the amount of the allowance, namely $50 for a single veteran and $90 for a married veteran. It was pointed out to us, as we have pointed out in the house on numerous occasions, that the increase should have been based on the cost of living. Since 1939 the cost of living has increased by something like 82 per cent, whereas the increase in the war veterans allowance is only 33J per cent.
Those are the two main objections we have to the bill. We think veterans are not being treated fairly or justly in this respect, and we feel the attention of the committee should be called to these matters. I know there are other members who are going to speak on the bill along the same lines, and it is not my intention to take any more time.


Mr. Gillis:: I too was a member of the special committee, and most of the things

War Veterans Allowance Act that we would ordinarily say we said there. However, there are a few matters to which I should like to refer. The minister has already indicated that several amendments are being made to the bill. In my opinion a lot of discussion will have to take place on the bill as we discuss it clause by clause. At this time the things about which I am concerned are the amendments that were not introduced and that we will not have an opportunity to discuss as we consider the bill.
The first amendment that I thought should have been made and which was not made is an amendment of the act to include the widows of imperial veterans whose husbands passed away before they were able to comply with the twenty-year residence qualification.
I had figures indicating that the problem was not very big and there would not have been much money involved. After the many times this matter has been discussed in the house I am disappointed that the act was not amended at this session to include the widows of imperial veterans who did not meet the residence clause. We object strenuously to what is not done for those who are already getting something; but the position such a widow finds herself in is very difficult because she receives nothing. The fact that she lost her husband before he had resided in Canada for twenty years does not improve her position very much, because the widow has been here the necessary time. She still has to eat and provide a home for herself in Canada and, as somebody remarked in the committee, the body of her husband is still in Canada. As far as he is concerned his bones are interred here and will remain here. Rather than a strict legal application of the act humanitarian consideration should be given to the widow who gets nothing at the present time. As I said before the cost would not be so great, because the figures presented to the committee indicated that not many cases are involved.
My second disappointment with respect to the amendments that were brought forward arose because of the fact that no amendment was introduced to include veterans of world war I who saw service in England. There are a considerable number of them, and in my opinion when the government amended the War Veterans Allowance Act to include veterans of world war II who saw service in England they immediately created discrimination. That discrimination should have been removed. We argued the matter in the committee but the government appeared to be adamant at this time that that recommendation was not going to be followed. I was very sorry to see these two matters not dealt with in the amendments the minister is presenting at this session. In my opinion the

act has been improved. The computing of the war veterans allowance on a monthly basis, without any reference to the income that may be earned by a veteran able to take seasonal employment for four, five or six months of a year, is a move in the right direction. There are many older soldiers who cannot take steady employment in heavy industry but who can do light work of a seasonal nature particularly in the summer months when the weather is good. Thus they are able to earn something, and then they can go back on the war veterans allowance when that type of employment is no longer available without the income they have earned being held against them on an annual basis.
I think that is a big improvement in the act and gives considerable latitude to the exservice man who finds himself in the position of not being able to work all the time.
There was a lot of discussion and several motions in the committee with respect to the schedule. Many of us thought the rates in the schedule were too low. They certainly did not meet the request of the Legion in their presentation to the committee, but again the government appeared to be adamant in the stand that this was as far as they were going at the present time.
We can have a lot of discussion on the clauses of the bill, but I want to say one thing now. There was a proposition made before the veterans affairs committee by a doctor from Vancouver. I spoke about the matter in the committee and I mentioned it in the house on second reading of the bill. I refer to the proposal that appears to have emanated from Vancouver where they have set up a geriatrics division in one of their institutions. The idea is that older veterans who are inmates of the institutions across Canada are going to be taken under the wing of this new organization and are going to be given some training. In the case of Vancouver the officials who are giving the training are working on a voluntary basis with the co-operation, as this gentleman told us, of the community chest people in that city.
I cannot agree with his presentation of the matter. We have to ask ourselves this question. To begin with why are these older veterans inmates of these institutions? Why was it necessary for any veteran to make application to the veterans affairs department asking that the department admit him to an institution and look after him so far as his meals, room and general maintenance are concerned? Why did he do that in the first place? He did it because he was no longer employable. He was certified as being unemployable by a medical authority or he was

over 60 years of age. Otherwise he would not have been receiving the war veterans allowance.
Having the war veterans allowance, why did he seek to become an inmate of an institution? He requested to be allowed to enter the institution because he was not getting enough on which to live on the outside. That is the answer. Some of them have been veterans care cases off and on over the years throughout the country, but apparently this medical doctor has devised a scheme of instituting a geriatrics division. Older veterans will go into these institutions, and they have to be psychoanalysed. They range in age from over 60 to about 70 and they are broken down. They are not employable. They are in these institutions because they cannot live on the outside. In Vancouver under the program sponsored by the community chest organization- they are very benevolent people-a geriatrics division has been set up, and apparently with the general sanction of the veterans affairs department these older veterans are going to be psychoanalysed to determine what their aptitudes may be for employment. They are going to find employment for them.
The doctor told us that there was one old gentleman in the institution whom they rehabilitated. He could do a little typing, so they made his fingers nimble again and sent him to a bush camp to type for the office manager. That was one case, but to my mind the whole idea is ridiculous and as far as I am concerned I am opposed to it. In the first place the veteran who is in that condition, the older veteran who goes into an institution, has reached the end of the trail. There is nothing outside for him. If he received enough by way of war veterans allowance to pay for a room and a bite to eat he would not have to become an inmate of that institution. He is a definite charge on the Canadian people and a responsibility of the Canadian government.
I object to any system whereby it is proposed to take men in this age group and ascertain whether they should go back to work somewhere just to get them out of the institutions. I want the members of the veterans affairs committee to think about the matter. I definitely object to them becoming in any sense of the term linked up with the charitable organizations of this country. It certainly is not the prerogative of any charitable institution in this country to become involved in veterans affairs. For that purpose there is a special ministry of government. There is a large department of veterans affairs and it extends clear across the country. There are investigators, there are hospitals and there are staffs across the country which
War Veterans Allowance Act are adequate to care for the needs of veterans in any category. I object to any attempt to turn the institutions established for veterans of this country in the direction of working through some other scheme that involves charitable organizations across the country.
If you want to do something for the older veteran who has been necessarily institutionalized because he cannot find employment and live on the outside, the thing to do is increase the rate of war veterans allowance so that the men can pay for room and board outside, and you will not have any of them in institutions.
On that particular angle I speak to you, Mr. Chairman, and through you to the minister, because I can very easily see what is going to happen. If you have a hundred or two of the older veterans institutionalized in Vancouver, Halifax, London or Toronto, or any of our large centres, and you start on this system of geriatrics what you are going to see happen is just this. They will be picked as orderlies in the hospital-no pay, of course-and they will be required to sweep floors, polish wards, make beds and do the work of a general orderly. Somebody determines whether they are fit for that type of work and they will say: If you do not do that type of work, out you go. We were going to rehabilitate you by giving you a job mopping floors, but you would not do that.
Before we get into that kind of organization I strongly urge the Minister of Veterans Affairs to take a square look at the problem and determine whether he has sufficient staff to look after the needs of veterans. If he has not, then he should increase the staff rather than seek the co-operation of charitable organizations across this country and let them get into veterans affairs in any way, shape or form. Let the minister build the department up if he has not sufficient staff to find jobs for these older fellows.
With conditions as they are and with the average condition of these old soldiers who have had to become institutionalized, the idea here is far-fetched and ridiculous, in my opinion. If there is anything these men can do, if they have any aptitude and there is employment they will find it. I think they are in a better position to determine what their capabilities are than the average welfare officer whose intentions may be good but whose ideas in my opinion are pretty far-fetched.
I just wanted to make this statement because I notice that very few people have been saying anything about this angle. I got the impression that some of the members of the committee at least were impressed and thought this was a good idea. To my mind it is not a good idea, and before we conclude

War Veterans Allowance Act this discussion I want the minister to tell the house exactly what the department has in mind and to what extent they are considering the organization of this geriatrics proposition across the country.
There are a few other matters in the bill on which I wish to speak, but I will reserve my remarks for the clauses of the bill.


Mr. Thomas:: I think I pretty well indicated my feelings on this bill when I spoke in the debate on the resolution. I agree that it is a great improvement over the act as it was before but, as I stated at that time, I do not think it goes quite far enough. I also stated that I believed any increases in war veterans allowance should be based on the cost of living index. The relationship of the present rates with those of 1939 is not in proportion at all when compared with the cost of living index today.
X also agree that section 4 is certainly an improvement. It does give the veteran who is able an opportunity to take seasonal or part-time employment. It encourages him to take employment when he can get it and contribute that much toward the welfare of the country. However, I do think they should get some sort of increase in allowance so they can have at least a reasonable standard of living. I think the maximum income allowed is too low. They can earn very little outside the actual allowance, and in my opinion that is an error. They should be encouraged to take what employment they can get because there are jobs open which do not pay enough to warrant a person working at them full time, and these men can handle those jobs quite nicely.
As previous speakers have indicated, we would like to see included wives of imperial veterans whose husbands died prior to having twenty years' residence. It does seem a shame that a woman should be penalized simply because her husband died beiore residing here for the required time.
As I said earlier when speaking on this bill, the property allowance could be increased to some extent without causing any hardship on the government. Although the present allowance is sufficient to cover a modest home, it should be increased, I think to such an extent that these people can at least live in a comfortable dwelling for the time they are receiving an allowance.
As I said before, this is an improvement and apparently the government are learning to crawl toward the ultimate goal. We just hope they will keep on improving this act as they go along, possibly speeding up the improvements at the next session.


Howard Charles Green: This bill is of great importance to the war veterans of Canada because it is a complete revision of the War Veterans Allowance Act. There has been no such revision for many years and the veterans of the country have been looking forward to a measure of this kind for a long, long time. It is important, therefore, that the measure as passed by the house now should be in the best possible form. One other reason that is the case is that it is very unlikely that there will be any changes of much consequence in the years that lie immediately ahead.
The bill as it comes back from the special committee on veterans affairs has been improved in several different ways, and I am extremely glad to be able to say that such is the case. There are, however, still two serious defects in the bill, and I come to them at once. The first is that the amount of the war veterans allowance has not been increased to the extent that it should have been increased. The second is that the permissive income or, in other words, the amount of income that a veteran may have or earn over and above the allowance, has not been made sufficiently high. I propose to deal briefly with those two defects.
First, as to the amount of the allowance, may I say this. At the present time the single veteran who qualifies for a full war veterans allowance can get $40.41 per month. Under the changes made in this bill he will be able to get $50 per month, an increase of $9.59. The married veteran drawing a full war veterans allowance will be able to get $90 per month whereas he now can get only $70.83. That is a difference of $19.17.
In addition to the war veterans allowance itself there is a special fund known as the war veterans allowance assistance fund from which a single veteran may draw an additional $10 per month and a married veteran may draw up to a maximum of $15 per month. Payments in many cases are not made in cash but by way of purchasing clothing, furniture or something that may be urgently required.
This assistance fund is based entirely on need. I have here the notice which was sent out by the department when the assistance fund was first set up two or three years ago. It stresses the fact that this fund can be drawn upon only in cases of need. This means, of course, that a veteran must first establish his qualification for the allowance itself which involves a means test, and it will continue to be a means test under this new bill. Then to get help from the fund he must pass a second means test.
The proposal made by both of the great veterans organizations of Canada-and I

refer to the Canadian Legion and the National Council of Veterans Associations in Canada-was that there should be established in this new bill a war veterans allowance of $60 a month for the single man and $120 per month for the married veteran. I have here the brief filed with the special committee by the National Council of Veterans Associations. In dealing with this question they have this to say:
Supplementation of war veterans allowance rates through the assistance fund for those who are unemployable and unable to supplement through casual earnings was at the outset regarded as practical and justifiable. However, in practice, it would appear that the supplementation in addition to the original means test attached to the war veterans allowance assistance fund has carried a secondary means test which serves to confuse and discourage worthy applicants.
Then they go on to recommend that the assistance fund payment be absorbed into the war veterans allowance itself and that there be payable a total of $60 for the single veteran and $120 for the married one. The Legion have made exactly the same submission. It so happens that their great national convention took place while the sittings of this special committee were being held. At that convention the Legion officials received a unanimous endorsation of the brief which had been submitted to our committee. There is therefore no question whatever as to where these great veterans organizations of Canada stand on this question. They believe the figures should be $60 and $120.
Then to come to the second main defect which is the amount of permissive income; at the present time, under the law as it now stands, that amount is $125 for the single veteran and $250 for the married one. In other words he can earn or get by way of interest or in any other way up to $125 or $250 over and above his maximum allowance. For some strange reason this new bill we are considering tonight cuts that figure to $120 for both the single man and the married one. In their brief the Legion dealt with that change in the following way:
. . . the Canadian Legion feels that a retrograde step has been taken in proposing the reduction in permissible income from other sources to $120 a year for both single and married veterans instead of the previous $125 and $250. An increase, not a reduction, seems indicated.
The National Council of Veterans Associations also dealt with the matter. They said:
It is quite obvious that the extremely limited ceiling applicable at present and contemplated in Bill No. 181 now before the house and affecting war veterans allowance, has not been sufficiently realistic in facing the problems of living costs under present-day conditions. In fact, the extremely low ceiling is reminiscent of the traditional poor-law philosophy-that the unfortunate should be grateful for a pittance.
War Veterans Allowance Act
This question of the amount of permissive income is of great importance. The Legion pointed that fact out by giving examples. I am going to read these examples to the committee because they clearly show how important it is to allow a higher permissive income. Here is the first case they mention:
First, there is the individual not physically able to do a full day's work. He may be competent, or with his wife be competent, to handle a part-time job such as janitor of a school or church, watchman, or some other work which provides regular employment but the labour is light and the pay is small.
He cannot qualify as a casual labourer for his earnings are regular, his income from this work may be smaller than war veterans allowance alone would give him, and neither earnings nor war veterans allowance taken separately is sufficient to support him.
Then they go on to quote from a letter written by the wife of a veteran in Alberta, as follows:
Whilst my husband was in hospital our minister offered us a three-room house with light and water and $50 a month. I told him we could not accept the salary, but would oe glad to accept the house and light free in exchange for caretaking of church property, but that we had better consult the W.V.A. board first. We have just received the letter tonight, and believe it or not, if we take this house and light and donate our work to the church the W.V.A. will deduct the rent value from his allowance.
Then the president of the Legion went on to read from the Legion brief:
I am quite sure the members of this committee will sympathize with the lady when she exclaims: "In the name of God what kind of system is this?"
Then the brief deals with another type of case, as follows:
In addition to recipients who can do work such as this, there are families who, finding it impossible to live on W.V.A. and the husband unfit for work, the women have to go out to work, and this at an age when that certainly should not be required of them, to earn enough to keep the home going. Meagre as their earnings seem to be they are more than W.V.A. would bring, but not a great deal more. Here the husband has a heavy psychic burden as well as his physical disability to bear.
Then they say:
Then there are individuals, thrifty and provident, who over the years have earned for themselves a small retirement pension of $25 or $50 per month. Not enough to live on, but enough to be a very great help if W.V.A. were permitted to bring their income up to a subsistence level.
In other words, if the ceiling on permissive income were raised, then these veterans and their wives would be able to get a decent income on which to live.
Then the Legion dealt with the case of pensioners in these words:
Finally, there is the disability pensioner, who is entitled to W.V.A.
Because, of course, his pension is so small. I continue:
The last pension increase he received did him no good, for he suffered a corresponding decrease in W.V.A.

War Veterans Allowance Act
That is what happened last year with these particular veterans, as we pointed out during the debates.
Many of these men find their war wounds an increasingly grave handicap, and these, coupled with their physical disabilities, may make them completely unemployable. Under the proposed legislation-
They are referring to this Bill No. 181.
-a 50 per cent disability veteran, if married and totally unemployable, can get but little assistance under the W.V.A.; the single man none at all.
I repeat, it is of the greatest importance that there be an increase in the permissive income allowed to these veterans.
All we need to do is compare the permissive income allowed under old age assistance. I hold in my hand the Old Age Assistance Act which was passed last year. It applies of course to people between the ages of 65 and 70. Both single persons and married persons are allowed a permissive income of $240 a year over and above the amount they get by way of assistance. There can be no justification for treating the veteran more harshly than the treatment given the recipients of old age assistance.
You may wonder, Mr. Chairman, why we did not have these changes made when the bill was before the committee, and of course that is a very proper question. Well, the answer is that we did our best to have the bill perfected in committee, but we were unable to make any progress. We ran into a government stone wall. I have here the proceedings of the committee for May 23. On that date we commenced to consider this bill by sections and my colleague, the hon. member for Hastings-Peterborough, moved this amendment:
That the committee recommend that the government give consideration to introducing legislation during the present session of parliament which will give effect to the representations submitted to the committee by the Legion and national council of veterans that the rates of allowance and the maximum total incomes set out in the schedules to Bill 181 should be increased.
There was an amendment to that motion moved by one of the government members on that committee. It was finally ruled out of order by the chairman, and a different amendment was substituted for it by another government member, which is to be found in the proceedings of June 5.


Leslie Alexander Mutch: On a point of privilege, the chairman did not rule it out of order. The amendment was moved and carried.


Howard Charles Green: The parliamentary assistant has not been listening.


Leslie Alexander Mutch: That is possible.


Howard Charles Green: The amendment was moved by the hon. member for Provencher.


Leslie Alexander Mutch: He withdrew it.


Mr. Langlois (Gaspe):: It was withdrawn; state the facts.


Leslie Alexander Mutch: On a question of privilege,
the hon. member is a stickler for the book. I indicated, after the hon. member for Provencher had withdrawn his amendment, that I probably would have ruled it out of order on the grounds urged by the hon. member who is now speaking, in spite of the fact that he destroyed his first premise with his second one. The fact remains that I was not called upon to do it. The hon. gentleman did withdraw his amendment. I have to answer for what I did, not for what I did not do.


Howard Charles Green: My point is, whether it was ruled out of order or withdrawn, a new amendment was substituted by another government member, and it read as follows:
That all the words after the word "that" to the end of the question.-
He was here referring to the motion moved by the hon. member for Hastings-Peterborough.
-be struck out and the following words be substituted therefor: the committee recommends to the government continued and sympathetic study of the needs and requirements of recipients of war veterans allowance keeping in mind the recommendations of the veterans organizations in that respect and particularly with regard to permissive income.
To that amendment the hon. member for Royal moved a subamendment as follows: ... by adding thereto the following words: and give consideration to introducing legislation accordingly at the present session.
That subamendment was ruled out of order by the chairman who is the parliamentary assistant, who just interrupted me. We appealed his ruling. It was supported by a straight vote of government members, with all the opposition members of all parties voting against the ruling and the hon. member for Fraser Valley abstaining.
When we got down to the sections of the bill an amendment was again moved by my colleague, the hon. member for Royal, recommending that the government give consideration to increasing the amounts in the schedules to this bill, which contain the figures both of allowances and of permissive incomes. That too was ruled out of order by the chairman of the committee. We again appealed his ruling. Again every Liberal member voted in support of the ruling with the exception of the hon. member for Fraser Valley, who voted with the members of the three opposition parties. Therefore, Mr. Chairman, we did our best to see that these changes were made at the present session

because time is of great importance to these veterans. These are front-line Canadian veterans having to exist on a subsistence level, and time means a great deal to them. They may die by next year if they cannot get a proper allowance.
Certainly they should not have to wait a year to have the ceiling raised. The amendment moved by government members in the committee would indicate that there is some possibility of the government making that change. Well, it will be a great tragedy if the change does not come before another year. We had that experience last year with pensions, the refusal of the government to make a proper increase in the pension rate. There was delay. Then last fall, finally, an increase was put through. It may be that we will have to go through the same procedure with regard to war veterans allowances.
I cannot urge upon the government and my fellow members too strongly that these changes should be made now, before this session closes. The rates should be increased to $60 and $120, and the amount of permissive income should be increased as well.
It seems to me that, for the first time, this war veterans legislation is now being influenced by social assistance legislation. Attempts are being made to place the veteran on the basis of the civilian social legislation. The Legion pointed that out in their brief when they said:
It appears from the legislation before you that the government, in suggesting rates and allowances, has been influenced to some extent by legislation in the field of social assistance. However we would strongly suggest that this proposed legislation affects men and women who have served this country honourably and well in time of war.
Those words sum up the situation very clearly. If this legislation is not put into proper shape before the close of this session, the government may well find itself faced with a request to abolish the means test in connection with the war veterans allowance. After all, the means test was abolished for civilians at 70 years of age, and the war veterans allowance was made payable at 60 on the basis that the veteran who had frontline service was pre-aged to the extent of ten years. It will not be easy for the minister to justify a refusal to abolish the means test in the case of veterans on war veterans allowance and to allow the veteran at 60 to have whatever amount of income he can earn.
There is nothing more one can say. The case is there for a proper increase, and for a proper amount of permissive income. All we can do is leave the problem on the doorstep of the minister and the government. If they wish to be fair with these old comrades of ours, who in the first great war helped
War Veterans Allowance Act save this nation, and fair to the younger men who did it again just a few years ago, then there will be no hesitation in bringing the allowance up to the right amount at the present session, as well as bringing up the amount of permissive income.


Mr. Lennard:: Mr. Chairman, as a member this session of the committee on veterans affairs, let me say I agree in principle with everything said this evening by the hon. member for Royal, the hon. member for Cape Breton South and the hon. member for Van-couver-Quadra.
I fully realize that Bill No. 181, respecting allowances for war veterans and their dependents, has been considered by the government, and sets out what the government proposes to do in respect of war veterans allowances at this session. That is clearly indicated. I hope, however, that the shortcomings of the measure pointed out in the briefs of the various veterans organizations, and by members on the veterans affairs committee, will be considered by the Minister of Veterans Affairs, by his department and the government, and that those shortcomings will be remedied.
I would hope that we would have another committee on veterans affairs at the next session of parliament, that these shortcomings would be rectified, and that the government would bring in a new act to include all the legitimate requests made by the various organizations interested in the matter. It has been pointed out tonight that the war veterans are receiving something far short of what they should get.
I would hope in particular that the widows of imperial veterans, who in many cases resided here almost the required 20 years, might receive proper consideration. We know of cases where husbands have died just before completing 20 years of residence. I think of one case in particular where there had been residence for 19 and a half years, just a few months short of 20 years. Yet widows in that position are denied any assistance. Surely that is something that should be rectified; indeed, it should have been done at this session.


Mr. Herridge:: Mr. Chairman, as a member of the veterans affairs committee may I support what has been said by the hon. members for Vancouver-Quadra and Royal, who have said many things I would have liked to say. I heartily support the proposals they have made, and trust the minister was listening carefully so they may bear fruit.


George Randolph Pearkes: Mr. Chairman, I was not a
member of the special committee on veterans affairs at this session. Perhaps therefore I

War Veterans Allowance Act may be permitted to voice my disappointment at the results the committee was able to achieve.
The advantages and disadvantages of the bill have been explained. One is pleased to see that this seasonal allowance is being introduced. But I do venture to say that while a number of veterans who are recipients of war veterans allowances will be able to get some form of seasonal work during the summer months, far more recipients of war veterans allowances will not be able to get those jobs because, even in the summer months, jobs for elderly men are limited.
I regret to see that the increase in the allowance is not greater. The total income now permitted for a single man, as I understand, is $720 a year, and for a married man $1,200. Those amounts seem pitifully small. When one thinks of other pension schemes in existence and being considered at the present time, he cannot help feeling that the committee lost all sense of proportion. If the house approves of this meagre increase, and the meagre amount of permissive earnings, then I feel it, too, will have lost all sense of proportion.
The claim may be made that these veterans did not make any contribution to their allowances, pensions or insurance schemes, whatever they may be called. I say these men made their contributions by service. They have not been in a position to make large contributions to any generous pension scheme. I hope before this session closes the members of the House of Commons will bear in mind the amount that they are now "generously" allotting to these old soldiers.


Mr. Montgomery:: Mr. Chairman, I do not feel I would be doing my duty if I did not get up and say a few words on this bill because in the last few years I have had considerable to do with veterans affairs. I want to thank the government for going as far as they have gone with this legislation, but in my opinion the bill still lacks some sections which should have been included. One of the sections which I think should have been included is one dealing with veterans who served in England during the first great war. Today many of those veterans who do not happen to be pensioners are unable to obtain this allowance because England was not considered to be a theatre of war.
Those men may have been kept in England through no fault of their own. I know from experience-this is a matter which we may have to face in future years-that many soldiers were kept in Canada during the second world war through no fault of their own. They were good, reliable soldiers but their commanding officers would not permit IMr. Pearkes.]

them to go over because they required good men here. Many veterans of the first world war may have been kept in England because of their ability to fill certain positions, because of their ability to carry on their jobs. I feel that they should be given some consideration in the legislation now before this committee.
Another point I should like to take up is that which has been dealt with by previous speakers. I contend that the ceiling, if you wish to call it that, is not high enough. In fact I submit there should not be any ceiling at all. We should permit these veterans to earn whatever money they are able to earn at whatever work they can get. They would then feel that they are contributing something toward their own support, that they are part of our economic life, that they are not just cast off and depending entirely on charity. That is the way you make them feel when you tell them that they can earn only so much.
If a married veteran has a family-I happen to know a few who have-$1,200 is not enough to permit them to more than barely exist. I do not know what the process is, but I would hope that this legislation could be reconsidered and amended, at this session if possible, so consideration could be given to veterans who served in England during the first war and to also raise the amount of permissible income a veteran may earn, either married or single.
There are many veterans who would like to do some work. They would like to think that they were at least helping to earn their own living. Under this legislation, if they are going to receive a war veterans allowance, they hardly dare go out and earn anything. It is like the story of the old woman related by the hon. member for Vancouver-Quadra. Some of these men just cannot understand this legislation. They cannot understand why they are not permitted to work and have the allowance when they are willing to work.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
On section 3-Veterans, widows and orphans.
Louis-René Beaudoin: The resolution which was carried a moment ago and referred to this committee contained an amendment to this section.


Hugues Lapointe: This is one of.the sections to which an amendment was agreed in committee, and I would now ask my colleague the Postmaster General to move it.


Mr.   Coie@SI Jean-Iberville-Napierville: I move:
That in paragraph (a) of subclause one of clause three the words: "sixty-five" be deleted and the word: "sixty" be substituted therefor.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 4-Employable veterans.
Howard Charles Green: Will the minister explain the effect of this section?


Hugues Lapointe: This section was amended in the committee but the amendment contains no new principle. It was an amendment to facilitate administration in the case of recipients who wish to revert to the benefits under section 3 of the act. In their case it was found advisable to make such an amendment, and it was purely for clarification purposes.


Louis-René Beaudoin: Perhaps I should inform hon. members that the amendments contained in the resolution adopted earlier affect sections 3, 6 and 31 of the act. In the case of other sections there were amendments made in the committee.


Howard Charles Green: As I understand it, the amendment to this section was not included in the resolution passed earlier; it was made in the committee and will be found in the reprinted bill.


Leslie Alexander Mutch: That is correct.


Hugues Lapointe: When there is no new
principle involved it is not necessary to make a formal amendment in the committee of the whole.


Clarence Gillis: Are you now proposing to deal with sections 3, 6 and 31?


Louis-René Beaudoin: I was merely pointing out that some clauses of the bill were amended in the special committee on veterans affairs, but this evening we passed a resolution providing for amendments to sections 3, 6 and 31, and that resolution was referred to this committee.


Clarence Gillis: We are now only dealing with section 3?


Louis-René Beaudoin: Section 3 as amended has been carried. Apart from sections 6 and 31, when I refer to a clause as amended I mean a clause amended in the committee on veterans affairs.


[Stage Direction]
Section agreed to.
Section 5 agreed to.
On section 6-What receipts not income.
Clarence Gillis: I think the minister should clarify the purposes of this section which deals with exempt income. Clause (f) reads:
(f) receipt of money or assistance from any province or municipality by way of mothers' allowance or by way of relief to dependent children.
War Veterans Allowance Act
Any outsider reading that clause will automatically assume that a widow in receipt of veterans allowance may also receive a mothers' allowance from the province. The minister will remember that I asked in committee whether this section dealing with exempt income was discussed with the provinces and if the provinces indicated they were willing to pay a widow a mothers' allowance if she was in receipt of a war veterans allowance. The answer I got, partially in the committee and partially off the record, was to the effect that there was consultation with the provinces and that in British Columbia and the western provinces generally there was some understanding. The understanding is to the effect that the total amount of the war veterans allowance as laid down by the War Veterans Allowance Act and the total amount of the mothers' allowance paid by the province will not both be paid. The war veterans allowance can supplement the mothers' allowance or vice versa. However, I understand that in the provinces from Quebec east no understanding was arrived at. I assume that a widow who may be on mothers' allowance in such a province and who can qualify for war veterans allowance will automatically cease to draw mothers' allowance when she applies for war veterans allowance.
Of course she is better off financially under the War Veterans Allowance Act. However, in the interest of saving members and departmental officials a lot of correspondence on this matter I should like the minister to make a brief statement explaining paragraph (f) of subsection 1 of section 6 so far as exempt income is concerned, because as it reads now the assumption is that one can draw both.


Hugues Lapointe: With reference to the
remarks made by the hon. member for Cape Breton South, actually this subsection is simply putting into the act what has been the policy of the board. I know the hon. member will understand that the most that can be done under any legislation passed by this parliament is to put in the act the necessary clause to permit payment of war veterans allowance when there is legislation in a province under which the recipient may also receive assistance. However, the payment of needy mothers' allowance is made under provincial acts in all the provinces, and when a particular provincial act will not allow payment of mothers' allowance when she is already in receipt of war veterans allowance there is nothing much this parliament or the department can do to amend the provincial act which sets out the conditions under which their payment will be made. There are some provinces where mothers

War Veterans Allowance Act can receive both the war veterans allowance and the payment under provincial legislation. Others have not seen fit to do that, and we can do no more than pray that some day they will permit payment as is done elsewhere.


Clarence Gillis: That is exactly what I wanted to get on the record. That is the position in so far as the Department of Veterans Affairs is concerned, and this legislation provides that that can be done.


Hugues Lapointe: Yes.


Clarence Gillis: If the provincial statutes are amended to permit it being done, and some of the provinces have gone that far.


Hugues Lapointe: We pay anyway whether or not they pay. This is another clause concerning which an amendment was agreed to in the committee, and I would now ask my colleague, the Postmaster General, to move:
That subclause 1 of clause 6 be amended by inserting after paragraph (h) the following:
"(i) Interest on bank deposits and bonds and dividends on shares in the capital stock of any company to the extent of $25 per annum from all such sources;" and by relettering the present paragraph (i) as paragraph (j).


Mr. Cote (Si. Jean-Iberville-Napierville):: I so move.


Howard Charles Green: That has the effect of putting back into the act the paragraph taken out by the amending bill.


Hugues Lapointe: Exactly.


Leslie Alexander Mutch: It is a little wider.


Alfred Johnson Brooks: The amount is exactly the same as it was in the old act.


Hugues Lapointe: Yes.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 7 to 29 inclusive agreed to.
On section 30-Veterans described.
Howard Charles Green: The hon. member for Cape Breton South raised the question of the widow of an imperial veteran who cannot qualify for war veterans allowance because her husband died before he had been here for twenty years. I suggest to the minister that he give consideration to having section 30, subsection 4 (b), which defines the residence qualification, changed to make it a domicile qualification. If it were worded to the general effect that the imperial veteran was domiciled in Canada before the 1st January, 1931, that would meet these cases and I think would be more in line with the actual wishes of previous veterans affairs committees. If the minister will recall, the group of imperial veterans who were


intended to be covered were the group who came here in the twenties. They had all come here by the end of 1930. I think there were practically none who came here after that time. There may be some coming now. but there were practically none between 1930 and the end of the second world war.
What we really were trying to do was cover the group who came here in the twenties; but instead of wording the definition to provide for those who were domiciled here by the end of the year 1930 we put it the other way around because the provision was only made in 1950, and we said it would apply to those who had resided in Canada for a total period of at least twenty years. There is no similar definition in the War Veterans Allowance Act. In other cases the test of domicile is used. For example, the minister will find that expression used in line 4 on page 12 of the bill. It refers to the imperial who was domiciled in Canada before the first war and then went overseas and served in the imperial forces. He has had eligibility throughout, the test being that he was domiciled in Canada before he went overseas in the first world war. I believe the test for this other group of imperials who came here after the first world war should be based on whether or not they were domiciled here before the end of 1930. If that were done the widows would all be covered and no widow would be ruled out provided her husband was actually domiciled in Canada before the end of 1930. I would ask the minister for his comments on that suggestion.


Hugues Lapointe: Mr. Chairman, following the remarks of my hon. friend, I will be very glad to consider the suggestions he has made. I am not aware of the full implications of such a change, but to my mind it would involve a change in principle. I would not like to commit myself at the present time but I will certainly consider his remarks.


Howard Charles Green: The suggestion is that you strike out the words "has resided in Canada for a total period of at least twenty years" and substitute "was domiciled in Canada prior to January 1, 1931."


Leslie Alexander Mutch: This is an ingenious device conceived for the express purpose of breaking the ceiling'which was put on the legislation when the imperial veterans were brought under the War Veterans Allowance Act. It is improper to suggest that was defined by the committee which wrote that legislation or the house which adopted it. The twenty-year clause was designed, perfected and brought forward by those people who sought

that benefit. As my hon. friend knows, because he was on the committee, those people came forward and said that was their final proposition. There had to be some definition under which they could qualify for benefit.
As my hon. friend knows, and as all the members of the committee know, benefits of this legislation flow from the veteran himself. Consequently if he is not qualified his dependents do not qualify.
I do not want to elaborate at the moment, but it is not correct to say that a change in the qualifying period would not be a change in principle. It definitely would be a change in principle. I am not arguing whether it should or should not be done at the present time, but I am saying for the benefit of the house that it does involve a change in principle, an abandonment of the principle upon which provision was made for wives of imperial veterans.


Howard Charles Green: I do not suppose the imperial veterans association gave any thought whatever to the widows. The matter probably did not cross their minds. The twenty-year clause is primarily related to the year 1930. That is why twenty years was put in, because they were going back to the year 1930. The legislation was passed in 1950 and the twenty-year residence qualifications was made then.
I am not trying to bring in any ingenious methods to break any ceilings or do anything of that kind. I simply suggest the test should be on domicile here before the end of 1930.


Leslie Alexander Mutch: I do not dispute that, but my point is that we should not argue or pretend that it does not mean an abandonment of the original principle behind the legislation. It does.


Clarence Gillis: I do not agree with the parliamentary assistant's analysis of the proposal put forward by the member for Vancouver-Quadra, when he says that it would in any way change the principle upon which the War Veterans Allowance Act was established.


Leslie Alexander Mutch: I did not say that.


Clarence Gillis: The parliamentary assistant stated a few moments ago that all the benefits of the act flow from the veteran himself.


Leslie Alexander Mutch: That is right.


Clarence Gillis: Yes. If the act were amended to make the suggestion of the member for Vancouver-Quadra operative that would in no way change the principle. What we are arguing about now is the widows' position. If the veteran had lived in Canada for twenty years he would have been eligible for war veterans allowance.


Leslie Alexander Mutch: That is not in dispute.
War Veterans Allowance Act


Clarence Gillis: By an act of God he did not live in Canada for the full twenty years. He was short a few months and passed on. That does not in any way change the benefits that flow from him.
We have already amended the act to make it applicable to the Canadian soldier who passes away in Canada. The benefit of the act is transferred to the widow. The need of the imperial veteran's widow is exactly the same as the Canadian veteran's widow. The benefit is a right that flows from the soldier to the widow because she is in need at this time. We are setting up a discrimination as between the need of the ex-imperial widow in Canada and the Canadian widow; and the pension should go to her because of need as it goes to the Canadian veteran's widow.
If the minister took the proposal under consideration and it were enacted we would remove an injustice and a discrimination. I do not think the amount involved is sufficient to have us quibbling year after year about this. This did not start yesterday in the veterans affairs committee; it started a good many years ago. We have included here what amounts to a discrimination and an injustice, and changing it would not affect the principle as I see it. I cannot help but feel that the application of this suggestion would save a lot of time in the future. I know the member for Vancouver-Quadra is going to continue to talk about this, and I am going to help him. The committee even passed it up in their recommendations to the house. The committee did not recommend anything on it.
Can the minister say that his department will take this under consideration, and may we hope that at the next session we will be able to avoid this discrimination and injustice?


Howard Charles Green: It is eleven o'clock but I would ask the minister to give some thought to it this evening.


Hugues Lapointe: There are only two sections of the bill left and I do not think they are controversial. The house might carry on and let me ask for an amendment to the next clause which will only take a minute to read.


Alfred Johnson Brooks: I quite agree with the hon. member for Vancouver-Quadra. We should make the amendment now.


Hugues Lapointe: I said very clearly that I would certainly consider the remarks made by the hon. member for Vancouver-Quadra, but it is not my intention to move any amendment to this act to put this proposal into force at the present time.


[Stage Direction]
Section agreed to.
[Stage Direction]
War Veterans Allowance Act
On section 31-Continuation of allowances.
Hugues Lapointe: I would ask my colleague the Postmaster General to move that:
Subclauses two and three of clause thirty-one be deleted and the following substituted therefor:
(2)	Every person who, immediately prior to the coming into force of this act, was in receipt of an allowance under the War Veterans Allowance Act, 1946, may be paid an additional allowance equal to the amount that he would have been eligible to receive under this act in respect of the period between the first day of January, nineteen hundred and fifty-two, and the coming into force of this act, if this act, except section four, had been in force during that period, less any amount that he was eligible to receive under the War Veterans Allowance Act, 1946, in respect of that period.
(3)	Every person (a) who was awarded an allowance under the War Veterans Allowance Act, 1946, whose allowance was discontinued and and was not being paid immediately prior to the coming into force of this act, for the reason that the amount of his income rendered him ineligible for the allowance, or (b) who, prior to the coming into force of this act, applied for an allowance under the War Veterans Allowance Act, 1946, but was not granted the allowance for the reason that the amount of his Income rendered him ineligible for such an allowance, may apply for and be granted an allowance in respect of the period between the first day of January, nineteen hundred and fifty-two, and the coming into, force of this act equal to the amount that he would have been eligible to receive under this act in respect of that period if this act, except section four, had been in force during that period, less any amount that he was eligible to receive under the War Veterans Allowance Act, 1946, in respect of that period.


Alcide Côté: I so move.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 32 agreed to.
On schedule A-Table of allowances.
Stanley Howard Knowles: Just before schedule A carries, and in just a word or two, I feel that I should express once again my regret that the figures set out in these schedules are $50 a month and $90 a month, single and married, rather than the figures of $60 a month and $120 a month which were proposed so often on the floor of this house and which were proposed by the Canadian Legion. It seems to me this parliament is not being fair to our burnt-out veterans by asking them at
this time to accept these figures when the higher figures certainly were in order and should have been written into this legislation. I earnestly hope that even yet the government will consider the higher figures of $60 a month for a single veteran and $120 a month for a married veteran on the burnt-out pension.


Alfred Johnson Brooks: The schedule, of course, is the main part of this bill. It was the schedule which received the most opposition in the committee. As the hon. member for Van-couver-Quadra pointed out, we asked that it be brought back and be reconsidered by the house. I do not feel that I could agree to the schedule passing without again registering a protest against it.


[Stage Direction]
Schedule agreed to.
Schedule B agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall this bill be read the third time?


Some hon. Members:: Now.


Alfred Johnson Brooks: Next sitting of the house.


Howard Charles Green: Next sitting.


Mr. Deputy Speaker:: Next sitting of this house.



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow we will take up the third reading of Bill No. 181,
respecting allowances for war veterans and their dependents; Bill No. 366, to incorporate the Belleville harbour commissioners; and the resolution of the Minister of Finance to introduce a bill entitled "An act respecting currency, the Royal Canadian Mint and the exchange fund." Then we will consider the estimates of the Minister of Defence Production and the other items of the Minister of Trade and Commerce; then the estimates of national defence, veterans affairs and public works.


[Stage Direction]
It being five minutes after eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday. June 24, 1952