1952-05-22

[Stage Direction]
Third report of standing committee on banking and commerce.-Mr. Cleaver.

Hon. Alphonse Fournier (Minister of Public Works):: Mr. Speaker, may I announce to the house that, after consultation with Your Honour, it was decided that the members of the staff of the House of Commons would be given a holiday on May 24.



NATIONAL DEFENCE


Hon. Brooke Claxton (Minister of National Defence):: Yesterday the hon. member for Calgary West (Mr. Nickle) asked about an order issued by the general officer commanding western command under which, it was said, all ranks of the Princess Patricia's based at Calgary had been required to move from their homes into barracks. I find this is not the case. During the period from May 17 to September 13, units in this command will be undergoing intensive training. Married officers and men can live out after duty hours, but must be back for the first parade.



PRIVATE BILLS


[Stage Direction]
Bill No. 247, for the relief of William Wallace Watson.-Mr. Winkler.
Bill No. 248, for the relief of Russell James Barrett.-Mr. Winkler.
Bill No. 249, for the relief of Alice Sabria O'Connor Muskett.-Mr. Winkler.
Bill No. 250, for the relief of Julia Emma Pearl Sager Noiseux.-Mr. Winkler.
Bill No. 251, for the relief of David Gilmore Bennett.-Mr. Winkler.
Bill No. 252, for the relief of Kathleen Hilda Turk Woodall.-Mr. Winkler.
Bill No. 253, for the relief of Mary Elizabeth Cate Lowe.-Mr. Winkler.
Bill No. 254, for the relief of Aldea Gen-dreau Bourbonnais.-Mr. Winkler.
Bill No. 255, for the relief of Peter Ernest Walker.-Mr. Winkler.
Bill No. 256, for the relief of Dorothy Agnes Kearns Bradley.-Mr. Winkler.
Bill No. 257, for the relief of Sarah Bernstein Smith.-Mr. Winkler.
Bill No. 258, for the relief of Margaret Gladys Redman Glassco.-Mr. Winkler.
Bill No. 259, for the relief of Louise Joslyn Smith Harvey-Jellie.-Mr. Winkler.
Bill No. 260, for the relief of Bertha Naujoks Stehr.-Mr. Winkler.
Bill No. 261, for the relief of Margit Aloisia Payer Worontschak.-Mr. Winkler.


Mr. Low:: 1.	What was the total amount paid to General Howard Kennedy as chairman of the eastern Rockies forest conservation board, for (a) salary; (b) expenses or other allowances, for each of the years 1947 to 1951, and to date in 1952?
2.	How many days in each year since 1947 did General Kennedy devote to duties in connection with the eastern Rockies forest conservation board?
3.	Is General Kennedy employed on a full-time basis, or in a consultant capacity only?
4.	Did General Kennedy hold any other position during the period January 1, 1947, to date?
5.	If so, what position or positions (a) with the federal government; (b) other than with the federal government?


Mr. Winters:: 1. Fiscal year	(a) Salary (b) Expenses
1947- 48	
$ 8,484.00	$2,588.531948-	49	
12,000.00	3,718.661949-	50	
12,000.00	3,327.431950-	51	
333.00	Nil1951-	52	
7,806.45	1,032.501952-53 (1 month) 625.00	Nil
2. General Kennedy combines work of and for the eastern Rockies forest conservation board with that of operating a private practice as consulting engineer. Some portion of virtually every day is devoted to work of the board. This varies from interviews with personnel of the Department of Resources and Development, the Auditor General's department or u.e treasury department, to correspondence and preparation of material for reports, study of legislation, etc.

Orders for Returns
In addition to the foregoing, General Kennedy devoted his full time to the work of the board on the following number of days:
Fiscal Year	Days
1947-	48	
841948-	49	
1051949-	50	
1021950-	51	
71951-	52	
571952-	53	
8
(He was on leave of absence without pay from April 1, 1950, to August 7, 1951, but nevertheless attended and served as chairman at board meetings in June and October of 1950.)
3.	The basis of General Kennedy's agreement with the Department of Mines and Resources in 1947 was that he would serve as chairman of the eastern Rockies forest conservation board and give as much time as was necessary to carry out the work of the board and to direct its affairs. He serves as chairman and in the formative stages of the board he acted in the capacity of both chief engineer and chief forester.
4.	Yes. General Kennedy served as director of the United Nations relief and works agency for Palestine refugees from April 1, 1950, to June 30, 1951. During this period he was on leave of absence without pay from the eastern Rockies forest conservation board.
5.	(a) In addition to the position with United Nations, General Kennedy has served as chairman of the forest insects control board. He also served as chairman of the associate committee in forestry of the national research council. No remuneration was paid for these two positions, (b) Not available except for No. 4.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Catherwood:: 1.	What was the total amount spent by the federal government on new public buildings in Ontario and Quebec, in the year 1951?
2.	What was the total amount spent by the federal government on wharves and harbours in Ontario and Quebec, during the year 1951?


Alphonse Fournier: Mr. Speaker, may we have this passed as an order for return. I understand that the information requested by these questions is all contained in the report of the public works department, the only difference being that my officials will have to get to work and prepare that. Perhaps the hon. member could easily find those details in the report.


Mr. Green:: May I ask the minister whether the departmental report does not go only to the end of March, 1951, whereas this question is for the whole calendar year.


Alphonse Fournier: That is where the difficulty will start. We do not keep the books open that way. We follow the fiscal year, so that is still more work, but I shall try to get the staff to do it.



ARMED FORCES


Mr. Pearkes:: 1.	What basic pay and allowances are received by officers of the various ranks between WO II in the army and equivalent ranks in the other services, and brigadier?
2.	After twenty years service, what pension would be received by the ranks mentioned in (1), upon retirement?


Mr. Blanchette:: Return tabled.



PURCHASE OF CARS FOR GOVERNMENT DEPARTMENTS

Mr. Dinsdale:: 1.	How are new cars purchased for the various government departments?
2.	Are these cars purchased directly from the factory or through retail distributors?
3.	If purchased through retail distributors, are tenders called for?
4.	If tenders are called for, how is information circulated among dealers so that all interested parties might have the opportunity to submit a tender?



CANADIAN FARM LOAN ACT


Hon. Douglas Abbott (Minister of Finance) moved: that the house go into committee at the next sitting to consider the following resolution:
That is is expedient to introduce a measure to amend the Canadian Farm Loan Act to provide for a number of administrative changes under the act; inter alia to give power to the Canadian farm loan board to borrow money from the minister to be paid out of the consolidated revenue fund on such terms and conditions as the governor in council approves for the purposes of the board; to permit first mortgage loans up to 60 per centum of the appraised value of the security and up to a maximum of $10,000; to provide for the appointment, duties and remuneration (out of the revenues of the board) of an advisory board to be known as the Canadian farm loan advisory board; to provide with respect to short term loans secured by second mortgage that they may be made for the same purpose as first mortgage loans and up to one-third of the amount of a first mortgage loan; and to provide further for aggregate maximum loans secured by first and second mortgages up to $12,000 and up to 70 per centum of valuation where chattel security is taken or 65 per centum where it is not taken.

He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.


[Stage Direction]
Motion agreed to.


Douglas Charles Abbott: that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to introduce a measure to amend the Tariff Board Act to provide that there shall be paid out of the consolidated revenue fund' an annual salary of twelve thousand dollars to the vice-chairman of the board and an annual salary of eleven thousand dollars to the other member of the board.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinion):: May I
ask the Minister of National Defence whether any further prosecutions are being planned or prepared now, in respect of thefts either at Petawawa or elsewhere, as the result of any recommendations of Mr. Currie's staff or otherwise?


Brooke Claxton: Mr. Speaker, it is rather difficult to anticipate events, but I will tell the hon. member that I expect further prosecutions to be laid.


Donald Methuen Fleming: Is the minister in a position to say how soon?


An hon. Member:: How can you tell?


Brooke Claxton: Just as soon as the legal
advisers of the Department of Justice think it is desirable.


Donald Methuen Fleming: I have one other question. Are those in respect of thefts at Petawawa or elsewhere?


Brooke Claxton: Unfortunately, as I indicated in the house the other day, there are a number of prosecutions laid every year; but the only ones I know about are at Petawawa.
Gold Mining



EMERGENCY GOLD MINING ASSISTANCE ACT


[Stage Direction]
1952 AND 1953
Hon. George Prudham (Minister of Mines and Technical Surveys) moved: the second reading of Bill No. 242, to amend the Emergency Gold Mining Assistance Act.
He said: Mr. Speaker, the amendments before the house will provide for the extension of the provisions of the Emergency Gold Mining Assistance Act for two years. It will also clarify the application of the formula for cost-aid as it applies to the last quarter of 1950, and in the years 1951, 1952 and 1953.
We had a very full discussion on the resolution. I was pleased to note that the speakers without exception indicated their intention to support the amendments. The hon. member for York West (Mr. Adamson) referred to gold mining as a dying industry. I know that the industry is experiencing serious difficulties at this time and is, in fact, struggling for its very existence. I will not, however, agree that it is a dying industry.
The legislation now before us is designed to assist the industry over the present difficult period. At no time has it ever been suggested that this Emergency Gold Mining Assistance Act and subsequent amendments are intended as a cure-all for the ills that beset the industry. They are only intended to help meet the emergency. In my opinion the difficulties that the industry is now struggling against will produce some benefit. The very fact that the price of gold has not been high enough to make it profitable is a challenge to all engaged in the industry.
As I said on a previous occasion, I recently had the pleasure of visiting the gold mining area of northwestern Quebec. There we saw at first hand the miracle that has taken place during the last few years. A short time ago the country was nothing but a vast wilderness. Today there are in existence thriving and prosperous towns; they are not the temporary makeshift communities that some people would expect to find on a wilderness frontier but are permanent, modern towns with all conveniences, well planned, with permanent and beautiful public buildings and fine homes. This has all taken place within the last twenty or twenty-five years. Similar history is being made in many other provinces in Canada and in the Yukon and the Northwest Territories. Around the towns agriculture is developing on an ever-expanding scale.
The spark plug of all this development was, and still is, gold. Many of the communities

Gold Mining
to which I have referred are largely dependent on one or more mines in their vicinity. Some mines are producing base metals as well as gold. Here and there base metal mines are being developed and these are adding stability to the region. I am informed that in almost every instance the original development was for gold.
These mines use an enormous amount of steel, electrical goods and products of the factories, forests and farms. They also contribute to the prosperity of our railways and other transportation facilities.
I should not pass on without saying a word about the contribution that aviation has made to the development of the north. Aviation has speeded up the exploration and development work tremendously.
The search for gold is the spearhead of civilization rolling back the wilderness and revealing and contributing to the development of the great riches of the Canadian shield. I could go further and tell you about the prospectors who brave the hardships of the wilds-black flies and the discomforts of the trail-as they go forth to discover and unlock the secrets of Canada's great storehouse of wealth, namely the Canadian shield. I could tell you about the engineers who plan the development and operate the mines and whose ingenuity and resourcefulness have evolved new and better methods, and more economical production.
It is this fine response to the challenge of adversity that has enabled the mines to continue under the present difficult circumstances.
I could tell you of the miners who daily face the dangers and hazards of underground operations. I believe, as the hon. member for Cariboo (Mr. Murray) does, that any man who works underground should receive a good svage for an honest day's work.
One partner in this great Canadian enterprise that is often forgotten, or to whom little credit is given, who I think should be recognized, is the investor, the provider of the risk capital, the men and women who provide the capital that makes possible the large scale very expensive enterprises that are necessary for successful operation under present-day conditions.
We all know that the prime reason for investing in mining enterprises is the hope of making a profit. As long as we believe in free enterprise we believe in the profit motive. We also know that free enterprise to operate successfully requires co-ordinated effort of capital, labour and management. In the gold mining industry at the present time we have an outstanding example of that co-ordinated effort.

I have been impressed during my trip to northwestern Quebec by the evidence of sincerity and public responsibility on the part of the owners and management and by the miners themselves. To their credit, they are investing -large sums in recreational and social facilities for the old and young. They are building beautiful churches and schools.
We visited one splendid community centre that had been donated to the town by one of the mining companies. In another centre we visited a large community hall that had been built and completely paid for by the employees of a mine.
I am confident that the gold mining industry, and our mining industry in general, will survive the present difficulties and show the way to a greater and more prosperous Canada. The industry will be stronger than ever because the people in the industry are meeting the challenge of the present day with the spirit of hard work, enterprise and ingenuity.
The people of the gold mining industry are not looking for a handout. They are only asking for a chance to work out a solution to their problems. I am firmly convinced, Mr. Speaker, that if Canada is to be a great nation, as we all hope, we must maintain that spirit of adventure, enterprise and industry that is so clearly exemplified by these -northern communities.
By these remarks I have endeavoured to show that the mining industry, although facing difficulties, is meeting the challenge and without a doubt will survive the emergency and be stronger for the struggle.
The extension of the cost-aid for another two years will give the mining industry a chance to cope with their problems. We all hope, and I know that the industry hopes, that they will not have to ask for further aid. However, that can be reviewed when the time comes. As I said before, this is not intended to cure the ills, but merely as a temporary aid to assist the industry in working out their own problems.


Mr. Rodney Adamson (York West):: In his
remarks the minister used the word miracle in describing what he had seen in northwestern Quebec. May I say with all due respect he is hoping for another if he hopes that this gold mining area will continue to live in face of rising costs, with a fixed price for its products, that is in front of it today.
To go over the situation with regard to gold production for the last fiscal year, we find a very serious deterioration has taken place. The costs for straight gold mines have increased in the last twenty months, rather

less than two years, by no less than $4.20 an ounce produced, or 12 per cent as a gross cost.
As I mentioned in my remarks last week, the Hollinger had an increase based on a ton of gold of $1 a ton. The grade at Hollinger may run $11 or $12 a ton, and the profit is a comparatively small amount. If this increase in costs per ton continues the gold mining industry even for the most profitable producer is doomed, and doomed in a comparatively short space of time.
The figures of production for last year published by the Canadian Metal Mining Association are as follows-they are in round figures: Thirty per cent of the gold is now being produced by mines whose costs are over $35 an ounce. The assistance from this act is $6 an ounce on the average. Even with this assistance these mines are operating at a loss at the present time. Thirty per cent of the straight gold mines have an average price of $32.50 an ounce, and the cost-aid averages $3.50 an ounce. At the present time these mines are just breaking even. The remainder, or 40 per cent of the straight gold mines, have an average cost of less than $30, and the cost-aid is 70 cents an ounce. These mines are still able to make money.
If costs go up in 1952 an amount similar to the increase in 1951, two-thirds of the Canadian gold mining industry will not be able to produce an ounce of gold for the statutory price of $35 in United States funds by the end of the year. And despite cost-aid on these figures, by the end of this fiscal year, practically two-thirds of our straight gold mining companies will not be making a profit on what they are producing. If that does not mean that the destruction of the industry is facing us, and facing us in the very near future, then I do not know what it means. The statement the Minister of Mines and Technical Surveys has made, that gold is the magnet, the metal that has attracted our frontiers north, is one with which I agree. But that just reinforces my statement that the gold industry today is in a perilous condition.
There is one other point I wish to make, and that is to deny the assumption that the United States treasury is the main market or even the control over the price of gold. The premium on the Canadian dollar is due not so much to inherent strength in our currency as to a weakness in the United States position, or a flight from the U.S. dollar. No matter how great or how rich a nation is, it cannot defy the laws of economics continuously. The United States policy of 55704-1554
Gold Mining
deficit financing is dangerous, not only to that country but to the whole of North America.
Annual deficits, particularly deficits which are suspect of being caused by and for internal political policies, are weakening the economic structure of the United States, and causing a great danger to the entire free world. The U.S. dollar, because of this policy, cannot be other than a wasting asset in terms of goods and services. For us to sell gold for this currency is basically unsound for this reason alone; but to sell it at a price below the world price, even, stated in terms of U.S. dollars, is, to put it mildly, the supreme folly. No matter what the prosperity, no matter how great the production, no matter how high the standard of living, no country can survive continuous deficits in its national accounting.
I say that without any desire to criticize a great and friendly government. But the whole policy which is being followed, the whole economic policy, makes the gold industry in Canada hostage to American inflation. And, as I pointed out before, today less than 15 per cent of the gold is going into useful channels; it is being placed in hoards. That is the one thing we are trying to prevent. The one thing that we are trying to do is to put gold back into useful circulation. To fail to do this would be as dangerous as any national policy we could follow.
I spoke at length on this subject last Wednesday, and I do not propose to repeat today what I said at that time. But I wish to deny as emphatically as I can any suggestion that the United States either controls the world price or is the main market for gold. We should examine carefully th* whole policy of selling gold to this market at the present price.


Mr. Vicior Quelch (Acadia):: Mr. Speaker,
when this measure was in the resolution stage we stated we would support it, to give assistance to the gold mining industry, because we recognize the important part that industry plays in the Canadian economy. First of all, we are producing gold and, secondly, gold plays an important part in helping us to meet our unfavourable balance of payments with the United States.
For a number of years we have been in the difficult position of not being able to balance our trade with that nation; and therefore gold does help us to balance our payments. On the other hand I would say that we would be in a far happier position and would be making a greater contribution to the welfare of the world if, instead of expanding the

Gold Mining
production of gold, we were to expand the production of some other useful commodity the United States was willing to accept. In that way not only would we be able to balance our payments with that country but, in addition, we would be making a real contribution to the wealth of peoples throughout the world.
During the last four years I believe we have paid over $40 million to the gold producers by way of assistance. I understand there are in the neighbourhood of 26,000 workers in that industry. I mention that only to remind those hon. members who, at the time we were discussing another measure, one which gave $65 million to the wheat producers, opposed it. Let me point out in passing that that $65 million was paid over a period of five years, and that over 250,000 grain producers benefited from the payment. So the amount of the subsidy now being given to the gold producers is far greater than the assistance given to the wheat producers. Further, the price of wheat was controlled in the same manner as the price of gold is now controlled. I mention that only in passing, and in the hope that in future, if measures come up to give assistance to wheat producers, a more reasonable attitude will be adopted by some of those very people who are so insistent now that this assistance be given to the gold producers.
When the hon. member for York West (Mr. Adamson) spoke at the resolution stage he said that a return to the gold standard was desirable. He made it clear that he realized this could not be brought about overnight and that certain preliminary steps would have to be taken. On the other hand he left no doubt that he supported the idea of the restoration of the gold standard; and, in view of the fact that he spoke first for his party, I am assuming he was speaking on behalf of it, and that the Progressive Conservative party supports a restoration of the gold standard.
Let me add that not only the Progressive Conservative party is advocating the restoration of the gold standard, because in his mail every member receives a great amount of propaganda from various interests advocating the same thing. Let me make this clear. If we in this group thought for one moment that assistance under this bill was aimed at the restoration of the gold standard, we would not support it for one moment. On the other hand I have no reason to believe that that is the attitude of the government. As a matter of fact statements made from time to time by the Minister of Finance (Mr, Abbott) indicate clearly that that is not so.

Apparently at the moment the government believes in a managed currency, which I believe is far more beneficial to the country than any effort to operate under a gold standard.
I found the speech of the hon. member for York West most interesting. With some of it I agreed, and with some I did not. I was interested in what he said with regard to the White plan brought down prior to the Bretton Woods agreement. Of course gold plays a large part in the Bretton Woods agreement. It holds a preferred position. It is the only commodity that a debtor nation has the right to demand that a creditor nation accept in payment of its obligations. A member nation's currency is valued in terms of United States dollars, and United States dollars are valued in terms of gold. So gold does play a very important part, and holds a very preferred position under the Bretton Woods agreement.
The hon. member for York West pointed out that Dexter White, who apparently wrote the White plan, had been called by Chambers a fellow traveller. Apparently he was a communist. The reason why that interested me is that at the time we were discussing the Bretton Woods agreement some of the strongest supporters of that agreement in this country were communists. At that time we were the only group in this house opposing the agreement and they criticized us bitterly and called us fascists and a few other names because we opposed it.
At that time we had in the house as a member a prominent communist. It so happened that he sat beside me. I said to him one day that I could quite understand why the communists were so anxious to push other nations into the Bretton Woods agreement because they felt that it was going to be a tremendous handicap to any nation that joined it and therefore Russia was all too anxious to get as many nations into that agreement as possible. I told him at that time that I was satisfied that Russia would never join the Bretton Woods agreement. He insisted they would, but what happened? Russia supported it up to a certain point and then dropped it. I think that was all by design; I do not think that was accidental.
It is very interesting to note that today one of the main reasons why Great Britain is having to trade with nations behind the iron curtain is to be found in the provisions of the Bretton Woods agreement. I do not think anyone should criticize Great Britain at the present time because she is trading with nations behind the iron curtain because it is a matter of life and death with her. She has to get food. She is able to get food

from Russia. Apparently we are not prepared to sell her food unless she pays for it in dollars and she has not the dollars. She must buy that food from nations which are willing to trade with her on a barter basis or in return, for sterling.
The hon. member for York West has advocated a return to the gold standard. I would say that any person who asks for a restoration of the gold standard is playing into the hands of the Kremlin to an even greater extent than were those who supported the Bretton Woods agreement. If the gold standard is ever returned it will mean strikes in this country from one end to the other; it will mean a very serious depression.
I say that for the simple reason that the gold standard cannot work efficiently where you have built up a degree of stability, where there is resistance against a fall in wages or a fall in the prices of agricultural products, where there is stability in incomes. In order to have the gold standard work efficiently that stability must be broken down.
Perhaps I should explain why I say that. I think we are all familiar with the principle of the gold standard. We know that under the gold standard currency is based upon gold; the gold reserves automatically control the internal prices in relation to the external prices. When prices within a nation rise to a higher level than the prices of other nations, gold flows out, exports fall off and we have an unfavourable balance of payments. The gold must flow out in order to adjust that adverse balance of payments. When the gold flows out your gold reserves are reduced and therefore there has to be a general restriction in the amount of money in circulation in order to bring it back into conformity with the reduced gold reserves.
When you reduce the amount of money in circulation it has a tendency to reduce prices. When you reduce prices there is a tendency to reduce wages and increase unemployment. That is supposed to go on until your prices fall to a level either lower than or equal to the prices of other nations. Then those other nations are supposed to buy your production and goods and gold will gradually come back into the country. That is supposed to be the automatic feature. Theoretically it works quite nicely.
As I said before, the gold standard can work effectively only when the social structure is amenable to these automatic features. Fortunately that is not the case in. Canada. I am not trying to pat the government on the back, but we have built up in this country a certain degree of stability. We have a certain degree of stability in wages due to wage agreements. We have a certain degree
Gold Mining
of stability in farm prices through price support. If the gold standard is to apply you would have to break that structure or lose gold and thus have to restrict the amount of money in circulation. In a very short time you would either be forced off the gold standard or you would have a very serious depression-.
I know that some will say that I am not giving a fair interpretation and therefore I should like to quote an orthodox economist, a man who I think has been recognized as an authority on the gold standard. I refer to Mr. T. E. Gregory, professor of currency and banking, University of London, and of the London School of Economics. I intend to quote from his book entitled "The Gold Standard and its Future", pages 32 and 33, as follows:
It is more profitable to turn to a consideration of the general nature of the post-war economic situation and to discuss how and why this situation has complicated the working of the gold standard.
Thirdly, the world economic structure has become rigid1 to an unprecedented degree. Owing to the much greater pressure which organized business and labour interests can bring to bear on government, there has been a general advocacy of "stability" which has in practice meant that particular groups could stabilize their own position without any, or enough, attention having been paid to the result of such stabilizing action on other parts of the economic field or to the long-period results of such action. Raw material producers have been allowed, with the aid of governmental or quasi-govem-mental assistance, to "stabilize" the prices of particular raw materials, without regard to the fact that consumption might thereby be discouraged and production encouraged ... In the sphere of labour there has been in certain countries a development of unemployment insurance schemes or similar relief measures which have prevented wage rates from falling, whilst in others public opinion, reinforced' by government propaganda, has had very much the same effect . . . From the standpoint of the working of the international gold standard, such a rigidity of social structure and of the scale of money income implies that the adjustment, which might under more elastic conditions have been made by movements in the domestic price and income structure, is at best delayed1, with the inevitable effect that gold movements, or, what is in the modern world very much the same things, changes in the holding of foreign exchange assets at the command of the Central Bank, take place on a larger scale than would otherwise have been necessary.
I think that explains it in a more lucid manner than the way 1 described it. It indicates exactly what I was saying, that you cannot expect the gold standard to work efficiently so long as you build up buffers against a fall in wages, a fall in agricultural prices and a decrease in the general degree of well-being. Consequently your gold standard either has to go or you go down into a serious depression.
In this regard I always think that the best way to learn is to study the mistakes we have made in the past. During the past

Gold Mining
we have been on the gold standard on various occasions. I was interested in a report issued by the United States department of commerce in 1944 entitled "The U. S. in the World Economy" in which they review the reason for the quick recovery from the 1920-21 depression, the reason for the duration of the depression in the thirties, and the reason why we got out of the depression rather quickly in 1937-38. As I say, I am only going to quote enough to explain what effect the gold standard had in these movements.	On page 2 there is
the following:
The major factors contributing to the relative ease and speed with which our international transactions weathered the strain of the 1920-21 period appear to have been the following:
As pressure emanated from this country through the fall in business activity and prices, declining imports, and cessation of government lending, other countries were able to absorb part of the strain by permitting their exchange rates to depreciate and thus avoided becoming enmeshed in excessive deflation in their own economies. This was possible because the pegged exchange rates maintained among the allies during the war had been abandoned and the international gold standard had not yet been restored. Few countries, if any, attempted at that time to maintain fixed rates on the United States dollar.
Also largely because they had not yet recommitted themselves to the gold standard . . .
With respect to the longer depression in the 1930's there is the following on page 5:
The major factors accounting for the duration of the decline and the severity of its consequences were in many respects the reverse of the more favourable conditions noted with respect to the 1920-21 period. Among these factors were the following:
In further contrast to the more flexible situation at the beginning of the decade, the world at large had returned to a regime of fixed exchange rates under the reconstituted international gold or gold-exchange standard, which had won general adherence by the end of the twenties. The initial endeavour to defend their exchange parities and reserve positions let the task of readjustment in their external demands fall full force on their internal economic life, thus strengthening the forces of depression and deflation throughout the world generally.
One can only speculate as to how much deflation other countries would have had to enforce and endure if the adjustment had been carried all the way through in this manner. The principal measures of adjustment resorted to by other countries, most of which involved a radical departure from the gold standard and the previous world commercial system in general, were as follows:
(1)	Abandonment of gold parities and depreciation of foreign currencies with respect to the dollar.
(2)	General tariff increases aimed at curtailing total imports and promoting domestic production.
(3)	Preferential tariff and commercial arrangements designed to foster trade among the participants and to divert trade from other sources of supply.
(4)	Direct trade and exchange control through quotas and licensing requirements for the purpose of forcing trade along selected channels and restricting the use of foreign exchange to the available supply.

May I interject there that very often we hear the charge made that these controls and restrictions were largely responsible for the depression. Note that the depression was the reason that these controls and restrictions were implemented, and it was largely as a result of these controls and restrictions and the abandonment of the gold standard that we were finally able to pull out of the depression. With regard to the 1937-38 depression there is the following on page 10:
The reasons for the short duration of the decline in our international transactions in 1937-38 and for its failure to have more serious repercussions seem to be as follows:
Of basic importance with respect to the supply of dollars, prompt and energetic action was taken by the national authorities to prevent the development of the domestic recession into progressive and cumulative deflation along the 1929-32 order and to insure revival. In addition to the greater flexibility of exchange rates in general, by the time of the 1937-38 recession many foreign countries had developed intricate systems of trade and exchange controls and other techniques which helped them to absorb shocks from the outside without transmitting undue pressure to their internal economic structures.
I think it is unfortunate, Mr. Speaker, that we did not benefit by the experience that we gained in those years when we were drafting our post-war proposals with respect to financial policy. If we had given due regard to what had happened during those years, I think we would have been very hesitant about signing the Bretton Woods agreement because under that agreement, as I have already stated, we did place gold in a preferred position. We made gold the only commodity in the world today which a debtor nation has the right to insist that its creditors shall accept in payment of its obligations. Second, we gave exporting nations the right to demand payment in their own currencies instead of accepting the currency of the importing nation without placing any obligation whatsoever upon the exporting nation to buy the other nation's goods so they could obtain their currency.
If they are not able to obtain the currency of the exporting nation with which to pay for these imports, then of course they either have to go into debt or meet these payments with gold. Most of the nations that need1 our goods are not in the fortunate position of having gold. Not satisfied with that, we also supported a policy of non-discrimination which even denied those debtor nations the right to determine their sources of supply. Naturally when they had an adverse balance of trade with the dollar area the only way they could correct their balance of payments was to try to reduce their imports from the dollar area and buy elsewhere. They were denied that right under the principle of nondiscrimination, although at the present time,

realizing that they cannot possibly get on in any other way, we have allowed them to discriminate.
Another point that the hon. member for York West advocated was a free market for gold as a preliminary step to the setting up of a gold standard. So far as this group is concerned1, we would have no objection to a free market for gold provided that gold was divorced entirely from the monetary system and made a commodity the same as anything else. Make it a commodity the same as other goods, provide a free market and make it subject to the law of supply and demand, speculation or anything else you like; but as long as gold is used as a yardstick we consider it very unwise to make it subject to speculation. As long as gold is used as a base for establishing the exchange rate between the currencies of the nations or as a gold base, then of course the price of gold1 should not be subject to speculation.
What would1 one think if our weights and measures were subject to the law of supply and demand? What would one think if every time there was a surplus of goods we agreed to put 24 ounces in a pound in order to move them, or if every time there was a surplus of cloth we agreed to put 40 inches in the yardstick instead of 36 in order to make it possible to move those goods or to meet the law of supply and demand? I think everybody would realize that our weights and measures would no longer be a yardstick of value. In exactly the same way, if you are going to make gold the basis of your currency and the basis for the exchange value between currencies, and then at the same time make the price of gold subject to the law of supply and demand, you have not got a yardstick at all.
I quite realize that some people may not agree with my viewpoint, and I believe the hon. member for York West would pay far more attention to the leader of the Conservative party in Great Britain than he would to me. Therefore I should like to quote what Mr. Churchill had to say on that particular point in a speech he made in the House of Commons of the United Kingdom on April 21, 1932, to be found at pages 1661 and 1662 of the official report of their debates. He said:
When I was moved by many arguments and forces in 1925 to return to the gold standard I was assured by the highest experts, and our experts are men of great ability and of indisputable integrity and sincerity . . . that we were anchoring ourselves to reality and stability: and I accepted their advice. I take for myself and my colleagues of other days whatever degree of blame and burden there may be for having accepted their advice.
But what has happened? We have had no reality, no stability. The price of gold has risen since then by more than 70 per cent. That is as if a 12-inch footrule had suddenly been stretched to
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19 or 20 inches; as if the pound avoirdupois had suddenly become 23 to 24 ounces instead of-how much is it?-16. Look at what this has meant to everybody who has been compelled to execute their contracts upon this irrationally enhanced scale. Look at the gross unfairness of such a distortion to all producers of new wealth, and to all that labour and science and enterprise can give us. Look at the enormously increased volume of commodities which have to be created in order to pay off the same mortgage debt or loan. Minor fluctuations might well be ignored, but I say quite seriously that this monetary convulsion has now reached a pitch where I am persuaded that the producers of new wealth will not tolerate indefinitely so hideous an oppression.
If any change is to be made in the price of gold while it is being used as a measure of value, then unquestionably that change should be made by statute and not be made subject to the law of supply and demand or speculation.
The member for York West further stressed that the free market would loosen trade in the sterling area. I was very interested in that. Perhaps I had better quote his words because I do not want to distort what any member has said. I refer to page 2212 of Hansard for May 14, 1952, where I read:
The return to the gold standard is the only measure which, by making currency both a medium of exchange and a store of actual value, will prevent inflation . . .
That is an interesting statement, but this is the one I really meant to quote, on page 2210:
If therefore the owners of the soft currencies were provided with the machinery by which they could exchange these currencies, through the medium of our gold market, into gold they would have a much more useful counter, no matter what it was called. There would have to be of course a buyer for the soft currencies, but the productivity of the sterling area in itself indicates a market for those currencies for those who wish to buy in that area.
I think that is a somewhat peculiar statement, because after all if anyone in Canada wants to buy sterling he can pay for it in dollars instead of gold. In so far as Great Britain is concerned she will be able to buy just as many things from Canada or the United States with dollars as with gold. In order to make it possible to buy sterling, you certainly do not have to have the restoration of either the free market for gold or the gold standard. I would have agreed with the hon. member had he advocated that we in this country should be willing to make some concessions to the sterling area by accepting payment for our goods in sterling, instead of demanding payment in dollars.
If we received a greater degree of sterling than we could use in the purchase of goods from that country, then we could hold those surpluses for future purchases or, if we considered that we would not need that surplus

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for future purchases, then I think we would be justified in investing that currency within the sterling area in order to encourage productivity, and thereby make it possible for that area to export more goods to us.


Douglas Charles Abbott: I do not want to interrupt the hon. member, but does he think that would be better than lending the money directly to the United Kingdom-, because of course it is a form of loan. It would be a loan without interest.


Victor Quelch: I am interested in the minister's observation there, because I had a dispute with a former minister of finance when I said the same thing about United States investments in Canada. I characterized the United States investments in this country as being a form of debt, and he said that was not a debt at all.


Douglas Charles Abbott: I did not mean that making investments in the sterling area was a loan, but does the hon. member think it would be preferable to make a loan by buying sterling, and perhaps investing it abroad, rather than to make the loan directly to the United Kingdom government as we have done in the past?


Victor Quelch: No, this is a suggestion by the member for York West. I am not suggesting for one minute that we buy sterling. I suggested that when we have goods to export to England, and they are not able to pay us in our currency and at the same time they require our goods, then we should be willing to accept sterling. Having obtained that sterling, it could either be used for the re-purchase of goods produced within the sterling area or invested within the country. I agree that, in effect, that would be largely the same as a debt to us, but I think it would be a good way and would help both Canada and the sterling area.
It would certainly affect the agricultural producers of this country, because at the present time the agricultural producers of this country are being warned that if they expand their production there will not be a market for it. I believe it is nothing short of a calamity that any industry today should be reducing the production of food when there is so much starvation in the world. I believe it would be a good thing, therefore, to make it possible for Britain to buy our agricultural products and pay for them in sterling, and then we could take that sterling and invest it in that area. After all, we would be doing only the same thing that the United States has been doing in Canada. United States people are making quite large investments in Canada and we are using the dollars that come from those investments to increase our

dollar and gold reserves and to meet our unbalance of payments. In any event, gold does not need to enter the picture at all. It is merely a question of Canadian dollars and United States dollars.
In closing, I would say that so far as I can see the government of this country intends to adhere to a managed currency. In my opinion a managed currency is far superior to the operation of the gold standard. Under a managed currency you have some of the best brains doing everything in their power to make the amount of money in circulation meet the needs of the Canadian people, and under the gold standard you make the amount of money in circulation dependent upon the size of the gold reserve, regardless of the amount that may be needed to maintain a high level of employment and well-being in this country.


Donald Methuen Fleming: Mr. Speaker, having spoken in the debate on the resolution stage of this measure on May 14, I do not propose to repeat anything I said at that time, although I shall press for answers to some of the questions I asked on that occasion which have remained unanswered. But I have a special wish to deal with some of the statements made by the Minister of Finance (Mr. Abbott), who I regret to say has just left the house, when he spoke at the resolution stage on May 19.
Before I come to those statements, I have only one observation to make on the speech the hon. member for Acadia (Mr. Quelch) has made. He has expended a lot of effort and a lot of words in answering a case which I believe was not offered in the house. I do not know that anybody is suggesting that the restoration of the gold standard is even within the realm of possibility under present international conditions. What we of the Progressive Conservative party are urging is a revaluation of gold, because that will serve the interests of Canada.


Victor Quelch: That is not what the member for York West (Mr. Adamson) said.


Donald Methuen Fleming: I think if the hon. member for Acadia will read again the speech made by my colleague the member for York West he will see that he is reading into that speech a great deal more than the hon. member said.


Victor Quelch: Will the hon. member permit me to read point No. 8 from page 2213 of Hansard for May 14, 1952? It reads:
A gold-backed currency is the only sure cure for inflation. The return to a gold standard Is desirable but is not an immediate prospect.


Donald Methuen Fleming: It is not an immediate prospect now, and under present conditions it would be quite impossible.


Mr. Blackmore:: Under any conditions will it be desirable?


Donald Methuen Fleming: I do not say that under no conditions would it be desirable. Unless certain conditions which do not obtain today were present in the international sphere, I would not suggest for one minute that restoration would be desirable. But I would want to see those conditions obtain before I would commit myself on that subject.


John Horne Blackmore: Will the hon. member permit a question?


Donald Methuen Fleming: I do not intend to be led off into a theoretical discussion which my friends to the left love so well, and which I am afraid would be unprofitable for all concerned.


John Horne Blackmore: The hon. member means a realistic discussion, not a theoretical discussion.


Donald Methuen Fleming: No. I am talking about a theoretical discussion when I refer to the theme that interests my hon. friends greatly.
I wish to deal with a very real subject, a subject of very real and direct interest and importance to Canada, namely a realistic policy on gold having regard to the interests of the Canadian nation. I propose to deal specifically with some of the remarks made by the Minister of Finance (Mr. Abbott) when he spoke in this debate on May 19. Some of us who spoke prior to the Minister of Finance in the debate had pressed for some statement of policy on the part of the government in relation to the price of gold and also for some statement of government policy with relation to the international monetary fund. What the Minister of Finance had to say falls short of a statement of policy with regard to either of those matters.
Let us then examine what the Minister of Finance had to say about gold in relation to the policy of the United States. At page 2367 of Hansard the minister is reported as follows:
Really to oversimplify it, the present value of gold today depends upon the willingness of the United States treasury to take it and to give $35 an ounce worth of goods and services for it. If the United States treasury ever stopped doing that, I can tell you that the Canadian gold producers would be in a much more serious position than they are at this moment.
And further down in the same column:
... I again remind hon. members that the continued value of gold and the future of the gold mining industry is dependent, under today's conditions, upon the United States treasury being willing to purchase it.
Everyone will concede, Mr. Speaker, that the policy of the United States government with reference to the purchase of gold is a
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factor of high importance in the position of gold throughout the world. But, Mr. Speaker, the Minister of Finance has not said one word about what the government of Canada is seeking to do by way of influencing the policy of the United States government or seeking to obtain on behalf of the gold producers of this country an adequate price for their product. Indeed, one could only interpret the remarks made by the Minister of Finance which I have just quoted as suggesting that there has been some fear gripping the minds of the Canadian government, namely the fear that the United States policy with regard to gold may somehow be offended if the Canadian government asserts the interests of the Canadian gold producers, and that this fear has somehow restrained the Canadian government from putting forth a proper effort to defend the rights of the Canadian gold producers.
I ask in all seriousness, Mr. Speaker, why this fear? How serious is a fear of this kind? Let us examine that matter for a moment. I submit to the house that there is no likelihood whatever of the United States government's abandoning its policy of buying gold. In the first place, while these figures are bound to fluctuate from time to time, the last figures I saw with reference to the gold holdings of the United States government indicated that the total held is some $22 billion in gold, of which $16 billion is required to give backing to the currency of the country, according to the laws of the United States. Mr. Speaker, is the United States government going to adopt any policy that is going to throw away or reduce the value of that national asset? Of course they are not.
In the second place, the policy of the United States government has shown a firm belief in gold as the final and universally acceptable means of settling international balances. Indeed it is fair to say that the policy of the United States government has been based upon that view. There is available today no evidence whatsoever to indicate that there is any change of viewpoint on the part of the United States government.
In the third place, all nations of the world still seek gold-even Russia. There is not one country in the world today that would not increase its supply of gold if it were within its power to do so.
In the fourth place, it has been and continues to be the policy of the United States government to keep gold out of private hands. I think that fact has a direct bearing upon government policy in Canada; and I think that anyone who suggests that the United States government is suddenly going to cease buying gold is not facing the situation realistically.

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Then in the fifth place, Mr. Speaker, I suggest that it is quite clear that governments are going to have to enter the gold market and to rebuild their currency reserves; and I suggest that the United States government is not going to be the last among the governments of the world in doing that. Therefore, Mr. Speaker, in his contribution to this debate the Minister of Finance has done nothing more than set up a straw man as an excuse for apparent inaction of the government of Canada in the face of a policy of the United States government which limits the price paid to the Canadian gold producer to $35 per ounce United States funds. This price is not meeting the cost of production of the majority of producing Canadian mines today, and is having the effect of grinding this important Canadian gold industry between the upper and the nether millstones, the upper stone being a fixed ceiling price for gold and the lower stone being the constantly rising cost of production.
What did the Minister of Finance have to say on May 19 with reference to the policy of the Canadian government with respect to the international monetary fund? As reported at page 2367 of Hansard he said:
I would therefore not take it for granted, as some people do, that Canada gets no benefit from being a member of the international monetary fund.
This is a question on which opinions may differ. That may not be the best medium for maintaining the stable, traditional role of gold in the world economy, but it is one means. The international monetary fund is participated in by most of the major trading countries of the world with the exception of Soviet Russia, and by all the major gold producers. I think that statement should be made here.


John Horne Blackmore: Whose words were those?


Donald Methuen Fleming: They were the words of the Minister of Finance.


John Horne Blackmore: When?


Donald Methuen Fleming: When he was speaking in this debate on May 19. They are to be found at page 2367 of Hansard, in the second column.
Mr. Speaker, to my ears that statement sounds like a very lame and feeble defence of the international monetary fund. If that is the best that the Minister of Finance or the Canadian government can say for the international monetary fund, then there is little indeed that can be said in favour of that fund.
On previous occasions when the subject of gold was under discussion, I have said that the whole basis upon which the international monetary fund was erected was certain assumptions which were written into the preamble of the fund. To read the preamble today is to read something which will invite
[Mr. Fleming.!
not comparison but complete contrast with many conditions that exist in the world now. The way in which international relations, international trade policies and international currency questions have developed since the days of Bretton Woods in 1945 has to a large extent, unfortunately, invalidated the bases upon which the international monetary fund's structure was then erected. What is the Canadian government doing about it? Here is a situation where international policy, as reflected in the international monetary fund, runs counter to the interests of Canada.
It is not to be argued, I think, Mr. Speaker, by anyone-certainly by anyone in this house -that when that fund runs counter to the interests of Canada as a gold producer it is not running counter to the fundamental interests of the Canadian nation. Well, then, what are the compensating advantages that Canada is receiving from the international monetary fund? The Minister of Finance hinted vaguely that there might be some compensating advantages, but he has scrupulously abstained from attempting to state them. If there are those advantages let us know about them.
In the meantime, Mr. Speaker, I repeat what I have said on previous occasions, namely, that the international monetary fund has become to an increasing degree an instrument of the fiscal policy of the United States. And to that extent it has run definitely counter to the interests of Canada as a leading gold producer.
We are still faced with a situation here in Canada, Mr. Speaker, where the government continues to subscribe to international policies which are definitely damaging the interests of Canada as a gold producer. If there are some compensating advantages that Canada is receiving, then let us know about them, because they are certainly not apparent to many of us.
When permission was given by the international monetary fund last fall for the step taken by Canada at that time to make provision for the marketing of gold of a fineness of 22 carats or less, other nations took advantage of the occasion to make some statements of policy, and I think that probably the most important of those statements was the one made by the government of South Africa, because after all it is the world's leading producer and exporter of gold. The statement issued by the South African treasury on October 3 closes with this paragraph:
While the union government will naturally watch this market closely,-

It is speaking now of the market for gold which can be called or was called in this statement the limited free market for gold.
While the union government will naturally watch this market closely, and take its decisions from time to time in the light of developments, it desires to state that it does not intend to use its release by the fund from its self-imposed restrictions in such a way as to embarrass the market. It has recently sold as much as 40 per cent of its current gold production in the industrial market. This percentage was of its own choosing, and it will not hesitate to reduce it if circumstances necessitate such action. On the other hand-
I ask the house to note this closing sentence, Mr. Speaker.
-the union government appreciates the fact that the new market will continue to be in a highly fluid state and it reserves to itself complete freedom of action to judge its course as circumstances may dictate from time to time.
This is a highly important statement of policy on the part of the South African treasury with reference to the marketing of South African gold. Does the Canadian government believe that it ought to reserve to itself complete freedom of action to judge its course as circumstances may dictate from time to time? Certainly the interests which the South African government indicates that it will seek to serve in fashioning its policy are the interests of South Africa, not without regard for the interests of the world as a whole and for the desirability of maintaining stable trading relations between nations; but nevertheless the interests that it will seek to serve will fundamentally be those of the South African nation.
Can it be said, sir, that the Canadian government has followed or declared such a policy? The fact of the matter is that we have had from the Canadian government no adequate statement of its policy with reference to gold. Today we are invited to give second reading to a bill which is no doubt acceptable to the house as far as it goes, but it does not go very far. The Minister of Mines and Technical Surveys said today that this bill is not intended to cure the ills of the gold industry; it is merely intended to aid the industry to work out its own remedy. I think that was the expression, or the thought to which he gave expression.
Sir, how can this industry be left to work out its own salvation when it is forced on the one hand to sell monetary gold, or fine gold, at a fixed price, a price which is fixed by international action to which the government of Canada is a party; and, on the other hand, the only opportunity given to it to market gold freely is on the basis of debasing it by a cumbersome method which requires the Canadian gold producer to debase his product, presumably by adding copper to it, [DOT] and sending it abroad where it is immediately
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refined-a cumbersome, clumsy and most inept procedure? Now, sir, in the face of a situation like that, all of it the result of government decision, all of it the result of government policy, how is it possible then to talk realistically in this house about leaving the Canadian gold producers to work out their own remedy and their own salvation?
We recognize, as the minister said today, that this measure does not purport to be a cure for the ills; it could not be. All that this measure does is to offer a subsidy for a limited period; in this case it is proposed to extend the period for another two years. It is properly called an emergency measure. The minister referred to the emergency today, and properly said that the gold mining industry in Canada is fighting for its life. I was very glad indeed, sir, to hear some of the remarks made today by the Minister of Mines and Technical Surveys, because he has come closer in some of those remarks, it seems to me, to recognizing the seriousness of the plight confronting the gold mining industry than has any minister on the government side as yet. He certainly stated the plight of the industry in much more realistic terms than the way in which the Minister of Finance dealt with it on May 19. The Minister of Finance did not come any closer than referring in a general way to what he called the difficulties now facing the gold mining industry of this country. I suppose everybody faces difficulties of one kind or another, but the Minister of Finance did not show a very realistic appreciation of the plight of this great Canadian asset today, the gold mining industry.
Sir, it is going to take a great deal more than stopgap and inadequate measures of this kind to meet the needs of the gold mining industry. We are not saying this, Mr. Speaker, simply in narrow terms with a view to keeping alive a particular industry. We are thinking in terms, sir, of a great many people who depend upon these gold mines for their livelihood; we are thinking of many communities that directly owe not simply their prosperity but their very existence to the prosperity and well-being of the gold mining industry, and we refer also, sir, to the fact that in this gold mining industry we have one of the bastions of the Canadian economy. It may not be adequately recognized in that role today by the government, but it should be, and the time may yet come when the Canadian government will have to realize, as Canadians did realize in the 1930's, how much the prosperity and well-being of the gold mining industry does mean to the economic well-being of all of Canada. And measures of this kind certainly do not hold

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out any promise of rectifying the fundamental ills and problems that confront the industry.
The Minister of Finance conceded that, but he sought apparently to wash his hands of (responsibility for meeting these ills and problems of the gold mining industry. Well, sir, the government cannot in any light way like that shed the responsibility that it bears today for the condition of the gold mining industry. The price is set by international action. The price is set by the United States government and by an organization which surely the Canadian government ought to have some voice in seeking to influence. We do not find the Canadian government fulfilling its responsibility to this industry by making any attempt to direct or encourage a change of policy on the part either of the international monetary fund or of the United States treasury with respect to the price of gold.
Sir, we again ask: What is the policy of the government? What is the government doing to bring about the one sensible and complete solution of the problem, namely an increase in the price of gold? What is it doing? What has it been doing? What representations has it made to the United States government? What representations has it made to the international monetary fund? When we ask those questions we are met only with a stony silence. We can only conclude that the Canadian government has not measured up to its elementary responsibility to Canada and to the gold mining industry by seeking to encourage a change of policy on the part of the international monetary fund and the United States government.
In the meantime no change is indicated in the policy of the government with reference to the marketing of debased gold in the so-called limited free market for nonmonetary gold. Apparently the step taken last fall, which was a good step so far as it went, is not to be improved; because apparently the government is going to insist that every producer make a firm and binding choice as to whether he will market his gold on the monetary basis at $35 an ounce or whether he will market it on the so-called non-monetary basis. He is not to be permitted to make a selection from time to time or to divide his product between two markets as may suit his interests.
Apparently also there is to be no relaxation in the rigidity of the regulations laid down by order in council last September in regard to the marketing of this so-called non-monetary gold. Apparently every producer is to be compelled to make a decision which will be binding for the calendar year. This

rigidity, I submit, is inexcusable. It has hurt the effect of what was a good step, albeit inadequate, last fall.
Why, when a step like that is taken, should the beneficial effects be compromised by the introduction of this intolerable rigidity? I submit that what the government needs to do is to work for a release of this Canadian gold mining industry from the strait-jacket into which it has been put by the policy of this government, and by international policy to which this government has apparently been a willing party. (Translation):


Mr. Armand Dumas (Villeneuve):: Mr. Speaker, I was quite moved, a few moments ago, to hear the Minister of Mines and Technical Surveys (Mr. Prudham) speak so enthusiastically of his recent trip to northwestern Quebec, that is to that part of the province wherein lies my constituency. I was also very gratified to hear him speak of the satisfaction he had felt while visiting the mines in our district and our-shall we say- recently established towns, that are no more than five, ten, fifteen or twenty-five years old. I was even more gratified to hear him speak in glowing terms of the young engineers who are at present directing operations in those gold mines now open in the northwest section of the province.
In this connection I would like to quote an article published in the newspaper La Frontiere on the occasion of the minister's visit to our district. Here is what this newspaper wrote in welcoming the Minister of Mines and Technical Surveys:
The Hon. George Prudham, Minister of Mines in the St. Laurent government, will be the guest of honour of the prospectors' association of western Quebec next Thursday evening at Noranda.
La Frontiere is happy to welcome the federal Minister of Mines. To our knowledge, this is the first time he has, officially at least, paid a visit to the main mining region of the province of Quebec.
He will notice, among other things, that in twenty-five years at the utmost, and in much less than that as far as Val d'Or and Malartic are concerned, we have witnessed here, in our province, the development of a district whose economy is based almost entirely on mining, especially copper and gold mining.
It will therefore be readily understood that the federal Minister of Mines will certainly be well advised to meet with the prospectors who ensure the continuity of our mining industry. We express the hope that the discussion he will have with them as well as with the mine managers will lead to a better understanding of the difficulties which stand in the way of prospecting and mining operations. Canada has to depend more and more on its mines. We may therefore hope that this visit, sooner or later, will bear fruit.
Well, Mr. Speaker, we see today that the minister's visit has certainly borne fruit, since he is now moving second reading of a bill which provides for the extension of the Emergency Gold Mining Assistance Act.

Notwithstanding what the hon. member for Eglinton (Mr. Fleming) has said, 1 believe personally that the Canadian government is doing all that is humanly possible to convince the directors of the monetary fund, as well as the United States government, of the necessity of raising the price of gold. I have every confidence that before long the price of gold will be raised. There is no other means of allowing our producers to meet the present requirements.
Mr. Speaker, I do not wish to prolong this debate; I would like, however, to add a few words in order to underline the fact that the measures taken in previous years by the government in favour of our gold mines, have turned out to be an excellent investment. When we read in the last report of the department of mines about the moneys granted to our gold mines under this assistance act, we see that Canada has paid to those mines grants totalling $42,100,000. Again, in the statistics which were recently released in connection with gold mining, we can see that from 1947 to 1950-not including 1951- our gold mines have disbursed $22 million for salary increases. I will admit that a few moments ago I was wrong in comparing these figures with $42 million; actually, during the three years comprised between 1948 and 1950, the federal government granted about $32 million in subsidies and our gold mines paid $22 million in salary increases.
It seems to me that this argument amply justifies the government's present attitude, in wishing to extend this Emergency Gold Mining Assistance Act to the years 1952-53.
(Text):


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, because of the importance of this industry to the 26,000 workers who are engaged in it, and because as matters now stand gold is playing a part in our economy, we accept this bill. However, we wish to make it clear that by so doing we do not concur in the views that some have expressed with regard to returning to the gold standard or the necessity or usefulness to our economy or the economy of the world of trying to get an increase in the price of gold itself.
The hon. member for Eglinton (Mr. Fleming) thought that the hon. member for Acadia (Mr. Quelch) was knocking down a straw man because he made the excellent case he did against returning to the gold standard.
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John Horne Blackmore: For not returning.


Stanley Howard Knowles: Yes. Nevertheless, it is quite clear that the hon. member for York West (Mr. Adamson) considered the return to the gold standard as being desirable under certain conditions. In his speech on May 14 he made it clear that there was at least one condition which he wished to have fulfilled before returning to the gold standard, and he spelled that out two or three times on pages 2212 and 2213 of Hansard of that date, when he said:
The gold standard is desirable, but we cannot arrive at a gold standard until we determine the price at which gold can be traded in terms of our own currency.
He then went on to list some ten points. In dealing with point No. 7, he said, as reported on page 2213 of Hansard:
The return to a gold standard must be preceded by the operation of a truly free market to establish a price for gold which can be maintained.
Then in his next point he said that to return to the gold standard was desirable. The hon. member for Eglinton says that he and others of his party are not at the moment making a case for a return to the gold standard, but the hon. member for Eglinton is working for that condition precedent which the hon. member for York West indicated the other day. That seems to suggest clearly that if the hon. member for Eglinton could get what he calls a realistic price for gold the next step would be the step advocated by the hon. member for York West, namely, a return to the gold standard.
It seems to me that what those who take that position, fail to admit is that they are asking to have it both ways. They are asking for gold to be the basis of our currency, which gives it a protected price, and at the same time they are asking for such advantages in terms of price as they think can be achieved by a free market for gold. As the hon. member for Acadia so well stated in the excellent speech he made this afternoon, it would be all right to ask for a free market for gold and to take whatever price can be obtained on that basis if you put it in the same light as other commodities, but to ask that gold be the basis of our currency, with a guaranteed floor price, and then on top of that to ask that gold have the advantage of a higher price by having it sold on the free market is, I submit, asking for it both ways.
Complaints are made, such as was made by the bon. member for Eglinton, that the price of gold is fixed. The inference from

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that complaint is that, in the hon. member's view, it is fixed too low. Actually that fixed price is a floor price; it is not a ceiling. As the Minister of Finance (Mr. Abbott) said the other day, it is fixed as a floor by the fact that the United States treasury is prepared to pay $35 an ounce. Here you have these protagonists for gold in effect complaining that the floor is too low, in other words wanting the guaranteed floor to be higher, and then they want a free market on top of that.
I submit that there is so much that is fallacious about that reasoning that it simply cannot be agreed to. It was good to hear the comments on this subject made the other day by the Minister of Finance, and I feel that the hon. member for Acadia rendered a real service by making the speech he made this afternoon. Someone might say, in the light of the complaints that I am now making against the argument for a return to the gold standard, that that should lead us to vote against this measure. As I have pointed out already, gold is playing a part in our economy as matters now stand. It plays a part in our exchange position with the United States, particularly when the United States treasury is prepared to buy it at $35 per ounce. Thousands of workers are involved in the industry and for these reasons we are prepared to accept and vote for the measure now before us. Nevertheless, as the hon. member for Acadia felt constrained to do, we feel that we must make it clear that if support of this measure were taken to imply that we were consenting to any steps designed to achieve the return of the gold standard, then the measure would not have our support.
As the hon. member for Acadia pointed out, if you go back to the gold standard you then submit your currency and your whole economy to the control of what amounts to blind economic forces. We in this group believe in a planned economy. We believe that it is our right and our duty to try to relate our natural resources, our productive capacity, and the goods and services we can produce by applying our labour power to our resources, to the needs of our people. We believe that in that process it is our right and our duty to control and manage our currency so that it will facilitate the greatest possible production and the most equitable distribution possible of the goods and services produced by our people.
We share with the hon. member for Acadia satisfaction-and I was glad to hear him express it this afternoon-that we have made some social progress in this country. We have moved to the point where there
CMr. Knowles.]
is definite resistance against the lowering of the standards of either our workers or our farmers. As it has already been put, there is definite resistance against the lowering of wages, not only monetary wages but real wages in terms of purchasing power. There is resistance against the lowering of the incomes, the real incomes of our farm population. Similarly I am glad to say that support has been built up in this country for the principle of social security, and there is very strong resistance against any moves that would lessen the value of such social security measures as we now have. Indeed, the whole trend of the thinking of the people of Canada is that our social security measures should be improved and that we should move forward in terms of improving our standards of living on all these fronts. You cannot do that if you are going to tie yourself to a gold standard. The only way we can really take full advantage of our natural resources and our productive capacity in such a manner as to provide a high standard of living for our farmers and other workers, and to provide adequate measures of social security, is to control our currency in the interests of these objectives, rather than letting our currency control us. It is for these reasons that we resist very strongly any move to return to the gold standard. It is for these reasons that we favour a managed currency as part of a program which we refer to as a planned economy.
While I am on my feet, I must say I have found it hard to reconcile some of the things that are said about gold and the gold industry. It was referred to this afternoon by the hon. member for Eglinton as one of the bastions of our economy. There came in the mail to members today a reprint of a speech made recently on the whole question of gold and gold mining in which it is said:
Gold still has all the qualities which for centuries has made it the only lasting international money, representing a permanent and indestructible form of wealth, and providing sound backing for national debt and currency.
As I say, we get comments of that kind telling us that gold is a bastion, that gold is indestructible, that it is something wonderful, all but eternal; we are told that the gold industry does not want a handout, and yet it has to come to parliament and ask for assistance, indeed for legislation, which during the past four years has resulted in subsidies amounting to some $40 million. The request now before us is that the payment of this subsidy continue for another two years. I have already indicated the reasons why we are prepared to accept the measure, but I

plead with the house that we understand what we are doing and realize that we are dealing with a particular case, a particular industry, which is merely one amongst many. Let us not think we are dealing with something that is basic to our whole economy.
After all, the factors that are basic in our economy are those factors that make possible the production and distribution of wealth, and if we have got any common sense and grey matter as human beings we are going to organize the production of that wealth and see to it that it is properly distributed. We are going to see that our monetary set-up facilitates that process. We are not going to tie ourselves down to some blind force which will deny us the right to make social and economic progress.
There is one other thought that we have given utterance to before from this corner of the house, and I am sure it is a thought that is in the minds of many people of this country from coast to coast when they learn of the amount that is being spent to subsidize this industry. If we can afford to subsidize the mining of gold out of the federal treasury, surely we can by making payments afford to subsidize other primary producers when it is necessary, and likewise subsidize desirable social objectives for the well-being of our people. I fully agree with the comment made by the hon. member for Acadia (Mr. Quelch) when he compared this subsidy with the payment to western wheat producers a couple of years ago. May I add in that same vein that during the past seven years the total amount paid out by way of subsidies to maintain floor prices for farm products is in the neighbourhood of only $10 million. We have paid only $10 million in seven years to support floor prices for agricultural products compared with $40 million for gold in the last four years. We now have a measure that will tell the gold industry where it stands ini relation to this subsidy for the next two years. On the other hand, the floor under beef is being set for a month at a time and the floor under pork for a year at a time.
Another subject that we frequently raise in the house is the question of housing. Again I say that if it is possible to provide sums like these to help a particular industry and group of workers^ surely this parliament should not object to or resist our appeals in the name of the people of Canada for subsidies for housing for our Canadian people, which is one of the greatest needs of our time.
The whole question of whether we control our economy or are controlled by it is at stake in a discussion of this kind. I feel
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very strongly that those who would try to get us back to the gold standard or who would talk in terms of gold as though, instead of being just one of several commodities, it was something basic to our whole economy, are getting us away from the fundamental fact that what we want out of a monetary system is not a form of enslavement that will carry us down to another depression but rather a medium that we can control and manage so that it will facilitate the production of the greatest possible volume of useful goods and services and the distribution of those useful goods and services amongst our people in the highest standard of living that is now possible.


[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-Calculation for 1950.
Agar Rodney Adamson: I cannot allow the remarks that have been made this afternoon to go entirely unanswered. A plea was made-and I am glad it was made-which marks the great cleavage and shows that the Social Credit and C.C.F. parties stand together in favour of a managed currency. They believe it is within the power of a national government to manage its currency despite all the evidence of history, despite the fact that every time any government has persisted throughout the years in attempting to manage currency it has inevitably meant inflation. I would suggest that they bring on the tumbrils and set up the guillotines because that is what will follow. Churchill's speech was quoted today. Churchill made the cardinal error in October, 1925, I believe, of trying to return to a gold standard at the 1914 price of 80 odd shillings per ounce despite the fact that the paper currency base and national debt had been tremendously inflated. There was not enough gold to make it operate. Consequently the value of the pound in purchasing power was greatly debased after the 1914-18 war, and to try to return to a gold standard based on a 1914-18 price for gold was obviously suicide. Before any attempt is made at returning to the gold standard there will have to be a period during which the price of gold can adjust itself as a free commodity. How long that will be I do not think anyone in this house, or in fact anywhere, can say; but that is the preliminary step which must be taken. The one step is that the market must regain its equilibrium as a free operation.
We have tried the device of pegging the prices of commodities. We have tried, within one country, setting the world price of certain commodities, whether it be wheat,

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copper, zinc, lead or anything else. Eventually those attempts have inevitably failed. To try to do the same thing for gold will also fail, as is being proven at the present time.
'Constant inflation is apparently the policy advocated by the groups on the left. Let me say, Mr. Chairman, that if there is any group that will be destroyed by constant inflation it is the working class in industry and the farmer. The one thing that will stabilize, and make that individual secure, is to know that the value of the money he can save, the value of the pension, the value of his insurance, will remain constant and not depreciate through the years. If that is the policy of the two groups to the left in this chamber, I am delighted to hear it, because I shall know what to say. If you want to maintain security for the individual you have to give him a counter that is going to maintain its purchasing power. With a managed currency or with any idea of some commodity basis for currency, that can never be done. We must take the steps necessary to safeguard the purchasing power of the Canadian dollar, irrespective of what it is quoted at in terms of any other currency.
There has been in history and there is now no machinery that has ever been able to maintain the purchasing power of a national currency except the exchangeability into gold at a fixed price. We realize that it may take some time. There may be a long period of adjustment, but eventually it must be taken if the security of a national currency is to be maintained. This cannot be done by decree or by decision of this parliament or the parliament of any country in the world. It has to be done by the freely accepted opinion of the producers and traders of the world and the laws of supply and demand.


John Horne Blackmore: I wonder if the hon. member who, to judge from the opinions he has expressed, must be the best authority on gold and its history in the house, can give us the price at which gold was being sold in the United States from 1925 down to 1935?


Agar Rodney Adamson: What was the hon. member's question?


John Horne Blackmore: What was the price at which gold was being sold in the United States for each of the years from 1925 to 1937?


Agar Rodney Adamson: It was $20.67 until the demand for gold forced the United States off the gold standard.


The Chairman:: According to our practice at this stage a general discussion of the bill is allowed. We should not have, in the first place, a recurrence of the debate which took
TMr. Adamson.]
place on second reading. In the second place, I think we should bear in mind that this is an amending bill in only two particulars. Discussion may be general as to the two particulars in which the bill amends the Emergency Gold Mining Assistance Act. At this stage I do not think hon. members should go through the whole picture of the gold mining industry, the value of gold as a basis for currency and so on, as some hon. members seem intent on doing.


Howard Charles Green: With all due deference, the rule here is that we can have a pretty wide discussion on the first section of the bill. I see no reason why that rule should be abandoned in the case of this particular bill. I really believe that if the discussion is allowed to take its normal course that will not only be more nearly in line with the rules of the house but will save us considerable time.


Alphonse Fournier: I wish to intervene at this stage. We spent a half day on the resolution without being able to complete it. We continued a day or two later in committee, and that discussion lasted quite a long time. We have spent the time from the opening of the house until now in the debate on second reading. We have had a fine general discussion on gold and I have become interested in it, though I have not seen any for a long time.


Stanley Howard Knowles: There has been a gold robbery, now.


Alphonse Fournier: Perhaps that is inciting the people to get more gold, but I believe that right now we should apply the rule which is applied in committee, that remarks should be relevant to the item.


Howard Charles Green: This is something-


Louis-René Beaudoin: Before anything else is said, may I say that I believe the hon. member for Vancouver-Quadra and myself are in agreement, but where we differ is that he seems to believe that what is before the committee at the moment is an act called the Emergency Gold Mining Assistance Act, but what is before the committee is a bill to amend the Emergency Gold Mining Assistance Act. If he looks at the explanatory notes he will see that. There may be a general discussion as to these two amendments, and that is quite in order.
On the first section of the bill in committee, however, we always cover what is in the bill. I think hon. members generally will agree with me on that score. We cannot have a general discussion on gold because we have before us a bill amending the Emergency Gold Mining Assistance Act. We may have a general discussion on the amending bill but not on the sections of the bill.


Howard Charles Green: Of course the first section of
the bill, as a matter of fact, deals primarily with assistance to the gold industry, and that opens up the whole question. I submit that the hon. member is quite in order in asking the question he has just asked of the hon. member for York West. We always have this trouble, Mr. Chairman. We have had the Minister of Public Works, who is the house leader-


Alphonse Fournier: I am not troublesome.


Howard Charles Green: -and he is an efficient and amiable house leader-rise whenever he thinks sufficient time has been spent on debate. We have him or some other member of the government getting to his feet and saying that now we should cut off this debate. He said today that because there was some extended debate at the resolution stage, the debate at this stage should therefore be short. The two have absolutely no connection. It is just the urge on the government side to cut off the debate and, I suggest, the urge on the opposition side to bring out all the facts. I submit that the hon. member for Lethbridge is quite in order in asking the question which he has asked.


Alphonse Fournier: Mr. Chairman, I
cannot agree. What I should like is for the chairman to see that the rules of the house are complied with once in a while. Generally I so greatly enjoy the speeches that I do not object; but I have heard a great deal about gold. If it is the intention to start the debate over again, I think it would be against the rules to do so. We are in committee. We have before us section 1 of the bill which provides for a change in the rate of assistance to the gold mining industry. I think an hon. member could discuss that rate. If he is not satisfied with it, but wants it increased or decreased, he would be quite in order to discuss that matter but it would not be in order for him to enter upon a review of the gold situation in the world generally. I think a discussion of that kind would be out of order.


John Horne Blackmore: Mr. Chairman, the reason for my asking the question is simply this. The hon. member for York West is advancing, as one reason for passing this bill, the fact that the gold standard ultimately is important to Canada and that consequently we should take care of our gold industry. My question is directed to examining the basis for his general assertion that gold, as a backing for currency, has been a stabilizing factor throughout the world and the only anchor which could be used in relation to money. That is the only reason that I am asking the question. The question goes right straight to
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the core of one of the major reasons advanced by the hon. member for passing this bill. It is not my desire to repeat the arguments which have been advanced, but certainly when a member like the hon. member for York West, with the position he holds, makes a statement in this chamber which in the opinion of other hon. members is fallacious, the other members should have the privilege of probing into the extent of his knowledge. That is the reason I asked the question. I will just say this. No doubt he has got off balance. He just has no information on this matter.
He wants to put the price of gold on the speculative market. I will just use one illustration and then I will say no more unless he provokes me. All you have to do in order to know what happens to the price of a commodity when it is on the open market is just remember what used to happen to the wheat crop in western Canada when the price of wheat was on the free exchange in Winnipeg. What the hon. member in effect is advocating is that gold should be put on the open market and that the price thereof should be determined not by supply and demand but by speculative supply and demand which results in the organization of bulls and bears, with all the drastic fluctuations that can take place in price. When the hon. member is ready to answer that statement let him come forward and do it, and not make general statements.


Mr. Herridge:: Mr. Chairman, I should like to ask a question or two. I was interested in listening to the exposition of the point of view of the hon. member for York West. I heartily disagree with his statement that it would benefit the Canadian people to have a return to the gold standard. I support what the hon. member for Winnipeg North Centre said.
I want to draw to the minister's attention the suggestion that came from another direction and was unique, and I want to get his opinion on it. The hon. member for Comox-Alberni, when speaking on this subject in the house on February 12, 1951, made a most interesting and original contribution to the debate.


Mr. Gibson:: Somebody has to have some intelligence around here.


Herbert Wilfred Herridge: He suggested that if gold were staked out in ore bodies, the government could issue a certain amount of currency against the gold in the ground. That was not a frivolous remark, Mr. Chairman. I am sure it was made as the result of a good deal of thought and meditation on his part.


Donald Methuen Fleming: It would be the first time.

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Herbert Wilfred Herridge: The suggestion came from a distinguished member who sits on the front bench, a gentleman with considerable business experience, one with a good parliamentary record and who is an original and creative thinker. I want to ask the minister this question. Has the minister given consideration to the proposal made by the hon. member for Comox-Alberni? If so, what objection would he have to an economic system or monetary and fiscal policy such as that suggested by the hon. member for Comox-Albemi?


George Prudham: Mr. Chairman, I do not see that this question is directed to, or deals in any way with, the question that is before the committee.


John Lambert Gibson: Mr. Chairman, I think I should try to clear up some of the misapprehension in the mind of the hon. member for Kootenay West.


Stanley Howard Knowles: Are you speaking for your party?


John Lambert Gibson: I am afraid the hon. member for Kootenay West has not read his Hansard. I am sure he can read; and I am quite sure that his powers of analysis are such that if he read a quotation from my speech at that time he would realize that what I said was this. Wo were setting up a manpower council at that time in order to try to allocate manpow er to most essential uses in Canada. I said that if we were short of manpower for the defence of our country, I thought probably the first thing we could divert was the manpower from gold mines in Canada. I still believe that to be so. Happily, however, since that time we found that we had sufficient manpower to maintain our gold mining as well as our other projects as far as national defence is concerned.
The hon. member will also recall that I did not say that paper should be issued against gold lying in the ground. I said that if it was necessary for Canada to have gold backing its paper dollars-and that is something for which I am quite prepared to take the word of the economists on the government benches-if we were short of manpower, I thought possibly we could take proven gold ore reserves in the ground and use those at their net value for the issue of paper currency. I still believe that to be possible.


Donald Methuen Fleming: I should like to ask the Minister of Mines and Technical Surveys several questions. The first is this. What proportion of the gold production has been going into the so-called free market for non-monetary gold since the policy was inaugurated last fall?


George Prudham: The production figures for the last quarter of 1951 and the first quarter of 1952 for auriferous mines were 1,126,738 ounces and 1,071,930 respectively. The percentage sold in the free market-


Agar Rodney Adamson: I would prefer it if the minister called it the premium market, because it is not truly free.


George Prudham: The percentage of total production going into the free market in the last quarter of 1951 was 25-7; in the first quarter of 1952 it was 32-5.


Donald Methuen Fleming: What does the government estimate to be the effect on the production of Canadian gold of the inauguration of the so-called free market for non-monetary gold last fall; the effect on the total production?


George Prudham: A possible increase or
decrease? I would not like to express an opinion on that. I do not suppose it makes any difference. Some mines are taking advantage of the free market. Eleven mines during the last quarter of 1951 and I think twelve at the present time have elected to use the free market.
Speaking to the resolution the hon. member for Eglinton I think made the statement that the order in council governing the free market permission was too stiff; that a mine electing to go on it was forced to stay on it. Well, as a matter of fact, a mine may elect at the beginning of any one quarter to go on the free market, and the only restriction is that it must stay on the free market for the balance of the calendar year. In other words if it elected at the end of the first quarter it would be nine months before it would have the privilege of going back on to gold mining assistance again, and so on.


Donald Methuen Fleming: That was my next point, Mr. Chairman. Why should that be? Why not allow the mine free choice each quarter as to whether it will market its gold production on a monetary basis or on a nonmonetary basis?


George Prudham: If a mine sees that it is advantageous to go on the free market it should be able to make up its mind two months in advance.


Donald Methuen Fleming: Is that the settled decision of the government in this matter, that they are not going to open this up at all to allow a free election each quarter?


George Prudham: They now have the choice, a free election, at the beginning of any one quarter, and at the end of any one quarter, and I think that is quite generous.


Donald Methuen Fleming: Then I take it that it is not the intention of the government to alter the

present plan, or to permit an entirely free election each quarter on the part of each
mine?


George Prudham: Well, if a mine wanted to wait until the end of the third quarter they would then have the privilege of changing; they would have the privilege of changing their mind at the end of the first quarter after election.


Donald Methuen Fleming: That does not answer
my question. I understand what the minister is saying about the present basis. If a mine does elect to go on the non-monetary marketing basis it is bound for the balance of the calendar year, no matter in what quarter of the year it so elects?


George Prudham: That is right.


Donald Methuen Fleming: I am asking if it is the fixed intention of the government to continue that basis, or whether the government is prepared to meet the wishes of the mines that are urging that they be permitted to make a free and unqualified election at each quarter as to whether or not they will go on the nonmonetary marketing basis.


George Prudham: To the best of my knowledge no mine has requested a change in that provision. For the time being at least we do not contemplate any change in that regulation.


Donald Methuen Fleming: I am amazed to hear the minister say that, because obviously he has not been reading the statements made by very eminent figures in this field. When I spoke on May 14 I made reference to the speech at the annual meeting of Noranda Mines, one of the biggest gold producers in the country, by Mr. J. Y. Murdoch, the president of the company, than whom I am sure no one holds a position of higher respect in this industry. Speaking on this very matter, Mr. Murdoch said:
I do feel that for greater effectiveness and in order to encourage more mines to forgo "cost-aid", the present regulations could be improved. As it now stands, once a gold producer elects to sell in the free market it must continue to do so for the remainder of the calendar year. This provision makes it difficult for certain mines to properly appraise the situation and decide what is best for them to do. In all fairness, as it is solely a matter of administration I would strongly advocate that arrangements be made to permit the mines to "elect" each quarter.
What could be plainer than that, and from what more eminent source could a responsible opinion on this subject be sought?


Mr. McCann:: Did he make representations to the government on that ground?


Donald Methuen Fleming: If I asked that question the minister would say it is privileged, and he would not even answer.
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George Prudham: I do not intend to read all the speeches that are made outside the house. I am quite sure that no application has been made to the Department of Mines and Technical Surveys for that change.


Donald Methuen Fleming: Why does the government insist that gold marketed on the so-called nonmonetary basis should be debased to a fineness of 22 carats or less, in finding its way to this so-called free market?


George Prudham: To the best of my knowledge that is the way the customers want it.


Donald Methuen Fleming: To what customers is the minister referring in making a statement like that? The essence of this matter is that the Canadian gold producer, in order that his gold may go to this so-called free market for non-monetary gold, must debase it to a fineness of 22 carats or less. It simply means that he has to add copper to it. Then when it is sent out of the country to the purchaser it is refined. What sense is there in that? Why should not the Canadian gold producer be permitted to sell gold on this free market on the same basis as he sells it for monetary purposes? Why introduce this requirement of debasing, knowing that when it reaches the foreign purchaser it is simply going to be refined again?


George Prudham: The gold that is now being sold on the free market is supposed to be sold for commercial purposes, not for monetary purposes, and I understand that the commercial market does not require the fineness that is required for monetary purposes.


John Horne Blackmore: May I ask a question? Is that restriction imposed by the monetary fund? Is the requirement for debasing the result of the restriction of the international monetary fund?


George Prudham: No.


Donald Methuen Fleming: I should like to ask the minister if the government persists in its present policy of refusing to allow gold to be held in private hands in Canada?


George Prudham: I do not see that that question relates to the amendment before the committee.


Donald Methuen Fleming: With all due respect, I do. One of the reasons this measure is being sought, this subsidy, is that effective marketing at adequate prices is not available to the Canadian gold producer. The question I have asked has to do with one suggestion that has been frequently put forward for easing the lot of the Canadian gold producer. To let people in Canada hold gold, even in coinage form, would at least increase your market, improve the price and provide a hedge for the Canadian gold producers. Surely that

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is a matter of very direct interest when we are dealing with a bill which proposes to continue a subsidy as one method of meeting the problems of the gold producers.


Louis-René Beaudoin: What seems to be very pertinent on this first clause is a discussion of the calculation for 1950. I am not in a position to say whether the question the hon. member for Eglinton has asked of the minister has anything to do with this first clause. That is a matter between the minister and the hon. member. The minister says it does not come under this clause. The hon. member disagrees. It seems to me it is a matter of opinion. Shall the section carry?


Donald Methuen Fleming: No. Is the minister prepared to enlarge upon his answer? I am trying to be helpfuL I can assure the minister I am not trying to make trouble for him, but we do want the information.


George Prudham: The hon. member of Eglinton is just as familiar with the present regulations regarding the holding of gold as I am. I know of no change in government policy.


Louis-René Beaudoin: Does the section carry?


Donald Methuen Fleming: Has the government made any representations to the United States government within the last year with a view to seeking an increase in the price that government is prepared to pay for Canadian gold?


George Prudham: Once again I do not see how this question relates to the matter before the committee. If the hon. member wishes he might discuss that matter when the estimates of the Minister of Finance are introduced. I am sure he would have a much better chance of getting an answer then.


Donald Methuen Fleming: Mr. Chairman, the minister has chosen to refer to the Minister of Finance. When a measure relating to gold is before the House of Commons, involving as it does many questions affecting this industry, I submit the Minister of Finance should be here to answer such questions as might properly fall within his department rather than that of the Minister of Mines and Technical Surveys. This is probably the one occasion this session when we will have a measure before the house dealing with gold. In my submission this is a matter of the highest importance. The Minister of Finance was in his seat for a short time this afternoon, but he left. In his absence all I can do, in seeking essential information which has a very direct bearing on the whole measure, is to put these questions to the Minister of Mines and Technical Surveys. If he feels they are outside his scope, then surely it is not impossible to have the Minister of Finance in the house to answer such questions as relate to the

Department of Finance. Certainly from some quarter, one or other of those ministers, information should be forthcoming.


Mr. Howe:: If I may intervene, there is a bill coming before the house, sponsored by the Minister of Finance, which deals with the Foreign Exchange Control Act, which comes up for amendment this year. My hon. friend is talking about currency, whereas this bill deals with the mining of gold, two totally different subjects. I see no reason why the Minister of Mines and Technical Surveys should be prepared to discuss currency when currency is not involved in this bill.


Donald Methuen Fleming: It is obvious that this bill deals with the production of gold. What I am saying, and the point to which my questions are directed, is not connected with currency; it has to do with the price to be paid for gold produced in Canada and sold in the United States.


Clarence Decatur Howe: Sold to the United States for currency.


Donald Methuen Fleming: Sold, I presume, directly for currency; and in the last analysis it will be used as a basis for settling differences in the exchange position. But surely I would have thought that when we are talking about the price of gold, this subject could be discussed. I asked simply what representations, if any, the Canadian government had made to the United States government with a view to seeking an increase in the price paid by the United States government for Canadian gold.


Louis-René Beaudoin: Would that in any way
affect the manner in which it is proposed to make a calculation for the year 1950, as provided in section 1?


Donald Methuen Fleming: Yes.


Louis-René Beaudoin: As the hon. member knows, it is difficult for me to assess what may be in order, if a discussion is to be related strictly to the section before the committee. I have been reading this section, and if I were taking part in the debate I do not think I would expect the latitude the hon. member thinks he should have. I would confine my remarks to the manner in which it is suggested, in this section, that the calculation should be made. The section states:
Notwithstanding anything in this section, the sum that may be paid in respect of gold1 produced from a mine and sold in the designated year nineteen hundred and fifty, shall be the amount calculated as prescribed in subsection 2, 2(a), 3 or 4-
And so on. I would be perfectly in order if I were to confine my remarks to that subject.


Mr. Sinclair:: The Minister of Trade and Commerce has just explained that an act if

to be amended shortly, and will be brought before the house, at which time some of the points brought up today by the hon. member can be discussed properly. Therefore it is merely a matter of deciding whether he would1 insist upon it now-that is, insist upon having replies to his questions-or whether he should wait until that time. If he insisted now, he would be out of order.
This bill has to do with a subsidy to aid in the actual cost of producing gold, for the present market price of gold. We have had other measures of assistance. The effect on the market price is something quite beyond the range of the Minister of Mines and Technical Surveys. The Minister of Trade and Commerce has pointed out that later in the session the Minister of Finance will introduce a measure to amend the Currency Act, at which time the value of gold, so far as currency is concerned, can be debated. I submit that so far as this bill is concerned, it is a measure to assist the mining industry and has no connection whatsoever with the price of gold either as a commodity or as a basis for currency.


Donald Methuen Fleming: I think the observations of the parliamentary assistant clarify the matter adequately. He has pointed out that a measure to which he has referred, but which has not yet been introduced, will relate to the gold backing for currency. But I am not discussing that matter here at all. What I am discussing is the price paid for Canadian gold production by the United States government. I am not talking about the gold backing of Canadian currency at all. I am talking about the price paid for Canadian gold production by the United States government, which buys it.


Alphonse Fournier: That does not relate to this section at all.


Donald Methuen Fleming: If this were not the first section of the bill, perhaps the Minister of Public Works would have some grounds for his observation. But may I remind the committee that this is an amendment designed to extend for a period of two years a bill which otherwise would lapse at this time, a measure designed to give a particular type of assistance to the gold mining industry. It is a type of assistance by way of subsidy, and would not be necessary if the kind of measure I am proposing were put into effect, namely an adequate price for Canadian gold, when it is sold. That is the purpose of my question.
I note that the Minister of Finance has now returned to the house. Perhaps we could save time if I were to put the questions to him. If I am permitted to do so, I think we would move along quickly.
Gold Mining


Mr. Laing:: All mixed up, just like in housing,


Donald Methuen Fleming: We have just heard from someone who has just come in, and who knows about as much about the subject under discussion, and the background of it, as someone sitting away in a far room in the building.


Arthur Laing: Just the same as housing.


Donald Methuen Fleming: The hon. member should not refer to housing. He supported a delay by the government last year in building veterans' houses at Fraserview which cost this country ten months' delay and $400,000 in additional cost.


Louis-René Beaudoin: Order. I think the hon. member will agree that I have tried to be fair, in order to give him an opportunity to ask his questions. Now, someone has to make a decision; we cannot carry on forever a discussion as to whether or not some question should be asked, or whether replies should be made now or later. If on the one hand the Minister of Mines and Technical Surveys, the Minister of Trade and Commerce and' the parliamentary assistant to the Minister of Finance claim that it is not in order for the hon. member to put some of the questions he has asked, then I believe that would give me sufficient support to decide that the questions are not in order on this section.


Howard Charles Green: May I-


Louis-René Beaudoin: Order. There are ministers and other members on the government side who have a knowledge of these matters. If they say the questions are not in order I am inclined to accept their statement. The hon. member has tried to get further replies to his questions and they do not seem to be forthcoming. He has asked me to co-operate, but I submit that the discussion should be strictly relevant to the section before the committee.
The hon. member has said that a general discussion is relevant under section 1. It seems to me that the general discussion on this bill has taken place and then he has proceeded to ask questions. He asked a few questions to which he received replies, and then the question arose as to whether his later questions were in order. I think the general discussion has been terminated and as soon as hon. members are through asking questions this section ought to carry.


Howard Charles Green: I would point out that the Minister of Finance has come into the house since the statements were made by his parliamentary assistant and the Minister of Trade and Commerce. I think that alters the whole picture, as the Minister of Finance is obviously able to answer these questions.

Gold Mining
Your Honour has not ruled that the questions are not relevant to the bill. The fact that another minister has said that they should not be asked is not proof that they should not be asked.


Douglas Charles Abbott: I am not sponsoring this bill. My function so far as this bill is concerned is to see that there is enough money in the treasury to pay for this assistance. I am sure that my colleague the Minister of Mines and Technical Surveys is quite able to answer any proper questions which are asked in connection with a measure he is sponsoring.


Howard Charles Green: The Minister of Mines and Technical Surveys has not been able to answer the questions.


Alphonse Fournier: That is what you say.


Howard Charles Green: I submit that we should not be met with a blank wall to the effect that because this is his bill and he cannot answer the questions, therefore we are not to have them answered.


Mr. Dickey:: They are not relevant.


Howard Charles Green: These parliamentary assistants should not be chipping in.


Alphonse Fournier: On a point of order-


Howard Charles Green: I am speaking on a point of order.


Alphonse Fournier: I thought you were speaking about gold.


Howard Charles Green: This question has been asked and it should be answered.


Alphonse Fournier: What question?


Howard Charles Green: Time and again we have had the experience of a minister not being able to answer a question and a colleague sitting in the house will -help give the answer. There is no reason why that should not be done today. This is a complicated matter and I quite understand that the Minister of Mines and Technical Surveys may not have the answers to all the questions that properly could be raised. I submit that the sensible thing to do is for the Minister of Finance to answer the questions and get this over with.


Alphonse Fournier: I suggest that the sensible thing to do is to follow standing order 58 which states:
Speeches in committee of the whole house must be strictly relevant to the item or clause under consideration.
We have had a general discussion on this bill. You cannot make me believe that after having spent two days talking about gold there has not been a general discussion. The chairman has ruled that the general discussion is through.
[Mr. Green.)


Howard Charles Green: The chairman has not the power to say there can be no more general discussion.


Alphonse Fournier: I suppose you are the
one who is going to decide what the chairman can do?


Howard Charles Green: All the chairman can do is rule whether the question is proper.


Alphonse Fournier: I ask the chair to decide whether we are following standing order 58 which I have read. I think that would settle the matter. If the chairman has not the power, I suppose the committee has the power.


Howard Charles Green: That standing order merely says that the discussion- must be relevant to the question.


Alphonse Fournier: To the clause.


Howard Charles Green: To the clause. It does not say Your Honour can rule arbitrarily that there shall be no more discussion. I am sure Your Honour does not intend to make any such ruling.


Alphonse Fournier: That is not what we are asking for.


Howard Charles Green: We have the situation here that the minister who can answer the question is present. I suggest that he answer it and get this over with.


Louis-René Beaudoin: The point at issue at the moment is not whether someone in the cabinet is capable of replying to a question that has -been asked; the point is whether the question asked is in order. I do not think hon. members would expect the chairman to have a complete knowledge of every bill coming before the committee. I listened to the debate on the resolution which preceded this bill, and I listened to most of the debate on the second reading, and I know the discussion was quite wide. When we commenced proceedings in committee the hon. member for York West spoke in general terms, as did the hon. member for Kootenay West. Then the hon. member for Eglinton began to ask a series of questions. Hon. members know that generally the indication that the general discussion is over is some hon. member beginning to ask a series of questions. Once such questions are asked and the minister begins to reply I consider that the general discussion is over.
That does not mean- I am ruling that the general discussion is over, and the hon. member is quite right when he says I cannot arbitrarily decide that. I have never done that. I think hon. members will agree when I say the indication that general discussion on the first clause is terminated is when

some hon. member begins to ask a series of questions and solicits replies from the minister.
Then as to whether the questions asked by the hon. member for Eglinton are in order, the Minister of Mines and Technical Surveys says they are not; the Minister of of Trade and Commerce says they are not.


Howard Charles Green: Very poor authorities.


Louis-René Beaudoin: What would the hon. member do if he were in my place?


Howard Charles Green: I would rule that the questions were in order.


Louis-René Beaudoin: That is what the hon. member would like me to do. The ministers on the other side contend that I should rule they are not in order. The minister sponsoring the bill should know more about this bill than I do.


Howard Charles Green: He should know the answers to the questions.


Louis-René Beaudoin: I think he does know. Therefore the questions are not in order and there will be no answers forthcoming. I think it must be admitted that we have spent enough time on the proceedings, and hon. members must agree that I should give a ruling on this matter. My ruling is that the questions asked by the hon. member are not in order.


Stanley Howard Knowles: The proposed amendment makes a change in the basis on which assistance is to be calculated. Can the minister say what will be the cost of this change?


George Prudham: Subsection 5 of section 3, enacted in 1951, was intended to modify the assistance payable in respect of the last quarter of 1950. Experience has shown that some mines would receive less assistance than was intended. Those mines whose rate of assistance was less than $3.50 were penalized because there was no provision in the formula to allow their actual rate of assistance to be used rather than $3.50. There are five mines affected by this change and the amount of money involved will be nearly $37,000. The mines will receive that much additional assistance.


Stanley Howard Knowles: Is that assistance for one year only?


George Prudham: It is for the last quarter of 1950.


Stanley Howard Knowles: In view of the fact that the provision is for the last quarter of 1950, why is it provided in this bill that this section shall be deemed to have come into force on the 15th day of June, 1948?
Gold Mining


George Prudham: That is when the act was first passed.


Donald Methuen Fleming: I should like to ask the minister what the government is proposing to do concerning the present policy of the international monetary fund with respect to the marketing of gold.


Alphonse Fournier: On a point of order, Mr. Chairman, I think this is completely outside the scope of this clause.


Mr. McCulloch:: He knows it, too.


Donald Methuen Fleming: This question is very important to this present measure.


Alphonse Fournier: It may be important but it is out of order.


Donald Methuen Fleming: I am glad the Minister of Public Works is not, among his other attributes, chairman of the committee.


Alphonse Fournier: I am a member of the committee and I say it is out of order.


Donald Methuen Fleming: I am not going to accept his rulings.


Mr. McLure:: Don't take any back talk from him.


Donald Methuen Fleming: I don't intend to. I am asking a quite relevant question on a matter of great importance in relation to the bill. I deplore the length of time that has been taken up here today by the government in fending off questions which were quite simple and admitted of ready answers. We could have been through with the bill long ago if we had had a little co-operation from the ministers.


Alphonse Fournier: I know why the hon. member is delaying the passage of the bill.


Louis-René Beaudoin: Shall the clause carry?


Donald Methuen Fleming: Mr. Chairman, I asked a question of the minister.


Louis-René Beaudoin: If the hon. member is asking for a ruling, I will rule that in my opinion his question is not in order on this clause. Shall the clause carry?


Donald Methuen Fleming: No. What steps, if any, is the Canadian government contemplating taking with respect to freeing the marketing of Canadian gold?


Alphonse Fournier: Mr. Chairman, I
maintain that question is also out of order. If the hon. member asks what is the policy of the government under clause 1 of the bill it is written in the bill, and the minister would answer to that effect, but I think we should not cover the whole field of monetary reforms and banking practices throughout the world on this clause.

Gold Mining


Howard Charles Green: This bill deals with assistance to the gold mining industry. I submit the question the hon. member has asked is perfectly in order and in line with questions-


Alphonse Fournier: Let us take a vote.


Howard Charles Green: -asked earlier in the afternoon. I cannot understand why the house leader should now get up and arbitrarily take the stand that the question is out of order.


Alphonse Fournier: I think it is unparliamentary for a member to say that the chairman is acting arbitrarily.


Howard Charles Green: I did not say that the chairman was acting arbitrarily.


Louis-René Beaudoin: I did not understand the hon. member to say the chairman was acting arbitrarily.


Howard Charles Green: I said the house leader.


Alphonse Fournier: Then I object because that would really be unparliamentary.


Louis-René Beaudoin: It seems to me that some hon. members have important questions to ask relating to gold and assistance to the gold mining industry in Canada. They are very important questions to these hon. members, but they should not try to get all their replies on this bill, which is an act to amend the Emergency Gold Mining Assistance Act. There will be other occasions on which they can ask their questions and get replies. Why should they insist on having important replies to their important questions on this particular clause? I have listened to the line of questioning of the hon. member for Winnipeg North Centre. He was perfectly in order, and if horn, members want to have a model as to how they should conduct themselves-


James Sinclair: Oh, spare us.


Louis-René Beaudoin: -they should follow his example. He was perfectly in order.


Stanley Howard Knowles: Members to your right, Mr. Chairman, please note.


Louis-René Beaudoin: The hon. member for Van-couver-Quadra says the questions asked now by the hon, member for Eglinton are along the line of questions asked earlier. Those questions were asked by the hon. member for Eglinton, and it is his questions that have brought about this whole discussion on procedure. It is his questions concerning which so many points of order have been raised. If hon. members still insist on asking questions which are thought by the minister sponsoring the bill or somebody else on this side of the house not to be in order, I will have to make
[Mr. Fournier (Hull) .1
a ruling. In my humble opinion this clause has to do with the calculation for 1950. Questions will be relevant only in so far as they relate to that clause, and I do not think some of the last questions asked by the hon. member for Eglinton are strictly relevant to the clause under discussion.


Winfield Chester Scott McLure: Introduce closure.


James Sinclair: Here is the model, Tennyson's brook.


Stanley Howard Knowles: Mr. Chairman, I shall certainly make note of your recent remark and will probably have occasion to refer to it later.


Howard Charles Green: I would not count on it too
much.


John Lambert Gibson: Don't take it too seriously.


James Sinclair: We all make slips, even the chairman.


Stanley Howard Knowles: Careful, now; that is out of order. May I ask the minister whether the five mines which will get the $36,000 as a result of this new calculation are mines which have already received amounts of money in the lower brackets, middle brackets or upper brackets, as set out in the report of the operations under the act? Perhaps the minister would indicate what amounts these companies have already received and what amounts they will now receive.


George Prudham: Possibly I can dig that out. It will take some little time to locate it. I do not wish to divulge the names of the mines because I do not think that is called for.


John Lambert Gibson: That would be in the public accounts.


Stanley Howard Knowles: I was not asking for that now, but I would assume it would have to be divulged sooner or later. After all, they are all listed in this report and that information would be published sooner or later. However, I was not asking for it now. In terms of the principle, I was asking whether the money will go to mines that have received some of the larger sums listed in the report or to mines which have received smaller amounts?


George Prudham: If it is agreeable to the hon. member, I would be glad to dig that out and show it to him later. I have the chart here but it will take some few minutes to make comparisons. I do not know exactly what he means by the upper brackets and the lower brackets. These mines all need assistance or they would not be applying for it.


Stanley Howard Knowles: I suggest that we call it six o'clock so that at eight o'clock-


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


[Stage Direction]
Motion agreed to.
Section stands.
Progress reported.
At six o'clock the house took recess.
[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
[Stage Direction]
The house in committee of supply, Mr. Beaudoin in the chair.

[Stage Direction]
463. Departmental administration, $1,370,576.
Mr. Chevrier:: When the committee adjourned on Friday last I was dealing with some of the points that had been under discussion during the consideration of these estimates. I believe I can cover the remaining points in a very few minutes. The hon. member for Winnipeg North Centre again raised the question of pensions for retired employees of the Canadian National Railways, and frankly I must say to him that I cannot see the point in his argument nearly as well as I could a year ago. The position I have taken all along is that this is- a matter for the officers of the Canadian National Railways to determine with its employees.
I say that I cannot see the point of the hon. member bringing it up again this year, because the position is entirely different now than it was then. For instance, the hon. member said he must draw the attention of the government to it until something is done. Something has been done; something very tangible has been done. The pension rules of the Canadian National have been revised very substantially and very favourably, I understand, to the men. They have been revised in two ways: First, by amendments to part I. Part I provides a basic pension and the opportunity of contributing to a supplementary pension. Employees may also transfer from part I to part II. Second, by part II of the plan which was designed to give employees the opportunity of increasing their pensions.
I think I could do no better than to put on the record a statement made by Mr. Donald Gordon, the president of the Canadian National Railways on Tuesday, April 29, 55704-156
Supply-Transport
in the committee on railways and shipping, which appears at page 111 of the report. He said:
Now, these men you are talking about did not choose to take advantage of that opportunity and that is why when their services terminated they received this small basic pension.
He is referring to the $25 per month basic pension.
That pension is now augmented to an extent by the old age pension and that brings the amount received up to as much as $65 a month. And now, as regards the C.N.R. increasing the basic pension, that would be meaningless, it would simply mean that the C.N.R. would be paying the additional sum instead of the provinces paying it. Most of these people would become eligible at age 65 or over. In connection with that I may say that the labour representatives supported our view on this point and in that respect I would like to quote to you from a letter.
Then he is asked about the date of the letter, and he says the letter is dated March 31. I should say that this letter is from Mr. Hutchinson, who is chairman of the brotherhood committees. The letter reads:
The expressions of opinion appeared to be almost universally in approval of the improvements which have been made.
Some of those who did not contribute toward annuities expressed disappointment that their lot is not improved but could not seem to impress the meeting that they were entitled to very much consideration on account of the fact that they had not made any effort to improve their lot.
Then Mr. Gordon goes on as follows:
Now that, as I say, is the view of the men themselves in a meeting assembled on this specific point. And so far as the C.N.R. management are concerned, we do not feel that we have any obligation in logic to recommend an increase in these so-called basic pensions by reason of the changed position arising out of the old age pension plan; because, again I emphasize that with a means test involved, if we were to increase the pension then it simply means that the C.N.R. would be paying the increase and not the provinces.
So much for the attitude of the management of Canadian National Railways.
Then the hon. member says this question must be considered by the minister and by the cabinet for action by the government without delay. Well, the cabinet and the minister considered this very thing. The management of the Canadian National Railways submitted a revision of their pension plan. We saw no objection to it, in fact we approved it after giving it careful study and said, "Go ahead; we think it is an improvement." The hon. member says it is for me to act. I do not think it is. The Canadian National Railways management means something or it does not. It has been appointed to administer the system and the affairs of its employees, and surely there must be a division of things. There may come a time when further changes are suggested. When changes are suggested, as I have said in the

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house and as I repeat now, it will then be the duty of the government to consider the requests or recommendations made by the officers of the Canadian National Railways. If the men, in conjunction or in co-operation with the management, want to submit to the government an additional plan to increase or revise the basic pension, the government will give it consideration. The government will not necessarily turn it down. The position I have taken all along is that it is for the management to determine what action should be taken. They have determined the action that should be taken, they have referred it to us, and we have approved of the position. For the time being I think the matter should be considered in that light.
Then the hon. member discussed the question of grade crossings, and asked that I put on the record some facts. I believe I can do it fairly quickly. With reference to the grade crossing fund, the amount available for expenditure as of April 1, 1952, was $1,985,000, roughly. The commitments against that fund as of the same date were $1,246,000, leaving a balance of, roughly speaking, $800,000. The hon. member wanted to know something about the commitments outstanding. There are sixteen commitments outstanding against the railway grade crossing fund at the moment, amounting in all to $1 246,000, which provide for an estimated amount of work totalling $5,170,000. Perhaps my hon. friend would like to have them broken down by provinces. These commitments are as follows:	British Columbia,
$28,000; Alberta, $201,000; Saskatchewan $18,000; Manitoba, $29,000; Ontario, $414,000; Quebec, $426,000-1 may say I am giving round figures here

New Brunswick, $37,000 and Nova Scotia, $89,000.


Stanley Howard Knowles: Are those commitments for projects being proceeded with at the present time?


Lionel Chevrier: I should like to be clear on that point. Those are commitments against the fund. Those are judgments handed down by the board of transport commissioners. A judgment might be handed down today and the municipality might decide not to go ahead with it; but that is still a commitment against the fund. In the list that I gave there are at least two such cases.
"Mr. Knowles: Does the minister have readily available the number of projects involved ini each province, in lieu of these commitments?


Lionel Chevrier: 
Howard Charles Green: Did they not make a ruling yesterday?


Lionel Chevrier: They made a ruling on one point only. I am prepared to deal with it. I want to bring it to the attention of the committee. I interrupted the hon. member the other evening and said that I thought perhaps he had put enough on the record and hoped he would feel that he had gone far enough; but the hon member proceeded, and I was not going to raise the point. But the hon. member knows that this matter is now being discussed in Regina by a court of record, namely the board of transport commissioners. He having put the case on record, I feel I should take some time to dispose of it; but I am in your hands, Mr. Chairman.


Louis-René Beaudoin: Does the minister feel that this question is sub judice?


Lionel Chevrier: Unquestionably it is.


Louis-René Beaudoin: If it is sub judice, he cannot refer to it. I do not remember the incident. I think it might have taken place while I was absent from the chair. I do not recall the point of order having been raised.


Mr. Argue:: On a point of order, Mr. Chairman, may I say that one matter the hon. member for Bow River raised was the fact that the trucking association was not given a hearing or might not be given a hearing before that board, and whether or not an amendment to the Transport Act should be brought down' at this session in order that the board of transport commissioners might hear the trucking association. I would point out that, according to a Canadian Press dispatch this morning, the truckers have been refused a hearing. It has already been decided, by a ruling of the board of transport commissioners, that the trucking association cannot be heard

before that board. Because that ruling has been made, I would say that particular aspect is certainly not sub judice now.


Lionel Chevrier: I am not going to deal with that point because the board is still sitting and will sit tomorrow on the case. I happen to know that. In any event, that was one point only that was decided before the case proceeded to the evidence stage. But since those people made representations to me personally I think I could deal indirectly with them without perhaps touching on the points that are now before the court. It will not, however, be a complete answer to my hon. friend.
The point arises out of an agreement made between the railways and certain oil companies in the province of Saskatchewan for the transportation of their oil and petroleum products. The requests of the truckers, to me at least, were that they should be allowed to appear before the board. The statement of the hon. member for Bow River was to this effect. Why should not the truckers be allowed to appear when the railways are allowed to appear before municipal boards in the various provinces? Of course, the answer to that is quite clear. The act indicates who is a carrier, and it was the act passed by this parliament. The provincial municipal board also defines those who may appear, and in the case of the Canadian National Railways it so happens that they own trucking operations in some of the provinces and are therefore free to appear. The definition is quite clear, I think.
Then it was suggested that the government should amend the Transport Act in order to allow them to appear. The government gave careful consideration to that suggestion after the representations made to them by the Canadian Automotive Transport Association, with a particular representation from the province of Saskatchewan. Here I pause to say that no one made stronger representations on behalf of them than did the Minister of Agriculture and the hon. member for Regina, in support of the contention that these truckers should be allowed to come in and make their case. The government carefully considered the point and came to the conclusion that it would soon have to determine the broader question of whether or not, following the recommendations of the royal commission on transportation, it should take over interprovincial and international trucking or in other words regulate those forms of trucking. Since a decision on the one question would have meant a decision on the broader question, we thought that, at this time at least, we should not decide in favour of allowing them to come in as a carrier. If we had done so, I think there was a neat constitutional
55704-156J
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point in that we might well have been told that we were infringing on provincial rights since, by the definition of carrier, we were attempting to regulate to some extent provincial operations of truckers.
Then again the act, to which I do not want to refer in detail, clearly covers the point raised by my hon. friend, namely that anybody who, being a carrier or a shipper, feels that he is aggrieved or affected, can protest before the board of transport commissioners; and I understand that is what is being done now. There are a number of shippers who are not parties to the agreement with the Canadian National Railways or the Canadian Pacific Railway and who are at the moment protesting against it. I cannot go any further because, as I say-


Mr. Johnston:: May I just ask a question of the minister?


Lionel Chevrier: May I just finish my statement. As I say, I cannot go any further because the case, as my hon. friend knows or should know, is before the court.


Charles Edward Johnston: The question I wanted to ask the minister was this. While some of these companies are appearing before the board, it is only through the courtesy of the board that they can do so, it is not? They have no legal right to do so.


Lionel Chevrier: Mr. Chairman, I have covered that point. My hon. friend was not in his seat when I did so. Perhaps he will look at my remarks as they appear in Hansard.


Charles Edward Johnston: I did not know the minister was going to be on tonight or I would have been here earlier. I was in my room, and I came down as soon as I knew he was on.


Lionel Chevrier: The other point raised by the hon. member for Peace River is one that I feel I should deal with because I think he has and I say this with great deference- and for the lack of a better word let me say magnified the dangers to the province of Alberta in so far as the present position with regard to transcontinental rates is concerned. The position as I understand it is this. The one and one-third rule has not been disturbed in the slightest degree by any decision of the board. The one and one-third rule still remains. What has been done is that a very small number of transcontinental rates have been increased by the two railways.


Mr. Low:: Can the minister say how many?


Lionel Chevrier: Well, I would think roughly eight or ten, but I am guessing when I sav that.


Howard Charles Green: The key commodities, though.

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Lionel Chevrier: On commodities such as iron pipe, canned goods and fish. My hon. friend says "key commodities". The categories of key commodities have been changed. For instance, while carloads could be moved on a transcontinental rate from one part of the country to the other, in certain instances it is not possible to move a carload of 60,000 pounds but one may move 30,000 pounds or 40,000 pounds. This I think does not entirely eliminate the benefit of the rates that existed before. The point I want to deal with is this. The benefit of the one and one-third rule still remains. I think what my hon. friend was aiming at was the fact that the board heard and determined the application made by the three or four western provinces with reference to the $7 million subsidy. It heard that, and there was a difference of opinion between Manitoba, which argued in favour of a per 100 pound basis subsidy, and the other provinces, which argued in favour of a percentagewise subsidy. They maintained that since freight rates had increased by percentages, they should also decrease in so far as the subsidy was concerned by percentages. The board found a formula which took into account the 100 pounds idea and the percentage idea. It was a compromise which seemed to be agreeable, as I understand it, to all the provinces save Alberta.
I am informed that Alberta launched an appeal against that decision. Since then I am told the province of Alberta has withdrawn its appeal, which would indicate to me that the advantages to be gained by the decision of the board under the $7 million subsidy are satisfactory to the province of Alberta.
There is one other point I wanted to make, namely that the board is still continuing the investigation under P.C. 1487. It is hoped that under that it will be possible to equalize freight rates, and undoubtedly out of the equalization the province of Alberta, as other western provinces, stands to benefit a great deal.
The hon. member for St. John's West raised one or two problems with reference to the Port aux Basques ferry. That work is proceeding satisfactorily. There was a change in the design which caused some delay, but since then that has been ironed out, and I am informed by our officers that the plans for construction are going ahead quickly.
With reference to the two coastal steamers of the Bar Haven type, the Canadian National Railways, who are charged1 with the responsibility of operating those steamers, have asked for tenders. Those tenders are being considered now and the contract has not been awarded1.

There are a number of other detailed questions which the committee would not expect me to deal with at this moment. I think I can dispose of them at a later date.


Howard Charles Green: May I ask the minister about the questions asked by the hon. member for Cumberland?


Lionel Chevrier: Yes; the hon. member for Cumberland dealt with a number of questions, one of which was in regard to the closing of certain stations. All I can say there is that stations are closed by order of the board of transport commissioners. Hearings are held before the board, and no doubt the particular station to which my hon. friend has reference was dealt with in that way. I presume that before the station could be closed the railway in question, the Canadian National Railways or the Canadian Pacific Railway, would have to make application to the board; and it is the board, not the department, that determines the question.
He also dealt with the dieselization of locomotives and the protection of the coal mining industry of Nova Scotia. Well, that is a broad question, with which the president of the Canadian National Railways dealt at length in the committee on railways and shipping.
I would refer my hon. friend to the sessional committee of railways and shipping, and particularly the hearing on Tuesday, April 29.
He also asked that I make a statement with reference to power resources and development in the province of Nova Scotia, as raised by the hon. member for Westmorland. I would not attempt to deal with that. The Department of Transport is not charged with the responsibility for power development. True, it is interested in questions of that nature, but it would not be a matter for me to handle in this department.
With reference to the contribution of the province of Nova Scotia to the causeway project, about which the hon. member inquired, it is $5,500,000.


Howard Charles Green: If I may clear up these questions, he also asked about the possibility of double tracking the Canadian National line from Moncton to Truro and through to Sydi-ney, referring particularly to the line from Truro to Sydney. In addition, he asked for a statement about the position of the Chig-necto canal and about the Amherst airport, and then about shipbuilding in Nova Scotia.


Lionel Chevrier: Well, it is pretty difficult to cover all of that.


Stanley Howard Knowles: We will give you another forty minutes.


Lionel Chevrier: With reference to the double tracking, that is a question which comes up

fairly regularly in my estimates. Again, it was dealt with by the president of the Canadian National Railways, I think fairly effectively, at the sittings of the committee. All I can say now is that the fact it has come up in the house requires me to bring it again to the attention of the officers of the railway, which I shall do.
With reference to the Chignecto canal, there is no change. A reference was made to the royal commission on transportation, and I need not repeat what the royal commission found in so far as that project is concerned. They made a recommendation. The committee is familiar with the report. Everyone has the report, and the recommendation can be found there.
With reference to the Amherst airport, if I remember rightly that airport is being turned over to the Crown Assets Disposal Corporation.


Howard Charles Green: It is a municipal airport.


Lionel Chevrier: My recollection is that the airport in question has been requested by the municipality. In other words they want the return of the land so that they can use it for municipal purposes. As I remember the correspondence with the hon. member for Cumberland and the mayor of Amherst is to that effect. I may be wrong. My recollection of the whole matter is that the land in question is to be assigned to the Crown Assets Disposal Corporation so they may return it, sell it or dispose of it to the municipality.


Howard Charles Green: Perhaps the minister can check that. I take it from the purport of the hon. member's question that what he was asking for was help for the airport, an improvement of the airport.


Lionel Chevrier: I will check on it.


Solon Earl Low: I should like to say a word or two in connection with the statement the minister has made. I thank the minister for the information he has given in connection with the freight rates situation, but I think perhaps he was in error when he suggested that Alberta had withdrawn the appeal against the board's division of the subsidy because we appeared to be satisfied with that division. Actually the reason the Alberta government withdrew its objection was that the Canada Steamship Company appealed the case against the board. That case is proceeding now, I understand, and therefore I cannot discuss it. As a matter of fact we in Alberta feel that when the board made its decision in respect to the division of the $7 million subsidy, partly on the basis of percentage and partly on the per 100 pounds involved basis, they were yielding to the interests within the city of Winnipeg and
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were considering their welfare in preference to that of the whole of western Canada, particularly in Saskatchewan and Alberta. That matter was argued fully before the committee; and I am quite sure the people of Alberta feel that was an unfair division of the $7 million.
There was another point I wished to mention to the minister, and it is this: The whole burden of the main part of my statement the other day was that, without any change in the competitive situation in the past six or seven months, the Canadian Pacific Railway did file with the board a new schedule of transcontinental rates on seven or eight key items and that the Canadian National Railways, which all through the committee hearing last fall took the position the railroads could get by without increasing the transcontinental rates and could apply the one and one-third rule without it affecting their revenue, changed their position.
It was not very long, in fact the ink was not dry on the legislation we passed, until the Canadian Pacific had somehow or another inveigled the Canadian National into supporting it in posting a new schedule of rates. As I said the other day, the Canadian Pacific could not have done so alone; they had to have the support of the Canadian National. Here is our own Canadian National system rushing in before they had even given the new one and one-third rule time to be tried, to find out what the experience would be. They proposed, with the Canadian Pacific, a new schedule of rates which we think is completely unjustified.
As the hon. member for Vancouver-Quadra said, this affected a considerable number of important items, such as canned goods. Whereas the merchants in Alberta under the one and one-third rule in the transcontinental rates in effect until early this year could receive their canned goods from Toronto or other Ontario areas for $2.09, it has now jumped to $2.53.


Arthur Laing: Some of us predicted that in committee.


Howard Charles Green: But British Columbia is paying the most.


Solon Earl Low: The fact that it came about was not, I suggest, as a result of the prophetic powers of the hon. member so much as because of the weakness of the Canadian National Railways in permitting themselves to be led around by the nose by the Canadian Pacific. That is the protest I was making the other day. I say they went in, with indecent haste.


Arthur Laing: You would not expect them to have different rates, would you?

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Solon Earl Low: No, I would not expect them to have different rates, because the Canadian Pacific simply would not dare operate under a different schedule of transcontinental rates from the C.N.R. That is why I say the culpable people are the Canadian National people; they could have held the line by simply saying, "Look here, you Canadian Pacific people, we took the position we could get along; and we would like to wait until we see what the experience is going to be. In any event it will not be serious for the time being. When we discover what the experience is, and how it will affect our revenue, we will be in a position to say whether or not we will join you in posting a new schedule of rates."
That is all that was necessary. Certainly the Canadian National and the Canadian Pacific cannot, under the circumstances, try to operate on different schedules. That is why they got together. As I said the other day, before such an important step was taken, even with a small group of items such as the eight or ten mentioned, in view of what happened last fall and the position taken by the minister I think the Canadian National people should have gone to him and sought his advice before agreeing to join the C.P.R. in posting new rates.


Arthur Laing: You could get those canal boats running again.


Solon Earl Low: We ought to get something going. I do not know what the outcome of the Canada Steamship Lines case will be; but when that has been decided Alberta will make her decision with respect to her position.


Mr. Knight:: 
An hon. Member:: No, to C. D. Howe.


Robert Ross (Roy) Knight: I am quite prepared to give the minister credit for almost anything, but not for the weather. I am prepared also to pay a tribute to the government and the minister for the encouragement they have given to the use of that particular route. Some hon. members appear to be intensely political in connection with almost any matter raised in this house.
There are one or two things which still militate against the use of this route and which I think could be remedied. I believe there are about four altogether. If this port is to be successful there must be import as well as export trade. Import facilities would seem to be limited during the time export operations are being carried on. Nevertheless I believe there are import facilities at the port which are not being used to their full extent. I would urge business firms, chambers of commerce and boards of trade throughout the prairies to encourage the use of this port. It is their own port and they should make greater use of it.
The Saskatchewan government has done something in the way of setting an example. In connection with bringing in heavy machinery or other imports from England they have ordered them brought in through that port. This created some savings to themselves and to the taxpayers of the country. If private
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business firms would follow that example greater use would be made of the port. Of course they are doing that to a limited extent.
Then there is the matter of the necessary annual importation of stevedores, dockers and other labour to take care of the loading of the wheat and the unloading of imports. The solution of this problem is the further development of the whole north. I think Canada's future lies in the north. When the north country is developed in whatever way it can be developed there will be more population. There would be a greater population at Churchill and we would have a native supply of labour to handle loading grain in what is an all too short navigation season.
At present these men must be brought in from Montreal; and while I am ready to admit that they do the work satisfactorily I have heard of one or two instances where they have seemed to regret having to work at a little place like Churchill. They have indicated that they thought it was rather small potatoes. I think we would do better if there was a labour force living right there and taking some pride and interest in the port.
Then another thing is the lack of feeder lines to the port. If one looks at the map he will see there are certain gaps. We would like to see a network of east and west lines leading into The Pas in Manitoba, which is the railway centre through which the grain is shipped. In his remarks the other night the hon. member for Melfort referred to two lines, one from Reserve Junction to Arbor-field and the other from Melfort to Carrot River. We look forward to the time when those lines can be extended to The Pas.
Another thing which is hindering the use of this port by grain companies and individuals is the diversion charges on grain passing through Churchill. My own definition of these charges is that they are money paid for services not rendered. The savings made by using Churchill, and they are very considerable, are cancelled out by these diversion charges. I do not know what the amount is, but I believe it is about a cent and a half per bushel. I want to say in the strongest words possible that these charges are unnecessary and iniquitous. They should be abolished. In connection with this hindrance to the use of this route I should like to quote from the Alberta wheat pool budget which under the heading of "Churchill Savings" states:
On wheat exported through the port of Churchill on Hudson bay during the 1950-1951 crop year the wheat board received an average premium of 4-96

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cents a bushel on wheat sold under the International wheat agreement and 3 05 cents a bushel on class 2 wheat, over the Fort William-Port Arthur price. The board1 made a saving of $132,217.22 on freight on grain exported through this port but paid $139,560.91 in diversion premiums. This information was given in the House of Commons by Right Hon. C. D. Howe.
My hon. friend referred to him a moment ago. When I raised the matter with the Minister of Trade and Commerce 'he did not agree with me that these charges were iniquitous. There is one other short quotation on the same subject which I should like to give. It is from our local paper, the Saskatoon Star-Phoenix. In an editorial on April 5 it expresses the view held by most western people with respect to this matter. The editorial reads as follows:
The existence of a diversion charge is bad enough in normal times. It means that the western farmer is making a donation to the terminal elevators at the lakehead and receiving nothing in return. It is one of the numerous obstacles that have been placed in the path of the development of Churchill, thereby preventing to some extent the growth of trade through the port with its consequent saving to prairie wheat growers. In short the farmer is paying to have himself kicked. But in this year when every facility of the trade has been necessary to move the crop it is a national scandal to pay money for service which the lake-head terminal could not provide in any case.
I say this impediment to the use of the port of Churchill should and must be removed. As I said before, I am grateful for such support of the route as has been given by the Department of Transport and the wheat board, and I urge that this support be continued and increased. Not only do I say this on behalf of my own city and my own province but also on behalf of all Canada, because a doubling of the present use of the facilities at Churchill with respect to the shipment of export grain would relieve the Canadian public of the present deficit which it has to pay. It is true the deficit has been decreasing, but it is still a considerable amount.


Mr. Murphy:: I only wish to take a very few moments. As usual my comments are nonpolitical.


An hon. Member:: At this time?


Joseph Warner Murphy: I see the parliamentary assistant to the minister laughing. I think he should know better because as a good friend of mine and also a very capable parliamentary assistant he will not mind my having made that reference. I do not think there will be any controversy about what I have to say. I wish to deal with two particular items. Like other backbenchers in the house I welcome the opportunity provided by the estimates to discuss a matter which I think is of interest to every hon. member. I want to refer first to transportation by private airline companies.

Only today I received a letter from the minister in answer to one of mine. I might remind him that when I am attending the house he need not send my letters to Camlaohie. The word is hard enough to pronounce, let alone spell, but when I am here he might address letters to me at the House of Commons. I know he will not take exception to that remark.
The matter I wish to raise concerns more than the particular case I have in mind. Recently a lad from Sarnia booked passage on the Queen Charlotte Airlines from Vancouver to some place a little farther north, though I thought Vancouver was far enough north for any white man to live. I see no exception is taken to that statement. The plane crashed and the young lad was killed. The minister was good enough to send me the general order of the air transport board covering the situation. The lad was a passenger on a private airline, and the same situation might arise with anybody's son or daughter or even with ourselves.
In looking at what material was available to me, I was rather disturbed to find that people taking transportation by such companies were limited in the amount of any claim they might make, and probably more so than, any of us may have thought was the case. I know the minister will correct me if I am wrong, but it does not seem fair to me that a private airline company operating anywhere in the Dominion of Canada should be so privileged as they seem to be under these regulations. The liability of the air transport company is limited to a passenger liability of $20,000 per seat. I have had occasion at different times to travel on some of these private transport planes when I was in a hurry to get some place, and there were more passengers than there were seats. I think that in itself is important, though I do not say they should not be overloaded because at times we all want to get some place and we do not worry about it. I do not think that such a limitation on liability is fair to the people who travel by private airlines. I more or less felt that in taking transportation by such means people were fully covered. If I am wrong I know the minister will correct me, but I do not think the limit is high enough.
I have no explanatory notes covering this particular matter, but I cannot see why there should be such a limit in the case of any transportation company. Certainly most people carry some insurance, and I have always felt that when people travelled by air in this country or elsewhere the transportation company was liable for damages to the

degree that might be held fair in a court of law, and that the family of the person involved would be entitled to receive damages to that extent in any court in the land. I know the minister will investigate this case further, but I should like to point out that under general order No. 3-51 so far as public liability is concerned the limit for one person is $20,000 with a total of $40,000 per aircraft. I am going to say quite frankly, Mr. Chairman, that I do not think that is fair. I do not think it is a businesslike proposition to place before the Canadian people. I am inclined to the idea that this sort of legislation may have originated when air transportation or even sea transportation were in their infancy, but I should like to see a complete revision of the legislation. I do not think it is fair to the Canadian people or to anyone else who might be travelling on a Canadian line.
The other item to which I wish to refer, Mr. Chairman, concerns property damage. Under this same general order No. 3-51, there is a limitation of $5,000 per aircraft per accident. I shall moderate my language in describing that limitation, and say that I believe it is extremely unfair, that is if I am interpreting the order correctly. All too often in recent months we have found property damage running much higher than that when accidents have occurred. I am not going to pursue that argument because I think it is so apparent to everyone in the house that this order should be overhauled in order to permit a guarantee that would be in keeping with Canada's status. It would be regrettable if an accident occurred in which some people suffered damages as high as $25,000 or $50,000, and this limitation enabled the company to set its liability at such a small amount. I am not going to pursue the matter, Mr. Chairman, but I think it is one of those things to which we should give some study today. While it may not have been drawn to the attention of the department before, it seems obvious that this order needs revision.
The other point to which I shall refer, Mr. Chairman, is something that I think applies to all of us. I rather hesitate to mention any particular incident-I am not going to refer to the item when it is called-but I should like to refer to the subject of damages that might accrue to any person or persons as the result of a fire or other accident to a passenger boat. Not so many years ago there was such an unfortunate occurrence, apparently through no fault of the captain, who was a most capable officer. Perhaps I should refer to the particular incident so hon. members will know to what I am referring. I
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refer to the fire which occurred on the steamship Noronic while it was docked in Toronto. Court actions were instituted both in Canada and the United States. Most of the passengers were United States citizens. In this country we welcome the United States citizens as tourists, whether they come by car or any other mode of travel.
The point I am making is this. I believe the liability of a steamship company for damages is limited according to the tonnage of the boat. In this particular instance the ship was carrying several hundred passengers and a certain amount of freight. While any court in the Dominion of Canada may have found damages, and rightly so, to the extent of several millions of dollars, we find that under our present legislation the steamship company's liability was limited on some tonnage basis. It has occurred to me that perhaps the limitation was proper years ago when we had sailing vessels, but it seems to me that in this advanced stage of our development we must recognize our responsibility. I believe the government has a responsibility to see that any passengers who desire to take a vacation on a Canadian ship are not faced with such a limitation on liability as this legislation seems to impose.


Mr. Robinson:: There is no limitation in the case of gross negligence, is there?


Joseph Warner Murphy: It is a long time since I studied any law, so I am not going to enter into an argument as to whether or not there was gross negligence. That would be a matter for the courts to determine. The point I am making is this. I am not going to argue the point about negligence, but wherever a disaster occurs the people should not be faced with such restrictions with regard to liability as are now apparent. I think that is unfair to any passenger who may embark on a cruise, no matter whether it be in Canadian or international waters. I may be wrong in my assumptions but after all, Mr. Chairman, I know from my personal knowledge that because of the limited liability in the particular disaster to which I referred some families who were left with two or three dependents received only $2,000 or $3,000 as damages, whereas in our own courts, for whom we have the greatest respect and where there is no limitation for damages in actions other than those of this sort which are limited by order in council or by a statute, they could have received a great deal more.
If I have misappraised this idea I am sorry, but I am now only going on what I know has happened. I feel that we in Canada should take it upon ourselves through the government to see that regulations and
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restrictions with respect to damages arising from accidents, either on airlines or on the sea, be revised at an early date.


Mr. Kirk (Digby-Yarmouth):: Mr. Chairman, may I take a few moments to speak on a subject which was mentioned by the minister when he spoke in the chamber on Friday last. I refer to the question of a water connection between the town of Yarmouth, Nova Scotia, and a port in the New England States. I do not intend for a moment to review, as I have on previous occasions, all the various factors affecting this situation; but I think the committee should realize that when I raise this matter I am discussing a service that has been in effect between Yarmouth and the New England states for over fifty years.
When world war II came along the service was discontinued because of the need for ships for overseas purposes. Following world war II the service was re-established1 on a part-time basis. The service operated only in the summer months, whereas prior to 1940 it had run both summer and winter. Following the war the ships had only been in service for a year or so when the owners, the Eastern Steamship Lines, announced that they intended to sell their ships at the first opportunity.
When you have had a water service for some fifty years or more you can imagine what it does to business in that area when it is learned that the service may be discontinued. AH avenues were explored and on December 7, 1949, the Minister of Transport announced that an automobile-carrying ferry would be built to operate between Yarmouth and a port in the New England states. Of course that announcement was a great relief to Nova Scotians in general and particularly to those of us who live in the southwestern end of the province.
Then in June, 1950, the Korean outbreak took place. Some two or three months later it was necessary for the minister to announce that, because of the steel shortage, it would be necessary to postpone the building of the ferry. Then, in the early spring of this year the papers ini the province of Nova Scotia and in the New England states were filled with articles to the effect that the sale of the Eastern ships had been practically consummated, that the ships would not run this year, and there would be no service between Yarmouth and Boston.
Prior to that time, during that period and since then the provincial government, municipal councils, boards of trade, town councils and various service organizations have all passed resolutions urging that the new

ferry be built as soon as possible so we may be assured of a continuity of service. It is easy to imagine how upsetting it is to business-retail business, wholesale business, hotels, motels and to everyone who is in any type of business-when it is realized that a ship may or may not run; that you may or may not have tourist traffic from the United States to Nova Scotia; that you may or may not be able to travel from the United States to Nova Scotia by water; that you may or may not be able to ship your goods by water, because you do not know-and we do not know-from one month's end to another what the situation is going to be.
It was not until May 8 of this year that Eastern Steamship Lines announced that they were running their ships again this year, but there is no guarantee for next year. The length of service is cut down this summer to two and a half months, and no one knows what is going to happen in the summer of 1953. As I said before, this situation is very upsetting to business.
No thinking person questions for a moment the fact that there is a shortage of steel. Despite articles and editorials ini many of the papers by those who purport to have some information on the subject, I think there is general agreement that there is a shortage of certain types of steel, particularly of steel plate, in structural shapes. I think that is the term the engineers use.
The minister has announced that there is nothing in the estimates this year for the ferry. This is most upsetting to Nova Scotia. We realize that there is a steel shortage, particularly of structural steel plate.
I should like to make this suggestion. The minister has already mentioned the fact that plans and specifications are completed and that we-"we" being the government- will be able to get under way quickly once the steel shortage eases or is over. May I say that it has been my experience-rather short though it may have been in this field- that after an announcement is made, it takes many months before advertisements are placed, tenders are called and the contract is awarded. I should therefore like to suggest to the minister, on behalf of Nova Scotians in general and those of us who live in western Nova Scotia in particular, that notwithstanding his previous statement, he discuss this matter with his colleagues and give serious consideration to calling for tenders at an early date.
I believe it cannot be gainsaid that the amount of steel plate required between now and the end of the present calendar year, that is if one were to start to build the ferry within the next two or three months, would

not be very great, in fact it would be negligible. If I am not mistaken the statement was made in this chamber, by a colleague of the Minister of Transport, that by the end of this calendar year there will be an easing of the steel situation, that steel production in Canada will have increased by about 25 per cent and that early in 1953 the short or tight steel situation should be over.
All I ask of the minister is that he seriously think of reconsidering his statement of last Friday, that he do not give me an answer tonight, but that he rise in his place within the next few weeks and say: "I think that was an excellent idea, and we will call for tenders."


Hazen Robert Argue: I first of all should like to agree with the suggestion made by the hon. member for Saskatoon. I believe that more use could and should be made of the port of Churchill. It has certainly meant a saving in the shipment of wheat, apart from the diversion charges.	The people in my part of the
province, with regard to the shipment of wheat, do not benefit to any extent from the port of Churchill but I believe the people in western Canada feel that the port of Churchill is their port, no matter to what extent they may use it, and the people in the three prairie provinces would like to see the port of Churchill used to the greatest possible extent.
The government is deepening the St. Lawrence waterway system. The country is spending a good deal of money on that project. Unless positive encouragement is given to the use of the port of Churchill I am afraid the St. Lawrence seaway development may spell doom for that port. For the life of me I do not know why the diversion charges are maintained. It does help the elevator companies but certainly it keeps the port of Churchill at a disadvantage, as compared with other ports, with regard to the shipment of grain. As the hon. member for Saskatoon has said, I believe every possible thing should be done to see that in the navigation season the port is used to the fullest possible extent.
I should like to deal for a moment with the statement of the minister that an amendment was not being made to the Transport Act in order to give the trucking association the right to appear before that board. I do not intend to refer to anything that is sub judice. I do not intend to refer in any way to the agreed charges which that board is now considering, or to say whether they are too low, too high or anything else. All I want to press for at the moment is an amendment to the Transport Act whereby the trucking association as of right may appear before that board when an agreed charge 55704-157*
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is being discussed which affects the trucking industry. I do not think any association, or any group of people, should be condemned to economic loss without a hearing. Because of the way the act reads many truckers are condemned to economic loss without a hearing. Many of them are condemned to economic ruin, because they are small operators owning only one or two trucks, and at present they are not able to appear before that board and present their case.
The minister said that if an amendment were brought in to allow the trucking association to appear before the board of transport commissioners, then the government would have to give consideration to bringing the whole trucking industry under the Transport Act. Well, I do not think the giving of consideration to one amendment needs to be postponed or delayed because the minister or the government perhaps would like to bring in the broader amendment. If at any time in future the parliament of Canada feels that the trucking industry from one end of Canada to the other should be brought under the Transport Act, then that proposition can be dealt with at that time; but I hope that the government will now give further consideration to amending the Transport Act so the trucking association may have the right to appear before the board of transport commissioners whenever an agreed charge is being discussed that affects them very disastrously.
When I was home at Eastertime I discussed this matter not only with truckers, but more particularly with the consumers in Saskatchewan, the farmers of that province. While the farmers in our province may gain from any agreed charge, whether it is a matter of oil rates or some other agreed charge, nevertheless I believe I am correct when I say that these consumers are very much concerned that the truckers, their neighbours in the little towns who depend upon trucking oil and gas and other commodities, may at this time, or at any other time, be forced out of business because of an agreed charge. And they said to me without exception they felt that the truckers should have the right to state their case, and they added the further hope that any agreed charge that is entered into should be of a long-term nature and should not be raised after the competitor is put out of business. That is all I rose to say, Mr. Chairman. I want to impress upon the minister again the need for an amendment to the Transport Act so that at this time the trucking association will not be condemned to economic loss without a hearing.


Mr. White (Middlesex East):: I will take only a moment or two of the time of the

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committee tonight to bring to the attention of the minister two or three items that we in western Ontario are particularly interested in. Last winter, just prior to the beginning of this session, representations were made to the board of transport commissioners regarding a dangerous crossing one mile north of Hyde Park, where the Canadian National Railways cross No. 2 highway. The representatives of the board of transport commissioners, the Canadian National Railways and the Ontario department of highways, together with the deputy reeve of the township of London and myself met there, and it was generally agreed that, all other systems of accident prevention having failed, steps would be taken to instal a warning light system. I have looked through the estimates and cannot locate any funds for that purpose, but I am hoping it will not be too late to include them in the supplementary estimates, if they are not in these estimates.


Lionel Chevrier: May I tell my hon. friend that they would not be in these estimates, in any event; if it has been approved by the board, the Canadian National Railways or the body ordered by the board to do it would do it.


Harry Oliver White: Thank you. The other item dealing with crossings has to do with a dangerous subway west of Melbourne known as the devil's tunnel. The Ontario department of highways have been improving highway No. 2 both east and west of this particular subway, but nothing has been done there, no doubt because of the fact that some changes are or will be contemplated at that particular spot. It involves a bit of an S turn, and the subway is too narrow for two cars or a truck and car to pass. I am hoping that will be taken care of in the not too distant future.
Then there is the question of the Canadian National Railways shop at London, Ontario. Railways seem to be a bit of a law unto themselves, apparently. The provisions of the Ontario factory act do not apply to that shop, apparently. I have received complaints of some of the conditions there. Provision should be made so that the Ontario factory act will be applicable, and an inspector sent in so that industry, which is no different from any other steel or heavy industry, would be subject to the same provisions and regulations as any other industry. No doubt the minister will look into this, and an improvement will be made.
I should now like to deal with a subject that was brought up earlier; and here I join the hon. member for London who brought the matter to the attention of the minister in the first place. I have refrained from saying anything about it because I was hoping that

the proposed weather station at London, Ontario would also be taken care of. I understand from items in the newspapers that such is not the case. Many groups all over western Ontario feel the need of an improved weather service at London. I am going to mention agriculture first. The western Ontario district has more and more gone into the growing of cash crops. All these cash crops are dependent on weather in the spring and fall, in the spring for planting and in the fall for harvesting. They are very dependent on knowledge of when frosts are likely to occur. The city council, the county councils and the aviation officials all have pointed out to the department, I believe, the need of such a station there. I have a long brief here from the fruit and vegetable growers of Ontario. I am not going to take time to read it to the committee at this point. However, it does set out in detail the needs of the industry in that area. I am hoping that further consideration will be given to the matter because the people in western Ontario are vitally interested in it.
Then, returning again to the railways and the Canadian National shops, there is the question of vacations with pay. This of course revolves around the length of service a man has given to the company. But there is a certain amount of dissatisfaction in the matter. I mention it to the minister so that he may look into it.


Mr. Henry:: Mr. Chairman, under this
general administration item of the Department of Transport I am afforded the opportunity of placing on record a few questions which, at a later time, the minister may choose to answer. They concern the Canadian Pacific railway crossing in North Rose-dale section of Toronto.
Within the last twelve months in Toronto at least 500 of my constituents filed a petition with the mayor and board of control complaining about noise, vibration and other alleged nuisances attendant upon railway operations connected with the crossing at MacLennan Hill in the area known as North Rosedale in my constituency. This petition was passed through me from the mayor of Toronto along to the board of transport commissioners, with the result that an investigation was launched immediately.
The exact details of the investigation have not been revealed fully. If at a later date the minister chooses to do so, I would ask him to tell the committee something about that investigation by the board and its officers, as well as the findings made. It has been said, to the credit of the board, that a shortterm remedial solution has been found for the complaints of my constituents. Among other

things reference has been made to a fifteen mile an hour slow order placed against trains operating at the crossing. Those are trains of the Canadian Pacific Railway. I believe, too, that some prohibition has been laid down concerning whistling.
However I would ask the minister to confirm on the records of this committee just what has been ordered by way of a shortterm solution, and to give any other remedies the board has seen fit to order in the matter by way of a solution.
Then, too, my constituents are most interested in a long-term solution of the problem. It has been stated that the Canadian Pacific Railway plans discontinuing its present yards feeding the railway line in question, and to remove the yards from Lambton to some other location. I have been unable to get more information on this point. If at a later date the minister could see his way clear to report to this committee, I know it would be appreciated by my constituents. At the moment the leader of the petitioning group states that the matter is settled on a short-term basis to the satisfaction of those who associated themselves with him in bringing the matter before the board of transport commissioners. However, the long-term solution of the problem, that is the removal of the yards from Lambton to some other place, is a matter which I shall leave for the attention of the minister.


Winfield Chester Scott McLure: Mr. Chairman, on Friday last when the estimates of the Department of Transport were first before us, due to the interest I have in transportation matters it was my intention to make some extended remarks. However, after listening to so many speeches, I noticed that the minister was not paying too much attention. I took my cue from that and, after making a sort of gentlemen's agreement with him, decided that I would wait and ask my questions when the several items were called. I interviewed the chairman at that time and understood from him that I would have an opportunity. It was pointed out to me that, so long as my questions were relevant, I would receive answers.
Therefore I shall not take my forty minutes on this occasion-and in this I know I shall please the minister very much indeed.


Lionel Chevrier: Thank you.


Mr. Fulford:: Mr. Chairman, I wish to bring to the attention of the minister, through this committee, a matter that has been raised in committee before both by myself and my predecessors. At the last session of this parliament I placed a question on the order paper, and repeated it at the beginning of this session, with reference to the union
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station at Brockville. I received an answer finally on March 19 confirming what I had already known. The answer showed that this matter is indeed worthy of consideration both by the railways and the board of transport commissioners.
According to the answer I received, the station was built in 1860. Well, as a matter of fact it was built a few years before that. In fact, if it were not such a homely, decrepit, worn-down, dirty, old brick building, I believe I would call the attention of the Minister of Resources and Development to the fact that it might be designated as a national monument. But one does not designate relics of that type as monuments.
Beginning in 1875 the union station at Brockville was used by the Canadian Pacific Railway and the Grand Trunk Railway, the latter of which, as we know, is now absorbed in the Canadian National Railways system. I consider the station not only a disgrace to the Canadian National but also a menace to the town of Brockville. The facilities for mail, baggage and express are inadequate and obsolete, and make for very difficult working conditions for those who have to operate these railway services. Brockville is now a junction point for pool trains running between Toronto and Ottawa and Toronto and Montreal. At Brockville Canadian Pacific passengers leaving Ottawa on the day train to go to Toronto have to change to the Canadian National, while passengers on Canadian National trains in the afternoon and evening, from Toronto to Ottawa, have to change at Brockville to the C.P.R. The facilities for passengers who have to change cars constitute a hazard to the travelling public.
I consider both the Canadian Pacific and the Canadian National lucky in that they have not had to pay heavy damages for personal injuries. I saw one man slip under a C.N.R. train coming into the station; and had it not been for a trainman standing right beside him there is no doubt both his legs would have been cut off. That is not good enough for the middle of the twentieth century; that is not good enough for a railroad system which is competing with bus and air transport. If the railroads insist on giving service like that they are bound to lose more and more of their passenger traffic.
From the standpoint of those living in Brockville the worst aspect is that when trains enter the station, especially east-bound passenger trains, the main artery of traffic leading from the south end of Brockville to the north is blocked. I want to pay special tribute to the train crews for their valiant efforts to do everything humanly possible to either split the trains or get them

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moving as fast as they can. But the fact remains that road traffic is blocked, sometimes over the legal limit, which I believe is eight minutes when a main artery of traffic is concerned.
Brockville is a progressive, fast-growing community. Because of our location on the bank of the St. Lawrence river our growth must be to the north. The new housing developments are north of the main line of the Canadian National. Should a serious fire break out in this new area-and we have had two serious fires in Brockville within the last two years-I hate to think what the consequences might be if the fire department could not get across the tracks. I realize that they would split the train, but it might take a few minutes and it does not take long for a fire to spread. Then if there was a case of emergency illness and an ambulance was held up, either on the way to pick up the sick person or on the way back with the sick person to the hospital, a delay of a few minutes might mean the difference between life and death. Another particularly bad feature is that our children have to go to the other side of the tracks to get to school, and they are continually passing back and forth.
One method of relieving the situation would be to build a subway. In 1945 the municipal council applied to the board of transport commissioners and a plan for such a subway was devised. Brockville is built on preCambrian granite and as a result the cost of such a subway would have been in the neighbourhood of $1 million, the town's share being $300,000.
Another solution would be to move the station further east so that trains would not block this main artery of traffic. If that were done, not by the wildest stretch of the imagination could that old derelict which the Canadian National chooses to call a station be moved. It would mean a new station, which expense would have to be borne entirely by the Canadian National Railways because the Canadian Pacific use the facilities of the station on a lease basis.
Some other method might be devised, such as an overhead bridge; or another location might be picked. In fact another location has been picked, but it would be a little out of the way. However, it would be much cheaper than what was suggested by the engineers of the board of transport commissioners and the Canadian National Railways.
I understand there is a possibility that the province would help in the construction of a subway or overhead pass where the road .concerned is an integral part of a provincial
[Mr. Fulford.i
highway. Perth street, Brockville, is definitely an integral part of highway No. 29. The fact remains that no matter how this is done, the time has now been reached when this hazard must be eliminated. I am not prepared to say how it can be done. As I say, the town did apply through the usual channels in 1945 to the board of transport commissioners, but the cost was found to be prohibitive.
After all, the municipalities of Ontario are hit hard enough as it is. Our tax rate at the moment is 86 mills, and to undertake anything like this would increase the mill rate. The town is not in position to undertake any such financial deal. I implore the minister to explore every possible channel in an effort to devise means of eliminating hazards such as this. I have no doubt that similar hazards exist elsewhere in Canada, but I think I can guarantee that there is no worse menace to be found anywhere in the dominion than exists in the county which I have the honour to represent in this house.
Anyone who has taken the pool train during the day from Ottawa to Toronto or from Toronto to Ottawa will agree with what I have said about the conditions prevailing at the Brockville station. I think they will admit that I have not exaggerated in any way. Anyone who has travelled on highway No. 29 and has had occasion to use Perth street, Brockville, I think will admit that I have understated the hazard that exists.
There is one other matter which I should like to bring to the minister's attention, a matter which I have mentioned before. I refer to the necessity of having a weather station somewhere in the upper St. Lawrence valley. Totally different weather conditions prevail in the St. Lawrence valley from those in the Ottawa valley. At the present time the Brockville radio station broadcasts the weather reports issued for Haliburton, simply adding twelve hours to the report. I do not know what method is used by the local newspaper, but I can assure you that it is equally unsatisfactory.
When the St. Lawrence seaway is completed it will be vitally necessary to have a weather station in the upper reaches of the St. Lawrence valley. Inasmuch as this station will have to be built eventually I urge that it be built as soon as possible so that our farmers may have the benefit of accurate weather forecasts.


Mr. Bryce:: I should like to bring one or two matters to the attention of the minister, matters which I have discussed before. One is in connection with the Canadian Pacific Air Lines plane which was blown up in

Quebec. The widow of the pilot of that plane who lost his life lives in my constituency, and she has asked me to find out from the minister just what is the responsibility of Canadian Pacific Air Lines Limited. She lost her husband. I wonder if any of the other passengers or crew members on that ill-fated plane have received compensation. She applied for some expenses and was turned down. I believe she was promised employment with the Canadian Pacific, but she thinks she is entitled to something for the loss of her husband. At the present time the only compensation she receives for herself and her boy is from the compensation board of the province of Quebec. When the minister is answering questions I should like him to go into the details.


Lionel Chevrier: I cannot hear the hon. member.


William Scottie Bryce: I am sorry. When the minister begins to answer questions I would appreciate it very much if he would go into that matter a little bit and tell me what it is possible for this lady to do. She is a widow with a son to raise, and I should like to know if any of the other passengers or crew members have received compensation. It is an unusual incident. The plane was blown up. It was the plane with which Guay was involved.


Lionel Chevrier: I am familiar with the case.


Mr. Hansell:: I will detain the committee for only about three minutes for the purpose of asking the minister if he can exert some influence in a certain direction. We recognize that the minister has tremendous responsibilities. His department is large, and as it has to do with transportation by rail, air and boat, with all the ramifications that are involved, his work is great and his responsibilities are heavy. I rise at this time to point out one little need in a certain part of the country. I refer to the Canadian Pacific railway station at Calgary, Alberta. I am well aware that the minister has no particular jurisdiction over a private railway company, but I am also well aware that as Canada's Minister of Transport a word from him in the right direction will do wonders.
I am not raising this question because I desire to embarrass the Canadian Pacific Railway. I happen to be an old C.P.R. man. I had a happy relationship with the company when I was one of the ticket clerks in the Calgary C.P.R. depot thirty-five years ago. I renew acquaintances every time I go through that depot; but, Mr. Chairman, it is the same kind of depot now that it was thirty-five years ago. Hardly a stick of wood in the whole place has been replaced. Perhaps the
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bars have been taken down from the ticket windows, and I think there are one or two new telephone booths. It is not only a matter of the building itself. The accommodation available for passengers is the worst of any station from Montreal to Vancouver, and I have visited them all.
There is no underground passage to enable you to reach a train on track 2, 3 or 4 if there happens to be a train parked on track 1. Let me give an illustration that may sound astounding to the minister. I arrived in Calgary one night on my way to Edmonton. The train was a little late because it was wintertime and nearly all the trains were late. I came in on the northbound train from Lethbridge and arrived at Calgary at about 10.30. The berths were made up on the midnight train to Edmonton. Do you know that I had to remain in the depot for nearly two hours before I could get on the Edmonton train and go to sleep. There was no underground passage, and as one train went out another train came in. For some reason the officials did not split any of the trains in the middle so that one could walk over the tracks. Therefore we had to wait there for two hours before we could go to bed because we had to cross to track 3 or 4 and there was a train on track 1 or 2.
Somebody may say that I should have complained to the railroad officials. I could have done that but if I had, perhaps I would have got some worker into trouble. However, my heart was brimming over with compassion, and instead of getting anyone into trouble I stayed in the depot and suffered for a couple of hours. I have actually seen people climb up the steps of railway cars, pass through the entranceway and step down on the other side in order to reach their trains. I have seen trainmen boost rather stout ladies up the steps so they might get over to track 2 or 3 in order to get their train on the other side. I do not know what the regulations are, but if an accident should happen when that was being done I am afraid there would be an awful mess not only on the platform, but someone would get into trouble and there would be a mess in that respect.
I know I am sometimes given to a little levity in the house, but I am serious when I say that a city the size of Calgary, which has doubled its population in the past ten or fifteen years, still has the same passenger accommodation as far as depots are concerned as it had thirty-five years ago.


George Taylor Fulford: We have the same as we had ninety-two years ago.


Ernest George Hansell: Then I will back my hon. friend in getting a new station if he will back me in getting a new station at Calgary.

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Perhaps there will be a double amount of influence there. I am serious about this matter. It may be there are some things that I do not know anything about. Perhaps they are negotiating for a union station. If they are, for goodness sake let the negotiations be speeded up and some conclusion reached. So far as the C.P.R. is concerned, Calgary is on the main line. Every transcontinental train on the Canadian Pacific Railway passes through Calgary in addition to numerous local trains running north, east, south and west. That is the situation which exists. Therefore I say to the Minister of Transport that I wish he would look into the matter and use all the influence he can to get a new railway depot that will be adequate to supply the needs of a city the size of Calgary, Alberta, the oil capital of Canada.


An hon. Member:: Hurrah!


Ernest George Hansell: Hurrah!


Howard Charles Green: Mr. Chairman, when the minister's estimates were first being considered I asked him some questions concerning Canada's merchant navy. He was good enough to give a brief reply that same evening, but I should like to get one or two points concerning that statement cleared up. On page 2321 of Hansard for May 16, 1952 the minister is reported as having said that there are now forty-five 10,000 ton ocean-going cargo vessels and twelve 7,500 ton vessels sailing under the Canadian flag. This would make a total of 57 ships. Is that the correct figure at the present time, and are all of those ships the old, slow vessels which were built during the war?


Lionel Chevrier: The answer to that is yes, plus other ships such as the "Lady" boats of the Canadian National Steamships, diesel passengers and some tankers, making a total of 80. They are all the Park vessels of wartime construction.


Howard Charles Green: And there are 97 Canadian-owned ships of the same type which are operating under the British flag, I understand. Is that the correct figure?


Lionel Chevrier: That is correct.


Howard Charles Green: The other evening the minister mentioned that two large modern tankers are under construction here or for which contracts have been let. Could he tell the committee what company is building those tankers, where they are being built, and on which coast they are to operate?


Lionel Chevrier: They are for deep-sea operation on the Atlantic coast. They are being built by Davie Shipbuilding for the order of the Andros Company.


Howard Charles Green: Into what service are they going, out of what port?


Lionel Chevrier: For the Atlantic and Mediterranean service.


Howard Charles Green: They will not be operating out of east coast ports.


Lionel Chevrier: Yes, they will be operating out of east coast ports. They will operate out of Atlantic ports and in the St. Lawrence, depending upon where the cargo is going.


Howard Charles Green: In my remarks the other night I brought up the replacement plan which was proposed by the Canadian maritime commission some years ago. The main purpose of that plan, as I read it in the second report of the commission-and I am referring particularly to page 52-was that Canadian owners, having sold these old, slow wartime ships, would pay the money into a trust fund held by the government or some government agency and with that fund it would be possible to build modern, fast cargo vessels to compete with the modern vessels of other maritime nations.
For example, on page 52 of the report we find these two statements:
The object of the plan Is to reduce and modernize the Canadian flag fleet.
Then again:
The funds, however, must be used for the purpose of replacement or modernization of Canadian shipping, and for the acquisition of vessels which are economic to operate.
Incidentally, the minister himself is on record in different speeches two or three years ago to the effect that Canada must have a modern cargo fleet. I have here a quotation from a speech he made at the Canadian National Exhibition in Toronto in October, 1949, in which he said:
It has been the policy of the government to endeavour to maintain a merchant marine under a Canadian flag, owned and operated by Canadians. It is not the intention to support a large fleet, nor is it a question of national pride of ownership. It is considered that a small, efficient, modern fleet of ocean-going vessels would be of benefit to Canada, not only as a contribution to the national economy but for the purpose of national security.
That statement is in line with the recommendation of the Canadian maritime commission. However, the policy seems to have changed, particularly with regard1 to the replacement fund. Of course there is the fact that no single modern cargo vessel has been built for the Canadian merchant navy, either from that fund or any other fund in Canada to date.
I have here the fourth report of the Canadian maritime commission; the one that was tabled in the house last year. There we find that the replacement fund is now being used

for other types of shipbuilding. There appears to have been some provision made for assigning these funds, for example, to operators on the great lakes rather than insisting that they be used for the building of modern ocean-going cargo vessels. We find on page 6 of the report that the commission's policy is to allow only a proportion of the cost to be met by assignment of the funds held in escrow under its replacement plan where the assignment of funds is destined for the building, conversion or acquisition of other than ocean-going ships.
What I should like to know is what steps have been taken at the present time by the Canadian maritime commission or by the government, either under this replacement plan or under any other plan, to help bring about the construction of modern fast cargo vessels for the Canadian merchant navy. The minister will answer that question later, will he?


Lionel Chevrier: Yes.	.


Howard Charles Green: I raised also the question of the Canadian maritime commission. I was protesting that a chairman had not been appointed, except for the deputy minister of transport. I should like to repeat that I have a great respect for the deputy minister, and I think he is doing a grand job. But it was never our understanding that an important commission such as the Canadian maritime commission should have as its head the deputy minister or any other officer of the department. There is no parallel situation. For example, the board of transport commissioners is an independent body. There is no suggestion that the department should have any representative on the board. While the air transport does not have the independent status of the board of transport commissioners in that it is directly responsible to the government, nevertheless that air transport board has a separate chairman whose only job, as I understand it, is to act as chairman of that board.
We believe that the Canadian maritime commission should be in the same position. We believe there should be a chairman who has no other work to perform than that of supervising the business of that commission. Since the discussion the other evening I have been reading the annual report from the deputy to the minister, and at page 7 I find this statement:
By order in council P.C. 6063 of December 13, 1950, the undersigned was appointed a member of the Canadian maritime commission and made chairman thereof, thereby knitting more closely together the advisory and operational responsibilities of government with respect to marine transportation.
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That statement would make it appear that it is the policy of the department to operate the Canadian maritime commission with the deputy minister or some other officer of the department as the chairman. I should like to know whether that is to be the fixed policy of the government. If it is, I am afraid it is an unsound one. I think shipping is of sufficient importance to this country for us to have a full-time chairman of the Canadian maritime commission. If it is of sufficient importance to have a commission at all, then there should be a full-time chairman.
I would point out to the minister that in the report of the Turgeon commission on transportation we had a finding with regard to these three important bodies, namely the board of transport commissioners, the air transport board and the Canadian maritime commission. The Turgeon commission explained the importance of each of those bodies to Canada, and went on to recommend that there should be only one body to deal with transportation, including the railways, the shipping and the airways.
I do not agree with that recommendation with respect to shipping. Coming as I do from a seaport, I consider that the shipping problems of Canada are of sufficient importance for us to have a separate commission. We are greatly worried because of the fact that, instead of having an independent commission to carry on the good work that was started, we now have one which is absolutely operating under an officer of the Department of Transport. The result is that the commission is, in effect, only a branch of the department. I would ask the minister to explain whether that is to be a permanent policy or whether we can expect to have some person appointed as the full-time chairman of this commission.
I repeat the recommendation I made the other night, namely that the minister try to get one of the leading shipping men of Canada, a leading marine lawyer, or someone whose life has been devoted to shipping. If that is done I think great benefit would accrue to shipping and to the country at large. I repeat that I am not for a minute questioning the ability of the deputy minister.


Lionel Chevrier: Did the hon. member for Vancouver-Quadra say that he had another question?


Howard Charles Green: I have one other question on shipping. Then I have a question on an entirely different matter. This other question has to do with the notorious Ming Sung ships. As the chairman knows, they were, and perhaps still are, owned by a Canadian

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company known as the Ming Sung Industrial Company which is controlled by Chinese citizens in communist China. I should like to know whether those ships are still on Canadian registry or whether there has been any change in that registration. Can the minister answer that question?


Lionel Chevrier: I think my hon. friend should proceed in the usual way.


Howard Charles Green: All right.


Lionel Chevrier: I think he should ask his questions; then when he is through, I will deal with them.


Howard Charles Green: All right. If they are still on Canadian registry, then as I read the Canada Shipping Act they are not only entitled to fly the Canadian flag but are bound to do so; if they do not, they break the Canadian law. I would refer the minister to section 89 of the Canada Shipping Act. If I am correct in that statement, it seems to me that something should be done about it by the Canadian government. If these ships are Canadian vessels then, as I say, they are entitled to fly the Canadian flag and are entitled to the protection of the Canadian navy, if you please-and I presume to the protection of the British navy and possibly of the allied navies. Yet the latest word we had of them was that they were in Canton, which is a communist-held port, waiting for a chance to make a break up to Shanghai, another communist-held port.
I realize that the situation is difficult, but I believe some steps should be taken to clear it up. I believe there is power to do so under the Canada Shipping Act. If not, there is certainly, under the Emergency Powers Act, power to deal with that unfortunate situation. I would ask the minister if he would explain the present status of those ships.


Lionel Chevrier: Does that cover the questions my hon. friend wishes to ask?


Howard Charles Green: That covers the shipping questions.


Lionel Chevrier: Are those all the questions my hon. friend has to ask?


Howard Charles Green: The other question has to do with the great lakes. I was surprised to read in the press of May 16-and I am reading now from a report in the Globe and Mail- an article which is headed: "Damage $1 Billion; Truman Calls on Army to help Lower Lakes." That dispatch was from Washington. The first paragraph reads as follows:
President Truman called on army engineers today to provide a remedy for high water damage to property on the shores of the five great lakes.

The article also gave particulars of the damage that was being done, and ended up with this paragraph:
Canada has agreed to the rediverslon of one of the two rivers flowing into Superior. It announced within the last few days that the Ogoki river would be diverted, on a temporary basis, to the Hudson bay watershed.
Today I picked up the current issue of U. S. News and World Report. It is dated tomorrow, as a matter of fact, May 23. I find an article in it entitled "Great lakes: new flood threat. Damage already big. Billion loss in sight." The article commences:
Flood damage around the great lakes this summer may get up to $1 billion or more.
There's a great, creeping flood under way. Water, rising steadily, is expected to be 5 feet and more above the 1934 level by summer. Big areas already are flooded or threatened.
What to do is a big question now worrying U.S. and Canadian governments.
Then the article goes on to give details which were not in the press dispatch from the Globe and Mail, and makes it pretty clear that the situation is extremely serious from the point of view of the United States, and I presume it is just as serious to Canadians. One paragraph says:
The threatened areas are finally getting Washington excited about it, too. Congressmen are needling the government for aid. The army corps of engineers is making surveys. The U.S. weather bureau is tightening up its storm-warning system on the lakes.
Then we find this significant sentence:
The state department last week got Canada to agree to a review of the problem.
The minister certainly should make a statement with regard to that, and let us know whether it is correct.


Lionel Chevrier: Surely my hon. friend would not expect me to make a statement on a matter like that. I can deal with the problem generally, but that surely is a matter for the Secretary of State for External Affairs, particularly in view of the sentence he just has read.


Howard Charles Green: Then the article goes on to deal with Canada's Long Lac and Ogoki power projects having diverted 5,000 cubic feet of water per second, and it also refers to Canada's Gut dam in the St. Lawrence river rapids just below lake Ontario which, it says, slows down the flow of Ontario's water to the sea, and thus adds several extra inches to the lakes' levels. Apparently the situation is extremely serious. I would ask the minister to make a statement to the house tonight in connection with this matter.


Stanley Howard Knowles: Mr. Chairman, I should like to say a few words in reply to the remarks the minister made at eight o'clock-in other

words, since it is now nearly half past ten I have been exercising the virtue of patience for over two hours-with reference to the need for augmenting the pensions of retired C.N.R. employees, particularly in the case of those who have only the basic $25 a month.
I spoke about this last Friday when the estimates of the minister were first called, and I endeavoured to make it clear at that time that there have been some improvements in the situation since we last discussed this matter in the house. I pointed out then, but it seems I must repeat it now, that although there are improvements for those still in the service, if they choose to avail themselves of those improvements, and although there are potential improvements for those already retired where their pensions were in part contributory, and therefore are more than $25 a month, it still remains that there is no improvement by virtue of the recent changes in the Canadian National pension rules for those already retired who have only the basic pension of $25 a month.
I respectfully suggest to the minister that to remind us of the improvements that have been made for others does not solve the problem or deal with the plight of the men who have only $25 a month. It is that group in particular whose case I continue to plead with the minister.
When he concluded the remarks he made at eight o'clock this evening the minister expressed the hope that what he had said would bring this discussion to an end, and that that would be the last word on it. I am sure he did not think that would be the case; I am sure he did not expect that I would cease pleading the case of men left in this most difficult position and drawing, as far as their railway pension is concerned, only $25 a month. My purpose in rising now is to express the hope that the minister will yet give further consideration to the situation of these retired employees.
The minister, as has been done on other occasions when this question has been raised, referred to the improvements in old age pension legislation that have taken place since we were discussing this same problem of the C.N.R. pensioners a year ago. Let me point out again that those improvements are available to other people as well, but in my view that does not relieve the Canadian National, which is owned by the government, of its obligation to these men, an obligation which arises in part from the fact that there has been such a tremendous increase in the cost of living since this $25 basic pension was first established.
The minister said tonight that under the new old age pension legislation it is possible
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for those men who are getting only $25 a month from their C.N.R. pension to get a total of $65 a month by going on the old age pension as well. For simplicity's sake I presume he was speaking of single men, and I will do the same. I would point out to him that in the case of those between 65 and 69 they cannot get a total of $65 a month. There is a ceiling in the old age legislation which limits total income between ages 65 and 69 to $60 a month, so the $25 railway pension limits them to the amount they can draw under the Old Age Assistance Act. I would also point out thst some of these men do have small homes, or some other asset, that they have been able to build up across the years; and if that is the case that other asset, together with their $25 a month, in many cases denies them the opportunity of getting anything out of the old age assistance legislation whatever.
Then there is the case of those over 70, and there are quite a few of them. I ask the minister to note this situation which I think is most unfair. Let us take the case of two C.N.R. pensioners, one we will say, for example, drawing $100 a month C.N.R. pension and the other drawing just the $25 a month. They are both over 70. They both qualify for the old age security pension of $40 a month. In the case of the C.N.R. pensioner with the $100 a month who gets $40 old age security, it is still possible for him, with his $100 railway pension, to take advantage of the new rules and augment that $100 pension to a slightly higher amount. But the C.N.R. pensioner who is getting only $25 a month, when he gets his $40 old age security, cannot do anything to increase that $25 basic pension. It is there, and he cannot get it increased by any means under the new rules. So you have on the one hand a C.N.R. pensioner with $100 a month getting an extra $40, which puts him up to $140, and he may increase that amount a bit further. On the other hand you have the railway pensioner on $25 getting $40 old age security, which puts him up to $65; and he cannot get any more out of the C.N.R. pension fund, even under the changes that have come into effect at the present time. The unfairness to the $25 pensioner is surely obvious.
In passing I should point out that when we talk about retired employees with pensions of more than $25 a month being able to augment those pensions, it should be noted that this possibility depends upon whether they can make a certain contribution. Thus for many of these people it is a theoretical possibility which it may be hard for them to turn into a reality.
However, there is not even a theoretical possibility of any increase for those men who

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are on the basic pension of only $25 a month. As I have already pointed out on several occasions, their number is something over 3,000 and I feel that the government still has a responsibility to those people.
In view of the statements the minister made tonight, I am not asking him to comment further at this time. I should prefer to hear from him in more favourable terms, and I hope he will give the matter further consideration. Surely he knew, when he expressed the hope that what he said tonight would be the end of this matter, that his hope would not be realized. Surely he would not, on second thought, ask any group of men on $25 a month to sit back and be satisfied with such a pension under today's conditions. And I know he does not expect those of us who have pleaded the case for these men to stop pleading it because of the kind of arguments that were put forth tonight.
The problem is still there; the plight of these men is there; the unfairness still exists; and I hope that even yet consideration will be given by the government to raising the $25 pension, particularly in the case of those already retired for whom there is no chance of improvement under the rules as they now stand.
Just one other word, and it is this: The minister suggested that this was a problem to be threshed out between the men and the Canadian National Railways. I agree that most aspects of employer-employee relations are best dealt with in that way. But it just so happens that, in the very nature of the case, once these men are retired and no longer working for the company, the normal negotiations that go on between employees, through their representatives, and the company, somehow or another do not seem to include the same attention for the plight of the retired men as is given to the needs of the men still in the service.
The minister must recognize that these men do need a voice pleading on their behalf and, what is more, that they need a ministerial ear to pay attention to that plea.


Charles Edward Johnston: Mr. Chairman-


Lionel Chevrier: I understand there has been some agreement that at 10:45 there will be further discussion of the matter under consideration before six o'clock. I should like to reply to what has been said.


Louis-René Beaudoin: Perhaps the hon. member's question could be asked on an individual item.


Charles Edward Johnston: Did I understand the minister to say that this discussion will stop now?


Lionel Chevrier: No; what I would like my hon. friend to allow me to do is to reply, and then

perhaps we could pass the first item. Then the hon. member could ask his question on one of the subsequent items.


Charles Edward Johnston: If it is simply to allow the minister to answer the hon. member for Vancouver-Quadra, and then allow the item to stand, I would be content.


Lionel Chevrier: No, no; I cannot consent to that. I think my hon. friend has already spoken twice on the question of trucking, and I presume that is what he wishes to bring up again. I have no objection to his discussing the matter again, but I do say it could be brought up under one or another of the succeeding items.


Charles Edward Johnston: No. I did wish to make passing reference to what the minister had indicated. However, I had intended to speak for a moment with respect to another item, one which I do not think comes up under any particular item in the estimates.


Louis-René Beaudoin: If the hon. member wishes to deal with it briefly, perhaps he could do so now.


Charles Edward Johnston: It would take only a moment or two. I wish to give some support to what was said a moment ago by the hon. member for Macleod about the possibility of having a union station in Calgary. He outlined the conditions as they apply to the C.P.R. What I had in mind was not so much those conditions-although I agree with what the hon. member said-but rather that the C.N.R. station in Calgary is a disgrace to any city of its size and importance.
I am sure the minister must have visited the C.N.R. station when he has been in Calgary. It is an old building which was renovated many years ago. Any visitor to Calgary who travels by Canadian National does not receive a good impression of the city upon landing there. The station is an old and dilapidated building, in the poorest part of the city, on the outskirts. Anyone who visits Calgary, arriving at that station, must of necessity take a taxi to his home. Calgary is in great need of a union station, and I hope the minister will give consideration to that fact.
Then I would make reference to the minister's suggestion that he was fearful that if the Transport Act were amended to allow the truck transport industry to appear before the board in a legal capacity to protest against charges, it would be dangerous because it might bring them under the control of the act. I made passing reference to the fact the other day that in Ontario, Quebec, Manitoba, Saskatchewan and Alberta, where the trucking industry is under the control of the provinces, both railways are permitted by law to

Supply-Transport
appear and not only to appeal against the the original replacement plan. Had it not rates the trucks are charging, but also to been altered a substantial number of orders appear in protest against any franchise they which have been received by the shipyards may be given.	would not have been received.


Lionel Chevrier: Because they own bus companies, and come in under the act.


Charles Edward Johnston: Yes, they might do that. But that does not in all cases, particularly in Alberta, bring them under the control of the act. All we are suggesting is that there may be some way-and I am not familiar with what the legal technicalities might be- whereby the truck transportation concerns could have the right to appear and protest so the board might become fully conversant with these matters, and so the trucking industry would have at least a fighting chance to survive.


Lionel Chevrier: If I may be allowed to deal with the question-


Mr. Gillis:: Is it the minister's intention to answer the hon. member for Vancouver-Quadra and then to close off the discussion on the first item?


Lionel Chevrier: I have no such intention. I am not in control of the committee; the chairman is in control. But I had understood that perhaps after I replied to the hon. member, and answered his questions, we would pass the first item and then proceed to the others.


Clarence Gillis: I have no objection to that, provided I am given the undertaking that I may be permitted under another item to ask a question about that section of the corps of commissionaires who work at the airports. If I am given the undertaking that I may discuss this matter under item 496, I shall be prepared to let the first item pass.


Lionel Chevrier: I will gladly give that undertaking- -and there are several other items, too.
The hon. member for Vancouver-Quadra dealt again with the question of the policy of the Canadian maritime commission with reference to the deep-sea fleet, and Canada's merchant navy. The policy of the commission has not changed-the hon. member seemed to be under the impression that it had- since the commission was established. It is true that the replacement plan has been altered, but that was because the shipping companies felt that it would be more profitable to build ships in Canada for St. Lawrence river and great lakes operation than to build fast cargo vessels for deep-sea operation. The cost of building deep-sea ships is far greater in Canada than in the United Kingdom and certain continental countries, and that is why it was found necessary to alter


Howard Charles Green: That is for great lakes and St. Lawrence ships?


Lionel Chevrier: Yes. My hon. friend dealt with the question of the dual capacity of the deputy minister acting as chairman of the maritime commission and asked whether that was a firm policy of the government. That is not a firm policy of the government; the government has determined no policy in that regard. It so happened that at the time of the resignation of the former chairman conditions and circumstances were such that it was found advisable to operate the maritime commission under the arrangement which was then adopted. That action was supported by the fact that a large number of our ships had been transferred to United Kingdom registry, which meant much less work for the maritime commission than it would have had if the one hundred or more ships had remained under Canadian registry. That does not mean to say that should they come back under Canadian registry we will immediately change this policy, neither does it mean that the government is committed to continuing the deputy minister as chairman of the maritime commission.
My hon. friend wanted to know whether the Ming Sung ships were still under Canadian registry. As far as I know they are. If they were not there would be no way of protecting the mortgage.


Howard Charles Green: There is not much way of protecting it now.


Lionel Chevrier: That remains to be seen. My hon. friend wants a statement and he should let me make it. This is a matter which concerns external affairs, but I will give as much information as I have available. It would be a mistake to remove the Ming Sung ships from Canadian registry because we would then lose forever the mortgage which we hold against those ships. There may be some other method of saving the mortgage, but I do not know.
The hon. member asked whether the ships were still flying the Canadian flag. I am not able to answer that and I am sure nobody else is. I do not know where the ships are. I presume they are in Chinese communist waters, but I do not know what flag they are flying. Then my hon. friend wanted to know what steps are being taken to clear up this situation. That is easier said than done. Steps are being taken and careful consideration is being given, and has been given, by

Gold Mining
the government to the whole matter. I am not able to go beyond that because other ministers are dealing with the question.
I can assure my hon. friend that the Canada Shipping Act has been carefully studied. The Department of Justice has been taking an active part, as has the Department of Finance and the Department of External Affairs. The government would like to be able to say that the matter is being cleared up, but there are international difficulties that do not make it so easy.
The matter of high water levels on the great lakes and the upper St. Lawrence river pertains to another department. This department is concerned in so far as the Gut dam is involved. It is a serious problem, and is created by precipitation and the diversion of waters into the great lakes, and to some extent by the Gut dam. All the artificial causes added together are but a drop in the bucket compared to the precipitation or other natural causes. If the Gut dam were removed the effect would be to raise the level about five and one-half inches; but if that were done, particularly at this time, it might cause serious trouble downstream, particularly if the Ottawa river rose as it did last year and some years ago. Serious flood conditions might occur in the downstream areas.
This is unquestionably an international matter, and it is being considered by the two countries. Were the minister of external affairs here he could say how far the talks between Canada and the United States have gone. There is provision under the great lakes-St. Lawrence seaway proposal to guard against this kind of situation by means of regulatory methods provided for in the plans and specifications.


[Stage Direction]
Item agreed to.
Progress reported.


[Stage Direction]
1952 AND 1953
The house resumed consideration in committee of Bill No. 242, to amend the Emergency Gold Mining Assistance Act-Mr. Prudham-Mr. Dion in the chair.
On section 1-Calculation for 1950.
George Prudham: Just before six o'clock the hon. member for Winnipeg North Centre asked about the mines that would be affected by this amendment. There are five mines

which will receive an additional $36,976.64, as follows:
Mine No. 1	 $ 6,986.69
Mine No.	2	
1,900.25Mine No.	3	
11,407.78Mine No.	4	
12,558.88Mine No.	5	
4,123.64


Agar Rodney Adamson: What is the cost per ounce of those five mines?


George Prudham: I could get it, but it is scattered through the report. I would prefer not to give the names, but if the hon. gentleman insists perhaps I had better do so and he can look it up:
1.	Hallnor Mines Ltd.
2.	Broulan Porcupine Mines Ltd.
3.	Porcupine Reef Gold Mines Ltd.
4.	Cochenour Willans Gold Mines Ltd.
5.	Rycon Mine (C. M. & S.)


Agar Rodney Adamson: I was wondering in what category they would come.


[Stage Direction]
Section agreed to.
On section 2-Application of act to 1951, 1952 and 1953.
Stanley Howard Knowles: With respect to clause 2, I note that it extends the application of the act for two more years, but in addition to that it seems to make certain changes so that the basis of computation will be different than it was previously. Can the minister say whether the changes for the next two years will result in the paying out of more money or the paying out of less money than would otherwise be the case?


George Prudham: The purpose of this amendment is to extend the application of the act to the years 1952 and 1953 and to clarify the conditions under which a mine operator may elect as a base year the calendar years 1948, 1949 or 1950. The intent of the present act was that the year chosen as the base year should be one in which the mine had been in operation for a full calendar year and had during that time been in production for more than six months. As the act at present reads, a mine whose first year of production commenced subsequent to January 1 and prior to June 30 of any of the above years may choose that year as its base year, thus gaining an advantage that was never intended.
There are five mines in this category and each elected as its base year the first year of operation which in every instance was less than twelve months. This amendment will mean a decrease in assistance payable of $69,456. The mines affected are Howe Sound Exploration Company Limited, Quesabe Mines Limited, Giant Yellowknife

Gold Mines Limited, Campbell Red Lake Mines Limited, and Consolidated Duquesne Mining Company Limited. The last mentioned is not affected financially. Giant Yellowknife Gold Mines Limited will gain $2,960 and the others will lose substantial amounts.


[Stage Direction]
Section agreed to.
Preamble agreed to.
Title agreed to.
Bill reported.

Alphonse Fournier: the adjournment of the house.
Business of the House
He said: Tomorrow we will continue with the estimates of the Department of Transport. When those are concluded we will take up the estimates of the Department of Mines and Technical Surveys. If we finish those two departments we will then take up public works.


Howard Charles Green: You are pretty safe on that.
Motion agreed to and the house adjourned at 10.55 p.m.
[The following item was passed in committee of supply]:



DEPARTMENT OF TRANSPORT

[Stage Direction]
A-Department-
463. Departmental administration, $1,370,576.
[Stage Direction]
Friday, May 23, 1952