1952-06-24

Mr. Alan Macnaughlon (Mount Royal):: On
a question of privilege, I should like to amend the second paragraph of question No. 18 on today's order paper standing in my name. I should like to change the figures "1951-52" to "1950-51" in the last line of the second paragraph.


Mr. Speaker:: Agreed?


Some hon. Members:: Agreed.



REPORT ON TRANSPORTATION OF CROP

Hon. Lionel Chevrier (Minister of Transport):: I am aware of the keen interest which the hon. members of this house have had in the transportation problem of the 1951 grain crop and I thought a brief report on the situation to date would be helpful. The figures which I will put on the record have reference to the period August 1, 1951, to June 12, 1952.
Latest estimates of anticipated marketings from the 1951 crop are 720-4 million bushels. Total marketings from the 1950 crop were 564-6 million. Actual marketings from August 1, 1951, to June 12, 1952, are 619-6 million bushels compared to 479-9 million bushels during the same period in 1950 and 1951 from the 1950 crop. Marketings this season have been greater than at any other similar period in the history of the Canadian grain trade. Car loadings at country points have increased 33 per cent over last year from 221,747 to 295,554 cars.
Total rail and vessel shipments from the lakehead for the present crop year total 370-3 million bushels compared to 223-4 last year, an increase of over 63 per cent.
Shipments to terminals on the Pacific coast this season total 104,947,000 compared to 50,-
970,000	during the same period in the previous crop year, more than a 100 per cent increase over last year.
Total overseas clearances in the same period are 266-3 million bushels compared to 146-5 million bushels from the 1950 crop.
Clearances from the port of Montreal alone since the season opened this year have been particularly large, over 35 million bushels having been shipped compared to 17-7 million for the same period last year, an increase of over 100 per cent. Shipments this season are already greater than at any time in the past in a similar period. Total export clearances from St. Lawrence river terminals since the opening of navigation are 51-4 million as compared to 20-9 million for the same period in 1951.
It should be borne in mind that this last year's crop has been a most difficult one to handle. A seriously delayed harvest last fall, coupled with very poor weather, brought large quantities of out-of-condition grain to market. Salvaging this grain only aggravated an already serious transportation problem. In addition, there has been the problem of getting the immediately saleable grades and types into export channels to meet the excellent demand for our grain abroad.
I think all hon. members will agree that this is a tremendous transportation accomplishment, credit for which should be given in full measure to all the interests concerned, railways, shipping companies, elevator and government employees, not the least of which is the transport controller under whose direction this effort has been achieved.

On the orders of the day:


Mr. P. E. Wrighi (Melfort):: May I direct another question to the Minister of Transport (Mr. Chevrier) based on the statement he has just made in the house. I am sure that we all appreciate the tremendous efforts which the railway companies have made to move forward the present crop. Has the minister information as to the amount of grain presently in store in country elevators, the estimated amount on farms, and what the weekly loadings are at the country elevators? We would then have some idea of what the position might be on July 30.


Lionel Chevrier: The figures that I have on hand are comparative only and indicate that for the year August 1, 1951, to June 12, 1952, there were 295,554 box cars moving out of country elevators. I have no figures of the number of bushels in country elevators but I can get that information and send it to my hon. friend.

Inquiries of the Ministry Mr. Wright: Perhaps the minister could get it and let us have it tomorrow.



IRRIGATION


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: should like to direct a question to the Prime Minister in connection with the present position of the commission on the South Saskatchewan river dam and irrigation project. Have any interim recommendations been made? When is a report expected, and is any consideration going to be given to that report in so far as early commencement of the work during the present session is concerned?


Right Hon. L. S. St. Laurent (Prime Minister):: Earlier this morning the hon. member was kind enough to send to my office a notice of his intention to ask this question. The only answer I can make at this time is that for the last three months or more the work has been prosecuted very vigorously by the commission. About the middle of April the secretary of the commission reported orally and then confirmed in writing to the Acting Prime Minister that the commission had found it necessary to retain the firm of Mannix Limited of Calgary to prepare an estimate of the owners' cost of the project. On June 6 I received from the secretary a letter informing me that this would mean an increase over the previous estimate in the expenditures the commission would incur in performing its duties. For that reason in the supplementary estimates that have been tabled a supplementary item has been included in order to cover that additional expenditure. There has been no other recommendation than the one for the money necessary to cover what the commissioners considered it was necessary to do. There have been no other recommendations about it to date.
I know that the commission realizes the government's anxiety to get the report at the earliest possible date. From conversations I know that the commissioners are doing their best to meet that desire. I should not like to fix a date. They have not been able to tell me just exactly when their work will be completed. I can say that it will not be within the next few days, and there will not be an opportunity of receiving or of communicating their report to members of parliament just at this time. I can assure the hon. member that we realize that not only the public of Saskatchewan but the public generally do not like to see unexplained delays in the performance of these tasks that are considered 
of general public interest. The commissioners fully realize that fact, just as we do. The best efforts will be put forward to avoid any justifiable criticism in that regard.


Mr. Coldwell:: I should like to ask a supplementary question. Did I understand from the Prime Minister that the report is expected? I understood that the commission contemplated the holding of public hearings in the province of Saskatchewan. Are those public hearings to be undertaken, and are they to commence soon?


Louis Stephen St-Laurent: I cannot say whether or not there will be public hearings. My understanding is that the commissioners expressed to the government of Saskatchewan their readiness to provide public hearings if that was desired. I do not know whether there has been from the government of Saskatchewan any indication in that regard. That is not something that is going to hold matters up. Everything is proceeding as fast as it can be done. I am sure that if the government of Saskatchewan felt that public hearings were not absolutely necessary and that they might be apt to occasion delay, they would waive that matter.


Major James William Coldwell: I did not understand that was the suggestion of the government of Saskatchewan. I understood that the commissioners themselves suggested that they hold public hearings.


Louis Stephen St-Laurent: They suggested that they would be quite ready to have public hearings if the government of Saskatchewan felt that it would be desirable to do so.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Solon E. Low (Peace River):: May I ask
the Prime Minister whether he is in a position now to tell us whether, when we finish the business that appears on the order paper, this house will be prorogued or adjourned?


Louis Stephen St-Laurent: That is a matter which is at present being actively canvassed and considered. Within the next day or two I hope to be able to make an announcement about it to parliament.



OLD AGE PENSIONS ACT


[Stage Direction]
On the orders of the day:
Mr. George A. Drew (Leader of the Opposition):: I wish to direct a question to the Minister of National Health and Welfare. In

view of the fact that the Old Age Security Act came into effect on January 1 of this year, is it the intention of the government to continue in force the earlier Old Age Pensions Act under which the provincial governments are now called upon to collect claims against many thousands of pensioners' estates, some of which would, of course, have arisen just a day or so before the new act came into effect?


Hon. Paul Martin (Minister of National Health and Welfare):: I thank the hon. gentleman for having given me notice of his intention to ask this question. As he knows, the Old Age Pensions Act was a co-operative measure in which the provinces as well as the dominion government paid contributions, the dominion government to a substantial extent.
The government has written to all of the provinces asking whether, from their point of view, there is any objection to the repeal of the Old Age Pensions Act. To date only one province has replied to signify that it has no objection. Two provinces, Ontario and New Brunswick, have, however, raised certain issues. Those issues are now being discussed. As soon as the clearance has been obtained from the provinces, it is the government's intention to repeal the act.



STRAWBERRIES


[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver-Quadra):: Is the Minister of Agriculture in a position to make a further report concerning the importation of strawberries from Holland?


Right Hon. J. G. Gardiner (Minister of Agriculture):: Mr. Speaker, a few days ago, in reply to a request made by the hon. member for Fraser Valley (Mr. Cruickshank) and also by the hon. member for Vancouver-Quadra (Mr. Green), I promised to get the information with regard to strawberries and it is as follows:
In recent weeks various complaints have engaged the attention of officials of this department of the depressing effect on processors' buying prices of quotations on Holland strawberries in S02.
According to our information the delivered duty paid cost of SOo strawberries at Montreal is 12J cents a pound for one variety and 13J cents for another; and 14 cents f.o.b. Rotterdam or approximately 17J cents a pound delivered duty paid at Montreal for frozen strawberries in 30-lb. tins.
The SOa product is usable only for second grade or "pectin" jam. Fresh or frozen
Inquiries of the Ministry berries are required for "pure" jam or for canning.
We are informed that no orders have been placed for Holland strawberries by Montreal or Quebec jam makers, but that with an abundant crop in sight processors are buying at 10 cents a pound, with some purchases as low as 8 cents. Hail yesterday afternoon will have shortened the supply in one main source, the Isle of Orleans.
In Ontario, where the provincial marketing board has set a minimum processors' buying price at 15 cents a pound against 18J cents in 1951, we learn that processors' purchases have been mainly at 17 cents to 18 cents a pound; that drought has shortened the crop in principal commercial acreages; and that the jam manufacturers are long on strawberry jam and even have some carry-over of S02 strawberries from 1951; but that various small orders have been placed for S02 strawberries from Holland.
British Columbia canners and jam makers are buying local strawberries freely at 12 cents per pound. The production of No. 1 or "pure" jam is higher in this province than in eastern Canada. One large operator contacted this morning replied that no orders for Holland strawberries have been placed or are contemplated by his company, and expressed doubt that competitors will buy any against good supplies of locals at 12 cents a pound. Another, an extensive jam maker, made the same statement of his company's intentions and of doubt that any orders have been placed or will be placed for Holland strawberries. I think the statement indicates that we have supplies in Canada to meet requirements.



WAR VETERANS ALLOWANCE ACT


Hon. Hugues Lapointe (Minister of Veterans Affairs) moved: the third reading of Bill No. 181, respecting allowances for war veterans and their dependents.
Motion agreed to and bill read the third time and passed.



HARBOUR COMMISSIONS


Lionel Chevrier: the second reading of Bill No. 366, to incorporate the Belleville harbour commissioners.


Howard Charles Green: Will the minister make a statement on this bill?


Mr. W. M. Benidickson (Parliamentary Assistant to the Minister of Transport):: Mr. HOUSE OF COMMONS
Belleville Harbour Commissioners Speaker, I do not think that this bill will be found controversial but perhaps a short statement would be in order. The bill was introduced in the Senate and referred to a committee of the other place. It follows generally the form and terms of other bills to incorporate harbour commissioners, notably the one recently before this house dealing with the Port Alberni harbour commissioners.
It repeals chapter 35 of the statutes of 1889, an act respecting the harbour of Belleville, in the province of Ontario. It is considered that that statute is not adequate to meet present needs. The boundary lines are extended beyond those now in effect and will include the whole natural enlargement of the bay of Quinte. The proposed commission will consist of the mayor of Belleville and two commissioners appointed by the governor in council.


Howard Charles Green: Mr. Speaker, I presume that there will be no objection to this bill, but I suggest to the parliamentary assistant that it should be sent to the standing committee on railways, canals and telegraph lines for consideration. That was done with the bill to amend the Toronto Harbour Commissioners Act and I think it is a good practice to follow in connection with any of these harbour commission bills.
There would be an opportunity in the committee to give the proposal more careful study and anyone who wished to make representations against the bill would have an opportunity to do so. I realize that it is most unlikely there will be any opposition, but I think it is a good practice to refer such bills to the committee. The parliamentary assistant has given only a brief and sketchy explanation from which it is not possible for us to really decide as to the merits of the bill and I suggest that it be referred to the committee.


William Moore Benidickson: Mr. Speaker-


Mr. Speaker:: If the parliamentary assistant speaks now he will close the debate.


William Moore Benidickson: Mr. Speaker, there is no objection to referring this bill to a committee, but on the other hand perhaps some consideration should be given to the members of that committee in view of the fact that even the hon. member for Vancouver-Quadra (Mr. Green) has suggested that the bill is not controversial. It was referred to a committee of the other place at which time interested parties had an opportunity to appear and express their views. I understand that there were no representations made.

I have discussed the bill with members whose ridings are close to this particular harbour, the hon. member for Hastings South (Mr. Foil well) and the hon. member for Hastings-Peterborough (Mr. White), the latter a member of the hon. member's own party. I should like to hear from other members of that committee as to whether they feel that it would be desirable to refer this bill to the committee. There is no objection that I know of, either from the city of Belleville or from any other source.
Motion agreed to and bill read the second time.


Lionel Chevrier: that the house go into committee to consider the said bill.


Howard Charles Green: Mr. Speaker, if you leave the chair it will then be too late to have the bill referred to the committee.


Lionel Chevrier: If I may just add a word to what has been so well said by the parliamentary assistant: The principal people concerned in this legislation are, first, the members of the harbour commission, the members of the municipal corporation of the city of Belleville, and the hon. members of this house who have been referred to. They are anxious to have this bill put through. There is nothing contentious in it as it follows the same pattern as earlier bills. I do not think that any good purpose would be served by sending it to the committee. I hope the house will find it possible to consider it in committee of the whole.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.
On section 1-Short title.


Howard Charles Green: Could the parliamentary assistant indicate the difference betwen this bill and the bill being repealed? Apparently there has been a harbour commission for sixty-three years.


William Moore Benidickson: I mentioned that the
boundaries are being extended. The personnel of the commission will be the same, being the mayor of Belleville and two members appointed by the governor in council. The real difference is that the old act did not really incorporate the commission as such. There has been some litigation and it was held that certain leases entered into by the so-called Belleville harbour commissioner were not valid because there was not an incorporation under the old act.


Howard Charles Green: Is there any change in the borrowing powers?


William Moore Benidickson: No, the powers are very similar.


Howard Charles Green: I presume under the old act the commission had no legal power to operate if it was not a legal entity.


William Moore Benidickson: They had the power to borrow over the years. They functioned and acted as a corporation but did not sign their documents as three individuals which it was held they should have done rather than as a corporation.


Mr. Macdonnell (Greenwood):: The lawyers have grown more critical.


[Stage Direction]
Section agreed to.
Sections 2 to 12 inclusive agreed to.
On section 13-Lawsuits.
Howard Charles Green: Under clause 13, what will be the position with regard to any claims arising for actions taken or omitted prior to the passing of this bill?


William Moore Benidickson: I believe there has been a settlement of the litigation to which I referred and it is not anticipated that there will be further actions. The new harbour commission will have the right to make new leases which must be submitted for approval to the governor in council. No doubt they will want to validate the former agreements they made which were held to be somewhat faulty so far as strict legality is concerned.


Howard Charles Green: The bill has no retroactive effect?


William Moore Benidickson: It has no retroactive effect, and the litigation to which I referred is the only litigation of which we have knowledge.


[Stage Direction]
Section agreed to.
Sections 14 and 15 agreed to.
On section 16-Revenues of corporation.
Mr. Fraser:: Can the parliamentary assistant say what the revenues were in 1951?


William Moore Benidickson: In the year ended December 31, 1951, harbour dues amounted to $17,757. Ordinary operating expenses amounted to $8,346 and expenditures that were considered capital were an additional $10,161, leaving a net deficit of $750 which of course was made up from previous surpluses.


Gordon Knapman Fraser: How much of the $8,346 was paid in salaries?


William Moore Benidickson: Wages and salaries
amounted to $600.


Gordon Knapman Fraser: That included the commissioners' salaries, if any?


William Moore Benidickson: It included payment to the harbour master and such.


[Stage Direction]
Section agreed to.
55704-228i
Belleville Harbour Commissioners
On section 17-Expropriation proceedings under the Railway Act, R.S.C., c. 170.
Howard Charles Green: Clause 17 is the one giving the corporation the power to expropriate. Was that power contained in the old act or is this a new provision?


William Moore Benidickson: I would think that would be in the old act. I have not got it before me, but of course that is similar to other acts that have been passed by the house, notably the port of Alberni act to which I referred.


[Stage Direction]
Section agreed to.
On section 18-Power to borrow and issue securities.
Howard Charles Green: There appears to be no limit on the borrowing powers of the corporation. Is it not customary to set some ceiling?


William Moore Benidickson: They are the usual
powers, but you will notice that they must obtain the approval of the governor in council.


[Stage Direction]
Section agreed to.
Sections 19 to 31 inclusive agreed to.
Title agreed to.
Bill reported.
Mr. Speaker:: When shall this bill be read the third time? Now?


Mr. Knowles:: By leave.
Mr. Fournier, Hull (for Mr. Chevrier) moved the third reading of the bill.
Motion agreed to and bill read the third time and passed.



FINANCE


Hon. Douglas Abboit (Minister of Finance) moved: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure intituled, ''An act respecting currency, the Royal Canadian Mint and the exchange fund," providing therein for certain administrative changes, and repealing the Currency Act, part II of the Department of Finance and Treasury Board Act, sections twenty-eight, twenty-nine and thirty of the Bank of Canada Act and the Foreign Exchange Control Act.


Mr. Adamson:: Is the minister going to make a statement?


Douglas Charles Abbott: At the convenience of the house I thought I would make a short statement when we are in committee. -

Finance Acts
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


Douglas Charles Abbott: Mr. Chairman, the purpose of the bill which this resolution seeks authority to introduce is essentially threefold:
(1)	to bring up to date the provisions of the old Currency Act;
(2)	to bring up to date the legislative provisions relating to the Royal Canadian Mint; and
(3)	to repeal the Foreign Exchange Control Act and in its stead bring back into force the general provisions of the Exchange Fund Act of 1935.
While the resolution appears to cover a wide and important range of subjects, it is only to provide for the introduction of a bill that consolidates and brings more up to date existing legislation dealing with the related subjects of currency, the mint and foreign exchange. It is fairly technical in character but introduces no changes of major significance. When the bill has been given second reading I would hope it would meet with the approval of the house that it should be referred to the standing committee on banking and commerce in order that the technical provisions of the bill may be more fully explained before that committee.


James MacKerras Macdonnell: Before the bill goes to the committee I should like to ask the minister to say a word at this stage about that part of the resolution which refers to the exchange fund.


Douglas Charles Abbott: Perhaps I should have added that when I move second reading of the bill I will make a slightly more comprehensive statement than I am doing at the resolution stage. I merely indicated that when it has been given second reading I would hope it might be referred to the banking and commerce committee.


Agar Rodney Adamson: Mr. Chairman, does the bill include the abolition or rescinding of that part of the Bank of Canada Act which covers the purchase of gold at $20.67?


Douglas Charles Abbott: Yes.


Agar Rodney Adamson: I am delighted to hear that.


Douglas Charles Abbott: There is a provision which deals with that.


Mr. Blackmore:: Would the minister outline in some detail the exact effect of these changes to the Bank of Canada Act? He must have the act before him and would he just give us a general comment on the effects?


Douglas Charles Abbott: I felt that it would be more appropriate to deal with the provisions of the

bill and the principle of the bill when I moved second reading. That will not be today but certainly it will be at an early date.
Resolution reported, read the second time and concurred in.
Mr. Abbott thereupon moved for leave to introduce Bill No. 390, respecting currency, the Royal Canadian Mint and the exchange fund.
Motion agreed to and bill read the first time.


Douglas Charles Abbott: that the house go into committee of supply.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.



DEPARTMENT OF DEFENCE PRODUCTION

[Stage Direction]
SO. To provide capital assistance for the construction, acquisition, extension or improvement of capital equipment or works by private contractors engaged in defence contracts, or by crown plants operated on a management-fee basis, or by crown companies under direction of the Minister of Defence Production, subject to approval of treasury board, $85,000,000.
Howard Charles Green: Mr. Chairman, there are two or three questions I should like to ask the minister with regard to this item which is for $85 million. The general purpose as I understand it is to provide assistance to war industry and I notice that in the supplementary estimates there is what appears to be a further vote of $25 million.


Mr. Howe:: That is correct.


Howard Charles Green: That would make a total of $110 million.
My first question is this: Has any consideration been given by the department to using some of this money to assist in bringing to Canada industry which would be useful for defence production and which we do not have in the country at the present time? There must be specialized industry in Great Britain and on the continent which could be of great help if it were to become established here in Canada, and I am wondering whether the vote is wide enough to give the department power to make expenditures for that purpose, and whether the government has any policy along that line.
It always seems to me so perfectly clear that if conditions are as bad as we believe them to be, and if they should finally result in a third world war, then the industries in Great Britain particularly and also those on the continent would be subject to atomic attack; and it would be very, very difficult for them to carry on their production. Just

as a matter of safety there seems to be a good deal of merit in transplanting as many key industries as possible to this continent.
I do not intend to go into the matter further but I would ask the minister if he would deal with this question. I have one or two other questions as well.


Clarence Decatur Howe: Mr. Chairman, it is the policy to bring firms from the continent, and particularly from the United Kingdom, to Canada provided their production is needed in the defence program. The vote is not wide enough to bring a firm to Canada and provide capital assistance if the company has no place in the defence program. If the full production of a new plant in Canada is required for war production we bring it- and we have brought several plants here. One is the Sperry plant which makes a special line of instruments never before made in Canada. SKF make special roller bearings used in aircraft work. Lucas Rotax of the United Kingdom make fuel systems not only for aircraft built in Canada but also for aircraft built in the United States. That is a big industry. Steel Improvement makes blades for the turbines in airplane jet engines. Peacock Brothers make special equipment used in the naval escort vessel program. One very large capital expenditure is being made to expand the turbine production of English Electric. We had a small turbine production here in Canada and that is to be expanded very considerably. The turbine designed by English Electric in the United Kingdom is to be built here in quantities sufficient to supply the turbines for the escort vessel program.
Those are the examples that occur to me at the moment but I would say there is no provision in this vote to bring English talent or continental talent if the facility is not required for defence work.


Howard Charles Green: But it can be done under this vote?


Clarence Decatur Howe: Yes. My hon. friend will understand that all property acquired under this vote is property of the crown. New arrangements would have to be entered into if the present operator wishes to continue on a peacetime basis. The equipment is installed for war production only and rental agreements or purchase agreements would be necessary if the occupant wishes to use the same equipment for peacetime production.


Howard Charles Green: I take it there would not be a great deal of difficulty in working out some arrangement that would allow these firms to carry on in peacetime.
Supply-Defence Production


Clarence Decatur Howe: No. We try to get the best competitive prices but we also try to work out an arrangement with the occupant of the plant if he gives an indication that he can carry on successfully in peacetime.


Howard Charles Green: What part does the Department of Defence Production play in deciding whether or not a firm shall qualify for depreciation? I realize there must be great difficulties in working out a fair plan to follow out the policy, but I have had some suggestions from the west coast that the time has now come to widen the power for taking depreciation. Apparently some of the smaller firms find that they are not able to qualify for the depreciation, and it may be that we are now in a position where some provision should be made for firms which, to date, have not qualified for such depreciation. Will the minister tell us what the situation is in this regard?


Clarence Decatur Howe: Yes, Mr. Chairman, the issuance of certificates providing for deferred depreciation is administered by the Department of Trade and Commerce, but probably that does not matter so far as this discussion is concerned. The regulations governing the issuing of certificates are fairly well outlined by the orders in council which have been tabled. There are certain types of production that are regarded as essential which automatically qualify a firm for the depreciation allowance. Then there are others that can qualify if they are essential to the defence effort; that is a qualification for the judgment of the minister. Some latitude is allowed in the case of a plant that can contribute, even indirectly, to the defence effort.
The list of conditions providing approval has been broadened from time to time, and I believe we are getting near a point where consideration can be given to repealing that legislation or at least rendering it inoperative. The situation has been recently made uncertain by the steel strike. The purpose of the regulations was twofold: first, to check the building boom which was contributing to inflation, and second, to conserve materials for the defence effort. Probably the first objective is no longer as important as it was at the time the regulations were issued, but the second objective becomes more important as a result of the stoppage of steel supplies from the United States. We shall have to re-assess the effect of the steel strike before we can arrive at a termination date.
I believe that at this time a termination of the regulations is indicated rather than a further relaxation. It would be difficult to be fair if the regulations are relaxed further. Within the limits of the regulations now, we can have an administrative staff that can

Supply-Defence Production establish a sharp dividing line between projects that qualify and projects that do not qualify. If the regulations were broadened it would be difficult to find that sharp dividing line.


Howard Charles Green: The minister thinks that once the steel strike is settled, it might be possible to remove the restriction altogether?


Clarence Decatur Howe: I would not like to indicate that that could be done immediately. I say that after the strike is over we can assess the supply situation, and probably determine a date at which the regulation would be removed. I would expect that termination date would be a few months subsequent to arriving at the decision.


Howard Charles Green: The situation was put very clearly by one of my correspondents. He said:
. . . we feel the restrictions should be released to give all industry an opportunity to purchase capital equipment to keep their plants up to date and modernize their operations so they will be in a position to be at their best as far as manufacturing is concerned, in preparation for any eventuality which might come along.
I think that this particular firm-I have no doubt others are in the same position- is finding it difficult to keep equipment up to date because the depreciation is deferred. I would hope it would be possible fairly soon to do away with these restrictions.


Clarence Decatur Howe: I might point out that the penalty for not being able to write off depreciation immediately is not severe so far as equipment is concerned. A firm loses nothing in the long run because the equipment is eventually all written off. Nevertheless, as I have said, consideration will be given later in this year to removing the provision.


Mr. Black (Cumberland):: I am interested in the statement of the minister respecting the encouragement to the introduction into Canada of industries that have been established in Great Britain and the countries of continental Europe. He has named a number of such industries, and it would appear to me that those industries represent a considerable amount of capital and employment, having regard to the volume of materials required in those industries. I would point out to the minister the special claim of the maritimes with respect to the establishment of new industries of this kind. The maritime provinces, and especially Nova Scotia, have not fared well in this respect in either of the wars-in fact, since confederation. Many of our native industries have been transferred to central Canada and in recent years we have suffered greatly from a lack of industry.
fMr. Howe.J

I recognize that the minister has given some encouragement to the establishment of defence industries in that part of Canada within the last few years. He has always expressed a willingness to expand that policy. I want to make an appeal again to the minister for special consideration by his department with respect to the establishment of such industries in the maritime provinces. If the minister has some statement that would be of interest to that part of Canada, I think it would be quite appropriate for him to make it now and I would be greatly interested in any statement relating to the transfer of industries from Great Britain or continental Europe to the maritime provinces.


Clarence Decatur Howe: Mr. Chairman, an effort is made to distribute capital assistance as widely as possible across Canada. I believe we have had some success in the maritime provinces. I have not a list before me at the moment, but Fairey Aviation of Canada has been established substantially through capital assistance. Employment in the plant is expanding. Cossor (Canada) Limited have had capital assistance in establishing themselves in Halifax, and that is an industry that was transported from England. It is thriving in the maritime provinces. In the town of Amherst, which my friend knows something about, substantial capital assistance has been given to Enamel and Heating Products Limited, to allow them to make aircraft components on a large scale which will give employment to people of the area. The Trenton Steel Works has been assisted to the extent of $2-9 million. That is for the production of rotor forgings for our shipbuilding program. The Saint John Drydock has been given substantial capital assistance. There are other firms, and I am sorry that I did not bring a list, but I think the hon. member will find that if there is any firm in the maritimes that is ambitious to undertake a defence contract, every encouragement will be given and capital assistance granted, if that is indicated as a requirement.


Mr. Thatcher:: There is one matter I should like the minister to clear up for me, if he can. It is in connection with aircraft production, especially as related to T-33A. I noticed from the evidence given in the special committee that in the United States these aircraft cost about $93,500, and yet when we build them in Canada they cost us $277,000. It would seem to me that in most instances where we are building these in Canada, it is costing us about $115 million. If that is not correct I wish the minister would give an explanation of it, because it seems a pretty serious procedure to me.


Clarence Decatur Howe: It is very difficult to assess costs against aircraft. The tooling up has to be charged against the first quantity, and the costs then come down substantially. The costs here are shown as pre-production, $50,000; production costs, $90,648,000; tooling costs, $10,643,000; royalties $2,137,000. Then there is about $15 million more for spares and ground handling equipment. The cost per aircraft will depend entirely on the number that are required. At the moment we have an order from the R.C.A.F. It was not possible to purchase the planes outside Canada. They just were not available, and therefore to carry out our duties for procurement we are tooling up to manufacture the aircraft. If we can write the tooling costs off against twice the number of planes now on order the costs per plane will decrease. My information is that in another contract that Canada has for the Sabre aircraft our manufacturing costs in Canada are slightly lower than the manufacturing costs in the United States. I think probably when the final accounting is made on the T-33, it will show the same results.


Wilbert Ross Thatcher: May I add one more sentence? Mr. Drury said:
Our known requirements at the moment do not extend beyond this figure of 576 for the three-year program.
I would take it from that there will not be any more of these planes built. It seems to me that we would be better off to go to the United States and buy these. I suggest that they could save money. The sum of $115 million is a fantastic amount to pay simply so that the planes may be made in Canada.


Clarence Decatur Howe: I would agree that we might be better off to go and buy them in the United States but there is an "if" there: if we could buy them. But we have information that the production capacity in the United States is fully booked for the foreseeable duration. Mr. Drury states the Canadian requirement. In almost every case of Canadian production there is a subsequent requirement from elsewhere tacked on to the Canadian production. For example, we have the Canadian production of Sabres; we also have production for the United Kingdom of Sabres and we also have the United States requirements for Sabres manufactured in Canada. It is very difficult to theorize about the production of aircraft because development of programs change the situation very materially. What looks to be an expensive aircraft at one stage turns out to be a low-cost aircraft at another stage, owing to the fact that the pre-production costs and the tooling costs are spread over a greater number of aircraft, and that the improving skills
Supply-Defence Production of the workers bring down the cost of producing subsequent aircraft.
If at some time my hon. friend is interested I shall show him a typical production curve which discloses a very sharp drop during the production of the first 100 aircraft and a decelerating drop carrying on throughout the length of the contract. Unless you can foresee at what point on the curve the production will be terminated, it is impossible to give an accurate forecast of the cost of the aircraft.
My hon. friend wants to close off at the Canadian requirements and say, that is it, that is what we are going to charge Canada, then it would be cheaper if we could buy them somewhere else. I would agree in theory, but I am not prepared to take that under the circumstances. Our experience is that if we have aircraft in production there is always a market for them during the defence build-up.


Solon Earl Low: Have we been able to get the engines?


Clarence Decatur Howe: Yes, we have the engines.


Solon Earl Low: Up until recently it was difficult?


Clarence Decatur Howe: We are only scheduling the building of aircraft to meet the availability of engines, but for the T-33 we are using a British engine which is in relatively good supply.


John Horne Blackmore: The minister, I think, is quite certain that we are going right into a war; at least we are getting ready to go into a war. In connection with providing for Canada's defence needs in case of war, while sugar supply is just a little off the beaten path, I think it is fitting that we bring it up here. The minister remembers something about our sugar difficulties during the last war. He remembers that instead of expanding our production of beet sugar, which we neglected to do, we had to depend on outside sources. The result was that sugar was rigidly rationed considerably below the ration allowed in the United States during the war.
It looks to me as though in all the fine things the minister is saying about defence industries he is making no provision for an adequate supply of sugar for the Canadian people if we cannot get that sugar from abroad. In case war breaks out no one can possibly foresee the difficulty which will be encountered. Any ships that we get from outside Canada will be carrying other things. The bottoms that we would ordinarily use to firing sugar into the country will be used for other purposes. All these considerations, it seems to me, should indicate to us the wisdom of making adequate provision for the production of our own sugar. It would not

Supply-Defence Production take any more than probably $50 million wisely invested all across Canada, in the maritimes, Quebec, Ontario and the prairie provinces, where beet sugar can be produced, to provide the factories to produce the sugar that will be needed during the next war, rendering us secure.
It may be argued that we shall not have any need for this productive capacity after the war, but I would say that we shall have much more need for that kind of production after the war than we shall have for the type of production that is being envisaged in the factories that we are building for aircraft and other munitions of war. I am just wondering whether or not the minister has given attention to the advisability of expanding Canada's beet sugar production facilities to meet possible needs such as I have indicated.


Clarence Decatur Howe: While Canada is not selfsufficient in sugar, the British empire is selfsufficient in sugar. I cannot think of any worse calamity to the West Indies than for Canada to produce all her sugar requirements from beet sugar. The West Indies are dependent on this market. The market has been open to them and was open to them during the second world war. While we did have to be a little careful-perhaps it would be good for most of us to be a little careful about the amount of sugar we take-the Canadian food supply has not been seriously crippled by lack of sugar. Canada is a trading nation, and I think we should avoid trying to become self-sufficient in anything just for the sake of doing that. I think we should produce those things that we can produce most economically and furnish a market to other allied countries for the things that they produce in surplus, hoping that they will continue to furnish a market for the things that Canada produces in surplus. Of all the countries of the world Canada is in the least danger of being crippled in the matter of food supply, and I think it would be unwise to spend any part of this vote for stepping up Canada's food supply.


John Horne Blackmore: I appreciate the minister's position. It is the orthodox one that was told me fifteen years ago. I believe it is fallacious, nevertheless, and I will tell the minister why. It was not very long ago that he gave a talk in Montreal in which I thought he displayed much wisdom. In that talk he said we were endeavouring to decrease our vulnerability as a nation. That must mean that Canada is getting more and more to the point where she is able to produce what she needs. What other meaning could the minister have in mind in using the word "vulnerability"? While Canada is safe in the main in respect of food, the one important
[Mr. Blackmore.1

food in which she is not safe in the event of a serious turn in the world situation is this very item of sugar. For Canada to be vulnerable in respect of sugar is utterably fantastic when you consider the fact that Canada can economically produce sugar in large quantities in so many areas of the Dominion of Canada.
There is another respect in which I think the minister should qualify his position; it is this: He speaks of our keeping ourselves free from producing sugar in order that we may provide a market for some other countries. That is a fine, altruistic attitude to take, but it just happens that we do not take that attitude with respect to any other commodity than sugar, as far as I know.


Clarence Decatur Howe: Oh, yes; we do.


John Horne Blackmore: I would be interested to be instructed. But as far as I know sugar is the only food which we can easily produce and which we do not produce in adequate quantity to supply our own needs in case of war. That state of affairs requires quite a good deal of justification.
There is one more aspect to this thing. We are rapidly getting to the point-and I am sure the minister, with the breadth of vision that he has, sees that the time is coming when this will be the situation-when there are not going to be enough external markets for the production of goods in the Americas. No matter how we try to find external markets enough, we are not going to be able to do so. We must have some other means of distributing the production of this continent into the hands of the needy people through the world; by that I mean some other method than the one we have been using up to the present time. I am not going to go into details as to how that is to be done, but it must be done. If men like the minister are not thinking about how to do it, probably they will wish they had done so, and so will the people who are relying on them with such complete confidence as we are relying on the minister at the present time. We simply must find a way of getting the surplus production from America into the hands of the 1,500 million people who are obliged to go to bed hungry every night. When a means of that kind is discovered, it will not be at all difficult to distribute the sugar which is produced by the British commonwealth. Until a means of distribution such as the one I have indicated is discovered, there will be difficulty for everybody to find markets-in the British commonwealth as well as in the United States.
I do not think that the minister's argument there is particularly valid; I do not think it is nearly as valid as are most of his arguments. I still maintain that we would be well advised

to make provision now, before we get into too many difficulties, for the production of at least all the sugar that Canada needs.
There is one more little aspect to this thing which is extremely important. As the minister knows, while the war was on we were told that we could not increase the ration of sugar for Canadians because we needed the sugar for various military purposes. The minister knows those military purposes quite as well as I do, or better. Those military needs for sugar were exceedingly urgent. They were extremely important. Why not have all of our sugar produced in Canada so as to assist in supplying our military sugar requirements? I think that is an argument which will appeal to the minister, as he thinks it over. So I say once more in this chamber, just as I said many times before world war II: Let us get ourselves ready to produce our own sugar. It will be a blessing to us from every standpoint and it can do us no harm whatsoever.


An hon. Member:: Oh, yes.


John Horne Blackmore: One hon. member says "Oh, yes". I shall be glad to take the hon. member on in a debate on this subject.


Mr. Hellyer:: How will our friends get Canadian dollars to buy our products?


John Horne Blackmore: If I caught the hon. member's question correctly, he asks what the difficulty is. May I point out that one year it cost 28 million United States dollars to buy our sugar. I think my hon. friend will recognize that that is a serious item. If there is any one really serious anxiety to Canada, it is the danger of an adverse trade balance with the United States. Nearly every bit of sugar we buy from abroad works down to United States dollars in one way or another.


Paul Theodore Hellyer: How?


John Horne Blackmore: A great deal of it is brought from areas that require United States dollars. The important thing is for the hon. member to read up on the subject and to come back here; then I will debate with him on this subject. I maintain that there is no single line of development economically in Canada that will be more in the interests of Canada than the development of the beet sugar industry all across this country.


Howard Charles Green: Has the minister checked the situation with regard to the manufacture of electronics on the west coast? Apparently about two weeks ago an eastern firm by the name of Canadian Aviation Electronics Limited announced, with quite a big splash, in Vancouver, that they would be providing all the electronic radar needs for west coast defence. There are already several firms
Supply-Defence Production there which I believe are well able to do this type of work. They resent this other firm walking in, presumably with the contracts. I do not know what the actual picture is; but perhaps the minister can tell the committee just what has happened there.


Clarence Decatur Howe: With regard to the firm mentioned, no order has been given for production on the west coast. I am told that the firm denied that they made the statement that was quoted in the paper. I read the first announcement with somewhat of a shock. There are several firms on the west coast which made a fine contribution in electronics in the last war. Those firms are being used in the present defence effort. The trouble with the electronic program has been that considerable time is required for design and development before equipment can be put into production. That program is really just coming into production now. I think that firms on the west coast which are capable of doing that work can look forward to the same sort of treatment which they received in the last war which I think they found to be quite satisfactory.


James MacKerras Macdonnell: When the defence estimates were before the committee on the last occasion, the minister was good enough to arrange for the deposit of the contracts which were discussed that evening. Among those contracts was one with Avro, and with regard to that contract I want to ask some questions. The contract actually was considerably earlier in date than, I think, the other contracts which were deposited. However, I do not know that we need to go into that matter. Actually I think the contract was made before the passing of the Defence Production Act. But again, as I say, I do not think I need to labour that point. What I want to do in general is to ask the minister some questions about the financing of Avro-that is A. V. Roe (Canada) Limited- and also to ask him some questions about the production.
First of all, my general objective is to find out how much public money has gone into Avro; how much, if any, private money has gone in, and the results achieved. One of the motives in working up the Avro enterprise was, I think, a natural and proper motive, namely doing our own construction here. Mr. Deisher, vice president and general manager of A. V. Roe Limited, speaking in February, 1946, said this:
We are going to build aircraft designed to suit Canadian conditions. Canada has always built the other fellow's product. Now we are going to have aircraft that are Canadian from the drafting board to the stars.
Here are my questions. The first question I should like to ask is this. What were the
3620	HOUSE OF
Supply-Defence Production arrangements with Avro in 1945 when the government made available the real estate, buildings and equipment previously controlled by Victory Aircraft? That is my understanding of the first transaction. I suppose it can be worked out in terms of investment. There must have been a figure at that time. Will the minister answer that question?


Clarence Decatur Howe: At the close of the war we were able to sell the Canadair plant to private interests and we were anxious to do something with Avro. The government was hardly in a position to enter into competitive aircraft manufacturing. The plant was called Victory Aircraft in those days. The Avro interests came out from England to discuss the matter and after a good deal of discussion we decided to let them operate the Victory plant on a temporary basis to see whether they could make a success of it.
An arrangement was entered into in 1945 that they would take over the management of the plant at a rental of 50 per cent of the profits on the operation. There was the usual peacetime amount of aircraft repair work to be carried out. At the same time we asked them to take over the work that the government had been doing in the development of a jet engine. The production of the jet engine was financed at the Avro plant. There were also supplies in the plant which had to be liquidated, and Avro took over that responsibility for government account. That arrangement carried on until 1948 and I think a modest profit was made in each year, 50 per cent of which was paid to the government as rental.
By 1948 the work in the plant had been liquidated; that is, the government stocks in the plant had been liquidated and we entered into negotiations with Avro to purchase the plant. The result was that the plant was purchased by Avro at a sum close to $2 million, which was paid in cash.
Then in 1949 the R.C.A.F. through the Minister of National Defence came forward with a proposal to undertake the design of a long-range, twin-engine, all-weather fighter, and of the jet engine to power the fighter. It was the wish of the R.C.A.F. that Canada be independent as far as the defence of Canada in the air was concerned. It was felt that there was no existing aeroplane suitable to meet Canadian requirements, which was the coverage of long distances without refuelling. Therefore that work was assigned to A. V. Roe and has been carried out by them subsequently. The engine and the aircraft are now coming into volume production.


James MacKerras Macdonnell: As I understand it, from 1945 until 1948 A. V. Roe was on a kind of agency-rental basis under which


they paid rent out of the earnings. Then in 1948 they paid $2 million cash. How much was the government investment at that time? Presumably there would be a figure on your books indicating that.


Clarence Decatur Howe: It was about $6 million. The plant was bought for $2 million. My hon. friend will appreciate that a special purpose plant cannot be sold for the full value when there is no work in sight to justify the investment of $6 million. It must be sold at a discount. We were anxious to bring some United Kingdom designing experts in to Canada and it was decided that it would be good business for the government to sell that plant to Avro for $2 million.


James MacKerras Macdonnell: What advances have Avro had since that time? One hears various figures, some of which I am sure are exaggerated, but there must be a specific figure of the total advances up to the present time.


Clarence Decatur Howe: Since Avro has been the agent of the government to build an engine plant there has been an authorized expenditure of $37,797,000 to date. That engine plant is separate from the A.V. Roe property, as my hon. friend probably knows. It is in Malton, but in a different area. That engine plant is wholly owned by the government. Expenditures have been authorized to the extent of $5,580,000 for the expansion of the aircraft facilities at the old plant that Avro own. Pre-production expenses at the present time stand at $35,492,050 and total capital pre-production and development $104,277,600.


Solon Earl Low: Does that include the $37 million?


Clarence Decatur Howe: Yes, that is the authorized expenditure for buildings and tools bought for government account and owned by the government; that is capital included in this vote.


Agar Rodney Adamson: That is on the aircraft, not on the engine?


Clarence Decatur Howe: Both.


James MacKerras Macdonnell: Let me see
if I have these figures right. There was the original amount of $37 million. What is the operating arrangement in connection with that As I understand it, the government set up this plant and Avro was to operate it.


Clarence Decatur Howe: That contract has not been finalized. There will be a fee paid to Avro for operating the plant, but it has not been worked out as yet.


James MacKerras Macdonnell: When was the plant begun?


Clarence Decatur Howe: It was begun about the summer of 1950 and is just being completed.


James MacKerras Macdonnell: Let me see
if I have these figures correct. The first figure I have is $37 million; then there is a figure of $5 million; then there was the pre-production figure of $12 million, making a total of $54 million. Then I understood the minister added $73 million, which would give a total of $127 million. Am I right?


Clarence Decatur Howe: No; I think I can straighten it out. Capital investment to date is $27,163,200; development expenses for both engine and aircraft, $41,622,350; pre-production expenses, $35,492,050. There is a figure here of $17,182,000 for production of aircraft and spares. Total payments to date amount to $121,459,700.


James MacKerras Macdonnell: I gather from the minister that apart from the actual expenditure payments there are certain authorizations outstanding.


Clarence Decatur Howe: I gave the authorization for capital account and I also gave the expenditures for capital account. The difference of about $12 million represents certain development work that was not paid for when these figures were compiled.


James MacKerras Macdonnell: So the expenditure up to the moment is roughly $120 million. Does that include the figure of $16 million which the minister gave us in the committee on May 30?


Clarence Decatur Howe: What was the $16 million for?


James MacKerras Macdonnell: At page 2783 of Hansard for May 30 the minister said:
This year the vote is $85 million, which includes a carry-over of $66 million from last year. That is allocated as follows . . .
Then among the various companies there is an amount of $16,176,000 for the A. V. Roe jet engine plant.


Clarence Decatur Howe: It does not include that. That was a forecast of capital expenditures for the new year. That has not been authorized yet. It is subject to review and it probably will be cut down materially.


James MacKerras Macdonnell: But something of that $16 million should be added to the $120 million?


Clarence Decatur Howe: That is right.


James MacKerras Macdonnell: Do these figures include the whole of the amount mentioned in the letter of August 18, 1950, which amended the original contract of May 9, 1949, and which increased the original amount from $6,450,000 to $19,876,000? Is that figure of $19,876,000, which is included in the letter of August 18, 1950, included in this $130 million?
Supply-Defence Production


Clarence Decatur Howe: It has been included to the extent that the money has been spent. I gave my hon. friend all the money that has been paid to A. V. Roe for every purpose up to date.


James MacKerras Macdonnell: I just wanted to be sure that it covered that.


Clarence Decatur Howe: It is difficult to sort out the bits and pieces here but I have tried to give the over-all figure.


James MacKerras Macdonnell: I am interested in that figure. As a matter of fact it is twice as much as I thought. I want to find out something about production. I understand that originally the plant had two or three objectives. One was the Chinook engine which, for reasons we need not go into, was not proceeded with. Then there was the jet liner and the Orenda engine. I am interested in the Orenda engine. There were some flowery speeches made about it although not by the minister. He did not make any flowery speeches but some were made and I should now like to get some facts. When did the Orenda make its first test flight? First let me read an extract from the letter of August 18, 1950, addressed to the A. V. Roe company and signed by the Canadian Commercial Corporation. It reads as follows:
It is contemplated that the additional capital expenditure authorized by this letter-
That is the amount to which I previously referred.
-will permit the following increases in production but no authorization in respect to production is given in this letter.


Clarence Decatur Howe: I should like to point out to my hon. friend that that letter is marked "secret". It got into the file by mistake but there is no need to read it in parliament.
*


James MacKerras Macdonnell: There is
nothing I want to do less than to read a secret letter. I got it along with the contracts. Actually, with deference to the minister, I would not have thought this information was very secret but if the minister wants me to stop reading the letter I am agreeable.


Clarence Decatur Howe: I would prefer that it should not go on Hansard.


James MacKerras Macdonnell: Then I will ask my next question. When did the Orenda make its first test flight?


Clarence Decatur Howe: It is difficult to say. The engine ran for a thousand hours or more in static tests and then was put in what is called a flying test bed. In other words, it was put in a Lancaster plane that had two internal combustion engines. It was flown there and finally was put in a commercial aircraft and flown about a year ago, I believe. I went to

Supply-Defence Production Toronto to see the first CF-100 powered with an Orenda engine fly about a year ago.


James MacKerras Macdonnell: I am
informed that there were tests as far back as January, 1950. Am I wrongly informed?


Clarence Decatur Howe: The static testing of the engine or type testing was completed in 1950. The bringing of an engine into being from zero is a very lengthy process. If my hon. friend were to compare it with anybody else's engine from zero to full production he would find that it compares very favourably. If you try to get the story of this engine by itself it sounds like a long time, and I may say that it sounds like a long time to me.


James MacKerras Macdonnell: I can believe that.


Clarence Decatur Howe: However, if I look up the record of any other engine I find that the time is about the same.


James MacKerras Macdonnell: I am not setting myself up as an expert. I am merely asking questions. I realize what the minister says is true, that it does take a long time, but there is such a thing as a long time being too long. Again I am only asking questions. When was the first actual order placed?


Clarence Decatur Howe: We were expecting to be examined on capital assistance. If we had expected to be examined on production we would have brought different documents. I am afraid I cannot give that information, but when you are moving from development into production contracts are not very important. You place a production contract when you are sure you are in production but before that you are working on development. I do not remember when the first production contract was made. I have something here with respect to ten pre-production aircraft but that is not a production contract.


James MacKerras Macdonnell: I do not want to be un-co-operative but I am very anxious to get this information. I was interested in the minister's statement a moment ago when he said he was inclined to think it was a rather long time. I have forgotten his exact words. I am very anxious to know exactly what the time involved was. I have certain questions with regard to the contract and production situation and if the minister has not the figures I would suggest that this item might stand. There are other items with which we could proceed. I do want these figures and I think we should have them.


Clarence Decatur Howe: I may say in general that we are now in production although it is true we are not up to capacity. We are producing a


commercial Orenda engine and we expect to be up to capacity by the end of the present calendar year. There is every indication that when we are at capacity the cost of the engine, including all development and preproduction costs, will compare with engines of the same thrust.
There is an active demand for this engine. We need it ourselves. We would like to power the Sabre with it and we intend to do'so. When we can do that we will have a much better aircraft than the one we are producing now because the Orenda is more powerful than the American engines we are now putting in the Sabre aircraft. We also require Orendas to match the production of the Canuck, the airplane for which the engine was developed.
We believe we have a very useful engine. Our pre-production costs are not out of line we find, and everything indicates that the price of the engine will be in parallel with competitive engines and that the operation will develop into a profitable operation.
If my hon. friend wants to go into a complicated subject such as this is-and I am sure that no one else in the house does- then if he will sit down with our accountants I am sure we can go through it and check each stage. I cannot do that here. I sit down with my accountants and try to get the thing in my mind and to keep the situation in focus, but there is a great mass of detail and I do not think he can get the information that he wants by questioning me. I am sure that he cannot because I do not know all the answers. There is a very considerable amount of detail when you produce an airplane and an engine and go through the development, testing, pre-production, and tooling stages.


James MacKerras Macdonnell: I am very interested in what the minister says and although he does not know it he is making me more and more anxious to get some of these facts. I do not think he suggests that there is any difficulty in getting the answer to my question. It was: When was the first order actually placed? I want those figures and I suggest that the item stand until three o'clock. I want the figures and I have been surprised and interested in the figures we have received already.
I had in mind, after making the best inquiries I could, as I have said earlier this morning, the figure of $120 million, very different from which the minister gave us earlier. I had a figure about half that in my mind which was all I had been able to get up to the moment. I am interested in these figures and I am equally interested in the

figures on production. I am grateful too for the information we have had.


Clarence Decatur Howe: I might point out to my hon. friend that he is talking about an engine made in a government plant for government account. Everything in that engine plant has been done for a government account. I do not know why he is anxious to know when the order was placed. I suppose we would give a contract to a privately owned plant if the work were performed there-but he is talking about Orenda engines built in a government-owned plant with which no one but the government is concerned.


James MacKerras Macdonnell: I am rather surprised at the minister's last comment- that he does not know why I want to ask these questions. If I am the only one who is interested it is too bad. There are a lot of people who ought to be interested and I think this is a matter of importance. We should know what we have received for over $120 million. I accept the general statement that the minister has made that it takes a long time to produce a new type of engine. We have had very flattering references to this engine but I am just asking for simple facts. When did we give the first contract? What has happened since, and so on? Those are very simple questions which I am sure the department can answer and I suggest to the minister that I am not asking anything unreasonable when I ask to have answers to those questions. I suggest that the item stand until three o'clock.


Clarence Decatur Howe: I have no objection to that but I might point out that the questions asked have nothing to do with the item. The item is capital expenditure. I am prepared to give you every fact about capital expenditure but my hon. friend is asking about production figures and there is nothing in this vote that covers production. Production is paid for by national defence and they are the proper people to ask about production figures.


James MacKerras Macdonnell: The minister surprises me doubly. I would have thought if I had asked national defence, they would have said: Ask defence production, they are looking after the carrying out of the contracts. I am also surprised that the minister should say that we should not be interested in what we are getting for our money. The minister in effect says that we should not ask that, or that if we should ask we should ask someone else. I find that a very great surprise.


Clarence Decatur Howe: Life is full of surprises.
Supply-Defence Production


James MacKerras Macdonnell: I am interested and I hope I am not wholly unreasonable in wanting to know what we have received for this $120 million. The minister has made some very general comments which I am sure are interesting but they do not answer these specific questions. I think I will understand the matter when I get the answers to these questions. If the minister agrees, I suggest that the item stand until three o'clock.


The Chairman:: I understood that the hon. member for York West had a question to ask.


Agar Rodney Adamson: Yes, my question concerns the assistance to machine tool production. I have had an opportunity to visit some of our defence plants in the last year and everywhere I went the one cry, which was I think universal, was that there is a shortage of machine tools.
Mr. Chairman, the economy of this country has now reached the stage where a growing machine tool industry must be part of that economy, and I want to ask the minister what if any assistance he has given to the establishment and the enlargement of machine tool industry in Canada. I realize that machine tools, like jet engines, are not something you can produce by turning a switch. They require a very great deal of tooling up and a very great number of experts.
In England there are some firms which have been at the production of machine tools for generations, and one firm, I understand, has now been in part at least taken over by the United Kingdom government. I refer to Herbert Alfred Limited of Birmingham, one of the major machine tool builders, and one of the very finest in the world.
I wonder whether it would be possible to have a subplant or branch of that factory or organization established in Canada. I mention this because all the production plants, almost universally, have a tremendously high opinion of the product of this firm. They just simply cannot get enough of those machine tools. As a matter of fact they cannot get enough of the United Kingdom machine tools.
I realize that everything has been done to pep up or step up production of machine tools and to get English machine tools in Canada, but apparently United Kingdom production is such that it is unlikely we are going to get machine tools from the United Kingdom in any great volume. Therefore, it would seem to me desirable, Mr. Chairman, to assist in capital expenditure for enlargement of our machine tool industry in Canada. I just wonder whether the minister has any information to give to the committee on this matter.

Supply-Defence Production


Clarence Decatur Howe: Mr. Chairman, the machine tool industry of course is a private industry like any other. We have a healthy machine tool industry in this country. If any manufacturer of machine tools wishes to expand his plant to take care of government business only we will give capital assistance, and that has been done. My hon. friend will understand, however, that we do not just give capital assistance so that the machine tool man can build any kind of machine tool that he likes. If he receives capital assistance we own the machine tools, we own the plant and it can only work for the department. In other words, it must be used in business for the department. If the manufacturer wants to use it for something else, he must buy it or rent it. The machine tool industry is not the type of industry particularly adapted to capital assistance, though we have given capital assistance on two or three occasions.
The hon. member talks about the government bringing out plants from England. We depend on private industry. I think if the government brought out a machine tool manufacturer and set him up here in competition with existing industry, it might be a bit difficult. We do not do that. If a firm from the old country comes here and can do a job that we require to have done, that firm would qualify for capital assistance.


Agar Rodney Adamson: Can the minister say how much capital assistance has been given the machine tool industry?


Clarence Decatur Howe: Not very much-it depends upon how you look at it. I do not want to be quoted by the opposition as saying a million is nothing. The capital assistance is probably around a million dollars. I take back that "not very much" and shall call it "that huge sum that weighs so heavily on the minds of the opposition."


Agar Rodney Adamson: I only mentioned this one firm because I understood it was in rather peculiar circumstances. The control of this firm is now in the hands of the United Kingdom government.


Clarence Decatur Howe: They used to have a socialist government, but we are a free enterprise government.


Agar Rodney Adamson: I entirely agree with the minister that it is not the business of government to own a plant, except where absolutely necessary.


Louis-René Beaudoin: The hon. member for
Greenwood has asked to have this item stand-


Clarence Decatur Howe: A very unreasonable request, but perhaps we can agree to it.


Louis-René Beaudoin: The minister has said that some of the questions asked by the hon. member are not in order. This is a very important vote, and I should like to take the next few minutes at our disposal to examine the matter of order. It seems to me that this vote provides for $85 million for capital assistance for the construction, acquisition, extension or improvement of capital equipment or works-and so on.
Now, I understand the hon. member for Greenwood is trying to obtain some background information which would lead him to the capital assistance provided, perhaps to the company he mentioned, under this vote. If that is so, that is in order. But as the minister pointed out, when he gets into the details as to the record of the company on technical production, there may be some difficulties there in so far as relevancy is concerned. Perhaps the hon. member could enlighten the Chair on those points.


James MacKerras Macdonnell: You flatter me, Mr. Chairman, but I shall at any rate express my views. When this matter was up before, we asked the minister for these contracts, which he was good enough to arrange. This was one of the contracts, and, quite apart from the contract to which we have reference, $16 million went to A. V. Roe.
The minister made quite a point of the fact that the money goes into property which remains the property of the government. It seems to me that the mere fact that this is government property which is being operated or used does not get away from the fact that A. V. Roe Canada is actually operating this property. After lunch, I hope we can find out a little of the basis upon which this is done, because it seems to me that the minister told us that no management contract had been entered into since 1949.
My point is this. Surely, when we are spending these huge amounts of money, we have not only the right but the duty to find out whether they are being successfully spent. This is a private company, but supposing it was absolutely at arm's length, which I do not think A. V. Roe is, but supposing it was, surely we would be entitled to ask something about the record of the company which is using this huge amount of government property. Actually, you cannot get any record of the A. V. Roe Company through any of the commercial agencies, because it is a privately-owned company. When you look it up, you find nothing. The only way we can find out about the efficiency of A. V. Roe, which I submit is quite relevant, is to ask something about the record of this plant which is using this very equipment running to the tune of $127 million.


Clarence Decatur Howe: Oh, no, the equipment did not cost $127 million. That is it, you see; we release a few wild figures and then spread them on Hansard quite out of context in a way that may be quoted in the papers.


James MacKerras Macdonnell: If the minister will allow me, I checked the figures. I read them to him and asked if they were correct. The general figure we had was in the neighbourhood of $120 million.


Clarence Decatur Howe: For what?


James MacKerras Macdonnell: I have the figures which the minister gave us. First of all, there was $37 million which was to be put up for the engine plant; secondly, $12 million which he called pre-production figures; thirdly, what he called a production figure of $73 million. Those are the figures that the minister gave me. I do not like to use inaccurate figures, and I checked the addition. If the minister wants to go back and change those figures-


Clarence Decatur Howe: You referred to the facilities costing $116 million, and the facilities did not cost $116 million.


James MacKerras Macdonnell: Will the minister correct it, then.


Clarence Decatur Howe: The facilities cost $37 million, which we have approved, and of which $24 million has been paid. That is all the facilities cost. The rest will be for work and materials which will be translated into finished planes.


James MacKerras Macdonnell: I say that one way or another $120 million of public moneys have gone into this operation, plants and facilities, which enable it to carry on. Is that satisfactory?


Clarence Decatur Howe: If you would say, facilities, materials and work in progress, I would be satisfied.


James MacKerras Macdonnell: All right, facilities, materials and work in progress. I am as anxious to be accurate as the minister is. If I may go back, then, and complete my argument, here is $120 million of public money which is to some extent ventured in this matter. We cannot get any reports on A. V. Roe Canada, which is a privately-owned company. I submit with great earnestness, the only way we can find out about the efficiency with which this money is being spent is to get the facts as to the records. I was asking when we gave the first contract, and I propose to follow that up by asking other questions concerning what has happened since and what the situation is at the moment.


Stanley Howard Knowles: It is one o'clock.
Supply-Defence Production


Louis-René Beaudoin: Perhaps I may add a last comment. I do not wish the hon. member to infer that I was attempting to interfere in any way with his duty to scrutinize the transaction or examine the record of whatever firm has been dealing with the government. My duty is to see that the hon. member's duty is performed at the right moment. That is my duty, and that is the only one I am performing at the moment. What puzzles me is how the hon. member is investigating the expenditure of $120 million on an $85 million vote. There must be a certain amount of that vote which is capital assistance provided to the A. V. Roe Company. I do not know how much that is, but if for instance it were $20 million, to be strictly relevant to this item the only thing that should be examined is the $20 million of capital assistance provided to the A. V. Roe. I wanted to inform the hon. member of that.
If, as background information for the examination of this $20 million of capital assistance provided by this vote, the hon. member wants to ask the minister certain questions, which he did ask, I believe that is in order, but always coming back finally to the discussion of the $20 million provided as capital assistance under this vote.
There is this matter of production. There may be a place somewhere along the line where questions can be asked about production; that is, the time at which the order was placed and other questions pertaining to the production process. There must be a place where such questions can be asked. The Minister of Defence Production has said that they should not be asked on this vote. Well, let us find out which other vote. I am sure the hon. member will be able to wait until such an occasion arises to ask his question as to production.


James MacKerras Macdonnell: May I just reiterate what I said a moment ago very briefly? Surely the whole purpose of defence production, as I understand it, is to serve national defence in getting this very kind of thing done.
As to your comment, Mr. Chairman, how we can investigate $120 million in a vote of $85 million, I think you gave the answer perfectly. The money which is going in now is going into the same pot into which other large amounts have gone. I submit finally: We have no other test of the efficiency of the spending than to find out what is produced. There are people who say we have spent this money and got nothing at all. I do not say that. They say we have got nothing in the way of actual aircraft in action. I am not saying that. But I do want to find out, and I hope the minister will not maintain

Supply-Defence Production a contrary position, because I think he will acknowledge that these are fair questions.


Clarence Decatur Howe: The next logical question is, how many planes have you produced? And the next logical question is, how many engines have you produced? My hon. friend knows better than I do-he has been told repeatedly in committee-that there are security regulations covering these matters, and the answer cannot be given. He may dwell on it from three to six-and I am sure he will-but at six o'clock he will not have the information on how many planes have been produced and how many engines have been produced. Without these figures he cannot tell whether money invested there was invested wisely or otherwise. I mean the $116 million that he is talking about. He understands that I cannot give that information. Security regulations are decided by the army, and we have our instructions not to give numbers of products. He understands that. We will give him dates of contracts, but again I say that, where the government is contracting with itself, dates of contracts are less meaningful than they are if you are contracting with an outside firm.
At one o'clock the committee took recess.
The committee resumed at three o'clock.


Clarence Decatur Howe: Mr. Chairman, the hon. member for Greenwood was questioning me about production at the A. V. Roe plant. I would call his attention to page 2743 of Hansard for May 30, 1952, in which I gave an analysis of the work being carried out at the A. Y. Roe plant, in some detail. I have no doubt he has read that recently. I believe that in that statement is contained much of the information he desires to ask me to give at this time.
Then, as to contracts: I have a list of the contracts between the government and A. V. Roe which I shall be glad to place on Hansard.
First is a formal agreement made May 2, 1946, executed on April 24, 1947. This is file 18-26-28, covering design and development of gas turbine engines. It includes a provision for jigs and tools. Avro is to be paid its costs of the work plus a fee of 5 per cent, but Avro is only to get 3 per cent of its progress payments. This is amended by a formal agreement dated April 13, 1948, to provide for such capital equipment as the minister may approve.
This agreement provides that Avro will obtain an undertaking from the Hawker-Siddeley Aircraft Company Limited, that it and its subsidiary and allied companies will


make available to Avro all technical information and processes which are available to any such companies in connection with the development of gas turbine engines.
This agreement also provides that the crown will make available to Avro all technical data, et cetera, relating to the design and development of gas turbine engines which are available to the crown from Turbo Research Limited. This is a former crown company, since wound up. Such data are to be used by Avro only for the purposes of this agreement.
Then, secondly, is a formal agreement made November 3, 1945, and executed on October 31, 1946. This is file 18-38-4540, covering design of jet type fighter airframes, prototypes, and spare parts necessary for the maintenance thereof during test operations. It includes a provision for jigs and tools. Avro is to be paid its costs of the work plus a fee of 5 per cent, but Avro is only to get 3 per cent of its progress payments. This is amended by three formal agreements dated January 30, 1948, November 3, 1948, and March 29, 1949, the provisions of which are covered earlier in this note.
The third is a formal agreement made May 17, 1949. This is file 18-38-87, covering the manufacture of ten only CF-100 jet fighter aircraft, known as pre-production aircraft, fitted with Orenda gas turbines, 30 spare Orendas and spares, publications, ground handling equipment, et cetera. It covers the cost of jigs and tools as approved by the minister. Avro is to be paid its costs plus a fee of 5 per cent, but is only to get 3 per cent on its progress payments.
Each of the ten aircraft was to be designed as a particular version, such as (a) dual control trainer, (b) tactical ground attack version, (c) P.R. version, special aircraft for airframe tests, et cetera.
By letter of authorization dated October 23, 1951, the ceiling of expenditure was set at $32,295,802.70 including acquisition of certain radar equipment and 2 Rolls-Royce Avon R A 2 type engines.
The fourth is a formal capital assistance agreement made December 9,	1946, file
51-R-37, covering $650,000 for equipment and office furniture for Malton and Nobel plants for use in production of gas turbine engines. Avro is to be paid its costs, but no fee.
The fifth is a formal capital assistance agreement made May 9, 1949. This is file 18-38-69, to provide machine tools and equipment and other facilities of a capital nature for the Malton and Nobel plants, for use in the production of CF-100 aircraft fitted with Orenda engines. All items of machine tools and equipment are to be approved by

the minister before acquisition, and Avro is to be paid its costs of acquisition, including engineering, planning and development costs in respect of the additional equipment, and the costs of installation and re-arrangement of the existing plant and facilities incidental to installation. No fee is to be paid to Avro.
By formal amendment No. 1, dated January 5,	1950, Avro can receive accountable
advances to cover estimated expenditures one month in advance.
By letter of authorization dated August 18,
1950,	Avro was authorized to acquire the following in addition to the machine tools and equipment covered by the formal agreement: New engine plants; re-arrangement of plant; additional machinery and equipment; extension of aircraft plant by 100,000 square feet. The formal agreement was to be amended to include these additional items.
By letter of authorization dated January 3, 1952, the deputy minister authorized a ceiling expenditure of $44,352,000.
The next is a purchase order dated May 14,
1951.	It is file B/18-38-14, serial number 2/B/112, CDEF-101, covering main production order for the CF-100 jet fighter aircraft incorporating Orenda turbine engine, and spare Orenda engines, together with spares of airframes and engines, ground handling equipment, special tools and technical publications. Then there was a purchase order dated March 19, 1952, covering metal shipping containers for Orenda engines, at a price to be negotiated.
Purchase order under file B/18-38-139 covers the overhaul and modification of approximately fourteen Lancaster aircraft on a cost plus basis.
Miscellaneous purchase orders covering the purchase of Lancaster and other spare parts on fixed catalogue prices.
Those are all the contracts entered into to date.


James MacKerras Macdonnell: I take it that these contracts and figures to which the minister has referred would approximate the over-all figure that was given this morning.


Clarence Decatur Howe: That is right.


James MacKerras Macdonnell: Reference was made to the CF-100 for training purposes.


Clarence Decatur Howe: No. I do not like to get the record muddled up; the pre-production aircraft were not all for training purposes. There was one typical training aircraft and one typical rocket firing aircraft; in short, each one is typical of a modification of the
Supply-Defence Production aircraft that is intended to be put into production. There were ten aircraft of different types, in connection with each of which there is to be a pre-production model for development purposes.


James MacKerras Macdonnell: I accept the minister's correction, but unless I misheard him he did use the word "trainer". Perhaps I took it up wrongly. Do I understand that the minister feels that the question I asked before recess as to the actual date of the order for the service plane is a matter of security?


Clarence Decatur Howe: No, I gave that; it is May 14,
1951.	That was item 6 on the contracts I gave.


James MacKerras Macdonnell: If there is no objection I should like the minister to tell us how many are on order, how many have been actually produced and whether they have come from an actual production line or from what was referred to in an aviation magazine as an enlarged model shop.


Clarence Decatur Howe: I cannot give that figure. My hon. friend knows from his experience in the committee on defence expenditures that the R.C.A.F. are very much against giving production figures or the total number on order. I cannot say why, but we have been informed that that is secret information and that we must observe secrecy.


James MacKerras Macdonnell: Then I shall not pursue that. I take it however that there is no secrecy about what appeared in the magazine Aircraft, which is referred to as Canada's aviation news magazine. The issue of March last makes a comment on production which I think should be put on the record. Certainly it is public, and accordingly I read it. This is from the issue of March,
1952,	a statement by E. V. Rippingille, Jr., federal director of aircraft production, who says:
Avro Canada has developed not only a gas turbine but they have started to move into their new engine plant and before long they will be in production. Engines produced to date have come from an enlarged model shop. The CF-100 is still undergoing test and development but, like all aircraft, it will continue to be developed until it is fundamentally obsolete. Production is slow but is being gradually accelerated.
In the same issue there is what is termed an authoritative review of Canada's aircraft industry, from which I should like to read briefly as follows:
It is unfortunate that engineering difficulties with the CF-100 have slowed its production and delayed its getting into squadron service. It is a fact that this is an aircraft under development and as such it can't be hurried along.

Supply-Defence Production
And then later:
With few Orendas likely to he available before the beginning of 1953, it is improbable that any of the Sabres will be powered with this engine. By this time, too, enough CF-lOO's should be coming along to absorb all the initial production of Orendas.
I pass from that to ask another question which I think has been discussed in the defence expenditures committee. Is the CF-100 being fitted with modern air-to-air armaments?


Clarence Decatur Howe: Again I am told that the armament on fighter aircraft is security information. I should like to make some comment on that subject, but I cannot.


James MacKerras Macdonnell: I do not know what comment I can make on that except that there ought to be a caucus of the departments. I have one or two more questions and I know the minister will be glad to be told that I am not going to take three hours, but only a few minutes. I think it is clear from the record that a large amount of money has gone into this and that the results to date so far as pace is concerned have been disappointing. From the records I have read and from other things, unless something has happened within the last few weeks, it looks as though no production in a real sense of the term has been reached.
As I pointed out this morning, it is evident that the R.C.A.F. and the manufacturers had a proper desire to build our own engine. They have been going ahead with that with disappointments. As far as I can see it is true that we have not a supply of these engines available yet and I should like to ask the minister if there was an engine that we could have had. Were the Hawker-Siddeley people manufacturing an engine which would have been useful as a stand-by and which would not have left us in the position in which we now appear to be?


Clarence Decatur Howe: I suppose my hon. friend is asking whether it was wise to undertake the building of an engine?


James MacKerras Macdonnell: I have said that I think that that was a proper thing to do. I am simply asking whether it might have been wise to have had a stand-by alternative.


Clarence Decatur Howe: The position is that the production of jet engines is limiting the production of complete aircraft. There are airframes all over the continent waiting for engines. The production of aircraft in Canada is limited by the supply of engines that we can make available or that are being made available to us. The Orenda will be a valuable addition to the supply of engines for allied countries.
fMr. Macdonnell (Greenwood).]

We are hopeful that it will take care of the requirements of the two aircraft I have mentioned, the CF-100 and the Sabre; we believe that the timing of production will permit that to take place. We have reason to believe that the actual production of Orenda engines will be ahead of the quantity that was scheduled for production, in other words ahead of the rated capacity of the plant. I understand that expected production will take care both of the CF-100, for which it was designed, and the Sabre, which will be a greatly improved aircraft when the Orenda can be installed.


James MacKerras Macdonnell: Apparently there has been in the past a lot of unwarranted optimism and I hope the minister's optimism is more warranted because he has not indulged in it in the past as other people have. The minister does not seem to have answered my question. He said that there are airframes waiting for engines and I asked whether there was any engine which we could have had. I understand the Hawker-Siddeley people have the Sapphire engine in production which might have been available if we had wanted a stand-by and it might have been useful now.


Clarence Decatur Howe: The Sapphire engine has been licensed for production in the United States. I am told, however, that it will not be in actual production for several months. In other words, the Orenda engine, so far as this continent is concerned, is some months ahead of the Sapphire. There are only a few Sapphire engines being produced in the old country which are being used for United Kingdom planes, and it is impossible to obtain them for installation in Canadian aircraft.


James MacKerras Macdonnell: I was aware that they were licensed for manufacture in the United States by the Curtiss-Wright people, but I did not know about Canada. He has added that. I come back to ask this question. He says that at the moment the Sapphire is not in production in England to an extent that would make any available here. Would that have been true two, three or four years ago if we had wished then to have an alternative?


Clarence Decatur Howe: There were no Sapphire engines two, three or four years ago. The development of the Sapphire engine has more or less paralleled the production of the Orenda engine. The two were started about the same time and the production of Sapphires is about as far advanced as the production of Orendas.


James MacKerras Macdonnell: Then am I wrong in my information that the Sapphire is and has been for some time in real production in England?


Clarence Decatur Howe: You are quite wrong.


James MacKerras Macdonnell: The minister is satisfied that is wrong.


Clarence Decatur Howe: Yes.


Agar Rodney Adamson: I want to make one or two observations. I think the whole question of security so far as the Department of Defence Production and the Department of National Defence are concerned should be examined. In my opinion more information should be available because I am sure it will not be helpful to anybody. Information is published in technical magazines, trade papers and frequently in articles by commentators in the press. I realize that an official statement is an official statement and that upon it those who are hostile to us can base their plans, but I feel that secrecy in this regard is carried to too great an extreme. There is one other point I should like to mention with respect to the A. Y. Roe company. The A. V. Roe company has a very advanced prototype of a jet liner-I think it is the only one in existence-which would give this country a tremendous advantage in the commercial production of a high speed jet short-range aircraft.
I realize that the project had to be abandoned temporarily owing to the lack of space, trained personnel and tooling. I realize that to go on with it would probably involve great expense. Far from criticizing the expense of bringing into production a new aircraft based on a prototype of this kind, particularly in conjunction with the Comet which is the long-range jet commercial liner, I think it was unfortunate to say the least that the project was abandoned. If it is at all possible I hope the A. V. Roe company will be encouraged to proceed with the construction of that aircraft.


Mr. Pouliot:: Before the item is carried it is my desire to pay a well deserved tribute to the minister. I know of no man who could have organized Trans-Canada Air Lines as well as their operations now demonstrate. In addition, he organized the Canadian Broadcasting Corporation and he provided a great impulse to Canadian business and industry to such an extent that Canada is one of the great industrial countries of the world. Therefore it is with great pleasure that I congratulate the minister on his numerous accomplishments and I hope he will stay with us long enough to make the country benefit from his wide experience and remarkable spirit of initiative.


James MacKerras Macdonnell: I am glad to be able to associate myself with a good deal of what the hon. member for Temiscouata has said but that does not affect the fact that I
55704-229J
Supply-Defence Production still have one or two questions to ask. I am not quite clear on this matter and I should like to ask the minister, particularly in view of what I read from the aviation magazine, whether the CF-100 is actually coming off the production line now. Before the minister answers, may I add that I ask that question partly in view of the speech of Mr. Crawford Gordon a short while ago in which I understood there was reference to a plant for a jet engine still under construction.


Clarence Decatur Howe: This is what I said on May 30, 1952, as found at page 2743 of Hansard:
Deliveries of the CF-100 under the main production contract are scheduled to commence in August, 1952. For security reasons, it would be inappropriate to review our planned rate of production, but I have every reason to believe that A. V. Roe will live up to our agreed production schedule, as long as certain electronic equipment can be secured from the United States.
I might say that we are rather in advance of the production schedule. The first planes have already come off the production line. My hon. friend lives in Toronto. I suppose he visits that city occasionally and if he would spend an hour at Malton all these questions would be answered because there is a very healthy production line that can be viewed by selected personnel from the House of Commons!


James MacKerras Macdonnell: I can understand the minister so much better than I could understand things if I went out to the plant myself.


[Stage Direction]
Item agreed to.
81[DOT] To provide for the liquidation of contracts, including commitments of previous years related to the acquisition of assets operated by the departments of munitions and supply and reconstruction and supply or an agency of these departments; the liquidation of the assets and liabilities of closed crown companies and crown plants; and for miscellaneous and unforeseen expenses, $150,000.
Howard Charles Green: I presume this item refers to payments which will be diminishing each year. Will the minister give us an explanation?


Clarence Decatur Howe: Yes. We must keep a token item available for the reason that we have two or three lawsuits still before the courts. All the contracts that could be closed by negotiation have been closed and we are only providing this amount to await the result of actions before the exchequer court.


[Stage Direction]
Item agreed to.
Crown companies-
82.	To provide for expenses incurred by Defepce Construction Limited in procuring the construction of defence projects on behalf of the Department of National Defence, $3,308,500.
Gordon Knapman Fraser: Why did the minister's engineers select the ground they did in Cobourg for

Supply-Defence Production the ordnance building there? It is swamp land. According to a return tabled in my name, I understand that it will cost $407,250 for drainage plus $70,000 for concrete slabs to be built underneath the concrete tile. That is practically half a million dollars.


Clarence Decatur Howe: The purchasing of land and the preparation of plans for development are functions of the Department of National Defence. The Department of Defence Production only takes over when national defence is furnished with the plans and the site. From there on the Department of Defence Production is responsible for the building. My department has nothing to do with the acquisition of land.


Gordon Knapman Fraser: Well, Mr. Chairman, is it not the minister's department that has the engineers .who go over the land checking the soil to see whether it is suitable for building?


Clarence Decatur Howe: If the engineers are part of the army organization they are not hired by us. If it is a firm of consulting engineers doing the job we make a contract with the firm to perform the work and after that they report to the armed services until the design is worked out. We take no responsibility for design. The functions are very sharply designed and it is the duty of the army to say what it wants-and that involves the preparation of plans-when it wants it, and then the Department of Defence Production attempts to take over from that point and give to the armed services what they want.


Gordon Knapman Fraser: But is it not the minister's department which has the soil engineers who say whether the land is or is not suitable for a building of that kind? I understand that they have 80-foot piling in the building in this case but in the Royal York hotel, the tallest building in the empire, they used only 38-foot piling.


Clarence Decatur Howe: I do not think the length of the piling is significant. I have built grain elevators where we used 20-foot piling and in others we used 80-foot piling. I am told that the site is very suitable for the purpose but as I say it is not the function of the Department of Defence Production to acquire the land or plan the requirements of the building.


Howard Charles Green: Will the minister explain the manner in which Defence Construction Limited is required to make expenditures? As I understand it the money for these defence projects is voted by the Department of National Defence. Then, the actual work is done under the Department of Defence Production through this agency or crown

company known as Defence Construction Limited. In what way is this vote of $3,308,500 to be used?


Clarence Decatur Howe: That is simply to pay for the administration of the work by Defence Construction Limited. If the army wishes to build a building it sends over to the Department of Defence Production the plans for the building and a certificate of encumbrance covering the estimated cost of the building. The department then operates through this crown company, Defence Construction Limited. Defence Construction Limited proceeds to process the building, to place a contract and to inspect the work through to completion until it can be turned over to the army in a condition that is satisfactory to the army. This item is to cover the cost of engineering and other services performed by the Department of Defence Production on the building through the construction period and until it is turned over to the services.


Howard Charles Green: Defence Construction Limited does not do any actual construction itself?


Clarence Decatur Howe: That is right.


Howard Charles Green: The work would be let out by contract?


Clarence Decatur Howe: That is right.


Howard Charles Green: There is an increase of $1,-
100,000	odd this year. Could the minister give us some idea of why the increase was necessary?


Clarence Decatur Howe: The increase is almost directly proportional to the amount of work the department has to handle. The more contracts there are the more inspectors and the more work generally is required. This is almost entirely payment of staff.


Howard Charles Green: Where does the Department of Public Works fit into the picture? If I remember correctly before the second war defence projects were built by the Department of Public Works very much in the way in which the Department of Defence Production now builds them. Does each department carry on in the same way but with the Department of Public Works being restricted to civilian projects-or just what are the respective spheres?


Clarence Decatur Howe: That is correct. In 1940 all procurement work for the services was turned over to the newly created department of munitions and supply. That included all building projects required for the services and all procurement for the services. That is the situation that has obtained since that -time. In other words, in 1940 the work was transferred from the Department of Public Works to the department of munitions and

supply. The Department of Public Works is responsible for building for other than the armed services and the Department of Defence Production is responsible for building for the armed services.
In the case of airports, since the Department of Transport has a trained staff familiar with airport work, at my request the Department of Transport has relieved the Department of Defence Production of building runways. Similarly, since Central Mortgage and Housing Corporation has the necessary staff and is familiar with the building of housing, the housing work for the Department of Defence Production has, at my request, been turned over to Central Mortgage and Housing Corporation and is carried out by them. That is simply a matter of using the best facilities that the government has available.


Howard Charles Green: The minister said a few days ago that he did not expect the Department of Defence Production to be carried on indefinitely. I presume that in due course this work of building projects for the Department of National Defence will revert to the Department of Public Works? Is that the intention?


Clarence Decatur Howe: That is a matter that cannot be predicted at this time. When the work handled by the Department of Defence Production becomes so small that it does not warrant the overhead of a separate department, the work will be placed elsewhere; but I cannot predict at this time where the work will be placed.


Percy Ellis Wright: Who carries on the day-to-day inspections on these various construction projects-the Department of Defence Production or the Department of National Defence? I would take it that it would be the Department of National Defence. They take over the projects and would have to pass on them.


Clarence Decatur Howe: The day-to-day inspection is carried on by the Department of Defence Production. When the work is ready to be turned over to the Department of National Defence, that department has to be satisfied with it or it will not accept the project; but up to that point, the inspection is the "responsibility of the Department of Defence Production.


Solon Earl Low: I wonder if the minister has a statement of the projects that are being constructed in the province of Alberta?


Clarence Decatur Howe: No, I am afraid not.


Solon Earl Low: Perhaps I could get that.
Supply-Defence Production


Clarence Decatur Howe: You can get that at any time from the department.


The Deputy Chairman:: Shall the item carry?


[Stage Direction]
Item agreed to.
Canadian Arsenals Limited-
83.	Administration and operation, $750,000.
Howard Charles Green: Will the minister explain the position of Canadian Arsenals Limited at the present time.


Clarence Decatur Howe: Canadian Arsenals Limited is a corporation formed to take over those installations of the last war which it was felt should be maintained as part of the permanent defence of Canada. A committee of the armed services and the department of munitions and supply studied the matter very carefully for a considerable period and made a report which recommended that certain plants be retained. It is the duty of Canadian Arsenals Limited to look after those plants, keep them ready for operation, and produce up to the capacity of the plants the peacetime requirements of the armed services.


Howard Charles Green: The peacetime requirements?


Clarence Decatur Howe: Requirements of the armed services between wars are of course peacetime requirements. At the moment the arsenal plants are working to capacity and they are accounting for a considerable part of the production of munitions of the present' day.


Agar Rodney Adamson: Can the minister say how much work is being done in Canadian Arsenals on NATO account?


Clarence Decatur Howe: It is difficult to say. The work on NATO account is an extension of the work on Canadian account. We are doing nothing for NATO that is not an extension of the work for Canada. At the moment, I presume the plants are working on Canadian production, although several of them have contracts for NATO which will follow on as soon as the Canadian requirements are met.


Agar Rodney Adamson: I know they are doing work for NATO, but I wanted to know whether the contracts are paid for through NATO. Do we pay for the equipment, deliver it to NATO and take credit for our part in the NATO establishment?


Clarence Decatur Howe: That is correct.


Agar Rodney Adamson: There is no monetary transaction from NATO to Canadian Arsenals?


Clarence Decatur Howe: That is right.


Agar Rodney Adamson: These things we produce form a part of our contribution to the North Atlantic Treaty Organization?

Supply-Defence Production


Clarence Decatur Howe: That is true in part, although countries in the NATO group have placed orders in Canada tor cash. For example, the United Kingdom is buying certain things in Canada and paying cash, but there is also certain equipment being furnished as a result of the Canadian contribution to NATO and that material is paid for out of Canada's appropriation for NATO. The finished material delivered to NATO forms part of Canada's contribution.


Agar Rodney Adamson: And the charge to NATO, I presume, is at cost?


Clarence Decatur Howe: That is right.


James MacKerras Macdonnell: There is one question which goes back to the previous item which perhaps the minister would answer. He told us that in 1946 and in 1947, one of those years, there was a sale to A. V. Roe for $2 million, and it was paid in cash. Has any money from outside gone into A. V. Roe since then, except from the government of Canada?


Clarence Decatur Howe: Yes, Mr. Chairman, from cash sent out from England or credits arranged in Canada and backed by Avro of England. The Avro investment in its Canadian operation is about $16-5 million at the present time.


[Stage Direction]
Item agreed to.
Canadian Arsenals Limited-[DOT]
84.	Construction, improvements and new equipment, $1,650,000.
Howard Charles Green: According to the details covering this item there was only $500,000 expended during the last fiscal year. The vote for this year is $1,650,000. Can the minister explain why there has been an increase of over $1 million?


Clarence Decatur Howe: Yes, Mr. Chairman; the vote for last year was $1,700,000. We are stepping up the capacity of the arsenal to take care of current requirements. For instance, we have reactivated the explosives plant at DeSalaberry, to fill orders for explosives for our own services and others. We are extending the plant at St. Paul l'Ermite to take care of shell filling, which in the last war was carried on at three or four plants. In Quebec, we are extending the capacity to make shell cases. At Long Branch we are setting up a new line for small arms.


Howard Charles Green: Apparently, the expenditure last year was only $500,000.


Clarence Decatur Howe: It may be-the payments, you mean, were only $500,000?


Howard Charles Green: Yes.


Clarence Decatur Howe: I presume a large part of the balance is a carry-over from last year.


[Stage Direction]
Item agreed to.

684. To provide capital assistance for the construction, acquisition, extension or improvement of capital equipment or works by private contractors engaged in defence contracts, or by crown plants operated on a management-fee basis, or by crown companies under direction of the Minister of Defence Production, subject to approval of treasury board-further amount required, $25,000,000.
Howard Charles Green: This is an additional vote of $25 million for capital assistance?


Clarence Decatur Howe: That is right.


Howard Charles Green: It is really covered by the minister's earlier explanation?


Clarence Decatur Howe: Yes; it just changes the amount from $85 million to $110 million.


[Stage Direction]
Item agreed to.
6S5. To provide for payment of grants to municipalities in lieu of taxes on crown-owned defence plants operated by private contractors, $250,000.
Howard Charles Green: Item 685 requires an explanation. It is to provide for grants to municipalities in lieu of taxes.


Clarence Decatur Howe: Yes. For example, the Orenda engine plant has just been completed, and it is on the tax rolls of the municipality for this year. The item covers the following list: Township of York, plant for occupancy by General Electric; Township of Etobicoke, Canadian Steel Improvement; Township of Renfrew, Cockshutt Aircraft Limited; Township of Lachine, Dominion Engineering Works Limited; Township of Scarboro, John Inglis Company Limited; Township of Ross, Light Alloys Limited; Township of Scarboro, Lucas Rotax of Canada; Town of La Salle, Peacock Brothers; Township of Toronto, A. V. Roe Limited. Those are all plants owned by the government and the provision there is to pay reasonable taxes on these crown-owned plants.


Howard Charles Green: Has the department arrived at the amounts which will be paid to each municipality?


Clarence Decatur Howe: No, it is a matter of negotiations.


[Stage Direction]
Item agreed to.
National Research Council-
295. Salaries and other expenses, $12,198,684.
Howard Charles Green: This is the administration item for the national research council, and it shows an increase of a little over $1-5 million. Gan the minister explain why there is an increase? I must admit that I am biased in favour of the research council, but perhaps the minister can tell us why there is that increase?


Clarence Decatur Howe: It is due to an extension of activities during the period of defence production. There are certain calls on the facilities of the research council that are abnormal

and call for more staff and greater activity. The activities of the national research council are expanding from year to year, but the expansion is greater than usual this year.


Howard Charles Green: What progress is being made with the branches of the research council which are being established in different parts of the country outside Ottawa?


Clarence Decatur Howe: The prairie laboratory has been making great progress with research on agricultural wastes, attempting to find a practical use for them. It has a very active program which I believe is welcome so far as the prairie provinces are concerned.
The maritime laboratory was opened only on Monday of last week, but we expect a very active program there, concentrating on the problems of the maritime provinces.


Howard Charles Green: Can the minister give us any details of the problems which will be considered there?


Clarence Decatur Howe: A specialist on seaweed is, I believe, one of the staff. Seaweed can be developed into edible products that are considered quite valuable. I have a statement here which does not mean very much to me. I will send it over to my friend. It refers to problems of biology and chemistry and biochemistry.


Howard Charles Green: Is there any thought of establishing branches in any other parts of the country?


Clarence Decatur Howe: Well, the national research council has a working arrangement, for example, with a new chemistry building that I was privileged to open in British Columbia, part of the university of British Columbia, and also has arrangements with a number of universities. I know of no plans to build branch laboratories in other parts of Canada. I think the proposal is to work with existing laboratories.


Howard Charles Green: What is the situation with regard to bringing students and graduates to Ottawa for work under the research council? At the time that we had a special committee of the house on the national research council we were given details of that program, and it seemed to be an extremely worth-while one. Has it been continued? What is the situation at the present time?


Clarence Decatur Howe: There are about 60 students working in the national research council at the present time. Many of them are from other countries. They are working under special students' arrangements, and it seems to be working very well. Most empire countries are represented. I think other countries
Supply-Defence Production are represented as well. We consider it a very valuable part of the work of the research council.


Howard Charles Green: Is the council doing anything in connection with the Colombo plan?


Clarence Decatur Howe: No, I think not. I am sure the council would be glad to undertake problems related to the Colombo plan, if the problems were placed in its hands; but to date the Colombo plan has involved more practical development work. For instance, fisheries experts from Vancouver have been in Ceylon; cement experts from eastern Canada have been in India. The work of the Colombo plan to date is not work that is adapted to the national research council.


[Stage Direction]
Item agreed to.
Atomic energy control board-[DOT]
297. Administration expenses of the atomic energy control board, $59,302.
Mr. Gibson:: Will the minister say how the production of uranium ore is coming along in Canada? Is there anything he may usefully say about the mining of uranium ore in Canada?


Clarence Decatur Howe: The present Eldorado property at Great Bear lake is working at capacity. Unfortunately a fire at the mine last November burned down a number of the buildings. They were rebuilt during the winter months and were back in operation about the first of May. The mining did not stop, but delivery of ore was stopped owing to the fact that the crushing plant went out of action. During last winter a leeching plant was erected to work over the tailings of earlier ores. The tailings had been preserved and are now being put through the leeching plant, which means stepping up the output of uranium to a very considerable percentage.
As far as Beaverlodge development is concerned, the report of Eldorado, which I tabled yesterday, gives quite a detailed account of progress at that place. We are in process of building a mill. We believe that we have a very large deposit of low-grade uranium ore. We shall have a very sizeable production. Canada used to be the second largest producer of uranium. It has slipped down to third place, and we expect that when Beaverlodge goes into production we shall come back to second place.


Mr. Mclvor:: I should like to express appreciation of the work that is done under this department. We had a very gifted young lady from Fort William working for the government in New York. She was taken seriously ill with cancer. She was rushed to the city of London and was give treatment. She is now up and out of bed. I commend the minister and his workers for this type of

Supply-Defence Production work and we hope that they will continue and develop; we also hope that this young girl will be completely cured.


Mr. McLure:: In the report of the Eldorado company, which we received the other day, I noticed that it is a paying proposition at the present time. It is really a good company. When we see it in the condition in which it is I often wonder whether that company will ever reimburse the shareholders who paid enormous prices for their stock and received only a small pittance for it. From time to time these complaints come in. No doubt they have come in to the minister, because when a backbencher like myself gets them by the score, indicating that some men paid as high as $11.75 for their stock and others more than that, and received only a small pittance when the government took over the company, surely he must get complaints as well. Now, since the company has commenced to pay, surely he will reimburse these men for what they paid for the stock.


Clarence Decatur Howe: When the government took over the property it was not in the condition that it is in today. It had never been a paying proposition. The government offered slightly more for the shares than the market price of that day. Whether the stock was delivered or not was quite voluntary. I think practically all the stock has been turned in. I know of only one shareholder who keeps alive the complaint, and I think his holding is something less than 1,000 shares, representing about $1,200. I hardly think that complaints from the shareholders are as serious as my hon. friend would suggest. Has he had complaints from great numbers or from just one?


Winfield Chester Scott McLure: No; I have had complaints from a great many more than one.


Clarence Decatur Howe: I do not know how it would be possible at this stage to reimburse each shareholder for what he paid for his stock. I do not think that it ever sold as high as $11. It might have sold for $4 and maybe $5. To determine what people paid someone else for their shares would be a very difficult proposition.


Agar Rodney Adamson: What is the position of the shareholders? Do they receive the annual report?


Clarence Decatur Howe: There are no shareholders
other than the government.


Agar Rodney Adamson: I was just wondering.


Howard Charles Green: This is the first item on atomic energy and there are one or two questions I should like to place before the minister. First of all, with regard to the sale of isotopes,

when the minister was speaking on a supplementary item of last year's estimates to be found at page 967 of Hansard for the current session he said:
There are many who feel that the dividends from the isotope field alone may well repay all the money spent for atomic energy.
But in the report of Eldorado Mining and Refining (1944) Limited, which we received a day or two ago, there is a statement about the marketing of isotopes which is not so optimistic. At page 9 the president says:
During the year, an increasing emphasis has been placed on the development of markets for other radioactive isotopes. While there is a growing demand for radioactive isotopes, it has not been possible as yet to establish this business on a profitable basis.
There was a net loss of $63,521 on the sale of radioactive isotopes during 1951. In order that the isotope development and marketing program might be carried out with greater efficiency, it became apparent that a building was required to house research, development and processing facilities, and sales and servicing staffs. The building will be located at Ottawa since this location is in reasonable proximity to the Chalk River project, the source of supply of radioactive isotopes and, at the same time, is readily accessible to the company's customers.
I would ask the minister to deal with that situation.
Then a further question has to do with the use of atomic energy for power plants of various kinds. We do not have very full information on these developments, but we read stories of the United States government making arrangements with private corporations for the development of these power plants. I would ask the minister to tell us whether Canada has some plan of that kind in contemplation. It is only a few months ago that a new crown company was set up, known as Atomic Energy of Canada Limited, and we were told at that time that the main reason for the setting up of this company was the prospect for the early and useful industrial application of atomic energy. I am wondering what progress Canada has made along these lines, and whether it is the government's intention to use private industry to help in the development of these plants.
Then, finally, we read in the press that the Prime Minister of Australia is here primarily to try to make some arrangements for assistance in establishing an atomic energy plant or for the mining of uranium in Australia. Would the Minister of Defence Production make a statement in that connection?


Clarence Decatur Howe: When I spoke of some persons feeling that the dividends from isotopes alone might justify all the government's expenditures in connection with atomic energy, I did not mean a return in dollars and cents. I think the sale of isotopes can be put on a

profitable basis, and at the present time there is a great deal of development work going on designed to interest Canadian industry in the use of isotopes.
What I meant was that the results to humanity, if we may put it that way, or to the over-all economy, might justify all the expenditure. For example, how can one place a value on the life of the woman to whom the hon. member for Fort William referred a short time ago. We have two cobalt-60 bombs in operation. I am told they are bringing about remarkable recoveries in cancer cases. We hope that during this year we will have six more in operation. I might say that the demand for the bomb is far beyond any likelihood of being met. At the present time Canada is the only country capable of producing cobalt-60. That will be a fine contribution to humanity.
Then there are plant studies taking place. These are efforts to trace the effect of the various components in the soil on plant growth. These studies might very easily contribute a result that would be a national benefit. It was these intangible values, intangible so far as dollars and cents are concerned, to which I was referring when I said that isotopes might justify all expenditures to date.
Then, answering the hon. member's second question as to the progress being made in the application of atomic energy for the production of power, we are approaching the stage where practical results can be obtained. For example, we all know that an atomic power plant is being put in a submarine.


Howard Charles Green: In the United States.


Clarence Decatur Howe: Yes, in the United States; at New London, Connecticut. We know that in the United States progress is being made in connection with pilot plants for producing useful energy from atomic energy. At Chalk River we are in process of constructing a larger pile which will permit wider development in the practical application of atomic power; and great progress is being made in working out the details of a process for transforming atomic energy into useful energy. At the moment we have not been active in building an actual and practical plant to convert one to the other; but we are well on the way toward that objective. I said before it is our belief that by 1960 atomic energy would be in practical use on a large scale for producing power from atomic sources.


Howard Charles Green: By 1960?


Clarence Decatur Howe: Yes.
Supply-Defence Production


Howard Charles Green: The minister did not answer my question concerning the use of industry in this development.


Clarence Decatur Howe: On the directorate of Atomic Energy of Canada Limited we have placed practical men from industry. There are four or five men from the large electrical power companies, and one or two others from industry generally. We hope that as a result of their contact with atomic energy we will get a directive as to how best to proceed with the practical development of atomic power.


Howard Charles Green: There is no private industry helping at the moment?


Clarence Decatur Howe: No, not at the moment.


Howard Charles Green: Now, would the minister answer my question with regard to Australia.


Clarence Decatur Howe: I am sorry to say that I have not yet met the Prime Minister of Australia, though I hope to do so this evening. But so far as I can learn he has nothing to ask of Canada with regard to the mining or refining of uranium ore. I may be wrong in that; but that is my present information.


Mr. Nowlan:: The minister suggested that by 1960 atomic energy would be available in substantial quantities for the production of electrical power. He also said that some of the directors of the company are associated with the electrical industry, and that he is hoping to get some directive from them.
I presume the minister has in mind the fact that the development of this power would present particular opportunities to the eastern part of Canada. In British Columbia there is an extensive development of hydroelectric energy in the mountains. Then there is the vast oil industry of the prairies. I presume the Minister of Transport would certainly say there will be additional hydroelectric energy from the St. Lawrence development.
This leaves a wonderful opportunity for hydroelectric development in the ' maritime provinces. I am not sure how many of the directors are associated with electrical energy development in the maritimes. I realize there may be some question raised by interests there as to what development should take place. But I do urge upon the minister the desirability and, indeed, the necessity for increasing power development in that area, if we are to have the industrial development we are seeking. Such development we all realize is dependent to a substantial extent upon additional power facilities.


Clarence Decatur Howe: I am well aware that areas such as the maritime provinces, that have not a plentiful supply of hydroelectric power, will benefit particularly from the development of atomic power. With that thought in mind I

Supply-Defence Production have put on the board a brilliant Nova Scotian, who was a student of mine at Dal-housie, in the person of Geoffrey Gaherty, one of the great engineers in this country. I am sure he will keep the needs of the maritime provinces in mind.


[Stage Direction]
Item agreed to.
29S. Researches and investigations with respect to atomic energy, $300,000.
Howard Charles Green: Can the minister explain how this money is expended? Is it paid to different universities which are carrying on atomic research?


Clarence Decatur Howe: This vote was formerly carried under the appropriations of the atomic energy control board and is for development work in the universities. There are various cyclotrons and other equipment in the universities.


Howard Charles Green: Could we have a breakdown as to how the amount is divided among the universities?


Clarence Decatur Howe: The following grants were made in 1951-52:
Capital
Dr. O. Maass. McGill university	 $17,650
Operations
Nuclear physics and chemistry
Dr. J. S. Foster, McGill university	 70,000
Dr. G, M. Shrum, University of British
Columbia	 20,000
Dr. H. G. Thode, McMaster university ...	18,000
Dr. J. A. Gray, Queen's university	 15,000
Dr. E. L. Harrington, University of Saskatchewan	 15,000
Physics department, University of Montreal	 10,000
Metallurgical research
Professor F. A. Forward, University of
British Columbia	 20,000
Dr. K. A. Clark, University of Alberta ...	12,350
Professor M. Hewer and Professor S. E.
Wolfe, University of Toronto	 2,000


Howard Charles Green: The grants are made to the scientists direct?


Clarence Decatur Howe: The purpose is to make one man responsible for producing results. If you just made it to the university it might be dissipated in general activities, but when it is made to a certain professor in the university he is held responsible.


Howard Charles Green: Will payments in the present fiscal year be to the same scientists?


Clarence Decatur Howe: Yes, I am told they will be the same for this year.


[Stage Direction]
Item agreed to.
Atomic energy project-
299.	Operation and maintenance, $7,089,371.
Howard Charles Green: What is the reason for the increase in this vote?


Clarence Decatur Howe: Higher salaries and cost of materials. The revenue from the operation of

the present pile is expected to offset its cost of operation in part only. When the new pile is in operation it is expected that the production project will be self-sustaining.


Howard Charles Green: I notice there is an estimated revenue for the present fiscal year of $900,000, whereas last year it was only $180,000.


Clarence Decatur Howe: Yes.


Howard Charles Green: There appears to be a large increase in revenue.


Clarence Decatur Howe: Yes.


Howard Charles Green: This is all for the plant at Chalk River?


Clarence Decatur Howe: That is right. The revenue is obtained from the ready sale of products, particularly plutonium. The purpose of forming the crown company was to put the operation on a commercial basis. While there will probably always be a vote for experimental work it is expected that the plant will operate on a commercial basis without cost to the crown.


[Stage Direction]
Item agreed to.
Atomic energy project-
300.	Construction or acquisition of buildings, works, land and new equipment, and to provide for payment to Central Mortgage and Housing Corporation for housing and other works to be constructed at Deep River during 1952-53, $3,141,850.
Howard Charles Green: Is this for housing at Deep River for the atomic energy staff?


Clarence Decatur Howe: Yes.


Howard Charles Green: How many are there on the
staff?


Clarence Decatur Howe: A total of 1,424 at Chalk River.


[Stage Direction]
Item agreed to.
301.	Construction of a new reactor and auxiliary buildings and services (revote, $4,300,000), $7,000,000.
Howard Charles Green: This is for the new reactor and only about $2,700,000 was spent last year. Can the minister tell us what the total cost will be and when it is expected the reactor will be completed?


Clarence Decatur Howe: The estimated cost of the finished plant is $30 million, including the heavy water which will cost $6 million or $7 million. The completion date is 1954.


Howard Charles Green: When the atomic energy project was under discussion last March I suggested to the minister that a special committee of the house should be set up to study the atomic energy plans of the government. At that time the minister said he was not against it, but he was not in favour of it, and he thought next year would be a preferable time to set up a committee. I did not press the matter then or discuss it with the other opposition parties, but I am wondering

whether the minister would be willing to set up such a committee in the 1953 session.
It seems to me that the whole atomic energy development has gone ahead much faster than anyone expected. Obviously we are going to have atomic energy plants much sooner than anyone had hoped for, and they will be of great importance to Canada. I suggest that parliament should at least be trying to keep up to date with what is going on, and one way in which that can be done is to have a special committee. I must admit that none of us who were on the committee in 1949 knew very much about atomic energy or scientific developments, but at least the result was to make all those members who had the good fortune to serve on the committee ardent supporters of the atomic energy project. I believe it would be most beneficial to have a similar committee at the next session and I ask the minister to give his views on that point.


Clarence Decatur Howe: As far as 1 know there is no objection to having a committee next year, and I shall be glad to arrange it if the group of members that visited the plant and are somewhat familiar with the operation think that it is wise.


[Stage Direction]
Item agreed to.
DEPARTMENT OF TRADE AND COMMERCE Exhibitions-
788.	Canadian international trade fair, 1953-to provide for preparatory expenses of a Canadian international trade fair in 1953, the remaining amount required to be provided in the main estimates for 1953-54, $319,000.
Howard Charles Green: Why is it necessary to vote this amount in advance?


Clarence Decatur Howe: The vote always comes in two sections. The preliminary work goes on between fairs, work such as advertising and other arrangements, and that is covered by the supplementary estimates while the expenditures of the actual fair will be covered in the estimates for 1953. We are simply following the usual practice.


[Stage Direction]
Item agreed to.
Canada Grain Act-
Canadian government elevators-
789.	Operation and maintenance expenses-further amount required, $192,909.
John George Diefenbaker: Would the minister
explain this item, and in particular inform the committee what government-owned elevators are under lease to private grain companies. Some years ago the situation was that one or two government elevators were leased to private companies, and I was wondering whether or not that system still prevails.
55704-230J
Supply-Trade and Commerce


Clarence Decatur Howe: Yes. The reason for the supplementary vote is the increased business that is being done. All branches of the board of grain commissioners' service are now operating at a profit. I believe the profit this year for grain handled in the government elevators was about $800,000, and I believe the fees collected by the board more than cover the respective expenses of the board of grain commissioners. That is due wholly to the very considerable volume of this year's crop. All elevators owned are operated by the board except the elevator at Fort William, which is leased to the McCabe Grain Company. The reason it is leased is that it is very difficult to operate an elevator at Fort William without a line of country elevators feeding it. We have discussed diversion charges at some length in the committee on agriculture, and the fact of the matter is that if diversion charges are paid to divert grain to a government elevator there is not much in it for the government. It seems a better arrangement to lease the elevator to the McCabe Grain Company which has its own feeder system and can operate the elevator profitably. The government has an assured income through rental of the elevator.


[Stage Direction]
Item agreed to.
Special-
790.	To provide hereby, notwithstanding anything contained in the Financial Administration Act or any other act or law, for payment out of the consolidated revenue fund to the widow of the late Joseph MacLeod Boyer of an annuity at the rate of $1,248 to commence from February 1, 1952, and to continue during her lifetime, $1,456.
Howard Charles Green: Will the minister explain this vote?


Clarence Decatur Howe: We had a very sad calamity in the trade service several months ago. Our trade commissioner in Egypt was killed in terrorist activities there. This is a pension for his widow. He was new in the service and had very little pension accumulated through the department. This pension is based on the military pension payable to one with the rank of colonel, which is about equivalent to his status in the Department of Trade and Commerce. The widow was left in destitute circumstances and this provision is being made for her. Under the circumstances I think hon. members will feel that it is a matter of equity.


Howard Charles Green: We are very glad to approve a vote of this kind.


George Clyde Nowlan: I should like to say one word on this item. I have known the gentleman personally for many years. He was a classmate of mine and president of our class, and a gallant gentleman. I understand from reports that have been received that he might

Supply-National Defence have saved his life on this occasion had he not acted as he chose to do in pursuance of his duty. I am sure this is a vote which will meet with the approval of all members of the house.


Stanley Howard Knowles: What has been said is
certainly true so far as all of us in this group are concerned. I hope that the minister or the people who dealt with this matter did the best they could. It would seem to us that the amount is not very high. Is this amount the best the minister felt could be done for Mr. Boyer's widow?


Clarence Decatur Howe: Treasury board went over the matter very carefully. They were somewhat reluctant about establishing the principle that payment on the scale of a military pension should be given to a civilian, but under the circumstances it was believed this was equitable, and it was the best I could do. I am very sympathetic. Mr. Boyer was one of our best trade commissioners. He was located in one of the most difficult posts and, as has been said, he acted very gallantly in trying to save other people in the building.


Mr. Fair:: We in this group also agree with the decision made by the government and hope that the provision is satisfactory.


[Stage Direction]
Item agreed to.
DEPARTMENT OF NATIONAL DEFENCE Defence services-
248. To provide for the Canadian forces, the defence research hoard and other expenditures relating to defence, including contributions toward the military costs of the North Atlantic Treaty Organization, and notwithstanding section thirty of the Financial Administration Act, to authorize total commitments for the foregoing purposes of $3,988,568,232, regardless of the year in which such commitments will come in course of payment (of which it is estimated that $2,346,221,325 will come due for payment in future years); and to provide for the estimated actual expenditures in the fiscal year 1952-53, $1,642,346,907.
Hon. Brooke Claxion (Minister of National Defence):: Mr. Chairman, I hope it would
meet the convenience of hon. members of this committee if there were an understanding along similar lines to that which we have had over the last four or five years regarding the method of proceeding with the discussion of these estimates. On previous occasions it has been understood, agreed, and generally followed that we should begin with a general discussion on this item and then when that is concluded proceed to deal with the navy, army and air force in that order, taking up the main subheadings, and then follow that with defence research and any other items. I take it that is the general view of the committee as to the most orderly way in which we can proceed.

It is not my intention to make a speech covering the whole ground of defence. We have already had three days' discussion on a motion to go into supply. That discussion took place on April 3, 4 and 8. In addition, there have been other debates dealing with defence matters which occurred on May 2, 12, 13, 19 and 20. There was an extended and detailed consideration of defence matters in the committee on defence expenditures which made its report to the house on June 10. Here I should like to express my own appreciation to the members of that committee for the very hard work they did on this very important subject. There was also a white paper tabled last Friday which covers the ground in a general way and also deals with defence expenditure and the appropriations under various heads.
It occurred to me that the most useful thing I might do at this time would be to touch on the highlights of the events of the last two years and then discuss with hon. members some of the problems with which we find it most difficult to deal in the years that lie ahead. Before doing that, however, I think you would expect me to say a few words about the general international situation, the climate which determines the temperature of the cold war. You will agree that lately there has been some evidence of a general feeling that the tension has relaxed. The impression has apparently been created somehow that for some reason the international situation has improved. Subject to one important exception, which I will mention later, I can see no fact, no event, no development which would justify this more optimistic outlook.
As to what are the reasons for the change in public sentiment, one guess is as good as another. One view might be that it is due to the rash of elections here and elsewhere. People do not like to be taxed for anything, and that includes defence. In the atmosphere of an election, whether it be in the United States, Canada or elsewhere, the natural tendency is for it to be said that taxes are too high; and this leads by a perfectly natural process to the feeling that one of the principal causes of high taxes, namely defence expenditures, is not as necessary as we thought a few months ago.
What is the position? No one I know in a position of authority or responsibility believes that war is likely in the near future; but no one knows that there will not be war and nothing has occurred to make the danger of war less than it was two years ago except perhaps the very fact that we have been successful in avoiding war over a difficult

period. Whether it be due to what our allies and ourselves have done in building up our strength to prevent aggression under the North Atlantic treaty, or whether it has been due to what our allies and ourselves have done to stop aggression under the United Nations effort in Korea; whether it be due to the industrial or economic strength-yes, the strength of the ideals of the freedom loving nations-the fact is that since the North Atlantic treaty was signed three years ago we have had three years of freedom from war.
Our experience before 1949 led us to enter into the North Atlantic treaty in order to build strong foundations for freedom and peace. That decision was entered into, that decision has been acted upon, the treaty was made, the build-up is occurring and we have succeeded in achieving that avoidance of war which was our original goal. There is no ground for discouragement; there is no cause for complacency; there is no reason for retreat. We are doing what we set out to do, and so far we are succeeding in our purpose.
Having set our hand to the plow, having tooled up the factories, recruited and trained troops, we must continue the difficult task of maintaining our effort. The necessity for taking this attitude, the need for continuing effort, and the difficulty we can expect to meet in obtaining continued support for what is needed have been pointed out by me on numerous occasions over the last three or four years. So I make two points at the outset. First, there is no cause for retreat, discouragement or complacency. Second, we must face the necessity of continuing this effort until some other foundation for security is found.
Now, against the background of these general remarks and the other discussions that have taken place, I would like to review in the briefest form some of the things we have been doing about defence since Korea -that is, just two years ago. Two years ago today, on June 24, 1950, we had a defence budget of $425 million. We planned to build up to a strength of possibly 50,000 officers and men of the three services and we had practically stopped recruiting because we were within sight of that goal. That was two years ago today; but two years ago tomorrow, on June 25, 1950, the communists ruthlessly made their unprovoked act of aggression on South Korea with the result that, under the leadership of the United States, the United Nations intervened to stop that aggression. Then and only then the United Nations and the North Atlantic treaty
Supply-National Defence nations realized that they must speed up the further expansion of their defence activities.
Following the October meetings of the North Atlantic treaty defence ministers at which defence requirements and plans were agreed to for the first time, we arrived at a three-year program, just like all the other nations; and that was announced to this house on February 5, 1951, and has since been acted upon.
I should add, however, that no program is static, that already we are extending our defence programming to the end of 1955 and into 1956. We are now seeing the results of the speed-up of this expanded program as it was affected by the events which occurred two years ago tomorrow. We are now beginning to see the tangible results in forms which can be seen by the Canadian people. In those two years, in the navy we have had continuously on duty in Far Eastern waters three destroyers which have given a good account of themselves. Orders have been placed for 54 new vessels. Seven have been launched and 19 more will be launched this year. We are meeting our commitments under the North Atlantic treaty for the current year, having 24 ships employed in the North Atlantic regional group in addition to the ships we have for the defence of our coastal waters and harbours.
Over forty members of this parliament saw the ceremonies that took place at Sorel just ten days ago which marked further stages in our defence program with equipment for the navy and army. There was the sponsoring of two new vessels, H.M.C.S. Labrador, a new Arctic patrol vessel, and the minesweeper Chignecto. More striking was the delivery of the first 3-inch 50 calibre navy gun. Hon. members will be struck as those who went to Sorel were struck with the size of the plant and the complexity of the operation it had to do. Just three figures point this out. Each gun-each of these 3-inch 50 calibre guns-has 28,000 parts. It took 20,000 drawings and 30,000 different machine operations to bring them to that unusual state of acceptability remarked upon by the U.S. naval ordnance and referred to by the admiral representing the U.S. navy on that occasion as well as by the Minister of Defence Production on a previous occasion in this house.
Naval training is being pushed ahead for officers, tradesmen and ratings. A new school was opened at H.M.C.S. Montcalm at Quebec city for French replacements and it is now going ahead with its full planned quota.
As regards the army, since Korea we have raised the 25th brigade for service there. Its

Supply-National Defence splendid work and reputation speak for it better than any words of mine could, do. The 27th brigade was similarly raised for service in Europe and has just completed extensive manoeuvres. Meanwhile, in addition to raising men for these forces, we have raised men to provide for rotation and maintenance of the forces we have for the defence of Canada.
We have continued the airlift to Korea without fatal or serious accident and with indeed that remarkable record of performance which has characterized all the transport operations of the R.C.A.F. We now have three Sabre squadrons in England waiting to take their place in Europe. This represents a significant strengthening of the air defence of that part of the North Atlantic area. Other squadrons will be built up as aircraft and aircrew become available and as airfields are ready. The chances are that the limiting factor on the arrival and participation of our squadrons under the North Atlantic treaty will not be either aircraft or aircrew but airfields. All these had be timed in together, but it all has moved forward so that we hope to keep up, and I hope we are going to keep up, the rather difficult target I set of having a squadron brought into existence about every two months. The R.C.A.F. operates 31 training establishments, and I think 32 flying fields.
Territorial defence is moving along. We shall be bringing into operation in successive months some of the large permanent radar stations which will take the place of the temporary stations on which we have had to rely up to date. In addition to this contribution of practical assistance to the United Nations and North Atlantic organizations, we have in two years given or offered equipment and ammunition totalling $273 million, and provided training facilities at a cost of $48 million.
During the two years since Korea we have taken into the armed forces, that is the regular forces, a total of 70,000 officers and men. I do not believe the Canadian people have begun to realize just how big this whole operation has been, and how big it has become during this period. Consider it; 70,000 officers and men taken into the armed forces, and of course a considerable number have been lost through casualties and other wastage.
Having said something about the progress, I should like to say something about the problems that arise in connection with a program of this size and scope. The last figure I gave, of 70,000 men and women taken into the armed forces in the two years
since Korea, has been in part made necessary by the principle of rotation. So far as I know this is the first time in Canadian history that we have had a considerable force abroad in peacetime, and have had to face the necessity of maintaining them at the same time. I announced that if the military situation permitted we would rotate men after they had served a year in the Far East. The announcement was in the following terms:
As long as the military situation permits, men will be eligible for return to Canada who have approximately twelve months' service in the theatre, but no man should be required to serve more than one winter in Korea.
I am glad to say it has proved possible to carry this out as planned. Brigade headquarters opened at Pusan in Korea on May 5, 1951. The last unit of the original brigade arrived back in Canada June 5, 1952, and rotation will be completed when approximately 1,100 personnel who are to sail from Japan towards the end of June arrive in Canada on July 10. The men who have returned to Canada and stay in the armed forces, remain in the second battalions of the R.C.R., the Princess Patricia's and the Royal 22nd. Armoured corps men have been posted to the Lord Strathcona's and the R.C.D.'s. In Korea their places were taken by the first battalions of the infantry regiments and by the first regiment of the R.C.H.A.
We have formed in Canada another brigade, now largely at Wainwright training, replacing those now in Korea. Where before Korea we had in existence one battalion of each of the R.C.R.'s, Princess Patricia's, and Royal 22nd, a regiment of armour and a regiment of artillery, R.C.D.'s and Lord Strathconas, making a total of only six major units, today we have twenty-two major units either in Canada or abroad. This represents a considerable problem in rotating forces and in providing accommodation, about which I shall have something to say.
At the same time the 27th brigade is in Europe. It is a highly trained fighting unit in tip-top shape. The arrangement there is that married men will be returned to Canada after one year abroad and single men after two years. This will mean that rotation will be, in the first instance, on an individual or sub-unit basis. The men to do this are now training in Canada, mostly at Wainwright. The first of these men to return will be coming back around November or December. It does not seem very long since I saw them on their arrival at Rotterdam in November of last year.
Experience I think has shown that the period of a year for Europe is hardly economic, even when the men arrive trained up to unit standards. Also having different

periods of rotation for married and single men complicates the operation. What we propose to work toward, and what we hope we will be able to work toward, is to have the period of service established at eighteen months for everyone, working into replacement by units so that men stay with their friends and keep the unit spirit. With the men at present abroad we shall adhere to the intention expressed-it was not an undertaking-when they went abroad.
One very useful result of rotation is that the Canadian armed forces will, to an extent never before possible, be increasingly composed of men who will have had post-war experience and training, either under combat conditions in Korea or under conditions which obtain in Germany where they are able to engage in large scale manoeuvres as a brigade or part even of larger formations. If war does occur, the Canadian forces will have a hard core of officers and men who will not be seeing active service outside Canada for the first time.
Then, in addition, we shall have available in Canada a considerable number of officers and men who, having seen service in Korea or Germany or in Canada, have since left the ranks for one reason or another. At the present time there are some 27,000 officers and men who have retired from the armed forces since the end of the second world war, and who to a considerable extent constitute a readily available reserve, adding to the reserve we always have in the reserve forces.
In order to carry out a policy of rotation, it is necessary to have a formation in Canada, or its equivalent, duplicating each formation abroad. It is necessary to have men in readiness, in a condition of training so that they can take their places in replacing their comrades either in action in Korea or in training in Germany. The intention is that the operation be carried on without a break. The performance of those returning will be equalled by the performance of those replacing them; so far that has proved possible. In the case of the army, as I said this means that for every formation abroad there must be a corresponding formation at home. In the case of the navy we have employed five ships to keep three in the field. In the case of the air force we have gradually worked through several hundred more officers and men, both aircrew and ground crew, than have been employed at any time on the air lanes to Japan. Meanwhile of course we have to maintain in Canada the mobile striking force. On previous occasions I have given reasons why this formation cannot be used for purposes of rotation; but this must not be
Supply-National Defence regarded as in any sense a static formation. The men who returned from Korea and stayed on in the armed forces are largely now in the mobile striking force, and many of them are undergoing airborne and arctic training. All of them will have that in time. Altogether we now have in the armed forces more than 3,500 officers and men who have had airborne training, and you see them in all types of formations.
As I have said, where we had two years ago six major formations, today we have twenty-two; and this points up the problem of providing accommodation for the armed forces.
We will have to relocate a number of major units at various places across Canada, and this will enable us to give a much more satisfactory geographic distribution of major units than has ever been possible before. The great majority of these units will be established at existing camps not far from urban centres or at places to be built close to urban centres. It is not our intention to relocate the permanent headquarters of these major formations at isolated centres. Camps like Wainwright* and Shilo, which are fairly isolated, will be used as training schools, but major units will not be located at those places. While they are fine training areas, Borden and Meaford no longer provide quite the range and variety of ground needed for the employment of artillery and tanks in all respects, and it would be costly, both in money and in the employment of useful agricultural land, to enlarge either of those areas very much. Accordingly we will be moving the armour school to Shilo, where the artillery school is already established and there, with the addition of some land at relatively little cost, we will have an area sufficiently large to enable us to train both armour and artillery on a considerable scale.
The school staffs at Shilo and the build-up of other formations at Borden will mean that all available accommodation will be used at both places, and indeed we will have to continue to construct more accommodation at Borden.
What I have said makes it evident that we will need assistance and widespread support to continue to secure the men we want. It is terribly important to make the young men of our country feel that they are needed in the armed forces; to make the members of the armed forces feel that they are members of the community, that they belong to the community, that they matter to the community, and that they are supported by the community. For every story of disorder or crime on the part of the armed forces that may be played up in the press, there are

Supply-National Defence two hundred records of useful service that, unfortunately but naturally, are never noticed. Because of this we in national defence, yes, we in parliament, must do everything we can to ensure that the services deserve a good name and that they have a good name.
Closely associated with obtaining the men and women we want is their training in leadership. Increasing the size of the armed forces from 47,000 to 97,000 in the two years has meant a brand new problem in officer production. During that time we were able to add 6,500 officers to the regular forces. In the white paper reference is made to my announcement of February 5, 1951, that the planned peak of the regular forces was 115,000. The figure now works out, according to our plans, to something in the neighbourhood of
120.000	from 1954 on. This has created a continuing need greater than that which could be filled through the existing officer training establishments. Accordingly we worked out, and on June 12 I announced, three important changes or rather developments in the arrangements for training officers. These were, first, a two-year course at the service colleges or universities for officers not requiring technical qualifications; second, assistance to candidates who engage to serve for at least three years after they are commissioned, and third, the establishment of a new Canadian service college cadet school at St. Johns in the province of Quebec.
Through these means we should be able to get the number of officers required after the forces have reached their planned strength. In the meantime we estimate that we have about 50,000 veteran officers still fit to serve who could be available to meet, and so enable us to meet, an emergency without any difficulty if it occurred in the near future, pending the increase in the training facilities that I have referred to.
Our reserve forces continue to be of the utmost importance, and they receive all possible assistance and support. But it is no part of the role of the reserve forces to furnish front-line strength ready at any moment to fight a trained enemy abroad. Their job, and I refer to the army particularly, remains what it was in the first and second world wars in which they did so well. The strength of the reserve forces of the tnree services since Korea has increased from
50.000	to 57,000. The aspect of their role, to which I have just referred, is brought out by the fact that another 7,600 members of the reserve forces have joined the active forces during this period of two years.
I have mentioned the all-important question of manpower and leadership. We want
fMr. Claxton. i
men of the type we have, and they need the best kind of equipment. Here the problem of defence planning becomes most difficult during a period of transition, and this is a period of transition. If there were a war today the weapons used would be largely those of the second world war. The only substantial improvements would be in long-range heavy bombers, the effectiveness of radar, the better performance of anti-tank weapons and, perhaps most important, the great improvement in the performance of jet fighters.
It is always a difficult question in a period of rearmament to know when to cease development and commence production. The work of development must be carried on mainly by our larger partners, and for us the question generally is when to purchase or put into production in Canada a model of equipment developed elsewhere. If this is too soon, the weapon may be obsolescent when it is most needed. If it is left too late, we may lack the weapons we need.
It is of course out of the question for a country like Canada to keep re-equipping with each succeeding development. We cannot afford to introduce developments which represent only marginal improvements. In this field one can never be sure that one's judgment is right except in relation to the past and reasonably near future, and errors of judgment are possible. So far, however, we seem to have steered the right course. For example, had we gone into the production of aircraft like the Vampire Mark III or Mark V and certain types of other weapons, as was sometimes suggested, we would now have the armed forces equipped with weapons that were already becoming obsolete. As it is we are producing the latest types of equipment we know of, well up in line with the United States and the United Kingdom.
Mention of our two largest partners brings me to the question of standardization. The ABC committees, as they are called, consist of representatives of the United States, Great Britain and Canada, and they are continuing to work on standardization within the framework of NATO. One branch for which we are responsible has to do with all matters relating to mapping. This work is complete, and has been accepted. Very considerable progress has been made in the standardization of battle procedures. This has been agreed to for the navy, and agreed to in part for the army and the air force. There has also been an acceptance of standard practices regarding communications.

As regards weapons, steady but unspectacular progress is being made. As new weapons are on the secret list until brought into operational use, it is not possible to report in detail. But I can tell hon. members that the other countries concerned have shown very considerable interest in the developments we have been making in regard to light wireless sets, flame throwers, anti-tank weapons and vehicles for use in winter under arctic conditions, as well as in a number of other lines.
While experience in Korea has shown that it is possible without too great difficulty to supply troops using different types of weapons and ammunition, there can be no doubt that the advantages of all using the same type would be very considerable. The difficulties in this respect of the aggressors in Korea make this quite clear.
Here I may point out that the United States, the United Kingdom and ourselves are using 3-5-inch army rocket-launchers, 3-inch 50 calibre naval guns, 75 mm. recoilless rifles and various types of aircraft, machine guns, rockets, torpedoes and anti-submarine bombs. On a large range of weapons we have reached agreement on the desirable military charac-teristcs, and design and development are being pressed on by the various teams.
In the case of the rifle and small arms generally, I have previously reported on the position taken by Canada. When it was announced in April, 1951, that the United Kingdom would proceed with the -280, our intervention resulted in a meeting at Washington in August and in further consideration of the problem by a committee of high ranking officers under North Atlantic treaty arrangements.
The present position is that the Americans, because of their large stocks, are prepared to continue to use the M2 semi-automatic Garand with the -30 rimless cartridge for a considerable period ahead. They are continuing to work on design and development of a new round and rifle having the agreed military characteristics. The British are working towards the same agreed characteristics, largely with the -280.
We hope that it might be possible to produce a round which would combine the characteristics of the British bullet and the United States cartridge, and accordingly we are doing research and development work on this with the support of both the British and United States partners. This work is being undertaken by a team representing Canadian Arsenals Limited, the defence research council and the Canadian army. We will keep in close touch with corresponding teams working
Supply-National Defence in Great Britain and the United States. From discussions I have bad in Washington with the secretary of the army, Hon. Frank Pace, and with Lord Alexander, secretary of defence in the United Kingdom, during the last week, it is evident that there will be a full interchange of information and a genuine effort to arrive at a common goal. As it is, the British and American weapons that have been designed and are in process of further development are very much closer to each other than they were a year ago.
Like the British, we are tooled up to make the -303 rifle and round and have a sufficient number of these to enable us to meet any current requirements and, pending further production, to equip our forces. Should this become necessary in another world war we could go into production at a high rate on the existing -303 rifle and round in a short time.
Until the end product of this development effort by the countries concerned becomes more evident, it would obviously be unwise for us today to go into the production of more than the minimum needed to fill immediate needs. Everyone at some time is going to adopt a new rifle and round. When that [DOT]time may be, it is impossible to say.
As regards field guns, we are making the 155 millimetre American-type gun for ourselves, for the United States, and for mutual aid to North Atlantic nations. This gun, like the ships to which I referred and the 3-inch 50 calibre gun, is being produced at Sorel, and quantity production will begin before many months are passed. At Sorel production is also being undertaken on the 120 millimetre gun for the United States army.
Anti-tank weapons and mortars are largely accepted as standard and both weapons and ammunition are being produced in Canada today.
Another problem presented by our type of force particularly is the standard of living we are going to provide for our armed forces. We have set as the right standard the standard of living which men of similar education and aptitude would obtain in corresponding civilian occupations with good employers. The committee on defence expenditure went into this and I am not going into it in any detail now. Moreover, there are some interesting figures in the white paper.
There are one or two points, however, to which I should further refer, particularly on construction. I mention this because people are surprised at the amount of construction we are finding it necessary to undertake. This year we are seeking a total of $563 million for construction, part of it to be met out

Supply-National Defence of cash appropriations for this year, and part out of commitments for future years. Of this we expect to spend $244 million in the current year, as compared to $92 million in 1940-41 or $152 million for the wartime peak year of 1943-44, and $173 million for last year.
The reason for part of this construction is doubling the size of the regular forces in the two years since Korea. An increase from
47,000	to 97,000 means that we have to find accommodation somewhere for the single men and the married men and their families equivalent to a city having a total population of 50,000. That is a lot of construction.
Wherever possible this is found through the renovation of wartime huts; but there is a limit, physical as well as financial, to what can properly be done along these lines. These huts were only expected to have a life of four or five years and for the most part were built in the cheapest and quickest way that could be found. A two-storey air force H hut cost $59,500 in 1941 and accommodated 304 men on a double-bunk basis. It now accommodates 168 men on a single bed basis after renovation. Today it costs about $100,000 to renovate such a hut; and that has been done with all the huts in locations where they can be used. That gives them an extra life of about 30 years.
To build a new R.C.A.F. barrack block for 250 men costs a total of $592,590. That allows about eighty square feet of space per man, which is about what is laid down by health authorities. This provides for four men in a room 16 by 20 feet, and it is contemplated that in an emergency we would have double decker beds and so double this accommodation.
In addition officers and men must have mess halls. and kitchens. The standard mess hall seats 500 men and has kitchen equipment that can deal with 1,000. The type of building, the amount of space, the quality of furniture and the kitchen equipment are about what you will find in an average cafeteria. This building is done for us by Defence Construction Limited, as agent for the Department of Defence Production.
Married quarters are built according to designs worked out by the Central Mortgage and Housing Corporation and provide similar standards of accommodation to those used by C.M.H.C. in housing projects and veterans' plans across the country. We collect for rent for these houses an amount which varies in proportion to the subsistence allowance for the married officer or man. If he gets a married quarter he does not get the allowance except for approximately $10. The amount collected for rent varies from $51 for


a private to $103 in the case of a major, and there is not much difference, generally speaking, in the accommodation. I found recently in one Canadian city that they had a subsidized housing plan, assisted under the provisions of the National Housing Act, under which they were building 88 houses. The accommodation was about the same as our married quarters. However, the average rent was $41, with the lowest at $20, indicating an average lower than the lowest we charge private soldiers.
In addition to living accommodations there are operational buildings of all types, including depots, warehouses, workshops for all three services, as well as hangars and radar stations costing very large sums. Of the construction program this year we plan to spend roughly 30 per cent on living accommodation and the like and 70 per cent on operational buildings and services.
Obviously we must give the service personnel shelter and must provide this on a standard comparable to that they would enjoy if they were in equivalent positions in civilian life. It should be remembered that a good part of the service personnel spend a good part of each year living under conditions of considerable hardship, and virtually all of them are posted to another station every two, three or four years. This has a definite bearing on the type of accommodation and the scale of the furnishings provided. All this affects the morale of our armed forces. They must know that the treatment they get, the food they receive, the clothing they are issued and the weapons they use are as good as can be found. That is our intention. Everyone who has been in Korea or in Europe says that the morale of the Canadian forces is as high as it has ever been. I believe that is true also of the men in Canada.
We civilians, we people in parliament, can affect the morale of our forces. It must be remembered that this is a large operation. It is an effort by the whole people of Canada. Just think of it; we have in the armed forces, active and reserve, and their dependents, along with the civilians engaged in the work of the Department of National Defence; in those engaged directly in defence production, in defence industry or in support of those operations, just about a million and a half Canadian people or 10 per cent of the population of Canada. We are seeking in this vote an amount which represents about 10 per cent of the national income of Canada. Consequently it is right to say that this is an effort requiring the support of us all, indeed the support of all of Canada.


Mr. Pearkes:: Mr. Chairman, the policy of the government as far as national defence is concerned has been discussed on several occasions during the early part of this session. The minister called attention to the various debates which have been held. Only a few days ago a white paper was issued entitled "Canada's defence program 1952-53". Since very little new information has been given to us, either in the minister's remarks this afternoon or in the white paper, I do not intend to spend a great deal of time discussing policies upon which I have already offered my comments.
When the policy was outlined two years ago all hon. members supported the general principle of supplying strength in order to prevent aggression and playing our part by supplying such forces as were necessary under the United Nations agreement or under the North Atlantic Treaty Organization to prevent the spread of aggression where aggression had already broken out. I think all hon. members realize today that we must continue our efforts in that direction.
The minister referred to the developments which have taken place in the two years since the outbreak of aggression in Korea, and he took particular credit to the government for the development in the strength, equipment and organization of our forces during that time. If it was necessary to make such a great effort during the last two years since the outbreak in Korea, it must be realized that the same government was in power and had in pre-Korean days allowed the defence forces of this country to sink to a position where they were far below the point which would provide reasonable security; nor were they in a state of efficiency or strength to enable us to meet such international obligations as we might be called upon to meet. In the pre-Korean days members on this side of the house called attention to the state of our defence forces. There had been a rapid demobilization of equipment and camps, a depletion of units and a failure to keep up training strength so that when the actual threat of aggression did arise there had to be a rapid semi-mobilization, the sudden bringing into force of hastily organized units and reconditioning of camps which had been allowed to fall into disuse, and the hasty transfer of personnel from shore establishments to ships and from one unit to another in order to have something ready.
This government had allowed the defences of the country to fall into a perilously low state and, as the minister said, it was not until then, and only then, that the government woke up to the necessity of providing adequate defences for Canada. What has been the result of this hasty speed-up to which reference has been made? We see
Supply-National Defence that in these quickly organized units there has been exceedingly heavy wastage of personnel compared with the numbers taken on strength. In the white paper tabled in the house a couple of days ago one finds that the total strength at March 31, 1952 was 95,394 and that during the previous year of 1951-52 the intake into the forces numbered 39,033 while the wastage was 12,066. The heavy wastage of one in three is indicative of the lack of foresight used in the hasty mobilization of such forces as were required.
Those of us who were members of the committee on defence expenditure realize that there have been exceptionally heavy losses due to theft, fire and other causes, losses which are costing the taxpayers of Canada many millions of dollars. In part that is also due to the speed with which it was necessary to build up our forces after the period of stagnation that had existed in the pre-Korean days. I am wondering whether we are really building up our forces along the right line. Are we not still building up our forces so far as their organization is concerned along the old traditional lines that have been in existence for many years? The minister used words to the effect that if war broke out today we would have to fight largely with the weapons of world war II. I can think of no more disturbing statement that could be made to the house eight years after the hostilities of world war II ceased.
With the threat of aggression today and the possibility of war almost around the corner, we are told that we would have to fight another war largely with the weapons with which we 'fought world war II. What concerns me even more is the fact that if we had to go to war today we should have to fight with very much the same organization we had in world war II. Have we really taken cognizance of modern trends? Are we really aware of the new concept of war today which consists so much of highly mobile hard-hitting units to which I have referred in the past? Surely the day of large formations of infantry soldiers is really past. The whole modern trend as visualized by modern military writers indicates that far more reliance will be placed on small, compact forces which are capable of being transported by air, are highly mobile and can be moved to any theatre of war.
A few years ago we heard a good deal of talk about the unification or integration of the various services. It seems to me we are drifting farther and farther away from the concept of a unified defence force. In the white paper to which I have already referred there is a discussion on page 5 of our contribution to the forces of the North Atlantic

Supply-National Defence Treaty Organization. We are told that the R.C.A.F. squadrons which are to be sent to Europe will be organized into an air division which is the air force formation normally adequate to provide air support for an army of four or more front line divisions. We are not relating our contribution as far as fighter forces are concerned to the contribution we are making so far as ground forces are concerned. We are supplying a ground force of one brigade, the 27th, to Europe; but so far as the air force is concerned we are making a contribution equivalent to the formation which would normally provide air support for four or more front line divisions.
We have not got four or more front line divisions. We do not plan to place four or more front line divisions in Europe; but it seems to me there should be some relation between the type of ground force and the type of air force that we are supplying. It seems to me we are still thinking in terms of world war I and world war II when we talk about the number of air force fighter squadrons which will support front line divisions.
Another indication of the additional expense which has been caused to the taxpayers of this country on account of the hastily organized forces is, in my opinion, this question of rotation. It has been found necessary to have this very expensive form of rotation; and it is very expensive if you are going to ship personnel across the Atlantic to Europe and leave them there for a period of only twelve months. For centuries the forces of Great Britain have been organized on the Cardwell system which provides for one regular battalion of a regiment to be stationed abroad and another battalion to be stationed in the United Kingdom, the two units being rotated periodically; but there never was such an extravagant form of rotation as that of transferring personnel of those units between the homeland and overseas every year.
Obviously the efficiency of the unit cannot be maintained with such rapid rotation of personnel; and though perhaps more men are gaining some experience, the unit cannot hope to maintain the same standard of efficiency as it would if there was a more extended period. Therefore I think the minister is wise to suggest that a change be made to extend the period of rotation, to somewhat reduce the enormous expenses which are now burdening the taxpayer; but I doubt very much if a period of an additional six months will meet the requirements.
The minister then referred to the question of the air force contribution to the
[Mr. Pearkes.l

North Atlantic Treaty Organization and indicated that the bottleneck might not be the actual raising of the personnel or the provision of aircraft but in the construction of airfields. That danger was brought to the minister's attention many months ago by the leader of the opposition who, at the last session of this parliament, called attention to the lack of technical troops in Europe and advocated the provision of engineer units which would assist in the construction of these necessary airfields in France and Germany. It is obvious that airfields are the most essential requisite for the efficient operation of any air force. We know that the airfields in France were largely destroyed and have not been rebuilt. Much of the big machinery which was available in France in pre-war days had been moved away into Germany. France suffered the experience of being an occupied power for many years and it would naturally take her some considerable time to once again build up her construction industry, which in France was faced with tremendous obstacles and with a tremendous task because there had been all the destruction of her cities and lines of communication. Those had to be restored in order to bring about an economic revival in France. That had to go on side by side with the reconstruction of military facilities which were essential for maintaining the forces of NATO, and it is therefore quite obvious that one of the first things that must be done before any R.C.A.F. component can work in Europe is to provide the additional airfields.
We are told there are to be two airfields constructed in Germany and two in France which will accommodate the twelve squadrons of the R.C.A.F. which are to be sent there. I believe that in this white paper the cost is mentioned as being somewhere in the neighbourhood of $22-7 million. That is a heavy expense to meet, and I wonder if there are not ways by which it might be reduced. I believe the paper mentions that the land for these airfields will be provided by the Republic of France but that the construction of the buildings, the construction of the landing strips and the general preparation of the airfield with all the necessary equipment will be paid for by Canada.
If that is so I cannot help feeling that Canada should approach the construction of these airfields along the most economical lines possible. If we simply tell the French government to go ahead and do the necessary work and we will pay for it, then we are not likely to have a very economical contract. It seems to me that if we are going to pay for this work we should have a good deal

to say as to how this work is going to be done, the type of machinery which is going to be used, and if necessary what firms are to carry it out. I do hope there are plans extant which will see that the construction of these airfields which are going to cost the Canadian taxpayers millions of dollars will be carried out in the most economical as well as the most efficient manner possible.
I say I think it is of the utmost importance that these airfields be constructed. In fact I would attach more importance to the construction of these airfields than to the dispatch of the actual fighter squadrons. I am not sure that it should be necessary for us to have all twelve squadrons located in Europe at one and the same time. I hope the minister will be able to tell us the causes which led up to the inclusion of the additional squadron and why that has become necessary, and will indicate the number of R.C.A.F. personnel who will actually be stationed in Europe. After all, it does not take very long these days to fly a squadron of jet planes to Europe. One sometimes wonders whether the actual stationing of those troops in Europe is essential. I have no quarrel at all with the provision of those squadrons, but I wonder if they could not get their training as efficiently here in Canada, where the facilities for flying are better than in Europe. Might that not be a sound reason for retaining some of these squadrons here?
I can see the advantage of having certain squadrons immediately available in Europe. I can see the advantage of certain personnel receiving training in Europe and becoming accustomed to flying conditions there; but we are placing practically all our eggs in one basket by sending by far the larger portion of our fighter aircraft and our trained air force personnel to Europe. We understand there will be a discussion on the various types available for such squadrons as remain here in Canada until such time as the CF-100 becomes available. I do not intend to discuss the question of policy at any greater length, because as I said before it has already been discussed.
I welcome the minister's suggestion that we deal with the estimates section by section as indicated in the details, starting off I presume with departmental administration and inspection. Before we go on to a detailed discussion, I should like to say a word of appreciation to the minister for the way he has accepted the suggestion which was made last year that more details be given in the pages of detail where, following the practice of other departments, the number of personnel in the various ranks has been set out. The only thing I think we might have had a little improvement in is the way in which
Supply-National Defence headings are given. It was much easier to follow the various headings in last year's estimates than it is in this year's estimates. For instance, the navy, army and so forth were set out far more clearly, enabling you to find the various items for the services more easily in the details last year than in the details as shown in this year's book.
You will recall, sir, that when we were discussing these estimates last year you called every item. I think if we are to have an orderly discussion of these estimates, without limiting the powers of the members to ask various questions, it would meet my convenience at least if these headings, such as defence services, administration, navy, army, were called instead of going down through all these minor headings such as civilian salaries and wages, civilian allowances and so forth as was done last year. I think that would not only assist the minister but would give all members of the house a wider range for questioning. It would not limit them quite so much. I have some questions to ask, so if there are other members who wish to discuss policy, I shall sit down.


Louis-René Beaudoin: Is the procedure suggested by the minister, and as qualified by the member for Nanaimo, agreeable?


Some hon. Members:: Agreed.


Mr. Thomas:: I am not going to make a long speech on the policy of the department, because earlier this session I made my stand abundantly clear. I should like to take just a few moments, though, and make some comments on the evidence brought out in the defence expenditure committee. Possibly the minister could make some reply later. I agree with the member for Nanaimo that the estimates of this department are much clearer and are put down in better form than they were previously. I agree with the minister that I think his department is wise in going rather slowly on orders for small arms until some measure of standardization can be attained amongst the various NATO countries.
I should like to mention briefly the fires and thefts that have occurred in the various establishments, as mentioned in the defence committee. I am not going to be critical at all, except to say that it appeared to me that in many cases the department was asking for trouble. For example the answers given to me in committee concerning 26 C.O.D. showed that in March 1950 the value of the building was estimated at $900,000 and the stores contained therein at $18 million. When the fire occurred in June, 1951, the stores were valued at $16,720,000. In January, 1952, the stores were valued at $23,850,000. It would appear to me that the average value
3648	HOUSE OF
Supply-National Defence of the stores contained in 26 C.O.D. would be somewhere in the neighbourhood of $19 million.
The thing which struck me most forcibly during our investigations into the fires was the fact that, prior to the first fire and the recommendations made as a result of that fire, no sprinkling system had been installed and there was very little in the way of firefighting equipment. It would appear that in an establishment of this kind, where such tremendous sums of money were involved, every possible precaution against fire should have been taken. I agree that immediately after the investigation was made and recommendations were sent in, a good many steps were taken to eliminate the fire hazard in that particular building. But when we have a value somewhere in the neighbourhood of $20 million on the average, including the building and the stores contained therein, and particularly when no insurance can be carried, I would think every precaution should be taken at all times, and should have been taken before there were any fires whatsoever.
I did not have the time to dig into the various stores across the country, but I would imagine that very much the same condition could be found in all the various establishments that one might go into. I should like to know from the minister whether or not the same precautions and the same steps that are being taken at No. 26 C.O.D. and in some of the other places that we visited and investigated during the sittings of the committee are being taken in other parts of Canada.
I might suggest to the minister at the same time that even if it entails a little additional cost to the government or to the people of Canada, the whole thing might be speeded up. Those precautions might be instituted with a minimum of investigation, because in the long run we would probably save money, regardless of whether or not the thing were a hundred per cent perfect. We realize too that in the fall of 1951 a contract was issued to instal a sprinkler system in No. 26 C.O.D., which of course was after the second fire. I believe it is pretty well installed now. However, in my opinion it should have been done at the time the building was constructed.
I would not want to indicate that there is any doubt in my mind at the present time that they are doing everything they feel is possible to rectify the faults that are there. The point I should like to make is that in future, when any stores depot or other building that entails a lot of expense is constructed, all these fire protection devices should


be installed at the time of construction. If that were done we would save a whole lot of money, particularly in installation costs, if there were any fire at a later date.
Speaking generally on the theft situation, I do not want to make it appear that I think it is a bad thing. You are bound to find a certain amount of theft anywhere, whether it be in the service, in private life or in any kind of establishment. I know; I was in business myself, and used to lose the odd article out of the store. But I do think that in many instances the security precautions are not stiff enough. So far as No. 26 C.O.D. is concerned, for the life of me I have not been able to find out how anyone could take anything of any value out of there. Therefore any thefts out of there, particularly in recent times, are bound to be of a minor nature. But at the REME training camp at Barrie-field they have 1,216 acres. At the time of the thefts they had a security guard of only six men, which I think is entirely insufficient to cover a camp of that size, which would cover almost two sections. Perhaps the minister can indicate that these guards in the various establishments have been increased and that further precautions are being taken. I certainly hope so. I bring this to the minister's attention in the hope that he is considering some tightening up of the security regulations and some increase in the security guards. When the minister replies I hope he will tell us that that has been done.
Item stands.
Progress reported.



MR. DREW-REFERENCE TO REMARKS OF MR. SINCLAIR IN DEBATE ON JUNE 23

George Alexander Drew: Before you leave the chair, Mr. Speaker, I wish on a question of privilege to deal with something which was said yesterday at a time when I was not in the house. I might explain that it was necessary for me to be absent at a funeral at the time the hon. member for Coast-Capilano placed on record, together with certain statements which I do not propose to deal with in detail, one statement I feel should be corrected without delay. In his remarks, as reported at page 3568 of Hansard, which I did not have the opportunity to read when the house met this morning because it was not yet in my hands, I find that he quoted what purports to be a Canadian Press dispatch reading as follows, and referring to speeches I had made:
Speaking in French, he told audiences here, at Normandin, Mistassini and St. Felicien that family allowances should be increased, even doubled.

I feel sure, Mr. Speaker, that the hon. member for Coast-Capilano was well aware that this statement had been corrected. I noticed in the report that he had used some typically complimentary remarks about those who corrected press reports at other times. I have no doubt that his remarks applied to the Minister of National Defence (Mr. Claxton) and other ministers who have found occasion to make such corrections in recent months. In this case, however, I am not relying upon any correction of my own. The remarks I made were well and fully reported in UAction Catholique and Le Soleil which were represented at those meetings by reporters. They were in fact the only reporters present. The reports were accurate in every detail. They were based upon a written text which was strictly followed and which had been handed to them. I brought this to the attention of the Canadian Press when I saw their report on returning to Ottawa. I received a letter from the general manager of the Canadian Press, dated June 5, after they had an opportunity to inquire into the circumstances. That letter, in referring to this subject, had this to say:
We very much regret our inaccuracy and are issuing a corrective story for morning papers tomorrow.
I place that on record, Mr. Speaker, because the Canadian Press itself expressed its regret concerning this inaccurate report. I do not know yet what the source of that report was. There was no statement of mine made which by the greatest stretch of the imagination justified such a report. The papers which were represented there gave very full and very accurate reports, which indicated quite clearly that I had made no suggestion that family allowances be doubled. The Canadian Press very properly, and with the courtesy one would expect, after inquiring into the details, expressed to me their regret that they had on this occasion used an inaccurate report in their condensation of the dispatch they had received.


Mr. Sinclair:: Mr. Speaker, I regret that I did not see the apology by the Canadian Press in the papers. This statement of course received very wide coverage in the newspapers of Canada. I of course accept the statement of the leader of the opposition. But while I am on my feet I would like him also to comment on whether or not the quotation from one of his radio speeches in which he makes very offensive remarks about Quebec and the families of Quebec is accurate.


Mr. Deputy Speaker:: Order.


George Alexander Drew: I do not propose to comment on offensive remarks of that kind, which have no relation to the subject.
Privilege-Mr. Drew


Some hon. Members:: Order.


James Sinclair: I was only seeking to keep the quotations accurate.


Mr. Deputy Speaker:: Hon. members should know that when Mr. Speaker is on his feet they should, if they are standing, resume their seats.


James Sinclair: I am sorry.


Mr. Deputy Speaker:: I do not think Mr. Speaker should have to call "order" several times to have hon. members resume their seats.



REPORTS OF COMMITTEES


[Stage Direction]
Second and final report of special committee on the national film board.-Mr. Robinson.

[Stage Direction]
Third and fourth reports of standing committee on agriculture and colonization.- Mr. Bater.
Mr. Browne (St. John's West):: Mr. Speaker, as a member of the committee on agriculture and colonization I wish to report that the third report of that committee was adopted on division.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.

[Stage Direction]
On the order:
Second reading of Bill No. 363, for the relief of Ann Martha Treglown Goodfellow..-Mr. Winkler.
Mr. H. W. Winkler (Lisgar):: Mr. Speaker, by leave of the house I should like to move the second reading of Bill No. 363 and Bills Nos. 367 to 389 inclusive.


Mr. Deputy Speaker:: Has the hon. member the unanimous consent of the house to move the second reading of these bills in one motion?


Some hon. Members:: Agreed.



SECOND READINGS


Howard Waldemar Winkler: that the following bills be read the second time:
Bill No. 363, for the relief of Ann Martha Treglown Goodfellow.-Mr. Winkler.
Bill No. 367, for the relief of Meryl Elman Kluger Schreiber.-Mr. Winkler.
Bill No. 368, for the relief of Janusz Juljan Borzecki.-Mr. Winkler.
Bill No. 369, for the relief of Perley John Walden.-Mr. Winkler.
Bill No. 370, for the relief of Louis Jules Fabry.-Mr. Winkler.

Private Bills
Bill No. 371, for the relief of Kathleen Anne Bentley Hainsworth.-Mr. Winkler.
Bill No. 372, for the relief of Ethel McCready Thomas.-Mr. Winkler.
Bill No. 373, for the relief of Lois Edith Laffoley Kelly.-Mr. Winkler.
Bill No. 374, for the relief of Evelyn Helen Cowell Varrin.-Mr. Winkler.
Bill No. 375, for the relief of Marion Helen Hawes Gordon.-Mr. Winkler.
Bill No. 376, for the relief of Winnifred Isobel Bassett Yuill.-Mr. Winkler.
Bill No. 377, for the relief of Eileen May Walker Cole.-Mr. Winkler.
Bill No. 378, for the relief of Frank Ashworth.-Mr. Winkler.
Bill No. 379, for the relief of Margaret Galbraith Hardie McCall.-Mr. Winkler.
Bill	No.	380,	for	the	relief	of	Goldie
Natovitch Molson.-Mr. Winkler.
Bill	No.	381,	for	the	relief	of	Norma
Veronica Besner Roast.-Mr. Winkler.
Bill No. 382, for the relief of Catherine Anna Regan Herdt.-Mr. Winkler.
Bill	No.	383,	for	the	relief	of	Errol
Alexander Edgley.-Mr. Winkler.
Bill	No.	384,	for	the	relief	of	Marie
Marguerite Eugenie Lucie Prevost Lalonde.- Mr. Winkler.
Bill No. 385, for the relief of Myrtle Meloche Reath.

Mr. Winkler.
Bill	No.	386,	for	the	relief	of	Eileen
Margaret Smith Bates.-Mr. Winkler.
Bill No. 387, for the relief of Selim Jean Malakie, otherwise known as Solomon Ma-lacket.-Mr. Winkler.
Bill No. 388, for the relief of Ruby Lydia Donnelly Champion.-Mr. Winkler.
Bill No. 389, for the relief of Edna Edith Lily Caron Gourdie.-Mr. Winkler.


Stanley Howard Knowles: Mr. Speaker, the house will not be surprised if I say that I still feel this is not the place to be dealing with these divorce bills, being Bill No. 363 and Bills Nos. 367 to 389 inclusive, or any other divorce bills. I have taken that view with respect to the two or three hundred bills that have been put through the parliamentary divorce mill at this session. I am sure that in expressing that view with respect to these bills and the others that have gone through I express the view of a great many people in this country.
These petitioners having gone through the rigmarole which is associated with applying for bills of divorce, I would not regard it as being fair to them to delay them further at this stage of the session, and for that reason I am not objecting to the request of the hon. member for Lisgar that this batch of bills be considered for second reading under the one motion. But I repeat my insistence
(Mr. Winkler.]
that some day we must get divorce out of parliament.
Motion agreed to and bills read the second time.



BOUNDARY PIPELINE CORPORATION

[Stage Direction]
The house resumed, from Friday, June 20, consideration in committee of Bill No. 62, to incorporate Boundary Pipeline Corporation- Mr. Larson-Mr. Beaudoin in the chair.
On section 1-Incorporation.
Mr. Shaw:: Mr. Chairman, when Bill No. 62, to incorporate Boundary Pipeline Corporation, was before the committee last Friday evening I took advantage of that opportunity to air certain of my own views. It just so happened that I was not given that opportunity until eight or ten minutes before nine o'clock, with the result that I was unable to conclude my observations during the time left to me. It was not my intention to talk out the measure, but it happened that I was speaking at the expiry of the hour allotted to private bills.
Last Friday I laid emphasis on the fact that what I was taking objection to was the procedure we follow in this house in granting charters to companies similar to the one we are dealing with at this time. I realize fully that objection to a company being granted a charter results in many cases from the conviction held by certain persons that gas or oil should not be exported from Canada. My personal view, as I have stated before, is that I have no objection, providing all the circumstances are as I think they should be, to the export of gas and oil from Canada.
I have indicated upon more than one occasion that I believe a province is justified in authorizing the export of gas and oil, particularly when it is concerned about seeing that the requirements of the people of that province are met as far as it is economically and physically feasible to do so. I would take the same attitude with respect to the export of gas and oil from Canada. I am fully convinced that when we contemplate the export of gas from Canada we should at all times be governed by the realization that as far as is economically possible the requirements of the Canadian people should be supplied.
If I were opposing this particular application for a charter on the ground that it might at some time engage in the export of either gas or oil, then in order to be consistent I would have had to do the same thing with respect to the other applications by companies Which have been before us and which might possibly eventually export gas or oil

from Canada. Once again I say that my principal objection is to the procedure for dealing with these matters.
I pointed out last Friday that for years we have held the view that such applications should not be dealt with by this parliament but by a semi-judicial body-we mentioned the board of transport commissioners-which should be given authority to do what we are presuming as a parliament to do at this time. I mentioned also that as long as we have applications from companies of this type coming before us, just so long are we going to find ourselves confronted with prolonged and protracted debates such as we have witnessed in connection with this application. In 1949 when the pipe line bill was being considered by a committee of the house we supported the idea that there should be a clause in the bill under which companies seeking charters would appear before a semi-judicial body, and that body could be the board of transport commissioners.
I rather fancy that much of the difficulty we have encountered in the house results from certain things which took place in the standing committee on railways, canals and telegraph lines. Regardless of what anyone may say, regardless of what defences may be put up, to me it is perfectly obvious that there was an effective effort to cut off the hearing of evidence in that committee. I have been a member of many committees during the past dozen years. Personally I have never encountered a situation before where I could conscientiously say there was an obvious attempt to cut off the hearing of evidence. I am afraid, however, there is sufficient evidence to indicate that that is what took place in this case. I think the chairman of any committee and the government majority on any committee would be well advised to go all-out to see to it that no room is left for a charge that the hearing of evidence was cut off. I also think it is wrong to refuse to hear witnesses where it is earnestly believed, not necessarily by the majority but by a substantial number of members of a committee, that other witnesses should be heard. If such requests are not granted then again it contributes toward a situation such as we have in this case. In fact I think it is bad policy to indicate almost arbitrarily when a witness is before a committee that so much will be heard from him and no more; and that was also done in this case.
I agree with a good deal of what the leader of the opposition said last Friday night. He pointed out that by granting a charter in this way we are automatically conferring upon the company broad, sweeping powers
Boundary Pipeline Corporation which become automatic as a consequence of section 7 of the Pipe Lines Act. That becomes particularly important when one realizes that very few of the members of this house, conceivably none, know exactly where the pipeline route is to finally go. I think of the powers of expropriation and the broad powers conferred upon a company under section 7 of the Pipe Lines Act. When one realizes at the same time that in the final analysis we have no idea at all where the pipe line is actually to run, then I believe we are taking upon ourselves a responsibility which as members of this house we should not have to bear.
I agree fully with the leader of the opposition, and as I stated last Friday night I think the government should initiate amendments to the Pipe Lines Act of 1949 authorizing the procedure I have outlined. The company would then appear before the board of transport commissioners. Witnesses could be heard and all relevant evidence procured. As a further safeguard there is of course the right of the province from whence the product, be it gas or oil, must come in the first instance before it can be transported to any other part of Canada.
Once again I want to emphasize that I am not trying to filibuster the bill. I am not saying what I am saying because of any personal opposition so far as the question of export is concerned. Certain recent developments lead me to the conclusion that if we desire to procure external markets, particularly for gas, we may have to hurry. I realize fully that possibly the province of Alberta is not in a position today so far as gas production is concerned to authorize a great many companies who apply for permits to export gas to do so at this time, but they do anticipate adequate reserves to enable substantial export. However, the thing that worries me a bit is whether, when we reach the stage where we have the required surpluses to export, markets will then be open to us for that product. I am not going to make any further observations at this time. I. hope the government will see fit to amend the Pipe Lines Act as I have suggested. I am sure the house would thereby be relieved of a heavy responsibility which I do not think belongs to this house. I think the whole matter could be dealt with in the best interests of the Canadian people by proceeding in that way.


Mr. Brooks:: Mr. Chairman, I have listened with considerable interest to what the hon. member for Red Deer has said-


Louis-René Beaudoin: Order. Perhaps the hon. member will allow the hon. member for

Boundary Pipeline Corporation
Kindersley, who is the sponsor of the bill, an opportunity to speak. I see he has risen in his place.


Mr. Larson:: Mr. Chairman, I know it has been said around the house from time to time that people have talked out their own bills, but in this case I see there are many others who are prepared to carry out that function and I feel I should be given an opportunity to say something on the bill.
I was approached some two years ago to sponsor this bill in the House of Commons. I considered the matter, and there were several points which immediately came to mind. One consideration was the fact that the proposed line was to go to Winnipeg. I probably felt that in going to Winnipeg it might not be serving the country to the best advantage. However, when I considered that the province of Alberta was obviously not prepared to be responsible for the amount of gas required to supply all Canada at this time, I felt some start should be made in supplying gas to the neighbouring provinces.
At the present time it would appear that the province of Alberta is not prepared to supply gas for export in any quantity until such time as the industrial development of Alberta based on a gas economy has been achieved. It is also quite possible that some considerable time could elapse before any major export from Alberta became a fact. It seemed to me that with this point in mind the province of Alberta might be prepared to make available for export a limited supply of gas much sooner than it would be prepared to be responsible for transcontinental supply. It seemed only justice to me that the very cold provinces of Saskatchewan and Manitoba should rate the same priority as Alberta's sister province of British Columbia.
In my opinion opposition to the bill has resolved around two major considerations. The first was put forward by the hon. member for Calgary West, who claimed that the economics of a line from Medicine Hat to Winnipeg were such that this parliament had no right to grant the company a charter. In his statement before the committee he made the point that he wanted parliament to make the final decision as to the economics of the line and in the process of making this decision a national gas policy should be evolved. He based his argument on the fact that the board of transport commissioners was too pressed with other matters to properly look into' all phases of pipe line development in Canada. On this latter point I submit that a change of government policy would be involved and, as such, I do not propose to debate the matter at this time.

As to the economics, I would suggest that this parliament is responsible first to see that the people financing the line are able to carry out their obligations if granted the necessary charter and the necessary permits. I think that point has been amply satisfied. Second, I submit this parliament should satisfy itself that the design engineers are competent to advise. That point should be amply satisfied because the engineers have vast experience in pipe-line construction in the United States; and if they are not competent to advise on this proposed company's operation, I do not feel that the advice is to be procured anywhere.
On the economic side I submit that if any money is to be advanced by any financial house their reputation will be ruined if they advance that money on an uneconomic proposal. After all, when the consideration of whether people are going to advance money on any proposition comes up, it is the financiers who finally settle the matter; and I say I think that point should be amply satisfied.
Then the hon. member for Calgary West stated that as yet he was not satisfied in his own mind-and I think quite rightly so- whether the eventual supply of gas to central or eastern Canada ' should properly come as an exchange with the United States or whether a pipe line across Canada was the solution.
There is another main point raised by those opposed to this bill. It is that if this line is built its eventual extension will be into the United States with no regard to the needs of those two great areas in Canada, first the lakehead and then central or eastern Canada. It has been mentioned that if this company is granted a charter it is horning in for nuisance value on somebody who has already been granted a charter to construct a trans-Canada pipe line; and that if it is granted a charter it will hold up that construction for many years.
It has been stated that this is a plot by the Fish Engineering Company to form a Canadian subsidiary to block us from ever having Canadian gas in eastern Canada. It was stated before the parliamentary committee that the Fish Engineering Company at present had no financial interest in the proposed Boundary Pipeline Corporation, and I think that statement can be substantiated.
Coming to the matter of the eventual extension of this gas line to the United States, a point which seems to cause great disagreement, I submit that in considering this bill that does not come into the matter at all because Western Pipe Lines has already been granted a charter to do the very thing these
[The Chairman.]

people are accused of intending to do. If that charter is already granted and the matter is already settled I cannot see how holding up this bill is going to satisfy any of the considerations which the opponents of this bill claim will exist. If gas is finally exported from Alberta in quantity I do not see how it is going to change the matter one little bit whether this bill is held up or not. The only thing that will do is give Western Pipe Lines a monopoly. I do not think that is Liberal policy, and I do not think it is the policy of others in the house who are opposed to this bill.
I feel that if gas can eventually be supplied to eastern Canada by a pipe line going across Canada on Canadian soil that should happen, and any person who has the interests of Canada at heart should think the same thing. I also suggest that the rule should not be so rigidly applied that gas would never be brought to eastern Canada or that it would be brought to eastern Canada at prices at which the interruptible industrial market could not buy it. I do not think that should happen at all. I believe the benefits of gas should be brought to eastern Canada by an all-Canadian route if that can be done. The hon. member for Calgary West said he was not sure that was the proper way to do it.
If we view this whole matter of the passing of this bill from a realistic standpoint, does it not all boil down to the fact that this company is merely asking for incorporation? It is asking for the right to become an entity so it can compete in a fair and equitable way with the people who have already been granted charters to build pipe lines.
Canadians have always felt, and history has shown, that much of our great advance is due to the fact that we have free competition in this country. Competition has demanded that the greatest economy be exercised so the producer gets the most for his product and so that the end consumer pays the least. I submit that principle applies here. By using this parliament to protect the interests of pipe-line companies already incorporated the Canadian public is being done a great disservice; and this parliament, in the way it is acting, is making itself a part and parcel of the disservice that is being done to the Canadian people.
If in the next year a supply of gas is available and Trans-Canada Pipe Lines is ready to build this line across Canada with ample finances and all the other requirements of the board of transport commissioners, it will emerge as the only company in the field. I have no objection to Trans-Canada Pipe Lines getting the eventual right to build that line; but what incentive will there be on the
Boundary Pipeline Corporation part of the people sponsoring that company, of the principals, to give the maximum price to the producer in the field and charge the minimum price to the consumer at the other end, because they will have a monopoly from the producer standpoint, and a monopoly from the consumer standpoint. On the other hand if the economy of this pipe-line development dictates that there will be reciprocal exchange of gas between Canada and the United States, and if the economics of it dictate that gas should be sent into the United States and brought back into Canada, Western Pipe Lines have a monopoly in that field. It might be all right to protect what would eventually become a monopoly; but it has never been the policy of the supporters of any Liberal governments in this country *-and those governments have been fairly successful-to support any monopoly.
I submit that if this parliament does its duty and allows any responsible group of individuals to incorporate themselves into a pipe-line company, the board of transport commissioners will be in a much better position to render proper judgment. That will be because every single company that appears before that board of transport commissioners will really have to ha^e its pencil sharp and get down to brass tacks, because there will be competition. They will have to get their economy to the point where' they are giving the absolute maximum to the producer of gas and charging the absolute minimum to the consumer. They will only be able to keep enough in the middle to carry themselves on an economic and proper business basis. The operating costs will have to be cut to a minimum, and the citizens of Canada will reap the greatest benefit. The board of transport commissioners can carry out this duty by giving the final go ahead to the pipe-line company which is prepared to pay the highest possible price and charge the lowest possible price at the other end. Instead of the pipe-line company being the master of the Canadian people, the Canadian people will be its master. That is the situation which I think should exist. I believe any fair-minded Canadian should be of the same opinion, because these companies are well able to look after themselves.
I want to refer for a moment to an issue of the Financial Post of June 14, 1952. The editorial on the front page is headlined "Ridiculous hold-up", and it reads:
Parliament pays lip service to reform of its procedures, but until it acts on this important cleanup and modernization, the house will often make nothing but a foolish spectacle of itself and important business will be neglected.
3654	HOUSE OF
Boundary Pipeline Corporation
That editorial goes on in the same vein for several paragraphs, and then it says:
Even more Important is the fact that even if Boundary gets the incorporation it wants, it can't do anything on its pipe-line plans without the sanction of the board of transport commissioners; a body much better equipped than the House of Commons to hear highly technical evidence and to allocate wisely route franchises.
It goes on to say:
Let them have their incorporation. Let the house get ahead with its work. Let the fight as to what Boundary does next be fought in the place provided for such bouts. '
I agree with that article. This is a paper which is highly regarded all over Canada. I do not see why this House of Commons should continue this business of holding up the normal incorporation of a company. The financial people can do the job. The engineers can do the job. I do not feel that any government in, Canada can sit by and watch something like this go on, thus protecting what will eventually become a monopoly. It will mean that one company will appear before the transport board and there will be, therefore, no competitive evidence upon which that body can base a decision. I submit the Canadian people will suffer. I believe this incorporation should be granted. I feel that we are doing the Canadian people a great disservice by carrying on in the way we have for the last few weeks.


Alfred Johnson Brooks: I was pleased to allow the hon. member for Kindersley to take my place, Mr. Chairman, and I have listened to his remarks with considerable interest. At the outset I might say he has not convinced me that this house should pass the bill which is before us. Hon. members might ask why I, coming from the maritime provinces, should be interested in a pipe line which is to be constructed from Alberta to other western provinces. In reply to that, Mr. Chairman,
I think I can say that it is a general interest that we have as citizens of Canada. We consider that what is good for one part of Canada would be good for all of us.
We may be a little envious of Alberta which today has this great natural resource, of which we have none in our province. I might say also that our interest extends to the fact that when this Dominion of Canada was formed there were only four provinces, Nova Scotia, New Brunswick, Quebec and Ontario. At that time we did have a great interest in the public domain of this country. These great natural resources which have been found in other parts of Canada were then part of the public domain, and at one time we did feel that we should have more than a passing interest in them.


This matter of the incorporation of a company, and the building of a pipe line, is a big problem. I feel that it would be a mistake for us, at this early stage of the development of this great gas industry in this dominion, to grant charters indiscriminately to every company making application. It might be said that all we in the parliament can do is grant the application, and that the feasibility of building and operating the pipe line could be decided by the transport commission. However, that is a chance that possibly we cannot take. Once we allow the matter out of our own hands we have very little control over the building of the line or the transportation of gas or oil. I did not have the opportunity of hearing the arguments before the committee which dealt with this matter. I was not a member of that committee. I have read certain of the arguments, however, and I have read the reports of the committee. I have listened also to the debate in this house on many occasions. We have had ample opportunity to listen to debates on pipe lines, not only on this bill but on many other pipe-line bills during the last two years.
From reading the reports of the committee, and also from listening to the debates in this house, regardless of what the hon. member for Kindersley has said this evening I am sure we must have some doubt as to the economic feasibility of constructing this Boundary transmission line. First there is the doubt raised in our minds by, the small size of the pipe line which is to be constructed, and also as to the advantages it is claimed will accrue to the people the line is intended to serve. Then there is a doubt raised in our minds, I think a very reasonable doubt, as to whether Canada should export gas until her own needs have been fully supplied. I believe that is a very important problem and one which we should carefully consider.
I have listened to applications for the incorporation of many pipe-line companies in this house, not only for gas but for oil as well. The thought has often occurred to me that if we granted incorporation to all pipeline companies requesting incorporation and those pipe lines were built, we would have pipe lines running in all directions across Canada. They would look like great snakes running from one end of the country to the other. I am sure that is something we should carefully consider. We all remember that in the early days when Canada was building railroads we were very careless and built more railroads per mile than this country required. Oil and gas transportation by pipe line is just another means of transportation, and I think we should carefully consider the

problem to ensure that we do not repeat the mistakes we made in years gone by. I agree entirely with the hon. member tor Red Deer when he says that somebody other than the parliament of Canada should deal with this matter of granting rights of incorporation in connection with pipe lines. I believe that body should be the board of transport commissioners. I have faith in the Board of Transport Commissioners for Canada, and I also have great faith in the Alberta government and in their good judgment to say what pipe lines should be built and what should not. I believe we can very well leave this matter to the consideration of the board of transport commissioners and the government of Alberta.
We know that the board of transport commissioners has also refused the Prairie Transmission company the right to build a pipe line down through British Columbia to the Pacific coast. We have heard that the Prairie Transmission Company Limited is also a subsidiary of the Fish Engineering Corporation, the same as the company which is now seeking incorporation.
There are three main problems which I have heard mentioned, and which should be considered. The hon. members from Alberta have stated very carefully that, as far as Alberta is concerned, the first consideration is to assure themselves that Alberta has all the gas it needs not only for the present but for some years to come. Since we are all Canadians, it does seem to me that our next consideration should be to see that Canada is preserving for herself a proper amount of gas, and that we are protected so far as the future is concerned. The third and last consideration should be what we are to do with any surplus we may have so far as exporting it to the United States is concerned. As I said, we are Canadians, and our first interest should be to see that the people of Canada are protected not only at the present time but in the future as well.
The hon. member for Kindersley sort of cast a little doubt on the quantity of gas that may be found in Alberta. If there is any limit to the supply, then definitely that limited supply should be saved for our own people. I think we could take a leaf from the book of the United States as far as this great asset is concerned. We have had ample evidence that the United States will not supply Canada until she herself has been satisfied. There is abundant evidence already on the record of this parliament to that effect. The hon. member for Vancouver-Quadra, the hon. member for Greenwood and many other hon. members have placed on Hansard the attitude of the United States government and the American
Boundary Pipeline Corporation people toward the export of gas. In that connection I should like to read from a report of the federal power commission in the United States relating to exportation. This case had to do with the application of Panhandle Eastern Pipe Line Company, dated April 12, 1946, to export gas from the United States to Canada near the city of River Rouge, Michigan, to be sold and delivered to the Union Gas Company of Canada, Limited. The judgment reads as follows:
No deliveries of natural gas shall be made to Union during the months of January, February, March, November and December in any year during the term of this authorization. Delivery of natural gas to Union shall be curtailed or interrupted whenever, and to the extent, required for the protection of deliveries of natural gas, either for immediate consumption or for storage, to any and all of applicant's customers in the United States. The authorization hereby granted shall not constitute ground or justification for any refusal by applicant to transport or sell natural gas to any person or municipality at any time during the time hereof, either for consumption in the United States by such person or municipality or for storage, or for resale for ultimate public consumption in the United States for domestic, commercial, industrial, or any other use, it being the intent of this authorization that at all times, persons and municipalities in the United States are to receive preferential service over that to Union.
As we all know, Union is a company in Ontario. That is a clear indication, Mr. Chairman, of the attitude of the people of the United States and of the authorities there to the exportation of gas from that country. There is other evidence of their attitude. As a matter of fact, in section 3 of their natural gas act they set out very clearly the attitude of the government of the United States to the exportation of gas from that country.


Mr. Murphy:: You do not blame them for that policy, do you?


Alfred Johnson Brooks: Not a bit; I think it is a very wise and sensible policy. It is a policy that we should adopt in this country so far as the export of gas is concerned. Gas is not like our forests; it is not something that can be reproduced. Gas is a very expendable commodity. If we expend all the gas we have in this country in a few years in order to satisfy the people of this and the next generations, what are the people who come after us going to do? The policy adopted in the United States is to protect not only their own people at the present time-


Mr. Boisvert:: Where does the gas come from with which you drive your car?


Alfred Johnson Brooks: We can get a lot from you.


Mr. Stuart (Charlotte):: May I ask the hon. member a question? During the last war where did the gas come from that was used in his car?

Private Bills


Alfred Johnson Brooks: The hon. member is talking about gasoline, and I am talking about another kind of gas altogether. If he would just pay attention-


Andrew Wesley Stuart: Where does it come from?


Alfred Johnson Brooks: As I was saying, Mr. Chairman, the gas that is found in Alberta is an expendable commodity. I was reading what the United States does in order to protect gas production. I am not speaking about gasoline, I might inform the hon. member for Charlotte.


Mr. Wood:: It is all the same.


Alfred Johnson Brooks: As far as gasoline is concerned, if they wish to protect that great natural resource for their own people and let our people have only what is surplus, they may do so. As I say, the policy of the United States is one that appeals to the people of the United States, and if it is a good policy for the United States I think it could be applied to the people of the Dominion of Canada in so far as the exportation of gas is concerned.


Alan Aylesworth Macnaughton: I move the adjournment of this debate.


Howard Charles Green: You cannot do that.


Louis-René Beaudoin: I am sorry. I saw the hon. jnember for Mount Royal rise, but I did not hear what he had to say.


Alan Aylesworth Macnaughton: I would like to move the adjournment of this debate on the Boundary Pipeline Corporation. There are two important bills that follow which are really of national interest, although they are in the nature of private bills. I am sure hon. members would co-operate with us to that extent. Since this is the last week of parliament, we hope, it is important that these bills get before the committee on banking and commerce. I say they are in the nature of public bills, although they come under the heading of private bills.


Louis-René Beaudoin: Since the hon. member for Royal has the floor he should not be interrupted, unless for the purpose of being asked a question, and only then with his consent. However, it may be that he would consent to the procedure suggested by the hon. member for Mount Royal.


Alfred Johnson Brooks: The hon. member for Mount Royal had spoken previously to me in the matter and, out of courtesy to him, I am prepared to move the adjournment of the debate, on the condition that this order of business will come up again on Friday in its proper sequence.
Section stands.
Progress reported.



CANADIAN SHIPOWNERS MUTUAL ASSURANCE ASSOCIATION

Alan Aylesworth Macnaughton: the second reading of Bill No. 364, to incorporate the Canadian Shipowners Mutual Assurance Association.


Howard Charles Green: Will the sponsor of the bill give an explanation?


Alan Aylesworth Macnaughton: Mr. Speaker, first of all I should like to thank the hon. member for Royal (Mr. Brooks) for his co-operation.
May I say at the outset that, while I do not want to dramatize this moment, it is only fair to tell hon. members that this is an historic moment in that it is the first time in Canadian insurance history that Canadian shipowners have banded together to form a mutual assurance association for protection against war risks in the event of a war breaking out.
The reason is very simple, and I shall make my explanation brief because I understand there is another bill to follow. Under present conditions marine insurance companies do not insure Canadian shipowners against war risks. The regular marine insurance companies in their policies usually have a 48-hour clause by which they may terminate any insurance covering a ship, in the event of the outbreak of war. Therefore the shipowner has two choices: (1) to leave his ship in harbour or (2) to negotiate a new contract with an insurance company at of course a greatly increased rate. The method of procedure in this instance is to form an association by which all the shipowners in Canada have the right to join a mutual non-profit association so that, in the event of war breaking out, they may have policies covering the value of their ships. These policies, in turn, are reinsured with the Canadian government which, it is felt, in wartime must assume the unnatural risk, if I may so describe it, of protecting private shipowners against losses from war risks.
The bill sets out the details as to who the incorporators are and the method by which they propose to operate this mutual benefit association. I think at this stage it would be wise to refer the bill to the committee on banking and commerce.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on banking and commerce.

Mr. G. T. Fulford (Leeds) moved: the second reading of Bill No. 365, to incorporate Ogdensburg bridge authority.
He said: Mr. Speaker, inasmuch as this bill should be non-controversial, and in the

light of the fact that it is to be referred to the committee on railways, canals and telegraph lines, I shall be brief in my explanation.
The purpose of the bill is to incorporate a company known as the Ogdensburg Bridge Authority. This company is to work in closest co-operation and conjunction vMth the bridge authority already set up by the house of assembly of the state of New York. I hold in my hand a copy of the measure passed by that legislative body.
There is a precedent for this bill inasmuch as it follows closely the legislation passed by this House of Commons to incorporate the Thousand Islands Bridge Company. The bill incorporating the company was passed in 1934, and there was an amending bill in 1936.
I might point out that the Prescott-Ogdens-burg Ferry Company is to be recompensed, as well as the land owners whose property must be acquired in order to complete proper approaches to the bridge. This bridge will conform to all the requirements pertaining to the proposed St. Lawrence seaway. Tolls are to be charged, and will be subject to the provisions of the Railway Act.
As in the case of the Thousand Islands Bridge Company when the bonds or other financial obligations are amortised the bridge will automatically become the property of the state of New York and Canada, the south half of the bridge going to the state of New York and the north half to Canada. In turn Canada, by order in council or otherwise, can designate to which province the bridge will accrue.
I do not think there is anything further to be stated about the bill. I do feel that the more bridges we have built, the more tourists will come to Canada, the better the Americans will know us, and the closer will be the bonds between our two countries. I urge that the bill be given second reading.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on railways, canals and telegraph lines.
Mr. Deputy Speaker:: The hour for private and public bills having expired, the house will resume consideration of the matter under discussion before the dinner recess.

The house in committee of supply, Mr. Beaudoin in the chair.



DEPARTMENT OP NATIONAL DEFENCE

Louis-René Beaudoin: The committee is considering item 248 of the Department of National Defence. Shall we now begin consideration of the details of the vote according to the procedure agreed to earlier? These details
Supply-National Defence are to be found at page 289 of the estimates. I shall call the groups of details, subheading by subheading. Under this procedure, then, the first of these is, "defence services; departmental administration, including inspection services".
Defence services-
Departmental administration, including inspection services.


George Randolph Pearkes: I notice an increase of $3 million in connection with civil staff. The white paper indicates that during the year there has been an increase in the strength of the armed forces from 68,426 to 95,394 which, roughly speaking, is an increase to the extent of about one third. But the increase in headquarters staff is practically doubled, namely from $3,393,842 to $6,024,852. I cannot help feeling that this is an indication of what has been described earlier in the debate as an inflated headquarters.
Would the minister be good enough to explain this large increase? I notice that as part of the increase there are additional assistant deputy ministers. The increase in expenditures in connection with assistant deputy ministers has gone up from $8,000 to $29,500. There is an increase in personnel from one to three. Perhaps the minister could explain the duties of these assistant deputy ministers.
The only other thing I should like to bring up under this general heading of departmental administration is to ask for an explanation of the $2 million to be spent on the acquisition and construction of buildings. I am wondering whether the department is going ahead with what has sometimes been referred to in the past as an Ottawa pentagon; whether they are going to build a large headquarters building with that $2 million.


Brooke Claxton: In connection with the increase in deputy ministers, there are two additional assistant deputy ministers: E. B. Armstrong, who was formerly with the treasury board, and L. M. Chesley, formerly vice quartermaster general. They were needed to cope with the increased activities of the department.
With regard to the increase in the civilian staff, almost all this increase is due to the increased activities of the inspection services which are in almost direct proportion to the amount of equipment orders that have been placed.
With regard to the proposed pentagon, I am sorry to say that we have not made much progress. There was some opposition last year which perhaps assisted in our not making any progress. We were unable to arrive at any position with regard to the location of

Supply-National Defence the proposed building. This must be undertaken at some future time, and the sooner the better, but it is not being undertaken now.
The additional amount for construction is in connection with a range for long-range artillery at Lake St. Peter amounting to $1,850,000, and magazines and power at Val-cartier, $160,000, making a total of $2,010,000.


George Randolph Pearkes: I notice that under inspection services the number of inspectors of stores has been increased from 161 to 350, as indicated on page 290, but the increase in the amount is only from $450,740 to $991,200. That hardly takes care of the large increase of some $3 million which is taken up entirely with personnel. Is there any other increase directly connected with the dockyards services?


Brooke Claxton: The personnel in the inspection services has just about doubled and the amount being provided for salaries is also just about doubled. With regard to other operations, there has been an increase in civilian personnel, but this is hardly commensurate with that in the armed forces except in the inspection services and operations of that kind.


George Randolph Pearkes: What is the total increase in the civilian personnel covered by this particular heading?


Brooke Claxton: I am informed that more than 75 per cent of the increase to which the hon. member refers is due to the increase in the inspection services made necessary by the greater activities.


George Randolph Pearkes: They would all be civilian. No doubt the minister will recall that there was some question about the civilian personnel being increased from 30,000, which-was authorized a year ago, to 40,000. Are the salaries of those extra 10,000 provided for in this vote?


Brooke Claxton: Oh, no. This item deals only with an increase from 1,230 in 1951-52 to 2,512 in 1952-53. As I have said, by far the greatest part of that increase is accounted for by the increase in the activities of the inspection services.


George Randolph Pearkes: The minister cannot tell me the actual increase in personnel?


Brooke Claxton: The actual increase under this item of administration?


George Randolph Pearkes: The increase in amount, not in number.


Brooke Claxton: I just gave the increase in number, which is from 1,230 to 2,512. The increase in the amount would be $3,489,842 to $6,105,650 if you included prevailing rates and casuals in that category.
 *


Ray Thomas: The minister said this afternoon that seven ships had been launched for the Canadian navy. Can he state whether any have been commissioned? If none has been commissioned, can he state when the first one will be commissioned and when he expects the last of the seven will be commissioned?


Brooke Claxton: A number of minor vessels, such as minesweepers, are being commissioned this year, while others now under construction will not undergo their trials until late in 1953 and certainly will not be commissioned until 1954. I refer particularly to vessels such as the anti-submarine vessels, which are a totally new type. It is not possible to give dates because there may be all kinds of developments which will intervene. These are highly complicated vessels costing up to $15 million each and have never been produced before in any country. We aim at the highest possible production rate. We have seven on order and seven more to be ordered and we hope for the best.


Ray Thomas: Can the minister tell me how many of the ships that have been launched or are expected to be launched this coming year are small vessels, such as gate vessels, and how many will be anti-submarine vessels?


Brooke Claxton: I can give my hon. friend a reference to page 18 of the white paper. We have commissioned one of the gate vessels, which is a ship. It is not an auxiliary vessel. Four are expected to be completed during the year. Of the fourteen minesweepers two were launched in 1951 and we hope they may be given trials this year. The patrol vessel Labrador was launched in 1951, commissioned in 1952 and we hope it will be ready for trials in the latter part of 1952 or in 1953.


Ray Thomas: I gather that the majority of those already launched or expected to be launched during the coming year are what you might call auxiliary vessels?


Brooke Claxton: No.


Ray Thomas: The anti-submarine vessels are not being launched at the present time?


Brooke Claxton: Several of them are being launched this year, but the major part of our launchings this year will be minesweepers which are not auxiliary vessels. In connection with the naval shipbuilding program, we are now engaged on the current construction of 33 major vessels of four different types, the construction, current and immediately intended, of some 41 minor auxiliary craft of eight different types and the conversion and rearmament, in some instances to

the point of reconstruction, of some 40 major vessels of ten different types. It is a pretty complicated program.


Ray Thomas: I would take it that the minesweepers under construction are somewhat of a modified Bangor type which will be available not only for minesweeping but for escort duty to some extent.


Brooke Claxton: They are minesweepers which can be made available to do the job that it is customary for coastal escorts to do.


Ray Thomas: Something similar to the Bangor?


Brooke Claxton: That is right, but much more modern in design. They are of entirely new construction with new equipment and armament.


Ray Thomas: I realize that.


Louis-René Beaudoin: Shall we proceed to the next subheading?


Mr. Harkness:: No, Mr. Chairman. I am a little confused as to the order of precedence we agreed upon before the dinner recess. I was a few minutes late getting back to the house after this debate was resumed at nine o'clock, and I must say I was a little surprised to find that the hon. member for Churchill, who took the adjournment, was not speaking. However, I would gather from what I have just heard that on the first item of general administration a general questioning or debate is being carried on. I have no intention of repeating the speech I made some several weeks ago when this matter was under general discussion for two days. However, there are a few remarks I should like to make.


Louis-René Beaudoin: Order. Perhaps in order to clarify the situation for the benefit of the hon. member, I might inform him that a general discussion took place, and it was agreed once the general discussion was terminated the details appearing at page 289 and following would be discussed. It was agreed that the chair would call each subheading separately. Once the general discussion was terminated I called the first subheading which is "departmental administration, including inspection services". Discussion must be relevant to the details as they appear under that subheading on pages 289, 290 and 291. Once the discussion is terminated on these details I will call the next subheading which appears on page 292 under "navy", namely "Royal Canadian Navy-active force and general". Then I will move on to the next subheading until we have completed all the details under this item.
Supply-National Defence


Douglas Scott Harkness: Under this item I see the salary of the Minister of National Defence and his motorcar allowance and the salary of the deputy minister whom I see sitting in front of the minister, and so on. When you rose, Mr. Chairman, I was just about to refer to one or two remarks the minister made this afternoon, and in view of the fact that these items are under the heading "departmental administration" I think my remarks would be perfectly appropriate at this time.


Louis-René Beaudoin: That is precisely why I rose and gave my interpretation of the agreement entered into this afternoon between the minister and the hon. member for Nanaimo. I understood from the opening remarks of the hon. member that he might have liked to take part in the general discussion, but unfortunately he depended upon the hon. member for Churchill making a speech. If the hon. member for Churchill had been speaking when the hon. member came into the house, then the hon. member could have taken part in the general discussion. He indicated that he was a bit surprised to see that the hon. member for Churchill, who had taken the adjournment, was not speaking. It is unfortunate, but now that the general discussion is over I know the hon. member will not want me to have to call him to order too often, and that he will follow the agreed procedure and make his remarks relevant to the details as they appear under this subheading.


Douglas Scott Harkness: Absolutely, Mr. Chairman. I should like to make one remark in connection with what the minister said this afternoon. He stated that the impression had gone abroad that the general world situation seemed to have improved. He went on to say that nothing, except one thing which I do not think he specified, would lead him to believe this general impression was correct. I should like to say I was extremely glad to hear the minister say what he did. I have been somewhat alarmed during recent months at the growth of what perhaps might be called a sort of ostrich view of affairs. In other words, the general opinion seems to have become rather current in the country during the last seven or eight months that everything is on the mend and that therefore the necessity for national defence was reduced.
I hope what the minister said in that regard will receive very wide publicity and will have a good effect in dissipating the view that the general world situation now is very much improved over what it was. In my view the events of the last two or three weeks particularly have confirmed that the general world picture is not only not better than it was but is possibly even worse. It
3660

Supply-National Defence seems to me that if the majority of people in this country get the idea firmly in their minds that everything is on the mend so far as the world picture is concerned they will also be convinced that the necessity for national defence is not very great and will not be prepared to support the defence effort one hundred per cent, which the minister indicated was absolutely essential.
I should also like to make some remarks with reference to the defence expenditures committee. I do not know exactly under what item of these details that might come. Possibly, Mr. Chairman, you might help me out of my difficulty in that regard so that when the appropriate item comes up I may say a few words on that subject. I shall leave it for the moment. So far as the defence objectives outlined in the white paper we received a couple of days ago are concerned, I think nobody in the house or throughout the country who has paid any attention to the matter has any quarrel whatever with them. We are all behind them one hundred per cent. Where any difference of opinion arises it is with respect to the means to be employed to carry those objectives into effect. In that regard of course I suppose there is bound to be a considerable difference of opinion.
I am still convinced, for example, that the expenditures on this particular matter we are dealing with, general administration, are greater than they need to be. I think the expenditures in regard to the equipping of our forces, training our forces, for accommodation provided for them and so on are greater than they need to be. That excess, if I may call it that, does not in my opinion contribute to a better and more efficient service but probably detracts from the efficiency of our defence effort.
I will say no more, Mr. Chairman, because I can see you are getting a little restive and I will address myself to one or two specific questions under this item. First, on these travelling and removal expenses, I see they are up from $290,500 to $910,000. These expenses of course have to do purely with the civil end of national defence headquarters, and I would ask why that very large increase is going to be necessary.


Brooke Claxton: The two largest items in this increased amount are in the audit staff, $80,000, and inspection service travel cost, $760,000. Those two items account for practically the whole increase.


Douglas Scott Harkness: I am sorry I did not quite understand the minister's last statement. Do the inspection services account for $700,000 odd of that $910,000?


Brooke Claxton: That is right.


Douglas Scott Harkness: What does that mean exactly? Do you mean you have a large number of inspection personnel on the road?


Brooke Claxton: Yes. We have virtually
doubled the size of the inspection service during the year due to the fact that the amount of equipment delivery has more than doubled, and a great part of the work has to be done away from the inspection service bases, which requires transportation.


Douglas Scott Harkness: Well, Mr. Chairman, as a matter of fact the next matter I was going to speak about was miscellaneous equipment for inspection services which for the year we are in amounts to $1,400,000 and last year was only $104,500. I presume what the minister was speaking about in regard to travelling expenses is the same with respect to this further item, and I would ask him what these inspection services are which have apparently been increased to such a large extent. I will refer particularly to miscellaneous equipment.


Brooke Claxton: Equipment for the new artillery proving range at Lake St. Peter accounts for $400,000. Laboratory and miscellaneous equipment is set at $200,000 for 1952-53 whereas it was $104,500 for 1951-52, representing an increase of $95,500. In addition there is $800,000 for inspection gauges. Those items total $1,400,000 as opposed to $104,500 last year. The largest factor is the $800,000 for inspection gauges.


Douglas Scott Harkness: Inspection what?


Brooke Claxton: Gauges. This increase covers the purchase of inspection gauges for U.S. type equipment. The change-over to United States type guns, ammunition, etc. has made it necessary for the inspection service to reequip itself with inspection gauges. The bulk of the gauges the inspection service held before were those required during world war II for the manufacture of United Kingdom equipment.


Ray Thomas: I would like to ask one more question having to do with naval personnel. During the war we had two separate departments of communications which at that time were known as W/T, wireless telegraphy and V/S, or visual signal. Immediately after the war they consolidated the two into the communications branch. Something like a year ago I was talking to a lieutenant in communications and he told me they were considering transferring back to the dual system where they had the dual set-up as

they were having difficulty in handling both the radio end and the visual end, due to the difficulties of taking the signals,
I was wondering whether the minister could say anything about that, and whether or not they intend to continue the single communications branch or to again divide it into visual and radio as two separate branches, as they had been during the last war.


Brooke Claxton: I will have to look into the question raised by the hon. member for Wetaskiwin. I think the general trend is for the visual system to disappear gradually, but beyond that I cannot go. I will have to get him the answer.


Ray Thomas: I might tell the minister that, being in the communications branch during the war, I found it very difficult to master both visual and radio for the simple reason that in visual signalling you read word by word and in radio you read letter by letter. When one accustomed to visual signalling tries wireless he has a tendency to read word by word, and when the situation is reversed the wireless signaller gets so far behind in visual signalling that he cannot catch up; in other words he starts to read letter by letter and cannot form words. I wonder if the minister knew anything about the matter, because from my own experience it is pretty difficult for anyone to try to master the two of them. Although the codes are the same, the methods of receiving messages are entirely different. I would like to get an answer at some later date.


Brooke Claxton: I will be glad to get that.


Louis-René Beaudoin: Can we proceed to the next subhead?


Some hon. Members:: Agreed.
Royal Canadian Navy-Active force and general.


Louis-René Beaudoin: The details are shown at pages 292, 293, 294, 295, and they conclude
in the middle of page 296, the amount being $263,481,102.


George Randolph Pearkes: In view of the number of army personnel serving overseas in Germany and Korea, has any consideration been given to transporting the replacements and general rotation personnel by naval vessels or by vessels manned by naval personnel? I understand from a debate which took place in the house a few days ago that certain vessels were required for the North Atlantic Treaty Organization. Are those being used for the transport of personnel or are we relying entirely on the commercial companies?
55704-231J
Supply-National Defence


Brooke Claxton: Well, sir, the hon. member for Nanaimo has much more experience with transport matters than I have; also with the situation on Her Majesty's Canadian ships, particularly destroyers which he may see leaving from Esquimalt. There is not room on board one of those ships to put a single extra human body; they are loaded to full capacity of the ship. In order to use naval vessels for transport it would be necessary to put on special naval vessels. They are full of gear of all kinds and are very inefficient for the purpose of transporting troops, so except in most unusual circumstances are never used for that purpose. Our troops going to Korea are largely carried either in specially constructed troop ships operated by the United States navy or by air. While we have looked at other possible types of transportation, I am sure the way we are doing it is the most efficient and cheapest.


Ray Thomas: Are the naval ships as crowded as they were during the last war?


Brooke Claxton: I think some of them are even more so, because in the Far East we have to carry equipment, officers and men, sometimes staying at sea up to fifty days, so that vessels which did not carry certain stores or types of equipment now have to carry them. I think they are about as crowded as they were.


Ray Thomas: In other words, they get lots to eat.


Brooke Claxton: Yes.


George Randolph Pearkes: I had no thought that personnel would be transported in destroyers, but I did mention vessels manned by Canadian naval personnel being used as troopers. What does the minister know-perhaps he would not know much because it comes under another department-about what has happened to those ships which were acquired by us for the purpose of either moving immigrants to the North American continent or possibly moving troops to Europe?


Brooke Claxton: We made full use of the return voyages of the ships used to bring displaced persons or immigrants to Canada. They were used on the westbound trip to carry immigrants to Canada, and on the eastbound trips vacancies were used to carry the 27th brigade to Europe. That was done for a large proportion of the forces there, and we got very low rates indeed.


George Randolph Pearkes: It is to those vessels I was referring.


Ray Thomas: Can the minister tell me whether or not it is the policy now to have some sort of combined officer course such as
3662	HOUSE OF
Supply-National Defence there was during the last war, which enabled naval personnel to get a certain amount of training for shore action?


Brooke Claxton: On several occasions in the Far East the personnel of our ships have taken part in shore action. On a number of occasions, both in the Far East and on the north Atlantic, exercises have been held to give special training in that field. That is one of the things being taught in the regular shore establishments as well as on the ships of the R.C.N.


Ray Thomas: It is the intention, then, that ships' personnel, as a general rule, will have a certain amount of training in shore action; is that right? Will they have more than during the last war?


Brooke Claxton: They have had more of that since the end of the second world war than they had during it, but it cannot be extended too far because of the necessity for sea training.


Ray Thomas: I realize that, but I wanted to know whether or not, in their pre-sea training, they were given more instruction in shore action than they had been given during the last war. I take it that is true.


Brooke Claxton: They have very much more instruction ashore during peacetime than they had during war. The course at Cornwallis generally lasts for 26 weeks before they go to sea.


Louis-René Beaudoin: Shall we go on to the next item, "Royal Canadian Naval Reserve"? Then the next item is "Royal Canadian Sea Cadets". The next subheading is "Canadian Army-active force and general", at page 297. Canadian army-active force and general.


Mr. Hees:: I was glad to learn, a few days ago from press dispatches, Mr. Chairman, that the government had at long last decided to pay the veterans of the Korean force the same clothing allowance which had been paid to veterans of world war II. About three months ago I brought this matter to the minister's attention, and it is encouraging indeed to members of the opposition to see that occasionally the government puts through much needed measures such as this, largely due to the pressure we bring to bear.
The matter I should like to bring to the minister's attention tonight is the need for combat pay for those who serve under fire in an active theatre of operations. Several months ago I asked the minister about this, and he replied that the Canadian forces serving in Korea were already receiving combat pay. Combat pay is very different from the overseas pay which the Canadian army in Korea is now receiving, and which is paid to
"Mr. Thomas.]

all servicemen who leave our shores for an active theatre of operations. Combat pay is extra pay which is given to those who serve in a special area, often under conditions of extreme discomfort and in constant danger from enemy fire and attack. The men who serve in the rear areas, such as clerks, artificers, driver-mechanics, motor mechanics and other tradesmen receive trades pay, which makes their pay higher than that of men of similar rank who do the actual fighting in the forward areas.
I believe the most important skill in any armed force is that possessed by those who achieve proficiency in handling their weapons under fire. I believe men who qualify in handling their weapons under fire should be paid combat pay in exactly the same manner as those who become proficient at their trade, and who are paid trades pay. I believe also that combat pay should be greater in value than any trades pay, because there is no skill in warfare that is comparable to that of handling weapons proficiently under fire. It is on that proficiency and skill that the outcome of any campaign depends. I believe that proficiency should be rewarded, with that importance in mind.
I would appreciate very much hearing the minister's comments on the need for paying this special kind of combat pay to those who become proficient in handling their weapons under fire while serving in an active theatre of operations.


Brooke Claxton: With regard to the first point, I can assure the hon. member that while his representations were given every consideration, the matter had been actively considered for perhaps six or eight months before he mentioned the subject.
With regard to combat pay, this involves a good many factors. We introduced a new type of tradesmen's pay last December. Under this, for the first time a trained infantry soldier became entitled to tradesman's pay for the first time. It is our view we should not go beyond that. We are paying a special allowance to men serving in the field. Our rates of pay are as good as any; the rates of pension are better than any and the treatment we give is as good as any we know about. We think that, taking into consideration the traditional practice of those serving in the British armed forces of trying to deal fairly with all men and all ranks, this is about as far as we can go at this time.


George Harris Hees: I should like to ask the minister specifically, does he consider that the skill required to handle a rifle, machine gun or Bren gun under fire against an advancing enemy, which after all is the skill upon which depends the success of any campaign, should

be less highly paid than that of the man who serves in the rear areas in comparative safety and comparative comfort at a trade such as clerk, artificer, motor mechanic or driver-mechanic, or one of the many other trades that receive trades pay? I have no objection to these men receiving trades pay. I think they deserve it for their proficiency. My whole contention is that the highest skill in any armed force is that of the man who handles his weapons proficiently under fire, because if he falls down the whole campaign falls down and all the tradesmen in the rear areas are simply mopped up by the enemy. I claim that the highest trade, the highest skill, should be paid higher than anything else, and I believe there is no problem in qualifying a man under battle conditions as being a man who can handle his weapons proficiently under fire. To me it is most important that that skill should be rewarded. Will the minister answer that?


Brooke Claxton: That is the case today.


George Harris Hees: Can the minister say specifically what a private who is a Bren gunner in a forward platoon receives per day as compared with a motor mechanic or an artificer? Will he give me that answer in the daily rate of pay?


Brooke Claxton: That was given in a release of the department in December when this new basis of pay was extended to qualified soldiers in the infantry and other formations. The qualifications and the rates are similar for all trades.


George Harris Hees: I am afraid that is not an answer at all. I have asked the minister the question, and I should think he would be familiar with these figures. I am asking him whether all trades pay is the same? It must be simple to give me the figure for the private who receives trades pay, and it must be simple for the minister with his knowledge to give me the figure of what the private-


Brooke Claxton: I do not carry these in my head. I can assure the hon. member that he flatters me when he suggests it; but the monthly rates of group pay for the tradesmen in addition to the monthly rate of pay set out for the rank are as follows: group 1, effective October 1, 1946, $4; effective December 1, 1951, $6. Now for the first time, subsequent to the introduction of this order effective December 1, 1951, the trade groupings were extended to infantry soldiers as well as others, in addition to what were ordinarily called tradesmen before.


George Harris Hees: Can we get right down to figures? The minister has his deputy minister and another official from his department in front
Supply-National Defence of him. They ought to have these figures. They must know the figures I am asking for. I am asking specifically, what does a private who serves in the front line under fire, handling a Bren gun, receive and what does a private who serves in the rear areas as an artificer or a motor mechanic receive? These are two specific questions. The minister has all that information in front of him, and he must be able to answer me.


Brooke Claxton: It all depends. Surely I must have made myself clear to the hon. member. I ask hon. members if I have not. If he is entitled to trades qualifications, either as an infantryman, an artilleryman, an artificer or a driver, then he will get in addition to the ordinary pay of his rank, if he falls into group 1, $6 per month. That will be in addition to the pay of his rank, which will be the basic pay of $91 a month for a trained private.


George Harris Hees: Does that apply to a man who handles a Bren gun in the forward area?


Brooke Claxton: If qualified as a tradesman according to the rules laid down for an infantry soldier.


George Harris Hees: But, Mr. Chairman, I asked whether a proficient Bren gunner, a man in a forward platoon, qualifies as a tradesman if he is simply a Bren gunner or a rifleman.


Brooke Claxton: Right.


George Harris Hees: If he be proficient?


Brooke Claxton: Right.


George Harris Hees: Then he gets his $6 in exactly the same way as the motor mechanic gets his $6 extra?


Brooke Claxton: Yes; that is if the motor mechanic is a trained tradesman according to the standards laid down in the army service corps for motor mechanics.


Douglas Scott Harkness: Since we appear to be on rates of pay there are two or three questions I should like to ask. Looking at page 12 of the white paper which was recently issued I see the rates of pay for various ranks, but I see nothing there in regard to rates of staff pay. Can the minister tell us what the rates of staff pay are at the present time?


Brooke Claxton: There is no staff pay.


Douglas Scott Harkness: There is no staff pay whatever at the present time?


Brooke Claxton: No.


Douglas Scott Harkness: Is there anything equivalent to staff pay as we had it during the last war?


Brooke Claxton: Could we have another question while I verify that? My recollection is that there is none. There might be some categories of what is called responsibility

Supply-National Defence allowance which might fall within the category my hon. friend is asking about, although there is no staff pay as such any longer.


Douglas Scott Harkness: Is that true of the whole service? For example, does the brigade major of the 25th brigade in Korea receive the same pay as, we will say, the major in command of A company, second battalion, Princess Patricia's Canadian Light Infantry receives?


Brooke Claxton: He receives in addition overseas pay, and because he is serving in an active theatre of war he receives an allowance in respect of income tax, which is quite substantial.


Douglas Scott Harkness: No; I think the minister has misapprehended my question.


Brooke Claxton: He does not receive any extra pay on account of his appointment.


Douglas Scott Harkness: Perhaps I have not made it clear. I will phrase it again. The first battalion of the P.P.C.L.I. is now in Korea. My question then would be this. Does the brigade major of the 25th brigade in Korea receive exactly the same pay as the major in command of A company of the 1st battalion P.P.C.L.I., which is also in Korea, receives?


Brooke Claxton: That is right.


Ray Thomas: Does the minister consider that the brigade in Europe today is on active service in the same way as the brigade in Korea?


Brooke Claxton: No, not the same. He does not receive any allowance in respect of income tax, or for overseas service.


Ray Thomas: I misunderstood the minister. In answering the last question I thought he said that the major in Germany today would receive overseas pay and active service pay.


Douglas Scott Harkness: I have one or two other questions on pay and then I have some other questions on other matters. The next one in regard to pay is this. Are our paratroopers in the 1st battalion P.P.C.L.I. and the 1st battalion R.C.R., and the Royal 22nd Regiment who have now been sent to Korea to be cut off from their jump pay when they are posted to Korea?


Brooke Claxton: In order to continue to be qualified for the paratroopers' pay they have to belong to a jumping unit and $30 a month is paid while undergoing flying or parachutist training, or while filling a role requiring active or continuous flying. There are regulations laid down to require that in order to continue to qualify for this pay for these operations, they must take part in a certain number of operations within each period.


Douglas Scott Harkness: As I understand the minister's answer it comes to this, that when a paratrooper is posted to Korea his jump pay is cut off; is that correct?


Brooke Claxton: If he is posted to an infantry unit which is not doing paratrooping, he loses his risk pay. But at the same time, having been posted to the 25th Canadian infantry brigade in Korea he becomes entitled to overseas pay and also to the income tax allowance, which may be more valuable.


Douglas Scott Harkness: All I want is an answer yes or no. I take it from what the minister has said that his paratrooping or jump pay is cut off when he is posted to Korea. I presume the same thing applies if he is posted to the 27th brigade in Germany?


Brooke Claxton: Answering an earlier question:	As I suspected, there is one case of
responsibility allowance, and that is for officers appointed as adjutants, who receive $15 a month extra.


James MacKerras Macdonnell: Adjutants?


Brooke Claxton: Yes, adjutants. Doctors and dentists receive an additional $60. Risk pay is paid with respect to continuous exposure to risk. Once that exposure concludes, the entitlement to that pay ends. But on the other hand, upon being posted to Korea, the officers and men become entitled to both the overseas allowance and the allowance in respect of income tax, which in most cases is at least as high as if not higher than the other amount.


Douglas Scott Harkness: I should like to ask one or
two further questions with regard to pay. Does the minister know how many members, if any, on the staff at national defence headquarters here, and on the staffs of commands, are still drawing jump pay?


Brooke Claxton: No. I would be glad to have any such cases drawn to my attention.


Douglas Scott Harkness: I am not drawing any case to the minister's attention. I am asking him how many, if any, in those categories are drawing jump pay.


Brooke Claxton: I do not know of any.


Ray Thomas: The minister says that any paratrooper assigned to an infantry group and sent to Korea is deprived of his jump pay. In the event that any such paratrooper were called upon or volunteered to jump into enemy territory, how long would that jump pay continue, or would it be of very short duration, added to his ordinary pay he would receive overseas? Would it carry on for a month, or any stated length of time?


Brooke Claxton: Except in most unusual circumstances of a rather hush-hush nature-

and we would not expect this to develop- they would be attached to a paratroop unit, and then would be entitled to risk pay. It is the attachment to the paratroop unit and the exposure to risk which creates the entitlement to the risk pay.


Ray Thomas: In other words if a man were a paratrooper and assigned to front line duty in Korea he would not receive his jump pay; but if he were assigned to a paratroop group behind the lines in Korea he would not only draw his overseas pay, but he would also draw his paratroop pay, whether or not he made any jumps.


Brooke Claxton: That has not happened.


Ray Thomas: But it could easily happen.


Brooke Claxton: If we had a paratroop unit, taking part in activities in Korea, and if such a man had proceeded from an infantry battalion to a paratroop unit which was taking part in paratroop activities in Korea', then he would be entitled to the risk pay.


Ray Thomas: That is complicated enough for me.


James MacKerras Macdonnell: Purely as a matter of interest-and I cannot help being interested in the difference between a stafE officer and an adjutant, having served as both myself-I should like to ask a question. I entirely approve of doing away with staff pay, but I am interested to know what the distinction is between an adjutant and a brigade major. I am not objecting to it, but I am just interested to know.


Brooke Claxton: The hon. member was a major himself, as I remember it, in the first world war. He will recall that normally an adjutant in a unit, as I understand it, is a captain. For his rank he carries more responsibility and a heavier burden than is carried by the ordinary captain, but rather less than was carried formerly by the major.


George Harris Hees: I think that certainly a brigade major carries a great deal more responsibility than a major who is a company commander or a battery commander. I do not think the minister's argument holds good at all. If there is a differential between the second in command and the adjutant, then there is the same differential between the company commander and the brigade major. What is the explanation of that?


Brooke Claxton: The major, whether in a brigade or a company, is receiving $335 a month basic pay, whereas the captain would receive $255 basic pay; and that is a pretty big differential.


George Harris Hees: But what the hon. member for Greenwood and I are getting down to is this.
Supply-National Defence We do not care which way it is, but we think it should be the same all the way through. There is the same differential in responsibility between the captain who is second in command of a company and an adjutant as there is between the major who is company commander and the brigade major. Why should the adjutant get extra pay over a captain who is a company commander, while a brigade major, who has the same increase in responsibilities, receives no increase over the company commander or the battery commander? What is the answer to that?


Brooke Claxton: Because the captain gets very much less pay than the major to begin with. And if the captain is doing work which is considered equivalent to that of a major, then it is considered that should have some extra recompense for his extra responsibility, whereas the major seems to be adequately paid anyway.


Douglas Scott Harkness: I was rather interested in the first part of this white paper, which deals with the first objective, so far as our defence is concerned, and that is defence against direct attack. It goes on to speak of radai installations, fighter control and the like, but it makes no mention whatever of antiaircraft defence.
In previous years I have referred to what I have considered to be a severe deficiency in respect of our anti-aircraft defences. Why is no mention made of anti-aircraft defence, and what provisions are there in existence, or being projected, for this type of defence?


Brooke Claxton: The hon. member raises on this occasion, and has raised formerly, one of the most controversial and difficult questions we have to face. We have a large number of anti-aircraft batteries in Canada. I do not want to say, any more than the hon. member would, anything that would indicate that they are not important, because the fact is that I regard them as of the greatest importance. But the fact is that in connection with anti-aircraft guns and anti-aircraft warfare we are in one of these transitionary periods where we are moving from the heavy and light anti-aircraft gun, particularly the heavy which existed at the end of the second world war, into the field of guided missiles. How soon that will come we do not know. How profitable it is for us to spend the amount of defence dollars necessary to have anti-aircraft forces, either in being or ready to be brought into being, is difficult to say in view of the prospect that there will be something quite different which will be far more effective within two or three years.
I have spoken with extreme frankness because the hon. member has raised the question. I think he knows the answer. This

Supply*-National Defence is a question of great difficulty. We must have anti-aircraft batteries, both light and heavy, in the number that we have. They are equipped, subject to some modifications by way of fire control instruments and the like, with as good equipment as there is available; but how much further we should go into the modification of anti-aircraft guns in the light of anticipated developments is difficult to decide.


Douglas Scott Harkness: I must say that the minister has ascribed to me much more knowledge than I possess when he says I know the answer. I know very little about it. As he knows, I have been disturbed for a considerable time over our ack-ack defences and what ack-ack defences we are projecting. I must say that the minister's remarks have thrown a certain amount of light on this matter.
He said we have a large number of ack-ack batteries in Canada, but I know he must refer to reserve force batteries. There is no reason why I should not say that there are few permanent or regular force ack-ack batteries. There is no reason for not saying, because it has been said by many other people, that the reserve force ack-ack batteries have not their full complement of guns or anything like it, and they have much less than their full complement of men. To say that there are large numbers of ack-ack batteries in Canada does not mean a great deal from the defence point of view because those ack-ack batteries are not in a position where they could go out and defend targets.
The importance of anti-aircraft defence was impressed upon me strongly as a result of a trip I took with a large number of members over the week end to the industrial area in Quebec lying up from the head of the Saguenay river. It struck me forcibly that if there was any place in Canada that needed ack-ack defence, it was there. I know there are numerous other industrial areas which need it just as badly.
I know what the minister has said with regard to guided missiles is of extreme importance. I assume that along with our allies we have been doing considerable research in air-to-air guided missiles, rocket weapons and air-to-ground weapons. It is important to know how long we will have to wait to get into operation batteries of air-to-ground rocket weapons, and whether in the meantime we should not have in operation or existence the regular form of ack-ack weapons as we have known them in the past. I do not know whether the minister would care to elaborate on what he said before, but I would like to have his views as to what is

proposed immediately as far as anti-aircraft defence is concerned.


Brooke Claxton: At the present time we have the guns to make a defence. Some of those guns are being modernized up to the latest standards. Our experience has been that to modernize such a weapon may not produce that margin of difference between what it was before and what it will be afterward which would justify the expenditure, in view of the fact that we expect that in three or four years there will be a much better weapon available. The cost of modernizing equipment of this kind is quite heavy indeed.
We are doing about one quarter of our guns, and we have a considerable number. Frankly we are hesitant about expending money in doing the rest in view of the time involved, and also when it is considered that the cost of modernizing each gun, despite the fact that the difference between what it was before and what it may be in the future is marginal, is about equivalent to the cost of a modern fighter. Our thought is that it is better to have more modern fighters than more heavy anti-aircraft guns in view of [DOT] the fact that all anti-aircraft guns, especially heavy anti-aircraft guns, are expected to become obsolete within a limited number of years.


Douglas Scott Harkness: I certainly agree with the minister that it is preferable to have a modern fighter than to modernize a last war antiaircraft gun. Have any steps yet been taken or is it proposed to take them shortly to convert present ack-ack batteries into air-to-ground rocket batteries?


Brooke Claxton: We have no rockets yet. Experiments along these lines are being carried out in other countries and we are prepared to follow their experience. It should be very easy to catch up with them. I think the experience of all gunners is that it is possible to adapt themselves rapidly to new type weapons. For example, our gunners were able to use 105's or 25-pounders, and similarly during the first and second world wars our gunners quickly adapted themselves to the use of new type weapons. I am sure they will be able to adapt themselves quickly in the future to rockets.


Agar Rodney Adamson: Since the question of antiaircraft defence has come up I should like to ask the minister a question which he need not answer unless he thinks an answer is desirable. Has there been any hesitation in developing in Canada newer weapons such as the ground-to-air homing rocket, which has such a great potential for air defence, and the new air-to-air weapon which is colloquially known as the fabula and which

apparently is a fragmentation homing weapon? I mention this because it is common knowledge, having been mentioned in the press, that these homing weapons have had outstanding success.
It seems to me that nothing would be more desirable for air defence than to concentrate on these new weapons. There is nothing secret about these things, as they have been referred to in the newspapers in the United States, in the technical journals of the United States air force and in our own journals. I realize the minister's difficulty in this regard, but I hope he can make a statement to the committee that something is being done along this line so we will at least have the protection of the most modern weapons available.
That brings me to the other question, and it is one of enormous difficulty. I refer to the standardization of ammunition. At the present time there are no less than five different calibres of small arms ammunition, and if you count the -50 Browning machine gun as a small arms weapon there are six. There may be more, but those are all I know of. There is the -280 of the United Kingdom, -300 of the United States, -303 of the United Kingdom, -450 of the United States, -50 calibre of the United States and the 9 millimetre which I gather is common both to the United States and the United Kingdom.
I realize that no problem has given the minister a greater headache than the standardization of arms, and there is no problem more important to us in Canada. It is not so much a question of standardizing the arms as standardizing the munitions because if, unfortunately, we have to fight, we will be fighting in association with groups of people who are already armed with various types of small arms to which their troops are accustomed. The situation presents difficulty as instanced by the prejudices of our own troops in Korea based on fighting experience for the rather old-fashioned Lee Enfield in preference to the more modern Garand rifle. It is a tremendous problem and the minister is beset with great difficulties, but it is no use for us in the house to say that we are faced with an impossible situation.
We have two warring factions, one favouring the United States type of ammunition and the other favouring the United Kingdom type of ammunition. The great challenge is to do everything we can humanly do to see that the types of ammunition, particularly for the same arms, are standardized. Even though the type of arm may vary from country to country we should try to see that the ammunition is useful and applicable to all arms.
Supply-National Defence I know it is easy to get up in the House of Commons and say that is the goal. I know it is easy to say we should do this. I realize the difficulty, but I think it would be helpful to the committee if the minister would make a statement tonight on the problem of standardization of small arms.
I know it is one of the supreme headaches today in all armies; but I think the more we talk about it, the more we discuss it, the more it is brought out into the open, the more likely we are to find a solution. This is not a hush-hush problem. It is not a conflict between the United States, Canada and the United Kingdom. It is something that must be worked out with the good will of all concerned. I bring up the matter knowing it to be controversial, knowing it to be a headache, knowing it to be a problem that must be faced, merely to give the minister the opportunity to state his opinion, if he so desires, because I feel we in Canada occupy a unique position in this regard. What I am saying to the minister is not said in any critical way. It is said entirely to be helpful, because one of the great problems the United States has to face is the standardization of ammunition. I feel that no country occupies such a key position as Canada in this regard.


Brooke Claxton: The hon. member for York West brought up two questions. The first had to do with the position regarding guided missiles and the second concerned small arms and their ammunition. With respect to the first, it is a field in which most of the work of research is being done in other countries at the present time. I can assure him that hundreds and hundreds of millions of dollars are being spent on it. In defence research and in the armed forces we have limited ourselves to keeping up with the progress in development, and also we have undertaken research in one special field, that of air-to-air missiles. We are doing special work in that field.
With respect to small arms, I am very glad indeed to have his encouraging words in support of the position I took this afternoon when I expressed the same view.


Agar Rodney Adamson: There is another entirely different matter I wish to raise. I am sorry I was not in the house to hear the minister but I was attending a committee dealing with a subject which was at one time controversial. I hope there can be established in our armed services the counterpart - of what is known in the British army as NAAFI, the navy, army and air force institute. I have had the privilege of visiting several military camps in the past year. The training officers as well as those on the G side in those camps complained to me that a great deal of the time

Supply-National Defence of training officers, who had duties elsewhere, was taken up with the auditing of the accounts of the camp grocery or department store. People were telephoning the colonels, regimental commanders, adjutants and others saying that they had brought a tin of such and such at the camp grocery and it was no good. This may seem a comparatively small matter, but when one considers that in some of our large military establishments the gross turnover in these stores runs to well over $1 million or $1,500,000 a year I think it is most unfair to ask regimental officers who are dealing with the training of a unit, or camp officers who are dealing with administration in a major military camp, to deal with the petty irritations occasioned by the bookkeeping of the camp grocery store.
I would hope, Mr. Chairman, that some consideration would be given to the establishment of an organization such as is known in the British army, the United Kingdom service, as NAAFI. I know we may have had criticisms of NAAFI overseas. We may have thought NAAFI coffee was pretty poor and we may have had other criticisms of it, but the establishment of such an organization takes off the shoulders of your training and technical officers-your G officers, your A officers, and your Q officers-the frightful irritation of running grocery stores and department stores and all other civilian operations which go therewith.


Brooke Claxton: The hon. member for York West has recalled to my mind an answer I should have given to the hon. member for Broadview. There is additional pay given to an adjutant as a responsibility allowance partly in consideration of his having to handle the funds for the regiment which, as the hon. member says, is quite a burden.
With regard to the institution of NAAFI or something equivalent in Canada, we have had the matter under consideration for quite a long time. There is a lot to be said for it. The main thing to be said against it is that it removes from the local unit, whether it be a ship, army unit or air station, the interest and incentive that assures efficient manage

nent and local interest through local control if the funds created. Those two things have to be balanced and as usual there are differing views, but all are being considered.


William Alfred Robinson: Shall the section carry?


Douglas Scott Harkness: On page 4 of the white paper which was issued, under army I see:
The army is continuing to maintain a mobile striking force for defence against a surprise airborne attack.


During the past two or three years the minister has always referred to our armed force for defence against airborne attack as our "airborne brigade". Why is it that here in the white paper and in the speech made this afternoon there was no mention of the airborne brigade at all? What we had mentioned was a mobile striking force.


Brooke Claxton: Mr. Chairman, it is essentially a brigade. The name was changed but I do not remember when, though I think it was about two and a half years back and "mobile striking force" is the term that has been used ever since.


William Alfred Robinson: Shall the section carry?


Douglas Scott Harkness: No, Mr. Chairman. We were still using the term "airborne brigade" last year when we were discussing the estimates. Whether it was changed as far as army nomenclature is concerned, I do not know. It appears to me that the reason it was changed, and I think rightly changed, is that we no longer have an airborne brigade. Our airborne brigade essentially has gone to Korea, and the people who have had training in Korea and have come back from there have not yet been trained as airborne or parachute troops. I do not think they are any worse troops, and I think probably their experience in Korea makes them more effective fighting troops than they otherwise would be. But the situation, I would take it, is that we no longer have an airborne brigade and therefore the term has been dropped.
There is another point in the white paper under army which I would like to ask about. It is mentioned on page 18 under army equipment that:
Deliveries on orders of U.S. army equipment are proceeding. First deliveries from Canadian production of U.S. pattern equipment are anticipated in the last quarter of 1952.
In view of all the evidence we had in the defence expenditure committee that appears to me a very peculiar sort of paragraph. As I understand it United States orders have already been delivered. With respect to deliveries of Canadian production of United States pattern equipment being anticipated in the last quarter of 1952, I would like to ask the minister what United States pattern equipment it is anticipated we will be turning out from our factories in 1952.


Brooke Claxton: Mr. Chairman, on the first point and the hon. member's suggestion that we have ceased to have an airborne brigade which we had before, I can assure him that is not so. The change in terminology has no reference to the strength or composition of the forces. The terms "brigade" and "mobile

striking force" were used the year before last and last year according to my recollection, and there is no change in the constitution or the composition of the forces. We have the three battalions and the other elements that we always had.
With regard to delivery of United States equipment, we have been quite frankly disappointed in deliveries but that was due to circumstances over which we had no control and over which we do not think the United States had any control either. We have never said that we had delivered to us all the United States equipment that we expected. Events have prevented it, and we will get deliveries as the equipment becomes available. In the meantime we are undertaking the manufacture in Canada of 105 mm. guns and ammunition, 155 mm. guns, and various types of mortars and the like. That is proceeding. The 155's will be coming off the production line later this year and so will the 105's. Ammunition for the 105's is about to be produced in considerable quantities, I understand. That is the job of my hon. friend the Minister of Defence Production. The principal two items that we planned to get from the United States and on which deliveries have been suspended are tanks and small arms and the reasons for that have already been given.


Douglas Scott Harkness: I do not want to enter into a controversy with the minister over the question of whether the mobile striking force is the same as it was before or not, but I do not think there is any question that it is the same or anything like the same. The term "airborne brigade" is no longer used, no longer appropriately used, because of the fact that the airborne brigade which was trained as such is now serving in Korea. The second battalions of the regiments which formed that brigade are in two cases just back from Korea. The members in most cases are still on their leave and are not back to receive training as airborne troops. There is no question but that the result is that we have not an airborne brigade at the present time and we will not have one for some months, under the very best of circumstances.
As I say, I do not want to enter into a controversy with the minister over that point, but I would just like to make that statement in explanation, considering what he said a few minutes ago.


James MacKerras Macdonnell: I understand we are still on page 296 where there is a sort of summing up figure for the navy-$268 million. If I may anticipate for a moment we
5.5704-232 J
Supply-National Defence will have a figure later for the army amounting to some $500 million, I think it is, and for the air force a figure of some $700 million, all adding up to the figure which appears on page 38 of $1,642 million, which is broadly our expenditure or the bulk of our expenditure for the year. Looking at item 248 which is a sort of controlling item for these and other items we find that it shows an estimate for this year of $1,642 million but a total commitment of $3,900 million or nearly $4 billion. It is stated that of that total about $2,346 million will come due for payment in future years. My question is this. We are given very full details with regard to the expenditure of $1,642 million which is to be made this year.


William Alfred Robinson: Do I understand the hon. member is directing his attention to the item "Canadian Army-active forces"?


James MacKerras Macdonnell: No.


William Alfred Robinson: It seems to me he is directing his attention to a general discussion which has been concluded.


James MacKerras Macdonnell: I think I can satisfy you on that, Mr. Chairman. I am directing my attention primarily to the figure on the page we are considering, that is the naval figure of $268 million. I was explaining my question just by reference to the overall figure. My question is this. There must be a figure corresponding to this $268 million, the figure of commitments, because we know that the commitment figure over-all is larger than the figure for expenditures this year.
My point is that I think we should be able to get general information with regard to this commitment figure. It is given in detail, so the department must have those figures. I presume they must have those figures available. They seem to me to be very important figures, because they indicate the policy to which we are committing ourselves. My question at the moment must be with regard to the figure corresponding to this $268 million, unless the minister considers it more convenient to answer the question for all three services rather than to have me ask this question now and then later for the army and still later for the air force.


Brooke Claxton: You are asking about the navy, and I thought we had finished the navy item.


James MacKerras Macdonnell: Yes, but I point out that my question is really a broad question. I do not care whether it is answered in three bits or over-all.


Brooke Claxton: I can give the hon. member the answer he wants. The commitments for the navy total $704,098,974, of which $427,213,488

Supply-National Defence are being carried forward to future years. The estimated cash requirement for 1952-53 is $268,224,932, which is the figure to which he referred at page 296.


James MacKerras Macdonnell: My question was not merely as to the actual figure, but the purposes covered by the amount.


William Alfred Robinson: Order. I am sorry to interrupt, but it seems to me the hon. member is referring to a section of item 248 which has already been passed. 1 do not think I should allow the question in respect of that section of the item.


Douglas Scott Harkness: I do not think we can say it has been passed, because it enters into every item of the details which we will be considering under vote 248. We have no means of knowing, unless we ask the minister, which ones it enters into and which ones it does not. In other words, if we wanted to know whether it entered into 105 millimetre guns we would have to ask, and the same would apply to every one of these items. The presumption is that it enters into every item, but I think it would expedite matters considerably if the hon. member for Greenwood received a reply now.


Brooke Claxton: I think the hon. member for Calgary East has in mind the form of the estimates as they were last year. The figures that appear in the details for the Department of National Defence, beginning at pages 289 and following, and particularly the figure of $268,224,932 which appears at page 296 and is the figure which gave the hon. member for Greenwood occasion for asking this question, is for cash. Commitments do not appear in the details.


James MacKerras Macdonnell: I realize that only too well. I am asking, even if there is not to be the same detail-and I do not suppose there should be-whether we may not be given some general indication. After all, $2 billion are being committed, and indeed judging from the detailed figures given I rather surmise they have largely been committed. Is it not reasonable that when we are being committed to this huge expenditure we should have some indication as to the purposes? I am not clear in my mind as to how much detail we should ask the minister to give, but it does seem to me we should have a general idea.


Brooke Claxton: The cash we are seeking from this parliament is the amount set out in the estimates as put before this committee beginning at page 38, and it totals $2,001,725,000; that is the cash appropriation we are seeking from this parliament. If this parliament sees fit to vote this appropriation and makes that amount of money available, that will


be all that will be available to meet the expenditures, the details of which are listed at pages 289 and following; that is receipting cash expenditures, and the details of the votes total up to the amount of the cash which it is expected we will spend in 1952-53.


James MacKerras Macdonnell: At the
moment the minister is telling us, as I understand it and he will correct me if I am wrong, that there are commitments of $2,346 million in addition to that $1,600 million of expenditures for which the details are now being given. I am suggesting that we are just as much interested in that, because in due course we will be asked to provide the money for it. To put it theoretically and rather fancifully, supposing we found that in the details of the $2,300 million there were things we did not approve of, and we said we did not want any of those things. I have given a fanciful illustration, but I come back to ask whether it is not reasonable to ask that we be informed in some particularity as to what those details are? These are commitments.


Brooke Claxton: I am afraid the hon. member goes a good deal farther than the limits of the work of this committee, because if I understand him correctly what he really is suggesting is that we should have a multiple year budget, which is not what our system provides for at all. We would have to seek from each parliament in each successive year cash authority to meet the amount required for each year's expenditure as it is made.


Louis-René Beaudoin: Shall we continue to the next subheading?


Douglas Scott Harkness: No. This item I notice includes tanks and armoured fighting vehicles, to which the minister referred a little while ago in another connection. The amount listed for last year is $22,500,000. The amount listed for this year is $22,250,000, approximately the same figure. How much of that $22,500,000 which is listed as the appropriation for last year was actually expended? What I am getting at is this. Is this actually what could be called a revote?


Brooke Claxton: Very largely a revote; only $7,500,000 of the amount voted last year was spent.


Louis-René Beaudoin: Is it agreeable to proceed with the next subheading?


Mr. Fulton:: I wanted to ask the minister a question about the equipment of the 25th brigade in Korea, which I think comes under this item of armoured fighting vehicles. As I recall it, last year when we were discussing the estimates, or very shortly after the 25th brigade was sent to Korea, we were discussing whether or not that brigade should be accompanied by a squadron of tanks, and we

engaged in a controversy with the minister as to whether anti-tank guns should be properly classified as armoured fighting vehicles or artillery. The minister told us at that time that all that was being sent over were anti-tank guns. We recommended that the brigade should be accompanied by a squadron of tanks.
It seems to me, Mr. Chairman, that the decision of the minister as announced at that time that they should not have tanks was reversed within about three months from the time this brigade arrived in Korea. Is that correct or not?


Brooke Claxton: I would have to refresh my memory on the details and dates. The fact is that the brigade went to Korea with the type of weapon which was considered suitable for it, which was 17-pounder self-propelled guns mounted on tracks, a tank chassis, which the hon. member I think at the time called the tank, but that was not the name given by the Canadian army.


Edmund Davie Fulton: No, indeed; I said anti-tank guns.


Brooke Claxton: I forget what the details were, but there was some controversy as he says. Anyway, it is a tank chassis carrying a 17-pounder gun. Some people call it a tank; some people do not call it a tank, but call it an anti-tank gun.
When this unit arrived it was found that in order to have additional fire power and also for greater uniformity these should be replaced by the United States Sherman M-4 A-3 EH tank, which was very similar to these Sherman tanks we have in Canada but with later modifications. That was done, and the 17-pounder anti-tank guns on their self-propelled tracks were made available to and went to our North Atlantic treaty allies and have since been delivered. There is no mystery about it. It was done in accordance with the views of the army; it has worked out satisfactorily, and we do not know why there should be any fuss about it.


Edmund Davie Fulton: The reason there should be some fuss about it is this. If the minister will look back at the discussion which took place in this house on his estimates, when the sending of the 25th brigade to Korea was being discussed, he will find that various members on this side, particularly including the hon. member for Calgary East and myself, suggested the brigade should be equipped with tanks. We raised a very specific question as to whether it was advisable to send that brigade over there without armoured fighting vehicles to support it.
Supply-National Defence


Brooke Claxton: These were armoured fighting vehicles.


Edmund Davie Fulton: Well, we raised specific questions as to whether they were adequate. We said, in our opinion, that they were not; that they should have tanks. I raise this question at the moment because it appears to me it has been proven by the experience of the brigade in Korea that the decision should have been taken in fact at the time the brigade was sent.
We have often heard in this house and in this committee criticism on the views put forward on this side. I am not attempting to say that we are always right and somebody else is always wrong. We have been advocating for some time as a policy, both with respect to the brigade in Korea and with respect to the brigade in Europe, that there should be more concentration on armoured fighting vehicles, that is tanks, in support of infantry. Indeed, with respect to the brigade in Europe, I know the hon. member for Nanaimo, the defence critic for the opposition has suggested that instead of concentrating so much on infantry we should concentrate on armoured formations.
The point I want to make is that it does seem to me that, based on experience in Korea, that criticism appears to have been fully justified. It seems to me the experience in Korea has demonstrated not only that the criticism was justified but that the decision of the military forces, which I presume was backed up by the minister, resulted in expenditure of a very considerably larger sum of money to acquire tanks on short notice to support the brigade in Korea than would have been necessary had the suggestions made by this party been adopted at the outset and tanks acquired and sent over with the brigade to Korea when they went.
The reason I make that statement is that we have an answer which was given to a question asked in the defence expenditures committee which shows that 20 M-4 A-3 EH Sherman tanks were first acquired for the 25th infantry brigade in May, 1951. One was subsequently acquired for the 25th reinforcement group for training reinforcements in June, 1951, and that was almost immediately after the brigade landed there. My recollection is that evidence was given in the defence expenditures committee that the cost of these Sherman tanks, particularly having to be acquired as they were on short notice, was considerably in excess of what it would have been had we acquired other types of tanks, particularly the British Centurion, and placed the order at the time it was being urged on this side of the house that we should concentrate more on armoured fighting vehicles.

Members of Parliament-Pensions


Mr. Fournier (Hull):: I move that the committee rise, report progress and ask leave to sit again.


Louis-René Beaudoin: Is it agreed?


Some hon. Members:: Agreed.
Item stands.
Progress reported.
(For list of items passed in committee of supply this day, see page 3739.)



MEMBERS OF PARLIAMENT


Mr. Hughes Cleaver (Halton):: Mr. Speaker, if I may have permission to revert to the order for motions, I present the seventh and eighth reports of the standing committee on banking and commerce.


Louis Stephen St-Laurent: Mr. Speaker, one of these reports recommends the introduction of a bill to establish a pension fund. Hon. members will recall that when giving notice of the motion to set up a committee I stated that if there was such a recommendation it would not be apt to meet with objection on the part of the government, but that any bill would have to be preceded by a resolution and the necessary constitutional recommendation to the house from the Governor General.
Having been informed of the report that was to be made to the house I had a resolution prepared, and had it submitted to His Excellency the Governor General. I have it here now for consideration, and would be prepared at this time to deliver the Governor General's recommendation for consideration.
Of course this could not be dealt with, except by leave of the house, without 48 hours' notice. But if I have leave of the house I would be prepared to move that the house do, at its next sitting, resolve itself into a committee to consider the resolution.


Some hon. Members:: Granted.


Mr. Deputy Speaker:: Has the Prime Minister leave of the house to introduce the resolution at this time?


Some hon. Members:: Yes.


Edmund Davie Fulton: May I ask if by giving consent it would merely advance consideration by a matter of 24 hours.


Louis Stephen St-Laurent: By 48 hours.


Edmund Davie Fulton: We would consider it tomorrow, instead of the next day; is that not correct?


Louis Stephen St-Laurent: The resolution would be called and it would then be moved that the house resolve itself into committee on the following day. So it makes a difference of 48 hours, instead of 24.


Edmund Davie Fulton: All right.


Mr. Deputy Speaker:: Then is it agreed?


Some hon. Members:: Agreed.



PROVISION FOR RETIRING ALLOWANCES

Louis Stephen St-Laurent: that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to introduce a measure to provide for the establishment of a pension plan after long service for members of the House of Commons of Canada; to provide also for contributions by all the said members to a special account for such purpose; and to provide further that the pensions payable shall be paid out of the consolidated revenue fund and charged to the said special account.
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.

Alphonse Fournier: the adjournment of the house.
He said: Tomorrow we will take up the resolution in the name of the Prime Minister respecting a pension plan for long-service members of parliament; Bill No. 390, respecting currency, the Royal Canadian Mint and the exchange fund. Then we will consider the estimates of national defence, veterans affairs, public works and agriculture.
Motion agreed to and the house adjourned at 10:55 p.m.

Wednesday, June 25, 1952