1953-02-04

COMBINES INVESTIGATION ACT


Hon. Stuart S. Garson (Minister of Justice):: Mr. Speaker, I wish to table the report of the combines investigation commissioner on the investigation into an alleged combine in the supply, distribution and sale of coarse papers and related products in British Columbia.



CANADA SHIPPING ACT


[Stage Direction]
Hon. Lionel Chevrier (Minister of Transport: I beg leave to table reports indicating the cases in which ships were relieved from compliance with steamship requirements under the authority of section 488A of the Canada Shipping Act, 1934, during the past year, and also reports indicating the cases in which ships were exempted under the provisions of section 133A of the Canada Shipping Act, 1934, from the obligation of carrying certificated masters, mates or engineers during the past year.
Mr. G. R. Pearkes (Nanaimo):: I would
direct a question to the Minister of Transport (Mr. Chevrier) arising out of the reports that he has just tabled. Are the vessels of the Ming Sung company in the reports which were tabled?


Mr. Chevrier:: The answer is no. The
exemptions for those vessels were withdrawn last year.


Mr. Graydon:: Did you ever find those
ships?



CRIMINAL CODE


Mr. W. Ross Thatcher (Moose Jaw) moved: for leave to introduce Bill No. 108, to amend
the Criminal Code (capital punishment).


Some hon. Members:: Explain.


Wilbert Ross Thatcher: The purpose of this bill is to abolish capital punishment in Canada and to substitute life imprisonment therefor.


Mr. Cruickshank:: Are you worried, Ross?
Motion agreed to and bill read the first time.



QUESTIONS


Mr. Argue:: 1.	What quantity of its agreed purchase of 115 million bushels of wheat from Canada has it been agreed that the United Kingdom will purchase at the class II price?
2.	What additional sum of money is involved at the prevailing class II price?


Mr. Mcllrailh:: 1.	200,000 long tons, the equivalent of 7,466,666 bushels.
2.	The quantity of wheat which the United Kingdom has agreed to purchase on a class II basis is to be priced at the class II price in effect at the time of offering, which will be between now and next August. As at January 29 the class II prices for the milling grades of wheat were 37 cents per bushel over the I.W.A. prices. On this basis the sum involved is $2,762,666.



WHEAT AGREEMENT


Mr. Argue:: 1.	What quantity of wheat in excess of our international wheat agreement United Kingdom allotment did Canada sell to the United Kingdom in 1951-52, at the lower I.W.A. price?
2.	What was the reduction in the sum of money Canada received for this quantity of wheat, as compared to the sum we would have received at the average class II price for 1951-52?


Mr. Mcllrailh:: 1.	Nil.
2.	Answered by No. 1.



BRITISH PURCHASES, 1951-52

Mr. Argue:: 1.	What quantity of wheat did the United Kingdom purchase in the crop year 1951-52, at the international wheat agreement price?
2.	What quantity of wheat did the United Kingdom purchase in 1951-52, at the class II price?


Mr. Mcllrailh:: 1.	98,621,333 bushels as wheat; 19,493,333 bushels of flour in wheat equivalent; 118,114,666 total wheat equivalent.
2.	1,500,000 bushels of No. 5 wheat.

Questions



GAMMA GLOBULIN

Mr. Applewhaile:: 1.	Has any action been taken by the federal government for the testing of gamma globulin as a protection against paralytic poliomyelitis?
2.	If so, is the federal government making any financial contribution towards such a test?
3.	Will any action be taken to control the distribution of gamma globulin?


Mr. McCusker:: 1.	Yes. Arrangements have just been completed for a test in Canada of gamma globulin to evaluate its usefulness as a protection against paralytic poliomyelitis.
2.	A grant of $67,000 from federal public health research funds has been allotted to buy special equipment needed to prepare an initial quantity of gamma globulin. Production of this substance in Canada will be handled by the Connaught Medical Research Laboratories, Toronto.
3.	On the recommendation of a conference of provincial public health and research experts recently held under the chairmanship of the federal deputy minister of health a standing committee consisting of representatives of provincial public health and research institutions and medical schools is being formed. Its main function will be to keep constantly in touch with the polio situation and to ensure the most effective distribution of the limited supply of gamma globulin which will be available.



GRAND ETANG, N.S.  GOVERNMENT WORK

Mr. Brooks:: 1.	Has any federal government work been done at Grand Etang, Inverness county, Nova Scotia, during the past two years?
2.	If so, what has been the nature of the work?
3.	How was the work done, and at what cost to the public?


Mr. Fournier (Hull):: 1.	Yes.
2.	(a) Rebuilding superstructure of head-block of east pier.
(b)	Repairing the stem of the west wharf.
3.	By day labour.
(a)	$3,552.81.
(b)	$995.54.



TELEVISION STATION, OTTAWA

Mr. Couriemanche:: 1.	Is it the intention of the Canadian Broadcasting Corporation to construct a television station at Ottawa or in the district?
2.	If so, (a) will the site of the transmitter of the said television station be in the Laurentians? If not, where will it be; (b) what reasons have determined the choice of the site for such transmitter; (c) will French programs be broadcast by such transmitter; (d) what will be the proportion
[Mr. Mcllraith.l
of such French programs and the time of performances in French, during the daily operating period of the new station; (e) what will be the principal performances broadcast for the French-speaking population; (f) will the new station be recognized as bilingual?


Mr. McCann:: 1.	Yes.
2.	(a) The site of a transmitter has not yet been determined.
(b)	See (a).
(c)	Program plans for the station have not yet been worked out but it has been the intention of the corporation that it should broadcast French as well as English language programs.
(d)	, (e) and (f). See (c).



BERTHIER-MASKINONGE COUNTY, QUE.  BRIDGE

Mr. Balcer:: 1.	To whom was the contract awarded for the construction of a bridge connecting Berthierville, Ile-aux-Castors and lie St. Ignace, in the county of Berthier-Maskinonge?
2.	On what date and for what amount?
3.	On what date should the work be completed?
4.	What amount has been paid, up to the present, on the said contract?
5.	Was a sub-contract awarded for the erection of embankments and the preparation and paving of approaches to such bridge?
6.	K so, to whom were the said sub-contracts awarded and for what amount?


Mr. Fournier (Hull):: 1.	R. A. Blyth, Toronto, Ont.
2.	(a) October 27, 1951.
(b) $334,824.
3.	June, 1953.
4.	$183,732.67.
5.	No.
6.	Answered by No. 5.



UNEMPLOYMENT INSURANCE ADVISORY COMMITTEE-RECOMMENDATIONS

Mr. Knowles:: 1.	Has the unemployment insurance advisory committee made any recommendations with respect to any changes in the rates of unemployment insurance benefits or any changes in the rates of unemployment insurance premiums arising out of a consideration of the amount of money now in the unemployment insurance fund?
2.	If so, what are the terms of such recommendations?
3.	Have such recommendations been considered
(a) by the unemployment insurance commission;
(b) by the government?
4.	What is the result of such consideration?
5.	Has the unemployment insurance advisory committee made any recommendation with respect to the continuing of unemployment insurance benefits to unemployed persons who become ill while on claim?
6.	H so, what are the terms of any such recommendation?

7.	Has any such recommendation been considered
(a)	by the unemployment insurance commission;
(b)	by the government?
8.	What is the result of such consideration?


Mr. Gregg:: 1.	No, not specifically arising out of the consideration of the amount of money in the unemployment insurance fund; however, as a result of reports from the unemployment insurance commission and representations from labour union federations, the committee recommended to the government at its meetings in July 1951 and April 1952 certain changes in the act and concurred in changes recommended by the unemployment insurance commission in certain regulations.
2.	(a) The reduction of the waiting period by three days.
(b)	Amendment of section 35 (1) (b) to give the commission power by regulation to defer the waiting period when a benefit year terminates during a period when the claimant is unemployed.
(c)	The increase in the scale of benefit rates raising the maximum rate for a beneficiary with a dependent from $21 to $24, with comparable increases in other rates, with no increase in contribution rates.
(d)	The period during which supplementary benefit may be paid to be extended from March 31 to April 15.
3.	The unemployment insurance commission recommended these changes to the government and they were put into effect by act of parliament assented to on July 4, 1952. In addition, the commission by regulation provided for the postponement of the waiting period where a benefit year commences within fourteen days of the termination of the previous benefit year and where the claimant was employed for less than six days during that two-week period; and another regulation provided for the payment of benefit during a holiday shut-down of more than one week where no pay was received from the employer.
4.	Answered by No. 3.
5.	No, the unemployment insurance commission and the advisory committee have found the problem most difficult of solution but are now giving it further consideration.
6.	7 and 8. Answered by No. 5.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Fulion:: 1. Was any contract, sub-contract, agreement, sub-agreement or arrangement whatsoever let or
Orders for Returns
entered into at any time by (a) the government of Canada or any department or agency thereof; or (b) by Canadair Limited, to or with the Ford Motor Company of Canada for production, manufacture or any other process or stage of production or manufacture of main wing panels or other parts of (i) F86 Sabre jets by whatever mark, number or letter the same may have been described; or (ii) T33 training aircraft?
2.	If so, (a) when was the contract, sub-contract, agreement, sub-agreement, or arrangement let or entered into; (b) for how many units; (c) what was the total amount of money involved or to be involved, in each case?
3.	Were any units produced under such contract, sub-contract, agreement, sub-agreement, or arrangement? If so, how many?
4.	Is the contract, etc., still in effect?
5.	If so, when is delivery expected to start?
6.	If not, when was it cancelled?
7.	If cancelled, by whom was it cancelled, upon whose instructions, and for what reasons?
8.	Did the government, or any department or agency thereof, or any other person or corporation, supply or pay for any plant or equipment for the purposes thereof, the cost of which is charged or will be charged to the dominion treasury? If so, what was or will be the cost?
9.	Has any other money been paid by or on account of the government, or is any other money or payment of any sort to fall due which will ultimately be chargeable to the dominion treasury, by virtue of such contract, etc. and/or its cancellation?
10.	Have any claims been made by the Ford Company against (a) the government of Canada or any department or agency thereof; (b) Canadair Limited, in respect of such contract, etc. and/or cancellation?
11.	If so. (a) for how much; (b) how much has been paid?
12.	Has any such contract, etc., as referred to in part one hereof been let to or entered into with any other person or corporation, or are negotiations with respect thereto being carried on, by (a) the government of Canada or any department or agency thereof; or (b) Canadair Limited?
13.	If so, to or with whom?
ENAMEL AND HEATING PRODUCTS LTD.__________


EMPENNAGES
Mr. Fulion:: 1.	Was any contract, sub-contract, agreement, sub-agreement or arrangement whatsoever let or entered into at any time by, (a) the government of Canada or any department or agency thereof or (b) Canadair Limited, to or with Enamel and Heating Products Limited, Sackville, New Brunswick, for production, manufacture or any other process or stage of production or manufacture of empennages or other parts of (i) F86 Sabre jets by whatever mark, number, or letter the same may have been described; or (ii) T33 training aircraft?
2.	If so, (a) when was the contract, sub-contract, agreement, sub-agreement, or arrangement let or entered into; (b) for how many units; (c) what was the total amount of money involved or to be involved, in each case?
3.	Were any units produced under such contract, sub-contract, agreement, sub-agreement or arrangement? If so, how many?
4.	Is the contract, etc., still in effect?
5.	If so, when is delivery expected to start?
6.	Did the government, or any department or agency thereof, or any other person or corporation, supply or pay for any plant or equipment for the purposes thereof, the cost of which is charged

Inquiries of the Ministry or will be charged to the dominion treasury? If so, what was or will be the cost?
7.	Has any money been paid by or on account of the government, or has any money, claim or payment been made by any other person or corporation which will eventually be chargeable to the dominion treasury, by virtue of such contract, etc.? Ii so, how much?



NATIONAL FILM BOARD


Mr. Fulton:: 1.	Has a site been acquired, or have arrangements or negotiations for the acquisition thereof been commenced, for a head office or central administrative location for the national film board? If so, (a) at what location; (b) how large; (c) on whose authority; (d) for what price?
2.	Have any plans, sketches or other preparations whatsoever been made for the erection of a building on the site? If so, what are the particulars of the type and amount of accommodation, and are these matters still being considered, or have they been decided on?
3.	Have any expenditures been made to date in connection therewith apart from the amount paid, if any, for the site? If so, how much, for what purpose or purposes, and on what authority?
4.	Is authority being asked for further commitments or expenditures during this fiscal year? If so, how much, for what purpose or purposes, and under what item in the estimates?
5.	What is estimated to be the final total cost of the complete project as envisaged?



POSSIBLE IMMIGRATION TO CANADA OF REFUGEES

[Stage Direction]
On the orders of the day:
Mr. Daniel Mclvor (Fort William):: Mr. Speaker, with your permission I would like to ask the Minister of Citizenship and Immigration (Mr. Harris) a question. Has the minister made any plans or does he intend to make any plans to make it possible for those left destitute by floods in the old lands to come to Canada? Is the door to Canada wide open to those people?


Hon. W. E. Harris (Minister of Citizenship and Immigration):: Mr. Speaker, the hon. member for Fort William (Mr. Melvor) telephoned me regarding this subject a short time ago. As everyone would expect of him, he was warm-hearted and concerned about the people who at the moment have been left homeless.


An hon. Member:: As we all are.


Walter Edward Harris: We have given consideration
to the problem and while it will be true that a great many of those people will want to continue their lives where they are, there will be some who will find it impossible to do so. There may even be among them some who had before this disaster contemplated' emigrating to Canada. We have directed the offices abroad today that the assisted passage scheme, which is now open

to the single worker or head of the family, should be broadened to include dependents of the worker as well.


Some hon. Members:: Hear, hear.


Walter Edward Harris: This will make it possible for the head of the family to come to Canada with his dependents without depleting his already depleted resources by the payment of somewhat heavy transportation costs.
If the circumstances as we learn them would indicate that some other step can be taken to aid those who would like to come to Canada at this time, we shall give consideration to it, bearing in mind the fact that people from the United Kingdom, Belgium and the Netherlands have been migrating to Canada since the war in goodly numbers and that they are the best of citizens when they come here.


Daniel (Dan) McIvor: Mr. Speaker, that is very good and I say "thanks".


Mr. W. J. Browne (St. John's West):: Mr. Speaker, I would like to ask a supplementary question there. I notice that the chancellor of West Germany the other day said that he was expecting that some of the refugees from East Germany were likely to go to Canada. Has that been considered?


Walter Edward Harris: Mr. Speaker, I presume my
hon. friend was not present when the hon. member for Kamloops (Mr. Fulton) raised that matter the other day. My answer at ithat time was that we had not heard of the proposal, and that is still the answer.



HEALTH INSURANCE


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: May I address a question to the Minister of National Health and Welfare (Mr. Martin). I was going to ask the minister this question yesterday but he is getting so slight I could not see him over there.
Can the minister say when he is going to make the announcement with respect to health insurance which one of his colleagues in the cabinet said recently would be made at this session of parliament?


Hon. Paul Martin (Minister of National Health and Welfare):: My hon. friend knows that whenever an announcement is made it is always made by the government at a time chosen by the government. I do not know

what my hon. friend is referring to but I think he will find that my answer is as definite as the question.


Stanley Howard Knowles: See the Minister of Fisheries (Mr. Sinclair).



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: wish to address a question to the Secretary of State for External Affairs (Mr. Pearson), arising out of an article in the current issue of Life magazine to the effect that strategic metals and aluminum from Canada are finding their way to the U.S.S.R. Is the minister in a position to say what is being done to prevent such a condition if it exists?


Hon. L. B. Pearson (Secretary of Stale for External Affairs):: I will have to look into
the matter but I can say now that there are international arrangements in which Canada participates to ensure that strategic metals do not get to the wrong destination. I think those arrangements are working reasonably well although they are probably not 100 per cent satisfactory. Indeed, during world war II such arrangements were not 100 per cent perfect. I will look into the matter and see if I can make a further report.



EDUCATION


[Stage Direction]
On the orders of the day:
Mr. R. R. Knight (Saskatoon):: Mr. Speaker, I would like to address a question to the Prime Minister (Mr. St. Laurent) of which I sent him notice. Has the government received a brief from the national federation of Canadian university students asking for action on the Massey commission's report in regard to university scholarships? If so, has it been considered and what action is proposed?


Mr. Speaker:: I think that is the type of
question which should appear on the order paper.



INQUIRY AS TO POLICY REGARDING IMPORTATION OF REFINED CUBAN SUGAR

[Stage Direction]
On the orders of the day:
Mr. J. W. Murphy (Lamblon	I
would like to direct a question to the parliamentary assistant to the Minister of Trade and Commerce (Mr. Mcllraith). In view of
Inquiries of the Ministry a statement made by the Minister of Trade and Commerce (Mr. Howe) yesterday in Havana, Cuba, as reported in today's press, can the parliamentary assistant inform the house what action has been taken with respect to the importation of refined Cuban sugar into Canada?
Mr. G. J. Mcllraith (Parliamentary Assistant to the Minister of Trade and Commerce):: No, Mr. Speaker.


Mr. Murphy:: I wonder if I could ask a
supplementary question of the parliamentary assistant in view of the answer he has given. Is he in a position to say whether the goverhment will take any action respecting the importation of refined sugar into Canada, and take it now?


George James McIlraith: Mr. Speaker, I am not in
a position to say whether the government will take any action on that matter. It is quite obvious that I cannot state that. I may say that the minister is in Cuba today and it would be quite improper for me to try to forecast what will be the result of the meetings he is now attending.


Some hon. Members:: Hear, hear.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Justice (Mr. Garson). Has the minister's attention been drawn to reports of maltreatment by the police of union members out on strike against Canadian Copper Refiners, Limited, in Montreal East? Will the minister look into this matter to make sure that the rights of these workers as Canadian citizens are protected and that the principles of justice are not being violated?


Stuart Sinclair Garson: Mr. Speaker, my attention has been drawn to the newspaper account in question by the hon. member for Winnipeg North Centre (Mr. Knowles). I have seen it in the Montreal Gazette this morning. Other than that I have no knowledge of the matter.
While we are quite willing to look into the matter as he suggested, and shall do so, I would point out to him that, so far as the newspaper account seems to indicate, this is a matter that would clearly come within the administration of justice which, under section 92, paragraph 14, of the British North America Act, is the exclusive responsibility of the province.

National Defence Act COMBINES INVESTIGATION ACT



INQUIRY AS TO PENDING PROSECUTIONS

[Stage Direction]
On the orders of the day:
John George Diefenbaker: wish to direct a question to the Minister of Justice (Mr. Garson) in connection with the combines report which he just tabled. Are there any pending prosecutions at the present time, and particularly in regard to the alleged combine in the production of fine papers?


Stuart Sinclair Garson: In reply to my hon. friend's question, if he means that an information has been laid and that it is pending in that sense, the answer would be no. If I let the answer remain at that point, however, I think it would mislead the house. We are at the present time considering prosecution in the fine papers case.


John George Diefenbaker: Having counsel's advice?



NATIONAL DEFENCE ACT


Right Hon. L. S. St. Laurent (Prime Minister) moved: the third reading of Bill No. 103, to amend the National Defence Act.


George Randolph Pearkes: Mr. Speaker, during the debate on second reading of this bill it was made abundantly clear by members on this side of the house that they considered that it was necessary to give some assistance to the Minister of National Defence (Mr. Claxton) in order to correct the general breakdown in the administration of his department which had been disclosed; and also to ensure the efficient functioning of that department in the future. Members on this side of the house feel that unless the duties of the assistant minister are clearly defined, and if he is only given loose powers of supervision over the administration of all branches in that department, the Minister of National Defence will not be released from the overburden of responsibility which has led to the breakdown in the department.
In order to correct this situation we have recommended that an associate minister for air, with definite responsibilities, be appointed, thus relieving the present minister from some of his duties.
I therefore move, seconded by the hon. member for Calgary East (Mr. Harkness):
That the said bill be nqt now read the third time, but that it be referred back to the committee of the whole for the purpose of amending section 1 thereof by adding the words "for air" after the word "defence" in the sixth line thereof; and by adding the words "for air" after the word

"defence" in the eleventh line thereof; and for the purpose of amending section 2 thereof by adding the words "for air" after the word "defence" in the sixth line thereof; and by adding the words "for air" after the word "defence" in the eleventh line thereof.


Mr. Jean Frangois Pouliot (Temiscouata):: I rise to oppose the amendment because it is untimely and meaningless. There are three branches in national defence, the militia, the navy and the air. At the present time, in virtue of this legislation, there are two associate ministers for the whole Department of National Defence which administers the three branches, the militia, the navy and the air. I cannot understand how an hon. gentleman, with the experience of the hon. member for Nanaimo (Mr. Pearkes), does not make the necessary distinction between the land and sea forces as he does for the air. His amendment refers only to the air service. He seems to be satisfied that there will be an associate minister for the militia and for the navy, which are two entirely different units. I do not see why he jumps at once in the air for a third minister of national defence.
This, sir, is my understanding. I do not realize the usefulness of having a third minister of national defence for air services when the two who are actually in office are entitled to look after the administration of the three branches of the armed forces. There is more to it. The idea of the hon. gentleman, and of the members of his party, apparently is to give more responsibility to the minister. Both ministers of national defence will enjoy a limited degree of jurisdiction over the department in virtue of the order in council that will be passed in due course or that has been passed by the government. Therefore, sir, in virtue of the legislation presently before us, the duties conferred upon both ministers are given to them by ithe government itself.
In his previous speech on the matter, and in the previous speeches of the hon. gentlemen of his party who spoke on this matter, reference was made to the responsibilities of the minister. If I understand the meaning of the amendment before the house, the hon. member who sponsored the amendment had in view the suggestion of limiting the responsibility of each minister. He did not do so for the land and sea services, but he intends to do so for the air service. I cannot conceive why a gentleman and a parliamentarian of his experience has not dealt with'l*%.K2 basis of responsibility of the associate ministers of national defence. He knows what I am coming to, and I am sure that when I am through with what I am

going to say he will honour me by concurring entirely with me. It appears to be a difficult proposition, but I have enough confidence in the good judgment, the experience and wisdom of the hon. gentleman to be sure that he will agree with me. I say that because of my deep conviction that common sense should be at the basis of all parliamentary debates, in order that the legislation coming before the house and passed by it shall serve its ultimate purpose for the good government of this country.
Well now, sir, that being said, what is the responsibility of the minister? It exists inasmuch as he is the master of his department just the same as the hon. gentleman was master of his divisional unit, the one he was commanding during the war. If there were members of that unit who were coming from different units, as soon as they were put under his command he had full authority over them. Is that true or is it not? Nobody will disagree with that statement. Therefore, Mr. Speaker, my conclusion is that the ministers of national defence, -any one of them, any one of the associate ministers; when I say "the ministers of national defence" the term applies to both ministers-in order to have direct responsibility to the House of Commons for the dealings of their department, must have authority over each one of the civil servants or high officials who are within the Department of National Defence. I presume that everybody agrees with me in that statement. How can we say that any minister of national defence has any responsibility to the House of Commons with regard to men who belong to another department? Would it be fair? Would it be just? It would not be. Pure and simple common sense teaches us that it is important that each minister-and I say that not only as to the Department of National Defence but as to the department of any one of the cabinet ministers-should have direct, immediate and complete jurisdiction over ail those within the department.
Why do the cabinet ministers bring their estimates before the House of Commons of Canada? They do so in order to render account of the dealings of their department and of the payments made by the department to anyone, not only for salaries and wages but for all kinds of expenditures that are approved by the department.
In any contract what is required? It is the consensus of one about a definite thing, whether it be a thing to buy or a thing to do. An essential part of a contract also is the payment that is made whether it be payment of salaries, of wages, for services
National Defence Act
or for things that are delivered to the purchaser. In this case the Minister of National Defence has no authority whatever concerning the payment made on behalf of his department. Those payments are not made by officials of his department. Those payments are made by the officials of another department who are intruders within the department. The minister has no authority over the treasury officials in his department who are under the comptroller of the treasury and who are under the Minister of Finance (Mr. Abbott). I do not make that statement in order to complain of the Minister of Finance. I do so in order to bring to the attention of my hon. colleagues some facts that I hope will provide them with food for thought.
May I quote an example? Right here within this House of Commons the treasury officials are not civil servants under the authority of Mr. Speaker; they belong to the Department of Finance. They are a branch of the comptroller of the treasury. The cheques that are issued here are issued by the House of Commons branch of the comptroller of the treasury. Here in the House of Commons we have elevator men but they are not under Mr. Speaker; they are under the Minister of Public Works (Mr. Fournier), Our speeches are translated but they are not translated by men who are under the direct jurisdiction of Mr. Speaker as they were in days gone by. They are translated by men who belong to the bureau for translations and who are under the Secretary of State Department. I could quote other examples but I content myself with giving only a few in order that the house may understand mj contention well enough that they may say I am not out of order when I discuss these matters which are of vital importance tc each member of the cabinet and to each member of the house.
Any one of the ministers of national defence cannot buy a soldier's cap or s sailor's cap; he has to make a requisitior for it. When the legislation was changed ] said that the then minister of national defence, who was transferred to anothei department some time afterward, had beer emasculated as to his political jurisdictior over his own staff. Why can they not ordei the purchase of one thing for any one of the branches of the department? The answer is that they are not responsible for the payment for that thing; it comes under the Department of Finance.
I also remember that the national defence purchasing board was established in order tc supply the Department of National Defence

National Defence Act
with the things that were requisitioned by the minister. For many years, Mr. Speaker, the Minister of National Defence has had no authority whatever with regard to the payments made by his department, and which should be made by his department but are effectively made by the Department of Finance through the office of the comptroller of the treasury.
That change which was made by the late Mr. Bennett had a considerable effect upon the jurisdiction and the responsibility of the Minister of National Defence. In order to give an idea of the growth of the comptroller of the treasury's office, on July 3, 1935, at page 4198 of Hansard, the late Mr. Mackenzie King said:
The appropriation in the main estimates for this jffice was $1,576,851, an increase of $7,112 over the mte of the previous year. We are now being isked to vote an additional $80,000-
So the total amount that was voted for ;he comptroller of the treasury's office in 1935 was $1,586,000. And if I look at the public accounts for 1951-52 I see that the expenditures in 1950-51 were $12,719,000 for ;he same purpose; in 1951-52 the amount vas $14,030,092, and the appropriations in 1951-52 were $14,246,433. These numbers are n italics in the public accounts for 1951-52. The increase has been nearly tenfold in the ast seventeen years.
According to a chart of May, 1938, there vere 79 employees of the comptroller of the reasury in the Ottawa office of the Depart-nent of National Defence and there were '3 in the outside offices, making a total of .52. There must be ten times as many now, jecause the cost of keeping that office is ipproximately ten times as much as it was eventeen years ago. Would it be fair to ay that neither of the associate ministers if national defence has any responsibility to he House of Commons for dealing with those nen who do not come under him in the lepartment? They do not have to listen to ny minister of national defence, but they lave to listen to the Minister of Finance nd they are supposedly independent of all he other ministers, including the head of he government.
They may make concessions, but according d the legislation that has been passed, and he orders in council relating thereto, this 5 the situation that we have to face now. 'hat is why I ask the hon. gentleman who .as proposed the amendment to listen to the fords of Mr. Mackenzie King on March 22, 934, as reported at page 1713 of Hansard:


Mr. Mackenzie King:: I do think it is most
nportant that parliament should retain the power, rhich it has had for fifty years, of exercising mtrol over public expenditures in the manner in 
which formerly it did. I submit that at the time the bill was introduced the house was not given to understand that the new appointment of comptroller provided by the act meant any withdrawal from the Auditor General of this particular function, which is the most important of all he formerly had, and placing it in the hands of an officer of one of the departments of government. Had the house so understood, I am sure there would have been strong opposition to such a proposal, and that the house would never have consented thereto. I am not sure that when the government brought in the bill its members appreciated the fact that this would be the consequence.
And there is more to it. If one knows how this legislation operates by statute and by order in council, it is the present Auditor General who was appointed the first comptroller of the treasury in 1931. I remember at the time that the then deputy minister of finance was coming fresh from a banking firm of Chicago, the Strauss firm. He had not the same experience as he had when he died, and he was full of ideas on centralization. He succeeded very easily in convincing the Prime Minister (Mr. Bennett) that his proposal was the best that could be accepted, and he had in his department a gentleman who had very little experience in accounting, and who has acquired more experience since, especially since he has become Auditor General. But this was concocted by two people, by the late W. C. Clark, the deputy minister of finance, and Mr. Sellar, the first comptroller of the treasury who is now Auditor General.
If one appreciates the truth and exactitude of what I have said since I rose this afternoon, how can the Auditor General blame the Minister of National Defence and the Department of National Defence for anything that is done by men who are not under the control and jurisdiction of the Department of National Defence? It seems to be clear enough, sir. The only way out is to give full responsibility to both associate ministers of national defence. These are my concluding words. The only way out is to abolish the office of the comptroller of the treasury and restore parliamentary responsibility in each department in order that each minister of any department should be responsible to the house for all that is done within his department, for the payments as well as for the orders. And that, sir, I leave to the meditation of my hon. friend from Nanaimo and to my colleagues in the house. I wonder if they will say publicly that they agree with me. I consider that they are sincere gentlemen, and I know very well that in the bottom of their hearts they will agree with me, even if they do not say so. And, moreover, I am very positive that they will join me-


Mr. Cardiff:: You have a great imagination.


Jean-François Pouliot: Well, I am sorry the hon.
gentleman did not catch the point I made. But he needs to meditate a little more. And if he does he will realize that what I have said is based upon parliamentary practice in England. What has been done has been done according to American expediency. Centralization was an American inspiration, while parliamentary responsibility is British to the core.
And that is all I want. I want to be fair to everyone. I am sure that my friends from all sides of the house, when they think over this matter, will join me in protesting against the system of centralization under the comptroller of the treasury, that they will support my contention that the office of the comptroller of the treasury should be abolished. With their support, in a very short time we will succeed, for the good of the country.


Mr. D. S. Harkness (Calgary East):: Mr. Speaker, by some devious form of reasoning the hon. member for Temiscouata (Mr. Pouliot) seems to have offered the peculiar argument that the deficiencies which have been brought to light recently in the Department of National Defence should be laid at the door of the late Lord Bennett, the late Dr. Clark and the present Auditor General.
It seems to me the hon member, in his complaint with respect to financial control in the Department of National Defence and in other departments, is confusing decisions made in any one department in respect of the spending of money, and matters of administration connected with those expenditures, with accounting methods used in connection with the spending of those moneys.
So far as I know, treasury branch officials in the Department of National Defence have nothing to do with deciding what moneys allotted to defence shall be spent for that purpose. They merely make sure that whatever sums are voted by parliament shall be spent for the particular projects to which they are allocated. The decision as to what will be spent, and the actual handling of expenditures, is not in the hands of treasury branch officials at all.
Without going into the other arguments offered by the hon. member, it seems to me that what happened during the war is sufficient proof that his argument has no validity whatever. In wartime we had a situation such as we now recommend, namely that there should be a minister for air. When I first came to the House of
National Defence Act
Commons there was a minister of national defence and, in addition, a minister for air. In 1945 the other defence ministry had disappeared, and only two were left.
In other words we had at that time exactly the situation we now recommend. There seemed to be no complaint in those days. I believe therefore that what I say disposes of the other arguments the hon. member has offered. We have suggested that there should be a minister for air. It has been suggested over and over again in the house by members on all sides that our defence effort should be concentrated on the air. If one may judge by the money allocated to this purpose, this is being carried into effect by the government. Almost half the present defence allotment is to be spent on air defence. It is because of this we have recommended that a minister for air be appointed, and that he be given definite responsibilities in respect of the air arm.
I think all hon. members will agree that the situation which has prevailed in the Department of National Defence has not been a satisfactory one. Confusion has existed, and as a result of that confusion inefficiency has manifested itself in various ways. The remedy proposed by the government to end that confusion and inefficiency is to appoint an associate minister having indeterminate powers. It is indicated that, so far as there is anything particular about it, he shall have charge of administrative affairs. But policy and administration are so closely intertwined that it will be extremely difficult for the associate minister to know what his responsibilities are, and what he is supposed to do. The great weakness in the whole thing is that the duties and responsibilities of the new associate minister will not be definitely defined. It seems therefore to a great number of us that the confusion which now exists in the department will be worse confounded by the move now proposed.
I do not think there is any need to repeat the numerous arguments supporting the course we have proposed. There can be no doubt however that, if the government could see fit to adopt it, our proposal would bring about much greater efficiency in the transaction of business in the Department of National Defence.


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


Some hon. Members:: Yea.


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the nays have it. I declare the amendment lost.

Loan Companies Act
Amendment (Mr. Pearkes) negatived on division.


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


Douglas Scott Harkness: On division.


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


Hon. Alphonse Fournier (for ihe Minister of Finance) moved: the second reading of Bill No. 7, to amend the Loan Companies Act.


Mr. Jean Lesage (Parliamentary Assistant to the Minister of Finance):: Mr. Speaker, the purpose of this bill is to amend the Loan Companies Act in order to allow companies incorporated thereunder to invest in bonds issued by the international bank for reconstruction and development.
Canada has been a member of this bank from the time of its establishment after the end of the war and has co-operated actively in furthering its objectives. The bank has made a steadily increasing volume of well-considered developmental loans. As a result of these loans as well as by constructive advice which the bank is able to give to the governments of underdeveloped countries in the formulation and the development of appropriate projects for financing, the bank is believed to be making an important contribution to world peace and prosperity.
In addition to the use of its own paid-up capital, the bank obtains funds by the issue of loans from time to time, chiefly in the United States market. It has not been considered desirable that the bank should be wholly limited to the United States market for borrowed funds. In February, 1952, therefore, as an earnest of its desire to give practical co-operation in the furtherance of the bank's objectives, Canada permitted the bank to make a public offering of its bonds in Canada and the bank made a successful issue of $15 million in the Canadian market.
The bonds of the bank are given a high investment rating by the recognized investment services. In 1947 the Canadian and British Insurance Companies Act was amended to permit our insurance companies to invest in these bonds. Permitting loan companies, subject to federal jurisdiction, to invest funds in these bonds will help to broaden further the market for them and

should assist the bank in connection with further financing which it may be permitted to attempt in Canada.
The international bank for reconstruction and development was established to provide and facilitate international investment for increasing production, raising living standards and helping to bring about a better balance in world trade. The bank began its operations in 1946. At the end of August, 1952, the bank had made seventy-two loans amounting to nearly $1,500 million in twenty-seven of its member countries and two of their overseas territories.
The fifty-four member nations of the bank are its stockholders, and the money which the bank lends is provided partly by them. When a country becomes a member it pays 2 per cent of its stock subscription in gold or dollars and 18 per cent in its own currency. The bank may lend from the 18 per cent funds only with permission of the member concerned. The remaining 80 per cent is not paid to the bank and is subject to call only if the bank should need some part of it to meet its obligations. The Canadian subscription was $325 million of which 20 per cent has been paid, or $65 million.
The bank derives the remainder of its loanable funds from the sale of its own securities in the capital markets of the world. The total amount of the bank's securities now outstanding is about $500 million. Of this amount $450 million has been raised in the United States market, $15 million in Canadian dollars in the Canadian market, $14 million in pounds sterling in the United Kingdom, and the remainder in Swiss francs in Switzerland.
All payments of interest and principal from borrowers have been received as due up to date. In its first year the bank operated at a deficit of almost $1 million. In succeeding years it has had increasing net earnings ranging from $4 million in 1947-48 to over $15-5 million in 1951-52. These earnings have been carried to a general reserve which on June 30, 1952, amounted to $58 million. A special reserve, derived from a 1 per cent commission which the bank's charter requires it to charge on all loans, amounted to $27-7 million. Total reserves therefore amounted to $85-7 million. The bank may lend to governments or to other borrowers. Loans to other borrowers have the guarantee of the member government concerned.

The bank's first loans, amounting to almost $500 million, were made to help in the postwar reconstruction of France, the Netherlands, Denmark and Luxembourg. Subsequent loans in Europe have been made to modernize and improve production and transportation facilities. In 1948 the bank began lending in less developed countries. Most of its loans, and about half the money it has lent, have been used to provide foreign exchange needed for projects in these underdeveloped countries. The loans have been made principally for the creation or improvement of basic facilities such as power, roads, railways and irrigation.
The amounts lent do not measure the magnitude or the total costs of these projects. The bank normally finances only the foreign exchange costs of imported equipment and services needed to complete projects; usually the larger part of the cost of any project is met by the borrower. The total cost of projects completed or going forward with the help of bank financing amounts to more than $3 billion. Canada of course is highly interested in increasing production, raising living standards and especially, as an exporting country, in helping to bring about easier conditions in world trade. That is the reason for the amendment.


Mr. J. M. Macdonnell (Greenwood):: Mr. Speaker, we have had a very clear statement of the purposes of this measure, and I have no criticism to offer. There are some questions I should like to ask when we get into committee. It seems to me that a prima facie case has been made, and I think it is worth commenting-certainly from my point of view it is satisfactory-that this appears to be one bit of international financial mechanism which has really worked according to plan and which we can only hope will go on increasing its influence and usefulness.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Robinson in the chair.
On section 1-Debentures, bonds, stocks, and securities of Canada, provinces, United Kingdom, United States, etc.
James MacKerras Macdonnell: I should like to ask the parliamentary assistant if he can give us some information indicating not merely what loans have been made but whether the demand is completely fulfilled. Have there been other desirable loans which it has not been possible to make? While I am on my feet, let me ask a further question. The parliamentary assistant made it quite clear that the primary guarantee was not 68108-103
Loan Companies Act
merely that of the borrower in the case of a private concern but of the government concerned also. Does the bank in fact take security, like an ordinary commercial bank, on the assets involved or does it rely wholly on the guarantee of the borrower and the government?


Jean Lesage: According to my information, it relies on the guarantee of the borrower and the government, but most of the loans have been made to governments and for government projects. With respect to the first question of the hon. member for Greenwood, he asked whether there is a large unsatisfied demand for loans in underdeveloped countries. Do I understand that is the question?


James MacKerras Macdonnell: Or anywhere.


Jean Lesage: The answer is yes, especially in underdeveloped countries. When I was at the meeting of the economic and social council last summer in New York we discussed the world bank and a proposition was put forward for the establishment of an international finance corporation which would supplement the work of the world bank and lend to individuals, individual corporations or organizations in various countries without any government guarantee. Of course, as my hon. friend is aware, the demand is even greater than that, and the underdeveloped countries, under the guidance of Mr. Santa Cruz from Chile, have asked for the last two years, in the general assembly and the economic and social council, that forthright grants for development be made by the United States, Canada, the United Kingdom, France and other countries to all underdeveloped countries.


Mr. Low:: Mr. Chairman, the parliamentary assistant to the Minister of Finance may have mentioned the rate of interest charged by the bank but if so I did not catch it. I wonder if he could tell the committee whether the bank charges the same rate of interest in all cases or is it graduated according to risk and security?


Jean Lesage: Mr. Chairman, the bank does
not charge the same rate in all cases. It is according to the risk or the securities offered. The rates, according to a statement contained in the seventh annual report of the bank, from what I can see by a quick reading, would range from 3i per cent to 4| per cent or thereabouts. That includes the 1 per cent commission which is payable to the bank on all loans.


Mr. Fraser:: May I ask a question? As
a result of the flood conditions at the present

Loan Companies Act
time Holland and Belgium could come along and ask for loans from the bank to rebuild their dikes.


Jean Lesage: Yes, Mr. Chairman, they
could. It is a question of arranging it with the authorities of the bank.


Gordon Knapman Fraser: What rate would they be
charged in that case?


Jean Lesage: Well, I do not know. That
is a matter to be arranged between the governments concerned and the bank. It all depends on the securities offered. The loans are not all direct loans. It very often happens that the borrowing country will issue bonds of its own which will be sold in the public markets of the world either with or without the guarantee of the bank.
For instance, when The Netherlands borrowed money to buy ships on July 15, 1948, they paid with obligations of The Netherlands which were sold by the bank on the markets of the world at the rate of 3i% per cent.


James MacKerras Macdonnell: Concerning
the question I asked a moment ago, let me remind the committee that what we are doing is approving this form of investments as a proper form of investment for those who have the trust moneys of Canadian citizens to invest. Therefore, it is relevant to point out, as the parliamentary assistant has done, that the running of this bank is done on a business basis. He pointed out that something like $1 billion has been loaned, of which some $500 million has been repaid in instalments on loans. That would be a very healthy condition in so far as that test is concerned-a very usual test and which speaks much for the safety of the loan. However, I want to come back and ask this other question. From what I understood the parliamentary assistant to say a few moments ago, the bank has not been able to take all of the business offered. We hear on all sides the statement, which I think we all accept, that one of the best and one of the necessary safeguards against world unrest-I think Mr. Truman called it point four-is that we should try in every way to assist underdeveloped countries to help themselves. I would like to ask how far, if the parliamentary assistant can tell us without a lot of detail, these unsatisfied demands or requests for loans were turned down because they were considered not good risks, and how far they were turned down simply because the bank ran out of funds.
That leads me to ask one other question before I take my seat. What subscriptions from fellow member nations have not yet

been paid? If I understand correctly, not a very high percentage of the underwriting of the various nations has been paid. If I am wrong I can be corrected.


Jean Lesage: Mr. Chairman, may I be
permitted to correct the hon. member for Greenwood. All the original members of the bank have paid their 20 per cent except China and Czechoslovakia.


James MacKerras Macdonnell: Twenty per cent?


Jean Lesage: Twenty per cent: 2 per cent in American currency or gold and 18 per cent in their own currency.


James MacKerras Macdonnell: What about the other 80 per cent?


Jean Lesage: The other 80 per cent is not payable unless there is default on a loan and -the bank is unable with its surpluses, its reserves and its cash to pay off the default. It is only if the bank has to go to the members of the bank in those circumstances that the balance is payable.


James MacKerras Macdonnell: 
Jean Lesage: The conditions requiring 20 per cent to be paid-2 per cent American currency or gold and 18 per cent in the member's currency-and 80 per cent to be called only in case of default, are contained in the articles of agreement which were approved by this house in 1945. They are covered by article II, sections 5 and 7, and article IV, section- 7.


James MacKerras Macdonnell: Well, yes, Mr. Chairman, I realize that, but 1945 is eight years ago. There has been a lot of experience since that time. I suppose that eight years ago this project was unprecedented. I would hesitate to say that the world was more unsettled eight years ago than it is today; nevertheless we have had eight years of experience and I would think we have had eight years of talk about the necessity of doing everything of this kind that we can to assist development.
I realize that the government of Canada cannot decide these things but I would suggest to the parliamentary assistant that we might very well ask whether what was done eight years ago was necessarily like the laws of the Medes and the Persians; or whether our government might not consider suggesting that with eight years' experience-and apparently very good experience as lenders with 50 per cent of the loans repaid-they could not launch out a bit. I am basing this on the one statement that they have not been able to accept the amount of business offering. Would I be correct in saying that part of this business has had to be turned down merely for lack of funds?


Jean Lesage: Mr. Chairman, no demands for loans have been turned down because of lack of funds. When they were turned down it was because the necessary guarantees were not offered. I explained that quite clearly when I was talking about the international bank making loans on a sound business basis. After all, as the hon. member has said himself, we are going to allow people in Canada who are administering trust funds to lend money to this international bank. Surely we could not do that if that bank was not administered according to sound business practices.
Secondly, if I mentioned the proposed international finance corporation, I did it only to distinguish between loans made to governments or to borrowers guaranteed by governments and others. I was saying that the underdeveloped countries wanted to go further and asked for a finance corporation which would make loans which would not be guaranteed by governments. I said that this is still under study in the economic and social council.
Third, there is this huge demand for outright gifts. I was just making plain the difference between the three, so that it would be very clear that we believe that any investment of money in the bonds of the international bank is sound business because the bank is operated according to sound business practices. Personally, I do not know of demands for loans from the 68108-103J
Loan Companies Act
bank that have been refused. It is like going ito a bank manager; you have to agree on the terms. It is quite possible that some demands for loans could not be granted because there was no agreement on the terms or on the guarantee; that is possible.


James MacKerras Macdonnell: I do not
think there is any difference between the parliamentary assistant and myself as to what is desirable. I quite agree that these loans must be safe. In view of what has been said, that loans have not had to be turned down through lack of funds, then I think we merely come back to this question-I shall not dwell on it-as to whether or not the terms are unnecessarily stiff. I do not think there is any point in my adding anything more.
I should like to ask a further question as to the marketing of these securities. I have in my hand the report of the international bank dated December 15, 1952. There is a reference here to the successful marketing in Canada and to the not so successful marketing of the last $100 million in the United States. They say here that the first $100 million United States issue of September, 1951, was an initial success. Then, later it says:
As matters developed, however, it became apparent that many banks and dealers . . . were interested more in subscribing for the bonds with hopes of an immediate rise in their market price, rather than in stimulating interest in the bonds, among the investing community.
That is rather unfortunate. That was irs September, 1951, and I wonder if the parliamentary assistant can say anything as to the standing of those bonds, as to the marketing of those bonds in the United States since that time, bearing in mind, as I said a few minutes ago, that it looks as if this part of the international financial mechanism had worked and seems to me highly desirable that every effort should be made to make it work on as large a scale as possible consistent with safety, which obviously we have to have if we are going to permit trust funds to be invested.


Jean Lesage: What date was that offering
in the United States?


James MacKerras Macdonnell: It was
September 12, 1951.


Jean Lesage: I have no information about
this offering in the United States, except that it was sold. I know that. I know that the offering of $15 million in Canada in 1952 was very successful, and was sold at par.


James MacKerras Macdonnell: It has a
three-quarters per cent higher rate.

Loan Companies Act


Jean Lesage: It was offered at par, 4 per
cent 10-year bonds. They were dated February, 1952, to mature in February, 1962.


James MacKerras Macdonnell: I do not
think I need to carry the discussion further. I would hope that what has taken place would at least warrant a review of the situation. After all, it is not a final answer to say that when we were exploring this matter in 1945 certain regulations were laid down. I think eight years later it would be eminently reasonable to say that the matter might be re-explored with a view to taking whatever action seemed reasonable.


Gordon Knapman Fraser: Will the parliamentary assistant say whether the bonds that were sold in 1952 are at par on the market today?


Jean Lesage: I do not know, sir.


Mr. Jones:: The hon. member for Greenwood has referred to the conservative attitude of this bank, and I hope that the suggestion that it be reviewed is accepted. I should like to know if any borrowers have defaulted on principal or interest up until now?


Jean Lesage: No, sir, as I mentioned in my statement on second reading.


John George Diefenbaker: I have one or two questions I should like to ask the parliamentary assistant. He is fully acquainted with these matters because of his experience in Paris and New York, and I am sure he will be :glad to furnish the committee with the information I have in mind. Certainly the assistance of underdeveloped countries, in order to permit them to rehabilitate themselves and thereby defeat the spectre - of poverty with which they are faced, is one of the most important activities of the United Nations. Defence has a large place, but moneys devoted to enabling people to face the future without fear may go a long way towards raising those standards which will ultimately afford a bulwark against the advance of communism.
I am wondering whether or not the parliamentary assistant has statistics available to him indicating the degree to which loans to underdeveloped countries are expected to be advanced during the next several years. What are the plans? Is it being found that what has been done is having a beneficial effect in proportion to the amount of moneys that have been advanced by the various nations within the United Nations? Certainly, the world situation today demands action of this kind. Some 150 years ago, when the Malthusian theory of papulation and food was first advanced, it was regarded as without economic foundation. Now, we

find ourselves in the position that the population of the world is increasing at the rate of 25 million a year, and that within a matter of 90 years the population of the world will have doubled. Food production is not keeping pace with the population increase.
The purpose that the United Nations has in mind is to enable these countries to produce for themselves. Is the parliamentary assistant in a position to say what the definite plans are for the next few years? When, he is making a reply, would he let the committee know the degree to which Canada has contributed to this by private investment through the purchase of bonds, such as the bond issue to which he referred that was floated in 1952 and prior thereto?


Jean Lesage: Mr. Chairman, the Canadian contribution to the world bank, as I have said, is a subscription of $325 million of which 20 per cent or $65 million is paid up. The contribution was made up of 2 per cent in United States dollars or gold and the balance of 18 per cent in Canadian dollars. There has been an issue of $15 million on the Canadian market; that was last year, in 1952. Also some Canadian investors bought some bonds of the United States issue. For instance, I know that the insurance companies of Canada bought over $2 million in the last public offering in the United States of which the hon. member for Greenwood was speaking.
The plans for the future are to carry on along the same lines as the bank has been following and to lend money to underdeveloped countries as much as possible under the conditions laid down in the agreement, to further the raising of the standards of living, and to help the backward countries of the world grow more food. As a matter of fact, if the committee will allow me to do so I should like to give only a few examples which I find in the report made by Mr. Eugene R. Black, president of the bank, on June 16, 1952, to the economic and social council of the United Nations, in New York. He says:
In the fertile fields of Chile, in the tropical valleys and upland plains of Colombia, across the mountainous countryside of Nicaragua, you would see hundreds of new tractors at work, helping the farmers to grow more food.
In the central plain of India, you would see at work a fleet of 240 much heavier tractors-one of the largest tractor fleets in the world-which has already cleared nearly half a million acres of rich land previously almost useless for cultivation because of the encroachment of a stubborn and vigorous weed.
It is the same in Colombia, in Ethiopia, in Finland and in Yugoslavia. In France, Belgium and Luxembourg the bank has helped the steel industry. In India and in

South Africa locomotives and rolling stock have been purchased from Canada with bank funds. As a matter of fact-and this answers more definitely one of the questions asked by the hon. member for Lake Centre- Canadian dollars have been used, for instance, to buy in Canada locomotives and railway equipment for India and electrical equipment for Brazil and Mexico for hydroelectric developments which those countries could undertake.
The bank is certainly doing one of the best jobs that can be done in the world in order to help backward countries raise the standards of living of their people.
Before I sit down I should like to make a correction with regard to one thing said by the hon. member for Greenwood. I believe he misunderstood me when he said half the loans had been repaid or reimbursed to the bank. That is not the fact. Up to date the loans amount to $1,412 million. Of this amount-and that is probably why the hon. member for Greenwood made that error-$102 million of loans are not yet effective. There have been nearly $30 million in cancellations and refundings. Repayments to the bank amount to a little bit over $10 million. The effective loans outstanding held by the bank amount to $1,213 million, of which the principal amount disbursed is $876 million and the undisbursed balance is $403 million.


Mr. Jeffery:: I should like to ask a question of the parliamentary assistant. Are the borrowing powers of the bank limited in any way in comparison with their capital or can they go on borrowing to any extent? Before I sit down I should like to express a little bit of surprise at the suggestion of the hon. member for Greenwood that the taxpayers' money should be taken and advanced to the bank as long as they are in a position to borrow money from private finance.


Jean Lesage: Mr. Chairman, of course the borrowing limit of the bank will be set by the governors of the bank. There is a governor of the bank for each member country.


Alexander Haley Jeffery: In other words there is no safety guarantee as to whether they could borrow three or four times the amount of the responsibility of the people who participate in the bank?


Jean Lesage: I believe that the voting power, as it is described among the members of the bank, is an extremely safe guarantee that the bank will not go too far.


Mr. Quelch:: Will the parliamentary assistant say something about the change in policy with regard to the organizations who will be
Loan Companies Act
borrowing under this legislation, or the groups of people? I understand that in some of the backward countries it will be possible for certain organizations to borrow money, but they will actually be paying two or three rates of interest. They will be paying the rate of the interest of the initial investor, the rate of interest of the bank and also the rate of the financial institution in the country that borrows it. I saw in the paper a report to the effect that that rate of interest would probably be about 6 per cent to the ultimate borrower. Would that be about correct?


Jean Lesage: I do not quite understand the question asked by the hon. member. Does he contend that when somebody borrows from the bank he will have to pay interest to the original investor?


Victor Quelch: That would be included in it. That would be part of the cost or the rate that he pays.


Jean Lesage: No. A few moments ago I gave the rates on loans, and that is all there is to be paid. That included the one per cent of commission. I think I gave that in answer to a question asked by the hon. member for Peace River. The rate of interest varies from 3 J per cent to 4J per cent.


Victor Quelch: Would that be true under the new policy that is being adopted by the bank?


Jean Lesage: I do not know of any new policy adopted by the bank. I have the reports of the bank, and there is no new policy as to the rates of interest. The rates of interest are given here in the report; I refer to the seventh annual report. Those rates include everything.


Victor Quelch: I mentioned the matter
because a great deal of publicity was given in the New York Times, I think it was, to the fact that they are widening the scope as to the kind of organizations that would be able to borrow under this legislation, and they pointed out that a proper rate of interest to this group would be over 6 per cent.


Jean Lesage: My hon. friend must have read about the proposed finance corporation which is still under study. That is probably the answer.


Solon Earl Low: That is subsidiary?


Jean Lesage: Exactly.


Solon Earl Low: That is what I was referring to.


[Stage Direction]
Section agreed to.
Sections 2 and 3 agreed to.
Title agreed to.
Bill reported.
[Stage Direction]
Trust Companies Act
The Acting Speaker (Mr. Robinson):: When shall the bill be read a third time?


Some hon. Members:: Now.


Stanley Howard Knowles: By leave.


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



TRUST COMPANIES ACT


Alphonse Fournier: the second reading of Bill No. 8, to amend the Trust Companies Act.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Robinson in the chair.
James MacKerras Macdonnell: This bill is on all fours with the other, and what has been, said already is entirely relevant and I think covers the situation.
On section 1-Debentures, bonds, stocks and securities of Canada, provinces, United Kingdom, United States, etc.


Jean Lesage: I was asked a moment ago on the other bill if there was any limitation to the bank's loans. I should like to refer to the articles of agreement which can be found in the second schedule of chapter 11 of the statutes for 1945. Article III, section 3, reads as follows:
The total amount outstanding of guarantees, participations in loans and direct loans made by the bank shall not be increased at any time, if by such increase the total would exceed one hundred per cent of the unimpaired subscribed capital, reserves and surplus of the bank.


Stanley Howard Knowles: One simple little question. Paragraph (c) of clause 1 contains the words "the United Kingdom", and they are underlined, indicating that a change has been made. I presume it is a matter of terminology. Can the parliamentary assistant say what the wording was before?


Jean Lesage: Yes; it was "the government of Great Britain and Northern Ireland".


[Stage Direction]
Section agreed to.
Sections 2 to 5 inclusive agreed to.
Title agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The house resumed, from Tuesday, February 3, consideration of the motion of 
Mr. Fournier (Hull) for committee of supply, and the amendment thereto of Mr. Diefen-baker, and the amendment to the amendment of Mr. Wright.
Mr. F. H. Larson (Kindersley):: Mr. Speaker, in continuing this debate on the South Saskatchewan project there are a few remarks I wish to make. First I should like to say that I am very happy to agree with almost everything the hon. member for Lake Centre (Mr. Diefenbaker) had to say about this matter on Tuesday night. I am speaking for myself, but I know that all members of this party on this side of the house, from our province especially, are as much interested in the development of this project as he is. In addition, this government has consistently voted money to carry on the investigations that are required before a project of this magnitude can be brought to fruition. That would certainly indicate a good deal of government interest in it.
I should like to quote the words of the Prime Minister himself, when he spoke in the committee of supply considering agriculture estimates, as reported at page 3945 of Hansard of June 28, 1952. He was referring to the several major projects that were under consideration, among them the St. Lawrence seaway, and he said:
The third project was the South Saskatchewan river project. This is of particular interest to the central provinces, but it is also of interest to the whole of Canada to have Canada developed in such a manner that there will be no depressed areas in this country.
When the urgency of debating this seemed to be greatest, on Friday night, the Minister of Agriculture (Mr. Gardiner) was away on government business. The person who has put the most into this project, in its initiation and in the engineering investigation, is the Minister of Agriculture himself. I submit that in all fairness to that minister this debate should be carried on, as it is being carried on at the present time, when he is in his place in the house. I know it would be considered a great thing politically by certain parties in this house if members supporting the government were jockeyed into the position, in voting on the amendment put forward by the opposition, where they would have to choose between appearing to vote for this project and against the government, or vote for the government and against the project. We have had enough political discussions over this thing. We want this project built.
A good deal has been said in Saskatchewan about my position personally. I said in Saskatchewan and I say on the floor of this

house that it is necessary to build this irrigation project for the reasons I will enumerate. But I think enough has been said about it politically already, and I believe we should get down to the essential merits of the project.
I should like it clearly understood at this time that while I am completely in favour of this project, and I will speak for it on the floor of the house, I am not going to vote lack of confidence in this government in an appearance of voting for the project. Some members of this house, particularly the hon. member for Lake Centre, are opposed to this government. He feels that if this government were not in power we would get the project quicker. I am in favour of this government, and I submit to the house that this is probably the only government that will ever build this project, and I propose to go along with it on that basis.


Gordon Knapman Fraser: It will never be built, then.


Frederick Hugo Larson: The house is well aware of the terrible drought conditions that can exist in Saskatchewan. I have made reference to them myself. The hon. member for Maple Creek (Mr. Studer) has discussed those conditions and so have others. At this time I do not think there is any reason to recite them to indicate the necessity of carrying on a major irrigation project in Saskatchewan.
Our sister province of Alberta has gone a long way in irrigation. They have well over a million acres of land under irrigation, or with projects under construction at the present time. 1 submit very strongly that it is Saskatchewan's turn to have her irrigation resources developed. While that development involves this project

I think the P.F.R.A. people have taken this up-I feel that before I sit down I can show that the problems in the way of the project are not nearly as insurmountable as they were recorded, or appear to be recorded, by the royal commission.
My personal feelings in the matter are that appointing this royal commission was sort of threshing away at old straw. The facts, as they stand out, had been covered by the P.F.R.A. long before this commission was appointed, and I do not think the commission ever would have been appointed had it not been for the hiring of an engineer by the province of Saskatchewan, Mr. Cass-Beggs, to make a report on the power aspect of the project. He found that power could probably be developed as cheaply through soft coal in the south and natural gas in the north as it could be through the construction of this dam to give the province water power.
South Saskatchewan River Project
That report threw doubt on the usefulness of building this project. It has been said by Saskatchewan that P.F.R.A. paid for part of the report. I do not know; possibly they did. But if they did, it was for the one purpose of getting the original unedited copy of the report.
I say again that had it not been for the throwing of doubt on the power part of the project, I do not think we would have had the present commission report. It would appear to me, in a few words, that the Hogg commission finds no particular reason why the South Saskatchewan project should not be proceeded with, except that it would cost too much for the value received by the people of Canada. And on the basis that it would cost too much they suggested that several smaller projects be proceeded with.
The projects mentioned were gone into by P.F.R.A. years ago. As early as 1947 and 1948 P.F.R.A. realized that the development of the South Saskatchewan was necessary to provide a reservoir large enough to carry on any substantial irrigation. If the flow of the Saskatchewan were not harnessed and put into a reservoir at flood time, the flood would go off to Hudson bay and be of no use in meeting the problem of irrigation.
It has been suggested that water could be pumped to the higher ground. That matter has been gone into, and it has been found that the silt in the river has made impossible the use of pumps. It is possible the weirs could be constructed across the river to control this silt, should this pumping project be considered. But with the flood having gone down the river there would not be enough water to carry on any large irrigation project.
This question has been put to me several times: Why use this particular site at Coteau creek for the construction of the dam? Would it not be more useful to bring it up the river to some other location? Since I was interested in politics,- if it were moved up the river it would probably land in my constituency; so I was interested in the problem right from the first. I consulted General H. B. Ferguson, when he was carrying on his work with P.F.R.A. in, Regina. His answer was that he could build a dam at any location on that river, but that the foundation characteristics west' of Saskatchewan Landing were such that the dam could not be built except at such great expense as to make the project impossible.
To construct a project like this there are three elementary factors which have to be considered. First, to construct the dam and reservoir at the minimum possible cost;
1618	HOUSE OF
South Saskatchewan River Project second, to have the project situated so that the levels of land are such that the water can run from the lake into the reservoir, or into the canals, and thence on to the land; and third, to have all the soil characteristics such that it would pay to irrigate.
With respect to the first consideration, that of a proper site, it is known that a relatively cheap site is available at Coteau creek. There is a good deal of land that could be irrigated by gravity. The original estimate by P.F.R.A. was 123,000 acres, but I notice the estimate in the report is 180,000. Then, while there is a large area around Dundum that is too sandy to be considered proper land for irrigation, there are about 500,000 acres on the fringes of that sandy part that are quite satisfactory and could be considered as irrigable land. Consequently these three conditions are satisfied at the site, and this matter should be proceeded with on the basis of the investigations made to date by P.F.R.A.
We must now consider the cost factor of the reservoir itself. There is a good deal of confusion, after reading the commission report, as to the total cost of the project, and the timing necessary for meeting that total cost. Quite frankly, if the federal government makes the same deal with the province of Saskatchewan that it has made with Alberta, it is responsible only for the water storage. It has been generally conceded that, after the experience in Alberta, irrigated land can pay water costs if the main works are provided free and the land does not have to take care of the water rights.
This was also recognized by the experience in Alberta. The federal government has pursued the policy that it will provide free water storage. This includes construction of the dam, construction of the main works and the arrangements for property rights, as well as damming up the coulees and valleys that are necessary to retain water in the main lake.
If this is done it has been proven that the land can carry the cost of the irrigation project. Let us consider for a moment the construction of the dam itself. On May 30, 1947, Gordon L. Mackenzie, chief engineer of the prairie farm rehabilitation branch, issued an interim report in which he estimated the cost of the dam at $66,360,000. This report was concurred in by General H. B. Ferguson, who had a good deal to do with the construction of the Fort Peck dam in Montana, and other similar projects in the United States. As well as making an estimate of the cost at that time, he considered the timing for the construction of the dam itself to be ten years.
After consultation with both General Ferguson and Mr. Mackenzie I received the impression that the number of days in which
'Mr. Larson.]

work could be carried on in the field per year would allow not more than about $6 million a year to be spent in each of seven years. This would bring the total sum to a point somewhere in the neighbourhood of $42 million.
Naturally in the last year or two the concrete would have to be poured for the spillways and the main works of the dam installed. This would mean that another $24 million would probably be spent in those two years. When one takes the cost of $68 million in one lump sum, in one year, it is a formidable amount. However, when it is spread over ten years the amount required in any one year brings the cost down to a point where it is not nearly so formidable.
The investigations in connection with the Hogg report were carried out in 1952. It was felt that a further review of the project should be made. The commission changed the timing to a little over six years, and increased the cost to a figure which is either $139,800,000 or $163,772,000, I am not sure which. Both these figures appear, without details, at page 25 of the report.
The matter of the cost of this scheme has been gone into by several speakers who have preceded me in the debate, and I do not intend to go over the figures again. It has been stated that those figures were based on the estimates furnished by the Mannix construction company. It is very hard to break down these costs, but there is one item here of $3 million for road relocation and bridges. I live in that country, and I am quite familiar with the roads and bridges that exist there. The province of Saskatchewan has one bridge across the Saskatchewan river at Outlook which will not be interfered with at all, nor will the highway that is located there. The other road is No. 4 highway running from Elrose to Swift Current. When the bridge was constructed at Saskatchewan Landing a few years ago the P.F.R.A. suggested that the bridge should be built higher because of the possibility of this dam raising the level of the water some 15 feet. Their advice was not taken. It was considered that if the time should come to raise the bridge, then that would be done. Nature solved that problem. Ice knocked the bridge down last year, and I notice that they are raising the level of it now so I presume that will take care of the situation.
The only other bridge is at Elbow, and it is a combination railroad and highway bridge. That of course will go. It will be at the bottom of the reservoir. That is the shortest way for me to drive to Moose Jaw but I never use the road across that bridge- it is not a highway-because it is in such a

condition that I would rather travel a longer distance and use one of the other bridges. Therefore I question whether more than $30,000 in roads is involved, rather than $3 million. Taking the figures at the top of page 25 of the commission's report, they show contractors' general expense and escalation of wages and materials. Wages and materials may have gone down by that time. They also show contractors' general overhead and profit. These items in my opinion, and I think in the opinion of a lot of other people, are the wildest type of guesses. It would appear that the endeavour is to make the cost so high that any contractor who may bid on the job can bid well under the figures set out here and still have a handsome profit.
I would prefer to consider the estimate of the P.F.R.A. officials plus the additions to that estimate as a result of the increases in the cost of materials. It is considered by the P.F.R.A. officials that in the neighbourhood of 12 per cent should be added to the original cost of $68 million, which would make a figure of nearly $80 million for the dam and reservoir and appurtenant works. This was concurred in by the Wells Construction Company, who built the St. Mary project, and also by the Ramsay Construction Company of Regina. The cost would thus be increased by $12 million over the original estimate by Mr. Mackenzie and General Ferguson. On ithe basis of those estimates I would say we can take it that the cost of this project would be somewhere around $80 million over ten years.
I would not go so far as to say that the Mannix construction company cannot estimate correctly, but I do say that any sensible person looking at the figures set out on page 25 of the report would be inclined to say that they are very much on the high side.
The province of Saskatchewan has stated that it is prepared to enter into the construction of irrigation projects on the same basis that the province of Alberta has entered into such projects with the federal government. Therefore the province of Saskatchewan would be responsible for the construction of the power house. According to the report of the commission, the cost of the power house would be $24 million. The province would also be responsible for the construction of the irrigation part of the project, and in this instance it could be stated that the province of Saskatchewan would not be financially able, if they were so responsible, to assume a cost of $100 million to $150 million. In other words their revenues are not such that they would be able to undertake a project of that kind. If the cost of the dam is $80 million
South Saskatchewan River Project and the complete cost of the whole project is $248 million, the figure set out in the report, then there is a terrific sum in the middle there which would seem to be pretty staggering so far as provincial finances are concerned.
Let us review the provincial position. They would be given without cost this water reservoir with a total capacity of some 7 million acre feet, of which nearly 3 million acre feet are live usable storage. In other words it can be used for power and irrigation. The power plant would be expensive in its initial outlay, but it would be self-liquidating if it could produce power in competition with other available power, and I think it is generally conceded that if water power is available in this form it could compete. Having in mind the experience gained from what has gone on in Alberta, it has been found that irrigated land can afford to carry the water rights necessary to provide the canals. While the irrigation project might not be self-liquidating, it should be selfsupporting. As has happened in Alberta, it will be found that by the time 500,000 acres of land are irrigated probably fifty years will have elapsed.
The cost of $24 million for the power house is set out in the report; and adding that to the P.F.R.A. estimate of $80 million for the dam itself you would have left $144 million if the total figure of $250 million is not as much out of line as the estimate for the dam itself. Naturally the land that would be irrigated first would be land that could be irrigated by gravity. According to the original Gordon Mackenzie report the figure was 123,000 acres, but the Hogg report changes that to nearly 180,000. This would be low-cost irrigation. All that is required is the digging of canals and turning the water into them.
That is all the work that would proceed until such time as the development of the province demanded that water be pumped to higher places. It would not involve the $30 million for a pumping station. It would only involve a part of the $45 million for the irrigation system; and if that course of action were followed, until that other land was irrigated and settled I presume it would not involve a greater outlay by the province of Saskatchewan than the $3 million a year originally estimated. I have no doubt that as the province develops and the need for this type of irrigation increases, the final moves will be made and the water will be pumped to higher levels.
I am afraid that in the consideration of this entire problem we are allowing ourselves as a federal parliament to think that if we
1620

South Saskatchewan River Project proceed with this project we will immediately commit ourselves to an expenditure of $248 million. This is by no means the case. As members of parliament we should take a realistic view of the matter and adjust ourselves to a way of thinking whereby we will consider that we have to spend possibly $6 million, $8 million or $9 million a year until the time of peak expenditure comes with the installation of spillways, when we will probably have to spend $20 million a year for a couple of years. If we go into this project with the province of Saskatchewan, we must realize that this other cost, this figure between $106 million and $248 million, will be spread over the next two generations. How could a number of engineers sit down today and decide what it is going to cost to do something two generations hence? That cannot possibly be realistic.
I have followed this matter very closely with people in Saskatchewan who have attended these commission meetings all through the west. They are vitally interested in the construction and it would appear to those people, from what has gone on, that the only real opponents this project had in the commission hearings were the minister of agriculture for Alberta and I presume his adviser, Mr. Ben Russell, director of water resources for that province.
I am wondering if the Social Credit members in this house take the same view those two officials in Alberta took when the commission hearings were on. I know that the province of Alberta is very keen to get on with the Red Deer project, but Alberta now has 200,000 acres under irrigation, around
600,000	that can be proceeded with on the basis of the present works constructed, and an envisaged 500,000 on the Red Deer river project, making a tots1- of 1,300,000 partly constructed and partly n. the future. Since they have this projected, or have it already, it seems to me they should be prepared to assist Saskatchewan in obtaining this very valuable asset for that province.
If we get into interprovincial rows over who has the right to irrigation, over who has the right to use those waters or who has not the right to use them, I feel we are taking a very shortsighted view of the whole thing and we will confuse the people in Ottawa whose approval of these projects is necessary. If we do that we are seriously jeopardizing irrigation in western Canada as a whole.
I have no opposition to the Red Deer project being proceeded with as soon as possible. My own feeling is that if the federal government are prepared to go along with the South Saskatchewan project


there is no reason why they should not announce their intention to go along with the Red Deer project. I do feel, with the federal money that has been spent in Alberta on the St. Mary project, the Canada Land and Irrigation project and others, the people in Alberta should be prepared to allow the federal government to proceed with the South Saskatchewan project. The soil surveys are done, the levels are run and the thing is about ready to go. The Red Deer project, on the other hand, requires a good deal of soil survey around Hanna, and my information would indicate that it will be some time before that project can be proceeded with.
Manitoba, of course, is fearful that if the waters of the South Saskatchewan are too greatly committed for irrigation that will seriously hamper power development in Manitoba. I understand Manitoba's fear in this matter but, on consultation with the secretary of the commission, it seems that the commission has taken the view that while power can be produced from other means than water, the development of irrigation is dependent on water and there is absolutely no substitute.
There are plenty of alternatives in the production of power. Possibly in ten years atomic furnaces will be generating power much more cheaply than we envisage today. I agree with the commission secretary on that point; and while there may be some disadvantages to Manitoba I do not think there are disadvantages that cannot be overcome when it is so important that we have this guarantee against drought in the sister province of Saskatchewan.
Another matter brought up by the secretary is that there are apparently untold possibilities of diverting the water up in the mountains, of moving the whole eastern Rocky mountain watershed south so that it would be useful in the centres of population. It would be many years before even the investigations on a project like that could be carried out, and the costs I understand would be tremendous. Some day when the population is there to warrant it possibly we will find that something well worth carrying out.
In the light of the developments which this nation is taking in its stride, with the development of the St. Lawrence seaway, I cannot help but feel and the people of Saskatchewan cannot help but feel that if this project is ruled against there will be a good deal of discrimination against the people of my province. No matter what future development is envisaged-suppose the entire flow of water east of the Rocky mountains is diverted-it seems only reasonable to me that

a water reservoir built at this time on the South Saskatchewan could well be incorporated with one of those broader schemes if it is considered proper to do that in the future.
I was considering going into the history of this thing. There is a history behind this reclamation development going on in western Canada now which dates back to the days when these provinces were part of the Northwest Territories. I am not going into that history but I will say that the Minister of Agriculture (Mr. Gardiner) had a good deal to do with the federal government when the negotiations were carried on regarding what share of the natural resources those provinces should have and what restitution there should be for natural resources alienated in the past. I do know that reclamation of the Palliser triangle, which according to Palliser should have never been settled, entered to a large extent into the negotiations which produced the prairie farm rehabilitation administration. Part of this federal expenditure in restitution has been made on major water projects in western Canada. There has already been spent over the years some $60 million.
It was always contended by the Minister of Agriculture that two or three of these major water projects had to be constructed before a complete equilibrium would be found in the dealings on natural resources between the federal government and the provinces of Alberta and Saskatchewan. On this basis the South Saskatchewan and the Red Deer can be regarded as the major water resources that we have in western Canada.
Since many surveys still have to be made on the Red Deer project, I would strongly recommend and I would feel that it is necessary that we get started on this South Saskatchewan project. I feel that we should enter into negotiations with the province of Saskatchewan at the earliest possible date to get accurate and true estimates of how cheaply we can build these projects. We should enter into negotiations on a firm basis with the provinces involved; and as the South Saskatchewan project is ready to go now we should make some arrangement so that we know where we stand. It would be impossible for the federal government to go ahead with the project until such time as the arrangements with the province of Saskatchewan were in contractual form. At that time this matter could be proceeded with on a co-operative basis.
I strongly feel that this matter should be taken up now, and that negotiations should be entered into now to put this most valuable and most necessary asset into the province 68108-104J
South Saskatchewan River Project of Saskatchewan. It is an asset which, in the view of many people in western Canada, is owing to that province.


Victor Quelch: The members of the Social Credit group have from time to time, Mr. Speaker, made it clear that they support federal action to provide for the construction of major irrigation projects in both Alberta and Saskatchewan. I believe that was made quite clear by the hon. member for Peace River (Mr. Low) and the hon. member for Lethbridge (Mr. Blackmore) when they spoke in the house last session on the question of the South Saskatchewan project. However, since that time certain facts have come to light which throw some doubt upon the advisability of proceeding with the South Saskatchewan project in its entirety, at least until alternative methods of providing irrigation-more especially of providing power-have been fully investigated. Apparently that was the attitude of the royal commission that investigated this project.
It seems to me that the important point to keep in mind-the commission stressed this point-is that there are somewhere in the neighbourhood of 15 million acres in the dry areas of Alberta and Saskatchewan which need water supplied to them in order that they may become productive. Yet if the total supply of water in the South Saskatchewan river and all the water that could be diverted from the North Saskatchewan river were utilized, it would be possible to irrigate only somewhere in the neighbourhood of 3 million acres. This illustrates how very important it is that we do everything in our power to make the most economical use of the water within the Saskatchewan river as a whole.
The purpose of the South Saskatchewan project, as outlined in the commission report, is to irrigate 455,000 acres of land, two-thirds of which apparently would have to be irrigated by pumping and one-third by gravity. It is proposed to develop 150,000 horsepower of electricity, and supply water to Moose Jaw and Regina. Apparently the main part of the project is the power development.


Mr. Gardiner:: I believe the commission
report states that two-fifths would be gravity and three-fifths by pumping, rather than one-third and two-thirds.


Victor Quelch: Yes, three-fifths by pumping and two-fifths by gravity. Somewhere in the neighbourhood of 125,000 to 180,000 acres are to be irrigated by gravity, and the balance by pumping.


James Garfield Gardiner: It is 179,000 acres by gravity.


Victor Quelch: The estimated cost has been set by the commission at $250 million. This estimate was severely criticized by previous

South Saskatchewan River Project speakers. Any criticism I have to make is not on the question of cost. On the other hand when I hear people lightly dismissing the estimates of the Mannix construction company, I am aware of the fact that that company is held in high esteem and is considered a very sound company. I can quite realize that this company would probably put in a high estimate because on projects of this kind you do not know just what type of construction difficulties you may encounter. The history of all major construction projects of this nature has been that the final cost has been very much greater than the original estimate.
In dealing with the question of the St. Mary dam, the hon. member for Regina City (Mr. McCusker) said the only reason the final cost was so much greater than the estimated cost was that the project was greatly enlarged. That is only part of the reason. The hon. member should know that construction difficulties were encountered, such as the diversion tunnels and a number of other things, which were largely responsible for increasing the cost of that project.


Mr. McCusker:: On a question of privilege, Mr. Speaker, were not those extra costs encountered because the project was expanded?


Victor Quelch: Not for that reason alone. A rock formation was encountered, and one contractor went broke. The Fort Peck dam is a large earth-filled dam, and its construction cost $100 million. Before the dam was completed the water broke through and washed a lot of it out. This caused a great increase in the cost of that project. The commission warns that contractors will have to be on the lookout for similar dangers in this project. I recall that in my own constituency a small earth-filled dam was completely washed out before it was completed. It had to be rebuilt, and the final cost to the government was double the original cost. Anyone making an estimate of the cost of a project like this has to envisage the possibility of encountering construction difficulties; therefore I would not be over-critical of any company for putting the cost perhaps higher than it actually is.
The commission found that the economic returns envisaged to the people of Canada were not commensurate with the cost of the project, and expressed the opinion that irrigated farms in Saskatchewan could still be supplied with water at less cost from other sources.
The commission make one point that I feel should carry a good deal of weight. They stress the fact that there is no substitute for water for irrigation, while there is a substitute for water in so far as electric power
TMr. Quelch.]

is concerned. The commission claims that the proposal would commit four-fifths of the flow of the South Saskatchewan at that point for hydro power, and it could never be returned to be available for irrigation in the large area above the dam. The hon. member for Regina. City pointed out that this water, after it passed this project, would be available for hydro projects lower down. That is not the point. The point is that there is no substitute for water for irrigation, and once the water has gone through this project it will not be available for irrigation purposes in the large area above the dam. I feel that is something that should be given a great deal of consideration.
On the other hand, the commission point out that the cost of providing power at Coteau creek dam is such that Saskatchewan's power needs could be provided almost as cheaply through steam plants. Now, I do not doubt for one minute that that is true, because in the west we have a lot of cheap fuel in the form of coal, gas and oil. For instance, there is a power plant at Drumheller on the Red Deer river which provides electricity within a radius of about 100 miles. All the farms that require electrification are being supplied from that power plant, which is a steam plant burning coal. Since it is located in the Drumheller valley, coal can be secured quite cheaply. The cost of producing that electricity compares very favourably with the cost of electricity supplied by other means.
The commission report has been criticized on the grounds that it conflicts with the findings of P.F.R.A. engineers. Some members have criticized the commission on the ground that they have ignored the P.F.R.A. findings entirely. In reading the report I find that on page after page reference is made to figures and submissions of the P.F.R.A., so it cannot be said that the commission did not consider the findings of the P.F.R.A., although in some cases they did not agree with them. One only has to read the report to see that there is continual reference to the submissions of the P.F.R.A. However, it does appear that the findings of the commission are right in line with the opinions of the former chief consulting engineer of the P.F.R.A., Mr. Ben Russell. I notice that in a report of a meeting of the water resources board in August, 1951, an application for an allocation of water for the South Saskatchewan river project was turned down by the water resources board. The reservation was continued for two years, but the application for allocation of water for that project was turned down by the water resources board chiefly on two grounds. The first was on the ground that they should

wait until the findings of the royal commission were available, and then also there was the ground that they should first of all make further investigations into the North Saskatchewan river project as an alternative.
It is interesting to note that when Mr. Ben Russell, who is a member of the water resources board, took that stand he did so without first of all consulting the government of Alberta. He made that point quite clear. He said, "I am doing this on my own account; I have not consulted the province of Alberta". On the other hand, later on when the province of Alberta made a submission they backed up Mr. Russell's contention.
I note that the Saskatchewan brief, and also the remarks of a number of hon. members who have spoken, including the hon. member for Kindersley (Mr. Larson), have criticized the North Saskatchewan project as an alternative on three main grounds. First of all it is contended that an investigation has already been made, and that it was found that the South Saskatchewan would provide water for irrigation more economically. Second, it is contended that the North Saskatchewan is not an alternative and that the South Saskatchewan and the North Saskatchewan are two separate rivers. In the third place it is contended that there would be a heavy loss of water owing to the length of the canals needed to take the water from the headwaters of this river into Saskatchewan. I want to comment briefly on those three points.
The answer to the first point, of course, is that a detailed survey of the North Saskatchewan project has never been made, therefore until a detailed survey has been made you cannot say whether the one would be better than the other. Unfortunately a great deal of the original survey made by Mr. William Pearce has been lost or is not available for some reason. Secondly, since the time the comparison between the two was made a number of changes-and quite large ones-have been made in the North Saskatchewan project.
Whilst, as I say, there is no detailed survey, there are two or three general surveys. The main change that was advocated was in that made by Mr. A. B. Cook. He proposed that instead of taking the water northeast from Youngstown to Macklin, it should be taken east and land irrigated at Alsask, Kindersley and a number of points east. The main advantage of that proposal is that you would be keeping water at a higher level-120 feet higher-than if you went the other way; and also that you would greatly shorten the length of the canals.
South Saskatchewan River Project
Another point argued is that there are two separate rivers, the North Saskatchewan and the South Saskatchewan, and that therefore you should not call the North Saskatchewan an alternative because in that case you would not be using the water of the South Saskatchewan. But there is an important point to take note of, and that is that if the greatest use of the waters of the Saskatchewan river as a whole is to be obtained for irrigation, you will have to divert water from the North Saskatchewan to the South Saskatchewan because the North Saskatchewan does not flow through the type of land that is suitable for irrigation. Mind you, if the South Saskatchewan project is constructed, it will still be necessary to divert a certain amount of water from the Clearwater, which is a tributary of the North Saskatchewan in order that sufficient water may be obtained.
Again, owing to the fact that so much of the water will be utilized by the power dam, if we are ever going to use it to irrigate as much as possible of the 15 million acres, it will be necessary to divert water of the North Saskatchewan into the South Saskatchewan in order that that land may be irrigated. Therefore it is nonsense to say that one is not an alternative to the other, because the waters of the North Saskatchewan will have to be utilized in order that the arid land in Saskatchewan and Alberta may be irrigated to the fullest extent possible. Incidentally,, the only place at which diversion of water from the North Saskatchewan to the South Saskatchewan can be made is at the headwaters of the river in Alberta. Whilst the North Saskatchewan is over 200 miles away from the South Saskatchewan at Outlook, at the headwaters the North Saskatchewan is only 20 miles away from the tributaries of the South Saskatchewan. So that by placing a dam on the North Saskatchewan it is possible to divert water to the Clearwater, and by placing a dam on the Clearwater it is possible to divert water to Stauffer creek which is a tributary of the Red Deer which is a tributary of the South Saskatchewan. So there is no engineering difficulty in diverting water from the North Saskatchewan river to the South Saskatchewan.
As to the next point, the contention that there would be a heavy loss of water due to the long canals, I should like to say this. The canals would be long, it is true. Some of them would be going through sandy land, so there would be a good deal of seepage. But the mistake, I think, in arguing that water is lost is this. Whilst it is a loss of water in so far as the project to which the water is being diverted is concerned, it is not

South Saskatchewan River Project a loss of water in so far as the land through which it flows is concerned because seepage of water raises the water table, which is a desirable thing in these dry areas. The water table in those areas is steadily going down. You need only look at what happened at Brooks to see how canals raise the water table. The water table at Brooks has been raised considerably as a result of the seepage of water from the canal. If there was seepage from these canals it would also raise the water table of the district through which the water flowed. Nobody could say that was loss of water. It is loss of water only with regard to that irrigation project, which would mean that more water would have to be diverted in order to get it to its final objective.
I want to say a few words now on the North Saskatchewan project and the modified project known as the Red Deer diversion. The North Saskatchewan project was originally surveyed back in 1921 or 1922 by William Pearce. Under that project it was estimated that a total of 1,430,000 acres could be irrigated, 1 million acres in Saskatchewan and
430,000	acres in Alberta, and the cost was estimated at $105 million. No doubt that cost would be much greater today, although it is pointed out that the costs at that time were deliberately set high.
It is also interesting to note that since that time a large percentage of the land that would be irrigated is now owned by the province of Alberta in the special areas. I would say there are about 8 million acres in the special area, so there would not be the cost of taking over that land.
It would be also possible to have a power development on the upper reaches of the Red Deer and the North Saskatchewan. I mention that fact because I have criticized the development of power on the lower regions of the South Saskatchewan. I have often heard people argue-including the late member for Calgary West (Mr. Smith)- that you cannot use the same water for both irrigation and the development of power, but that depends on the location of your power development project. If that project is on the upper reaches of the river, then the water can be used to develop power and after it passes through that power development project it can be used for irrigation, provided, as I say, that your land to be irrigated is below your power project. But on the other hand, when your power project is below the land to be irrigated the water is not available for irrigation once it has passed through that plant. It is argued that four-fifths of the water of the South Saskatchewan will be required for the South

Saskatchewan power project, and therefore the amount of water available for irrigation itself will be reduced by that amount; that is, an allocation will have to be made for that amount of water for a power project.
Under the North Saskatchewan project the water, as I say, would have been diverted from the North Saskatchewan into the Red Deer river and by damming the Red Deer river, taken by canal across 100 miles down to Sullivan lake, which has a storage capacity of 1,730,000 acre feet. From there it would be taken by canals through Alberta into Saskatchewan where it could irrigate about 1 million acres. However, for a number of years many people considered the project so immense that we should not even think about it but should consider some project which would not be of such gigantic proportions.
So a demand that a modified project be constructed grew, and finally out of that we got the so-called Red Deer diversion project. Actually with the Red Deer diversion project as formulated at the present time it would not be possible to divert water to Saskatchewan. I notice that the hon. member for Kindersley (Mr. Larson) kept referring to the Red Deer diversion project as a means of getting water to Saskatchewan; but as it is formulated it would not be possible to get water to Saskatchewan because under the present proposal instead of using Sullivan lake as a reservoir it is proposed to use Hamilton lake, and from Hamilton lake it would not be possible to take water by gravity into Saskatchewan.
The Red Deer diversion project, which would mainly use the water of the Red Deer, would probably use water from Clearwater river as well. It would be possible to irrigate in the neighbourhood of 450,000 acres in Alberta, most of it by gravity, although it is possible that if the whole 450,000 acres were irrigated some of it would be by pumping. It is estimated that at least 300,000 acres could be irrigated by gravity under the project at an estimated cost of only $15 million. I quite agree that that estimate is probably too low. Probably it would be higher than that. It would mean, however, that you would be able to irrigate a large parcel of land at comparatively low cost.
Now, it is generally argued that if you are going to have irrigation you have to grow specialized crops; you cannot afford the high water costs in the raising of feed, particularly if you are going to have to pump the water 60 or 120 feet, as it is proposed in part of the South Saskatchewan river project. It is quite evident that you would never be able to use that water for the growing of feed

because of the high cost. The hon. member for Kindersley pointed out that in Alberta it was recognized that farmers could stand the yearly cost of getting the water on the land, but in Alberta the water is placed on the land by gravity, and the cost of getting water on the land is considerably less than it would be under a project such as the South Saskatchewan project where a large percentage of the land would have to be irrigated by pumping.


James Garfield Gardiner: May I ask a question? I know my hon. friend is interested in the whole matter of irrigation, and I want to ask him this question. Has he given consideration to what I understand is the fact, that if you follow the Red Deer project and take the water across the prairies by the long ditch, you lose as much water by evaporation and by seepage as would be in the South Saskatchewan river dam?


Victor Quelch: That would be on the Red Deer river project. It is estimated that you would need a yearly diversion of 1,200-acre feet to provide the actual water needed for
400,000	acres, on account of seepage. But as I say, that is only a loss in so far as the irrigation project is concerned. It is not a loss to the district through which it flows.
A great deal of concern is being caused throughout the whole area over the water table going down. Many of the wells on the farms have gone dry. Therefore if as a result of the water seeping through the canal the water table is raised, you are performing a very valuable service; and so long as water is diverted from the Clearwater to the Red Deer river sufficient water can be provided for that purpose and it will be performing a very useful function in raising the water table.
Under a new proposal I understand Mr. Ben Russell is making this suggestion, that the North Saskatchewan project should be investigated. The new proposal includes the suggestion of Mr. A. B. Cook, and that is this: Instead of taking water by canal northeast to Macklin it should be taken from Sullivan lake and east of Youngstown to Saskatchewan so that a large amount of land could be irrigated at Alsask, at Kindersley and at Kerrobert, and then if necessary the water could be taken down to the very land that would be irrigated under the South Saskatchewan project. Let me say that we think it would be advisable to investigate these proposals. I want to make it clear, however, that we are not suggesting for one minute that the damming of the South Saskatchewan river should be held up
South Saskatchewan River Project until such time as there has been an investigation into the North Saskatchewan project.
As a result of what I have said, I want to summarize briefly the stand this group is taking on this matter at the present time.
I will admit that along with a lot of people in my constituency I am feeling somewhat discouraged at the way these large-scale projects in Saskatchewan and Alberta have been held up. They seem to have become a kind of political football. Apparently they are being held up not so much through economic and engineering details as from certain political considerations. But we feel that the government should not attempt to go ahead with the construction of this South Saskatchewan project in its entirety until they have made a thorough investigation of alternative methods of providing power.


James Garfield Gardiner: May I just suggest that is the reason it has been held up for the last three years. We were making and proving that survey, and we have made it.


Victor Quelch: That may be the reason for the South Saskatchewan, but the minister is going to have an awfully hard job to convince me that that is the reason the Red Deer diversion was held up.


James Garfield Gardiner: That is the only reason consideration was dropped for the time being.


Victor Quelch: I will deal with that in a minute. We support immediate action to build the dam on the South Saskatchewan river for the purpose of providing a large reservoir from which I understand by gravity
125,000	acres and perhaps even 180,000 acres could be irrigated; because even if you could irrigate only 180,000 or 150,000 acres by gravity you will still have a tremendous amount of other land that can be irrigated by low-lift pumping.


James Garfield Gardiner: The P.F.R.A. decided about three years ago, or a little more, that 400,000 acres of land could be irrigated at Hanna by carrying out what we call the Red Deer project, and there has never been any change in that excepting that there are some people who question the amount of land on the ground that it may not all be suitable.


Victor Quelch: Coming back to the South Saskatchewan dam, I want to make it clear, as I say, that we support building a dam on the South Saskatchewan river to provide a reservoir from which a certain amount of land could be irrigated by gravity and an additional amount of land by low-cost pumping. In Alberta today a great deal of land is being irrigated by low-lift pumping. Many
1626	HOUSE OF
South Saskatchewan River Project farms are doing it on their own and are finding it very satisfactory. No doubt if a reservoir of this kind were built it would be possible to irrigate a good deal of land. On the other hand, we are not supporting the idea of a power development because we believe the water of the South Saskatchewan river will be needed for irrigation purposes, and to the extent that it is utilized for power at that point it is not available for irrigation.
In so far as the Red Deer diversion project is concerned, we feel that the government should proceed immediately with its construction. Perhaps all the soil surveys have not been completed, but it would be possible to start work immediately on the dam. Agreement has been reached as to where the dam should be built. If it is thought possible that at some future date that water might be taken from that project into the Saskatchewan, then I would suggest that instead of using Hamilton lake they should utilize Sullivan lake, because if Hamilton lake is used as a reservoir it will not be possible to take water into Saskatchewan. On the other hand, if Sullivan lake is used then it will still be possible to carry water from there into Saskatchewan at a later date. All that would be necessary then would be to divert water from the North Saskatchewan to the South Saskatchewan, but that is no reason to delay the building of a dam on the South Saskatchewan, and it is no reason to delay the construction of the Red Deer diversion project. These projects can be gone ahead with, and so long as they use Sullivan lake as a storage reservoir they will have their water at a sufficiently high altitude to make irrigation possible by gravity.
I can assure the minister that in past years I have tried to excuse the failure of the federal government for not going ahead with the Red Deer diversion project. Three years ago I quoted what the minister himself said in this house. He said in reply to a question put by me just about three years ago that surveys had gone sufficiently far that by the fall he hoped it would be possible to sign agreements with the provinces so they could start work on the Red Deer diversion. That would be two years ago, not three. Now we are told that they have discovered patches of a new type of soil that had not been found anywhere else on the North American continent. The only other place it has been found, they say, is in Australia. We are told that, therefore, they will have to have another two years to investigate soil conditions.
I have been reading in the Hanna Herald reports of meetings held throughout the constituency by members of the east central irrigation association, and it is stated that the farmers are disgusted with the inaction of the federal government. They say they have


farmed out there for 40 years, and they know what the soil is. They have the machinery today that will bust that hardpan wide open. So long as the land is cultivated shortly after it begins to dry, there is no difficulty in breaking it open. They are not satisfied to be told today that because patches of hardpan have been found, new soil surveys will have to be made. They know what that land is, and they think it is high time the government began action on the project. It was first investigated in 1921. Now, in 1953, they are told soil surveys will have to be made which will probably take another two years.


Mr. H. R. Argue (Assiniboia):: Mr. Speaker, I listened to the hon. member for Acadia (Mr. Quelch) with a great deal of interest. However, nothing he has said detracts from the advantage of going ahead immediately with the South Saskatchewan project. So far as I am concerned the best reply to the statement he has made was given in the house last year by the leader of the Social Credit group when, on June 28, he said:
There is just one thing I would like to say by way of encouragement to my friends in Saskatchewan. I want to see Saskatchewan get that project on the South Saskatchewan river as quickly as they can because I know what it will do for their province and for the rest of Canada as a whole.


Victor Quelch: We all agree with that.


Hazen Robert Argue: I hear another one of their members says that they all agree with that.


Victor Quelch: Would the hon. member permit an interjection? If he would rather not, I shall not insist. However, I thought I made it clear that since that time a lot of facts have come to light which throw doubt on the advisability of proceeding with the power development. But we still strongly support the idea of a dam, a reservoir and irrigation.


Hazen Robert Argue: I am not a member of the Social Credit party, and do not caucus with them. I do not want to say what stand that party has taken and so far as I am concerned I shall wait until I hear from the leader of that group in this debate.
The South Saskatchewan river project has been talked about for a good many years- since 1935, I believe. Surveys have been made year after year by P.F.R.A. engineers. The Minister of Agriculture (Mr. Gardiner) and other spokesmen for the Liberal party, in one election after another, have gone on record in support of the building of the South Saskatchewan river project. I am pleased to note that the official opposition is supporting this project. Certainly we in the C.C.F. group, members from Saskatchewan in particular, are supporting the project wholeheartedly.

I think in assessing the benefits of a large undertaking such as the South Saskatchewan project members of parliament should look at it from a national point of view. We should attempt to find out whether it will not only help our fellow citizens in a certain part of Canada but whether secondary benefits flowing from the project would improve the standard of living and well-being of all our citizens.
Members of this group have supported the Canso causeway. We have supported the St. Lawrence seaway development. In our view the Canso causeway was needed in the maritime provinces, and for that reason it received our support. We viewed the St. Lawrence seaway development as something advantageous to central Canada. We now look at the proposed South Saskatchewan project as one which will bring to a large area in western Canada benefits that will be available to the people in that region, just as the St. Lawrence seaway and the Canso causeway will benefit other sections of Canada.
As I have said, the Minister of Agriculture and other spokesmen for the government have gone on record favouring this project. So have members representing all the other parties in the house. My question is, then: What are we waiting for? It is time the government made up its mind and announced a project on the basis of repeated recommendations from its own P.F.R.A. engineers. As Dr. George Spence, former P.F.R.A. director, has said, those people have lived with this problem now for almost half a lifetime.
The information contained in the report of the royal commission was pretty well known some months ago. It was officially tabled in the house on January 19, more than two weeks ago. P.F.R.A. engineers in 1951 apparently had completed all their studies and recommended that the project be undertaken. I say to the government now that what we in this group as well as the people in western Canada, particularly those in Saskatchewan, are asking is that the government announce that it is going ahead with the project, and that it do so in such a way as to guarantee its being built.
The amendment before us regrets that the government has not placed an item in the estimates to cover this expenditure, and the amendment most certainly will have my support. The hon. member for Kindersley (Mr. Larson) who set forth some of the main advantages that would flow from the project, said that the amount involved would be only six or seven million dollars a year. Well, we want something more than an item of $6 million in the estimates. Such an item might appear in this year's estimates and
South Saskatchewan River Project again next year and the year after. As happens in connection with some items, it might appear merely as a revote. In other words an item might appear in the estimates without very much being done by way of construction.
In my view the government should place on the statute books of Canada whatever legislation is necessary to guarantee that this project will be proceeded with and completed. We have already waited far too long. We have heard the Minister of Agriculture and others set forth the advantages of this project. In general elections and in by-elections we have heard them make the statement that, in order to have this work done, the thing to do was to send supporters of this government to the House of Commons.
In their wisdom, from time to time the people of Saskatchewan have sent a number of government supporters to the house. We are now very tired of hearing these promises repeated time and again, but not fulfilled. We want action now; we want legislation now. The government of Saskatchewan is prepared to enter into an agreement. The minister of agriculture and the premier of that province have stated that Saskatchewan is prepared now to enter into an agreement with the federal government and is prepared to undertake its share of the cost with respect to the project on the same basis as the costs of other irrigation projects have been shared with the province of Alberta.
I am sure the present royal commission report must be rather embarrassing to some members of the government. In the last few years we have had a royal commission on transportation, the Massey royal commission on arts, letters and sciences, and the now famous Currie report which is comparable to the report of a royal commission. We now have a royal commission report on the South Saskatchewan river dam. Apparently we are getting government by royal commission. I say that when members of parliament on all sides of the house want something, then the government should give the necessary leadership to carry out the wishes of members of parliament and should not set up another inquiry in order to establish whether or not the project is feasible.
In this instance we have had another inquiry and the commissioners have cast grave doubts on the feasibility of the project. Their report is now something that is standing in the road that must be gotten rid of before we can go ahead with the project. Surely the vast majority of members in the house realize that the reports made year after year by the government's own P.F.R.A. engineers are the ones to which attention
1623	HOUSE OF
South Saskatchewan River Project should be paid. I have been handed a clipping from tonight's Ottawa Journal. It is a Canadian Press dispatch from Regina, and I certainly agree with it. It reads as follows:
The Saskatchewan Liberal party yesterday said the federal government should ignore the findings of the royal commission on the South Saskatchewan river project.
We think they should ignore these findings, and we in this group are sorry the royal commission was ever appointed. I think the best thing the Minister of Agriculture (Mr. Gardiner) could do with the report would be to gather together all copies of it, throw them in the Saskatchewan river and let them go down to the sea. In my opinion there is nothing valuable in the report that has not already been reported many times, and there are other parts that are of no value, so possibly the whole report might be handled in the way I have suggested.
A lot has been said about the advantages of the South Saskatchewan river project to the people of that province. Naturally two of the main advantages are irrigation and the providing of Saskatchewan with a source of cheap power. We believe that by reason of the large power facilities that could be installed if such a project were undertaken we would have a reasonable chance of attracting industry to our province in the future. Saskatchewan is basically an agricultural province. We are really a one commodity province. We are a wheat province, and while we have had good fortune in the last number of years in growing and selling our wheat, no doubt there will be years in the future when our crops will be low in yield because of drought, and there will in all probability be years in the future when prices will be lower. Certainly anything that can be done to bring industries to our province will be a stabilizing influence on our economy.
Naturally I am interested in the effect of irrigation on our agricultural industry. I have read the statement made by the Saskatchewan government to the royal commission. In that statement the provincial minister of agriculture points out that right now the province really has 10,000 too many farm units, too many because their size is so small that the units are uneconomic. He points out that even with all the irrigation that may be developed and the new land that may be brought under cultivation, the best we can hope for is an additional 5,000 units. Our own Canadian citizens, our own farmers who are farming in the drought area, or who are farming on units uneconomic because of smallness of size, would welcome the opportunity to engage in the irrigation farming


that would follow the development of the South Saskatchewan river project.
We did not think it was necessary in the first place to appoint a commission at all, and of course it gave us some concern that on that commission were two hydro engineers and only one irrigation engineer. We feel that if the personnel of the commission by way of qualification had been reversed, it is very likely the report would have been favourable. The report advocates further studies, many of which have already been made, and in so doing it seems to me that some members of the royal commission want to continue their jobs for years to come. I do not blame anyone for attempting to have a good job if he can get it, but when this project is so necessary for the people of Saskatchewan I do not think the wishes of one or more individuals, who hope they may get lucrative employment, should be a sufficiently good reason for accepting a recommendation that a lot more study of this project is needed.
It has already been said that some of the estimates of the royal commission with respect to costs of the project are fantastic. The commissioners have loaded their estimates against the South Saskatchewan project. In addition to actual construction estimates they have included such estimate items as $12,300,000 for general expense, over $6 million for interest during construction, and $4 million for other contingencies after having provided for every conceivable contingency in their estimates. Then they have a figure of $10 million for escalation of wages and materials. That is a kind of cost of living index that can only go up. Here they have suggested an unnecessary $10 million for some construction firm that may undertake this project.
Then they come to another amazing finding, namely that there are no stones in Saskatchewan. I imagine that the municipality in which I live could make a very substantial contribution to the rock necessary for the riprap on the spillway. But the commissioners have a place where they are going to get rock. They are going to go to the Frank slide in the western part of Alberta. They are going to bring rock from the Rocky mountains, and because they are going to go to the Frank slide the cost of the rock will be increased from $4.20 per cubic yard to $11 per cubic yard.
For this reason alone the project will cost another $4f million.
After the commission has made these fantastic estimates of the cost, then they decide they are going to assess the advantages that will flow from this project. In one place they

state there will be a saving of $10J million in relief over the next 35 years. Well, the Saskatchewan brief lists some of the costs that have been incurred to date under P.F.A.A. expenditures in time of crop failure, direct relief expenditures and amounts that have been expended through tax and debt cancellation, but the Saskatchewan brief does not arrive at $101 million. It arrives at a figure of over $400 million.
Well, we would not expect to save all of that even if this project were completed, but certainly a saving of $10J million over the next 35 years in the way of relief in time of crop failure is just about as nonsensical the opposite way as are the inflated estimates in their report.


Stanley Howard Knowles: One of -those silliest blank, blank ideas.


Hazen Robert Argue: The Regina Leader-Post points this out in an editorial of Tuesday, January 20, and has this to say:
The commission went to the other extreme in estimating the economic returns from the project. It ignored the province's estimate that increased annual agricultural output in the irrigated area would range from $34,151,157 initially to $50,543,237 when maturity had been attained. Instead, the commission in its balance sheet entered on the credit side the equivalent of a niggardly amount of less than $3 million a year for the first 35 years.
So when it comes to assessing the benefits that will flow from this project the commission makes the benefits just as small as it possibly can. Then, of course, it establishes the conclusion that this would not be an economic project, as it wants the investment to pay the government 3J per cent a year.
That royal commission is looking at this whole project from the standpoint of a businessman who is making an investment and wants to be assured of a fair return on the capital he is providing. I do not think that is the attitude the federal government should take. I hope it is not the attitude it will take. Surely if by investing $60 million or $100 million, or let us -call it $250 million over a ten-year period, we can save many thousands of farmers of Saskatchewan from the ravages of drought; if we can provide secondary industry for that province; in other words, if we -can lift the living standards of that section of our Canadian population living in Saskatchewan, then surely the results that flow from that investment should warrant the investment even if the federal government never got a dollar as an actual return from -the investment. If we do not go ahead with the project the federal treasury in the future as in the past will be called upon from year to year and from time to time to expend millions of dollars in relief.
South Saskatchewan River Project It will spend millions of dollars to provide prairie farm assistance and will wind up, instead of having saved money because it did not go ahead with the project, losing money because it lacked the foresight to see the economic advantages that would flow from the project.
The report contains other criticisms of the project. I think these criticisms have been dealt with very well by Dr. George Spence, who for a number of years was a director of the Prairie Farm Rehabilitation Act. He has an article in the Regina Leader-Post of Thursday, January 22, and point by point deals with the objections made by the royal commission. The report says that pumping schemes might be studied and in connection with that suggestion Dr. Spence says: Pumping schemes, without specifying where the cheap power is to come from, are among other things suggested. Strange but true, the commission advocates pumping in one breath and questions the efficacy of that system in the next.
He points out that if you are going to attempt to irrigate by pumping from the river without a dam having been built you will need your greatest quantity of water naturally in July and August when the crop is growing and when it is maturing, and in these two months the river is at its lowest point. For that reason pumping is out of the question.
Then he deals with the suggestion in the commission's report that we should do something to take this water where it is needed most, to the more arid regions of Saskatchewan and Alberta. He points out that the soil and topography of that more arid region make that region unsuitable for irrigation. You cannot take water uphill. You cannot irrigate the tops of hills and so, when you get into rolling country, irrigation becomes impractical. He points out too that that soil is not suitable for irrigation because it has a high mineral content. If you bring water on a soil that has a very high mineral content, a substantial alkali content, you bring the mineral salts to the top of the soil and your soil is ruined. Dr. Spence says that the arid area in Saskatchewan is now being used for pasture and that is its proper use, that it is not suitable for irrigation.
He goes on to point out that every conceivable irrigation project has been studied for years by P.F.R.A. engineers. He says that if any alternative to this program existed the P.F.R.A. officials would have found that alternative -and would have recommended it; -because they have lived with the project, they are qualified persons and they have recommended this project. One of the reasons for recommending it is because

South Saskatchewan River Project it does not interfere with any other project that may be undertaken with advantage.
The position of the Saskatchewan government is crystal clear. The Saskatchewan government has supported this project ever since its election to office in 1944. In their submission to the royal commission they point out that they want an opportunity for an early start on the dam. When the royal commission report was tabled and made public, the Saskatchewan minister of agriculture made the position of the Saskatchewan government very clear. The Regina Leader-Post in an editorial on Thursday, January 15, makes this comment:
Undoubtedly the most significant part of agriculture minister Nollet's statement of January 12 concerning the "excessively high" estimate of $250 million on the costs of the South Saskatchewan river development project, which the royal commission is reported to have advanced, was the following statement:
The Saskatchewan government pledged its financial support to the project long ago and reiterates its anxiety to fulfil the commitment for the cost and construction of that part of the project assigned to the province on the basis similar to other major irrigation projects.
This is capable of only one interpretation; the Saskatchewan government is not alarmed over the patently inflated cost estimate on which the commission reportedly based its findings. It is prepared to go ahead with its part of the undertaking despite the forecasted unfavourable aspects of the commission's findings. It is not doing so blindly, with a wanton disregard of the probable cost. As Mr. Nollet pointed out, the province has checked the much lower cost figure based on "estimates meticulously prepared by the P.F.R.A., which were ignored by the commission in favour of a contractor's estimates". It has shaped its policy on a greater reliance on the more realistic P.F.R.A. estimate than on the fantastic quotation which it is said was prepared for the commission by the contractor.
I believe, Mr. Speaker, the commission was at fault in another way. They went to Alberta and asked a contracting firm, the Mannix corporation, to make an estimate. When the estimate was made, the commission would not allow the representatives of the Saskatchewan government to cross-examine the representatives of the Mannix corporation on their estimates. This company sends in an inflated estimate, and the people concerned are not allowed to cross-examine them and find out the basis upon which the estimate was made.
I believe another mistake was made when the Prime Minister (Mr. St. Laurent) gave instructions to the royal commission, or more probably to the P.F.R.A., that P.F.R.A. officials were not to appear before the commission. If the commission was to do its work fairly and honestly, and take into account all the factors, surely the P.F.R.A. officials should have been called before that commission at a public hearing. These officials should have

been allowed not only to produce the information they had, but to cross-examine the Mannix company on its fantastic estimate.
Shortly after the commission report was made, Dr. L. B. Thomson, the director of the P.F.R.A., spoke at Saskatoon. While he was referring to the report itself, he made it crystal clear in a public statement that the P.F.R.A. still supported the South Saskatchewan project. He should have been invited to make such a public statement before the royal commission when it was sitting.
It is strange the way the government has acted with regard to the royal commission on the South Saskatchewan as compared to its action in connection with the Currie report. Before the Currie report was made public, it had to go to the Department of National Defence to be looked over. If the department did not agree with what was in it, apparently they cut out those parts. When it came to the report of the royal commission on the South Saskatchewan project, the Prime Minister and the government instructed P.F.R.A. officials not to appear before that royal commission. I do not think the royal commission report should have been-


James Garfield Gardiner: May I say, Mr. Speaker, that my hon. friend is not representing the position correctly. The officials of P.F.R.A. were available to the commission every day the commission was in existence, right from the time they were appointed until they went out of office.


Hazen Robert Argue: That doesn't alter my statement. I think that rather than having them available in a back room some place, P.F.R.A. officials should have been allowed, as they were not allowed, to go before that commission in a public hearing and state their position concerning this project.
We have before us, Mr. Speaker, an amendment and a subamendment. The amendment, as it appears at page 1591 of Hansard for February 3, 1953, reads as follows:
This house regrets that in the estimates presented to this house no provision has been made for immediately proceeding with the construction of the South Saskatchewan river dam.
I am sorry that the hon. member for Kin-dersley (Mr. Larson) and the hon. member for Regina City (Mr. McCusker) have taken this to be a want of confidence motion which threatens the existence of the government. They say, therefore, they are not prepared to vote for that amendment. I feel that they should have taken the same attitude members of their party took back in 1946 when there was a motion before the house asking the government to continue the subsidy on milk. One Liberal member after another got up

and said he was supporting the motion. After that support was made known, the Minister of Trade and Commerce (Mr. Howe) rose in his place and told the members on the government side of the house they were to be allowed a free vote on the motion. I believe there should be a free vote on this motion, and that those members should not be governed by the party whips.
As I pointed out some time ago, we would like to see a better guarantee than merely an item in the estimates. You can put something in the estimates and leave it there for the next ten years, but it may not move a cubic yard of dirt on the South Saskatchewan project. We would like to see concrete legislation, and an agreement in concrete terms with Saskatchewan whereby we will know that within the next ten years we shall have the dam constructed and whatever other works are essential within that period of time. The hon. member for Melfort (Mr. Wright) moved a subamendment which I seconded. The subamendment, as it appears on page 1600 of Hansard for February 3, 1953, reads as follows:
as recommended by the federal government's P.F.R.A. engineers.
I hope the Liberal members from Saskatchewan, if they are not prepared to support the amendment, will at least support the subamendment. By so doing they will show that they support the recommendations of their own P.F.R.A. engineers. I think all of us from Saskatchewan, irrespective of party, should stand by the P.F.R.A. engineers. If the subamendment carried, it would not defeat the government at all. Then the government could have a second look at the motion as amended, and do what they saw fit with the amended motion. In the meantime, Liberal
South Saskatchewan River Project members would have at least given some support by way of vote to the South Saskatchewan project.
I move the adjournment of the debate.


James Garfield Gardiner: May I ask if the member has had his forty minutes?


Mr. Speaker:: A question is asked as to whether the member for Assiniboia (Mr. Argue) has taken up all his time. He has two minutes left.


Hazen Robert Argue: I shall relinquish my place, Mr. Speaker. I thought I had five or ten minutes left.


James Garfield Gardiner: If the hon. member has exhausted his time, I would move the adjournment of the debate.
Motion agreed to and the debate adjourned.



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow we shall take up Bill No. 38, respecting the Saint John Bridge and Railway Extension Company; Bill No. 39, to amend the Canadian Overseas Telecommunication Corporation Act; Bill No. 19, to amend the Canadian Vessel Construction Assistance Act; Bill No. 40, respecting the appointment of auditors for national railways. Then we shall take up the resolutions standing in the name of the Minister of Resources and Development respecting the conservation of water resources; the historic sites and monuments board of Canada; revision of the Yukon Act, and if we have time left we shall try to agree on some other bills.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, February 5, 1953