1953-04-29

PRIVILEGE


Mr. A. E. Dewar (Qu'Appelle):: Mr. Speaker, I rise on a question of personal privilege which arises from a series of articles published in the Toronto Telegram on Wednesday, April 22, and subsequent dates.
I have known Harvey Lunam, proprietor of the Lunam Construction Company, for many years. In 1945, when I purchased a hotel, Harvey Lunam advanced me moneys which I repaid him in full in 1947, when I sold the hotel. Subsequently, I accommodated Harvey Lunam by exchanging cheques with him. That was one of his methods of financing when he was hard pressed for funds to meet his obligations. All those cheques were honoured by the banks on which they were drawn. I exchanged cheques with him over a period of nearly three years, from the middle of 1948 to the middle of 1951. He gave me cheques and I gave him covering cheques. I received no benefit and suffered no loss from these transactions. I did it to help an old friend.
The Lunam Construction Company, in response to public advertisements by the dominion government, tendered successfully and was awarded contracts to construct public works. In each case the company was the lowest bidder and met all of the conditions of the invitation to tender. I had no direct or indirect interest in the Lunam Construction Company, and have none now. I never profited from the Lunam Construction Company or from the public treasury.
This house will recall that I was elected in 1949. I did not believe that in continuing to help my friend Harvey Lunam I was violating the spirit of the law as it is applicable to members of the house. Fuller knowledge of parliamentary practices brought me to realize that the combination of circumstances might create false impressions, and I discontinued cheque exchanging.
It is worth mentioning that most of the buildings involved are not located in my constituency. It is also noteworthy that it
was almost one year after I stopped exchanging cheques with Harvey Lunam that following a serious automobile accident he failed to meet his obligations.
I deny any intentional wrongdoing and I repeat that I did not profit in any manner or fashion from my dealings with Harvey Lunam or the Lunam Construction Company.
I have enjoyed the friendship and camaraderie of my fellow members of the house. That I shall always prize.
I thank my constituents for the privilege of serving them, which I believe I did conscientiously and with credit. They were always uppermost in my thoughts and I spared no effort on their behalf.
We are now nearing dissolution. Consequently, I choose to place myself in the hands of my constituents. They will understand and have an opportunity to return me.
Regretfully, I tender my resignation as a member of the House of Commons.


Mr. Speaker:: The hon. member for Qu'-Appelle having given in his place in the house notice of his intention to resign, I shall immediately after such notice has been entered by the Clerk in the Journals of the house, forthwith address my warrant under my hand and seal to the chief electoral officer for the issue of a writ for the election of a new member in the place and stead of the hon. member who has resigned.


Mr. George A. Drew (Leader of ihe Opposition):: Mr. Speaker, in view of the statement that has been made, I would ask the Prime Minister (Mr. St. Laurent) if it is his intention to inform the house now as to what steps he proposes to take to deal with the relationship of the Department of Public Works to this transaction which has just been discussed.


Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, the Department of Public Works is competent to deal with the transaction between that department and the Lunam Construction Company and has been doing so. In view of statements that there are unpaid suppliers of materials and subcontractors, I am rather surprised that no proceedings have been instituted by those so-called creditors against their debtor. I understand that, when this Mr. Lunam met with this accident and ceased to carry on with the completion of his contracts, those
4510	HOUSE OF
Mr. A. E. Dewar-Resignation contracts were taken over by the department in conformity with the clause of the contract. I understand that there were several of those contracts, that with respect to some of them they will be completed and there will be from the contract price and the deposits a surplus available.
That situation presents a difficulty. It will not be up to the department to determine what will be the priorities with respect to claims on this surplus or what payments to creditors should be made. It would seem to me that this was an appropriate case for the placing of the affairs of this unfortunate contractor under the Bankruptcy Act where there would be a trustee who would take possession, who would receive all the claims and would then prepare, in the way provided by the act, a distribution of whatever is available in accordance with the priorities which prevail in the province of Saskatchewan and in accordance with the rules laid down in the act.
I have heard it said that it was intended to assert a claim for something beyond the contract price because of delays in supplying some of the equipment that had to be installed. That is something which a trustee would be quite competent to deal with. If there were grounds for such a claim and for submitting that claim, it would have to be considered. I am credibly informed that there were delays that had not been foreseen in procuring and supplying some of the equipment that had to be installed. It would not be the first time that that has happened, and it would not be the first time that that kind of a claim had to be dealt with. But it is generally stated and believed that this contracting firm is not capable of discharging its liabilities.
If that is the case, it is something which I think should be dealt with by the courts. The Bankruptcy Act contains all the provisions required to deal with that matter in a manner that would perhaps not satisfy all the creditors but which would treat all the creditors with equal justice and on the basis of the rules with respect to priorities recognized under the act.


George Alexander Drew: Mr. Speaker, I would suggest
to the Prime Minister that he inform himself with regard to something that is a matter of common knowledge, namely that this man Lunam had failed to complete similar contracts in 1948 in Regina and that the Great-West Life Assurance Company had been compelled to take over, with serious difficulties for subcontractors on that occasion; and that these contracts were made subsequent to that time, with knowledge of this situation, unless there was a complete absence
TMr. St. Laurent.]

of any consideration of the qualifications of the man.
I submit that this is not something to drop here. I think the government's responsibility is quite clear to inform us as to what steps are being taken to ensure that contracts will be completed. Here there was a notorious failure to complete earlier contracts by Lunam in that area; and on top of that, these contracts are entered into with that warning or with that knowledge, and with the results that we have seen during this session.


Louis Stephen St-Laurent: Mr. Speaker, may I say
that the hon. gentleman is much better informed than I am. This is the first time I have heard the suggestion made that this contracting firm had failed to complete contracts in 1948 and had involved the Great-West Life Assurance Company in any way whatsoever.
The contracts that are let by the government have to be let in a manner provided by the statutes adopted by this parliament; and the government is always subject to severe criticism-and rightly so-if the low tenderer who complies with the conditions for tendering is not awarded the contract. When it is felt that it would be imprudent to award a contract to the low tenderer, the matter is brought before council; and I can assure the hon. gentleman that when it is brought before council there must be extremely serious grounds to induce the members of council to depart from the principle that a low tenderer who has complied with the conditions and who has made the required deposit should be awarded the contract.
It does happen. Not long ago there was a tender that was lower than the one of the tenderer to whom the contract was awarded; but the invitation for tenders contained the stipulation that the tenderer would have to satisfy the department that he had had previous experience in similar undertakings. This was a company that was just entering the field in Canada, composed of gentlemen who claimed that they had had experience in similar work in other countries, but they had no experience in similar work in this country. We finally came to the conclusion that they did not comply with the requirements, they did not satisfy the department that they had the required experience. But this requirement that the contracts be awarded to the low tenderer is on the whole a wise one, and that the low tender on all these jobs can be disregarded only when there are good grounds for doing so, the sufficiency of which the government has to take the responsibility of justifying to this house.

I am unaware that there had been any indication before this that the Lunam contracting firm was not a firm that should be considered when its tender happened to be the lowest, and it had complied with the other conditions of the invitation to submit tenders.


George Alexander Drew: I submit that there must be other considerations, and I lay before the Prime Minister my suggestion that in view of the fact the statement to us this morning makes it clear that the kiting transactions were in relation to the government business, there should be a select committee appointed to inquire into this whole transaction. There are a number of questions on the order paper at this time that indicate the nature of the inquiries which should be pursued, and I suggest that that would be the proper way in which to deal with this subject.


Louis Stephen St-Laurent: Perhaps the hon. gentleman would tell me whether this 1948 contract was with the federal government or with private interests.


George Alexander Drew: I am not suggesting it was a contract with the federal government. I merely-


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order.


George Alexander Drew: I pointed out that this was a contract where this man was known to have failed to complete his undertaking. I made no suggestion that it was a government contract. I said the Great-West Life was called upon to take over, and by that very fact indicated the place where the contract had been established.


Mr. Diefenbaker:: Might I be permitted to ask the Prime Minister a question? He referred to the fact that these contracts had been awarded on the basis of the lowest tender. It is not a question of the lowest tender; it is the question of the fact that this man or his company-
Som


a hon. Members:: Question.


Mr. Speaker:: Order.


Mr. Fraser:: Don't you want the truth?


John George Diefenbaker: This man or his company was paid the amount of the contract without the Department of Public Works insisting that the subcontractors would be paid to the extent of $200,000. Why was this man paid when these subcontractors' accounts were not paid, and the department should have insisted on it. The Prime Minister also mentioned that there would be a surplus when
29, 1953
Mr. A. E. Dewar-Resignation it was completed. That was not the statement of the Minister of Public Works (Mr. Fournier). The debts are $200,000 at least; the assets are nothing. In these circumstances, is it not right that the government should do something because of the fact that they failed to assure themselves that these accounts were paid before they paid Lunam, and protect those honest suppliers?


Louis Stephen St-Laurent: I did not say that there would be an over-all surplus after all the debts of the contractors were paid.


John George Diefenbaker: Before any debts were paid.


Louis Stephen St-Laurent: I said my information was that, with respect to several of these contracts, they would be completed at a cost that would be less than the amount that was still unpaid by the government, including the deposits that had been made.


John George Diefenbaker: A surplus of $3,000, is it not, on all accounts?


Mr. Abboii:: Are we going to debate this?


Mr. Daniel Mclvor (Fort William):: Mr. Speaker, on a question of personal privilege, I think we would do well to think of the great words of the Divine Teacher when He said:
He that is without sin among you, let him first cast a stone . . .
My personal privilege is that I dare not cast a stone, because I have been guided by the advice of a personal friend. I have been widely accused of the sin of idolatry because of my admiration for a man who is the champion cutter of red tape in Canada, the Minister of Trade and Commerce (Mr. Howe).



INDUSTRIAL RELATIONS


Mr. D. F. Brown (Essex Wesl):: Since the
beginning of our work on the criminal law committee, which is revising and consolidating the Criminal Code, I, as chairman, have received numerous letters and telegrams, most of which have not been of a complimentary nature. In the past few days, Mr. Speaker, I have received some 70 telegrams, all in the French language, addressed to me as chairman of the industrial relations committee. I am not, and never have been, chairman of the industrial relations committee. I therefore take much pleasure in sending these telegrams to the hon. member for Edmonton East (Mr. Macdonald), who has been chairman of that committee.

Questions



REPORTS OF COMMITTEES

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

[Stage Direction]
A message from His Excellency the Governor General transmitting supplementary estimates for the financial year ending March 31, 1954, was presented by Hon. Douglas Abbott (Minister of Finance) and read by Mr. Speaker to the house.
Douglas Charles Abbott: I move that the estimates be
referred to the committee of supply. I am sure the house will be pleased to know that the amount of these supplementary estimates is less than the amount that has been presented to the house as supplementary estimates in the last seven years.


Mr. Casselman:: Starting to save, eh?


Douglas Charles Abbott: Another election budget.


John George Diefenbaker: This is cyclical budgeting.


[Stage Direction]
Motion agreed to.


Mr. Stanfield:: 1.	When were last tenders called for rural mail route number 4, Pugwash, Nova Scotia?
2.	When were tenders received, giving (a) names of tenderers; (b) amount of each tender?
3.	Who held the previous contract, stating amount?
4.	To whom has contract been let, stating amount?


Mr. Cote (St. Jean-Iberville-Napierville):: 1.	January 8, 1953.
2.	January 30, 1953.
(a) and (b) John Miller Earl Mundle, Pugwash, $965; Gerald Ernest Langille, R.R. 4, Pugwash, $1,000; Roy Murray Langille, R.R. 4, Pugwash, $1,400.
3.	Mr. Morrell Langille, $1,000.
4.	Mr. Langille withdrew his notice of termination and, as a result, the contract was renewed with him at $1,000.



NATIONAL DEFENCE


Mr. Proudfoot:: 1.	Did the Ottawa Sentinel edition of March 9, 1953, carry a regular recruiting advertisement of the Canadian army?
2.	If so, how much was paid to this publication for printing such advertisement?
3.	Was the publication of this advertisement authorized?
[Mr. Brown (Essex West) .1
4.	Is it the intention of the Department of Naitonal Defence to pay for such advertisement?
5.	If not, for what reason?


Mr. Blanchette:: 1.	The Ottawa Sentinel edition of March 9, 1953, carried an advertisement purporting to be a regular Canadian army recruiting advertisement.
2.	No payment has been made.
3.	No.
4.	No.
5.	Advertisement unauthorized.



TAX DEDUCTIONS-PENALTIES FOR FAILURE TO REMIT

Mr. Diefenbaker:: 1.	By provinces, how many employers have been penalized for failure to remit tax deductions promptly, since the first day of January, 1951?
2.	What is the total amount of the penalties that were imposed?


Mr. McCann:: 1. Statistical information is not available in respect of the number of employers penalized for failure to remit tax deductions promptly.
The statistical information available covers the number of penalty assessments issued both for late remittance of tax deductions and for late filing of information returns and is available for the period from 1st December, 1952. Such information for the period from 1st December, 1952 to 31st March, 1953 is as follows:
Province	Number
Newfoundland	 106
Prince Edward Island	 40
Nova Scotia	 162
New Brunswick	 160
Quebec	 2,690
Ontario	 7,110
Manitoba	 279
Saskatchewan	 92
Alberta	 1,641
British Columbia	 1,255
Yukon	 20
13,555
2. No statistical record available.



QUESTION PASSED AS ORDER FOR RETURN


Mr. Argue:: 1.	Did government agencies hold surplus stocks of cheese, bacon, eggs, butter, potatoes, apples or any other agricultural products on March 1, 1953?
2.	If so, what was the quantity and value of surplus stocks of each product held on March 1, 1953?



MOTIONS FOR PAPERS


John George Diefenbaker: For a copy of all letters, telegrams or other correspondence, since the first day of February, 1952 and to date, which have passed between the Department of Public Works and representatives of any department of the federal government in the city of Regina or elsewhere in the province of Saskatchewan, and the replies thereto, in connection with efforts to locate Mr. Harvey Lunam of the Lunam Construction Company Limited.


Mr. Fournier (Hull):: Mr. Speaker, while the hon. member was away on Monday this motion was called and I stated that, looking over the files, there were no letters, telegrams or correspondence covering this subject.


John George Diefenbaker: I wish to thank my hon. friend for having allowed this to stand. I have looked back over the records of the house and I find that the proper course under the circumstances is to pass the order and then the minister makes an immediate return. So I would ask that it be passed, and then the minister can make a return that there are none, by a simple statement.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.



LUNAM CONSTRUCTION COMPANY

Mr. Coldwell:: For a copy of final or any other statements regarding the payment to subcontractors in connection with the contracts awarded to the Lunam Construction Company of Regina.


Alphonse Fournier: Once more, would the hon. member clarify this. Is it statements from the Lunam Construction Company to my department that he wishes to have?


Major James William Coldwell: I want statements in connection with payments to subcontractors, whatever statements there were. I presume there would be statements by one of the officials of the department-an architect, or a superintendent of works. That is what I am anxious to get-as well as any statements that may be O.K.'d by officials.


Alphonse Fournier: What appears on the file is a progress report giving the amount due to subcontractors and the work done, and materials delivered. This is signed by the contractor. We have no dealings whatever with the subcontractors. The contract is between two parties. We have no dealings with other people. If those are the statements the hon. member wants, I will have this file looked up and, as soon as possible, bring down the reply.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.
Inquiries of the Ministry


Major James William Coldwell: For a copy of progress reports signed by dominion public works architects, Saskatchewan, in connection with contracts awarded to the Lunam Construction Company of Regina.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr.  W. Chester S. McLure@Queens: I
should like to ask a question of the Minister of Fisheries (Mr. Sinclair) or, in his absence, his parliamentary assistant. Has the department received a telegram from the Prince Edward Island fisheries federation endorsed by the Prince Edward Island fishermen's association, and also by 2,200 lobster fishermen, 40 packing plants and employees demanding immediate rescinding of new carapace measurements for lobsters? This is important, as the fishing season opens immediately.


Mr. J. Wafson MacNaughl (Parliamentary Assistant to the Minister of Fisheries):: Mr. Speaker, I wish to thank the hon. member for having given me notice of his intention to ask this question. I received a similar notice of intention from the hon. member for Kings (Mr. Kickham). The telegram to which the hon. member has referred has been received by the department.
On March 26, in reply to a similar question by the hon. member, I made a full statement giving reasons why the new carapace measurement was necessary. Since then no new reasons have been advanced to warrant a change. Elsewhere in the maritime provinces the season has already opened, with the new carapace measurement being used.



SUBVENTION ON PRODUCTION IN WESTERN CANADA

[Stage Direction]
On the orders of the day:
Mr. E. G. Hansell (Macleod):: Mr. Speaker, I should like to ask a question of the Minister of Mines and Technical Surveys. Has the government's attention been called to a press dispatch of about ten days ago respecting subventions on coal? Secondly, is the government prepared to report on whether there is to be an increase in subventions on coal mined in western Canada either for the use of the railways or for other industrial or domestic purposes?


Hon. George Prudham (Minisier of Mines and Technical Surveys):: Mr. Speaker, I wish to thank the hon. member for having given
4514	HOUSE OF
Inquiries of the Ministry me prior notice of his question. The particular news item to which he has referred has been brought to my attention. I have no comment to make, other than that the news item is just speculation-probably an educated guess.


Mr, Fraser:: What do you mean by that?


George Prudham: The railways since 1938 have been paid a transportation subvention to the extent of 5 mills per ton mile with a maximum of $3 a ton, for Canadian coal used on company service, to make such coal competitive with American coal at the same coaling points.
The Canadian National Railways, in recent years, has claimed that this 5 mills per ton mile is not a true assessment of their costs. At present a study is being made of the Canadian National Railways' costs by an independent commissioner, under the direction of the dominion coal board and the Department of Transport. Until that investigation is completed, the Canadian National Railways is continuing to buy coal in the same quantities as last year, and the dominion coal board is assisting in order to give the maximum tonnage available to all operators affected.
At the present time the government does not intend to increase subventions either for the railways or for the movement of domestic and industrial coal, unless this investigation should show that the railways are not being adequately paid.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I should like to ask the Prime Minister whether he has received a telegram from the farmers' union of Saskatchewan with reference to the grain handlers' strike at Vancouver and suggesting once more the calling together in Ottawa of representatives of the companies and the labour unions, both being authoritative representatives. I should like to know also what the prospects are of an early settlement of this matter.


Louis Stephen St-Laurent: Mr. Speaker, I am not in a
position to answer offhand with precision the hon. gentleman's question. There have been telegrams that have come to my office and I would have to look at them again to see what is the date of the last one and what are its terms. With respect to whether or not consideration has been given to the


suggestion of bringing the men and the operators together in Ottawa, there are negotiations in process which are being handled by the Department of Trade and Commerce and the Department of Labour. I have had progress reports and am hopeful that these negotiations will bring about a settlement of this strike. I am rather disappointed that it has not come about as yet. The negotiations and the reports that I have received have led me to believe that there would be agreement even before today.


John George Diefenbaker: It is very close then.


Louis Stephen St-Laurent: I understand that it is
very close. It would not be helpful to suggest anything that would occasion further delay by having the forum of the discussions changed.


John George Diefenbaker: That is the most helpful
statement yet.



PRIVILEGE


[Stage Direction]
On the orders of the day:
George Alexander Drew: Mr. Speaker, I rise on what is really a question of privilege, but in addition perhaps I might get an answer from the Minister of National Defence. I have received a copy of the Crown News, which is distributed throughout the first commonwealth division. The issue I have is that of Friday, November 28, 1952. Although it was posted on November 30 I received it only about two weeks ago. Perhaps I am speaking also on a question of privilege concerning the leader of the C.C.F. party. This publication contains news from different parts of the commonwealth and under the heading "By our Maple Leaf Reporter" I find the following:
Votes of "no confidence" in federal parliament.
The leaders of the socialist and C.C.F. parties, Mr. Coldwell and Mr. Drew, both put down motions of no confidence in the government on Wednesday. The socialist leader said that in its failure to begin a national health scheme, the government had not fulfilled its pledge to the people. Mr. Drew attacked the government on the grounds of wasteful defence expenditure. Government extravagance, he said, was the cause of the very heavy taxation the people had to bear.
I do not question the accuracy of the last part of that statement. While I take no offence in regard to any inaccuracies in this, I do believe that perhaps we might expect that news communications which are distributed among our troops in Korea and which purport to be on the basis of reliable reports from the different nations in the commonwealth might bear a little more relationship

to the actual political divisions within this house and throughout the country.


Major James William Coldwell: have not yet received a copy of this publication. I can assure you that when I do I shall keep it as a fairly interesting souvenir.


Hon. Brooke Claxton (Minister of National Defence):: Apparently my apologies are due to both hon. gentlemen. However, we have no direct responsibility for the publication of this periodical which is issued by the division for distribution to the troops of the commonwealth serving in it. I think it is within the knowledge of hon. members that political appellations do not mean precisely the same in all parts of the commonwealth. For example, Liberal in Australia means a rather different thing from what it does in Canada.


Major James William Coldwell: They are really Tories.


Mr. Knowles:: As they are here.


Brooke Claxton: My recollection is that the Canadian content of this publication is derived from the Canadian Press. I am sure the Canadian Press would not make that error. In some line of communication from the Canadian dispatch to the Crown News this error must have crept in. I shall write a letter to the editor myself.


George Alexander Drew: While political names may have different connotations, it does seem to me that our young men in Korea and elsewhere might expect, in references to political parties in Canada, to have names reported as they are used here. I would ask the minister if there is not a Canadian public relations officer on the staff of the Crown News.


Brooke Claxton: There may be; I do not know.


Mr. Gardiner:: I should like to say that judging from the developments in the last Saskatchewan elections I think the description is fairly accurate.


George Alexander Drew: Perhaps we can now understand why there is some measure of confusion when the right hon. minister makes an interjection such as he has. I have not yet received from the Minister of National Defence a reply to my question.


John George Diefenbaker: The Prime Minister in 1949 said that the C.C.F. were Liberals in a hurry.


Brooke Claxton: I answered my hon. friend. I said that I did not know and I shall be glad to find out.
Excise Tax Act EXCISE TAX ACT



CHANGE IN DATE OF ALLOCATION OF TAXES


Douglas Charles Abbott: the second reading of and concurrence in amendments made by the Senate to Bill No. 225, to amend the Excise Tax Act.
He said: Mr. Speaker, I might say a word of explanation as to these amendments. They relate only to the time of coming into effect of section 11 of the bill which provides for the allocation of the revenue from taxes on radio and television sets. When the bill went to the other place this section was to come into effect on February 20, the date of the budget changes. The deputy minister of national revenue pointed out that it would be administratively impossible to do that satisfactorily and proposed an amendment which was made at my request that the effective date should be April 1 rather than February 20. Of course there is no change in the amount of the tax received; it is simply a change in the date on which the allocation will be made.


Stanley Howard Knowles: Mr. Speaker, I am sure the house
is glad to have the assurance which the Minister of Finance (Mr. Abbott) has just given. The reason I rose at the same time as the minister was for the purpose of asking for that assurance. As he has pointed out the amendments made by the Senate to this bill are to section 14. Although there are two amendments, they have just the one effect, namely, to change the effective date of section 11 of the bill which has to do with the separation of excise taxes on radio and television sets.
My concern was that there should be no violation of what I believe is an established principle, namely, that no proposal involving a change in the balance of ways and means can come from any source other than the government. In other words, I believe it is perfectly clear that just as a private member of this house could not move an amendment involving the expenditure of money or a change in the balance of ways and means, neither can Their Honours in the other place move such an amendment. I am glad to have the assurance of the Minister of Finance (Mr. Abbott) that this is simply a change in the date at which an alteration is made in the manner in which certain records are kept and that no change in dollars and cents is involved. On that basis I have no objection to Their Honours making such a change and to the house approving it.
4516	HOUSE OF
Canadian National Railways


Douglas Charles Abbott: I wholeheartedly share my
hon. friend's views as to the right of private members of the other place to make changes in money bills which affect the balance of ways and means.


Stanley Howard Knowles: The minister agrees with
me that they do not have that right.


Douglas Charles Abbott: Yes.
Motion agreed to and amendments read the second time and concurred in.



CANADIAN NATIONAL RAILWAYS


Douglas Charles Abbott: the second reading of Bill No. 363, to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways system during the calendar year 1953, and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company.


Mr. Macdonnell (Greenwood):: I have one or two questions to ask which perhaps can be left until we are in committee.


[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-Short title.
James MacKerras Macdonnell: I should like the parliamentary assistant to repeat with
Equipment originally ordered under Financing and Guarantee Act (No. 1)
1951	$ 5,754,000
Equipment originally ordered under Financing and Guarantee Act and the financing thereof under No. 2 act ...	3,055,700
Equipment originally ordered under Financing and Guarantee acts 1951 and 1952 and the financing thereof under 1952 act	 10,340,000
Financing of additional costs of equipment ordered in 1951 and delivered in 1952 over amount estimated in 1952
act	 2,366,985
Equipment ordered under 1952 act	 57,775,000



$79,291,685 COMMONS

[Stage Direction]
more detail the explanation that he gave last night. The item with respect to which I am particularly anxious that the house should be clear has to do with equipment. I wish to correct a statement I made last night that equipment was a self-liquidating item. That is only partially true. I wish the parliamentary assistant would explain the exact method by which grants for equipment are made because it is very complicated. When one reads the statement of the railway company one sees that there are authorizations from previous years not fully used, an authorization for the current year, and then an authorization for the forthcoming year, so that they may be able to deal with the situation in the first few months of the year before this annual bill is passed. My understanding-and I think this is important-is that the policy under the bill is to make a fresh start each year, that is to say, all the unused authorities of past years are washed out and we make a fresh start each year so that there is no overlapping period and no chance of misunderstanding between the national railways and the Department of Finance as to just what are the authority and scope of the Canadian National Railways.
Mr. Lesage:: That is correct. The composition of the figure of $79,291,685 for obligations incurred prior to 1953 that become due and payable in 1953 is as follows:
(Item 7A-in the budget of the C.N.R. as presented to the committee on railways and shipping)
(Item 7B-in the budget of the C.N.R. as presented to the committee on railways and shipping)
(Item 7C-in the budget of the C.N.R. as presented to the committee on railways and shipping)
(Item 7D-in the budget of the C.N.R. as presented to	the	committee	on	railways	and
shipping)
(Item 8E-in the budget of the C.N.R. as presented to	the	committee	on	railways	and
shipping)
The composition of the $9,959,000 is set out in item 8F of the budget.
tMr. Knowles.]


[Stage Direction]
Section agreed to.
Section 2 agreed to.
On section 3-Capital expenditures authorized.
Mr. Wright:: I should like the parliamentary assistant to the Minister of Transport to give some explanation as to how decisions are made with respect to the construction of new branch lines. Are such decisions made by the board of Canadian National Railways or are they made by the government? There is need for additional branch lines in western Canada, particularly in the northeastern part of the province of Saskatchewan. Petitions have been sent to the railway, but apparently the railway company does not feel that it can proceed with branch line construction without government approval. I should like the parliamentary assistant to outline what procedure it is necessary to follow to bring to the government's attention and the attention of the railway the need for this new branch line construction that is so necessary if we are to develop the Carrot river triangle in the northeastern part of the province of Saskatchewan and the northwestern part of the province of Manitoba.


Mr. Benidickson:: As the hon. member for Melfort knows, as the railway is wholly government owned it cannot spend anything without government approval. That is why these items come before parliament. The budget is approved by the parliamentary committee on railways and shipping. If there is a deficit, the deficit has to be voted by parliament. In so far as branch lines are concerned, they go forward after a recommendation comes to the government from the board of directors of the railroad. Then the government must decide whether or not it is prepared to support the recommendation. Extensions of recent years that can be recalled are the Barraute line, the Kitimat line and the Lynn Lake line. My hon. friend will recall that in each of these instances, when the government accepted the advice of the C.N.R. and decided to ask parliament to authorize the construction of those lines, a separate bill was brought before parliament in each case.


Percy Ellis Wright: I take it then that the
government itself does not initiate the building of branch lines, but that the initiation must come from the railway company through their asking the government to authorize them to go ahead with the construction of a certain line.


William Moore Benidickson: That is correct. Of
course the railway has an expert staff to
Canadian National Railways investigate the possibilities of revenue, estimate construction costs and so on, and after all preliminary inquiries have been made then the board makes its recommendation to the government.


Percy Ellis Wright: Are there no cases in which
the government initiates the construction of branch lines rather than waiting for a recommendation to come from the board of Canadian National Railways?'


William Moore Benidickson: I certainly know of none in recent years.


James MacKerras Macdonnell: Now that
this question has come up, would it be possible for the parliamentary assistant to indicate what have been the operating results of the last two or three additions? I am thinking particularly of the Barraute line. I believe we were given an 'estimate a year or two ago indicating that it was expected that it would show an operating surplus, and I should like to know the result if it is available.


William Moore Benidickson: I am afraid, Mr. Chairman, that I have not that type of information here. It is the kind of information, of course, we do usually try to get from the officers of the railway when they appear before the railways and shipping committee.


[Stage Direction]
Section agreed to.
Sections 4 to 11 inclusive agreed to.
Title agreed to.
Bill reported.
Mr. Speaker:: Shall this bill be read the third time by leave?


Stanley Howard Knowles: By leave.


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



PUBLIC SERVICE SUPERANNUATION ACT


Douglas Charles Abbott: that the house go into committee to consider the following resolution:
That it is expedient, in the proposed measure before the house, "An act to provide for the superannuation of persons employed in the public service of Canada'', Bill 334, to extend in the definitions the termination date of world war II from the end of March to the end of September, 1947; to grant election rights to certain contributors for prior part-time service; to make it possible that persons ceasing to be employed on and after January 1,

Public Service Superannuation Act 1953, but before the coming into force of the act may be able, through election, to enjoy improvements in benefits.
Motion agreed to and the house went into committee, Mr. Robinson in the chair.


Douglas Charles Abbott: Mr. Chairman, the purpose of this resolution is to authorize certain amendments to the bill which were discussed in the banking and commerce committee, and which were made at the suggestion of the department. My understanding of the procedure is that when this resolution is adopted X move that it be considered in committee of the whole along with the bill, and if that course meets with the approval of the committee now, I suggest we might proceed in that way.


Stanley Howard Knowles: Mr. Chairman, there are one or two questions that perhaps one might ask at this time. I might start with the last of the provisions mentioned in this resolution, namely-
-to make it possible that persons ceasing to be employed on and after January 1, 1953, but before the coming into force of the act may be able, through election, to enjoy improvements in benefits.
The minister will recall that he made a statement, I believe on second reading of the bill, that it was the intention to make the provisions of this legislation retroactive to January 1, 1953, for persons who had since retired. Does this involve any change or addition to the provisions which he announced on that occasion?


Jean Lesage: No, Mr. Chairman, we were not sure that the wording as it is would cover the case. The proposed amendment is to make sure that the policy is followed.


Stanley Howard Knowles: Now that we have that
point clear, I urge the minister very strongly to consider the point that I made when speaking on this matter on April 16. As the minister will recall. I referred to an answer which he gave to a question which I put to him on the orders of the day last year, that was in June, 1952. At that time it was becoming apparent that the amendments to the superannuation act, promised for that session, would not come before parliament before we adjourned in the early part of July, 1952. I asked him if it would be possible for some of these changes, when they were brought in, to be made retroactive to the date that would have been the effective date had the bill been brought in in 1952.
As the minister knows, he answered in the first place by saying it would not be possible to do that. The answer is recorded
[Mr. Abbott.l

on page 3547 of Hansard for June 23, 1952. Later on that day the minister said this: Perhaps I should supplement the answer I gave the hon. member for Winnipeg North Centre. It is possible that some of the changed provisions of the Civil Service Superannuation Act could be made retroactive, but I think it is unlikely that all of them could be.
When I asked the question I imagine the minister knew on that occasion what was in my mind. I had in mind the situation that would develop with respect to people who would retire between that date and the time when the new legislation would come into effect. It seemed to me then only fair that, since the changes in the act had been promised in the 1952 session

they were mentioned in the speech from the throne which started the 1952 session-people who retired after the date on which we might have expected that earlier bill to come into effect should get the full benefit of it. If the amending bill had been brought in during the 1952 session, it would have been passed not later than early in July, 1952, and it seems to me that that would be a more reasonable date so far as these people are concerned. I am sure that the minister felt that that was the significance of the answer he gave to me on June 23, 1952. I am disappointed now that he picked a date as late as January 1, 1953.
I could go on, but I do not think it is necessary to do so at this point. I should like to hear from the minister as to why, in the light of his answer to me on June 23, 1952, he did not pick an earlier date than January 1, 1953, for purposes of this retroactivity.


Douglas Charles Abbott: The hon. member's reference to what I said last year is quite accurate. It is possible to do anything. That was the main reason why, later in the day, I corrected my answer to say it may be possible to make some changes retroactive to 1952. However, it was not possible to prepare the act in 1952. It would not have been possible to get it in at any reasonable time during last year's session because the amount of work that has been involved in the revision of this act has been tremendous. After reviewing the situation this year when we finally determined the measure we would recommend, we came to the conclusion it would be neither practicable nor desirable to make the effective date go back beyond January 1, 1953. One must always have a cut-off date in matters of this kind. In view of the fact that this measure was being introduced in March or April, 1953, the appropriate date to make it effective seemed to be January 1, 1953, and that decision was taken.


Stanley Howard Knowles: I quite realize that there has to be a cut-off date. I realize that if the minister had picked an earlier cut-off date, someone from the opposition might have asked for a still earlier one. But it does seem to me that in this case we have a good argument for asking the minister to reconsider. It is true that when he made that answer to my question on the orders of the day on June 23, 1952, all he said was that it was possible that some of the changed provisions of the act could be made retroactive, and he thought it unlikely that all of them could be. Surely it was this sort of thing the minister had in mind. So far as I can ascertain, none of the provisions has been made retroactive to a date back in the last session. I am sorry that the minister takes such a firm position with respect to it because it seems to me that, in the light of the statement he made last June, the retroactive date should be put back at least to June 30, 1952.
In his speech he mentioned the difficulties of administering a matter of this kind. There will be difficulties in administering it with the retroactive date of January 1, 1953. Certainly there is a difference only of degree, not of kind. In ordinary kindness I feel that the minister should have proposed an earlier date.


Mr. Pearkes:: I should like to ask one
question with regard to the date of the termination of the war. It refers to world war II. Is there any change in the date of termination of world war I? I ask that question because reference is made to world war I.


Jean Lesage: Clause 2(o) gives the termination date of world war I as being that of the 31st day of December, 1920. We propose to amend clause 2(p), in order to change the date of the termination of the second world war. When we get to committee of the whole on the bill, it will be moved that the words "31st day of March, 1947" be deleted and that the words "30th day of September, 1947" be substituted therefor.


James MacKerras Macdonnell: Just as a
matter of curiosity, perhaps, will the parliamentary assistant indicate whether that date was selected as having any relationship to the war or any aftermath of the war or whether it was selected purely as a convenient date for this bill?


Jean Lesage: The date of September 30,
1947, is the date of the official cessation of active service.


Douglas Charles Abbott: Mr. Chairman, would it not
be better and would it not make for more orderly discussion if we were to elaborate
29, 1953
Public Service Superannuation Act on those points when we are in committee on the clauses of the bill itself?


The Deputy Chairman:: Shall the resolution carry?
Resolution reported, read the second time and concurred in.


Douglas Charles Abbott: I move that the resolution be referred to the committee of the whole on the said bill.


[Stage Direction]
Motion agreed to.

Douglas Charles Abbott: that the house go into committee to consider Bill No. 334, to provide for the superannuation of persons employed in the public service of Canada.
Motion agreed to and the house went into committee, Mr. Robinson in the chair.


William Alfred Robinson: The house in committee on Bill No. 334, to provide for the superannuation of persons employed in the public service of Canada, together with a certain proposed resolution to amend certain provisions in Bill 334.
On section 1-Short title.


Douglas Charles Abbott: Mr. Chairman, I should like
first to take this occasion to thank all hon. members who have participated in the debate on this bill in the house and in the discussion in the banking and commerce committee. I was not able to take part in the discussion in the committee, but I am informed that it was a most helpful and useful one. I am also told that during the course of the discussion several members of the committee were impressed by evidence brought before the committee by or on behalf of certain civil servants who were borderline cases in respect of eligibility under parts II and IV of the 1924 act, and who were ruled to be ineligible. This has meant that the superannuation of these individuals is based on their best ten consecutive years of service and not on their last five years of service.
I am also informed that these members of the committee were unable, in the time at their disposal, fully to satisfy themselves as to the essential facts of some of these cases. In response to requests from these members, who are on both sides of the house, I shall be glad to instruct my officials to make a further careful detailed examination of the facts in these cases and to report to me. I need hardly add that if this examination shows that any erroneous decisions have been made, they will be corrected; and if it

Public Service Superannuation Act appears that the bill now before us leaves any substantial injustices in principle unreraedied, I shall be glad to give consideration to ways and means of correcting them.


James MacKerras Macdonnell: I should like to make a comment on that matter. I am glad the minister has made this statement, because, as he said, we found ourselves in real difficulty. There was a strong feeling that certain special groups-not large in numbers, and notably some of the officials of the old department of soldiers' civil re-establishment-were suffering from what looked like an inequity. The situation at that time was rather amusing in its way. It seemed as though some of the departments carried on in splendid isolation and without much cooperation. I think it is not an exaggeration to say that the department of soldiers' civil reestablishment at that time sought virtually to run a pension scheme of its own and had sent money from time to time to the Department of Finance, hoping thereby to give this scheme an over-all validity. Their subscriptions were month by month regularly returned. The result was that certain of the employees who, in good faith, had made their pension subscriptions-which were eventually returned to them-for some years felt that they had a status which later on it was suggested they did not have.
The equity of the situation was fully appreciated by the minister's officials and, I think I may say, by the parliamentary assistant who was there. I am glad that the minister has made this statement which, as I understand it, will mean that the situation can be looked into and every effort can be made to bring about equity. The numbers involved are only a few score, so that the actual amount involved is not large.
My recollection also is that it was pointed out that this bill, which we all welcome because it is a great step forward in the relationship with the civil service, nevertheless involves a good deal of constructive work and has a good many new features. I think there was a feeling that it is not like the laws of the Medes and the Persians that can never be changed. As time goes on and this inquiry which the minister, I am glad to say, has referred to, is made, it will be possible to review the situation if equity seems to demand it.
I might just add also-and this refers to one part of the minister's statement-that it was extraordinarily difficult to feel that we had obtained all the facts. There were one or two members of the committee who had made a special study of the facts over the years; but at the end of our deliberations I


think even they felt they were not sure that we had got the last bit of detail affecting those classes. I am glad therefore of the statement the minister has made.


Mr. Mcllraiih:: Perhaps I could take a moment of the committee's time to place on record one thing which I think should be said, namely, a word of appreciation for the complete unanimity of opinion, as to the general equity and virtue of this bill, that was shown in the committee's study of it. I am very grateful for that fact. All members in the House of Commons serving on the committee seemed to be completely together in their view as to what should be done. There was one outstanding problem with respect to a relatively small group, and I am delighted with the statement of the minister today. I think that is the best way of dealing with the matter. We got to a stage in the committee where we were not sure of the facts, and it would seem as if the associations and others just did not have all the facts relative to the problem. I refer of course to those employees in the old department of soldiers' civil re-establishment and a small group in the interior department. This assurance of the minister that there will be a detailed examination of the facts in these cases will provide the right way of remedying any injustices that may have been committed.
I also note the statement that if there are substantial injustices in principle not remedied the minister will see that consideration is given to the method of correcting them as well. I think that is a better method than attempting an amendment to the bill at this stage on the information or the lack of information concerning the group who felt that they had an injustice.


Stanley Howard Knowles: I am sure we all welcome
the statement the Minister of Finance has just made. It often happens in our experience here that when a new piece of legislation is put on the statute books, that is it; we have had it for some time. I am very glad to note the attitude of the Minister of Finance this morning, and also his statement that where there seem to be injustices any steps necessary to correct any injustices that the minister feels should be corrected will be taken. I take it from that that if it should happen that an amendment is necessary to this new act to take care of injustices that the minister is satisfied should be corrected the necessary amendment will be brought in at the next session of parliament, if the minister is still in charge of the finance department.

One always has to make that qualification. He might have gone somewhere else in the meantime.
As I listened to the minister's statement it seemed to be couched in general terms. I did not hear any specific reference to the employees in the old soldiers' civil-re-establishment department, but I take it from the way in which it has been accepted by the two previous speakers that it does include them. I am glad to note the minister is nodding his head up and down, and I hope his statement will include other individuals whose cases do not seem to be covered by the terms of this legislation.


Douglas Charles Abbott: My hon. friend was not on
the committee. It does include one or two other small groups.


Stanley Howard Knowles: I have one or two letters
on my desk that I may not have to refer to in view of the statement the minister just made. In other words, generally speaking, I think it is appropriate for us to say from the opposition side of the house that this is pretty good legislation; we may find some shortcomings in it, but nevertheless we welcome it and we are glad to give it our support.
While we are on clause 1 of the bill I should like to ask the minister whether any further consideration has been given by him since the debates in the house on the resolution stage and on second reading to the problem of retired civil servants on low pensions. As he recalls, that matter was referred to by several of those who took part in that debate, and the support for doing something for these people seemed to be quite strong. It is not out of place for me to say to the minister that after that debate was over I received word that a change had just been made in Manitoba, and I took occasion to speak to him one day out in the hall and to call it to his attention.
In other words Manitoba must now be added to the list of those jurisdictions that have done something for their retired civil servants. Those that I now know of are the United States, the United Kingdom, Newfoundland, Saskatchewan and Manitoba.
I also point out that the Canadian Pacific Railway-although the provision made is very small-has done something for its retired employees who were on low pensions, provided they are not yet 70 years of age. In the case of Manitoba the provision made at this year's session of the legislature was for civil servants between the age of retirement and the age of seventy. The increase of their pension amounts to 25 per cent, pro-
29, 1953
Public Service Superannuation Act vided that increase does not exceed $40 a month. Obviously the idea that the government of Manitoba has is that that bonus will be discontinued when the retired civil servant in that province reaches the age of 70 and qualifies for the old age security pension. I would rather have seen it continued even beyond that, but at any rate something is being done for these people in these five jurisdictions that I have named.
Surely, as the number of governments that do this increases, the minister must feel that his argument that this government cannot do anything about it gets weaker and weaker. I hope it will not be long until he will indicate that some way will be found to help these retired civil servants of the federal government, particularly the many hundreds whose pensions are in the lower brackets.


Mr. Low:: In the circumstances I do not think it necessary for me to say very much except that the way the bill has been handled by the committee, and the consideration that has been given by the minister to the requests made by all sides of the house in connection with those special groups, is most satisfactory. I am certainly pleased to give my wholehearted support to what has been done.
Inasmuch as I was one of those who on the motion for second reading of the bill did speak on behalf of the retired superannuated civil servants, asking that something be done for them, I am just going to ask the minister at this time to give very careful consideration to some measure to bring further relief to them, at least until the cost of living has gone down to a point where their superannuation payments are sufficient to give them a decent standard of living.


James MacKerras Macdonnell: I have a suggestion to make, but I do not know whether it is suitable to make here or not. I refer to a statement as to the actuarial position of the fund. It would be very desirable for readers of Hansard to know how much has been done, because a great deal has been done, and the reason for it. To me that was one of the most interesting and important things that came out of the committee. It would be very desirable for the people of Canada to know how much has been done. If the minister agrees, perhaps it could be put on on a later section.


Douglas Charles Abbott: My memory is that I gave it the other day, perhaps in answer to a question of my hon. friend. Speaking from memory, I think the actuarial deficit of the fund is now approximately $189 million Again speaking from memory, I think this

Public Service Superannuation Act house voted $75 million in two successive years and $25 million this year; and after making these appropriations and after adopting the new basis of protecting the fund by matching the contributions of employees for both current and prior service, of paying interest on the actuarial deficits, as well as on the amount actually in the fund, the approximate actuarial deficit today is $189 million. I have indicated on previous occasions that I felt that as and when circumstances were appropriate this house should vote additional sums to fill that hole.
I have never felt that it would be quite appropriate to put new taxes on in order to do that in any particular length of time, but I think we should continually bear in mind that that deficit exists and that it should be filled and that the present bill again provides actuarial reports every five years. So parliament will be constantly informed of the position of the fund from time to time.
Before I take my seat I should like to express appreciation of what has been said this morning about the general nature of the bill. I share the views of hon. members. I do that in any particular length of time, but I think we should continually bear in mind that that deficit exists and that it should be filled and that the present bill again provides actuarial reports every five years. So parliament will be constantly informed of the position of the fund from time to time.
As I said in the debate on second reading, credit must also go to the advisory committee composed of civil servants in other departments of government, who have given a great deal of their time and knowledge to the development of this piece of legislation.
Referring for a moment to what was said by the hon. member for Winnipeg North Centre, let me say that I never consider a piece of legislation as being in the nature of the laws of the Medes and Persians. It is always susceptible of improvement. This represents a major step forward. But if next year it is found that some provisions have been overlooked and some improvements could be made then, whoever is the minister responsible for introducing the measure would be only too happy I am sure to make them.


Stanley Howard Knowles: Will the minister answer one other question in reply to what I said a moment ago? Will he give reconsideration now to the plight of retired civil servants on low pensions.


Douglas Charles Abbott: It has not been possible to give any further detailed consideration of that

point. Since my hon. friend has mentioned it again I would say simply this, that if such action were to be taken-and I am not satisfied that it should be-it would not be proper to do it under this legislation. It should be by a special vote of the house to provide for the very substantial additional cost involved.
And, apropos of his remarks concerning what is done in other countries-


Stanley Howard Knowles: And in some of the provinces.


Douglas Charles Abbott: -and in Manitoba, and other provinces-the desirability of doing something here must depend upon a comparison of the superannuation benefits in those countries and provinces as compared with the benefits under this act. I suggest the benefits under this act are far better than those in any province- certainly better than in any province in Canada. So that it is not simply a matter of saying that just because Manitoba does something or the United Kingdom does something, we should do exactly the same thing.
However, I repeat that this bill is not the place to make a provision such as that suggested by the hon. member. It should be by way of an item included in the estimates and a vote by parliament, so that the information would be available to the taxpayers of Canada.


James MacKerras Macdonnell: To complete the minister's answer to my question, I wonder if he would indicate the reasons for the deficit in the fund. There is a simple explanation, and it should be on the record.


Douglas Charles Abbott: It is all on the record. I am sorry I have not the references here; but when I tabled the report of the actuaries of the insurance branch, that report indicated with great detail the cause of the actuarial deficit. I think it is fair to say that the major reason is the sharp increase in salaries which has taken place in the last few years. Then there have been certain other factors to which I referred in my speech on second reading-although not in detail. However, I think the information is all on the record somewhere. I am sorry I did not understand that this would be discussed again this morning. I am prepared however to give my hon. friend the references, and if there are points which have not been covered I shall certainly see that the information is made available.


Mr. Brooks:: Mr. Chairman, as a member of the committee I wish to say only a word. I believe there is general approval of the measure among civil servants and among the people of Canada generally. It affects 60,000 people and, naturally, they are particularly interested.

One important point is that it clarifies the situation in regard to long-term temporary employees in the civil service. I was sorry I could not be in the chamber when the minister made his statement, but I understood pretty well what it would be. I understand he is carrying forward certain studies in connection with certain persons many of us think should have received special consideration.
I had hoped personally that this would be done this year, because these people have been waiting for a long time to have what they considered a wrong corrected. During the debate at the resolution stage I pointed out that the matter affecting the old department of soldiers' civil re-establishment had been up before the veterans committee on a number of occasions, and that the Canadian Legion had made representations to the government. They had also requested that the matter be given consideration by the veterans affairs committee. However, under the terms of reference of our committee we were not permitted to include a discussion of that matter.
I felt so strongly about it that in committee I moved an amendment, which I believe would make the necessary correction, in which I recommended that the government consider giving further assistance to the personnel of the department of soldiers' civil re-establishment. The amendment was received favourably in principle, but it was thought that it was broader than it should be. I withdrew it on that account, with the assurance from the chairman of the committee that quite probably further consideration would be given. In any event we were assured the minister would be consulted; and it was felt that he would give sympathetic consideration to the matter. As I say, I am pleased now that this has been done.
On different occasions the veterans have asked consideration of the 12 per cent feature -the payment of their own contribution and that of the government when war service was included. This matter did not receive much consideration in committee, and I have nothing more to say about it this morning. It is a matter about which many veterans feel strongly. The fact that comparatively few took advantage of the opportunity granted them of paying the double amount indicates that they do not consider it a very generous offer.
Another provision set out in the act is that changing the date for the close of world war I. I recall that on numerous occasions veterans have requested that this be done, and I am pleased that it has been done.
I do not think it is necessary to repeat the arguments presented in connection with those B8108-286
23, 1353
Public Service Superannuation Act who were connected with the department of soldiers' re-establishment and also the small group of civil servants in the old interior department. These people had served since the end of the first war. I know many of them personally and, as all hon. members are aware, they have given excellent service. We and they considered that it was only because of a technicality that they had not been included in the permanent service. Some 500 of them after 1924 contributed to the fund on the assumption and with the feeling that they were entitled to be considered as permanent. We understand that the moneys they contributed were not accepted by the civil service branch. Those funds were held until 1927 and then returned to them. I feel strongly that these persons should be included. While I regret an amendment was not made to the act to include them at this time, I appreciate the fact that the minister is going to consider the matter, and I would hope he might consider it favourably.
I should like to quote P.C. 3560 of October 3, 1921, which indicates quite clearly that these people were considered by the authorities at that time as being permanent. This reads:
And whereas the staff of the board of pension commissioners of Canada has recently been amalgamated with the Department of Soldiers' Civil Reestablishment under the direction of the latter and the work of the combined organizations is now approaching a permanent basis;
It was considered in 1921, shortly after the war, that they were on a permanent basis. It is now 1953 and they have not been accepted as being on a permanent basis. The order in council continues:
And whereas the soldier settlement board has now reached a stage where the general business of the board, including the collection of moneys loaned, will continue for some years to come and may be regarded as on a permanent basis.
When the soldier settlement board was set up after the war I think it was considered that it would be temporary in nature and that possibly after a few years it could be done away with. It is a long time from 1919 to 1953. Permanent civil servants were taken in by other departments to do exactly the same work as these men and were considered as permanent civil servants while these men were not. I am not going to labour the point any further. I am pleased that the matter is going to receive further consideration and I trust that the position of these men will be looked into.


Mr. Green:: I should like to ask a question in relation to the statement the minister made this morning. Will any action taken to help these men who were in the old department of soldiers' civil re-establishment be made retroactive as though provision had been made
4524	HOUSE OF
Public Service Superannuation Act for them in this bill? I am thinking of those who may reach retirement in the meantime or who might unfortunately pass away.


Douglas Charles Abbott: This is a most complicated question. My understanding is that in the Department of Veterans Affairs there are at least 12 employees who consider that they are eligible for superannuation on the five-year instead of the ten-year basis and who have in fact made their contributions during a subsequent period. My information is that both the committee and the officials of my department have been unable to get the full facts about these cases up to this time. I have given the assurance that this question will be thoroughly and fully gone into. If it is determined that they are in fact eligible, as they assert, they will get the full benefits of that eligibility as though they had been in the fund from the time that they should be.
It may take a little time to do that. My information is also that in order to achieve that result it would not be necessary to specifically amend the act to deal with the ones to which I have made reference. That may also be true for a certain other small group in another department.
It is my opinion that this whole question should be thoroughly investigated to establish the facts. It may be that as a result of that investigation some amendment to the act would be proper at a subsequent session. I think we should be absolutely clear as to the facts in these cases because this is a highly technical measure. If we are not careful to handle it properly there may be the possibility of charges of real discrimination by those who feel that they should be given comparable treatment. My understanding is that the members of the committee were satisfied with an assurance such as I have given this morning. That was the information given to me this morning by my deputy minister who, as hon. members know, was a witness before the committee and who followed its proceedings very closely.


Alfred Johnson Brooks: The minister mentioned 12 employees.


Douglas Charles Abbott: I said approximately 12.


Alfred Johnson Brooks: That is not my understanding.


Douglas Charles Abbott: I am subject to correction because I was not in the committee.


Alfred Johnson Brooks: My understanding is that there were 292. I believe the 12 referred to were in the old department of the interior.


Douglas Charles Abbott: I was not in the committee, so I do not want to be tied down to numbers.


Jean Lesage: The hon. member for Royal will recall that it was mentioned by some of


the members of the committee that there might be a small number in the old D.S.C.R. who had contributed to the retirement fund prior to 1924 but that, in spite of that, their contributions after 1924 had been returned to them and the privilege of electing the five-year basis had been refused. The deputy minister said that he would look into these cases very carefully. It might be that no amendment would be required to correct this situation. This morning the minister gave assurance that all the facts would be inquired into for the whole group. The hon. member for Royal mentioned 500 employees, and I believe in committee it was mentioned that the number would be about 290.


Alfred Johnson Brooks: 292.


Jean Lesage: It is 292. The facts relating to that group, and the other small groups which have been mentioned, will be inquired into. The minister will give consideration to all the facts and if it is necessary to amend the act, to correct any injustice that may have been committed, it will be done.


Howard Charles Green: The point I want to have clear is whether these men and women will be covered as from the present time?


Douglas Charles Abbott: That is right, they have to be.


Howard Charles Green: Unfortunately I was not
privileged to be a member of the committee. What would be the position of a man of 60 years of age who entered the civil service 12 years ago for war work and who has been kept on by order in council after reaching the age of 65 years? Would he qualify for superannuation under the act?


Douglas Charles Abbott: I would want to check my facts, but my recollection is that he would qualify for superannuation after five years' service. This act provides, as the previous act provided, that service after 65 years does not carry any extra entitlement to pension. That is dealt with by section 11 of the bill which we will come to shortly. It is assumed that a man entering the public service at 60 years of age would have made some provision, either privately or through some previous employer, for a proper pension up to that time. I think it is a sound rule that service after 65 should not carry entitlement to extra pension because it might create a tendency under certain circumstances to keep a man on for a longer period than perhaps his physical condition would justify.


Howard Charles Green: Does he have to be in the service a certain number of years in order to qualify?


Douglas Charles Abbott: He has to be in the service five years in order to be entitled to pension.

If he is in the service for less than five years there is a return of his contributions.


Howard Charles Green: If he had made a contribution after reaching 65 it would be refundable?


Douglas Charles Abbott: He would not make a contribution after 65 under this bill. Under the old act, he would.


Howard Charles Green: He would be entitled to refund?


Douglas Charles Abbott: I am informed that under the old act service after 65 would count for pension, but under the new bill it would not. If he comes in under the old act he will get superannuation based on his contributions.


[Stage Direction]
Section agreed to.
On section 2-Definitions.
Jean Lesage: I would ask the Minister of Public Works to move the following amendment to clause 2:
The the words and figures "31st day of March, 1947" in line 48 of paragraph (p) of clause 2 be deleted and the following substituted therefor:
"30th day of September, 1947".


Alphonse Fournier: I so move.


William Alfred Robinson: Does the amendment carry?


Jean Lesage: Mr. Chairman, it is proposed to amend the termination date of world war II for purposes of this act in line with the new date in 2(o) for the termination of world war I. Instead of March 31, 1947, as now found in the Civil Service Superannuation Act, it is proposed that the date shall be September 30, 1947, which was the date of official cessation of active service.


George Randolph Pearkes: You said world war I. Do you mean world war II?


Jean Lesage: No. The date of termination of world war I has been changed in this act. It is not the same as it was in the old act.


George Randolph Pearkes: May I raise a point in this connection? In 2(o) it is stated that world war I shall be deemed to have terminated on the 31st day of December, 1920. In the Pension Act and veterans legislation generally the first world war is deemed to have terminated on the 21st day of August, 1921. I only raise that point because of the confusion that must arise among ex-servicemen as to when they should apply for these various benefits. I should think it would be desirable to have it recognized both in the Public Service Superannuation Act and in the Pension Act that the war terminated on the same date. It is only an extension of some eight months. I wonder whether the minister would not like to consider amending this 68108-2864
29. 1953
Public Service Superannuation Act legislation in order to make the two dates on which the war is deemed to have terminated coincide.


Douglas Charles Abbott: I wonder if my hon. friend would let us look into that. I think the principle is that we have taken the date as being the date on which it is declared that hostilities have ceased, but at the moment I am not able to explain this difference of seven months.


George Randolph Pearkes: I might refer the minister to section 2(p) of the Pension Act which gives the date on which the first world war is deemed to have terminated.


Douglas Charles Abbott: The information I am given is that the date which is now included in this new bill is the date when national demobilization had taken place. It was the date which was asked for by the veterans organizations and it was the date which was recommended by the advisory committee. I cannot answer offhand why there is another date in the Pension Act. I agree with my hon. friend that there is a seeming anomaly between the two dates, but perhaps we could look into it and if there is no good reason for the difference an appropriate amendment might be made.


George Randolph Pearkes: I simply draw attention to the fact that the Pension Act has been in existence now for many years and most veterans and officials dealing with pension cases recognize the date given in the Pension Act as being the one on which the war terminated.


Douglas Charles Abbott: Apparently nobody spotted this in the committee.


George Randolph Pearkes: I was not a member of the committee. I cannot be on every committee.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 3 agreed to.
On section 4-Persons required to contribute.
Stanley Howard Knowles: I should like to ask the minister whether it would be possible, under the provisions of this clause, to extend superannuation rights and privileges to employees of the House of Commons.


Douglas Charles Abbott: A good many of them are now included.


Stanley Howard Knowles: That is true with respect to employees who are classified as civil servants. What about the so-called sessional employees who in some cases have worked here a good many years, or who in some cases may continue working here a good many years?
4526	HOUSE OF
Public Service Superannuation Act


Douglas Charles Abbott: They would be eligible to contribute and have superannuation under this section after they have had a year's continuous service.


Stanley Howard Knowles: Does that mean that a sessional employee who does not have continuous service, in view of the fact that he or she is laid off between sessions of parliament, is not covered?


Douglas Charles Abbott: If they are only here for two, three, four, five or six months, whatever the length of the session may be, they are not eligible for superannuation, but if they are so-called sessional employees who are employed for twelve months in the year and have been here for more than a year they are eligible.


Stanley Howard Knowles: I should like to urge that consideration be given to the other group. After all, one important change in the legislation was to change the title from Civil Service Superannuation Act to Public Service Superannuation Act. I know that we have always drawn a line between employees of the government and employees of the House of Commons. We insist that those who are employees of the House of Commons are not working for the government but for parliament as a whole. Nevertheless it is employment in the public service, and it seems to me that consideration should be given to employees who have given faithful service and who have come back session after session. They may not work for us the full twelve months of the year but they earn over the minimum amount per year specified in the legislation, and in some cases the cumulative amount of their service will certainly exceed the five years stipulated as the minimum. I would hope that further consideration would be given to that group.


[Stage Direction]
Section agreed to.
Section 5 agreed to.
On section 6-Amount to be paid.
Stanley Howard Knowles: Mr. Chairman-


Douglas Charles Abbott: One o'clock.


Stanley Howard Knowles: There are many clauses to be considered yet. Perhaps we might as well call it one o'clock.
At one o'clock the committee took recess.
The committee resumed at 2.30 p.m.


The Chairman:: At the time we recessed, we were considering section 6.


Douglas Charles Abbott: Before we proceed with the consideration of that clause, I should like to clarify an answer I gave to a question


which was raised this morning by the hon. member for Vancouver-Quadra with respect to the superannuation position of a person employed after age 65. I indicated earlier that the service of a person employed after that age would not count under the new bill. I should have pointed out, as I did in my speech on second reading, that this will only be the case after August 1, 1957. This merely continues a provision which was included in the present act at the time of the amendments in 1947. Up until that date, that is August 1, 1957, a person may contribute after his 65th birthday. The benefits of those over 65 would then be frozen, and the benefits of those under that age would be frozen on becoming 65.
, Mr. Knowles: I wonder if the committee gave any consideration to one aspect of the provision that accords to civil servants the right to elect to cover prior service. I have in mind the case of civil servants who did not exercise the right to elect within the year's limit, and are now given the right to go back and pick up prior service provided they pay for that prior service on the basis of the present salary rate. In some cases this seems to involve a rather high payment. It raises the question of whether or not there is a great deal of monetary or pensionable value to the provision. Could the minister or his assistant say whether this matter was dealt with in the committee?


Douglas Charles Abbott: I am informed it was not dealt with in the committee, but in any case after careful consideration the provision as contained in the bill is the provision which we thought was equitable. In the case of these elections for prior service, there is almost invariably a time given within which the civil servant may make the election and exercise the option. As I said in my speech on second reading, in a good many cases at least two opportunities have been afforded to do that. Various factors may have contributed to the civil servant coming to a decision that it would not be in his interest to elect during the prescribed period. It was felt that, in such circumstances, if he finally decides at some later date that it is in his interest to do so he should not be able -if I may use the colloquial phrase-to bet against the actuarial position of the fund by waiting until some future time to make such a decision. We felt that since we were opening the act for election again it was only fair that, if they decided to do so, they should do so at their current rate of salary.


[Stage Direction]
Section agreed to.
[Stage Direction]
On section 7-Manner of making elections.
Jean Lesage: I should like to ask the Minister of National Revenue to move the following amendment:
That paragraph (b) of subclause (2) of clause 7 of Bill 334 be deleted and the following substituted therefor:
"(b) any period of service in the public service as a part-time employee unless it is service that may be counted under clause (b) of subparagraph (i) of paragraph (b) of subsection (1) of section 5."


Mr. McCann:: I so move.


Stanley Howard Knowles: I hope the parliamentary assistant understands that.


Jean Lesage: The effect of this clause as it now stands would be to cut out an election for prior part-time service of a contributor whose year for electing had not expired under the Civil Service Superannuation Act on the coming into force of the new act. This would have contravened the proposed policy of not cutting out any election rights of contributors under the Civil Service Superannuation Act, and the amendment is proposed to correct this.


[Stage Direction]
Amendment agreed to.
Section 7 as amended agreed to.
Section 8 agreed to.
On section 9-Computation of annuities.
Stanley Howard Knowles: Was any consideration given in the committee to the ten-year period set out in this clause? Perhaps I should put alongside of that another question: Was any consideration given to the recommendation of the advisory committee which was made to the minister, namely that the pension should be based on the best eight years of service?


Jean Lesage: Yes, consideration was given.


Stanley Howard Knowles: With what success?


Jean Lesage: Well, the bill stands. There was no amendment in the banking and commerce committee.


Douglas Charles Abbott: I should add that, as I indicated in my speech on second reading, I felt, and my colleagues felt that, in the light of the actuarial deficiency of the fund now, it would be improper to place further charges on that fund unless the contributions were increased. As I indicated also in my speech on second reading, the five-year period which was proposed in 1924 was to provide for the case of civil servants who would be near the time of retirement and who would have been prejudiced by reason of the fact that there
29, 1953
Public Service Superannuation Act had not been appropriate salary adjustments during the last few years of their service.


[Stage Direction]
Section agreed to.
Sections 10 to 25 inclusive agreed to.
On section 26-Certain contributions to be returned.
Mr. McLure:: In going through this bill I have not as yet found any arrangements made for those poor people who had to retire on low pensions. Will there be anything in the bill anywhere to give them any consideration whatever? For instance, as to people who retired a few years ago, their pensions were $50 or $60. Today they are worth about $25 or $30. I do not oppose any of these good things that are coming to civil servants or others under this act. At the same time I think that some consideration should be given to those on pensions in the lower brackets. Why can they not get something decent under this act?


Douglas Charles Abbott: My hon. friend may not have been in his seat this morning when this matter was raised and when I dealt with it briefly. I pointed out, among other things, that even if such action were justified-and I have never yet been satisfied that it should be done-it should not be done under this act but should be done by an item in the estimates so that the taxpayers, the people of Canada, would know what such extra payment was costing.


[Stage Direction]
Section agreed to.
Sections 27 to 34 inclusive agreed to.
On section 35-Transitional grants.
Jean Lesage: Mr. Chairman, I should like to ask the Minister of Labour to move the following amendment:
That clause 35 be amended by adding thereto the following subclause:
"(8) Notwithstanding anything in this section, any person to whom subsection (5) applies may, in accordance with regulations of the governor in council,
(a)	make any election, exercise any option or do any other act contemplated by this act as though that person were still employed in the public service, and
(b)	elect to retain or receive, in lieu of any other benefit payable to or in respect of that person under this act, any benefit that has been or might have been granted to him under the superannuation act upon ceasing to be employed in the public service and upon so electing he is entitled to that benefit less any amount thereof that has previously been paid to him."


Mr. Gregg:: I so move.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
4528	HOUSE OF
Public Service Superannuation Act
Sections 36 to 38 inclusive agreed to.
Schedule A agreed to.
Title agreed to.
Bill reported.
Douglas Charles Abbott: the third reading of the bill.


Stanley Howard Knowles: Mr. Speaker, just before third reading is given, there is a brief word I should like to say. When we were in committee of the whole on this bill, on clause 1, the minister and I had a discussion concerning the plight of the retired civil servants to whom the senior member for Queens (Mr. McLure) also made reference just a few minutes ago. In his reply the Minister of Finance (Mr. Abbott) said that comparisons as to what is done for retired civil servants should not be made with other governments without at the same time comparing the beneficial provisions of this legislation. I do not wish to detract by one iota from the praise that the minister feels is coming to this superannuation act so far as its provisions at the present time are concerned. It is good legislation and it will stand up favourably alongside that of any other government or jurisdiction. But when we enter our plea, as we do, on behalf of retired civil servants whose pensions are in the lower brackets, I ask the minister to remember that many of these people were retired when the provisions of this legislation were not so generous and were not so beneficial as they are at the present time. He said a moment ago that when I raised this matter this morning it was a case of raising it again; he could say "again and again". He knows that some of us will continue to do so, for we feel that these people really have consideration coming to them.
From what has been said today, it appears that the present Minister of Finance has closed the door to the possibility of anything being done for these people within the confines of the Public Service Superannuation Act. However, although he closed that door, he left another door open, namely the possibility of something being done for these people by way of a special vote in the estimates. At least we now know what to ask for in precise terms. I feel strongly that our retired civil servants, particularly those in the lower brackets, have an increase coming to them to meet the increase in the cost of living. This principle has been recognized by the governments of the United States, the United Kingdom, Newfoundland, Saskatchewan and Manitoba. I therefore feel that something should be done here. We shall continue to press the matter, and I hope it will not be long until, to use the minister's
IMr. Gregg.)

own words, an item will be put in the estimates so that a cost of living bonus or an appropriate supplement can be paid to these deserving retired civil servants whose pensions are still in the lower brackets.
Motion agreed to and bill read the third time and passed.


Alphonse Fournier: that the house go into committee of supply.



LUNAM CONSTRUCTION COMPANY


George Alexander Drew: Mr. Speaker, I propose to deal with a suggestion which I made earlier today and which was not accepted at that time. I proposed that a select committee of members of this house be appointed to examine into the circumstances under which contracts were awarded to the Lunam Construction Company and the nature of the supervision exercised in a case of that kind. I am dealing now entirely with the responsibility of the government in relation to the awarding of contracts of this nature, and the inescapable fact that those who deal with a contractor, as subcontractors or otherwise, have reason to believe that they are engaged in a safe type of employment and that they do in fact have a measure of protection that is appropriate in relation to contracts awarded by the government.
I am also bearing in mind the fact that in the handling of public contracts, the extent of the supervision that is exercised is, in itself, the one assurance that we have as members of parliament or that the people of Canada generally can have that there is in the handling of public funds that care which will prevent waste, extravagance and unsupervised spending, all of which in the end amounts to a burden upon the taxpayer of the country.
When I raised this subject this morning it was explained that the contracts in question had been let by tender, and that emphasis has been placed in this house upon the desirability of respecting the tender system. I subscribed to that statement. In fact I have had occasion to raise some question about certain contracts that were let without tender. Nevertheless there is something more than the tender itself. There is the question of the ability of any contractor to carry out the contract. There is also the fact that accumulating obligations are of concern not only to the people to whom debts may be owed, but also to the government which has undertaken certain public

construction on behalf of the people of Canada, and must at all times be concerned with the manner in which that is carried out, and also the relationship that exists between the government and those who are performing work of that kind.
We all recognize that the circumstances under which work is carried out have a large bearing on the efficiency of the undertaking and the ultimate cost. I refer to a discussion which took place in general terms on April 8 last, as reported at page 3617 of Hansard. I merely wish to refer to the quotations appearing on that page which I shall read. After some discussion of the way in which these contracts had been awarded, the Minister of Public Works (Mr. Fournier), in referring to the Lunam Construction Company, used these words:
They were competent tenderers.
Very shortly afterwards he said:
We sign a contract with the lowest tenderer. He proceeds with the work. Our officials in the field make progress reports.
It has been amply demonstrated, Mr. Speaker, that the Lunam Construction Company were not competent tenderers, whatever else they may have been. They were not able to carry out the undertaking, and while we have not yet those figures before us, I find that the Toronto Telegram of Saturday, April 25, 1953, reports an interview with the Minister of Public Works in which the interview is summed up in these words in the headline: "Let Lunam pay;" and then the subheading is: "Government washes its hands of $239,000 left unpaid on Lunam subcontracts." I have read the report and it would seem that the heading and subheading to which I have referred represent an accurate condensation of that report. If that is the exact figure, it is a large sum of money for which there is apparently little now to pay those who worked on those contracts.
Some question was raised this morning as to why bankruptcy proceedings had not been taken. I have no thought of venturing any guess in that respect. We all know of course that sometimes bankruptcy proceedings are not taken if the assets are likely to be so little that no one is ready to assume the personal expenses involved in the proceedings which might produce very little in the way of financial results. We do know that some payments have been made, if the reports on this subject have been correct, payments in relatively small sums.
The point I wish to make, however, is that these contracts were let under circumstances which suggested reasons for caution and for some examination as to the ability of this contractor to complete the contracts. After
29, 1953
Lunam Construction Company all, the government had decided it was important that these various projects be completed. Since the government was acting on behalf of the people it was important that the government be sure they could be completed; it was important that the supervision of the expenditure be constant and adequate; it was important also that those who had some reason to look to a government contract as offering a substantial measure of security in that very fact would not find themselves in the position in which they find themselves on this occasion.
During the present session we have had a good deal of discussion about the desirability of bringing all the business of parliament back under the control of parliament. On this side we have objected strenuously to the re-enactment of the Emergency Powers Act which had the effect of making it possible for the government to carry on a great part of the business of this country, if they chose to do so, without obtaining direct authority from parliament in regard to that. But in that case, having regard to the existence of legislation of that kind, having regard to the heavy expenditures on construction of all kinds, having regard to the vital necessity of economy wherever economy could be practised so that we protect the taxpayers of this country against overtaxation which is the result of extravagance and waste, I believe it is the duty of parliament to insist that it know what takes place.
We understand that this parliament will shortly terminate its activities. All the more reason that we should know what did take place in this case so that the authority of parliament may be exercised to establish some effective measure of supervision over contracts of this kind. This may be only one contract in itself. If there is no greater assurance that other contracts are to be supervised effectively than is furnished by this case, then I submit that hon. members have a right, yes, and I believe a duty, to insist that they know what actually did take place; that they know what procedure is followed in dealing with contracts of this kind; and that they be able, as a result of that information, to establish a more effective system in the future.
Therefore, Mr. Speaker, I move, seconded by the hon. member for Lake Centre (Mr. Diefenbaker):
That all the words after "that" to the end of the question be deleted and the following substituted therefor:
"in the opinion of this house a select committee should be appointed immediately to inqure into the circumstances under which contracts were awarded by the government to the Lunam Construction Company, the steps that were taken to supervise the completion of the said contracts, and the failure of the government to take appropriate steps to protect subcontractors and others in regard to
4530	HOUSE OF
Lunam Construction Company payment for work performed and materials supplied under these contracts."


Major James William Coldwell: Mr. Speaker, in view of the statements which have just been made by the Leader of the Opposition (Mr. Drew), and the circumstances under which this matter is being discussed today, I feel we must support the amendment to the motion to go into supply.
I may say that I have been very unhappy about this matter ever since it was first raised in the house some days ago by the hon. member for Lake Centre (Mr. Diefenbaker). I lived in Regina for a number of years, and I have some knowledge of Mr. Lunam's background; and it seems difficult for me, in view of the stories in Regina in the middle thirties, to understand why Mr. Lunam was regarded as a competent tenderer for government contracts. The Minister of Agriculture (Mr. Gardiner) was in Regina, too, at the same time; and I do not know whether his view of Mr. Lunam's activities at that time is the same as mine. However, I find it difficult to understand how he could be regarded as a competent contractor.
However, be that as it may, I think the house would be justified in making an inquiry. Indeed, I am going to support the proposal of the Leader of the Opposition for a select committee. I think perhaps if I had been making the proposal I might have suggested a judicial inquiry. However, the one suggested should meet the needs of the situation at the present time.
I think there should be an inquiry into the circumstances, and I hope that such committee will make constructive suggestions when it reports. After all, the matter that has been before the house today is one which, so far as a personality is concerned, is ended. But the matter of the circumstances connected with the contracts, and the method of the letting of these contracts, are matters which concern the whole house.
I am not criticizing the Minister of Public Works (Mr. Fournier). I fully realize that a minister dealing with a department of this size, and with a large number of contracts in varying amounts, cannot know about every contract or every detail in those contracts. Nevertheless I think we have to be safeguarded, and that future ministers have to be safeguarded against the kind of thing with which we have been faced in the house in the last week or two in this connection.
And so, Mr. Speaker, I am going to support the motion, because I believe it is fully warranted at the present time. I would hope that perhaps even the government might accept the suggestion for an inquiry.


Solon Earl Low: Mr. Speaker, I feel I should support the amendment that has been moved by the Leader of the Opposition, because I think it is in the best interests of the country, of the House of Commons and even of the government itself that an inquiry be made into the subjects named in this amendment.
I want the Minister of Public Works (Mr. Fournier) to know that in supporting the amendment I do not mean to cast any reflection upon him. I do believe that the people of the country feel that it is our duty and responsibility to get as much information as we can in this whole matter, so that proper safeguards can be set up against this sort of thing happening in the future. So I propose to support the amendment. I hope the government will look with favour upon it.


Louis Stephen St-Laurent: Mr. Speaker, in spite of the hopes of the hon. member for Rosetown-Biggar (Mr. Coldwell) and the hon. member for Peace River (Mr. Low), if they will only look at the amendment they will realize at once that it is quite impossible for the government to accept it. It is clearly a motion of no confidence, condemning the government for having failed to take appropriate steps to protect subcontractors and others in regard to payment for work performed and materials supplied under these contracts.
Now, it may be the hope of hon. members that there will be a majority in the House of Commons prepared to express that censure of no confidence in the government. But to ask the government itself to repudiate itself is something which we simply cannot do, especially when it has been explained that these contracts were let in the usual way, and that they were granted to the lowest tenderer who had complied with the conditions set out in the notice calling for tenders*
The hon. member for Rosetown-Biggar says that in the thirties he was residing in Regina, and that something happened at that time which would have made him dubious about the propriety of giving a substantial contract to the Lunam Construction Company. That is something which certainly does not appear in the government files, and certainly something which was entirely unknown to the officials of the department who received, checked, reported upon and recommended the granting of the contract to the lowest tenderer who had complied with the conditions upon which tenders were called.
The Leader of the Opposition (Mr. Drew) spoke this morning about something which happened in 1948, and which involved the Great-West Life Assurance Company, and

stated that the fact that the Great-West Life Assurance Company was involved would indicate sufficiently where this did take place. Well, to me it does not indicate where this did take place; because it is my knowledge that the Great-West Life Assurance Company operates throughout the whole of Canada and I think, also, beyond the boundaries of Canada. It is one of our largest assurance companies, and is represented in the important centres of the various provinces of Canada. I think it is also represented abroad.
That is something which was entirely unknown to the department or to the government; and perhaps this will be taken as an indication that there should be more care taken in ascertaining the competence of contractors, even when they are the low tenderers. I know it does happen sometimes that the very amount of a tender is a notice that it might be imprudent to accept it. And it is quite possible that some of the difficulties of this contractor may lie in the fact that his estimate was below the estimate that was made by others who tendered on the contract. Sometimes there are substantial discrepancies. I am told that in these cases the differences between the low tenderer and the next low tenderer varied from 4 per cent to 10 per cent. That is not unusual. That margin obviously does not indicate that the low tenderer is altogether out of line. Variations of from 4 to 10 per cent are not infrequent in tenders submitted by contractors.
Now, the contracts were let and they proceeded satisfactorily until the time when this contractor met with an automobile accident which put him in the hospital for several weeks. It was during that period that the difficulties became apparent. I am not suggesting that they did not exist before. There was an exchange of cheques to take an unfair advantage of the bankers. There may not be any law against the exchange of cheques in that way and thus taking that kind of advantage of our banking practices, but it is certainly an abuse. If one has to resort to that it does indicate that his situation is not the kind of situation that inspires confidence. But that was something which was not in the knowledge of the government or of the officials of the Department of Public Works.
As to the suggestion that there were no proceedings instituted to investigate the affairs of a man who was not paying his obligations as a result of the fact that there were no obvious assets that would even cover the expenses involved, I am told that there are several thousand dollars here that are going to be available. The hon. gentleman mentioned that there was $3,000.
29, 1953
Lunam Construction Company


John George Diefenbaker: $3,500 is what the minister said on April 8.


Louis Stephen St-Laurent: Even about that I am sure we will want to take another view. It is likely now that this debtor has not sufficient assets to satisfy all his creditors. I do not think it would be proper for the crown to take a surplus arising under one contract and apply it against a deficit under another contract. That would be getting an unfair portion of the available assets. If there are not sufficient assets to satisfy all obligations I think the crown should rank along with the other creditors and would not be justified in applying a surplus arising out of one contract to a debt arising out of another, though it may be the same contractor and the crown in both instances.
I think that we will have to take the view that, if there are insufficient assets to cover the liabilities, the liabilities under such contracts as cannot be completed for the amount available under each of them should be a claim that would rank with the claims of other creditors and should not be enforced in such a way as to provide preferential payment to the crown.
I think it was the hon. member for Lake Centre (Mr. Diefenbaker) who said that there appeared to be $170,000 of claims unsatisfied for materials and supplies. That would seem to indicate that there was work performed and there were materials supplied when the progress estimates came to the department and called for certain payments. I am informed that it was only after this accident to the contractor and after he got into the hospital that there was any notification from suppliers or subcontractors that they had claims outstanding. This is something which was handled in the ordinary way and the government cannot admit that it has failed in anything it was required to do in connection with these contracts.


John George Diefenbaker: Mr. Speaker, the very judicial manner in which the Prime Minister (Mr. St. Laurent) dealt with this matter will be followed by myself who first brought the matter to the attention of parliament. All of us will feel that this has been an agonizing day for parliament, possibly a day of disenchantment. It is in the spirit, however, of realizing that on occasions like this parliament must rise above narrow partisanship that I am going to speak on this occasion. The Prime Minister dealt with this matter in a way that, while I cannot agree with his conclusions, nonetheless I will follow. I shall deal with the various matters in the order in which they arose in the house and also with the answers given
4532	HOUSE OF
Lunam Construction Company by the Minister of Public Works (Mr. Fournier) when the matter was first discussed in the house.
The first answers to questions that were asked appear on pages 1308 and 1309 of Hansard of January 26. I had asked for details of the contracts that this company had. I disagree immediately when the Prime Minister says that this was a company of financial repute. It had no assets and it has no assets now. It had all the appearances of what I referred to on one occasion as a fly-by-night company without any visible capital. Yet it received a large number of government contracts. Naturally it was able to carry on and do that which the Prime Minister has just referred to, secure supplies from subcontractors to the extent of what I believed was $170,000 when I spoke in April but which as a result of examinations made by Judith Robinson has been found to be $230,000.
The figure of $170,000 was one I secured as a result of questions asked in parliament. Apparently the figures that were before the Department of Public Works were insufficient in amount and did not represent the true story of this debacle, one of the most serious I believe that has occurred in a long while. The facts would never have been found out through the questions asked in parliament had it not been that Miss Robinson apparently found it interesting on the facts revealed to make an examination which resulted in the finding out of things that parliament would never have found out.
On February 11 I asked further questions in the house as reported on page 1828 of Hansard. I am not going into the particulars of this question. But there are even yet a number of questions upon which parliament has not been vouchsafed any information. On March 11 the following motion for papers was passed by the house:
For a copy of all correspondence and telegrams since the first day of January, 1951 between any department of government and the Lunam Construction Company Limited of Regina, Saskatchewan, having to do with the failure of the said company to complete its several contracts, and in particular referring to the work progress reports submitted by it on the various construction projects under consideration by the same company, together with any statements on file containing the liabilities of the said company.
That was on March 11. That is information that parliament needs, but apparently that request for information has not aroused the interest of the department to the extent that one would have expected on a matter as important as this. The Prime Minister (Mr. St. Laurent) has said that payments made by the Department of Public Works were made on the basis of progress reports.


Progress reports, in order to be effectual, require first an affidavit or declaration of the contractor, as the case may be, and in addition they require certificates on the part of suppliers or subcontractors setting out that they in fact have received payment for the amounts which the contractor in turn is asking the department to pay. None of these answers have been given. There has been no reply to that important question. Replies should have taken no very great length of time; for, if progress reports are on file, it should not take long to produce copies.
In addition, other questions were asked. On the 25th of March the following question was asked:
1.	How many building or repair contracts have been granted to the Lunam Construction Company of Saskatchewan or the Lunam Construction Company Limited, in all departments of government other than public works, since the first of January, 1948?
2.	What were the contract prices of each of the said contracts and how much has been paid on account of each of them to the said company?
3.	Was work on one or more of said contracts discontinued by the said company before completion, and if so, in respect to which contracts?
4.	What did it cost to complete the contracts which were uncompleted by the said company?
5.	Were any materials or services unpaid by the said company?
6.	If so, what is the total amount of such materials or services on which any of the departments have notice or information?
That was on March 25, over one month ago, and as yet there is no answer. That indicates one of two things, either that the government does not want to reply or that the accounting system in the department is of such a nature that these particular documents are not available. On the one hand it is a case of dilatory action for the purpose of keeping parliament uninformed, or on the other hand it is an indictment of the government for its failure to have in effect the type of accounting system that would render such information instantly available, particularly when the last work done in respect of which this information is sought was over a year and two months ago.
The Prime Minister took the stand a moment ago, as he did this morning, that after all bankruptcy proceedings could be taken. The Leader of the Opposition (Mr. Drew) covered that point in a few words. In so far as the liabilities of this company are concerned, and work that has been done for public works and Indian affairs but which is unpaid, we know that the suppliers and the workmen have $240,000 coming to them, and the only asset that is visible is the asset referred to by the Minister of Public Works (Mr. Fournier) when he said that when all the contracts were completed there would be

a surplus of $3,500 to the credit of this company. If there were no costs in connection with bankruptcy proceedings and if trust companies accepted such work without compensation, then on the basis of my computation it would mean that the creditors, the suppliers and workmen who are still owed money would receive one and a half cents on the dollar.
When the matter was first brought to the attention of the Department of Public Works in 1952, the first answer given to those who were applying for payment was that some of the contractors had made false statements, that they had signed false progress reports.


Alphonse Fournier: Did my department give that answer?


John George Diefenbaker: No; that is information we got outside of parliament and which we could not get here.


Some hon. Members:: Oh, oh.


An hon. Member:: Hearsay.


John George Diefenbaker: I am making this statement as to what took place. When the minister says, "Did we give you that answer?", my reply immediately is no. Replies to our questions which would have indicated the situation have so far been denied to parliament, either intentionally or accidentally.


Mr. Sinnott:: Cheap stuff.


John George Diefenbaker: Several contractors were advised that the reason for the delay was that they themselves were to blame in that they had given false reports of the progress of the work.


Louis Stephen St-Laurent: Would my hon. friend mind saying by whom they were advised?


John George Diefenbaker: By the departmental
officials in Regina.


Alphonse Fournier: Can the hon. gentleman name them?


John George Diefenbaker: I am naming them as departmental officials. When it was found that there was only one in that position, the next thing that happened was that it was stated that because of Mr. Lunam's accident things had got behind. It was not Mr. Lunam's accident that put things behind. Mr. Lunam's accident but intensified and accelerated the situation. In other words, at the time of his injury he in fact was unable to pay the subcontractors. He in fact had accepted payments from the department under false declarations.
I shall refer to the false declarations in a moment. But the one thing that it is difficult 68108-2871
Lunam Construction Company for many of these people who have been defrauded to understand is the fact that payment has been denied to several of them who continued to supply materials in great volume for two months after Lunam's accident, and for two months after the government had discontinued its relationship with him and was looking for other contractors. Certainly there can be no excuse for denying payment to those contractors who, after Mr. Lunam's accident, continued to supply materials believing that they would be protected as people dealing with governments as subcontractors always are. There was not a word from anyone on the inspection staff of the Department of Public Works. Remember that Lunam no longer has any interest. My information is that in one case the subcontractor tried to remove several hundred dollars' worth of stuff which had been delivered after the Department of Public Works had cancelled its relationship, and the subcontractor was denied that opportunity.
When I brought this matter up, I brought it up because I believed that parliament would accept it as a principle that it would place itself in no higher position than the private contractor. As against the private contractor, however, the subcontractor and the workman have the right of a mechanic's lien. They can protect themselves if they are dealing with a company that is of the fly-by-night type. If perchance they were dealing with a company whose only capital was political fitness, then at least they would know and would have filed mechanics' liens to protect themselves. No such opportunity comes to the person who subcontracts under government.
I brought the matter to the attention of the Minister of Public Works on April 8. We dealt with the matter at some length in the house and the minister said, in effect, that it was difficult to find the whereabouts of Mr. Lunam; that he was a disappearing phantom who, having accumulated $240,000 worth of liabilities, vanished and could not be found. At the time I asked the question: How is it that the Regina Leader-Post reporters can find him? No answer came. They have been trying to find him since February, 1952. I asked a question, to which a reply was given today, and I find there is no correspondence between the Department of Public Works and any government official in Saskatchewan, the purpose of which has been to locate the whereabouts of the allegedly unlocatable. Yet Lunam has been in Regina week after week since February, 1952. The contractors and the workers have been asking for consideration from the government. They
4534	HOUSE OF
Lunam Construction Company have been met by delay; they have been met by everything but action.
Now, sir, these are a few circumstances that I think deserve consideration. Why should the government or Her Majesty be in a position where tradesmen trust governments and government representatives, where tradesmen knowing that there was a contract should be placed on their guard as to whether or not they should advance credit to a company with a contract with Her Majesty? Provision is made in the contract for progress reports. Under the contract the contractor agrees to pay the subcontractors. Either that means what it says, Mr. Speaker, that the contractor will not be paid before the Department of Public Works is satisfied that the contractor has settled with the subcontractor, or it means nothing. No bond, such as is ordinarily required, is required by the government, and the reason for it, as I understand from looking at the record, is that it would be a most costly thing to provide for bonds. The government, in fact, becomes its own bondsman. Many companies do not have insurance in certain particulars. They carry their own. They find it cheaper. When the practice of having bonds was first discontinued, the reason given was that it would be cheaper for the government of Canada to carry its own instead of paying insurance.
I point out these circumstances. I point out the failure of the government to notify those tradesmen who honestly continued, after February, 1952, and after the accident to Mr. Lunam, to supply goods, merchandise, wares and labour.
Then I come to the next thing. Why was this man not located? If he deceived the government by false affidavits, there is no reason whatever why he should not have been prosecuted. Why has something not been done, why is he immune, having defrauded the government of Canada under false declarations? Why is he immune when not one scintilla of evidence is available that even the slightest interest was taken by the Department of Public Works to ascertain the whereabouts of the wrongdoer? He was living in a Regina hotel. All these tradesmen were defrauded as a result of a false declaration. Over six weeks ago I had a question passed as an order for return asking that the declaration be produced. There is no one else who can prosecute Lunam except the government which was defrauded. The workmen, the suppliers of the goods, can do nothing. All they are met with is, "Well, if he owes you money why don't you sue him?" We have a straw man and a straw company.
Mr. Speaker, these are circumstances that merit the serious attention of parliament. If


men and women in this country cannot deal as subcontractors with safety, there is no safety for anyone in connection with government contracts. I could continue at length in this regard. I referred to the generally evasive nature of the letters received by the subcontractors in Saskatchewan when they asked the government for action. The Prime Minister (Mr. St. Laurent) says, we dealt with these contracts in the ordinary way. If they did, and I accept that statement as I accept the Prime Minister's statements, then there is something radically wrong with the whole system in the Department of Public Works. There is no way in which this matter can be brought out except through the instrumentality of a select committee of parliament to look into it.
I do not know whether or not there are other cases, but I have placed on the order paper, returnable on Thursday next, a question regarding the post office at Southampton, Ontario. If my informants have given me the correct information, the answer to these questions, too, will reveal that a real shake-up is necessary in order to preserve, on the one hand the rights of government, and on the other hand the rights of individuals in this country who deal with the government.
Mention is made by the Prime Minister of the fact that a number of contracts had been completed successfully by the Lunam Construction Company before Mr. Lunam suffered this accident.


Louis Stephen St-Laurent: That may be so, but I did not make that statement; and I do not know whether it is true or not.


John George Diefenbaker: All right. I may have misunderstood the Prime Minister, and I hasten to make a correction if I have done so. That was the inference I drew from his statement.


Louis Stephen St-Laurent: What I said was that my information was that there were some of these contracts that would be completed for less than the amount remaining unpaid to Lunam, that there would therefore be a surplus, that there had been some suggestion that that surplus might be applied to other contracts where there was a deficit, and that I did not think that would be fair.


John George Diefenbaker: I accept the correction, and I say this. According to the Minister of Public Works there will be approximately $3,500 to the credit of Lunam. What then is the situation? Approximately $239,000 worth of materials that have not been paid for have gone into these buildings that the government of Canada has taken over, a fact which indicates that there was waste or carelessness in the construction by Lunam and that there

was not that degree of supervision on the part of the Department of Public Works that is necessary in order to protect the taxpayers' dollar and to assure as well protection for individuals dealing with contractors.
The post office building in Prince Albert was built by this contractor. It was completed a long while ago. Yet there are contractors in Prince Albert who have not received anything on account of the work. Here is the situation of one firm in Prince Albert. Haylor and Hogeweide, a painting and decorating firm in Prince Albert, according to their statement here, have $3,801 coming for painting and decorating done. They state that they put in their claim but that they have never been paid. Lunam was paid for the work these people did. No wonder he could keep within his contract price; and even in the completion of the work that remains to be done on some of his contracts, it will be possible to complete them within the limitations of the tender he made. But $3,500 divided among the creditors of this contractor is as nothing.
I suggest that the Prime Minister might well accept the suggestion-although he has turned the question down without going into it at length-of a thorough investigation, because this is the first time that the curtain has been lifted in even the slightest degree. If this be the regular system, then changes must be made. The changes must be made for the future in order to protect the Canadian people. They must also be made to protect honest dealers who deal with contractors and who believe that those contractors will be required to live within and to maintain each and every portion of the contracts they enter into. Such a special committee of parliament could be similar to the one that was recommended by Sir Wilfrid Laurier many years ago.
These are matters that affect all Canadians. I say to the government: Set up a committee such as that which is suggested. Let us have the answers to the questions which I asked weeks ago and which have not been answered. Let us ascertain whether there are not material changes that must be made in the awarding of contracts and in the preservation of the rights of individuals dealing with contractors, both being necessary in order to achieve the largest possible return for the money to be expended by parliament and at the same time protecting those Canadians who have a right to be protected. There is no way under law by which they can be protected except by a strong, stern, severe supervision by those in authority in the Department of Public
29, 1953	4535
Lunam Construction Company Works or in the other departments of government, before payments are made to a contractor in respect of services or materials that have been supplied to him.
I am not going to say anything more at this time. Today the Lunam Construction Company owes at least 40 firms in Saskatchewan. Its record appears in some detail in the return brought down as sessional paper No. 178 on February 11, wherein are set forth in detail the contracts this company had and those wherein it has defaulted. It defaulted in the department of Indian affairs. It defaulted in the Department of Public Works. It did not default in the Department of Defence Production. Apparently one department was able to ensure that proper auditing took place, whereas in two other departments there was not that degree of supervision and examination which Canadians have a right to expect.
I join with the Leader of the Opposition in support of the motion, because I know how necessary it is that Canadians have a realization of what is taking place and what methods must be achieved in order to protect the taxpayers' dollar.


Alphonse Fournier: Mr. Speaker, I am to a certain extent pleased to see that some interest has been developed in the activities of the Department of Public Works. I have been head of that department for nearly eleven years now. During that time I recall that this house has voted for that department millions of dollars in the space of an hour or so. That procedure kept on until this year. I was grateful to hon. members for their confidence in the officials of the department and in myself; and I am convinced that, when I am through making these few remarks, the officials of the department and I will still have the esteem and confidence of the members of the house.
May I thank the Leader of the Opposition (Mr. Drew), the leaders of the other parties, and also my friend the hon. member for Lake Centre (Mr. Diefenbaker) for the tone in which they treated this subject before the house. The motion was for an inquiry into the procedure of the Department of Public Works, as to the way contracts are awarded and as to what happened in the Lunam case. I suggest that all that can be explained by myself just as well as it could be explained by an official of the department if he were to appear before a committee. The last paragraph, as the Prime Minister (Mr. St. Laurent) stated, seems to be quite out of order. Nobody believes that the government has failed in the execution of its public works in the last eleven years. This is the first time it has been suggested.
4536	HOUSE OF
Lunam Construction Company
The Leader of the Opposition wants to know how we proceed in public works. May I say that we proceed in an extremely simple manner. We follow the statute that governs the department and we follow the contracts we sign with contractors. Those are the binding limits on our activities. I have the statute before me. It has been discussed in this house. Hon. members know that if I was advised sometimes to ask for amendments that did not meet the wishes of the house I was the first one to admit that the amendment should be amended. It went so far that one hon. gentleman said that he had brought me down to my knees to amend the amendment. I did not have to be brought down to my knees. I was using only good sense, after consulting members of parliament, members of the opposition and everybody else. I think we have a good statute.
I believe there is a lot of red tape in that statute, and I have always approved of it, because it is the one spending department that exists and has existed since the British North America Act was passed. It has been developed in the decades by different governments, and it was set out in the statute books until two years ago, when we found that the value of the dollar was not the same as it was in 1867. At that time I obtained an increase in the amount of contracts that could be awarded without public tenders from $5,000 to $15,000. That is the only amendment in the eleven years that I have been head of this department.
What does the act say about the general procedure? This was debated in the house by the hon. member for Greenwood (Mr. Macdonnell) and the Leader of the Opposition (Mr. Drew). I cannot recall whether the hon. member for Lake Centre (Mr. Diefenbaker) took part but I do recall that the hon. member for Vancouver-Quadra (Mr. Green) put up quite a struggle against section 36 of the Public Works Act being amended, or if amended there should be a limit on the amount. We took probably two days on that question. Never was it mentioned that I did not follow the statute or follow the binding procedure in the giving out of contracts.
We followed that in all of the Lunam cases. I have given answers to questions that were put to me by the hon. member for Lake Centre. They will be found in Hansard of January 26, 1953, at page 1309 as follows:
How many contracts for buildings or projects have been let by the Department of Public Works to the Lunam Construction Company, in Saskatchewan, since January 1, 1948?
The answer I gave was:
Eight:	Prince Albert; Regina; Tisdale; Fort
Qu'Appelle; Langenburg; Fort Qu'Appelle; Regina; Fort Qu'Appelle.


There were two buildings at Regina, and at Fort Qu'Appelle an Indian hospital. I gave the amounts of the contracts; I gave the amounts that were paid; I named the buildings that had been completed and paid for, and I mentioned that three buildings had not been completed.
When we met with this case of Lunam in February, 1952, I was advised by my officials that this man had discontinued the execution of work on certain buildings and that we were receiving certain claims. I instructed them to withhold any payments, to communicate with the contractor and tell him that if the works were not resumed and completed according to the terms of his contract the department would take over. That is one of the clauses of the contract between Her Majesty and jhe contractor. We had up to that time received, to my personal knowledge and according to the information I am given, no criticism of Lunam or his company.
When the hon. gentleman says that we should have looked into Lunam's background as a contractor, well, lately somebody told me that years ago he had been an employee of the Poole Construction Company which had fallen by the wayside. Now, I ask myself if that would be a reason to take him off the list of tenders that were made according to the statute?
This morning the Leader of the Opposition was kind enough to tell me that in 1948 this contractor had started a job but had not completed it. I must admit that neither my officials nor I knew about it, or if they did, I did not know that he had had troubles. But if I look back into the history of this department I find that one of the largest contractors in Canada had failed in putting up one of the largest buildings in the capital city. Who blamed the Department of Public Works at the time? Nobody blames the department because a contractor fails. I am mixed up with bankruptcies. I can give a case in the city of Sherbrooke where a contractor failed. He was declared bankrupt; a trustee was appointed. The trustee undertook to complete the work. He has just completed the work, and we shall hand back to that trustee the amount of the security deposit and the amount that we had held back on the execution of the contract. That is the regular procedure in public works. Is it perfect? Well, it is just as perfect as any other system of contracting on buildings that I have seen.
We have a guarantee but no bond, as the hon. gentleman says. During the years it was found that a security deposit in cash of 10 per cent, plus a holdback of 10 per cent on the execution of the works, was a sufficient guarantee, and I admit that we have not lost

much money. Everything that was regular in all the contracts I have been handling for eleven years was followed in the case of Lunam, who was the lowest tenderer, who had the equipment, the personnel and the experience. Even if he had worked for firms that had failed, he must have had experience, for away back in 1931 he was one of the foremen or head men of that Poole Construction Company. Therefore we could not say that he did not have the knowledge and the experience; we could not say that he did not have the financial backing. He put up the deposit, as is done in every case. We could not say that we were not protecting the public treasury by holding back the 10 per cent.
I sincerely ask any hon. member, were he Minister of Public Works, what he would have advised in the Lunam case that I have not undertaken, to protect the public treasury. My duty here, and according to the statute, representing the people of the country, is to see that when I give a contract I get the services on the work that is mentioned in that contract in the value agreed on and put up by this parliament on the request of the Minister of Public Works.
In every instance in the Lunam case I am told that we have value for the money that was expended. Perhaps today I am the only defender of the public treasury, when I see my hon. friend trying to protect creditors who may have lost money on certain contracts. They have little experience if they believe that nobody loses money on contracts, even subcontractors. Nobody sympathizes more than I when I see a contractor fail; but my sympathy has to be displaced in the observance of the statute, and so long as I am holding this portfolio my first duty, and what I will do, is to protect the public treasury. I shall make mistakes; I make them every day even in this house; my officials will make mistakes. But up to date nobody has charged anybody in that department with wrongdoing. If they were doing wrong it has not come to my attention; and if there is wrongdoing those who are the wrongdoers will in one way or another pay for it.
That is the position we take in the department. With respect to the officials who have been in that department so long, and who are respected, and who deserve the respect of the population, I wish to give them credit for the work they have been doing ever since I have been Minister of Public Works.
With regard to the protection of creditors, I am all for it. Do not put the crown over and above the ordinary private man, says the hon. member for Lake Centre. But would the hon. member for Lake Centre tell me why no storekeeper or anybody else around here
29, 1953
Lunam Construction Company can garnishee the wages of a civil servant? Is that the difference between the crown and the ordinary man? And this has the approval of parliament, and has had it for years.
We are not spending here the money of one person; we are spending the people's money. And every statute which is passed here is to protect the public treasury under the supervision of the Minister of Finance (Mr. Abbott), the comptroller of the treasury, the treasury board and the Auditor General, all these who protect the public treasury. If I were doing things or if my officials were doing things by which the country would lose money, then I think I could be justly blamed. But the argument used now by the hon. member for Lake Centre is, "You should protect these subcontractors, these people who sell materials." Well, if I had the time, probably I would do that. If I could go around to all the contracts we are handling in the Department of Public Works to see if that keg of nails in Peterborough was paid for, or if this other thing somewhere else was paid for-well, if I did that, I do not know whether I could administer the department at all. That is not the way it is done.


John George Diefenbaker: But $240,000 is not a keg of nails.


Alphonse Fournier: Those claims would be disputed and become legal claims. How does one judge the rights of this man, in the light of what the other man says? The hon. member is an experienced lawyer. How would that hold up in court? How would I, as Minister of Public Works, pose as a judge to determine whether that is or is not a just claim, or if it has not been paid? The hon. member has just said these men were accused of falsely making reports of materials they had sold. This is the first time I have heard of that.


John George Diefenbaker: Well, you should have known it. Everybody else knew it.


Alphonse Fournier: Perhaps my knowledge is not as great as that of my hon. friend. But perhaps if my hon. friend would just take time to come to the department I could give him a few lessons about contracts. You know, there are two ways of handling the Lunam case. One of these is according to law, and-


John George Diefenbaker: And one is to do nothing.


Alphonse Fournier: As I said, one of these is according to law, and that is what the department will do; and that would be unlike a certain lawyer who brings up a case without being well prepared. When we do

Lunam Construction Company bring it here we will be well prepared as to what we are going to do.
The second way would be to handle it politically. I ask this House of Commons-


John George Diefenbaker: Now you have it.


Alphonse Fournier: I ask this House of Commons if the hon. member is handling it according to law or according to politics. I am asking myself if during the hon. member's absence from the house he was preparing this case, or meeting newspapermen who had looked around-


An hon. Member:: And a woman.


Alphonse Fournier: I might say myself-[DOT]


John George Diefenbaker: My hon. friend has asked a question. The only case I can prepare is from the little information I have got from the minister. If I can just have an answer to the two questions I have asked, then everything I have said today will be established; but we cannot seem to get that information.


Alphonse Fournier: The hon. member says he cannot get information or answers to questions. Well, let me tell him I stood in my place here for three days answering questions. And he reached the point where he said, "No, I will not continue; we have had enough." I thought I had put the answers on the record right then, but I am ready to go on. There is no end of trying to convince a man who wishes to have an answer in the prosecution of a case. In this case what does the hon. member want? Does he want to show that my department is not well administered?


John George Diefenbaker: I think that has been shown.


Alphonse Fournier: Who do you think will agree with you in what you have said today? I will leave it to you; you are the only one who must be convinced. You are trying to tell us that we are not well organized in that department, and that we did not do everything to protect the subcontractors.


John George Diefenbaker: You did nothing to protect them.


Alphonse Fournier: If we did nothing, why not tell me? We have not been told anything. The hon. member wants to know where we stand. Well, if he will just wait until we get through with this contract we will know exactly where we stand with Mr. Lunam, and perhaps with his creditors. But we have no relationship at all with the subcontractors, the sellers of materials or services. Our contract is with Lunam. And
[Mr. Fournier (Hull) .1

the guarantees with Lunam are those which have been followed for years and years, even before I was Minister of Public Works.
We have followed that practice in each instance. And having done that, without waiting to complete the discussion that our case is well prepared, my hon. friend comes to the House of Commons. I can tell you this, that it is no help either to the officials of my department or to the claimants to have the matter decided on the floor of the House of Commons. My hon. friend might make a good judge, but when he is in parliament he loses sight of the facts and makes a political speech. I would not want my department to be subjected to that; I would rather have the case come up before the courts.
The country will lose no money in this transaction, through the Department of Public Works. I tell my hon. friend that if I can give him any information and I can say anything else to prove that my department has rendered good service for so many years, with the limited money it has had to expend, I shall do so. Since the last war hon. members can see what it has been doing throughout this country, in nearly every constituency. And I am still proud of what my department has done with the amount of money granted to it by parliament.


Howard Charles Green: Mr. Speaker, there are two or three points with which I should like to deal for a few moments, arising out of the remarks just made by the Minister of Public Works. He did not explain, in the first place, the fact that when his department suspended payment to the Lunam Construction Company Limited, which I believe was in December, no notification of that action was given to any of the subcontractors.
The minister has said that he notified the main contractor, the Lunam Construction Company Limited. But he makes no pretence of having notified the subtrades of that position, that the Lunam people were no longer responsible and that the government was to make no further payments to them. That I think is where one of the grave injustices in this matter arises. I believe that at least some of the subtrades, after the time the minister suspended payment to the Lunam Construction Company Limited, supplied materials on the jobs. They incurred further expenses, the benefit of which went to the government.
During that time they had not been notified that the government was no longer making payments to Lunam. The result of course was that the government got the benefit of these

materials that were supplied and, in actual fact, got the goods for nothing, at the expense of these subtrades.
I suggest that that is a very unfair situation. The Minister of Public Works has made no attempt whatever to justify that result. In fact he has taken the position this afternoon that he was not interested in the subtrades, that they were none of his responsibility, that he was only dealing with the head contractor, the Lunam Construction Company Limited. Yet we find him making a statement on April 8, as reported on page 3618 of Hansard. While he says today that he had no interest whatever in the subtrades, that they were none of his responsibility, he told us at that time that he was getting reports every month from his inspectors on the job about the firms who were actually supplying these materials and the men who had subcontracts. I quote from one paragraph on that page as follows:
Every month, on special dates, a contractor makes progress reports as to the work done and the materials employed, and gives us a list of those who have sold him materials,. That list is part of the progress report, and it is accompanied by an affidavit of the contractor.
I was wrong in saying that he got those reports from his inspectors. He got them from the head contractor. If the minister's statement on April 8 was correct, those reports contained a list of the subcontractors and of the people who were supplying materials. So all the way through the minister was in a position to contact these subtrades. When he knew the head contractor was no longer able to function, the minister had the opportunity to notify the subtrades, but I believe there was no notification whatever sent to them for a matter of two or three months after he had suspended payments to Lunam Construction Company Limited.
Then I understand that the department took the holdback and the deposit from jobs that had been completed and used them to complete jobs which had not been completed. SureL' that was an unfair procedure. If a man has supplied materials for building A and that building has been completed and there is money held by the government, what right does the minister have to take the money which he is holding in that case, and rather than using it to pay the man who has helped complete the job, take it and use it to finish another job?


Mr. Howe:: What evidence is there that that was done?


Howard Charles Green: I have the quotation here and I referred to the page.
Lunam Construction Company


Clarence Decatur Howe: It cannot be properly done and it will not be done after there is a final accounting. The Prime Minister (Mr. St. Laurent) has just said that each job must be considered by itself. In other words, the government cannot use a holdback from one job to apply to another.


Howard Charles Green: That is one of the unfortunate features of this situation. The Prime Minister said that today, but the Minister of Public Works said something different on April 8. As I understand it, the fact is that money was taken from those jobs which had been completed and applied to the uncompleted jobs. I quote again from page 3618, where the minister is quoted as saying:
People sent in their bills to the contractor who, in his affidavit, swore that they were paid. Up to that time there was no difficulty at all, and no claim from anyone. We have five out of eight buildings completed. The man suffered this accident and was laid up in hospital for months. At that time we had information that he could not continue, because he was the principal owner of the firm. He acted as contractor, superintendent of works, and everything else.
Here is the significant statement by the minister:
We were left with three uncompleted buildings: and from then on we told him we would keep the deposit, keep the drawback and continue the work on those three jobs.
If that is not what was done, the Minister of Public Works failed to explain it. My submission is that on his own statement of April 8 that was the practice followed in regard to these contracts.


Clarence Decatur Howe: I do not want to interrupt my hon. friend, but I suggest that the proper thing to do was to hold all the money. After the final accounting the money will be allocated to each job.


Howard Charles Green: Does the Minister of Trade and Commerce (Mr. Howe) say today that the money that was held back on the jobs that were completed will be repaid to the men who supplied materials and who worked on the completed jobs?


Alphonse Fournier: Those three jobs were progressing at about the same rate. We would want evidence to show whether those materials were delivered, to which job they were delivered and, after the three jobs have been completed, where the money had been spent.


Howard Charles Green: On April 8 the Minister of Public Works went on to boast that with the money which had been taken as holdbacks and security the government had been able to complete the other jobs. He boasted of that on April 8. The fact is that his position

Lunam Construction Company
is entirely different from the position taken today by the Minister of Trade and Commerce.


Clarence Decatur Howe: Why is not there a trustee in bankruptcy who sees to it that these things are done?


Howard Charles Green: It is not the job of the trustee in bankruptcy to see that the government does its duty or acts fairly. That is the responsibility of the government, not of any trustee in bankruptcy. There is another feature which the Minister of Public Works did not explain; and I regret to see he has had to leave the house.
Minister of Public Works, as appears at page 3620 of Hansard for April 8, and at one point he said in reply:
When we make a progress payment it is to enable him to pay these bills, and he swears he has paid them.
I suggest that is putting the cart before the horse. The contractor should be required to produce his receipts before he is paid. If that were done, then there would be no unfortunate occurrences such as in this case. For these reasons I suggest that a committee should be appointed and a new system should be worked out for the handling of construction contracts of this kind.
The fact is that there was not adequate supervision of these jobs. If a private individual had a contract of this kind with an architect employed, that architect would see the receipts showing that the subtrades had been paid. In these cases the minister was getting lists of subtrades all the time. There was an architect at least on some jobs, and I presume there were also inspectors. Yet nobody seems to have accepted any responsibility for seeing that the contractor paid the subtrades.
When this was under discussion on April 8 the Minister of Public Works took the position that that was quite all right, that he had no responsibility in that regard, and in effect said that if the subtrades did not get paid it was just too bad for them. I suggest that shows a serious defect in the manner in which the Department of Public Works is functioning on these jobs. The very fact that ;he department is supposed to get affidavits from the contractor showing that he has made payments indicates that it was the intention of parliament throughout that the subtrades should be protected, that proof should be required of payment of the bills of these subcontractors. Yet that practice has not been followed at all by the Department of Public Works.
I think the great value of this amendment lies in the fact that it asks for an investigation of this situation in the hope that there will be a better system worked out for supervising government contracts. There surely would be very little difficulty in having the government make a contractor produce his receipts before paying. Instead of doing that in this case, as the Minister of Public Works indicated during the discussion on April 8, the money was actually paid out to the Lunam Construction Company Limited so that they could pay their debts. Yet the department undertook no responsibility for seeing that the money was used for that purpose. For example, we questioned the


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


John Sylvester Aloysius Sinnott: Before you put the amendment, Mr. Speaker, I should like to say a few words. As I understand it, the reason this matter is brought up today is that the official opposition is at so low an ebb that they will stoop to almost anything. I rise in particular to say a few words on behalf of the contractor, Mr. Lunam. I do not know Mr. Lunam. I have never heard him discussed in the house before. But I do say to the house and to the country that I have never heard such a vicious and cheap attack on a man who is not here to defend himself as that made by the leader of the C.C.F. party.


Mr. White (Middlesex East):: I was paired with the hon. member for Middlesex West (Mr. McCubbin). Had I voted, I would have supported the amendment.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.



DEPARTMENT OF AGRICULTURE

[Stage Direction]
Administration service-
1. Departmental administration, $358,893.
Major James William Coldwell: Mr. Chairman, when this item was up for consideration before, on Monday evening, the Minister of Agriculture did something which I think is rather unprecedented in the House of Commons. He read into the record a copy of a letter which he had written to the premier of Saskatchewan with regard to the South Saskatchewan river dam and report. The letter was dated the previous Friday, and I have since learned that this letter was written by the hon. gentleman on April 24 in Regina and was delivered to the premier of Saskatchewan at his home on Monday evening at ten o'clock, Regina time, or two hours after the letter had been made public in the House of Commons.
As I understand it, the procedure that has been followed in the house for a long time now has been this. When letters are exchanged between a minister and the government of a province, when we have asked for even the production of that correspondence we have always been told that the correspondence could not be tabled or be made public until the consent of the other government had been received. In this instance, for what purpose I do not know, a letter was delivered at Premier Douglas' home in Regina at ten o'clock, Regina time, on Monday evening, over two hours after the communication had been read in the House of Commons. I say that that act seems to me to be one of discourtesy, having regard to the procedure that we have followed in the house now for a long time.
I know the Minister of Agriculture has little use for the present government of Saskatchewan and never misses an opportunity to show that fact, as he did this morning, for example, when he interjected quite irrelevantly the statement that the Conservative party and the C.C.F. had in some way co-operated last year in the provincial election. Let me remind him that in 1948 a coalition was formed between my hon. friend's supporters in the province of Saskatchewan and the Conservative party, so that the Conservatives delivered the votes and the Liberals got the seats. There was indeed one independent Conservative elected, and that independent Conservative is today a member of the Liberal party. I do not know whether or not he was in fact an independent Conservative at the time he was elected to the legislature of Saskatchewan.
I want to say something both about this letter and about the matter of the Saskatchewan river dam, particularly as it closely affects my own constituency. In the event of irrigation being undertaken on the South

Supply-Agriculture
Saskatchewan river, it would be the constituency of Rosetown-Biggar that would largely benefit from the undertaking.
This subject has been a matter of discussion in the House of Commons and in the country for a number of years. I recall raising the matter here myself in 1938 and moving a resolution asking for the study of irrigation possibilities in Saskatchewan and indeed in western Canada. From time to time the Minister of Agriculture himself has made speeches in which he has fairly clearly indicated to the people of Saskatchewan that the project would be undertaken. But when I look at this letter which the hon. gentleman wrote on April 24 to the premier of Saskatchewan, I find that he now takes a position entirely different, as I shall show in a moment, from the position that has been taken hitherto either by himself or by the government. He says:
. . . the federal government is prepared to consider a definite proposal from the provincial government for co-operation in the project and I am authorized by my colleagues to discuss such a proposal with you-
That is with Premier Douglas.
-once the question of water rights has been settled among the three prairie provinces and agreement reached that the water would be available for the project.
He also goes on to say this:
Any proposal put forward by the province should make it clear what contribution to the cost of the dam itself the province is prepared to make to remove any element of federal subsidy for the production of power since power development could obviously not be subsidized in one province . . .
Of course power development could not be subsidized in one province. But the Prime Minister, when he was speaking in the house on February 9 of this year, said something rather different in discussing the project in reply to a question of my friend the hon. member for Lake Centre. The hon. member for Lake Centre said, "What proof is required for that?"-that is, if the Prime Minister could be convinced to the point where he could honestly say that he believed it to be the best use of the water. The Prime Minister then went on to say this, as reported at page 1770 of Hansard:
I do not know of any better use.
That is better use of the water.
But they suggest-
Referring to the experts who have just reported.
-and they are experts, I am not-that that further information is required to reach a positive opinion as to whether or not that is the best use. I think it would be a good use. I am not frightened at the cost.

Then further down he goes on to say:
-the creation of that body of water in the province of Saskatchewan would be a magnificent thing, and that the indirect, not the direct returns -the direct returns you cannot calculate mathematically-would be a permanent addition to the capital value of this great country of ours.
In his letter the Minister of Agriculture makes no mention of the use of the water or the desirability of convincing the government of Canada and the Prime Minister that this would be the best use. What he says is that he would like to get the views of the Saskatchewan government and the proposals that government may have in this regard.
Let us take a look at the background of this matter, to some extent, and see what actually has happened in connection with proposals dealing with this matter. For example, in 1950 the Minister of Agriculture made the statement in the House of Commons that he was meeting the Saskatchewan government to discuss the South Saskatchewan river project. At that time the government of Saskatchewan had heard nothing about such a meeting; so on June 19 the premier of Saskatchewan sent this telegram to the minister:
Notice you have stated in House of Commons that you are meeting government latter part of this week. None of the Saskatchewan ministers have received any word of proposed meeting. We are anxious to make sure that members of cabinet are available to suit your convenience. Would you advise us if you desire meeting and if so please suggest date.
In reply to that telegram the minister wired as follows:
Retel. I regret not having previously contacted you. Will be in Regina Saturday morning, June 24. Wish to discuss with you and members of your government, particularly ministers of finance and agriculture, the South Saskatchewan project and possible financial arrangements.
The premier of Saskatchewan wired back:
Meeting arranged for 9 a.m., Saturday, June 24, office of provincial treasurer.
That meeting was held and a discussion took place, but apparently no definite arrangement or decision was made. Then on January 15, 1951 the Minister of Agriculture wrote to the premier of Saskatchewan and said:
I have been wondering whether it would be possible sometime during the day of February 2 to have further discussions on the possible development of the South Saskatchewan river project. If so, I shall make time available for that purpose.
I expect to arrive in Regina on February 1 by plane and to leave by train on Saturday, February 3.
Then we have the reply thanking the minister for the letter of January 15. Then a reference to the possibility of discussing the South Saskatchewan river project, as follows:
I am sure that my colleagues and I would be prepared to arrange our schedule so as to meet

you at your convenience when you are in the province on February 1 and 2. As you have said, the sitting on Friday afternoon is usually quite brief, and the ceremony in connection with the hanging of your portrait will not likely take more than half an hour. This means that we could have a meeting from four to six in the afternoon, unless you have some other plans. If, however, you would prefer the morning, we would do our best to arrange it although I think four to six p.m. would be more convenient for us.
Trusting you will advise me of your wishes in this matter and looking forward to seeing you when you are in Regina.
Then we have the reply to that:
I expect to be in Regina on Wednesday the 24th.
The meeting was held, and some * definite arrangements regarding the project were agreed upon. As a result the premier of Saskatchewan immediately put in writing the understandings that had been arrived at and sent them to the minister. Because this letter is quite important, in view of the project under discussion, I want to put it all on the record. This is from the premier's office in Regina; it is dated February 10, 1951, and reads:
Dear Mr. Gardiner:
This will confirm the conversations which took place between you and the members of the Saskatchewan government on Friday afternoon, February 2.
Our understanding is that the federal government is prepared to accept full responsibility for the construction of the dam-
There is no reservation in that. I continue:
-the estimated cost of which is to be in the neighbourhood of $68 million. It was further suggested that the distribution system at an estimated cost of $19 million and the cost of levelling the land for irrigation, which is estimated at $6 million were to be the responsibility of the provincial government and the water users who will benefit by this project. It was also suggested that the installations for the generation of hydroelectric power at an estimated cost of $8 million were to be the exclusive responsibility of the provincial government. While this is not the allocation of costs which was suggested when this project was first proposed, if this is the only basis on which the federal government is prepared to proceed with the project, I do not see that we have any alternative than to base our discussions on the allocation which you outlined to us-


James Garfield Gardiner: "To base our discussions."


Major James William Coldwell: The letter continues:
[DOT]-which you outlined to us (on February 2, 1951). My colleagues and I are most anxious that the South Saskatchewan river development project shall be proceeded with at the earliest possible date. As soon as the federal government has announced its intention to proceed with this undertaking, we are prepared to negotiate and sign an agreement on the basis of the allocation of costs outlined above. You were good enough to suggest that this allocation of costs was not to be considered as final but merely the basis for future negotiations. It is understood that if any more favourable terms are given any other province, for example, the St. Mary's project in Alberta, Saskatchewan would receive similar treatment.
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May I say how pleased we were to have the opportunity of discussing this matter with you and may I express the hope that in view of the agreement contained in this letter, it will be possible to proceed with the construction of the South Saskatchewan river development project some time during the present year.
The present year was, of course, 1951. There was an acknowledgment from the minister's private secretary as follows:
In Mr. Gardiner's absence this will acknowledge receipt of your letter of the 10th February, which will he brought to his attention upon his return.
There was no further communication. The minister did not reply to this letter, and it was quite obvious that the understanding reached at the meeting of February 2 was an understanding on both sides.


James Garfield Gardiner: I replied to that letter in June.


Major James William Coldwell: Yes, in June. The next letter was dated June 26. Had there been any doubt in the minister's mind as to the correctness of the statement made by the premier of Saskatchewan in February, I have no doubt the minister would have written at once to correct any misunderstanding. On June 26 the minister wrote as follows:
I am sorry when going over our files to find that I did not answer your letter of February 10, 1951.
I note that you indicate in your letter that your government is prepared to consider an expenditure of $25 million on the irrigation system and $8 million for the generation of hydro electric power if the federal government would undertake to build a dam across the South Saskatchewan river near Outlook at an estimated cost of $68 million. I note that as soon as the federal government has announced its intention to proceed with this undertaking your government is prepared to negotiate and sign an agreement on the basis of the above allocation of costs.
There has been considerable discussion on the question since, some of which has found its way on to Hansard and some of which has taken place through the press.
It has been recently announced that all the information available with regard to the proposed South Saskatchewan development will be placed before a committee of experts and their opinion obtained before final consideration is given to the proposed development. The Prime Minister (Mr. St. Laurent) stated to the house today that he hoped to be able to announce the personnel of the committee of experts at an early date.
I may say that in checking the records here I find that none of the three prairie provinces have yet notified us that they are agreed upon the division of water proposed by the provincial-dominion water board. I am sure you will agree that it will be necessary for us to have the opinions of the three governments before final consideration can be given to the matter.
I hope favourable decision will have been made to the findings of the water board by the time the committee has given its opinion on the whole development.
There we get a fairly complete background of the part that Saskatchewan was prepared

Supply-Agriculture
to play and the understanding which in February, 1951, seemed to be understood was agreeable to both sides. Of course, that letter caused a good deal of consternation among those of us who were interested in the project, the setting up of another commission to go into the many reports on this project that have already been made to the house and to the government. It also caused us some anxiety, because we understood that the minister's own advisers in the P.F.R.A. had made estimates of the costs and recommendations for the location of the dam, and that everything was ready to proceed when this commission was set up.
I have always been rather surprised that when that commission was set up there were two power project men and only one irrigation man on the commission in the person of Dr. Widtsoe. Unfortunately, Dr. Widtsoe fell ill. He was a man in whom I learned to have confidence as an irrigation expert, because although I did not know anything about him until he was appointed to the commission, subsequently I saw some of his writings and learned something of his record, and I must say that he commanded my confidence. Unfortunately he was an aged man. He fell ill. He underwent an operation which was serious for an aged man. He died before he could complete the work he was called upon to do.
The appointment of this commission of course provoked a letter from the premier of Saskatchewan and again I wish to put it on the record, because I think the record should be complete. It is dated at Regina, August 2, 1951 and reads:
Dear Mr. Gardiner:
I have your letter of June 26 in regard to the South Saskatchewan irrigation and power project. You will recall that this was in reply to my letter of February 10, in which I advised that as a result of our earlier conversations with you the Saskatchewan government was prepared to enter into an agreement on the sharing of financial responsibility along the lines indicated in my letter, in order that an early start might be made on the project.
I now note that the government of Canada is appointing a committee to review all the information on the project and that the Prime Minister expects shortly to announce the personnel of the committee. We feel sure that you will agree that the data which has already been compiled by competent engineers and technicians has provided conclusive evidence that the project is both practical and feasible. Dr. L. B. Thomson, of P.F.E.A., has in fact expressed to us the view that no irrigation project in Canada has ever been so thoroughly and carefully documented as this proposal. We cannot appreciate the need for this further review, but are of course prepared to co-operate with the committee in any way we possibly can to expedite their work.
In your letter you mention that none of the three prairie provinces have yet notified you "that

they are agreed upon the division of water proposed by the provincial-dominion water board". You will, of course, be aware that the recommendation of the board with respect to allocations for certain projects in Alberta have now been formally assented to by all four participating governments. Our own application for an allocation of water for the South Saskatchewan project has been before the board since May, 1949. The documents and evidence submitted since then in support of the requested allocation are admittedly far more complete and authoritative than any other application previously accepted by the board. The Saskatchewan government withheld formal assent to the Alberta allocations only until such time as authoritative water studies by the board itself showed that the supply of water is adequate for the needs of projects in all three provinces. We have now issued the required order in council with the distinct understanding that an early meeting of the board will be called to recommend a final allocation for the South Saskatchewan project. It is inconceivable that this will not be forthcoming.
In any event, as you well know, construction of the St. Mary's dam, opened by yourself only two weeks ago, was begun by the federal government at least three years prior to formal agreement by all the provinces on the water allocation. In fact, very substantial works had been carried out on the project by the federal government long before an agreement had been finalized with the province of Alberta.
In view of the foregoing, we cannot see that any further delay is necessary. We would urge again that the government of Canada should recognize its obligations in this matter and undertake the immediate construction of this project which will undoubtedly benefit the nation as a whole and Saskatchewan in particular.
I hope favourable decision will have been made to the findings of the water board by the time the committee has given its opinion on the whole development.
That is signed by Mr. Douglas. Then the investigation went on. Some of us in the house were pressing for the presentation of the report. Early in the session of 1952 a question was placed on the order paper by the hon. member for Kindersley (Mr. Larson) asking if the Saskatchewan government had presented a brief. The Prime Minister (Mr. St. Laurent) answered that no brief'had been presented.


James Garfield Gardiner: May I ask the hon. member if he is not going to put my other letter on the record, so that it will be complete? There is one further letter.


Major James William Coldwell: I thought I had all the letters. Perhaps I just missed that one, and failed to bring it down to the chamber. However, a reply was given by the Prime Minister-and I absolve him from responsibility in making it, because it was not according to the facts. I suppose his officials drafted it for him. Mr. Douglas saw the Prime Minister's reply in Hansard and, accordingly, wrote to him on March 28, 1952 as follows:
My dear Prime Minister:
In answer to a question placed on the order paper by Mr. Larson, member for Kindersley, you are

quoted as stating that the Saskatchewan government has not yet presented a brief to the royal commission investigating the South Saskatchewan river project despite the fact that the chairman of the said commission requested us to do so on December 19.
It seems to me that in all fairness the House of Commons should have been informed that the Saskatchewan government met two members of the royal commission informally on September 21, 1951, and that at that time our technical staff discussed with the secretary and two members of the commission the type of information they required and the scope of the inquiry. During the latter part of December we were informed that the chairman of the commission had to return to Salt Lake City and that one member of the commission was ill and that consequently we could carry on further investigations before making our submission. On March 12, 1952, Mr. B. T. Richardson-
He was secretary of the commission.
-informed our technical staff that the royal commission was not satisfied with the estimates furnished by the P.F.R.A. and that a meeting of the engineering consultants was being held in Washington, D.C., on April 7. Mr. Richardson invited the Saskatchewan government to send an engineer to the proposed meeting and stated that our report should be withheld until the results of this conference were made known. Mr. Richardson's statements of March 12 have since been confirmed in a letter dated March 22.
Then Mr. Douglas goes on to say what is perfectly correct-
There is no provincial government in Canada which has co-operated more fully with the royal commission investigating the South Saskatchewan river project than has the government of Saskatchewan. We have indicated our willingness to place before them all the data which we have and to carry out extensive investigations regarding any matters on which they want further information. Any attempt to suggest that the Saskatchewan government has not co-operated fully is not in accordance with the facts and cannot possibly serve the best interests of the investigation which you initiated. If the government of Canada wants us to file a submission without waiting for the results of the proposed conference in Washington on April 7 we shall, of course, comply. We thought, however, that by acceding to the request of the secretary of the commission that we wait until certain information had been received from consulting engineers we were acting in accordance with the wish of the commission.
Then he goes on to add:
I do not propose to have the Saskatchewan government placed in the impossible position ol being blamed inferentially for not having submitted a report, while at the same time the commission itself is suggesting that we withhold our submission until after the results of the conference commencing April 7 are made known to us. I would therefore appreciate hearing from you as to whether or not you wish our submission filed immediately or whether you prefer to have us withhold it as requested by the commission.
That is pretty much the story of the negotiations as they occurred, and the attempt from time to time to transfer the responsibility for delay from the federal to the provincial government. The provincial government, and hon. members in the House of
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Commons who are from Saskatchewan, particularly those in the vicinity of the river, have done everything possible to co-operate in bringing this great project to a successful conclusion.
I believe this is a project which would be of inestimable value to the people of my province and, indeed, to the people of Canada. I agree with the Prime Minister when he says that he does not know of a better use that could be made of that water. I agree with him when he says that this great body of water in the centre of Saskatchewan should be available for irrigation, and incidentally available to supply water to the cities of Moose Jaw and Regina, although of course that must not be made a main consideration because this is an irrigation rather than a water project. However, it is a very important feature of the proposal.
Premier Douglas has again assured the Prime Minister when, first of all, he states that he is in receipt of a letter from the Minister of Agriculture asking the provincial government to submit a proposal for the construction of the South Saskatchewan dam. He says this, and I think quite properly, in view of all that has happened:
Before submitting proposal or discussing agreement essential that we have from you-
That is from the Prime Minister.
-categorical assurance on two points-
They are reasonable points.
-first that you are now convinced that South Saskatchewan river project represents best use that can be made of water available and secondly that the federal government is prepared to proceed with this undertaking if government of Saskatchewan assumes fair share of costs.
Premier Douglas says they have always been prepared to assume a fair share of the costs. As a matter of fact I can imagine that hon. members from Saskatchewan were quite disappointed in the report of the royal commission. We could not be otherwise. How that decision of the commission was arrived at I find it difficult to understand. I noticed that when the report was first issued the Minister of Agriculture made some very caustic comments regarding the report as made by that commission to the government, although he denied some of the language that was attributed to him.


Stanley Howard Knowles: The minister called it a silly blank, blank report.


Major James William Coldwell: I know that is what was in the press, but I can only guess what the "blank, blank" stands for. In view of the fact that this is a navigable stream the damming of the river is a federal project, and

Supply-Agriculture
the cost and allocation of the cost were discussed with the government of Saskatchewan in 1951. Any further proposal to vary this should not be requested from the province of Saskatchewan but should come from the federal government. If they have any further suggestions to make regarding costs and allocation of costs, it is the federal authority and not the provincial authority that should take the initiative. Moreover, it is the federal authority which has all the engineering and other details, all the estimates and everything else in connection with this project.
I suppose that with an election coming along and the disappointment there is in Saskatchewan, the Minister of Agriculture is anxious to prolong the discussion and place the responsibility where it certainly does not lie. I am not going to be a party to that, and I am sure the government of the province of Saskatchewan will not be a party to that kind of thing. This project is too big to play politics with. I do not think anyone can accuse me of ever playing politics with this important project, and I do not intend to do that either now or in the future. I hope the Minister of Agriculture will not be able to introduce a political angle into this.
There is an election coming and a definite proposal is up to the federal authority and none other. A tentative agreement having been reached, and this being a navigable river under the jurisdiction of the federal authority there has never at any time until recently been any suggestion that the province should be called upon to do more than was agreed to at Regina on February 9, 1951. I have tried to place the facts before the committee. The minister says I have omitted a letter. If I did so it was done quite inadvertently and I shall be glad to have the minister complete the record.


James Garfield Gardiner: Did the hon. member read the letter of August 15, 1951?


Major James William Coldwell: I thought I had all the correspondence with me. Did I not read it?


James Garfield Gardiner: The premier's letter was dated August 2 and I replied on August 15. I do not think the hon. member read that letter.


Major James William Coldwell: I may have it in a separate file for some reason. Perhaps the minister would complete the record in that respect.


James Garfield Gardiner: Mr. Chairman, may I just reply to one or two things before we go on to some other matter. Statements have been made with regard to the letter that was prepared and sent to the premier of Saskatchewan under date of April 24, and it was suggested that I must have written this

letter in Regina on April 24. Perhaps I should review some of the history of the discussions that have been going on. It will be recalled that when we were discussing this matter some time ago-


Major James William Coldwell: May I ask the minister why that letter was delivered by messenger and not mailed.


James Garfield Gardiner: I shall come to that. When the matter was being discussed here previously, one of the questions that came up was whether we had discussed the matter and whether this government was going to build the South Saskatchewan river dam. I stated that it was not discussed in 1951 at the time the proposal was before the government, and that it was not discussed again when the report of the commission was received.
I think it follows that before I wrote the letter that was written to Premier Douglas the question certainly was discussed. We had continuous discussions in council about it and finally the letter which I sent to Premier Douglas was passed upon by council. It constitutes the present policy of the government in relation to the South Saskatchewan dam.
That statement of government policy was dealt with in the manner in which statements of government policy always have been dealt with in this house. Had I made the announcement when I was in Regina or had I made it in any other place but this House of Commons I would have been strongly criticized for having done so. This was an important matter of policy having to do with a most important question, and for me to have gone to Regina and made the announcement there before the Canadian Club, to which I happened to be speaking on April 24, I am certain would not have been acceptable to the leader of the C.C.F. party, nor would it have been-


Major James William Coldwell: Mr. Chairman-


James Garfield Gardiner: Just let me finish the story and I think you will be satisfied. I do not think it would have been satisfactory to the members of any other section of the house had I done that. When I was speaking on February 24 to the Canadian Club in Regina I said that had the matter been dealt with in the house prior to my coming there I would have dealt with it at that time, that that would have been the subject of my speech. But as it had not been dealt with and as it would be necessary for me to deliver any message I had to the house before discussing it outside, I told them it would be impossible for me to discuss it at that particular time. I said I would be discussing it here in the course of a few days.	.

But I left a sealed copy of the letter I desired to have delivered with Mr. L. B. Thomson, commissioner of the P.F.R.A. I asked him when I rose in the house to deliver my speech, which I thought would be at about 11 o'clock in the morning-it was about 9 o'clock in the evening-to personally deliver the letter to Mr. Douglas and tell him the reason he had not had it before, that I was making my announcement on the floor of the house and intended him to have it before I read it to the house. That is why it was being delivered to him personally.
When I walked out of the house I went to my office, and they told me they had been in touch with Regina. They had been told that when Mr. Thomson tried to locate Premier Douglas he found he was at a banquet. He took the letter to the banquet and as Mr. Douglas was engaged, I suppose in making a speech or doing something else, he gave the letter to Mr. Nollet, the minister of agriculture, and asked him to give the letter to Mr. Douglas as soon as he was not engaged. I assume, since there is a difference of two hours between our time and Regina time, that the letter was delivered at least to one member of the government before I had actually got to that part of my speech, which took some considerable time.


Major James William Coldwell: Two hours' difference; midnight, Ottawa time.


James Garfield Gardiner: There is a difference of two hours in the opposite direction; my speech was forty minutes long, and this was the last thing I dealt with in my speech. Therefore, whether or not Mr. Douglas had read it, I think the letter was in the hands of the government before I undertook to place it on the record here. Whether or not it was, it was my intention that the letter should be left there to be delivered in order to make absolutely certain that it was in his hands by the time it was produced here in the house. I make no apologies for following that plan which was adopted at the time.
I have no criticism to make, either, of the fact that the leader of the C.C.F. party has placed the letters on the record. I have them here, and I was going to put them on the record some time before we got through with this discussion if someone else did not do so. There is only one letter which was not read into the record and I think I should read it as close to the time the other letters were read as it is possible for me to do so. It is rather lengthy, and is only reviewed in the letter which I read to the house the other evening. I replied to the letter of August 2 on August 15, and this is the statement I had prepared for the government at Regina. It reads as follows:
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I have yours of August 2 and in reply would state that the government is experiencing a little difficulty in securing the services of the type of person they desire to have the opinion of as to what would likely be the result upon the Canadian economy of constructing a dam on the South Saskatchewan river. It was hoped that someone with sufficient standing could be secured as chairman to warrant that whatever recommendation is made would likely carry weight with the general public. I may state to you confidentially-
This is the reason the hon. member did not have the letter. The word "confidentially" is used in the letter to the premier, and I suppose he did not feel that he was justified in releasing it. But since the matter is now long past I do not think there is any reason for that, and I will read the letter just as it is.
I continue:
I may state to you confidentially that two persons have already been approached who, after some consideration, have decided that they could not find the time to take on the work.
That explains one of the remarks made by the leader of the C.C.F. party a few moments ago.
I am afraid that if information were given to the public with regard to the matter it might interfere with the setting up of the committee. However, the government succeeded in obtaining the consent of two of those who were asked to form a part of a committee of three, and I have been hoping daily that a suitable person would he found to fill the third position.
I can assure you that no time has been deliberately lost in getting this committee set up. Every effort has been made to secure the services of the type of person whose views would be acceptable to all interested parties. I feel certain that the committee will be announced very shortly.
The other question about which I have been somewhat concerned is the fact that the lands and resources, including water other than in navigable streams, have been turned over to the provinces. This being the case, we have taken for granted that if any one of the provinces were to transgress against the rights of another there would exist some right of action in the courts. We had thought to avoid any necessity of such difference arising by setting up the prairie water board. It was my understanding that it was hoped this board would find it possible to produce an agreement among the provinces as to what the division of water actually should be, and that this agreement would be put in such form as to leave no question before expenditures were made.
The question which you raise with regard to allocation of water for developments in Alberta would appear to me to be entirely outside the issue under discussion. The water rights which have been dealt with had been granted to the areas concerned prior to the turning over of the resources to the provinces. My understanding is that the whole question as to their right to the water has been settled many years ago. On the other hand, utilization of water on such projects as the Red Deer in Alberta and the South Saskatchewan in Saskatchewan has not been dealt with. If that is the case, it would be advisable to have a decision reached before an effort is made to obtain final decision at Ottawa.
I do not think that it is reasonable to suppose that Ottawa is going to put up a battle for the right to spend money in Saskatchewan. I would hope that the Saskatchewan government would feel that there was some obligation upon them to clear

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up any differences which may exist between Saskatchewan and Alberta or Saskatchewan and Manitoba. I do not think that obligation should rest with the federal government, and I am afraid that unless it is borne by the Saskatchewan government there could be considerable delay in obtaining consent to the expenditure of money for any purpose upon or toward the development or utilization of waters of the Saskatchewan river.
What I am attempting to suggest is that in my opinion the province insisted on having the obligation to develop its own resources prior to 1931. They were finally given that right. It would appear to me that if they are suggesting now that the federal government should assume the cost in whole or in part of any undertaking to develop the resources they should first clear away any differences which may develop as between the provinces themselves which could result in damages being claimed against the party which undertakes to carry out the particular development.
This was the final letter in the group of letters, and it does deal directly with some of the questions raised by the leader of the C.C.F. party.


Major James William Coldwell: Does the minister not think it is an indication of their good faith and their intention to settle this water problem that they gave their consent to the St. Mary dam project and the allocation of water in that regard? Were they not prepared to clear up this matter of water rights at any time?


James Garfield Gardiner: I hope nobody can quote anything I have said at any time which suggests bad faith on the part of the Saskatchewan government. I have never had any intention of doing so, and I am certainly not going to do so now. I would say that at any time I have been discussing the question with the Saskatchewan government, I have not gone quite so far as has been suggested in the reading of the letters which have been read; and in order to make it plain as to what the position is I think one only needs to read again the letter which I read to the house the other evening I gave a review of all these letters and the discussions which had taken place. The first discussion, which was referred to in the remarks of my hon. friend, was on June 24, 1950. The only reason I went to Regina to discuss the matter on that date was because of what I have just read from the letter that was not read previously, namely the fact that these resources were under the control of the provinces.
We had discussions on the floor of the house during which members had got up and said the province had nothing to do with this matter, that the province should have nothing to do with it, that this was a project which was entirely the idea of the federal government, and being entirely the idea of the federal government we should pay for everything having to do with it. In

order to make it perfectly plain that that kind of discussion would probably not get us very far, after we had been discussing the matter here I said in the house, without having communicated with the Saskatchewan government, as the hon. member has pointed out, that I was going to see the Saskatchewan government. I had my mind made up then to be in Regina on a certain day, and I said I would see them. It is true that wires came through before I had the arrangements made; nevertheless I was there and saw them, as I had announced to the house.
I went there for the purpose of clearing up something we had been discussing here, and to point out to the province that if anyone was legally obligated to do these jobs it was the province and not the dominion government. I pointed out that the fact that we were putting our engineers to work in order to develop possible projects was not any assurance to anyone that we were going to undertake the projects. We would make a report first to the province concerned as to what the possibilities were, and then we would discuss the matter with them under plans which we had already agreed upon and about which we had already passed an order in council. Those discussions would take place under those plans.
I made that known to the government of Saskatchewan on my first visit. I think we met them for about an hour in Mr. Fines' office. Mr. Douglas was not home at the time, and Mr. Fines acted as chairman of the meeting. All the other members of the government were there, and we made it as plain to them as we could that this was a matter which was still in the embryo stage, so to speak. It was one of those projects upon which we had put engineers, but about which we had announced no policy in connection with construction, and we wanted it understood that if there were an arrangement it would have to be agreed upon.


Major James William Coldwell: That was the August meeting in 1950?


James Garfield Gardiner: It was June 24, 1950.


Major James William Coldwell: Subsequently, may I point
out to the minister, you came to a tentative understanding with regard to cost.


James Garfield Gardiner: I know this story pretty
well by heart. You do not need to hurry me on it. I will get to it all right. The meeting of June 24 was a preliminary meeting before there were any reports in connection with the matter, at which we announced to them that there was a possibility of building a dam on the South Saskatchewan river at Coteau creek. We said the engineers had come to that conclusion and we wanted to

tell the provincial government that that was a possibility. Our reason for wanting to tell them was that, after all, the resources were under the control of the province. At the time it was suggested to us that the province was not very much interested in it.


Major James William Coldwell: Oh, well, it was.


James Garfield Gardiner: Well, they did not say so.


Major James William Coldwell: Yes, but they were.


James Garfield Gardiner: I was there at the meeting,
and you were not.


Major James William Coldwell: I was in the province.


James Garfield Gardiner: You may have been in the
province, but you were not at the meeting.
I understood why they felt that way about it. They still had the opinion that the federal government had been advocating the whole project, and therefore ought to build not only the dam but the whole project. I pointed out to them at that time that, no matter what their views on the subject might be, in all probability when we got down to discussing that feature of it the federal government would not be prepared to go that far.
The matter was left that way, and then in February, 1951 I again met the government. On that occasion the premier was there. There was considerable discussion at that meeting. It started out with the same contention as the one where we had left off at the previous meeting, namely the contention that the federal government had raised the whole question, had raised the hopes of the people in connection with it, and that being the case we should finance it. I took the position that there would not be any possibility of getting a plan of that kind even discussed; that we certainly would not go any farther than we had gone elsewhere. The question was raised as to whether that meant that, because we had built the dam on the St. Mary, or had undertaken to build the dam, we would also build any dam that had to be constructed on the South Saskatchewan river.
At that time I raised the question of power, and we discussed it for some considerable time. Eventually the premier said to me just what he said in the letter. He said the Saskatchewan government were of opinion that we should at least build and pay for the dam. He said they were quite prepared to undertake the construction of the power facilities, and the setting up of the irrigation plan. It was estimated at that time that one would cost some $8 million and the other about $25 million all told, $19 million for ditches and the distribution of water and the
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remainder for the levelling of land. He said they were quite prepared to say then that they would do that. If you read the letter carefully, you will find that as Mr. Douglas goes through it he says at two different points that that was a matter which was to be the basis of discussion. He states exactly what he said to us, namely that we ought to pay the whole cost of the dam, and he maintains that.
But in finishing up the letter he also says that he understands I did state that this could quite properly be a basis for discussion.
I agree that I did say that to him, that this could quite properly be a basis for discussion.
I went farther than that. I said that I thought the best thing for him to do in order to put his position before the government was to write a letter and state what his position was. It was that letter which was read here today, and that was the position of the government of Saskatchewan. They said, we are prepared to pay $33 million for the distribution of water and for the setting up of the power facilities. We do that conditional upon the federal government spending $68 million to build the dam. I am not questioning that at all; that is what he said. What I am questioning is the assertion that I agreed to it.
The hon. member rather doubted that himself, because he said the only reason I must have agreed to it was that I did not answer the letter until June. It is quite apparent he has never been in a government. If he goes back over the files I have created in the many years I have been in the government, either out there or here, he will find there are many times when you cannot write an answer to a letter the day after you get it. After all, we have a government of 20 men. We have to discuss these questions. I cannot commit the government to an expenditure of $68 million by going out to Regina and sitting in a roam with a group of men who have nothing to do with running this government. That should be obvious to anyone.
The next letter which went forward acknowledging this letter was one which was sent after we had discussed the question here in the house, and after there had been a submission made to the government. The result of that submission to the government was the suggestion for the setting up of a commission to investigate the whole matter further. We intimated what government policy was with regard to it. Now, I am not going to discuss what happened under the commission. The commission sat and heard evidence. The commission reported, and that report was laid on the table of the

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house. It has been discussed in the press and by individuals right across Canada.
I am going to say this. No matter what I think of the commission's report or what anyone else thinks about the commission's report, I am not going to admit that having the commission report did not do any good. If it did not do anything more, it created an interest in the whole matter in this country which is worth having, and that interest was stirred up from one end of the country to the other.
This is not a job that can be completed in a few months or in one season. It is a job that, whenever we do start, is going to take ten years to complete. I am suggesting, therefore, that the matter of a few months' delay at the beginning is not as important as some people would try to make believe it is. It is just as important to have the public interested, and I think the public is interested now. The suggestion is made as to what is the government's position. I am not going to read the letter again. I have said enough to indicate what our position is. I think if I read the last paragraph before the letter in my speech of Monday, April 27, it would be sufficient.
It is, therefore, important for me to state the present position of the project. After considering thoroughly the information compiled and the views expressed in the report of the Hogg commission as well as the comments on it by the Saskatchewan government, this government has decided that we should be prepared to review and continue our discussions with the government of Saskatchewan on the feasibility of the project as set up by P.F.R.A. and the willingness and ability of the provincial government to assume the costs of what we would consider provincial obligations.
In other words, we have just simply suggested that we are prepared to discuss the question with them further. What have we the right to discuss under the order in council which sets up this whole matter? The order in council P.C. 2298, drawn up on June 19, 1947 and agreed to by all three western provincial governments as well as our government, states this. I am not going to read the first paragraph. Everyone can get it and read it for himself. It is just the lead-off in the order in council. It then states:
The committee, therefore, on the recommendation of the Minister of Agriculture-
That is the committee of the privy council.
advise that Your Excellency may be pleased to approve the following principles to govern the policy of the dominion in respect to such projects:
That is large irrigation projects:
1. Before Canada undertakes the construction and operation of a project it will be necessary for the province in which the project is located to enter into an agreement:
(1)	to transfer any water rights required for the construction and operation of such project;

(2)	to make available to Canada any provincial crown, lands which may be required for dam site, reservoir or canal right of way purposes in connection with such project;
(3)	under which the water will be utilized by the province or some other authority or organization on the terms set out in such agreement.
This is the point at which we were in 1951 when the matter was referred to the commission. So what the government has actually done is this. It has gone back to that point and said to the province, "We are prepared now to discuss the question which we would have had to discuss with you had we gone ahead back in 1951."


Major James William Coldwell: The province of Saskatchewan did not say that.


James Garfield Gardiner: I will read the letter to the hon. member. He read it a few moments ago. I will read him our answer to it.
Then I just want to say this with regard to that matter. The province of Saskatchewan is not in a position today-and they will not be in that position until the water board makes a decision-to transfer the water rights to us. That board was set up by the three provinces and ourselves, with authority to recommend in connection with it. We certainly would not proceed without a recommendation. As the leader of the C.C.F. party has said, the last time they met they decided not to make a recommendation.


John George Diefenbaker: Will you proceed if a
recommendation is made?


James Garfield Gardiner: I will tell the hon. member in due course. He is getting ahead of me.


John George Diefenbaker: No; I like to ask
questions.


James Garfield Gardiner: The hon. member is getting too anxious. It is obvious to anyone that before the province of Saskatchewan can turn over the water rights to us, they must have the water rights. So we have said that we have reached the stage now where that question ought to be settled, as to whether they are in a position to pass them over. As to No. 2, they have already agreed to it. There are 80,000 acres in the South Saskatchewan river valley and along the sides of it that are owned by the province of Saskatchewan; and they have said that they will make those 80,000 acres of land available to the dominion if the project is set up, without any cost to the dominion. They have agreed to No. 2 already and there is no necessity for their doing otherwise. As to No. 3, they have to make an agreement under which the water will be utilized by the province or some other authority or organization on the terms set out in such

agreement. In other words, three things must be done before we can even start to talk to the province about doing the job.


Major James William Coldwell: The last was implicit in the understanding.


James Garfield Gardiner: It is not implicit in anything until an agreement is drawn up and signed.


Major James William Coldwell: It was stated by the
province.


James Garfield Gardiner: It has not been stated at any time by both parties; it has been claimed by one and not agreed to by the other, in some instances. But the position is this under that clause:
(3) under which the water will be utilized by the province or some authority or organization on the terms set out in such agreement.
In other words we must have an agreement. What we have said to them in the letter which had been forwarded to them is: "We are prepared to sit down with you and discuss the first question-are we going to get the water rights, have you applied for them, when do you expect to get them-and we are even prepared to talk about that matter now; but we do not see how we can get anywhere with an agreement to go ahead with the job until you have the water rights and are prepared to hand them over to us."


Percy Ellis Wright: Was that policy followed in Alberta with regard to the St. Mary dam? They went ahead with that.


James Garfield Gardiner: That policy has been followed throughout, except for this-


Percy Ellis Wright: It was not followed as far as the St. Mary dam is concerned.


James Garfield Gardiner: I would ask the hon. member just to sit down. I have the floor at the moment and I will give him the answer.
At the time the St. Mary water project was under discussion, it was not a question of discussion as between the province of Saskatchewan and the province of Alberta or the province of Alberta and the province of British Columbia. It was a matter of discussion as between the United States and Canada. The international joint commission had intimated that we would have to start operations in Canada, in order to indicate our intention of using the water, if we wished to get a decision that this water belonged to us. So we had letters pass between Alberta and ourselves, and Alberta agreed that no matter what we decided to do in connection with that dam, they would apply whatever terms we had made as a result of our discussions with the international people; they would apply the same
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terms to whatever they had done and paid for or we, on the other hand, would apply the terms to what we had done and paid for. The result of that is that the Alberta government had built and paid for the first storage outside the St. Mary dam and reservoir. After it was all over we adjusted that payment by accepting responsibility for it and paying for it.
I just say that in order to indicate that this matter involved international questions that are not involved at all in the other matter, and they had to be dealt with in the manner in which we dealt with international problems. But the fact is that it was made known at that time that these were questions which still had to be discussed and settled. Now we have renewed the discussion at just the point where we left it then, and have said to the province that we are prepared to come and discuss this question with them. The letter means that. The letter says that. It says it in two or three different places. I do not need to say anything more about it at this moment.
A few moments ago the hon. member for Rosetown-Biggar read a telegram that was received from the premier of Saskatchewan. The Prime Minister has replied. I think I had better read the two communications so they will be together in the record. The one which has already been read is signed by Mr. T. C. Douglas.


Major James William Coldwell: I think I read only a paragraph.


James Garfield Gardiner: I shall read it all and we will get it all on the record. The telegram reads as follows:
Regina, Sask.
Right Hon. L. S. St. Laurent, Q.C.,
Prime Minister of Canada, Ottawa, Ont.
On January twenty-third nineteen fifty three I wrote you indicating Saskatchewan government prepared to enter into agreement re South Saskatchewan dam and willingness to pay share of the cost. In House of Commons February ninth you stated that you were not afraid of cost but that you were not convinced that this was the best use to be made of the water. You indicated that if you were convinced you were prepared to recommend project to parliament. I am in receipt of letter from Mr. Gardiner asking provincial government to submit proposal for construction South Saskatchewan dam. Before submitting proposal or discussing agreement essential that we have from you categorical assurance on two points, first that you are now convinced that South Saskatchewan river project represents best use that can be made of water available, and secondly that federal government prepared to proceed with this undertaking if government of Saskatchewan assumes fair share of costs.
T. C. Douglas

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The Prime Minister sent this telegram in reply under date of Ottawa, April 29, 1953:
Honourable T. C. Douglas,
Premier of Saskatchewan,
Regina, Saskatchewan.
Your telegram of April 28 regarding South Saskatchewan project has been submitted to my colleagues. Present position of the federal government is fully set out in Mr. Gardiner's letter of April 24. It does not ask the provincial government to submit proposals but simply states that the federal government is prepared to consider a definite proposal from the provincial government for co-operation in the project on certain conditions and to have Mr. Gardiner discuss with you the terms of such a proposal. Before deciding whether and to what extent the federal government should participate we must know what would be involved and to what extent the provincial government is willing to accept those conditions.
Louis S. St. Laurent.
In other words, I repeat that we are just back to where we were. I may want to apologize to some people for the fact that we have taken some time to have a commission make the report they have made and say what they have said; but again I say that is not all bad. A great many things have been said by the commission that probably should have been said by someone, and it has created a great deal more interest in the project than we had before. But what is set out is that we are back at the point now where "we want the Minister of Agriculture to go", as the order in council provides, "to Regina or the premier to come to Ottawa and discuss the project", and get a full understanding as to where we are going from here, and get both sides committed on this question, which my hon. friend would like to argue are not committed because I did not answer a letter, or something. We will get committed by sitting down around a table, putting it down in black and white, signing it and saying, "We have an agreement."


Major James William Coldwell: May I point out to the
Minister of Agriculture that I cannot see that the Prime Minister's reply bears out the minister because the minister's letter says very definitely:	"The federal government is
prepared to consider a definite proposal from the provincial government for co-operation" and so on. The interpretation he places on that, or the telegram, is entirely different from the interpretation I would place upon this letter. Co-operation in reaching an understanding or agreement is an entirely different matter from a definite proposal from the provincial government.


James Garfield Gardiner: Here is what he says:
Your telegram of April 28 regarding South Saskatchewan project has been submitted to my colleagues.

That is the whole government. The telegram goes on:
Present position of the federal government is fully set out in Mr. Gardiner's letter of April 24.
He says that, and he goes on to repeat:
It does not ask the provincial government to submit proposals . . .
There is in my letter a suggestion that we would be quite prepared to receive a proposal that the provincial government may have a desire-I would not say they should not-to go ahead with the project themselves, and might want to say to us what they think we ought to do. If they have any such proposal, we are quite prepared to listen to them; but then it goes on to say:
It does not ask the provincial government to submit proposals but simply states that the federal government is prepared to consider a definite proposal from the provincial government for cooperation in the project on certain conditions and to have Mr. Gardiner discuss with you the terms of such a proposal.
All we require from the provincial government is word that they would like to have me go to Regina some day-I hope it will be after the session closes-and sit down and discuss the matter with them and listen to what proposals they have to make. We have made only two up to the present. One of them is that they must have the water rights under their control before we can proceed to discuss any project. The second is that if they are going to discuss a project for the building of a dam in Saskatchewan that we can assist with, then our assistance is not to apply to the production of power, the reason being that-


Major James William Coldwell: They have agreed to that.


James Garfield Gardiner: No; according to your statement a few minutes ago they have not. The production of power involves more than just putting an $8 million development plant at the dam. If we were to do that alone we would be supplying the cheapest power there is in Canada to a province. Every other province in Canada would be insisting that we do something similar for them, and there would be no way of avoiding it, if we once started into a program of that kind. Therefore we wish to have a discussion with Saskatchewan as to just what position they want to take in relation to that whole program and have some agreement on it before we undertake to go ahead with the project.
Until we have had those discussions, and until we have had those agreements, there is no possibility of this government saying we are going to build a dam. But I am going to say this to you. Once these agreements are reached and we have agreed that all that kind of thing is provided for, this

policy cannot assume anything else but that we are prepared to go ahead in co-operation with the province in doing the job.


John George Diefenbaker: Will the minister answer one question? Will the government go ahead if an agreement is made for the power project?


James Garfield Gardiner: That is what the agreement would mean; the agreement could not mean anything else but that the government is prepared to go ahead. When we sign an agreement we carry it out.


John George Diefenbaker: Would they go ahead with the project?


Major James William Coldwell: Is the government committed to that? Is the government committed provided a satisfactory agreement is reached with the Saskatchewan government? If that is done, are you prepared to spend up to the amount of money suggested by the royal commission?


James Garfield Gardiner: What do you mean by the royal commission? My hon. friends have argued, and so have I, that the royal commission was not very reasonable. They were talking about an expenditure over fifty years, not an expenditure over ten years. We have all said that, and the government of Saskatchewan has said that, and we have accepted the statement of the government of Saskatchewan that they think the project could be gone ahead with on the estimates that were made by the P.F.R.A. We say, "All right, we are prepared to sit down with you and discuss the revision of expenditures under those circumstances." We are also prepared, as I suggested in the last paragraph but one of my letter that I read the other night, to find out exactly what it will cost to build the dam, and there are real ways of doing that, some of which were discussed this afternoon. If we had to follow everything the hon. member for Lake Centre mentioned this afternoon we probably would not be able to do it, but there are things of that kind that can be done.


John George Diefenbaker: There are a lot of
loopholes.


Major James William Coldwell: The Prime Minister said the other night in reply to a question by my hon. friend that the government is not prepared to go ahead, without further information, to recommend to parliament the expenditure of the amounts estimated by the commission, and will not take upon itself to do that until it has further information.


James Garfield Gardiner: That is exactly what the letter says, and the letter suggests that we have ways of doing that.
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John George Diefenbaker: That is exactly what the suggestion was today.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
John George Diefenbaker: Mr. Chairman, I am sure that generally speaking throughout the province of Saskatchewan the announcement made by the Minister of Agriculture today will be received with feelings of widespread disappointment. The situation regarding the South Saskatchewan river dam and irrigation project is that everywhere public opinion has been aroused, and the people in general have been led to believe in successive general elections, as well as in the by-election in Rosthern in 1948, that there was nothing in the way of proceeding with the dam providing the engineers of P.F.R.A. came to the conclusion that the project was one necessary for the province, one that could be built and one that should be built.
The situation in 1945 as I remember it, and I am not going to give any quotations although I have them here, was that we in Saskatchewan believed that this project would be proceeded with. Following the election of 1945 there were engineering works carried out and expenditures were made from year to year to cover preliminary engineering examinations. By the time the 1949 election came along the Minister of Agriculture and those associated with him left no doubt in the minds of the people that this work was going to be proceeded with. Following that election the water board was set up providing for representation of the three prairie provinces. We were led to believe that providing the engineers of the government, acquainted as they are with conditions in Saskatchewan, would say this project would be an efficient and effective one, the work would be proceeded with. Then we were met with a royal commission, which postponed any action for a period of a year and a half.
In August of 1951 the Prime Minister spoke in Saskatoon and, according to the report in the Saskatoon Star-Phoenix headed "LongTerm Value of Outlook Dam to Canada Primary Consideration..." he used these words:
The Outlook dam is a big undertaking. But none of us is scared of big things-if they are sound. We are not concerned with how we will pay for it. What we want to know is whether it is a good thing for the country.
Then he goes on to say-and I refer to the Prime Minister-
He was convinced that Canada would grow in population at least as fast in the future as in

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the past and, in the light of this optimism, felt that such projects as Outlook and the St. Lawrence seaway should no more disturb this generation than the equally big plans for building transcontinental railroads disturbed Canadians of the last century.
Then he said this:
While the feasibility of the Outlook project had been demonstrated there was still some divergence of opinion as to its long-run economic merit from a national point of view and it was this question which the commission to be set up would study.
There was no concern then regarding division of responsibility as between federal authority and the provincial government. In fact, until 1951 there was never any suggestion that responsibility for any part of this project should rest on the provincial government. However, the question was mooted then for the first time by the minister, and immediately the government of Saskatchewan gave the assurance that this suggestion about provincial responsibilities in respect of irrigation would be accepted by the province. Only after that was the royal commission set up.'
As I look at the peregrinations in connection with this project it appears to me that at election time high hopes are raised. Between elections they recede by twists and dodges and meanderings here and there. I must say that I had high hopes after the vote in this house in February that the government would at least show its intention of going ahead with this work. I am disappointed that the Prime Minister is not here for, after all, regardless of what the Minister of Agriculture or any other minister may consider to be the merits of this project, the final responsibility as to whether or not it will be proceeded with must inevitably rest upon the Prime Minister and other members of the cabinet.
I think those of us in Saskatchewan have a right to ask from the Prime Minister something of a definite nature regarding this matter once and for all. Now something new has come around, and that is that the provincial government has not yet made a proposition or is asked to make a proposition. A proposition for what? The question of money and cost was never a consideration, at least so the Prime Minister said in 1951.
When the matter was discussed in the house in February we had the memorable scene of hon. members from Saskatchewan standing up one after the other and saying, "We believe in this; we are all for it; we are all firmly behind it" and then voting against it. Today we are in the position where something new has come up. I hold no brief for the government of the province of Saskatchewan, but I do say that certainly
[Mr. Diefenbaker.l
in anything I have seen and in any correspondence I have read that government has been careful to accept its responsibilities and in no way raise a smokescreen to evade its responsibilities in so far as the production of power and the distribution of water for irrigation are concerned.
Why this latest twist? Between elections the possibility of the dam being built wanes; when elections are called the probability waxes strong. This latest development was to say the least unexpected. I had always believed that the minister was a strong devotee of the need of this dam being built, but over the last eight years we have witnessed that twisting and meandering and dodging back and forth with new and successive excuses, all of which have resulted in postponement and some of which apparently had that designed purpose.
But to me the latest is the most surprising of all. I did not think the government would be able to produce a new one. After all, there are only so many cards in the deck, but this time the Minister of Agriculture has been able to reshuffle the deck of excuses and produce a new joker. I want to hear the hon. member for Swift Current get up in the house and join with us in a demand for this, because he and those associated with us can do it.


An hon. Member:: Who is "us"?


John George Diefenbaker: They will have no opportunity this time of voting on the question. My hon. friend and those from Saskatchewan who are with him had that opportunity, but they did not vote.


Mr. Siuder:: That was not the question at all.


Mr. McCusker:: You are not that stupid, are you?


John George Diefenbaker: What did he say?


Emmett Andrew McCusker: You asked me to repeat my interjection. I said that we were not that stupid. The Saskatchewan dam was not the question; it was a vote of want of confidence.


Louis-René Beaudoin: Order.


Emmett Andrew McCusker: Did I say something I should apologize for?


Louis-René Beaudoin: Yes.


Emmett Andrew McCusker: What did I say?


Louis-René Beaudoin: A few words must be withdrawn.


An hon. Member:: He will have to take it back.


Emmett Andrew McCusker: Does my hon. friend say that-


Louis-René Beaudoin: Order.


Emmett Andrew McCusker: Does my hon. friend wish me to retract? He will have to give me an opportunity. When he brought in the vote of want of confidence early this session he brought it in in such terms that he forced us to vote against the Saskatchewan river project or support him in an attempt to defeat the government.


Some hon. Members:: Oh, oh.


Mr. Ross (Souris):: Don't overrate yourself.


Louis-René Beaudoin: The hon. member has
explained his position as against that which was stated by the hon. member for Lake Centre. The hon. member for Lake Centre may continue.


John George Diefenbaker: The hon. member may be a parliamentary assistant, but that does not give him any rights over other hon. members. I particularly made it clear that it was not a vote of want of confidence as was the case when the milk subsidy matter came before the house in 1946. I wanted this vote so we could make a united stand. Hon. members talked one way and voted in another. They have been trying to alibi themselves out of it ever since. It is obvious that the interruptions indicate that my hon. friends have reason to feel that they ought to start to explain.
The fact remains that as far as the appointment of the royal commission was concerned, that was evasive action. I have before me a report of the remarks of the hon. member for Kindersley when he spoke at the annual meeting of the Liberal association in Saskatoon on October 8. I read from the Saskatoon Star-Phoenix as follows:
During the discussion of resolutions, it was suggested from the floor that one dealing with the proposed South Saskatchewan river development scheme should be passed.
The chairman of the resolutions committee

J. E. McDermid-replied that the group felt it better not to have one.
Retiring president J. S. Woodward asked: "If we do, would we congratulate the government on the appointment of a royal commission to investigate the feasibility of the scheme?" "There are," he remarked, "some of our fellow Liberals who do not approve of the appointment".
Mr. Larson was asked for his views on the subject. The Kindersley M.P. replied-and these are his words-"The royal commission on the South Saskatchewan river project has a lot of eyewash mixed in with it. The project," he said, "has been investigated by both Canadian and American engineers and found feasible". "The federal agriculture minister," Mr. Larson added, "does not want it to become known as 'Jimmy Gardiner's white elephant'
The Liberal federation finally agreed to commend the government for the steps it already has taken towards construction of the dam and power project.
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And at the same time urge that nothing be allowed to interfere with an immediate start on the work.
There are a couple of questions that I think can be asked at this time. The royal commission expended a great deal of money on its investigations. Sessional paper 170D of April 20, 1953, was an answer to the following question:
1.	Who were the counsel on the royal commission on the South Saskatchewan river project?
2.	How was the sum of $66,935.07, being expenditures for counsel as set out in sessional paper No. 170C of March 27th, 1953, distributed, and to whom?
The answer of the Prime Minister was as follows:
In the question to which sessional paper No. 170C of March 27th refers, the hon. member asked for information concerning
(a)	commissioners
(b)	counsel
(c)	staff
As there was no category in which expenses for professional other than legal advice could be placed, the term "counsel" was given a broader interpretation than usual and the figure of $66,935.07 includes fees and travel expenses for persons rendering professional advice as follows:-
Details of the fees paid to engineers and solicitors are given. In the case of the engineers, the fees paid to three of them were comparatively small. Among the larger amounts were the following: D. Hays, $9,112; Mannix Limited, $35,000; G. Haase, $3,963 and K. A. Buckley, $3,286.70. The total was $66,934.71, including travelling expenses of just under $10,000.
The latest explanation is that the government is waiting for the province of Saskatchewan. Surely the people of Saskatchewan do not have to wait for something so necessary to the future of that province, as well as of the country in general, because of some created or illusive difference of opinion between the provincial and federal governments. Certainly fairness demands that I say that in everything the provincial government has done in this matter-and I restrict it to this matter-I believe they have accepted their responsibility. In other words they are supposed to provide that portion of the total cost involved in the power and irrigation works. I see nowhere any equivocal statement in respect to that responsibility. If there is, I should like to have it pointed out.
On the other hand, raising this question at the present time in the form in which it is raised cannot but have the effect of affording another loophole and excuse for the government failing to face the problem directly now. If the dam is not to be built,

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let us know. If it is to be built, give us that information. I ask the Minister of Agriculture but one simple question. Is he prepared, regardless of whether or not the cost estimated by the royal commission is correct, and if the Saskatchewan government is prepared to accept its proportionate responsibility to the degree indicated by the needs of irrigation and power, to assure us that this project has now been properly examined, found feasible and will be constructed? If we can have that assurance, then as far as I am concerned the matter is clear and commendation is due. If, however, it is to become merely a plaything through the raising of a succession of new and sometimes fantastic excuses for not facing the problem, then that is not good enough. Certainly no one expects the dominion to accept responsibility beyond what is federal responsibility. But if the water board, representative of the three provinces, is able to come to an agreement as to the diversion, disposal and distribution of the waters of the Saskatchewan river, and if the Saskatchewan government is prepared to accept its responsibility for that portion of the cost involved in the power and irrigation works, then surely the house and the country have the right to a definite answer.
On the other hand, we in Saskatchewan- and this is true without regard to political division-are very insistent with respect to the need of this work being proceeded with. We in Saskatchewan have assumed our share of responsibility in connection with projects elsewhere. Over and over again we have shown our support for such things as the St. Lawrence seaway, other waterways projects and any other meritorious project needed for our national development. I am not going to argue as to the need for the South Saskatchewan river project because the minister and I would see eye to eye on that, but there has never been anything for which the people have been more insistent in asking, as to which they want us to face the issue and deny ourselves the luxury of alibis, and for parliament through the government to let the people of Saskatchewan know once and for all whether or not this project will be proceeded with.
When the question was asked before the recess the minister indicated that the answer was in the affirmative; but in the last seconds before adjournment, when the leader of the C.C.F. party pointed out that this was a somewhat different attitude from what was taken in February, the minister said that the stand today is the same as in February. Certainly there was nothing in the nature of

a definite promise in what was said in February. The Prime Minister was asked whether or not, over and above the investigations by the royal commission appointed by the government, the project would be proceeded with.


James Garfield Gardiner: I think my hon. friend is speaking of a different February.


John George Diefenbaker: I did not hear the minister.


James Garfield Gardiner: I think the February about which the leader of the C.C.F. party was talking was February, 1951, not last February.


John George Diefenbaker: In February, 1951 the situation was different. I took it that it was February, 1953. In any event, in February, 1953 I asked the Prime Minister a very simple question as to whether or not, if feasibility plus economic value were determined as a result of the further investigations and researches asked for by the government, the project would be proceeded with. The Prime Minister's attitude was simply a qualified affirmative answer subject, however, to eventualities that might arise in the future.
I am not going to labour the matter and argue it over and over again because we have done that in the past. We in Saskatchewan know what the need is. We know that this dam will provide a diversification of industry that hitherto we have not had. We know that it will guard a large portion of central Saskatchewan against the repeated effects of drought. We know that we need industry in Saskatchewan if we are to keep our population there. We have been led to believe by the investigations of P.F.R.A. engineers that the project is feasible.
Political consideration aside, in the event that the province of Saskatchewan, to whom a definite proposition should be submitted as I see it, accepts the categorical terms laid down by the federal government-apparently the federal government does not intend to accept any suggestions from the provincial government, for it has had that opportunity in the past and has not done so-what we want above everything else is that the Prime Minister shall give assurance that in fact this work will be proceeded with and not delayed, played around with and postponed until after the next election. We do not want it to become an election football in 1953 and then be put in mothballs until the next election in 1957 or 1958. All of us are agreed on the need. There is no division between the members of any of the political parties. We want this matter decided so it will no longer be something which is talked about at election time, promised at election time, and forgotten thereafter. We do not want it put in mothballs until an election in 1957.


Irvin William Studer: It looks as though we are going to come back.


John George Diefenbaker: I am not talking about the government; I am talking about an election in 1957.
Having said that, subject to anything that may require an answer, I have made the last representation I am going to make on this subject because the facts are there, the statistics are available and the records are in P.F.R.A. All that is needed now is action to carry out what has been so often promised. We want implementation of the promises that have been made that the work will be done.


Mr. Quelch:: Mr. Chairman, every time we consider the agriculture estimates we seem to jump into a Saskatchewan political scramble. I should like to ask the minister one or two questions regarding the South Saskatchewan, if the Saskatchewan members do not object. The minister has stated that he will be prepared to discuss the proposal of the Saskatchewan government regarding the South Saskatchewan project just as soon as the matter of water rights has been decided by the prairie water board. The question I am interested in is this. Will the federal representatives on that board be prepared to vote in favour of an allocation of water for this project?
I ask this question because the last time this matter was before the water board on September 5, 1951, a motion was moved by Mr. Scammell, the Saskatchewan representative, asking that an allocation be made. When a vote was taken the rest of the board voted against it. The reasons they voted against it were mainly covered by two points. Mr. Ben Russell, the representative from Alberta, stated that he thought an investigation should first of all be made into the North Saskatchewan project. At that time he said he was taking that stand on his own and had not consulted the province of Alberta concerning it. It is true that at a later date apparently he was able to convince the Alberta government that an investigation into ihe merits of the North Saskatchewan project should be made first.
I know some members have stated in this house that that project has been investigated on several occasions. But what they must keep in mind is that great improvements in the surveys have been made by Mr. A. B. Cook of the P.F.R.A. engineering staff. Under his proposal it will be possible to reduce the length of the canals by approximately 100 miles. In view of that fact I think Mr. Ben Russell's suggestion is worthy of consideration, and at least some study should be given to the alternative proposal. The Manitoba representative and the federal representative voted against an allocation being made 68108-288J
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* at that time on the ground that the board should wait until it had a report from the royal commission.
The question which comes to my mind is this. If those two representatives were not prepared to have that allocation made before the report of the royal commission, will they be any more likely to vote in favour of it after a report of this kind? It seems to me they would be less favourably disposed toward it after reading this report than they were before. However, no matter what stand the Alberta and federal governments took at that time, personally I feel that Saskatchewan has the right to use its share of the water in any way it likes. After all, they are entitled to a certain amount of water. If they are convinced that the best uses of that water can be made through the South Saskatchewan project, then they have every right to use it as they like. No other province should have the right to say to them, "You cannot use the water for this purpose; you have to use it for some other purpose." After all, it. is the people of Saskatchewan who will suffer if they do not make the very best use of the water.
I wonder if the Minister of Agriculture could tell us whether or not the federal representatives on the water board will now be willing to support an allocation of water for that project. I can assure the minister that we will do all we can to see that Alberta supports a reasonable allocation.


James Garfield Gardiner: It is probably necessary to discuss the situation in relation to the board before one is in a position to give an answer to that question. The water board was set up in 1947, not in 1945 as was suggested a few moments ago. The order in council setting it up was passed at just about the same time as P.C. 2298, which I was quoting before the dinner hour. The board was set up as a result of the fact that the three prairie provinces set up a water board and notified Ottawa that they had done so. They indicated that they were going to determine the uses that could be made of water on the prairies. We wrote them thanking them for the information, and indicating that we were rather pleased that they had decided to undertake the control and management of western waters. Well, we received a reply to that, that they had no intention of doing any such thing and they were prepared to cancel the board and have another one established on which we would be represented.
As a result this present board was set up. We desired to give this board the authority to determine what the division of the water should be. The province of Manitoba took exception to that. At first the provinces of

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Alberta and Saskatchewan agreed, but later Alberta agreed with Manitoba. The result was that we could not get any other agreement than that any one province could veto the wishes of the others in the matter of water rights. The position now is that you must have a unanimous decision before you can proceed on any decision reached. I do not want to go further into the details than to simply state that. It is a fact that when a matter comes before the board, one province can hold up a decision.
I agree that it is not necessary to have a water board. The water board was put there to make it possible for the three provinces and the federal government to get together and, by reaching an understanding or agreement, make it unnecessary for us to ever carry this question to the courts in order to get a decision. We thought the board could come to an agreement, and when that agreement was reached it would not be necessary to have any controversy about the matter.
What we are saying at the moment, and what we did say in the last letter which was read into the record this afternoon, is that we are not prepared to enter into a matter of controversy amongst the three western provinces as to what their water rights are. We think they should settle that question themselves, and we should not get into the .discussion at all, particularly when they are .asking us to spend mopey on projects in western Canada. All we say is, "You settle that question and we will be prepared to go ahead and discuss the utilization of that water." Until they have settled it, we are not entering into the discussion amongst the provinces.
Coming again to the board, the set-up of the board places Mr. Thomson of the P.F.R.A. as chairman. Then there is a representative from the department of resources here, and one from each of the provinces. Under the constitution of the board a decision amongst the provinces as to what ought to be done in relation to that question has to be unanimous. This government is not going to mix in a question as to what the rights of Saskatchewan are as against Alberta and Manitoba; but any agreement which they reach will certainly have the support of our representatives on that board.


Victor Quelch: That is the point on which I wanted clarification. There is no question of a federal representative vetoing an agreement that is reached?


James Garfield Gardiner: No.


Percy Ellis Wright: Mr. Chairman, it is not my intention to pursue this matter of the South Saskatchewan river dam at any great length.

I think probably everything that needs to be said has been said. The record has been put straight several times already on the matter; the record has been changed and put straight again. I therefore do not think we can gain anything much by further discussion at this time.
There is one observation I should like to make, though, and it is this. While the Minister of Agriculture may never have been in the army, he certainly has learned to play the old army game of "passing the buck" a little bit better than I have ever seen any old soldier play it in my experience in the army. It seems to me that is what has been happening, namely just a passing of the buck, with regard to the matter of who is responsible for going ahead with the construction of the South Saskatchewan river dam. I do not think we can decide that matter in the House of Commons. However, in the coming election I think the people of Saskatchewan will be able to do something about it. They know who has been making the promises before the last two or three elections in the province of Saskatchewan with regard to the South Saskatchewan river dam. I do not think their memories are so short that, when it comes to voting, they are not going to be able to make a decision as to where the responsibility lies. I think we can leave the matter with them; at least I am content to do so.
I now want to deal with some of the things the Minister of Agriculture said in his speech in opening his estimates. The Minister of Agriculture, both in that speech and in a speech which he made previously on agriculture, placed on Hansard a great many figures which indicated that agriculture in this country was in a fairly prosperous condition. As a matter of fact, if the figures placed on Hansard were reflected in cash in the pockets of the farmers in Canada, I am afraid that 85 per cent of them would be paying income tax instead of 10 or 15 per cent as at the present time. That is the proof as to whether or not the farmers are really prosperous. They are prosperous when they are in an income group which is paying income tax. I do not think there is in the Dominion of Canada any other economic group in which the percentage of those who pay income tax is as small as it is in the agricultural industry at the present time. Not only that; the Minister of Agriculture has held his present portfolio for some 15 years, I believe.


James Garfield Gardiner: Eighteen years, to be exact.


Mr. Boucher:: And he will hold it for a long time yet.


Percy Ellis Wright: That may be; that remains to be seen. But I am satisfied that at least the Minister of Agriculture is going to run in his constituency at the next election, and that is more than the hon. member who is speaking is going to do.


James Garfield Gardiner: And more than the hon. member for Melfort is going to do.


Percy Ellis Wright: I want to point out something else. I have in my hand the brief presented to the government by the farmers' unions in western Canada, and here is what they say with respect to agriculture. May I say that I have not heard the Minister of Agriculture deny it. They state:
The fact is that the net average return on capital invested in the agricultural industry was -under 2 per cent over the 20-year period from 1931 to 1951.
The Minister of Agriculture has held the position he now has for 18 of those 20 years. Yet the average return on capital investment in agriculture over that period, according to this brief, is less than 2 per cent. I wonder if anyone in the house can indicate another major industry in this country in which the average return on the capital invested over a 20-year period is less than 2 per cent. The Canadian Pacific Railway, in presenting their case just recently to the board of transport commissioners, asked for a 6i per cent return on their capital investment. They think that is a fair return for the railways. I think probably agriculture is just as important as are the railways. If the railways are entitled to 6J per cent return on their capital, possibly agriculture is entitled to more than under 2 per cent.
When this government enter into a cost-plus contract for war materials, or when they enter into contracts with various industries in this country for the production of equipment that is necessary so that Canada may play her part in the protection of the freedom in this world, they guarantee to the industries in this country which are engaged in producing those goods not 2 per cent but 6 to 8 per cent. I think that, in bringing about permanent peace in the world, the production of agricultural products can probably play just as important a part as the production of armaments. Yet we give no such guarantee to those in agriculture with regard to the amounts which they have invested.
The other day the Minister of Agriculture placed on Hansard a great many figures, and I just want to read one statement he made. It has to do with eggs. As reported at page 4441 of Hansard he said:
The average farm price of eggs for the years 1950-52 was 43 cents per dozen . . .
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I hope he goes on a farm platform and tries to tell the wives of the farmers in his own constituency or any other constituency in western Canada that they received an average price of 43 cents a dozen for eggs on the farm during the years 1950-52.


Stanley Howard Knowles: If he does, they will throw the eggs at him.


Percy Ellis Wright: The minister also said:
To date this year the average farm price has been 8 cents per dozen above 1952.
That would be 51 cents a dozen. That is not a fact. At least you would have an extremely hard time to convince the producers of eggs in western Canada-and I think also in eastern Canada-that they have received an average price on the farm of 51 cents per dozen for their eggs. That is an average price. The minister does not say it is for grade A eggs; he says it is the average price received by farmers. I am sure the hon. member for Glengarry knows that his farmers, even right here close to the markets, have not received an average price of 51 cents a dozen for their eggs. They just have not received prices of that kind. I think the Minister of Agriculture is doing a disservice to agriculture in this country when, by making such statements as that, he leaves the impression that agriculture is really prosperous. Of course we are better off than we were in the thirties.


James Garfield Gardiner: My hon. friend has used that term again. He is the only member in the committee who accuses me of having said that the farmers are prosperous. I did not use the word "prosperous" when speaking of the farmers. I indicated the other figure that was used by the hon. member a few moments ago, namely that only a small percentage of the farmers are making enough income to be able to pay income tax. I have said that the farmers are doing better now than they ever did in any other three-year period.


Percy Ellis Wright: All right. We will take the minister's words. He says they are doing better.


James Garfield Gardiner: I have not said they are prosperous. I have not said that at any time.


Percy Ellis Wright: I hold in my hand something I do not use very often. It is the Searle Grain Company bulletin of April 22. They say this:
The dominion bureau of statistics has just issued their periodic estimate of the costs of living and production of prairie farmers. The present figure for western farmers is 216-6 compared with 100 in the base years 1935-39. This means that it costs farmers today 2 166 times as much on the average for the things they buy for their living and production as these same things cost them in 1935-39.

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Then it goes on to say this proposed ceiling price of $2.05 under the wheat agreement means in 1935-39 dollars 94-6 cents a bushel. The price we have received for wheat in the past three years has been about $1.85 a bushel, and the cost of the goods that we have had to buy has varied from $2.06 to $2.25. In other words, in 1935-39 purchasing power we have received about 85 to 87 cents a bushel for our wheat over the last three years, and the minister says they are the most prosperous three years agriculture has ever known.
You can take a lot of other things. Take the minister's own figures with regard to cheese. Here is what the minister said in his statement with regard to cheese as reported at page 4442 of Hansard:
During the years 1943-45, cheese producers received an average price of $1.91 per hundred pounds; whereas in the years 1950-52 it was $2.37, an increase of 46 cents per hundred pounds.
But according to the minister's own figures a little farther on, the cost of production had doubled. Are the cheese producers better off as far as the dollars they have to spend are concerned? Were they better off in 1943-45 or were they better off in 1950-52, which the Minister of Agriculture says were the most prosperous years agriculture has ever had in the Dominion of Canada?


James Garfield Gardiner: I am still right, in spite of what you say.


Percy Ellis Wright: You may take other products as well and you will get the same story. It is not enough to say that our total income this year is almost $2 billion. It is what you can buy with that $2 billion after you have received it that counts as far as the farmer is concerned, and believe me it will take a lot more than the figures which the Minister of Agriculture has placed on the record, or figures which he may give on the platform, to convince the farmers of this country that they have more dollars in their pockets at the present time than they ever had before, after they have paid their expenses. That is not a fact. The farmers engaged in agriculture today are back to the position they were in in 1939-


William Albert Boucher: Rubbish.


Percy Ellis Wright: -as far as the value-


William Albert Boucher: That is not true.


Percy Ellis Wright: -they can get for the dollars they have in their pockets to spend, and every farmer knows it.


William Albert Boucher: Every farmer knows he's better off than he ever was.


Percy Ellis Wright: Here is what the federation of agriculture, which represents the farmers of this country, had to say about it:
With this thought in mind we believe that the evolving of a more adequate and more permanent national agricultural policy is the challenge which now faces, not agriculture alone, but all governments and all economic groups and the Canadian people as a whole.
They do not say that we have no problems and that we are better off than we ever were. Here is what they say about the present trends. This is the Canadian Federation of Agriculture speaking in their annual presentation to the cabinet. They say:
The seriousness of the downward trend was clearly indicated by the Hon. Mr. Abbott, Minister of Finance, in the presentation of his recent budget, when he reported the preliminary figure for net farm income for 1952 to be $1,861 million, a decrease of 12 per cent from 1951. In contrast with this decrease, official figures show that during the same period, farm costs rose 4-8 per cent.
I ask the hon. member for Rosthern who knows the agricultural position in this country better, he or the Canadian Federation of Agriculture?


William Albert Boucher: May I ask the hon. member a question?


Percy Ellis Wright: They are speaking for the farmers.


William Albert Boucher: May I ask the hon. member a question?


Percy Ellis Wright: The hon. member can make his own speech after I am through.


William Albert Boucher: You can't take it.


Percy Ellis Wright: He will have an opportunity to do so then.


Mr. Charlton:: He won't, though.


William Albert Boucher: You watch out.


Percy Ellis Wright: What are the Canadian
Federation of Agriculture asking with regard to prices at the present time, with regard to the position which the farmers find themselves in as well as with regard to butter prices? Here is what they say on page 5 of their brief to the government:
With the cost of cream production increased by some 15 per cent since the present floor price of 58 cents lb. for butter was established in 1950, we urge that this floor price be now increased to 63 cents lb. and established for a two-year period.
The government are continuing the present 58-cent price for a further two years. I do not know what the result of that will be; I do know what the result was two years ago when the Canadian Federation of Agriculture asked for a floor price of 58 cents and the government decided in their wisdom that

53 cents was enough. I know that as a result of that floor the production of butter dropped that year to the point where we had to import about 10 million pounds of butter into an agricultural country which should be able to produce everything we can consume in this country and some for the rest of the world. That is the result when the government fails to establish reasonable floor prices.
At the beginning of this year the government dropped the floor price of pork from 26 cents to 23 cents a hundred pounds. I know the minister will say that we are going to reach a balanced position in Canada where we shall be able to consume all that we produce. We may even go farther than that, because there has been a great decrease in the breeding of sows in this country as a result of the drop in the floor price of pork. That means that we might go back to a position where we would be importing pork into Canada, because of the shortsighted policy of refusing to place reasonable floor prices under agricultural products.
Reasonable floor prices are a protection not only to the producer but to the consumer in this country, because a reasonable floor price means that the producer will continue to produce enough to satisfy the market so you will not get violent fluctuations in prices. When the government fail to set reasonable floor prices under agricultural products they have not the interest of either the producer or the consumer of this country at heart. There should be a floor price which will not necessarily encourage the producer to overproduce, but will at least give him an incentive to supply our own market. Personally I think they should have incentive enough to produce more than just enough to supply our own market.
We are living in the kind of world today where we cannot hope to sit back and take the selfish position where we are going to produce only enough for ourselves and forget about the rest of the world. We are spending over $2 billion on defence, and we are not spending one dollar in economic aid for every $100 that we are spending on defence. I heard on the radio just last night an address by Mr. Hugh Keenleyside, our representative at the United Nations, given before a United States audience, in which he said to them what he has said in Canada, namely that in this country we are not playing our fair part in the world today in combating communism, when we are sitting back and spending $100 for arms and spending only $1 for economic aid. The quickest way to provide more in the way of economic aid is to produce more food in this country. Surely we should have a government which is far-
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sighted, which has the interests of freedom at heart, and which wishes to see a world in which we can have peace and plenty. If they have that interest at heart then I want to say that the surest way to achieve it is to see that agriculture in this country is given an opportunity to produce to capacity. That industry does not want to sit back at half production.


William Albert Boucher: Produce for use, not for profit.


Percy Ellis Wright: I would say yes, produce for use. I would say that we are only going to have the type of world in which we can have peace when we do produce for use.


William Albert Boucher: That's not what you are doing now.


Percy Ellis Wright: When the only incentive to produce is profit, people are selfish enough that they will take the profit and it does not matter to them what happens to the rest of the world. It does not matter what happens to their own neighbours. If that is the situation, then I say that you are not building a>
world in which we can have peace, and I am not afraid to go on any platform in Canada and say so. I have said it before in this house and I am going to say it again.


William Albert Boucher: You are producing for profit now.


Louis-René Beaudoin: Order.


Percy Ellis Wright: Well, I have just placed certain figures before the house which indicate that as far as the present production of agricultural products is concerned, the profit is not very big.


William Albert Boucher: What 10-year period do you want to go back to?


Percy Ellis Wright: I do not want to go back, and I am not going back. Only the Liberals want to go back. As far as the C.C.F. is concerned we are prepared to go ahead.


Louis-René Beaudoin: May I ask hon. members not to carry on a private conversation at the other end of the chamber. All remarks should be addressed to the chair.


Percy Ellis Wright: I thank you, Mr. Chairman. The only time some of these people can make a speech is when they are interrupting someone else. I would like to hear the hon. member for Rosthern make a speech of his own. I have never yet heard him make a speech of his own.


Louis-René Beaudoin: Order. I have just asked hon. members not to interrupt; but if the hon. member for Melfort stands up immediately

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and provokes those who have been interrupting, he can expect to have further interruptions. The hon. member may continue, but he should speak about agriculture.


William Albert Boucher: On a question of privilege, Mr. Chairman, I have spoken several times in this house, as you know.


Mr. Macdonald (Edmonton East):: And very well indeed.


William Albert Boucher: When the hon. member says he has never heard me, he must have been away from the house a great deal.


Percy Ellis Wright: Well, I do not think it is necessary to pursue this argument further.


Irvin William Studer: You better present an argument.


Louis-René Beaudoin: Order.


Percy Ellis Wright: I do say that our agricultural policy in this country during the last two years has not been one that has encouraged production.


Irvin William Studer: It has made some of you socialists rich.


Percy Ellis Wright: The Minister of Agriculture placed figures on Hansard in a speech some two weeks ago, when he compared certain periods of production in this country. I believe he compared the years 1943 to 1945 with the last three years. His figures showed that while the cash returns for farm products had been greater in practically every product such as bacon, eggs, milk and things in which the farmer can increase his production, yet the actual production during the first three years was greater than it was during the last three years. Grain was the only thing in which there was greater production. Surely, we have had bumper crops in the last three years; we have had a record production of grain, but I do not think even the Minister of Agriculture or this government can take credit for it or endeavour to take credit for it.


Irvin William Studer: You would. Mr. Douglas takes credit for it.


Percy Ellis Wright: We have just been fortunate to have had three years of high production in this country. As far as the things over which the farmer has control are concerned, production of those products has decreased and not increased during the last three years.


Irvin William Studer: How much have you lost?


Percy Ellis Wright: As I said before, we have not been encouraging the farmer to go out and produce to his maximum capacity. That is what the farmers prefer to do. They prefer to produce to the maximum and not curtail their production. They are not in the same position as the manufacturer.
[The Chairman.]


Irvin William Studer: Or the distributor-and don't look behind you.


Percy Ellis Wright: Mr. Chairman, you asked me to desist from speaking directly to hon. members. I would ask you to keep order among some of the members who are apparently unable to contain themselves.


Louis-René Beaudoin: I shall accede to the hon. member's request immediately. I will ask the hon. member for Maple Creek, the hon. member for Meadow Lake and the hon. member for Rosthern not to interrupt any more. May I point out that once the chairman has asked hon. members not to interrupt, if they persist with their interruptions the rules, if applied, are very severe. The hon. member for Melfort may continue.


Douglas Charles Abbott: Wright is right.


Percy Ellis Wright: As I was saying, there are certain industries in this country which produce for profit, and when that profit is threatened they do not reduce the price of the product they have to sell, they reduce their production. That has happened time and again in industry after industry in this country, but unfortunately the farmer is not in that position. He operates a farm; he has to sow his crop. When nature is bountiful and it rains and the sun shines he produces in abundance. The farmer would like to see that production used for the purpose for which it should be used in this world, to create a plentiful world in which his children can live.


Mr. Harrison:: Mr. Chairman, on a question of privilege, I think Your Honour must be gifted with some kind of telepathy because you were anticipating my thoughts. I did not interject when the hon. member for Melfort was speaking, but it may have been that some of my thoughts did come to you.


Louis-René Beaudoin: If the hon. member for Meadow Lake was not interrupting I immediately withdraw the remarks I directed toward him.


Mr. Fair:: As a peaceful member of the house who does not want to scratch his neighbours, I would just like to have a few moments to deal with a return that was tabled in my name some weeks ago. It had to do with subsidies paid to agriculture and the questions read as follows:
1.	During the past 13 years what subsidies and other aid have been paid to farmers?
2.	On what particular products were the subsidies paid and what amount on each, each year?
3.	During the same period what subsidies and other aids were paid to the gold mining industry?
There was quite a detailed answer brought down and, since the return has been tabled,

it has received fairly wide publicity throughout Canada. Because farmers seem to be living in such prosperous conditions-I said "seem to be" and I do not entirely agree, because some are better off and some are not better off-I have had a number of letters dealing with the matter. I find in the list of subsidies many things which should not be included. The total amount of the subsidies paid by the Department of Agriculture, the Commodity Prices Stabilization Corporation and the Canadian Sugar Stabilization Corporation is $1,017,625,000. That is everything that could be gathered up during the past 13 years. I learned a little subtraction and addition when I went to school, and I should like to do a little subtracting now.
I find in this list an item of $2,163,000 for the removal of apple trees. I presume that would be in Nova Scotia. There is another item covering compensation to seed dealers, $66,000. Then compensation for diseased animals slaughtered, $10,673,000. I assume that would be the amount paid on account of foot-and-mouth disease. Then feed, freight assistance, $180,746,000. Much of that would be paid to people who are feeders and not farmers. Then an item of $86,388,000 for wheat acreage reduction. That was paid to farmers during the war years to take their land out of wheat, to either summerfallow it or sow it to coarse grains. Replacement of maple production equipment, $2,249,000. That does not look to me like an agriculture subsidy. P.F.R.A., which is a government proposition, $32,261,000; maritime marshland rehabilitation, $2,845,000; drainage and land reclamation in the Lillooet valley, $704,000, and land reclamation and development in British Columbia, $1,462,000. Major irrigation and conservation projects in the prairie provinces, which I expect would take in the St. Mary river and Red Deer river projects, $21,435,000; flood control projects in Manitoba, which would be for the protection of city people as well as some on the land, $539,000; St. Mary river dam project, $2,339,000; cord wood, $2,098,000; milk subsidies, which was entirely a consumer subsidy, $76,598,000.
Those add up to a total of $422,566,000. When that is deducted from the original amount I gave of $1,017,625,000, we are left with a net total subsidy of $595,059,000. I could go into this in greater detail, but I do not think it is necessary. What I have given will perhaps help to dispel some of the false ideas held by some people throughout the country.
We have more than one million workers in agriculture at the present time, and during the years under review we had many more.
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A total of $595 million paid to that number of people is not very large when compared with the $48,170,956.16 paid to the gold mining industry with a total working population of 23,000. I thought I would like to make that comment before we passed the first item of the agriculture estimates.


Mr. Higgins:: Mr. Chairman, I am not an agriculturist but I should like to deal with something closely akin to agriculture. I want to talk about Newfoundland dogs. One of the minor, or perhaps major, industries that we have in Newfoundland is the breeding of Newfoundland dogs. Many hon. members who know these dogs are aware that they are fine animals. However, because of a foolish regulation which the minister introduced during the last few years, the breeding of dogs in Newfoundland has practically stopped. As I understand it, this regulation requires that a dog be tattooed and nose-printed. The nose-printing of a puppy may be something the minister can do, but I do not think any ordinary person can do it. I was going to use stronger language.
I am not giving my own opinion; I am speaking from the knowledge of the chief breeder of Newfoundland dogs in Newfoundland. This man has bred these dogs for many years. He has shown dogs in various countries of the world, and has written a textbook on them. He has judged dogs in New York as well as up here. He has written to the minister about this matter and has talked with him. I think that should be sufficient to give the minister the picture I want to give him tonight.
I propose to read a letter which was written by this gentleman to the minister in June, 1952, a copy of which I believe the minister has. It demonstrates the point I wish to make much better than I could do it. A copy of this letter was sent to the minister's private secretary recently. The letter is dated June 4, 1952, and reads:
You may remember an interview you kindly gave me last summer when I told you of my troubles with nose-printing dogs and tattooing. You promised as soon as you returned to Ottawa you would have this untried impractical method of registration satisfactorily amended.
My reason for writing you now is to advise you that for some time I have been asked to reprint my little book on the Newfoundland dog. There have been some 10,000 copies sold and I purpose another addition of 3 or 4 thousand and I thought I might add a chapter on Canada's precipitating an untried, tedious nose-printing and an equally troublesome and impractical tattooing, neither of which is favoured in England and in the U.S.A. They ignore nose-prints and refuse to read lip-tattoos.
I again judged at the Westminster show, Madison Square Gardens this February and had occasion to hear the views of dog fanciers.

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Although I deeply regret the trouble you are having with foot-and-mouth in cattle-
That was the time the minister was having a little trouble.
-I trust you will consider the personal trouble I am having with the new registry demands, which are sabotaging a very valuable Canadian industry.
I never register the Irish terriers as there is a fair demand (at lower price) as pets but there is a clamour in the States for all the Newfoundlands I can supply but I find that the Newfoundland's-
Meaning dogs, of course.
-nose sweats so quickly that a blotter or duster is
not sufficient to keep back the excessive moisture long enough to imprint anything other than a blur. After waiting a month, I received word from Ottawa that the prints were not acceptable and I secured Newfoundland's fingerprint expert-
That was the head constable of the police force, who was trained at Scotland Yard.
-and he tried three methods before he got what he considered indifferent prints though acceptable in Ottawa.
I am not alone in the dissatisfaction caused as three dog breeders of Newfoundlands of the five in this province have, or are closing their kennels and I have reduced my dogs from seven to three. Even if I get successful nose-prints in an all-black litter of Newfoundlands, it would be difficult to know which nose-print belongs to which dog. The five puppies I recently had registered were distinctively marked, one each sex all black and of the three male puppies, white on chest, white on right hind foot and the other left hind foot.
Regarding tattooing, many of the Newfoundlands have all black skin-
Again referring to dogs.
-and it is impossible to find tattoo marks and the whole scheme is frowned upon by U.K. and Q.S'.A. breeders.
I believe I read recently that some senator in the United States was objecting to Newfoundland becoming a part of the United States because a lot of the people were non-Caucasians. They are not actually. I continue:
After all, over 99 per cent of the dogs are pets and of the other 1 per cent how many would ever be lost or traced through nose prints?
Last year Maclean's wrote an article claiming that the dog industry in Canada was worth an annual $30 million. Isn't it a pity to jeopardize or curtail this through the whim of possibly a cattleman-
That is not the minister or his adviser.
-in the case of tattooing and an impractical crank in the case of nose prints?
It seems a pity for one who was presented with a sterling trophy by the Newfoundland club of America, engraved 1902-1952 for breeding Newfoundlands, and to whom a journalist in this month's Maclean's refers as "a St. John's businessman and the world's best breeder of Newfoundlands."
I readily could sell a hundred pups a summer to the States, yet two litters a summer with this new demand takes more of my time than ten heretofore. I cannot spare the time entailed as naturally some 500 employees, my family's interests and a number of directorates take precedence.

The man I am talking about is well known to the minister. He is the head of one of our biggest business firms, and his breeding of Newfoundlands is really a hobby. I say to the minister that it is a great shame. I am not going to read any more of the letter with the exception of the last paragraph, which is as follows:
My hobby is now a chore and the breed is well established in U.S.A. so I'll throw in the sponge along with other frustrated breeders and hope the government will realize that in addition to time wasted and expense incurred, feeding a litter of Newfoundlands with lusty appetites for an extra month costs more than is economical or attractive to the average breeder.
I am not going to delay the committee any longer. I think the industry of breeding Newfoundland dogs, and indeed all dogs, is very valuable to Canada. From what I have learned through talking with this particular man and also with hon. members of the house, the method of tattooing and noseprinting that the department requires is absolutely impractical. Is the minister going to change it, or are we going to lose the whole Canadian dog industry?


James Garfield Gardiner: Perhaps I might be allowed to say a word on this matter, inasmuch as there probably will not be anyone else who will want to discuss the question. As has been suggested by the hon. member, I did visit the gentleman and I saw his dogs. I have an interest in what has been discussed, but I should like to point out that the registration of livestock is not handled directly by the Department of Agriculture. We make a grant of $18,000 toward the organization that carries on that work, but the livestock breeding associations carry on the registration of livestock. That applies to cattle, horses, hogs and all other breeds of livestock, and it also applies to dogs. The kennel club regulates the marking of dogs. They had a very lively discussion about it. Some representatives only want to have nose markings in the same way that you take thumbprints of people. They say that the noseprint of a dog is just as effective, and that it is the only way you can really distinguish one dog from another with certainty.
I do not know enough about the matter myself to know whether every dog's nose is different from every other dog's, but that is what they say. They say that if you take the imprint of a dog's nose you get the only sure marking. There are other people who want to have them tattooed. There are some who object to that because of the place where they are tattooed and the fact that it is particularly bad for a small dog. The tattoo sometimes gets too big for the dog.

I do not understand their reasons for all these things, but it is not the government that does it. I have suggested to those who have written in that they should get in touch with the kennel club so far as dogs are concerned, and see if they cannot influence the attitude of the kennel club. I should say that there is a set of regulations set up under the act with which we are supposed to agree or disagree, but I do not know just what we would do if we disagreed with their whole set of regulations. We have to agree on something, and we have agreed to tattooing and nose-marking. Either one or the other can be done, and that is the system that is pretty generally followed among kennel clubs.


Gordon Francis Higgins: While this country definitely recognizes that the government is going to the dogs, although not this variety, I should like to say to the minister that it is my understanding that the nose-printing is done under regulations passed by his department. Is that correct?


James Garfield Gardiner: The regulations are made by the kennel club but the act requires that we give our approval to the regulations.


Gordon Francis Higgins: Do you make the regulations as the result of recommendations?


James Garfield Gardiner: No, the regulations are drawn up by the board of directors of the kennel club. I believe that is what the organization is called. They pass them first, the livestock association endorses them, and then they come to us.


Mr. Murray (Cariboo):: Would the minister care to make a statement about the damage being done by dogs to our livestock in the north? Let us cut out these trivia and get down to a serious discussion.


Louis-René Beaudoin: Order.


George Matheson Murray: Dogs are doing a great deal of damage. While this subject is before the committee, let us treat the question seriously. Is the government prepared to do anything to decrease the dog population north of Prince George? These dogs are scattering rabies among the flocks throughout the country and are causing other damage.


James Garfield Gardiner: Mr. Chairman, I think we are getting quite a long piece away from a general discussion. We will oe coming to these questions that are now being raised, and we will have all the information here to answer them when we come to the items. But if we are going to go on with a general discussion under item No. 1 I would prefer that we would proceed with that. If we are going to discuss individual items, then I 68108-2891
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think they should be discussed when we come to them.


Gordon Francis Higgins: May I finish my remarks? I probably will miss the item. I cannot find it in the book. I can finish my remarks in a minute, if the minister would not mind.


James Garfield Gardiner: It is under livestock.


Louis-René Beaudoin: Item 26.


Gordon Francis Higgins: Would you suggest that I should stop now, Mr. Chairman?


Louis-René Beaudoin: If the hon. member had not asked me what I would suggest perhaps he could have carried on, but if he asks me I will have to ask him to wait until the appropriate item is called.


Gordon Francis Higgins: I would suggest that I finish. It will only take a few minutes, and then I shall not bother the minister any more. The minister had a discussion of this very important matter with the gentleman who wrote the letter, and according to the letter the minister said he would have this untried, impractical method of registration satisfactorily amended. In view of the knowledge the minister now has, and particularly in view of what I believe is called the retrousse nose of a bulldog, I would ask the minister how a bulldog could be nose-printed? I suggest to the minister that he might amend this regulation. I think it would be worth while.


Mr. Bennett:: Mr. Chairman, I hope what I have to say will not be construed as meaning that I am in agreement with the hon. member for Melfort, but I do want to speak on farm prices briefly. I should like to draw to the attention of the minister a telegram I received from the county council of the county of Grey which reads as follows:
That whereas the drastic decline in prices of farm products has become alarming and dangerous for the future welfare of our whole Canadian economy, the county council requests our dominion government to take positive action immediately to correct this critical situation which, if allowed to continue, will force our economy to the depths of a serious depression.
The riding of Grey North which I represent is divided about equally as between rural and urban population. The urban centres, as is the case with most urban centres- the city of Owen Sound and the towns of Meaford and Thornbury-are sharing in the general prosperity of our country. There is full or almost full employment in those places, and the factories are operating at top capacity.
The farm community, however, is not so happy, dependent as it is for its prosperity chiefly on the marketing of hogs and of cattle. Grey county is second in the production of cattle and fourth in the raising of

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swine in Ontario. As a consequence, since 1951 the Grey county farmer has been adversely hit by falling cattle and hog prices. While the national gross product showed a substantial increase last year, and while the national farm income was off only a little in 1952 compared with 1951, the income of the person engaged in mixed farming was decidedly lower in 1952.
This, of course, is contrary to the belief held by some city people, who think the farmer is making a killing today. There is no question but that the lot of the farmer is much better, and has improved tremendously during the last few years. I was interested in the figures given by the minister the other evening, which showed that farm products were selling at 2-5 times the figure they were a few years ago. I do not think the farmer would argue for a minute that he has not been getting a more proportionate share of the national pie than formerly; and mechanization, hydro and good roads have revolutionized life on the farm.
But life on the farm is still no bargain. In my county the proof of that fact is that the young people are still leaving the farms. The long hours on a seven day week basis, the risks of weather and markets, the shortage of labour and rising costs are the reasons young people are not staying on the farm.
As has been said so often, the farmer's real income depends not only upon farm prices but upon farm prices in relation to farm costs. As has been pointed out in this house many times, farm costs have been rising steadily, and in some cases sharply. It is difficult to estimate the rise in farm costs, because these costs vary so much from farm to farm. I noticed in the last issue of "The Farmers Guide" that the farmer's purchasing power, which takes cognizance of both what the farmer receives for his products and what he pays for his labour, material and other costs, if represented by the index of 100 for 1948 stands at 82 for 1952. This figure of 82 covers the whole field of agriculture. I submit that the purchasing index for the mixed farmer would be considerably lower than that. I do not for a moment subscribe to the statement that the purchasing power of the farmer is back to the 1939 level, as the hon. member for Melfort suggested, but I think it was lower in 1952 than in 1951. In other words, as my farmers say, there is nothing wrong with 20 cents for cattle as long as costs are brought in line.


Some hon. Members:: Hear, hear.


Colin Emerson Bennett: I hear "hear, hear" from the opposition benches. I do not want to create
fMr. Bennett.]
the impression that the Grey county farmer is not appreciative of what the Minister of Agriculture has done for him. On many occasions the minister has said in this house that the best way the government can help the farmer is by fostering and maintaining a domestic climate in which there will be full employment and the resultant maximum purchasing power. This situation certainly obtains today. This government's immigration policy has also helped agriculture. As a result 800,000 new mouths to feed have arrived in this country since 1945.
My farmers also want to say thanks to this government for its support price program. Under this policy farm prices have been supported at levels which have prevented undue losses, and at the same time have allowed the principles of supply and demand to come into play. I think the farmers realize that if the support price is fixed at too high a level, production will be encouraged and huge surpluses will result. This has happened in connection with some products in the United States. If you fix prices at a high level, the only other alternative of course would be to control production. I think most farmers are individualists, and do not want too much government intervention, certainly not controlled production. In these days when we hear so much about hunger and want in the Asian countries, it is unthinkable that we should talk about controlled production.


Solon Earl Low: Or limiting it.


Mr. Benneti:: Or limiting it, I agree. The government's action in supporting pork, beef and butter was particularly effective in Grey county because those, with apples, are our main farm products. In the last six or eight months many farmers have come to me without any prompting to state that if the government had not stepped in and supported hogs at 26 cents, the bottom would have simply fallen out of the market. I think this government has convinced the farmer that farm prices will never again be allowed to drop to disaster levels.
We all know that there is no easy solution to this problem of sagging beef prices. Even at today's prices the Canadian farmer is getting the best prices in the world for his beef. It is obvious that it would be difficult to support beef, either by means of a floor price program or with subsidies, unless the United States border were closed. I have heard no one suggest that such a drastic step be taken.
Some people believe we are now passing through the worst period so far as the price

45G7
of cattle is concerned, and that as soon as the cattle are on the grass the markets both here and in the United States will strengthen. I sincerely hope so. I am anxious to hear what the minister has to say about that. I recall that last year, when hogs were selling at 20 and 21 cents, he predicted that within three weeks the market would be 27 cents. His prediction was exactly correct.
The farmer is the first to admit what the minister stated on Monday night, that there almost had to be an adjustment of price in the cattle market. From 1946 to 1951 the price of beef rose swiftly and steadily, and without doubt some farmers made remarkable profits. These high prices, of course, encouraged production, and I think we are in about the same position this year in so far as cattle are concerned as we were with hogs last year. I know that in Grey county the cattle population has been steadily increasing in the last 18 months. For instance, on June 1, 1952, there were 148,600 cattle in the county, and six months later this figure had increased to 161,500. The farmer knows also that from 1946 to 1951 he was capitalizing on the fact that the Canadian dollar was selling at a discount in the United States. Today the opposite is true.
When the officers of the Canadian Federation of Agriculture met the cabinet last March, they said that if they were to pick one overriding thought out of the discussion during their convention, it would be that agriculture does not feel secure in its economic position. I believe that is the thinking which prompted the telegram sent by the Grey county council. The farmers are not particularly disgruntled. They are reasonable people. They know there must be ups and downs in the market in a free-enterprise society. They have confidence in this government, but this combination of falling beef prices and rising costs has them worried, together with the fear that agriculture, as a group, may be lagging behind the industrial sections of our country. The farmers want to be assured again by this government that in this period of our country's great growth and expansion the position of agriculture will be maintained as an important and basic pillar in our economy.
(Translation):


Mr. Balcer:: Mr. Speaker, I wish to say a
few words this evening about a problem which is of interest to the whole district of Three Rivers and more particularly to the farmers of Baie-du-Febvre, as well as those of five or six other parishes in the county of Nicolet. As a matter of fact, these farmers are now facing a most heartbreaking situation indeed.
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Baie-du-Febvre probably has the highest milk production of any rural parish in the province of Quebec. One of the reasons for that is that it has the use of what we call the Baie-du-Febvre commune. This very fact explains why this village and the adjoining parishes have become the most important dairying centres in the province of Quebec.
The farmers of that district have always used this commune, which is already more than a century old, to graze their cattle, that is their steers, heifers and calves throughout the summer. This has allowed them to farm their lands which are among the richest in the province. Moreover this commune has enabled them to carry on the raising of really productive milch cows.
In summertime, there were up to 2,000 or 2,500 cattle in that commune. Lately their number has decreased but it has finally settled at 1,500. Most farmers of that area were using this commune for grazing their horses, and especially their cattle. That commune had a real importance in the area, for it helped increase milk production more than any other area in the province and Nicolet was the best agricultural county in the province.
Unfortunately, these advantages, these factors which are of such importance to the prosperity of the parish of Baie-du-Febvre and other parishes of the neighbourhood are about to vanish. That commune, which has contributed so much to the prosperity of the farmers, will soon be taken over by the Department of National Defence to serve as a firing range.
All Canadians and especially the farmers of our district want Canada to be well defended. They are ready to make sacrifices, like everyone else in the country, but they cannot understand why the Department of National Defence takes over the most productive lands in the province of Quebec to transform them into a firing range since there is so much waste land in the province that could be used for such exercises.
Anyone who has the faintest notion of the topography of the district could have explained that fact to the promoter of that famous national defence firing range. Unfortunately, the department, always desirous of clouding itself in an atmosphere of secrecy to hide something or other, sent its officers to Nicolet where they set up all sorts of installations, casting a veil of mystery over the district, so much so that today when people mention military works in Nicolet county everyone speaks of the Nicolet radar. Well, there has never been any radar in Nicolet and there probably never will be. It is only a firing range, where sailors or soldiers may hold firing exercises.

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Had the Department of National Defence been frank about the matter and had it revealed its true intentions about this range, the local farmers, those who are truly interested in the local dairy production, would have lost no time in protesting against this seizure of the best farming land and might have convinced the Minister of National Defence (Mr. Claxton) and his officers of the grievous injury being wrought by them on these farmers. In this way this famous range might have been moved further on, into the waste lands of the county of Nicolet, perhaps, but in any case, in such a way as to prevent this wastage of farming-land productivity in the very heart of the province of Quebec.
The province of Quebec has about 380 million acres, of which barely 28 million are fit for cultivation. Out of these 28 million, 10 million lie in the St. Lawrence river valley. It seems absolutely foolish for the Department of National Defence not to have managed to find, out of these 380 million acres, a bit of land suitable for range purposes.
Now, the study which is being made of the estimates of the Department of Agriculture indicates that this department intends to spend millions of dollars on reclamation schemes in order to transform arid lands into arable lands. However, all these efforts and the millions of dollars which are being spent on these projects will be wasted if the government, through its Department of National Defence, ruins the best lands in our province and causes considerable damage to the farmers of our district.
For these reasons, if it is not too late, I would ask the Minister of Agriculture (Mr. Gardiner) to bring some of his influence to bear upon his colleague, the Minister of National Defence, so that, in the future, no more land-or as little as possible-be taken from this commune, even if the firing range cannot be transferred elsewhere. Moreover, I would ask him to see to it that the Department of National Defence, if it must expropriate lands, does not pick the best ones, thus destroying that which our farmers have taken centuries to establish.
(Text):


Louis-René Beaudoin: Shall the item carry?


Harry Oliver White: Mr. Chairman, I have waited patiently all afternoon, and I have a few words I want to add to what

has been said already by various members throughout the chamber.
First of all, the minister's statement at the beginning of this debate provided a change of pace as compared with what we have heard in other years. The statement, while not an optimistic one, presented a fairly true picture except that the comparison of years was not exactly as it should have been. Then, too, statements issued by industry always give the net income. I notice that the Minister of Agriculture quoted gross income as far as the farmers were concerned, and ignored their costs.


James Garfield Gardiner: It was the net income I gave on Monday night.


Harry Oliver White: Everyone
knows that the costs, particularly this year, have been going up while the income from most products of the farm has been going down.
I am glad the hon. member for Grey North brought to the minister's attention some of the problems that farmers in that area are experiencing, and it is not confined to Grey North. Someone must have brought the minister up to date since he addressed some very optimistic remarks to the Canadian Federation of Agriculture in Vancouver not too long ago.
Yesterday everyone in the house-and I am going to dwell on this for only a moment-was unanimous in the opinion that the international wheat agreement was a very desirable accomplishment. But in view of the fact that one of the chief importers, the United Kingdom, has not yet signed that agreement, so far as I am aware, it would seem to me that the agreement is another scrap of paper. Unless and until Britain does sign, the wheat producers of the world are going to find themselves in a very confused marketing situation.
In this as well as in some other policies the government have followed they have been influenced too much by opinion across the line. If it was not for the United States holding out for the price of $2.05 a bushel I think possibly we could have arrived at an agreement, and we all know that it would be certainly more desirable so far as Canada is concerned.
I for one have always been a bit critical of the government's apparent preference for dealing with the United States, and failing to cultivate and retain our United Kingdom markets as far as humanly possible with respect to trade. The desire of the western

producers to discuss the international wheat agreement yesterday was quite evident. They know very well they are not going to sell any great quantity of wheat to the United States.
I am one of those who believe that stronger and more effective measures should be taken to make the United States aware of the fact that we are not pleased with the embargo placed on dairy products, and we are not pleased with the prospects of higher tariffs. After all, we have some strategic and scarce materials that the United States must have. There is also the fact that the United States' supplies of raw materials are on the wane. That should be brought to their attention. They should be made aware of the fact that the good neighbour policy is something that can work both ways. While I am not suggesting that harsh measures should be taken, I think there is a method of approach that could be followed. We could point out to them that this can only add to the difficulties of two friendly nations.
The hon. member for Melfort pointed out that farmers were prepared to produce in abundance. I want to point out that farmers are being penalized because they have produced plenty. This government is sowing the seeds of another depression, first by its failure to grasp the opportunity to feed the hungry world; second, by inflation that has priced us out of world markets for our products, particularly our primary farm products, and also the action of the United States in keeping Canadian farm products out of United States markets by embargoes; and third, if we fall for the latest Soviet cold war moves. Loss of markets, inflation, overtaxation, all adding to the cost of production, are leading us right into the Soviet trap.
As a barometer of conditions on the farms, one need only go to the farm auction sales,
29, 1953	4569
Supply-Agriculture
where farm implements and many other farm goods are selling for much less than they have for many years. Used machinery can hardly be sold at all; and the supplies of new farm machinery in the hands of dealers is very plentiful. You see it piling up all over the country. The end result of this policy is decreased purchasing power in the hands of the citizens generally, not only in the hands of farmers. It will finally add up to unemployment and the serious dislocation of our economy.
How serious is our loss of trade? According to the Minister of Finance, in 1951, which was one of the best years as far as agriculture was concerned, 25 per cent of the people were engaged in agriculture in Canada; yet in that year they received only slightly over 11 per cent of the gross national income. When we come to 1952 we find that a lot of the people left the farms, and that in that year only 20 per cent of Canada's people were engaged in agriculture; and the trend is continuing. It is my firm opinion that the Minister of Agriculture and the Minister of Trade and Commerce should take another serious look at Canada's markets for agricultural products. The results so far are not good enough.
May we call it ten o'clock, Mr. Speaker?
Item stands.
Progress reported.



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow we will go into supply and consider the estimates of agriculture, health and welfare, mines and technical surveys and post office.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]

Thursday, April 30, 1953