1953-04-13

Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, on Friday last my parliamentary assistant read to the house the text of a press statement regarding the outcome of the prolonged negotiations for a renewal of the international wheat agreement. I now intend to supplement that statement by a brief account of the negotiations and to state the Canadian position with respect to the renewal of the wheat agreement.
The negotiations for a renewal of the agreement began in London in the spring of
1952.	The United States at the outset proposed a price range of $1.90 minimum and $2.50 maximum for a period of four years. Canada saw no hope of an agreement at that level of prices and made an opening proposal of $1.75 minimum and $2.25 maximum, excluding carrying charges, which under the present agreement have amounted to the additional six cents per bushel. Australia indicated general agreement with Canada.
The importers did not make price proposals in London, but indicated that they considered the maximum price of $1.80 in the present agreement to be a fair basis for renewal if that maximum included carrying charges.
In Washington the negotiations began on January 30, 1953, where they had left off in London. The United States, supported by France, repeated its proposal on prices but for a period shorter than four years. Canada and Australia repeated their offer of $1.75 minimum, $2.25 maximum, for a period of four years. At this stage the importers made no proposals whatever.
In order to advance the negotiations the exporters unanimously declared that they would not enter into a new agreement at present maximum or minimum prices. The importers replied that they could contemplate an agreement at prices higher than in the present agreement but that they were not prepared to make a definite proposal unless the exporters were prepared to contemplate an agreement with a maximum below $2.25. The exporters unanimously met this condition by agreeing that a maximum below $2.25 would be acceptable.
The importing countries, then, on February 16, 1953, put forward their first offer of a minimum of $1.40 and a maximum of $1.95, inclusive of carrying charges. At that point there was a good deal of informal probing of the price positions on both sides extending over a period of some days. On March 6, the United States said that it was prepared to accept a maximum price of $2.15, inclusive of carrying charges. Canada and Australia supported the $2.15 maximum price as offering a reasonable basis on which to conclude an agreement for a three-year period with a minimum 50 cents below the maximum. A few days later the importing countries unanimously rejected the $2.15 maximum as unacceptable but indicated that there was some basis for compromise between the views of the exporters and importers.
On March 17, Canada, supported by Australia, declared that although they considered the maximum of $2.15 to be reasonable they were prepared to accept a maximum of $2.10 and a minimum of $1.60 in an effort to bring the views of the exporters and the importers into harmony.
A week later the importers replied to the Canadian and Australian proposals. They unanimously rejected the $2.10 maximum. A substantial number of them, representing well over a majority by number and a high proportion by quantity of wheat purchased under the agreement, declared that they could accept a maximum of $2.05, inclusive of carrying charges and a minimum of $1.55. A smaller number, but representing a substantial quantity of wheat, said that they could not agree to this level. Included was the United Kingdom which adhered to the importers' original offer of minimum $1.40, maximum $1.95.
This marked the turning point of the negotiations on price. The United States and the United Kingdom, being the largest exporter and the largest importer, respectively, held discussions in an effort to bridge the considerable gap that still separated them. Finally, on Thursday last, the United States announced that it was willing to accept the proposal of $1.55 minimum, $2.05 maximum, made by a substantial number of the importers. The United States delegate added that while the administration would, of course, recommend approval by the Senate

Wheat
the maximum price to which he was agreeing carried the possibility of failure of Senate ratification. Australia and Canada fell into line. The United Kingdom, however, said that it was unable to accept a maximum price above $2.00.
When the motion to fix the minimum at $1.55 and the maximum at $2.05 for a period of three years was put before the council, only the United Kingdom voted against it, although a few other importing countries abstained.
I have summarized the course of these prolonged negotiations on prices so that hon. members will realize that there was a good deal of give and take on both sides at this wheat conference. Some people may think that the importing countries scored a victory by bringing the exporters down so far from their original ideas. Other people may think that the exporters did well to bring about an improvement from the levels of the present agreement. I suggest that if there was a victory, it was a victory for common sense. That such a wide measure of agreement was reached is evidence that with patience and perseverance and a generous portion of good will, views which may at one time seem so irreconcilable may be reconciled.
It is unfortunate that the council could not reach a unanimous conclusion. Yet I am impressed not by failure to reach complete unanimity, but rather by the fact that the proposal for a $1.55 to $2.05 range of prices received such a wide measure of support and so little opposition. After all, even the United Kingdom did not disagree with the minimum price of $1.55 and was within 5 cents of agreement at the maximum price.
A good deal more attention seems to be directed to the maximum than to the minimum price. Indeed, I have seen suggestions that the maximum of $2.05 will determine the price at which wheat will be bought and sold under the agreement during the next three years. This, of course, is not necessarily so. The forces of demand and supply are bound to affect the price, regardless of whether or not there is an agreement. The wheat agreement merely fixes the range within which prices can fluctuate.
The maximum price is intended to be a protection to the importing countries against prices for the quantities of wheat in the agreement going above that level, just as the minimum price is intended to protect the exporting countries against prices for the agreement quantities going below that level.
At the maximum the importing countries have rights, not obligations. They can demand that wheat be delivered to them at

that level. But they do not have to take it. If they can buy wheat at cheaper prices they are free to do so, down to the minimum.
In effect, agreement to a maximum is what the exporting countries have to accept to get the importing countries to undertake to buy wheat at the minimum. As far as Canada is concerned, we look upon the minimum as being fully as important as the maximum. It is only because of the minimum that we are prepared to join in the agreement.
The Canadian delegation had, of course, worked for a unanimous recommendation and the government regrets that this was not possible. But it will be agreed, I think, that prices which were opposed by only one country out of 46, and which were approved by all except a very few countries which abstained when the vote was taken, do on the face of it provide a fair and reasonable basis for a renewal of the agreement. And, of course, the difference of 5 cents at the maximum between the United Kingdom and rest of the world is very small indeed and well within the margin of error of any forecast of price trends.
Having been in many negotiations with our good friends from the United Kingdom, I know that they are shrewd and hard bargainers and I respect them for it. Their final effort to bring the maximum price down by 5 cents was quite understandable. In a similar position the Canadian government might have done likewise. We tried very hard indeed to get an agreement at maximum and minimum prices 5 cents better than were finally recommended. It should be clear now, however, after fifteen weeks of negotiation, that an international agreement is possible on the basis of the prices recommended by the council and on no other basis. There is a bare minimum of time left for signature and ratification before the beginning of the new crop year.
The agreement will be open for signature for a period of two weeks. The Canadian delegate has already been authorized to sign on behalf of Canada, and will do so today.
We hope the United Kingdom will also sign. While it is possible, and may be necessary, to have an international wheat agreement without the United Kingdom, that is obviously most undesirable. Canada would not be happy. We would not like to be dealing with our best wheat customer on one basis and with our other customers on another. And the government would regret to see relations between our two countries adversely affected either by failure of the agreement to go ahead because the United

Kingdom did not adhere, or because there was an agreement without the United Kingdom.
During the conference, as my summary has indicated, Canada's chief purpose was to harmonize the views of the importers and the other exporters, in particular the United States. To be perfectly frank, we encouraged the United States to modify their original ideas to the point which we thought would provide a reasonable basis for settlement. From time to time, we led the way. Finally, however, it was clear that any further reductions would jeopardize the chance of acceptance by the United States Senate and would probably be unacceptable to the farmers of Canada and Australia. At that point, fortunately, the main body of the importing countries could agree, and thus the council was in a position to make a recommendation supported by an overwhelming maj ority.
I am confident that the United Kingdom shares our belief in the underlying purposes of the wheat agreement. Their declarations on this point and their agreement with the recommended minimum price of $1.55 are evidence of that belief. I hope that they will join the rest of us by agreeing to just a little less protection at the ceiling than they had tried to get.
May I add a word or two on the question of quantities. As further evidence that the proposed range of prices is reasonable under all the circumstances, requests were made for increases in their guaranteed quantities by many importing countries, adding up in total to very large amounts. Unfortunately, because of a series of short crops, Australia, on the exporting side, could not agree to maintain her quota and submitted a lower figure. It was, therefore, impossible to meet all the requests for increases by the importing countries. Canada, however, agreed to increase her guaranteed quantities from 235 million bushels, which applies during the final year of the present agreement, up to 250 million bushels for the three years of the new agreement. The agreement will relate to approximately 600 million bushels if all countries join. A guaranteed quantity for the United Kingdom is included at the present level of 177 million bushels.
The new agreement will come into force if signed by April 27 and accepted by July 15, 1953, by importers representing 50 per cent of the guaranteed quantities, and by exporters representing 50 per cent of the guaranteed quantities. There is provision for withdrawal by any exporting country if an important importing country fails to accept, and vice versa.
Wheat
May I add that throughput the negotiations the position taken by the Canadian delegation had the unanimous support of the five farm advisers-Messrs. Parker, Wesson, Plu-mer, Brownlee and Coates. The government is grateful to them for their assistance and their patience.
I cannot speak too highly of the work of Canada's three official delegates, M. W. Sharp, W. C. McNamara, and Dr. C. F. Wilson. Their skill as negotiators, their patience and industry, were in my opinion responsible for avoiding a breakdown in the lengthy negotiations. Their efforts to reconcile the conflicting views of the largest exporter with those of the largest importer were tireless and, I believe, effective to a high degree.
The present international wheat agreement is one of the few successful international commodity arrangements. The measure of its success is that the 46 member countries were willing to spend five weeks in London and ten weeks in Washington trying to agree on terms of renewal, and that they were almost able to reach unanimity in their final recommendations.
In the light of this success and these efforts, I think there is reason to be hopeful that the agreement will continue in full vigour for another three years. The Canadian government will leave no stone unturned to achieve that objective.


Mr. Diefenbaker:: Mr. Speaker, I rise
merely for the purpose of asking one or two questions. I realize that the matter is not debatable at this time but I am sure Your Honour would raise no objection if I say that, in my opinion, the prices set will be disappointing to the expectations of the western farmers.
The questions I rise to ask are these. Does the minister believe that it will be possible to make an international wheat agreement either effective or even operative without the participation of Great Britain? Second, in the anticipated agreement is there any provision for escalator clauses to cover possible rises in the cost of production? Finally, will the minister say which were the importing countries that abstained from voting when the final determination as to prices was made?


Clarence Decatur Howe: Mr. Speaker, the answer to the first question is yes. The answer to the second question is no. The countries that abstained from voting were New Zealand, Greece, Ceylon and India.


Mr. Thatcher:: Mr. Speaker, may I ask a supplementary question of the minister? Would he say whether he or some other minister would contemplate flying to Britain

Questions
within the next two weeks in order to see whether or not the British cabinet could be persuaded to sign this agreement?


Clarence Decatur Howe: Mr. Speaker, it is not customary to announce government policy in advance. If I do fly to England I will certainly let the house know after I return what transpired.



QUESTIONS


Mr. Fulton:: 1.	What are the particulars of the item shown as two buildings at St. Hubert, Quebec, sold as surplus crown assets to Raoul La Forest, Montreal, for $5,600, as shown at page 22 of the Crown Assets Disposal Corporation report for 1950-51?
2.	What were their dimensions and for what purpose had they been used?
3.	What was the original cost of these buildings?
4.	Were tenders invited for the purchase of these buildings?


Mr. Dickey:: 1.	Two frame "H" huts Nos. 12 and 15 R.C.A.F. station, St. Hubert, Quebec.
2.	No. 12 (other ranks quarters) being 1-storey "H" hut consisting of 2 sections: 120' x 24' and centre section 60' x 24'.
No. 15 (other ranks quarters) being 1-storey "H" hut consisting of 2 sections: 120' x 24' and centre section 60' x 24'.
3.	The report of surplus gave the cost of these two buildings as follows: No. 12, $26,426.08; No. 15, $24,298.10.
4.	Yes, for the purchase and removal of the buildings, as they had deteriorated beyond economical repair.


ST. HUBERT, QUE.  BUILDINGS SOLD AS SURPLUS CROWN ASSETS
Mr. Fulton:: 1.	What are the particulars of the item shown as three buildings at St. Hubert, Quebec, sold as surplus crown assets to Armand Guy, Jonquiere, Quebec, for $6,000, as shown at page 22 of the Crown Assets Disposal Corporation report for 1950-51?
2.	What were their dimensions and for what purpose had they been used?
3.	What was the original cost of these buildings?
4.	Were tenders invited for the purchase of these buildings?


Mr. Dickey:: 1.	Three frame "H" huts Nos. 9, 10 and 14, R.C.A.F. station, St. Hubert, Quebec.
2.	No. 9 (other ranks quarters) 1-storey "H" hut; 2 sections: 120' x 24'; centre section: 60' x 24'.
No. 10 (other ranks quarters) 1-storey "H" hut; 2 sections: 120' x 24'; centre section: 60' x 24'.
]Mr. Thatcher.]
No. 14 (other ranks mess) 1-storey double "H" hut; 2 sections 120' x 40'; 1 section: 60' x 40'; 1 section: 40' x 40'; lean-to 20' x 38'.
3.	The report of surplus gave the cost of
these three buildings as follows: No. 9, $22,744.07; No. 10,	$22,774.10; No. 14,

4.	Yes, for the purchase and removal of the buildings, as they had deteriorated beyond economical repair.



R.C.A.F. TRUCKS  GRAVEL BOXES

Mr. Harkness:: 1.	How many R.C.A.F. trucks, equipped with gravel boxes, have been brought into Calgary, Alberta, for repairs?
2.	Where had these trucks been used?
3.	What was the average mileage on these trucks and what was the nature of the repairs made?
4.	Were the welded seams on the gravel boxes of these trucks ground off smooth? If so, for what reason?
5.	What is the total amount which has been paid, or will be paid, for the repair of these trucks?


Mr. Campney:: 1.	Ten.
2.	Churchill, Gimli, Macdonald, Penhold, Comox and Edmonton on construction work being done by No. 2 construction maintenance unit, Calgary.
3.	24,639 miles. All trucks to be completely overhauled. To date only one has been completed.
4.	The contract does not include grinding of the welded seams on the gravel boxes. This was begun on the first truck but stopped as not being called for.
5.	Total estimated cost is $20,000.



C.B.C. BUILDING, WINNIPEG, MAN.

Mr. Churchill:: 1.	What was the original cost of acquisition of the Canadian broadcasting building on Portage avenue, Winnipeg, Manitoba, and from whom was it purchased?
2.	What is the total amount spent or contemplated to be spent on the structure, not including equipment?
3.	Is the building as now constituted, large enough for the future television broadcast programs contemplated?
4.	Is the Canadian Broadcasting Corporation giving consideration to acquiring other buildings in Winnipeg for the purpose of television broadcasts?


Mr. McCann:: 1.	Purchase price, $260,000. Purchased from James Richardson & Sons, Limited.
2.	The estimated cost of structural alterations, and new construction, converting this building for sound broadcasting use as studios

and offices exclusive of technical equipment is $523,425.
3.	Yes.
4.	No.



OYSTER LEASES

Mr. Robichaud:: 1.	What was the total amount collected by the Department of Fisheries in rentals for oyster leases, during the year 1952, in each of the following provinces: (a) Prince Edward Island; (b) Nova Scotia; (c) New Brunswick?
2.	Were any rentals on oyster leases collected during the same year in any other province? If so, (a) in what other province or provinces; (b) what was the total amount collected in each of said province or provinces?
3.	How many oyster leases were in force, during the year 1952, in the following counties of the province of New Brunswick; (a) Gloucester; (b) Kent; (e) Northumberland; (d) Westmorland?
4.	What were the total amounts collected by the department in rentals on oyster leases, in each of the above-mentioned counties, during the year 1952?
5.	What has been the total cost of administration, including personnel, of the departmental staff charged with the collection of said rentals on oyster leases, during the year 1952?


Mr. MacNaughl:: 1.	1952-53 to March 31 (not final)
(a)	Prince Edward Island_____	$1,224.75(b)	Nova Scotia	
243.33(c)	New Brunswick	
350.50

2.	No.
3.	(a) Gloucester-420.
(b) and (c) Kent and Northumberland-not under federal jurisdiction.
(d)	Westmorland-6 Shediac bay only under federal jurisdiction.
4.	Gloucester-$331.50.
Westmorland-$19.
Kent and Northumberland-not under federal jurisdiction.
5.	It is not possible to segregate the cost.
"external affairs"


John George Diefenbaker: What was the February, 1953, press run of "External Affairs"?


Mr. Bradley:: 1. English	 7,880
French	 955
8,835
It may be noted that the above quantities include copies requisitioned for use toy the external affairs department and the United
68108-237i
Orders for Returns
Nations and for sale and authorized distribution by the Department of Public Printing and Stationery.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Jones:: 1.	What has been the amount paid each year for compensation to replace maple products equipment since the assistance was first started?
2.	How many buckets have been replaced?
3.	How many buckets are normally in use during the season?
4.	Approximately how many more buckets or equipment have to be replaced?


RUSSELL G. MANN, JOHN BERRY
Mr. Coldwell:: 1.	Have Mr. Russell G. Mann and Mr. John Berry (or Barry), both of Kyle, Saskatchewan, been employed with P.F.A.A.? If so, for how long?
2.	In what capacity or capacities have these men been employed and where did they work for P.F.A.A.?
3.	At what places were they employed and on what dates?
4.	What salary and expenses has each of these men been paid per annum since becoming employed with P.F.A.A.?



IRRIGATION


Mr. Diefenbaker:: 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 the expenditure for counsel as set out in sessional paper No. 1700 of March 27, 1953, distributed, and to whom?



ROYAL COMMISSIONS


Mr. Coldwell:: 1.	What royal commissions were appointed by the federal government from January 1, 1942 to the present time?
2.	Were legal fees paid by the federal government in connection with these royal commissions during this period?
3.	If so, what were the legal fees paid in connection with each royal commission?



MOTIONS FOR PAPERS


Mr. Bryce:: For a copy of all correspondence, telegrams and other documents from the 20th day of November, 1952 to date, exchanged between the Minister of Justice and the town of Gimli, Manitoba, regarding relief payments to dependents of service personnel.


Mr. Garson:: Mr. Speaker, we have no objection to having this motion passed subject to our getting the town of Gimli's approval of the production of the papers. I do not think there will be any difficulty.
3744	HOUSE OF
Inquiries of the Ministry



TELEVISION, SASKATCHEWAN

John George Diefenbaker: For a copy of all correspondence, letters, telegrams and other documents, since the first day of January, 1951, which have passed between any person or persons containing applications for the right to establish television station anywhere in the province of Saskatchewan, or requesting information as to the terms and conditions upon which consideration to private companies to construct such stations would be considered.


Mr. Chevrier:: Mr. Speaker, there are two difficulties in the way of this notice of motion. One is a question of interpretation. If my hon. friend reads the notice of motion, I am sure he will realize that it is not clear. I do not know what he means by it. For instance, it is set out that there is required-
-a copy of all correspondence, letters, telegrams and other documents, since the first day of January, 1951, which have passed between any person or persons . . .
Then it goes on to deal with certain applications. This might mean that it were to cover correspondence between Mr. X in Regina and Mr. Y in Regina or Mr. X in Saskatoon and Mr. Y in Saskatoon. With all due respect to my hon. friend may I say that, if he will be good enough to couch the motion in one of the two official languages of this house, I shall be glad to see that he gets a reply. When he does indicate that the motion is one which I presume is directed at the Department of Transport, then may I say to him now, so there will be no loss -of time, that there is no objection to the motion as presumably reworded with this one exception, that all letters, correspondence, telegrams and so forth should, I take it, be produced with the exception of the application itself. It has been the policy not to produce the application, and for technical and financial reasons I take it that it should not be produced. I do not think my hon. friend will want that. Subject to that, I presume the order could go through.


Mr. Speaker:: Do I understand that the
motion is to be dropped and reworded or does it carry in its present form? I take it that the motion is to be dropped and reworded.


Some hon. Members:: Agreed.


Mr. Speaker:: Motion dropped.



ATOMIC ENERGY


[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver-Quadra):: Mr. Speaker, will the Minister of Trade and


Commerce give the house a report on the atomic energy conference which took place at Chalk River last week?


Clarence Decatur Howe: The conference held at
Chalk River last week was a conference of technicians who met to discuss with their colleagues from other countries the problem of a further declassification of atomic energy information. It was not a meeting at which decisions were made. It was a meeting to formulate recommendations that could be made to the appropriate authority of the countries represented by these men. I have not heard the results of the conference, but that was its purpose.


Howard Charles Green: Will it be possible to make
an announcement at a later date?


Clarence Decatur Howe: If the final decision is to
further declassify atomic energy information, most certainly an announcement will be made in every country.



CANADIAN PRISONERS OF WAR


[Stage Direction]
On the orders of the day:
Mr. A. J. Brooks (Royal):: I should like
to direct a question to the Secretary of State. Has the government arranged to meet representatives of the national council of Canadian prisoners of war? If so, when is such meeting to take place?


Hon. F. G. Bradley (Secretary of State):: The hon. member's question was handed to me just a few minutes before I entered the house. I shall be glad to take it as notice and let him have an answer in due course.


Alfred Johnson Brooks: I do not see why the
Secretary of State needs notice at all.


Mr. Speaker:: Order.



LABOUR CONDITIONS


Mr. Angus Maclnnis (Vancouver East):: Mr. Speaker, there have been reports over the radio and in the newspapers indicating that considerable activity has been taking place in connection with the negotiations with respect to the grain handlers, dispute on the west coast. Will the minister bring the house up to date?


Hon. Milton F. Gregg (Minister of Labour):: There is nothing of a definite nature that I can report to the house but perhaps I may be permitted to bring the house up to date

following the statement I made on the 24th of March, to be found at page 3230 of Hansard. I placed on record at that time the proposal which our chief conciliation officer, Mr. Wilson, had made to both parties with the object of effecting a settlement. No formal reply was received from either party until toward the end of last week. In the late afternoon of April 9 the following wire was received from Mr. R. H. Tupper on behalf of the employers. The wire is addressed to Mr. Bernard Wilson, chief conciliation officer, Department of Labour, and reads as follows:
Referring your letter March 20th regret delays arising from settlement of Port Arthur differences prevented earlier reply. Am directed by all five elevator companies concerned in dispute in Vancouver and New Westminster to inform you that they leave open their offer to grant two additional statutory holidays, an increase of 5 cents per hour in present graveyard shift differential, payment of double time for all work done on Sundays and to provide where practicable for proper job rotations provided the union will join with the companies in submitting as the only outstanding difference to be determined the question of wages for arbitration before a judge of the Appeal Court or Supreme Court of British Columbia.
On the next day, the 10th of April, the following wire was sent at 1.46 p.m. Pacific time by Mr. E. C. Sims on behalf of the unions. This wire reads as follows:
Re your wire April 9-
I should interject that the terms of the wire I have just read were conveyed to the unions. This wire is also addressed to Mr. Wilson. I continue:
-we note the companies have rejected your proposal of March 20th and submitted counter proposal re arbitration. I am instructed to inform you this counter proposal has been rejected and your March 20th proposal will be taken to membership tomorrow for acceptance or rejection. Will inform you of results.
On the next day, the 11th of April, the following wire, addressed to Mr. Wilson, was sent by Mr. Sims at 11.40 p.m. Pacific time:
Full general membership meeting held today. I am instructed to inform you that question put re acceptance or rejection of your proposal of arbitration dated March 20. Motion carried rejecting the proposal with twenty-nine dissenting votes. Results of vote indicate same strength as when strike vote taken. Manner of voting decided by motion of membership. Results indicate tie-up to go on indefinitely unless employers change attitude toward wage question and fringe benefits.
Since the receipt of these wires we have continued our efforts to bring the parties together for further negotiations. I can report nothing further this morning.


Howard Charles Green: Does the minister still think it would be of no value to invite representatives to come to Ottawa?
Inquiries of the Ministry


Milton Fowler Gregg: I do not think that there would be value in taking that step at this time.



INQUIRY AS TO 1953 INITIAL PRICE FOR WHEAT, OATS AND BARLEY

[Stage Direction]
On the orders of the day:
Mr. J. A. Ross (Souris):: I should like to
ask the Minister of Trade and Commerce if he is in a position to announce what initial prices will be paid by the Canadian wheat board for wheat, oats and barley produced in 1953. If he is not in a position to do so now, when may such an announcement be expected?


Clarence Decatur Howe: My hon. friend will
appreciate that the situation is too uncertain at the moment to permit an announcement of that kind. When matters regarding the wheat agreement have been clarified, an announcement will be made.


James Arthur Ross: Not before seeding, in
other words.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. D. S. Harkness (Calgary East):: I
should like to direct a question to the Minister of National Defence. Does the minister propose to table a white paper on defence this year, as has been done in the past several years? If so, will he be in a position to table it today so it may be in the hands of members before the defence debate commences, which is scheduled for tomorrow?


Hon. Brooke Claxton (Minister of National Defence):: I had confidently expected that
the queen's printer would have the white paper here in time to table it at the opening of the session this morning. I expect it within an hour or so, and if I may intervene then I shall revert to motions and table it the moment it is received.


Brooke Claxton: If I may have permission to revert to motions, I should like to table a copy of "Canada's Defence Program, 1953-54."


Mr. Knowles:: May I ask the minister if
there will be the usual copies available for all members?


Brooke Claxton: Yes, they have just arrived
at the distribution office.

Inquiries of the Ministry EXTERNAL AFFAIRS



INQUIRY AS TO WHEREABOUTS OF BISHOP CUTHBERT O'GARA

[Stage Direction]
On the orders of the day:
Mr. W. J. Browne (St. John's West):: I
should like to direct a question to the Acting Secretary of State for External Affairs. I tried to get in touch with him and left notice at his office. Has the Canadian government made any inquiries regarding the whereabouts of Bishop Cuthbert O'Gara of Ottawa, a member of the Passionist order, who was last reported on March 21 to be on his way to Hong Kong via Canton from somewhere in China but who has not yet arrived at his destination?


Brooke Claxton: We have not
been informed so far that Bishop Cuthbert O'Gara, the Canadian church official referred to by the hon. member, has been released from prison by the Chinese communists. On March 26 we were informed that he was seriously ill. We immediately asked our high commissioner in London to approach the foreign office, requesting them to instruct their charge d'affaires in Peking to make representations to the Chinese government on behalf of the bishop. As yet, no reply has been received.



CRIMINAL CODE


[Stage Direction]
On the orders of the day:
Mr. Paul E. Gagnon (Chicoutimi):: I would like to ask the Minister of Justice whether the government is considering an amendment to the Criminal Code to allow the establishment of provincial lotteries.


Stuart Sinclair Garson: Mr. Speaker, the answer is no.



INQUIRY FOR RETURN


[Stage Direction]
On the orders of the day:
Mr. A. M. Robichaud (Gloucester):: I should like to ask the Secretary of State (Mr. Bradley), for the third time, when a reply may be received to an order for return appearing in my name and passed by this house on January 28, over two and a half months ago.


Some hon. Members:: Order.


Mr. Speaker:: The hon. member has asked his question.


Brooke Claxton: I might answer the query because


it concerns the affairs of the Department of National Defence. We have been ready for some time to table such correspondence as there is, but we are still awaiting a reply from a provincial government whose consent is necessary before the tabling of it.


Albany M. Robichaud: May I ask the minister a supplementary question? Which government is it?


Brooke Claxton: The government of Ontario.



PACIFIC SECURITY CONFERENCE


[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver-
Quadra): Mr. Speaker, may I ask the Acting Secretary of State for External Affairs (Mr. Claxton), whether Canada has any representative or observer at the Pacific security conference which opened in Honolulu a week ago today.
Brooke Claxton: We made inquiries concerning the character of these talks and the information received was that their purpose was to have an exchange of views, of a technical military character, between the countries which have forces committed in that area. Consequently, we did not seek to have any Canadian representative in attendance as an observer or otherwise.


Howard Charles Green: Can the minister tell us what countries are taking part?


Brooke Claxton: There are the members of the ANZUS alliance, I understand-and I do not know whether there are others.


Howard Charles Green: I think also the United Kingdom and France.



INCOME TAX ACT

Hon. Douglas Abbott (Minister of Finance) moved: the third reading of Bill No. 228, to amend the Income Tax Act.


Stanley Howard Knowles: Mr. Speaker, before third reading is given to this bill to amend the Income Tax Act there are one or two things I would like to say. In the first place I wish to say that this bill does nothing to narrow the tremendous gulf that exists in our income tax legislation between business and professional people on the one hand and the ordinary worker on the other.
I speak with particular reference to the matter of deductions or exemptions that are allowed to these two groups of taxpayers. This matter was particularly drawn to my attention, although I have spoken of it in

the house on previous occasions, when I received through the mail a few days ago a little vest pocket booklet entitled "Canadian Pocketax, 1953" which has been issued by the National Trust Company Limited, 250 Portage avenue, Winnipeg. It seems to me to be quite up to date and to take into consideration the changes being made this year in our income tax legislation. It is one of those little booklets that various firms sometimes put out to advise people as to their rights and privileges, as well as their obligations, under the Income Tax Act.
What interested me particularly, as I went through the pages of this little booklet, was to find that it takes more than four pages to list what are known as deductible items. The deductible items on these four pages are listed under a total of 46 main headings. If one were to break down these main categories into the subdivisions that are included he would find that the number is much larger. However, when one goes through these deductible items, and when one reads the preliminary paragraphs commenting on them, it becomes clear that this long list of deductions is not available to the ordinary worker when he files his income tax return.
The ordinary worker, as a matter of fact, finds himself for the most part limited to just four possible deductions, apart from his personal or family or statutory exemptions. Those four which are available to the ordinary worker, if he meets the required conditions, are:	Deduction for contributions
to an approved pension plan; deduction for allowable trade union dues; deduction for charitable donations; and a deduction for medical expenses, but only on that portion of expenses which exceed, from now on, 3 per cent of his gross income.
Beyond these four there are no deductions available to the average worker. In other words, when he gets his pay and when he is confronted with his income tax bill, he has had it. His tax, for the most part, is a tax on what he actually gets-and there is no fooling around with it. For the other group who are on what is called "gross income", whether it is because they operate a business or are in the various professions, there is, as I have pointed out, this long list of deductions which the National Trust Company has listed in this little book. I am not going to take the time of the house to read all of these forty-six main headings but I would like to name some of them. Here they are:	Accounting expenses; advertising
expenses; appraisal costs for insurance; bad debts; carrying charges; carting charges; efficiency experts' fees; industrial engineers' fees; insurance premiums; fire, theft and
Income Tax Act
group insurance premiums deductible by the employer; interest on borrowed money; interest on succession duties; legal expenses to collect past due debts, to defend actions under the Combines Investigation Act, and to protect the right to do business; production control costs; raw material costs; promotional expenses; secretarial expenses; taxes on real estate; cost of technical assistance; and telephone, and so on.
As I say, Mr. Speaker, I have not read all of them but those are some of the main headings in this list of forty-six deductible items set out in this little booklet. It is very interesting to get this little book and to find that so many deductions are permitted, but it only draws attention to the tremendous gulf that this government's income tax legislation has established between the people who get their income in what is called a "gross form" on the one hand-business and professional people-and the ordinary working people who are on salary or receive a pay envelope on the other.
Of that list the latter taxpayer is limited to the four deductions I read out earlier. Incidentally, my colleague from Vancouver East (Mr. Maclnnis) points out that a telephone is an essential to the earning of a livelihood in the case of many workers, such as railway men, who must have a telephone so that they can be called. But they do not get such a deduction. There are travelling expenses which are an essential part of the earning of a livelihood of many industrial workers, but for the industrial worker who is on wages they are not allowed. He gets none of these many deductions available to business and professional people. He is limited to the four which I have read, as anyone can see by referring to the short income tax form. He gets his deduction for a pension plan, provided it has been approved by the department; some are and some are not. He gets his trade union dues allowed, provided those dues are for the purposes spelled out in the act. He gets charitable donations allowed, up to a certain amount, provided he has the receipts. There are many instances where charitable donations are made by individuals who are unable to get receipts for them. As for medical expenses, of course, he gets only those expenses that are set out in the act, and he gets only that portion in excess of 3 per cent of his gross income.
Now, I suggest, Mr. Speaker, that this is a serious matter and that something should be done to narrow that gulf. If the minister is not prepared to widen and extend the exemptions that are allowed to the ordinary worker, I submit that he should apply the

Income Tax Act
axe to many of those deductions and exemptions that are allowed to that other group. Surely, the one principle that should characterize our income tax legislation is fairness. Here is a place where unfairness persists, and I strongly urge the minister to reconsider this whole question. This is not the first time I have made this appeal to the minister, but I point out that there has been no narrowing of this gulf in the legislation presented this year. In fact, some of the so-called technical changes in the bill now before us have actually widened that gulf, for they extend still greater concessions to those on the business or professional side of the picture.
I remind the minister again of a particular example of this unfairness which has to do with the fact that the government has, as yet, done nothing about the ruling of the income tax appeal board to the effect that the expenses of lawyers attending conventions of the bar association are deductible. The minister has said this is a matter for the courts to decide. I remind the minister that when the courts have made decisions on other matters that were at variance with what the government had intended the legislation to provide, they have changed the legislation so as to make it conform to what they originally intended. I could cite other cases, but I shall stick to income tax matters;'.
The minister remembers the Bond and Rutherford case back in 1946, when Mr. Justice Thorson of the exchequer court ruled that the fees of those two lawyers to the law society were to be allowed as deductible, even though they were on a net salary rather than on gross income. It was very interesting to note that, in that particular case, no action was taken by the government to change the law to meet what had been their original intention. In that instance lawyers were involved, but a few years later another judge of the same exchequer court, Mr. Justice Angers, ruled that the same right to deduct fees paid to an association should be extended to trade unions, and the government immediately amended both the old income war tax act and the Income Tax Act so as to make the law read the way they had intended in the first place. The government simply said that they recognized the decision by the exchequer court as indicating what the law meant as it was then written, but they did not mean that so they changed the law to make it read the way they intended. Fortunately, that chapter has a much brighter sequel in that the government was later persuaded to change the law to grant the right of deductibility in respect of trade union dues.

But then we come to the case of Mr. Parkinson, the lawyer who claimed deductibility for his expenses in attending a convention of the bar association. He made out his income tax form including those expenses as a deductible item, but the department rejected his claim. I think it is fair to assume that the department knew what the government intended. As soon as Mr. Parkinson had his claim denied by the Department of National Revenue, he took his case to the income tax appeal board, which board acts now in these cases instead of the exchequer court. Mr. W. S. Fisher, Q.C., of the income tax appeal board, ruled that as the law read Mr. Parkinson, even though he was on a salary, had the right to deduct his expenses to the convention of the bar association. Surely that is a case where it is quite clear that the income tax appeal board has ruled that the law says something different from what the government intended it to mean. What happened back in Mr. Cooper's case with regard to trade union dues? Actually the same thing, and when that happened, the government changed the law to make it say what they intended it to mean. But now in the case of Mr. Parkinson and the expenses of lawyers attending the bar association when a corresponding judicial body says that the law means something the government never intended it to mean, the government refuses to take any action.
I submit that in all fairness the government should do one or the other of two things. Either they should amend the law so as to permit deductibility for expenses to conventions to be extended to all trade unionists, farmers, those attending church conventions, school teachers and all the rest, or they should amend the law to make it clear that lawyers do not have that particular right. I have no particular quarrel with my lawyer friends in the house, some of whom are staring at me while I am making these remarks. As a matter of fact, I believe most of them will agree with me, whether or not they are personally affected, that there should be fairness in respect of this matter.


Mr. Speaker:: I do not know whether the
hon. member was referring to me as one of the lawyers who were staring, but if so the reason I was staring at him was that I was rather concerned about whether he was in order. As the hon. member knows, on third reading of a bill a member can discuss only what is in the bill. He cannot go beyond the bill as it is presented for third reading. It seems to me he is getting away from the bill as presented to the house for third reading.


Stanley Howard Knowles: I want to say at the outset
that I was not referring to you, sir, as one of the lawyers who were staring at me. I shall not go so far as to name the ones to whom I referred, but may I just say that it did seem to me that on third reading it was proper to deal with the general principle of this bill. However, I assure Your Honour that I have said all I need to say on that particular subject. I feel I should point out that this bill amends the Income Tax Act, and some of its changes involve widening the exemptions and the deductible items that are provided in the Income Tax Act. I was expressing my regret-if Your Honour feels I have gone far enough, I shall leave it at that-that at a time when changes were being made in the provisions for deductibility, the government had not seen fit to make the necessary change to clear up this injustice, this inequity. During the course of the debate, when we were in committee of the whole on the bill, the Minister of Finance (Mr. Abbott) said in a number of instances that the reason for the point he was introducing was to clear up an inequity or an injustice. Well, I have cited what I regard as a gross inequity, a gross injustice, and I hope that one of these days soon it will be cleared up.
I leave that item as I have put it, Mr. Speaker, and I suggest that it is another example of the case I was making earlier, namely, that there is too wide a gulf between the treatment accorded by the Income Tax Act, as we are now amending it, to the business and professional groups on the one hand and to the ordinary workers on salary on the other.
There is just one other comment I wish to make and then I shall take my seat. I do this very briefly; I do it by no means in any argumentative tone but rather just to place my position on the record with respect to it. Earlier in this session, in connection with one of the taxation bills, the Minister of Finance, not on a point of order and yet with reference to a matter of procedure, expressed the view that it was proper to precede a taxation bill with a resolution much shorter in form than that to which we are accustomed. In fact, he said it was now his view that it was not necessary, in the resolution preceding a taxation bill, to spell out the proposed changes. He said that all that was necessary was to bring in a resolution saying that it is expedient to amend such and such a bill. The Minister of Finance did not contend that he was going to change the practice now being followed, and I am sure that he does not intend to do so. I am sure that for his .purposes the 68108-238
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present practice of presenting resolutions which give a certain amount of detail is much more satisfactory. Because I am sure he has no such intention I do not wish to argue the point; I simply wish to say this. I have secured the memorandum on this matter to which the Minister of Finance referred the other day, and which he invited us to secure, and I must say-and this is the point that I wish to put on the record- that in my view the memorandum is well put with respect to another matter, but it does not deal with this point at all. It is a memorandum on the question as to whether or not a resolution preceding a money bill should stipulate the maximum amount of money to be included in that bill. That is a different question altogether in my humble but very considered opinion.
The memorandum to which the minister refers really does not deal with the point he was speaking about the other day, and since it does not deal with it, it does not back up his case in the way that he seemed to feel it did. Now, I am not going to go into it in any detail; I am not going to argue the point, but I simply felt that the minister having said what he did the other day I should report that I have read the memorandum, and that, in my view, it would be very difficult for him to make a case on it for the proposition that he gave the house. I leave it at that because I am satisfied, as I have already said, there is no intention to change the practice; that it is more satisfactory for the minister as well as for the house as a whole to follow the present practice of bringing in, prior to taxation bills, resolutions that give us a fair amount of detail as to what is to be expected in the bills themselves.


Mr. J. M. Macdonnell (Greenwood):: I
should like to make one or two brief comments. In the first place I should like to associate myself with what the hon. member for Winnipeg North Centre (Mr. Knowles) has just said. I was surprised at the breadth of the statement made by the minister the other day, but I do not propose to deal with it because I think in fact that in practice we shall find that the minister does not go the length which that statement might be presumed to take us.
This bill is like the curate's egg, Mr. Speaker. It is good in parts and therefore we are not going to propose an amendment; nor shall we oppose the bill. There are certain things in it which we have approved again and again, namely, the reduction of the income tax on persons and corporations. But on the other hand I wish very briefly to reiterate the fact that there are certain things

Income Tax Act
in the bill which we have disapproved and which we still disapprove. I wish to maintain that position to the end.
We are not able to bring about any alterations in these, but we have of course continued to disapprove of the fact that the sales tax has been unaltered. We have pointed out that it means the great bulk of the people benefit very little from the present budget. We sought to have relief given to municipalities and school boards on their purchases, but that is denied us. Mr. Speaker, that is all I wish to say.


Mr. H. W. Herridge (Kootenay West):: I am
going to be very brief. I intended to say a few words on second reading, but the hon. gentleman who has just spoken failed to take part in the debate on second reading and it passed before I realized it.
We in this group regret this Income Tax Act still provides for the income taxation of cooperatives. We believe that co-operatives are the economic hope of the world, and we think that the government would be doing a great service to this country if they would eliminate those sections in the act that provide for the taxation of co-operatives. In that respect I am going to be quite brief because I realize a good deal of time has been spent on this bill. I do want to quote what Canon Coady had to say in this respect:
It has been said that nature is red in tooth and claw. This is the philosophy of the survival of the fittest, but it is fundamentally erroneous. Cooperation, more than competition, is the chief factor in survival. Nature at its best is co-operative. We see it in the human family, the primary unit of society.
Co-operative nations can make the world a family. There is here the germ of universal peace. Until this foundation is laid for peace, there is not much hope for the future.
This excerpt is taken from "Social Significance of the Co-operative Movement".
We believe exactly as the canon does in that respect. A large number of my constituents are very concerned about the income taxation of co-operatives. We were very sorry indeed that the government decided, shall I say, to surrender to the views of the Canadian Chamber of Commerce, who presented a brief to the royal commission on co-operatives in 1945, and to illustrate its point of view I want to quote from that brief. It was an excellent brief from the chamber's point of view. It dealt with the position of co-operatives so far as taxation is concerned, and in one paragraph it said this in part:
After a slow rate of growth over many decades the rapid expansion of co-operatives and mutuals in Canada has been substantially enhanced by their exemption from liability for income taxation. The record supports that conclusion. While this position of special privilege is maintained the

expansion of co-operative and mutual associations will continue, leading finally to the removal of a considerable part of the commerce of the country from the taxable to the tax-exempt form of business organization.
From the point of view of the business interests, that is a sound analysis of the situation. However, we in this group believe that the co-operative movement is a movement that should be supported in every way possible and that this government could not assist such a movement to better advantage than by removing the income taxation of co-operatives at this time.
While we agree with various deductions made for travel expenses in the act, before taking my seat I do want to bring to the attention of the house and the minister again the fact that we believe that workers who have to live some distance away from their employment, up to thirty to thirty-five miles, are put to abnormal expenses of from $10 to $25 a month, which they often cannot afford, and should be permitted to deduct these expenses for income tax purposes. In addition to that, we in this group believe that not only should oil companies, gas companies and mining companies receive exemption on developing properties, but that farmers who are clearing land, who are bringing land into production, should be allowed to deduct these expenses for income tax purposes. In that connection we support the proposal of the Canadian Federation of Agriculture, which in its presentation to the cabinet this year said, on the subject of tax exemption on clearing and breaking:
In our opinion it is desirable to encourage the improvement and development of our farm lands, just as much as it is to encourage the exploration and development of minerals and oil by special inducements. We therefore recommend that clearing, breaking and improving of farm lands be deductible as a farm expense where such acreages are reasonable in relation to the general farm operation.
We support that point of view, and regret a provision is not made for those deductions in the bill.
Finally, while I agree with the minister that there are administrative difficulties, and that possibly there have been some abuses on the part of some provincial governments, I think due consideration should be given to the removal of the sales tax from supplies, equipment and machines purchased by municipalities.


Mr. Speaker:: I think that question was discussed previously under another bill.


Herbert Wilfred Herridge: Perhaps so; I am just concluding what I have to say. I do think the violations of the law could be overcome by strict regulations.

Motion agreed to and bill read the third time and passed.



FISHERIES RESEARCH BOARD ACT


[Stage Direction]
Hon. Douglas Abbott (for the Minister of Fisheries! moved the second reading of Bill No. 331, to amend the Fisheries Research Board Act.
Mr. J. Watson MacNaughi (Parliamentary Assistant to the Minister of Fisheries):: Mr. Speaker, when this bill was in the resolution stage on April 2 I made a short statement indicating the reasons for the amendments.


William Joseph Browne: I wonder if the bill has been distributed, so that we could have a copy of it.


John Watson MacNaught: Yes, it has been circulated. It is Bill No. 331.
At this time there is very little that I can add to what I said on that occasion; I think, however, I should remind hon. members that for some time it has been becoming more and more apparent that, owing to the increasing ramifications of the work of the board, its structure required some modifications. The modifications which the amendments will bring about will permit wider regional representation on the board itself. This will permit representation from Newfoundland and additional representation from central Canada.
Under the present set-up the chairman and the vice-chairman are professors doing university work in Queen's and Toronto universities respectively. It is thought desirable that the chairman should be a full-time scientist residing at Ottawa. This will permit of continuous attention to the management and co-ordination of work done at the various stations. The chairman will be responsible for seeing that the program laid down by the board at the annual meeting is carried out.
The work of the board has grown tremendously over the years. A decade ago the budget of the board amounted to approximately one-quarter of a million dollars. Today it is close to the two million mark. It is apparent, therefore, that the chairman should be located at headquarters in Ottawa so that greater co-ordination can exist between the various stations and the Department of Fisheries.
When this bill was in the resolution stage the hon. member for St. John's West asked me if there would be representation from the province of Newfoundland on the board. One of the purposes of the amendments is to permit of such representation.
68108-238i
Fisheries Research Board Act


William Joseph Browne: Mr. Speaker, I am sorry I had not seen the copy of the bill, although I find that there was one on my file. I am sure hon. members will agree that, in view of the volume of work done by the fisheries research board, these amendments are important. I am familiar with some branches of that work. It is unfortunate that the report of the board for 1952 has not yet been published-at least I have not received my copy. We were told two weeks ago by the parliamentary assistant that the report was in the hands of the printers; but it has not yet been received.
I think it is a wise procedure to give the chairman permanent tenure so that he may give more attention to the valuable work the board has to do. For many years I have been familiar with the work done by the scientists in connection with the fisheries, and I realize that this work is of the utmost importance to fishermen.
I hope the changes contemplated in the measure will result in improvements for the benefit of the fishermen and all others concerned with the fisheries.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
On section 1-Constitution of board.
William Joseph Browne: Why has
not the report been published? It is difficult to discuss these amendments properly without having the annual report before us.


John Watson MacNaught: Mr. Chairman, I checked the date upon which the report was tabled last year, and I find that it was during the month of June. This year the report was sent to the queen's printer some time ago, but it has not yet come back. The moment it is received it will be tabled.


Mr. Gibson:: Why do we make the assertion that the board must have a majority of scientists? Has there been any difficulty in that connection? Usually when an assertion of that kind is made, it is because there has been some dispute about it in the past. Would the parliamentary assistant make any comment as to why the board is to have this majority of scientists?


John Watson MacNaught: Most of the work done by the board is of a scientific nature. Therefore I think it is desirable that a majority of the persons doing the work should be scientists. That has been the practice in the past, and I think it is a good one.


[Stage Direction]
Section agreed to.
[Stage Direction]
Fisheries Research Board Act
On section 2-Appointment.
William Joseph Browne: Where is *the statement in the bill indicating that the board shall include representatives from the provinces?


John Watson MacNaught: I do not think there is a specific section covering the point. However, it is the intention of the department to see that a representative is appointed from Newfoundland.


William Joseph Browne: Would he be from the fishing industry, or a scientist; or is there to be dual representation?


John Watson MacNaught: That will be decided on a balance of convenience. If it is found to be more desirable that the representative be from the industry, then he will be from the industry. I think the fishing industry of Newfoundland in relation to the fishing industry of the rest of Canada is such that it would1 be desirable that the representative from Newfoundland be from the practical side of the industry, rather than the scientific side.


William Joseph Browne: Has the
parliamentary assistant considered informing us as to who the chairman will be, in view of the fact that it is to be a permanent appointment? What is the salary?


John Watson MacNaught: Those are matters of
government policy. No decision has yet been made as to who the chairman will be, or the salary he is to receive.


[Stage Direction]
Section agreed to.
Sections 3 and 4 agreed to.
On section 5-Constitution of board.
The Chairman:: I take it that sections 5 to 8, which are a duplicate of the original sections, will be accepted?
Sections 5 to 8 inclusive agreed to.
Section 9 agreed to.
Bill reported.


Mr. Deputy Speaker:: Shall this bill, by leave, be read a third time?


Stanley Howard Knowles: By leave.


Mr. Deputy Speaker:: By leave.
Mr. Fournier, Hull (for Mr. Sinclair) moved the third reading of the bill.
Motion agreed to and bill read the third time and passed.	[DOT]



VETERANS BENEFIT ACT


Hon. Hugues Lapointe (Minister of Veterans Affairs) moved: that the house go into committee to consider the following resolution:
That It is expedient to introduce a measure to amend the Veterans Benefit Act, 1951, to provide that the act shall expire on the last day of the first session of parliament in 1954 in lieu of the last day of the first session of parliament in 1953.


James MacKerras Macdonnell: Mr. Speaker-


Mr. Fournier (Hull):: Mr. Speaker, may I interrupt the hon. member. I have had to pass over the next item, the bill to amend the Trans-Canada Air Lines Act, 1937. This is a small bill. The Minister of Trade and Commerce (Mr. Howe) is out on government business and will be here at 2.30. I therefore thought we would bring in these two small resolutions in order to advance them to the bill stage. I have no objection to having the hon. member for Royal (Mr. Brooks) notified.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


James MacKerras Macdonnell: Mr. Chairman, on a question of privilege, may I point out that-


Hugues Lapointe: Mr. Chairman, may I suggest that we await the return to the chamber of the hon. member for Royal, since he had asked to be present when these matters were being considered. I told him that I would wait.


James MacKerras Macdonnell: Thank you.


Stanley Howard Knowles: Here he is now. He is on the job.


Hugues Lapointe: Mr. Chairman, this is the resolution preceding the annual bill to extend for a further year the provisions of the Veterans Benefit Act, 1951. As I explained during the course of the last session-in April, I believe it was-the bill provides at the present time that the act shall expire on the last day of the session of 1953.
There are two manners in which these benefits made available to Korean veterans could be extended for a further period of time. The first would be to follow this procedure, which we have followed since 1951, of extending from year to year the provisions of the act. The second would be to give a more permanent character to these benefits by putting them into a statute. It has been felt that until present events in Korea changed and the situation was such as to anticipate an early settlement, it was preferable to follow this present procedure which hon. members will recall was the one followed during the last war.

As a matter of interest to the committee, I might say that under this act 9,474 gratuities have been paid to Korean veterans to date and re-establishment credits have been set up for 9,046 Korean veterans. Some of them have taken advantage of the vocational or university training facilities. At the present time about 150 Korean veterans are undergoing either university or vocational training. This procedure will be continued under the present act.


Alfred Johnson Brooks: Mr. Chairman, this resolution is familiar to us all because it has been up for consideration a number of times; I think this is the third time. Of the two systems which the minister mentioned as to the procedure followed, I think this is the one which meets with general approval.
The minister has pointed out that this legislation will be needed as long as our soldiers are in Korea. It gives to the Korean soldiers all the benefits that were given to the soldiers in world war II. I think that is correct. I do not think that anyone will criticize this measure, because, while we do not call this Korean situation a war exactly, there is no question that these men are undergoing just as severe hardship as the soldiers experienced in the second world war, and that the fighting is just as severe in Korea as it was in world war II. They are fighting under conditions which are perhaps even worse than those under which the soldiers fought during the second world war. They are also fighting against an enemy who is just as unscrupulous and cruel, if not more so.
I have little comment to make, Mr. Chairman, with regard to this matter. The minister has said that the situation may change. I am sure that we all hope that the present negotiations for a new truce or a continuation of the truce talks, which were ended on October 7, will be resumed. We also hope that not only will the truce be resumed but that in a short time we may have peace. This may be too much to expect. In reading the press not only of the past week or so but of this morning, I note that the United Nations command is studying the Red offer to resume full-scale truce talks. This is all to the good. I think that the members of the United Nations are certainly taking the right stand when they are cautious in dealing with this matter. However, as I said, I hope that the situation will change and that, as to these men who are now in Korea, we may hope they will be home at a not-too-distant date.
Veterans Benefit Act
I had a number of questions I intended to ask the minister; he has already answered some of them. One was: How many war service gratuities have already been paid? That question has already been answered. I should like to ask him what is the average amount of each of these gratuities. He has also answered another question, the number of applicants for university and vocational training; but I should also like to ask him how many have applied for settlement under the Veterans Land Act and the number of contributions made under the unemployment insurance benefits. Perhaps the minister is not prepared to answer those questions at once. If not, he can answer them on second reading.
I should like further to ask the minister whether the department has reached a decision with regard to paying re-establishment credits, the same as gratuities, to members of the forces who are still serving in the regular forces after their return from the theatre of war. These are just a few questions I should like to have answered. I should also like to know whether men serving in Korea will receive all the benefits granted to veterans of world war II. I think it is correct that they are but I want to make certain.


Hugues Lapointe: I will be very pleased to answer these various questions when we are on second reading of the bill. There is one which I can answer right away. I apologize for not giving the figure when I spoke previously. Up to the present time there have been eighty-nine applications made by Korean veterans under the Veterans Land Act. Thirty-eight have already qualified, nine have been withdrawn, nine have been refused and the remainder are being processed at the present time.


Mr. Quelch:: I am very glad to support the resolution extending the act for another year. We will welcome the introduction of legislation to bring into operation the full set of benefits under schedule A. I realize that under the act the governor in council can declare any of the benefits under schedule A to be applicable. Section 3 of the act reads in part as follows:
The governor in council may by regulation provide that all or any of the enactments set out in part I of the schedule to this act shall, in such manner as the governor in council may prescribe, apply to . . .
Can the minister say whether all the benefits outlined in schedule A are available today to veterans of the Korean war?

Armed Forces


Hugues Lapointe: My understanding is that all can be made available if applied for. I would prefer to give a more definite answer to my hon. friend, and perhaps I might do so on second reading of the bill.


Victor Quelch: When the minister answers that question I should like him to explain whether or not a veteran can make application for any of the benefits under schedule A or whether first of all the governor in council has to pass a regulation to provide for that being done.


Hugues Lapointe: I shall be pleased to do so.


Stanley Howard Knowles: We in this group would also like to indicate our support of the resolution and of the bill to be based on it. We would not imagine that the government would do anything less than is called for here in extending the legislation for another year. But even so, we welcome it and hope that more precise provision respecting these matters will be made in due course. While I am on my feet, may I join with the others who have spoken at this stage and say that we too share the hope that it will soon be possible for those who have been representing us in Korea to come home.
Resolution reported, read the second time and concurred in.
Mr. Lapointe thereupon moved for leave to introduce Bill No. 335, to amend the Veterans Benefit Act, 1951.
Motion agreed to and bill read the first time.



ARMED FORCES


Hugues Lapointe: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to provide assistance for the higher education of children of certain deceased members of the armed forces and of other persons, all allowances and costs payable under the act to be paid out of moneys appropriated by parliament.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


Alfred Johnson Brooks: Will the minister give us an explanation?


Hugues Lapointe: Mr. Chairman, in introducing the resolution I believe I can make the statement that this country is justly proud of the legislation it has put on the statute books for the benefit of its veterans, which legislation has come to be known as the veterans charter. I can also state that all members of the House of Commons, irrespective of party

affiliation, have looked upon veterans legislation in years past in a generous and unselfish way, in a manner truly reminiscent of the high spirit of service of those who enlisted in the Canadian forces.
As was stated once by one of my predecessors, the Hon. Ian Mackenzie, the veterans charter grew in spirit, substance and final form out of the hearts and minds of a united people dedicating themselves and the lives of their sons and daughters to victory. Its basic provisions were the result of a desire to deal in a just manner with all who served.
In view of what I have just said, I am confident that all members of the House of Commons will welcome the introduction at this time of a measure to provide assistance for the higher education of children of certain deceased members of the armed forces and other persons. As the committee will recall, the legislation governing rehabilitation for world war II veterans provided assistance in a training program designed to fit the veteran into suitable employment. It provided training assistance for the veteran with little formal schooling at one end of the scale and right up to university graduation at the other. The purpose of this resolution is to assist financially pensioned sons and daughters of former members of the forces, who have died as a result of service, in obtaining post-secondary education.
Such a program has been under consideration by the department for some time, and the time has now come when many of these children are reaching university age. I might add that it is also proposed to extend the benefits to be derived from the terms of the legislation to children of Canadian veterans who have lost their lives as the result of service in Korea.
For the information of the house I might say that at the present time there are approximately 12,000 children who are receiving pensions under schedule B of the Pension Act. An analysis made by the department shows that the peak load of candidates for the type of training that this legislation will provide for those whose fathers served in world war II will come between 1958 and 1962. Candidates who qualify under the act will receive a training allowance during the time they are in full time intramural attendance plus payment of their tuition fees. In addition to occupations for which graduation from university is required there are occupations, as hon. members know, for which high school graduation -that is matriculation or the equivalent of university admission-is required. Teacher training, through the provincial normal

schools, and nursing, through the teaching hospitals, are cases in point. Under the Veterans Rehabilitation Act which provided training to world war II veterans these latter were classified as "vocational". The bill is designed to provide assistance in these training institutions for which high school graduation, matriculation that is, is now a prerequisite.
The provincially controlled secondary schools, that is the high school, technical and commercial schools, provide training required for entry into the most common occupations. Statistics indicate that some 60 per cent of young people entering high school leave without completing the usual four-year program, and not more than 10 per cent or about one-quarter of those who do graduate proceed, or are likely to proceed, with further schooling-post-secondary education.
The bill which will follow this resolution is designed to deal with this latter group eligible for admission and seeking admission to training institutions for which high school graduation is required. In other words, the criterion is secondary school graduation- regardless of whether the proposed occupation requirement is regarded as university or vocational.
That, Mr. Chairman, constitutes the general outline of the proposed measure and I shall be glad, when we are in committee on the bill, to go into any further details-for instance, questions of eligibility, type of education contemplated, benefits available, academic standing required and time limits.


Alfred Johnson Brooks: Mr. Chairman, I do not think there will be any disagreement about this resolution. The minister spoke about the veterans charter, and I recall that when the veterans charter was before the committee in 1945 and 1946 it was recommended by myself and others that this matter be given consideration. The Canadian Legion and other veterans organizations have been pressing for this ever since. As we all know, they presented a brief in November, 1952, and this point was covered, as were a number of other recommendations presented to the government at that time. I might say, incidentally, that this is one of the very few to which the government has given consideration.
Also, the Canadian Legion presented a resolution before the veterans affairs committee of 1948 which read as follows:
That the government accept greater responsibility for the welfare and education of the children of men who lost their lives in the service, by extending benefits equivalent to the rehabilitation benefits their father would have received had he returned.
Armed Forces
The comment made on that is:
Veterans feel that this is an important omission in Canada's rehabilitation program as it affects the children of those who lost their lives in the service. Subsistence maintenance until the age of 16, 17 or 21, as the case may be, is not enough. The responsibility for educational or training benefits or assistance to enter a trade or calling must rest with the government.
For a good many years this matter has been before veterans committees and I, for one, am very much pleased that the government is introducing this resolution now and intends to introduce a bill to implement it.
One great criticism that might be made is the delay. As the minister pointed out, to the great majority this legislation is coming in very good time; but there were children who were in their early teens in 1945-eight years ago. Those children have now reached the age when they are past university entrance. There are not many but still there are some, and I can think of a few myself. If this legislation had been introduced immediately after the war those children would have been looked after. I would ask the minister whether any young men or young women of the age of 21 and over who are anxious to take up university training will be able to do so. In other words, will the act be made retroactive? Will those who have paid their own way through the university be reimbursed?
One of the main arguments used for introducing legislation of this kind-and I think it is perfectly	obvious to all	of	us-is	thefact that with	the high cost	of	living	the
widow with only a pension would have hardly sufficient means to buy clothing, food and shelter let alone provide a college education.
The minister	stated that there	are about12,000 children	who would be	of	school	age
and who would be covered.


Hugues Lapointe: At the present time there are about 12,000 children who are receiving pensions under schedule B, which would mean up to the age of 21.


Alfred Johnson Brooks: The minister estimated that about 10 per cent of those would be eligible for university and vocational school grants.


Hugues Lapointe: That is a rough estimate.


Alfred Johnson Brooks: I would hope that there would be more because, as we know, there are many boys and girls who would like to take -advantage of university and vocational training but they cannot afford to do so. No doubt this group would be a very intelligent group because we think of our soldiers themselves as -the best and, as children of our soldiers, I would hope that the figure for

Armed Forces
this group would be larger than the 10 per cent average.
There is nothing further that I would like to say except to add that I believe there is no way in which we can invest money to greater advantage than by educating the boys and girls of our soldiers. I might also say that I do not think there was any finer investment made of our country's money than the investment which was made to educate our soldiers when they came back. My understanding is that there were in the vicinity of 40,000 returned soldiers of world war II who took advantage of the educational facilities offered by this country. Those men are now in every walk of life and in every profession. The contribution which they are making to this country today cannot be overestimated.
When the bill comes up for second reading there are certain questions which I would like to ask the minister, but until that time, Mr. Chairman, I will let it stand.


Stanley Howard Knowles: Mr. Chairman, this is good legislation and we heartily welcome it; and we shall certainly give it our full support. There is no question but that these children of our servicemen who gave their lives deserve this consideration, and as has been said by the member for Royal, we could hardly find a better investment than assisting these young men and young women with their education. As I say, we support this bill wholeheartedly.
While I am on my feet I must say that we in this group are very glad that the government's opposition to federal aid to education in some forms has not stood in the way of this kind of federal aid to education. I am sure the Minister of Veterans Affairs and other members of the government agree with me that this bill and other legislation which we have had similar to it, in no way interferes with provincial responsibility for education, which all of us in this country agree to and support. It is another example of the fact that where there is a will there is a way.
I am glad that a way has been found in this respect, and the minister knows that he will hear more from us later on this point.
Before this matter is concluded I hope the minister will make a statement to the house as to whether or not there will be any other veterans legislation presented at this session of parliament. In particular, I hope he will tell us whether or not there will be any changes made in War Veterans Allowance Act.


Victor Quelch: We in this group are wholeheartedly behind this measure, which carries out, at least in part if not in whole, the recommendations of the veterans organizations. We feel that the money spent under

this measure will be money well spent, not merely in the interests of veterans and their dependents, but in the interests of the people of Canada as a whole.
Resolution reported, read the second time and concurred in.
Mr. Lapointe thereupon moved for leave to introduce Bill No. 336, to provide assistance for the higher education of children of certain deceased members of the armed forces and of other persons.



TRANS-CANADA AIR LINES ACT INCREASE IN NUMBER OF DIRECTORS   ADJUSTMENT OF CAPITAL STRUCTURE, ETC.

Clarence Decatur Howe: the second reading of Bill No. 330, to amend the Trans-Canada Air Lines Act, 1937.


William Joseph Browne: I believe the hon. member for Greenwood has something to say on this measure. Since he is not here, could we call it one o'clock?
At one o'clock the house took recess.
The house resumed at 2.30 p.m.


Clarence Decatur Howe: Mr. Speaker, this bill proposes certain amendments to the Trans-Canada Air Lines Act, 1937, as amended. The principal objects of this bill are four in number: the first object is found under section 2 of the bill where provision is made to increase the number of directors of Trans-Canada Air Lines from seven to nine persons. This will enable a wider geographical representation on the board of directors.
The second object is seen in section 9, subsections 1, 2 and 3 which provide for a rearrangement of the capital structure of the corporation to bring it in line with the normal commercial practice of financing part of the corporation's undertakings by means of equity capital and part by borrowed money.
Under these provisions Canadian National Railway Company will be required to surrender 200,000 shares of the capital stock of the corporation for a bond or debenture having a face value of $20 million, bearing a fixed interest rate and payable at a definite time in the future.
In this connection since the inception of Trans-Canada Air Lines the practice has been followed of requiring the air line to pay to the railway company interest on the railway company's investment in the air line. This principle was written into the Trans-Canada Air Lines Act, 1937, during what was called in the act the "initial period". During

the initial period the air line was permitted to add to its operating expenses five per cent on the capital invested in the air line and deficits, if any, were made up by upward revisions of mail payments to the corporation by the department of the Postmaster General. The initial period was to end on December 31, 1939, but was extended by parliament on two occasions and finally came to an end on March 31, 1942. Since April 1, 1948, interest on the capital invested has been paid by the air line to the railway company at the rate of 3 per cent per annum.
The third object of the bill relates to income tax liability. The rearrangement of the financial structure of the corporation will have the effect of keeping the income tax liability of Trans-Canada Air Lines within normal commercial limits. If the capital structure were allowed to remain in the form of equity capital only, no deduction from that income would be permitted for income tax purposes on the interest payment hitherto paid or to be paid to the railway company, with the result that the railway company might be forced to look for payment by way of return on its investment to the net earnings of the corporation, if any, after payment of income tax. Furthermore, the provisions of subsection 4 of section 9 propose to give legal effect for income tax purposes to the interest paid to the railway company on the capital invested during the calendar year 1952 and, as well, up to the time of enactment of the bill, limited to three per cent on the capital invested by the railway company in the air line.
The fourth object of the bill is to be found in section 20. This provides for the extinction of the company incorporated under the name "Trans-Canada Air Lines (Atlantic) Limited." This company was formed to take over the responsibilities and activities of a wartime organization known as the Canadian government transatlantic air service. That organization was set up for the primary purpose of providing a rapid mail service to Canadian troops serving overseas, and its operation was made the responsibility of Trans-Canada Air Lines. When the Canadian government transatlantic air service was discontinued, it was thought desirable to form a separate company to continue overseas operations. There no longer seems to be any reason for making a corporate distinction between what are in effect two divisions of Trans-Canada Air Lines, and the absorption of Trans-Canada Air Lines (Atlantic) Limited into the parent company, Trans-Canada Air Lines, has many administrative advantages.
The above are the principal objects of the bill. However, there are some minor objects. There are certain proposed amendments in
13, 1953
Trans-Canada Air Lines Act section 1 of the bill to section 2 of the act, which might be termed "clean-up" amendments, as they remove from this section definitions of words or expressions which are no longer referred to in the act.
By section 3 of the bill, subsection 3 of section 7 is amended by providing that Canadian National Railway Company may sell the shares of the capital stock of the corporation only with the approval of parliament.
By section 5 of the bill, section 13 of the act is amended to provide that the auditor appointed by parliament to audit the accounts of Canadian National Railway Company will be the auditor of Trans-Canada Air Lines instead of an auditor appointed by the minister.
By section 6 of the bill, certain amendments are made to section 14 of the act which authorize Trans-Canada Air Lines to carry out functions directly connected with the operation of the air line. This section also authorizes Trans-Canada Air Lines to use the descriptive name "Air Canada" which already has wide recognition in the Frenchspeaking sections of the country.
By section 8 of the bill, section 20 of the act is repealed by providing that if another corporation is formed under the provisions of section 20, the number of directors shall not exceed nine, instead of seven as presently provided in section 20.


James MacKerras Macdonnell: Mr. Speaker, I have just a few remarks to make at this time, and I shall ask some questions when we get into committee, and are discussing the sections of the bill. My observations at this time will be general.
I can understand the reasons the minister has given. The desire to escape taxation is one of the most human desires, and apparently it exists even in crown corporations. The reason the minister has given is quite understandable.
I should like to reiterate briefly something that took place in the debate on the resolution, because I think it is a matter of some importance. I had asked the minister a question with regard to the monopoly position of Trans-Canada Air Lines, and I should like to read my question and the minister's answer, because I regard his answer as of sufficient importance to have it on the record.
As reported at page 3548 of Hansard I asked this question:
I would like to ask the minister a question having regard to the answer he gave to the member for Winnipeg North Centre.
That was in answer to a quotation the hon. member for Winnipeg North Centre (Mr. Knowles) had read from a statement by Mr. HOUSE OF COMMONS
Trans-Canada Air Lines Act King on April 2, 1943, which seemed to indicate almost that the monopoly position was going to be without end, or at least there was no indication of an end. I asked this question:
We do have competition between the railways, and I believe they feel it is good. The chairman of the Canadian Broadcasting Corporation spoke about the usefulness of competition. I wanted to ask the minister whether the policy enunciated by Mr. King might not be changed, and whether we might not reasonably look forward to a time when there would be enough airplane traffic for more than one company.
To that the minister replied:
The hon. member is quite right. This is a thinly settled country. We have air services that are essential to the economy. However, today air transport in Canada is not competitive, or is competitive in only a few cases, whether public or private. If an air line company is assigned to a territory, that is its territory and no one else has a right to operate an air service in it. I believe that is a sound policy at the moment. If sufficient travel develops to the point where competition is warranted, then certainly air routes may be entitled to competition.
Having put that on the record, I shall reserve anything I have to say until we reach the sections of the bill.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
On section 1-Repeal.
James MacKerras Macdonnell: I have noticed what the minister said about section 1, and I am assuming it has been carefully drawn. However, it is surprising to me that all the definitions listed on the right side of the page, including such phrases as "gross revenue" and "operating expenses", are no longer necessary. But if the minister is satisfied that this long list of definitions can be taken out, certainly I am not going to set up my opinion against his. I understand from the minister's explanation that none of these is needed.


Clarence Decatur Howe: That is correct. These refer to conditions which applied during the initial period, which ended in 1942. At that time there were certain guarantees when basic revenues resulted in a deficit. All those provisions have been abandoned, with the result that it is possible to delete certain definitions from section 1, which is the definition part. These definitions are no longer essential.


[Stage Direction]
Section agreed to.
On section 2-Board of directors.
William Joseph Browne: What did the minister mean by his reference to regional representation? Another question is
[Mr. Macdonnell (Greenwood) .1
this: How are these five directors to be elected by the shareholders? Will there be anybody else in addition to the Canadian National Railways?


Clarence Decatur Howe: The provision now in the act is that there shall be seven directors, of whom four are elected by the shareholders, the Canadian National Railways.


William Joseph Browne: How are they elected?


Clarence Decatur Howe: The board of the Canadian
National Railways, I would assume, passes a resolution. Perhaps they have only a voice vote; I do not know. But somehow or other four people are designated to be the directors of Trans-Canada Air Lines. I am not sure as to the method followed. Then, three members of the board are appointed by the government by order in council.


William Joseph Browne: Does that not mean that Canadian National Railways are going to control Trans-Canada Air Lines?


Clarence Decatur Howe: Canadian National Railways
owns the air line.


Mr. Stewart (Winnipeg North):: As the
minister knows, in the past there have been requests from Winnipeg that consideration be given to the appointment of someone from that locality to serve on the board of directors of Trans-Canada Air Lines. In view of the increase in the number of directors, has consideration been given to that request?


Clarence Decatur Howe: I undertook two or three years ago that when the Trans-Canada Air Lines Act was in process of being amended I would enlarge the board to make provision for a director from Winnipeg. That is the purpose of this amendment.


James MacKerras Macdonnell: I wish to
add a word on the question of directors. It seems to me that what we are doing in respect of this crown company-and it may be true of any crown company-is to afford a means whereby control to all intents and purposes is vested in the government, but where the government makes the best of both worlds by escaping the limitations of a government department through having a corporation which technically is independent and has the rights and privileges of a corporation including, as we have found out -and I am not criticizing this-the right to keep salaries confidential. In my mind this raises an important question:	Are these
boards, as set up, anything more than creatures of the department? Is there any independent opinion which is brought to bear?

As has been indicated, this board will consist of five members elected by the Canadian National Railways and four by the governor in council. As reported at page 3546 of Hansard the minister said:
It is a board of seven at the present time. Four are directors of Canadian National Railways. One is a retired civil servant and the two others have no association with the government.
In other words, five out of seven were to all intents and purposes government officials or, let us say, directly or indirectly under the control of the government.


Clarence Decatur Howe: Some five of the directors would not like you to say that, though.


James MacKerras Macdonnell: I realize
that; I am trying to speak as accurately as I can, and used the expression, "directly or indirectly". I raise the question as to whether that is a sound position. When I raised it the other day I suggested that there might be a larger board and the minister answered in effect that if you had a large board the members might be careless about attending and would perhaps come only a few times a year and then not be familiar with the business when they did come. My answer to that is that that is true of national private corporations, but nevertheless they do not consider it wise to have a group of their own officials running their company. I do not see why the same considerations should not apply here.
I am quite sure that the minister has no qualms in his mind about the efficiency of the running of this corporation while he occupies the position he does, but nevertheless the fact remains that the operations of many of these crown corporations are quite large and I do not think it is sound principle to have them to all intents and purposes just branches of the departments concerned.
I raised this question in connection with Canadian National Railways and when I did I was careful to say that I was making no criticism of the members of the board. The only member of the board that I know quite well is Mr. Symington, who is an outstanding businessman. I have no doubt that these members are competent, but to have the board as small as it is seems to me to be unwise. In the same way I think that this board is more open to objection because the minister has said quite frankly that five of the directors are going to be elected by the directors of Canadian National Railways while four will be appointed by the governor in council. There you will have a pretty tight family party. I submit that the people of Canada are entitled to have a much more representative board.
Trans-Canada Air Lines Act
I am not foolish enough to think that the directors are going to dictate the policy of the company. I was a director myself once in a small way and I know that usually directors do not do that kind of thing. Nevertheless, I think you should have the combined judgment of a wide variety of men because it may happen that we will run into times when it will be much harder to operate than it is now. I think in this section we are approving of an unwise principle.


[Stage Direction]
Section agreed to.
Section 3 agreed to.
On section 4-Repeal.
Stanley Howard Knowles: What is the effect of this section which repeals section 9 of the act?


Clarence Decatur Howe: I do not remember what section 9 was.


Stanley Howard Knowles: It is set out in the explanatory note as follows:
Shares of capital stock shall not be transferable except to such persons engaged or interested in aviation as are approved by the minister.


Clarence Decatur Howe: In the early stages of the company's history it was contemplated that ownership of the air line might be distributed between those engaged in aviation. In other words, at that time the possibility was being explored of making the company a private enterprise operation. The situation today is that the air line is so firmly established that it is undesirable to change the ownership and therefore that section is being deleted which contemplated the sale to aviation interests.


Stanley Howard Knowles: In other words, this is to make sure that it will stay under public ownership?


Clarence Decatur Howe: It provides definitely that the shares can be transferred only with the consent of parliament.


Stanley Howard Knowles: Good.


[Stage Direction]
Section agreed to.
Section 5 agreed to.
On section 6-Maintenance of air lines.
James MacKerras Macdonnell: Here the power to erect, construct, etc., is continued. Will the minister say whether this power has been availed of to any extent in the past or whether construction has not in the main been done by the Department of Transport or other departments of government.


Clarence Decatur Howe: The air lines has constructed a great deal of real property. At the moment it is building a $3 million hangar in the city of Toronto. It builds its own facilities except those required for passengers. It has built
3760	HOUSE OF
Trans-Canada Air Lines Act passenger terminals, but in the major airports the government usually builds the terminals and leases space to those air lines operating at that airport on a self-liquidating basis. Considerable sums are spent each year by Trans-Canada Air Lines on the construction of physical property.


James MacKerras Macdonnell: Does the minister approve of the idea of separate construction facilities? It would seem like a multiplication of the Department of Public Works. Does the minister think there is advantage in having the T.C.A. do it itself?


Clarence Decatur Howe: The air lines builds its own hangar facilities and either leases from the government or builds its own passenger accommodation. That is done out of its own funds earned from operations.


James MacKerras Macdonnell: That is interesting, but I do not think it settles the question. In the case of passenger accommodation, why should the construction be done by the government? Is it because the accommodation may be used by several companies?


Clarence Decatur Howe: Yes. The Department of Transport and other departments of government such as the post office, the express service, immigration and so on may require space in the building. The usual practice has been for the government to construct the terminal, although in some of the smaller centres Trans-Canada Air Lines builds its own accommodation out of its own funds, just as it builds its own hangar accommodation. However, the practice more often is for the government to build the airport building and lease space to those that require it, including the post office, the express company, immigration, the Department of Transport and so on. Space is leased to the Trans-Canada Air Lines according to its requirements. I might say that the rents are quite expensive.


James MacKerras Macdonnell: When the minister says "government" he means which department?


Clarence Decatur Howe: Department of Transport.


James MacKerras Macdonnell: I am not
sure whether this would come under this particular section, but is it the intention that all necessary financing will be done through Canadian National Railways?


Clarence Decatur Howe: Yes.


James MacKerras Macdonnell: Why is it
considered desirable that T.C.A. should not do that directly when it needs money? Why should it have to make application to Canadian National?


Clarence Decatur Howe: Canadian National Railways own all the shares of Trans-Canada Air Lines.


The air lines is a creature of Canadian National Railways. I think that any other arrangement or any other source of money would be poor business.


James MacKerras Macdonnell: It would
depend upon the respective capacity for borrowing from the public. I am not suggesting that today or tomorrow T.C.A. may want to borrow, but why should it be prohibited from doing so if it is faced with a situation where it needs money?


Clarence Decatur Howe: Canadian National Railways have 100 or more subsidiaries and I think it would be poor policy to have every subsidiary do its own borrowing. It is -much better to centralize the borrowing in the parent company and let it look after its subsidiaries. It is not anticipated that Trans-Canada Air Lines will require more than the $25 million that is now at its disposal plus earnings and accrued depreciation which may be added to that amount.


James MacKerras Macdonnell: If the minister is saying that they are not going to need to borrow, then the question is academic.


William Joseph Browne: Paragraph (j) of subsection 2 reads:
(j) to purchase, lease, or otherwise acquire or provide, hold, use, enjoy and operate such hotels in Canada as are deemed expedient for the purposes of the corporation.
Does that meet the existing need?


Clarence Decatur Howe: It refers to existing or future needs. For example, T.C.A. operate a hotel at Goose Bay and I think-I am not quite sure of this-they also operate a hotel at Gander. I am not sure of that but I know they built and are operating a hotel at Goose in order to take care of passengers stranded overnight.


Mr. Gillis:: With respect to paragraph (k) of subsection 2 of section 6, it is not the intention to change the name "Trans-Canada Air Lines" and use the name "Air Canada" on this continent, is it?


Clarence Decatur Howe: I believe that the name "Air Canada" is used in the province of Quebec.


Lionel Chevrier: It is the translation.


Clarence Decatur Howe: It is really the translation of "Trans-Canada Air Lines", and the purpose of this provision is simply to reserve the term "Air Canada" so that the right to use it in the province of Quebec cannot be infringed. It is really the French translation of Trans-Canada Air Lines.


Clarence Gillis: I understand that, but it is not the intention to change the trade name of Trans-Canada Air Lines across the country?


Clarence Decatur Howe: No.

37G1


Clarence Gillis: It is merely legalizing it.


Clarence Decatur Howe: It is to protect the French translation.


Stanley Howard Knowles: The marginal note to this clause refers to maintenance of air lines. Perhaps under that I might be permitted to say a word which I think would express the view of all hon. members. I want to say that we are proud today, as we have been throughout the years, of the splendid record of Trans-Canada Air Lines, particularly in the matter of safety. In Winnipeg and here too, because of the attention that was drawn to it in the news a few days ago, this safety record was highlighted a short time ago by the skill and cool-headedness of Captain E. W. Norquist and his crew when after they took off from the airport at Stevenson field with a load of some forty-three persons, it was learned that the landing gear and hydraulic equipment had been damaged. The way the pilot and his crew, consisting in addition to Captain Norquist of Murray Lunt, first officer, Ken Flack, purser-steward, and Miss Eva Mossop, stewardess, kept the plane in the air for some six hours until the runway could be sanded and a safe landing effected made quite a dramatic story.
There is no doubt there are many such instances that occur in the service, and they serve to point to the skill and care of the crews who operate T.C.A. planes. We think it is a very good record. There are others whose names might be put on the record, but I think it is only fair to name this particular crew for the way in which they have drawn attention to the care and skill exercised by those who operate this air line.


[Stage Direction]
Section agreed to.
Section 7 agreed to.
On section 8-Governor in council may create corporations.
William Joseph Browne: What is the purpose of changing the number of persons to form a corporation? It does not refer specifically to Trans-Canada Air Lines. It refers to any corporation which Trans-Canada Air Lines or Canadian National Railways may like to form in connection with the business of T.C.A. Why is there a change in the number?


Clarence Decatur Howe: The pattern up to now has been seven directors and the number is being changed to nine. It is felt if any other corporation is formed the same nine directors might wish to act, but in any event the number on the board shall not exceed nine.


William Joseph Browne: Is there anything in contemplation at present?
Fair Employment Practices


Clarence Decatur Howe: No.


[Stage Direction]
Section agreed to.
Section 9 agreed to.
Louis-René Beaudoin: Perhaps I might inform hon. members at this point that clauses 10 to 18 inclusive are repetitions of the clauses that we have already carried.
Sections 10 to 20 inclusive agreed to.


[Stage Direction]
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: Shall this bill be read a third time now, by leave?


Some hon. Members:: Agreed.


Clarence Decatur Howe: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



FAIR EMPLOYMENT PRACTICES


Milton Fowler Gregg: the second reading of Bill No. 100, to prevent discrimination in regard to employment and membership in trade unions by reason of race, national origin, colour or religion.
He said: Mr. Speaker, in moving this bill for second reading I should like to make a few remarks. The speech from the throne last December declared the government's intention to introduce a bill which would prohibit discrimination in employment against any person because of his race, national origin, colour or religion in connection with any work, undertaking or business within the legislative authority of parliament. National labour organizations and many other bodies in recent years have advocated such federal legislation.
I think it is only fair to say that several members of the house have stressed the importance of the government taking some action in this field. I do feel that it would be wrong in introducing the bill if I did not acknowledge one voice from this side of the house that has been forceful, consistent and eloquent in its demands for action against discrimination for many more years than I have been a member of the house. I refer of course to the voice of the hon. member for Spadina (Mr. Croll). I wish to express to him my warmest thanks for all he has done in the past to help prepare the ground to make possible the introduction of this bill at this time. I am sure there are many Canadians
3762	HOUSE OF
Fair Employment Practices outside the house who would want me to make this public expression of gratitude to the hon. member for Spadina on their behalf.
Also, it is with respect that I acknowledge the sponsorship of similar private members' bills by the official opposition labour critic, the hon. member for Hamilton West (Mrs. Fairclough). It was very kind of her to withdraw her bill from the order paper this year to make way for mine, and I welcome her support of the principle of the bill.
I believe that equality of opportunity for employment without discrimination on account of race, national origin, colour or religion is a fundamental right which every resident of our democratic state should enjoy. It is a right which this parliament can well assert and try to protect. The government is now asking parliament to make this assertion by the bill I am introducing in respect of all persons in Canada who are employed or seeking employment in activities which come under federal authority. Although this federal sphere of jurisdiction is relatively limited, I believe that the passing of this legislation may have a far-reaching and healthy influence across the whole country.
I think one can say that the underlying principle of the bill is assurance of equality of vocational opportunity. In recent years Canada, as a member of various international organizations, has subscribed to general declarations concerning the basic rights and liberties of the individual. However, because of the divided jurisdiction established by our federal constitution, Canadian representatives have not always been able to make specific commitments with regard to legislation to ensure the protection of human rights.
For example, in 1948 the Canadian delegation to the general assembly of the United Nations voted for the universal declaration of human rights which was adopted by the assembly on December 10 of that year. The head of our delegation stated that certain important aspects of the declaration lay within the field of provincial jurisdiction in Canada and that the federal government did not intend to invade that field. Canadian participation in the international labour organization has been affected in the same way by the federal nature of our constitution. Canadian delegates to the general conference of the ILO in 1944 approved the adoption of the new declaration of the aims of the ILO which became known afterwards as the Philadelphia charter. This declaration asserts, among other things, the solemn obligation of the ILO to promote among the nations of the world programs which will achieve full employment, higher standards of living, the


extension of social security, adequate protection for the life and health of workers, effective recognition of the right of collective bargaining-and this is the one that embraces the principle of this bill-equality of vocational opportunity, and other conditions conducive to human well-being.
Some action has already been taken by this government to prevent discrimination in employment in those areas of jurisdiction within which the federal authority has power to legislate.
At the last session the Unemployment Insurance Act was amended to provide that it is the duty of the commission to ensure that there will be no discrimination in referring any worker seeking employment, either in favour of or against any such worker, by reason of his racial origin, colour, religious belief or political affiliation. Then, as a further step in its program, in September last an order in council was passed which requires the insertion of a non-discrimination clause in federal government construction and supplies contracts entered into on or after January 1, 1953, to which the government fair wage provisions apply.
This clause expressly forbids the contractor to discriminate against any person because of his race, national origin, colour or religion in the employment of labour for the execution of the contract.
It might be said that discrimination in employment is based on ignorance, prejudice, selfishness, or an attitude of mind which cannot be discovered or changed by legislation. I agree, Mr. Speaker, that there is much to be said for that view. However, I would like to stress the point that the legislation which I am introducing is designed to deal with positive acts of discrimination. There will still be need for continued effort on the part of all those educational, religious, cultural, yes, and government influences, which are now working together and doing so much to create in Canada a climate of opinion in which racial and religious prejudice shall find no place.
The provisions of the legislation will apply to all employers of five or more employees, excluding non-profit educational, fraternal, charitable, religious and social organizations. The legislation applies to employment upon any work, undertaking or business which is within the legislative authority of parliament to regulate, to crown companies, and to trade unions composed of persons employed upon such works, undertakings or businesses. In effect, the legislation applies in respect of the same industries to which the Industrial Relations and Disputes Investigation Act applies.
The provisions of the bill will prohibit employers from discrimination as defined

against any person in respect of employment or prospective employment, and prohibits employers from using the services of any employment agency which in its operations so discriminates against persons seeking employment. The use of advertising in connection with employment which expresses any such discrimination or preference is prohibited. Trade unions shall not so discriminate against any person in the matter of membership.
The legislation will be administered by the Department of Labour and by a division of the work amongst existing staff. It is not anticipated that additional costs for administration will be great.
Provision is made in the legislation for the receipt and investigation of complaints by conciliation officers of the department, and for the use of industrial inquiry commissions for the purpose of ascertaining the facts, with a view to the adjustment of complaints made under the act. Provision is made for prosecution in the courts for alleged infractions of the act and for the imposition of penalties by way of fine and recovery of lost wages where the offence is proved. This procedure for the handling and disposition of complaints is very similar to the procedures provided under the Industrial Relations and Disputes Investigation Act for the handling and disposition of complaints of unfair labour practices. It is proposed to use the same administrative machinery.
I believe that legislation of this nature to deal with overt acts of discrimination is practical and can be administered. The record of New York state, which pioneered in the United States in prohibiting discrimination against workers, has established the effectiveness of an act of this kind.
Passed in 1945, the New York law set a pattern for similar laws in ten other states and, I think, for the fair employment practices act enacted by the province of Ontario in 1951. Experience under the Ontario act perhaps has been of too limited duration to permit an adequate appraisal of its effectiveness. But there is ample evidence that in 71 years of its operation the New York law has had an appreciable effect in eliminating discrimination and in broadening job opportunities' for minority groups.
Briefly stated, the New York law provides that no person shall be denied the right to earn a living because of his religious belief or his racial or national background. It lays down penalties for acts of discrimination, whether by employers, labour organizations, employment agencies or other individuals.
The term "employer" under the New York act does not include a non-profit organization
Fair Employment Practices or an employer with fewer than six persons in his employ. The act does not apply to a person employed by his parent, spouse or child, nor to domestic servants.
While punitive powers are provided for the New York act, to be used when and if needed, the policy of the commission administering the legislation has been to rely on conciliation and persuasion and to avoid legal proceedings wherever possible. The record shows that out of approximately 2,500 cases handled to date the New York commission has had to resort to court action only three times. When one considers this experience in that highly industrialized state it seems a great victory for conciliation and persuasion, with the teeth of the law almost entirely unused.
One might sum up by quoting the following paragraph from the commission's 1951 report on its administration of the law:
The commission realizes full well that the problems of employment discrimination which made a law necessary have not been completely solved. It is satisfied, however, that the law is no longer viewed by the general public as an expedient, an experiment, or a controversial document, but as an important instrument in the building of a stronger, democratic state.
The Ontario act has been in force since the middle part of 1951, and I am advised that in the intervening period, while there have been a limited number of complaints dealt with under the act, these complaints have been adjusted under the provisions of the act without the necessity of resort to the courts in any instance.
I am sure, Mr. Speaker, that the principle of this bill will have wholehearted support in this house and amongst the citizens of this country. It is only with this large measure of public support that it will be effective for the purposes for which it is designed.
Following a discussion of the bill on second reading, if it is the wish of the house, I shall move to refer it for study to the standing committee on industrial relations. I am confident that it can be made into an effective ally to the main effort in Canada for ensuring equality of vocational opportunity.
It is as an -ally that I view this measure. The main effort against discrimination must continue to be carried on by individual Canadians with the potent weapons of human understanding, of charitable example, and with the application of the golden rule. If this bill becomes law we will see to it that it is used only to augment those weapons.
I commend it to the house.


Mrs. Ellen L. Fairclough (Hamilton West):: I should like to join with the minister, Mr. Speaker, in paying tribute to the hon. member
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Fair Employment Practices for Spadina (Mr. Croll) for the work which all of us know he has done in this field over a period of many years. I should like to thank the minister for his kind remarks concerning my own participation, small though it has been, in this field. I think that possibly at this time I might review some of the reasons for my support of this type of legislation and the motives which prompted me, in the first instance, to introduce a bill which, as the minister has said, I withdrew earlier in this session.
As I said on previous occasions, I think it is important that legislation should be provided to implement the universal declaration of human rights as proclaimed before the general assembly of the United Nations on December 10, 1948. Like the bill which it was my privilege to sponsor earlier, this bill applies only to employment in those fields which fall within the jurisdiction of the federal government. I am sure that every member of parliament will be in sympathy with the enactment of legislation which seeks to establish a common basis for all peoples in this nation, regardless of their origin, their religion or the various circumstances and conditions under which they labour. Canada is a nation of producers, and their production falls into many and varied categories. The very life and future of this nation depends upon those who, by their labours in every field, are building an economic stability to support a growing importance of international scope.
Quite apart from humanitarian standards, it is important that all citizens of Canada should recognize equality of effort which every day enhances our nationhood. It will be said, and truly so, that discrimination is of the heart and that legislation cannot alter the thoughts of man. But it is true also in other fields that all legislation sets a standard to which citizens tend to conform more and more as time goes on. In the past two years we have gone a long way towards recognition of the universality of human rights, and it is my opinion it is now expedient to put upon the statutes of this nation testimony to our belief in that fundamental principle. Of course, the members of my party propose to support this motion.
The preliminary steps in this direction which have already been taken were described by the minister, that is the amendment to the Unemployment Insurance Act and just latterly P.C. 4138 which became effective January 1 of this year with regard to government contracts. These steps, taken with the support of all members in this house as well as with the support of various labour organizations, have come about as a result of changing opinions, or perhaps I should say a realization on the part of the people that


there must come a time when we would put upon the statute books of this nation some tangible evidence of our belief in the equality of all citizens. I was very much interested some time ago in reading a statement which was submitted to the minister by the Canadian Congress of Labour, and I should like to quote two or three excerpts from it. The first one reads as follows:
The congress asserts that the denial of a job to any Canadian for no other reason than that his race, his creed, his colour or his ancestry is not that of the majority, is a violation of one of the most fundamental tenets of democracy: equality of opportunity. Such discrimination has no scientific basis; it is based- wholly on prejudice. It is contrary to the religious and moral values on which this country was founded.
Then a little later on the statement says:
It deprives Canada of the best efforts of countless thousands of her people and leaves her the poorer for it.
Then, touching upon the manner in which such legislation should operate, the statement says this:
The removal of prejudice is a long, hard task, and fair employment practices legislation is but one of the many means which must be used in the process.
It is true, Mr. Speaker, that the goal will not be reached overnight. Deeply held opinions and long practised habits are not easily changed. It is my opinion that lasting results can only be achieved by constant educational efforts, coupled with prompt and intelligent handling of reported situations. As the minister has said, this is a fairly new type of legislation. So far as I know the New York and New Jersey legislation of 1945 was about the first, and possibly the New York legislation has become a pattern for most of the -legislation which exists today. Because of that it is very easy to examine the New York record and to judge the effectiveness of such legislation by the experiences within that state. It was, therefore, very interesting to read the current report of the New York commission covering the year 1952. In the introduction, I find this paragraph, which I should like to read to the house:
The New York state law against discrimination, which started out on July 1, 1945 as an experiment in enlightened social legislation, may now be assessed, almost eight years later, as an essential statutory device in eradicating those practices of discrimination which not only deny individual interests and inventives, rights and privileges, but retard the growth of our economy by the squandering of our manpower resources. Such practices can never be justified in a democratic society, and to the extent that they continue to exist . . . they not only violate the law, but they tend to keep us from the immediate goal of our national defence production program: the most effective use of our available manpower supply. They also, quite obviously, supply grist for the propaganda mills of

those forces which seek to undermine the faith of . . . the people ... in our democratic form of government.
Then they, too, proceed to speak of the necessity for an educational program in connection with this type of legislation. A little further on they say this:
In 1945, when the law became effective, it was generally recognized that the ultimate goal could not be reached overnight. Although that observation is as valid today, it is the fact that persons formerly barred by reasons of discrimination from jobs in certain fields or prevented from advancing above menial or segregated levels of employment, have made definite progress towards the achievement of equal employment opportunity. The patterns of the past, however, are not easily changed, and a sizeable job remains to be done.
I was interested, Mr. Speaker, in the minister's remark that the implementation of this bill will be undertaken by the existing staff within his department. I was particularly interested in that because I had previously examined the estimates of the labour department, and I found no item especially earmarked for administration of this legislation. Therefore, possibly I can be forgiven if I wondered whether or not it was the government's intention to proceed very vigorously along the lines of administration of a Fair Employment Practices Act.
Now that the minister has made that explanation I should like to say this: I do hope that the government is not going to pass this bill and push it to one side, waiting for someone who happens to find out about it to make a complaint under the legislation. I believe that the full effectiveness of this legislation can only materialize if the government will institute a proper program of education to go hand in hand with the administration of the legislation itself. I believe that very strongly. We are all human, and we know that workers hesitate to make complaints, particularly those who are in menial employment. In many cases they are afraid of their jobs. They need to be assured that under this legislation it is their right to complain, but not to file complaints indiscriminately. Where there is definite basis for belief that they have been discriminated against they should be encouraged to make known instances and circumstances of such discrimination. I believe that, by removing from them the fear of retribution from employers or others, legislation of this sort can be made properly effective.
In this bill, as in the Ontario bill, provision is made for an industrial inquiry commission to look into such complaints as are made. This of course is an entirely different matter from a standing administrative commission or body to plan not only the administration but the education of workers in this field.
Fair Employment Practices I would urge the minister to give serious consideration to the establishment of a commission which will be charged with this responsibility. 1 feel that it would not only be a good thing at the federal level to have someone actively engaged in dissemination of information, but it would provide a stimulus to those provinces which have legislation of this order at the present time or who may, I hope, enact such legislation at a later date, to proceed along those lines. I believe that at the present time in the Dominion of Canada only two provinces, Saskatchewan and Ontario, have legislation of this kind. I understand that Manitoba is seriously considering such legislation, and one other was mentioned to me as being keenly interested in this type of legislation.
There should be a permanent administra-' tive body charged with this responsibility, and the establishment of a commission should not depend upon the receipt of complaints which cannot be handled by the ordinary conciliation officers of the department.
The minister has spoken of the limited experience which the province of Ontario has had in this matter, and that is quite true. It is my understanding that in the approximately two years that the act has been operative only ten complaints have been received, and these have all been easily handled. While the province of Ontario did not set up any educational program, it did cover the ground fairly thoroughly in the first instance with letters and information to employers, trade unions, and so on. A great deal can be done to make effective the provisions of this legislation if one specific body is definitely charged with this responsibility. This is the least we can do to make such legislation operative. If we are not going to go that far, then the enactment of such legislation is merely giving lip service to a principle; and while that is all very well in itself, unless we are prepared to take more active steps, the legislation itself cannot achieve the result that is desired. I feel very strongly upon this point, because I have travelled pretty extensively across this country and throughout the northern part of the United States. I have seen conditions under which a great many people work and I have witnessed all too frequently instances of discrimination which should not exist. It is up to those who have very definite opinions on this subject to voice them, and to voice them in places where they will be heard right across the length and breadth of this land.
We are creatures of habit. A great deal of the discrimination which exists today is merely habit. We are inclined to gather

Fair Employment Practices together in groups of our own kind, and that is true of those who come from other countries as well. We are proud of the traditions of our own particular race. We all suffer to some extent, and in varying degrees, from religious bigotry. Some of this we do not take seriously; some we do. Because we are human and given to human frailty it is necessary that we should dig beneath the surface of habits which produce discrimination and to set up this example of the intention of the people of this country so that discrimination cannot threaten the rights and privileges of the citizens of Canada, nor can it menace the institutions and foundations of a free democratic state.
Since this bill is to go to the committee on industrial relations I do not propose to speak on any particular clause thereof. There will be plenty of opportunity to discuss them in the committee, and later when we get to the committee stage in this house. In closing these few remarks on the principle of this bill, I should like to quote a small paragraph which has come to me and which is anonymous:
When people are no longer willing to help right the wrongs of others, their own rights are no longer safe.
And so, Mr. Speaker, in supporting this bill I say that if we are motivated by no more than selfishness, it behooves all members of this house to give their wholehearted support to the enactment of this legislation which will do away with one blight which unfortunately infests the whole North American continent today, and in so doing we shall support Canadian principles and give impetus to production, which this country needs more than anything else to take it farther along the road of progress on which it has so well started.


Alistair McLeod Stewart: Mr. Speaker, I should like to say at once on behalf of the C.C.F. that we support the principle of this legislation. Indeed, I think in days to come it will be recognized that this bill has been something of a landmark in Canadian labour history. We believe, of course, that it should be sent to a committee because, while we support the principle, there are many details connected with the bill with which we are quite dissatisfied. We are convinced many improvements can be made in it, but it is in the committee on labour relations that these improvements will be suggested.
For many years the major labour congresses in this country have worked long and hard to try to secure legislation such as this. Along with those labour congresses have been individuals. As the minister has

said, credit should be given to persons such as the hon. member for Spadina (Mr. Croll) and the hon. member for Hamilton West (Mrs. Fairclough) for what they have done to bring this condition about.
But we ought to remember-and the hon. member for Hamilton West has pointed it out-that with the passing of this legislation a new day is not going to dawn overnight. This is but a start. Prejudices are not lost with such speed. Indeed I would say it is much easier to smash an atom than to break a prejudice.
The bill is an attempt by means of conciliation to prevent discrimination in employment. That, I believe, is a proper procedure- although behind that conciliation there must be the force of law and of compulsion. American experience has shown us that in the last resort these measures must be compulsory if they are going to be successful. In those areas where there was no compulsion there was a quite noticeable lack in the efficiency of the legislation as compared with states, such as the state of New York and other states, where the element of compulsion existed.
One of the reasons we dislike some of the sections in the bill is that they are altogether too permissive. In other words, they are not sufficiently mandatory. We would not like to see the bill pass only to see it by-passed at a later time. There was a suggestion by the minister which led us to feel that perhaps not as much was going to be done about this legislation as those of us in the C.C.F. would like to have done. Where discrimination is found, discretionary powers are given where we believe the powers should be mandatory and insisted upon. In our opinion the bill would be strengthened if these discretionary powers were removed. In other words, the legislation must have teeth if it is going to be successful.
Then one further obvious and glaring omission has been brought to the attention of most hon. members, in that there is nothing in the legislation concerning discrimination against a person because of sex. There are still a number of men-fortunately, a decreasing minority-who seem to think that women are not people. They look upon women as chattels, an idea which I trust will rapidly disappear. However, this matter of discrimination because of sex is something which can be discussed more fully in committee.
Another weakness now apparent in the bill is that it has not outlawed those wretched application forms which insist that an applicant for work must state his or her religion, his or her ethnic origin, or the

place where his or her mother and father were born. The bill would have been much stronger had some thought been given to this subject, and I believe the committee should give careful consideration to the outlawing of such stupid questions in applications for employment.
I have never been able to understand why it is better to employ a man because of his religious belief or the colour of his skin rather than because of his innate capacity to do the work. Yet that is what these application forms seem to suggest.
The minister has told us that there will be a director in this new division, and he added that the cost of the division would not be great. I felt somewhat pessimistic when he made that statement, because I think the government could make no greater mistake than to burden with the directorate of this division a man who already is doing something else. Whoever is to be the director will find that he has a full-time job. This is one place where I am sure the members of the various parties in the house would not object to an increase in costs of a department, if we knew that the division was going to function properly.
The minister has said the government worked with other groups throughout the country to try to create a society in which prejudice would have no place. But if we are going to do that properly people will have to be educated; and if we are going to educate them we must be prepared to spend money. I would hope that the director of this division would not be merely an administrative head, but rather one who would conceive it as his duty to act as an educational spearhead in the fight against discrimination all across the country.
While at times we in Canada may think we are free from the more baleful influences we see in other nations, nevertheless we do see examples in this country which would indicate that this kind of education is required. In my journeying around Ontario I have found repeatedly that many who have been settled here for some generations insist upon describing as foreigners those who have been immigrants to this country, but who have now become Canadians. Nothing could be more distasteful or insulting to a Canadian who has taken out Canadian citizenship than still to be referred to as a foreigner.
It is that sort of attitude which we hope education will change, and change for the better. If we insist upon describing these Canadians as foreigners, perhaps it is because they have lived on the other side of the tracks. In Winnipeg I live on the other side of the tracks. I am very happy about it and
Fair Employment Practices proud of it, because I could not hope to live among better people.
However, discrimination does exist in part of almost every community in this country and, indeed, most other countries. There are various bases for discrimination, but, after examining into the subject, I would conclude that, apart from ignorance and prejudice, the greatest is an economic one.
I recall vividly that before the depression people would live as neighbours. They might be of different ethnic groups but, in normal, good times, they would get along very well and continue to be good neighbours. But when times got hard, when there was a struggle for work, a struggle for jobs, a struggle for existence, one would become afraid of the other. He would have the fear that the other might take his job, his very means of existence. When such conditions occur, instead of being good neighbours these people become hostile to each other, if not indeed enemies.
One of the best ways to avoid discrimination is to create and to maintain a society in which there is full employment. In my experience the chief forms of discrimination have been by and large against working people. Anyone who has studied the history of our labour organizations knows full well that race hatred has been used on many occasions as a weapon with which to destroy organized labour. I suppose that that is why labour is such a strong advocate of legislation such as this.
The union to which I belong, the united packinghouse workers, has as its symbol two clasped hands, one black and the other white. The two colours together indicate not only neighbourliness but brotherhood. It is quite understandable why a trade union should have such a symbol. I think labour realizes better than most that racial intolerance, racial prejudice and racial hatred is one of the most dangerous fifth columns we can have in this country and of course it shows itself in practice by discrimination against individuals.
Some years ago I introduced legislation before the house which was not dissimilar to what the minister hopes to achieve in this bill. That legislation did not get very far. Obviously this will get much further. I have been so much impressed with what I have seen of the effects of discrimination that I do not think it can be handled adequately except by an amendment to the Criminal Code. In its effect upon people racial discrimination is vicious and should be made a criminal offence. Discrimination against an individual is an insult to that man or woman, an insult to the inherent dignity of the individual, and it should be punished accordingly.
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Fair Employment Practices
Our experience has been that discrimination has been practised against many of the minorities in this country. We seem to forget that this is a nation of minorities, that there is no one in the majority. When anyone is hurt we should be ready to go to his rescue immediately lest we ourselves suffer in the long run.
I know of many cases where Canadians of Ukrainian descent have complained of discrimination and on examination it has been proved to be well founded. Yet Canadians of Ukrainian descent have been among the hardest workers in this country. They were settled on sparse land and they made gardens out of what was almost desert. They worked day and night to earn a living for themselves and to educate their children. The sons of those people have risen to high positions in many walks of Canadian life. They are to be found at the bar, in commerce and, as this house knows, in politics. As one who lived among them I can say that the record of their sons, and indeed their daughters, during the last war was second to none as the honour rolls of Winnipeg schools can well testify.
They take their citizenship most seriously.
I remember when there was a provincial election in Manitoba two or three years ago a Canadian of Ukrainian descent who was 72 years of age decided it was his duty as a Canadian citizen to get out and vote although he was sick in bed. He attempted to get to the voting booth but before he could enter it he dropped dead. That man took his citizenship most seriously indeed. It is intolerable that Canadians such as these should be discriminated against as they have been in the past.
One of the reasons why we support this legislation is our hope and belief that it may help groups such as this. There are others with whom I am well acquainted who have suffered just as badly, and I speak now of citizens of the Jewish faith. Anti-semitism I am afraid is something which is always latent, not the least among employers. In my professional experience I have come across employers who refuse under any circumstances and for no good reason to employ one of the Jewish faith. No reason can be given except that of ignorance. Such ignorance can be dispelled only by educational processes carried out, I would hope, by the minister's department and other institutions and organizations in this country.
I have found discrimination against the Jewish people in every walk of life in Canada, from the universities down through every occupation. Yet who is there to deny that the Jews have made a most distinguished contribution to Canadian life and culture? We can only hope that this legislation will do


something to help those who have been so often and so unjustly discriminated against and against whom the hands of their fellow-men have been so often raised.
There are other groups which will hope for relief and help from legislation such as this. A young Polish-Canadian of Winnipeg gave his life during the last war. He was a pilot of a bomber and he ordered his crew to bail out while he continued to fly the bomber until it disintegrated in the air. He was given the Victoria Cross posthumously for his heroism. Yet his people have suffered. Canadians of Polish descent have been among our hardest workers and have contributed much to Canadian life. It is wrong that people such as these who are Canadian citizens should be discriminated against because of their religious views or because they bear names which do not seem to suit Anglo-Saxon employers.
I have brought to the attention of the House of Commons previously the case of certain Canadians of German origin whose sons and daughters were in the armed forces but who were compelled to report month after month to the mounted police who thought perhaps they might be disloyal. This sort of discrimination unhappily runs through almost every segment of our society.
Not the least of those affected are our coloured people. There are not many of them, yet they have suffered as have many other groups, although they are good, law-abiding citizens. Two days ago I happened to be passing through Dresden, and I could not help but think of the wretched action which had brought such notoriety to that community. I have heard of many examples of discrimination against people because they were coloured.
Marisse Scott of Owen Sound hoped to work in a hospital in that town but she was refused employment because the colour of her skin was not acceptable to the hospital authorities. They said to her, "we are sorry, but we do not accept coloured girls." She could not get employment in the vocation which she had decided she wanted to follow, that of nursing. But her parents were not content to let it go at that and they took the matter up further. The trades union congresses of Canada took up the matter and finally Father O'Reilly of Guelph, Ontario, persuaded St. Joseph's hospital to let this young girl work there. She was given employment in that hospital, and all credit to the authorities. She turned out to be a most excellent nurse.
This sort of enormity against human beings has to stop and I can only hope that this legislation will help to stop such stupidity.

I hope that this legislation will really have teeth in it. Yet history of the past has shown that on occasion after occasion employers have opposed such legislation on the ground that they did not really need it and it would interfere with their freedom to hire whom they liked, and all the rest of the usual conventional excuses. But Business Week, a reputable businessmen's magazine, had this to say about the United States experience:
Employers agree that FEPC laws have not caused near the luss that opponents predicted. Disgruntled job seekers have not swarmed commissions with complaints. Personnel friction has not been at all serious.
We will find exactly the same thing in Canada. Then Mr. Arnold Forster in Personnel Journal said:
Some businessmen have worried that FEPC would involve them in endless red tape and in complicated legal proceedings, but again the statistics show that these fears are unfounded and that voluntary adherence to the law has been the rule rather than the exception.
The time is coming, and I hope it comes soon, when we shall all realize that discrimination against human beings is wasteful socially and economically. What is more important, discrimination against human beings is morally indefensible. It has been put no better than by the most Rev. Bernard J. Shiel, auxiliary bishop of Chicago, when he said:
A fair employment practices law would give legal recognition to the God-given dignity which every human being possesses. If we are truly Christian, we cannot preach one thing and practice another . . . Economic discrimination is immoral; it is clearly sinful. How long can we expect to sit by while children of God find their paths blocked at every point by the forces of bigotry and discrimination?
We have sat by for a long time. Now we are taking the first step forward, and it is a step which we in the C.C.F. most warmly welcome.


Mr. C. E. Johnston (Bow River):: Mr. Speaker, I do not intend to take very long to discuss this bill on this occasion. I think it is generally conceded in all parts of the house that the general principle of the bill is going to be accepted as a step in the right direction. Therefore we in this party have no hesitancy in accepting the general principle of the bill. When it comes before the committee no doubt there will be some argument with respect to certain sections and some changes will have to be made, but I think we can all agree on the general principle.
It has been pointed out that Canada is a great nation, and we all recognize that fact. One of the obligations which we as Canadians must assume is that of seeing to
Fair Employment Practices it that everybody has the opportunity to be employed. Certainly in our country there should be no lack of opportunity, and when those opportunities present themselves it should be the privilege of any Canadian to make his livelihood by being employed in the development of the resources of the country. In my judgment the bill provides a basis, at least, whereby all can enjoy the opportunities presented by our country.
Generally speaking I think nearly all industries and individuals would like to be as fair as they can to their employees in giving employment regardless of race, religion or colour, but it seems to me that many of the difficulties that present themselves to such employers are not nearly so great as they imagine. I believe that one of the difficulties in enforcing a law such as this is not going to be so much the question of legal enforcement as it is going to be a matter of education. When we get our people educated to the point where race, religion, creed or colour make no difference, I think we will have gone a long way in getting over the racial, religious and colour difficulty.
I do not believe there are very many members of the house who have not had a great number of letters and other communications from women's organizations throughout the country presenting the problem with which they are faced. They contend, and probably rightly so, that one of the faults of the bill lies in the fact that no provision is made against discrimination as to sex. When the bill goes before the committee I think every opportunity should be given to the women's organizations to present their briefs and support their claims. Then the members of the committee will be in a much better position to judge what action should be taken.
There is also another form of discrimination so far as labour is concerned that is not mentioned in the bill and which is becoming very widely practised in this country. I refer to discrimination on the ground of age. It seems to be the current practice of industry now to retire a fellow when he reaches approximately 50 years of age whether or not he has sufficient pension or income to take care of him. When he reaches 60 they are mighty sure that he is old enough to retire, and when he gets to be 65 they kick him out. One of my friends behind me says that he might be ready to go to that other house over here by that time, but that depends.


Mr. Speaker:: Order.


Charles Edward Johnston: Again it is purely a matter of opinion. That too is dependent upon education.

Fair Employment Practices


Mr. Hansell:: The poorhouse, you mean.


Charles Edward Johnston: Some of these questions will probably confront us as the bill advances through its various stages, but I think the proper place to discuss them is in the committee. I am pleased that the minister has said the bill will be sent to the committee, and it seems to me that is the time when further discussion should take place. We are glad the bill has been introduced, and we accept the general principle of it on this occasion.


Mr. David A. Croll (Spadina):: Mr. Speaker, may I first say that I appreciate the kindly reference made by the minister to the part I played in the formative stages which led to the introduction of the bill today. The fact of the matter is that the minister's name appears on the bill and the credit is his, but I appreciate that there is enough reflected glory for the rest of us.
It is my view that this bill does credit to this great House of Commons. I am pleased to join with other members in hailing it as the latest step in reducing racial and religious discrimination in this country. I am both pleased and proud to be associated with a government which is making an earnest effort to maintain this and other basic principles of human rights. By passing the bill we indicate that we are realists and we give a lead to the provinces and to industry. It is now written, it is spelled out, endorsed by parliament and supported by the Canadian people.
As other members of the house have already said, intolerance and discrimination are the two sides of the coin of infamy which has been current far too long. It is the duty of all of us, nations no less than individuals, to wipe out this base currency which is a constant threat to our freedom. I am reminded of the words of Mrs. Eleanor Roosevelt, a great woman, spoken several years ago when she told of her embarrassment while she was chairman of the United Nations human rights commission owing to the prevalence of racial intolerance in her country. These are her words:
Racial discrimination is now an international problem. Each account of discrimination, segregation or lynching discredits us abroad. Racial discrimination is the weak spot in our democracy. We must re-examine ourselves and work out a solution as quickly as possible.
It can be added that discrimination is also a source of grave infection within a nation. No country can be healthy or secure so long as that infection goes unchecked. So far as this country is concerned I am very happy to say that the incidence of acts of discrimination has always been low. I believe this is

due partly to the good sense of our people and partly to the fact that almost every one of us in Canada belongs to a minority group in some sense, be it racial, religious or linguistic.
With so many minorities living together we are more concerned with respecting each other's freedom because we know in the long run it safeguards our own freedom. Yet we must be honest enough to admit that prejudice and discrimination are not unknown in Canada. Unfortunately these ugly things do exist, these cancers in the flesh of our freedom; and they call for the application of preventive medicine without delay. Many of the symptoms do not appear dangerous to some people at first glance. A barber refuses to shave someone because of his colour; a deed of land contains a clause that the land may not be sold to people of a certain race; a winter resort cancels a reservation because of the guest's colour or religion.
Some people do not consider these things dangerous, but they are. They are what Mrs. Roosevelt called "the weak spot in our democracy". If we do nothing about them, if we permit them to increase and multiply, then in the long run we shall be without democracy; for if there is no freedom then there can be no democracy. So we have examined ourselves and we have been working out a solution. Ontario and Saskatchewan have already taken steps along similar lines, and I would like this house to particularly consider the situation in Ontario. I indeed am very proud of it.
In 1944 the province of Ontario enacted a law against discriminatory advertising. In 1950 the conveyancing and law of property act was amended to prevent racial restrictive covenants in conveyances of land. In 1951 the province passed a fair employment practices law. I wish to quote Premier Frost, who is a man of stature and who has a place in the hearts of the people of Ontario. He had this to say on the passage of the act:
I think our people in this province do not want to discriminate. They do not like it and do not want it. The position of the government and my personal position is one of strong opposition to racial discrimination of any kind.
The province of Ontario, in passing the fair employment practices act in 1951, took a great step forward. That was the first act of its kind in Canada. Unusual, too, was the inclusion in the act of the following significant preamble:
Whereas it is contrary to public policy in Ontario to discriminate against men and women in respect of their employment because of race, creed, colour, nationality, ancestry or place of origin;
Whereas it is desirable to enact a measure designed to promote observance of this principle;
And whereas to do so is in accord with the universal declaration of human rights as proclaimed by the United Nations;

There we have very positive, welcome and decisive steps in the long fight against discrimination.
This government is not without credit, and I think I should point out the steps which have been taken by the present minister on behalf of the government. In recent months it has removed, in a number of important areas, the legal bases for some of the more blatant forms of discriminatory practices. I want to review a few of them briefly, as I do not think the minister did himself justice in his opening statement. Perhaps he was a little too modest.
In June of 1952 the Unemployment Insurance Act was amended to include the following subsection:
It shall be the duty of the commission to ensure that there shall be no discrimination in referring any worker seeking employment, subject to the needs of the employment, either in favour of, or against any such worker, by reason of his racial origin, colour, religious belief or political affiliation.
Of lesser importance but still involving the important principle of religious liberty was the amendment in July, 1951 of benefit regulations under the Unemployment Insurance Act ensuring that a claimant shall not be prejudiced under the act when, because of his religious beliefs, he cannot accept work on Saturday.
Possibly the most significant federal measure was the recent order in council, P.C. 4138, dated September 24, 1952, which establishes a fair employment practice policy regarding government contracts effective from January 1, 1953. The preamble states: -it is considered advisable that a clause prohibiting discrimination by the contractor in the employment of labour in respect of race, national origin, colour or religion should be incorporated in all contracts made by the government of Canada for construction, remodelling, repair or demolition of public buildings or other works, or for the manufacture and supply of equipment, materials and supplies.
Today we are considering a further step in the same direction but, before going on with that, I should like to put on the record something this house has overlooked. On February 3 there was a bill before this house entitled the Royal Style and Titles Act. There were admirable speeches made in the house that day by all members who spoke. I want to refer particularly to part of the speech made by the Prime Minister (Mr. St. Laurent) as it appears at page 1567 of Hansard. His words are most expressive; they are beautiful words, and they ring so genuinely:
We all know from our own Canadian experience that unity between us, unity between all the elements of our population, is and must be based upon that recognition by us all that we are all equal to each other and that all have the same
Fair Employment Practices rights to Canadian citizenship, and that Canadian citizenship gives us equality in every respect with all our fellow-citizens, whatever their origin, their traditions and their cultures may be. It is because our forefathers had the wisdom to recognize that it was not going to be necessary in this Canadian nation to pour all the elements into the same mould that we now have a Canadian nation.
We are all proud of being Canadian citizens because we can be so and can exercise all our rights as such without forgetting our racial origins, our ancestral traditions, and without there being any effort by any of our fellow citizens to make us over into any other kind of Canadian than we happen to be because of our racial origins and with our ancestral traditions.
The bill before us at the present time calls for no racial discrimination, particularly with regard to membership in trade unions. The stakes which trade unions have in discrimination being wiped out are certainly as great as those of management. Fortunately Canadian labour unions have directed a strong campaign for the enactment of fair employment practices, and are deserving of much credit for their persistence in this regard. Their resolutions passed at annual conventions, their briefs presented to the government, their constant vigilance in reporting on discriminatory practices, should not go unnoticed at this time when we are considering this legislation. Nor should the efforts of other groups, religious, fraternal, welfare and minority bodies, who have acted on their own or in co-operation with labour organizations to end discrimination in this country.
I need only remind you that Canada has received since the end of world war II new Canadians to the extent of 165,000 who have survived nazi concentration camps. If it were to permit these people alone to become established and employed as citizens equal in status to native-born Canadians, this fair employment practices legislation would be more than warranted. By this legislation we show these people that their suffering, their persecution and discrimination has been fully replaced in Canada by a sense of tolerance and understanding, in employment and in other ways.
I want to take issue with those who say you cannot legislate for tolerance. This type of remark is made too lightly by people who want to dismiss this problem without thinking it through. Has the Criminal Code not acted as a deterrent to lawlessness and crime? I do not believe it is far afield to say that you can legislate for tolerance. I am convinced that most people are not intolerant by nature. They may, and indeed they often do, fall into intolerance through carelessness or lack of consideration, or they are led astray by a bad example. Legislation in this field can have a very direct effect upon

Fair Employment Practices human conduct. First of all it brings to light the fact that society officially disproves of intolerance and discrimination. I do not think we should underestimate the effect of social disapproval on people's minds. Secondly, by positively discouraging acts of discrimination it will reduce the incidence of such acts and so reduce the number of bad examples which others might be tempted to follow.
I am not suggesting that an act of parliament is sufficient to transform an intolerant man into a tolerant man, but it definitely can introduce a climate that will foster the spirit of tolerance and the reduction of discrimination. Law not only expresses custom; it creates it. I am satisfied that the vast majority of our people are not intolerant, but some of them may be potentially so. There is in every society a fringe, the young, the impressionable, those with real or imagined grievances, who can fall prey to intolerance if it is allowed to work on their minds. If we keep them on the right track, if we show them society frowns on discrimination, if we prohibit acts of discrimination by law, then I believe we will have gone a long way toward eliminating the vice itself. The government, by setting an example of tolerance within its own sphere 

that is all that can be expected of it- can accomplish that. It can set a standard of public morality which is bound to have an effect on industry and the private citizen.
I am particularly hopeful as to the future of this legislation in establishing a national standard. In this connection I recall the experience of the wartime labour regulations. As hon. members are aware, that was a revolutionary advance in labour legislation in Canada. Imperfect though it was, it set a national standard for labour regulations which left its mark on every factory and home in Canada. Then when the dominion partially vacated the field of labour regulations at the end of the war, the provinces drew heavily on the national code in framing their own labour laws. Thus the dominion established a standard and a practice which moulded the pattern of labour relations in this country. In the same way, I anticipate with confidence that our good example here will be followed across the nation by the provinces.
Let no one think that legislation such as this is mere whistling in the dark. The experience in Canada, and in various states in the United States, has proven that regulation of employment practices really works. There has generally been an acceptance of these government standards which speaks

well for the future of human relations. Discrimination in employment can be brought under control. But it is not enough merely to enact the law. It must be enforced, and it must be accompanied by continuous public education. I do not propose to devote too much time today to a consideration of the enforcement aspect, other than to say that there are no great obstacles in the way.
This bill does not have as its purpose the abolishment of prejudice; that is to change human nature. It is a law to prevent antisocial manifestation of prejudice. It is possible of enforcement, and it can be determined that men are denied employment because of racial or religious prejudice or for other such reasons. It is a difficult task, but we do it every day before our labour relations boards when men, who have been discharged for union activity, obtain a hearing and are often reinstated. It does need a patient, perceptive approach. I am satisfied that the Department of Labour has sufficient good men in its ranks to do the job conscientiously and well. The important thing is that the law be enforced. It must not be allowed to sit idle on the statute books, and I am sure it will not.
But enforcement alone is not enough. Authorities agree that the elimination of intolerance depends, in the long run, on a process of continuous education. I appreciate that this matter of education is not one that can be provided for in this bill. I am concerned to raise it at this point as an indication of what remains to be done after this bill has been enacted as law. Education is an indispensable part of the act. It can only be administered with great restraint, and with understanding of some prejudices that, unfortunately, have roots in our Canadian life. There must be recognition that persuasion is generally more potent than coercion in leading men to change their long formed habits.
Just as education may be essential to the act, so this act will be considered an indispensable element in directing men to follow fair practices. Law is the most potent educational force that we have. The lack of law in this field of human relations suggests that discriminatory employment practices are acceptable; whereas the passing of this bill would be the sign that discrimination on grounds of race and religion is deplored by the community as a whole.
Intolerance is the product of darkness and ignorance. I believe firmly that it can be brought under control by legislation like this, and experience bears me out. Our schools, our churches, our community organizations are already doing much in this direction, but their work must be increased. Public opinion

must be brought to bear on the problem in order that we may have not only obedience to this new law but also understanding and acceptance of what it means and what we are trying to accomplish.
Finally, Mr. Speaker, I think the days of discrimination in this country, for the reasons for which this act is passed, are numbered. Mind you, the end of discrimination and prejudice will not come about automatically. It will require hard work and determined effort. But ours is a democratic and resilient society. It has shown fundamental respect for human rights, and it has absorbed change in response to the will of the majority. The sooner we learn to practise what we are brought up to believe, the sooner we will be at peace with ourselves and our neighbours. The late President Roosevelt wrote just before he died:
Today we are faced with the pre-eminent fact that if civilization is to survive we must cultivate the science of human relationships-the ability of all peoples of all kinds to live together and to work together in the same world at peace.
We add a new weapon to our arsenal for strengthening democracy at home. I close by quoting a man of great eminence, James Cardinal McGuigan:
We must endeavour to accord to all men of whatever colour or creed equality in the fundamental rights of the human person, equality in the respect due to man's dignity, equality of rights of employment.


Mr. George H. Hees (Broadview):: I was
pleased indeed to hear the Minister of Labour so generously pay the credit which was justified to the hon. member for Hamilton West (Mrs. Fairclough) for the part she has played in bringing this matter before the house. We all know, as the minister mentioned, that last year she introduced a private member's bill almost identical to this bill and withdrew it at the government's request so that a government measure could be brought forward at this time. I feel that a great deal of credit is due her for the fact that we are discussing this very important bill today.
I was also very pleased to hear the minister pay credit to the hon. member for Spadina (Mr. Croll). I think all hon. members know the work he has done over the past few years in bringing this matter to the attention of the government. I am particularly interested in the work of these hon. members, because the hon. member for Spadina defeated me the first time I ran for this house, in 1945, and I was elected the same day as the hon. member for Hamilton West. The hon. member for Spadina also happens to be my member of parliament, so of course I take a great deal of interest in everything he does in and out of the house.
Fair Employment Practices
I believe the principle embodied in this bill is a very important one indeed, not only for the application which it will have to the industries to which it will apply, but also for the educational value it will have on all industries throughout this country.
The fact that we in this parliament are in favour of this measure is a clear demonstration that the people of the country are in favour of it because, after all, we are simply their representatives. This legislation should provide a great deal of encouragement to provincial governments right across the country to introduce similar legislation in the near future.
In Ontario we have had a fair employment practices act in operation for the past two years, and it. has proved to be both workable and beneficial. During the first year of its operation only five complaints were lodged with the Ontario department of labour, which is an indication of how well the act has operated in that province.
Many people ask this question:	Can you
eliminate discrimination by legislation? They point out the fact that an employer can give any number of excuses, other than the right one, for his refusal to employ a certain applicant for a job. If the employer persists in refusing to employ people who fall into one or more of the categories specified in this bill, these rejections will form a pattern. This pattern will make it possible to prosecute the employer and get a conviction. From then on it will become increasingly difficult, if not impossible, for that employer to break the law.
As I said earlier, another important reason for passing this bill, and I believe it is the most important reason, is the educational value it will have. If we in this parliament demonstrate our belief in this measure by making it law, I believe the effect this legislation will have on industry throughout the country will be very great indeed. Heads of companies will then have been given a clear lead by the government, arid it will be up to them to impress upon their personnel directors, their superintendents and their foremen the importance of judging an applicant for a job solely on his merit and on no other basis.
I have found from practical experience that those who are responsible for employment within a firm can be educated to observe the principle embodied in this bill; and they have found, often to their very great surprise, that the people against whom they have held a prejudice in the past have turned out to be no different from all other people with whom they live and work. The resulting effect upon their outlook is very refreshing indeed.
3774	HOUSE OF
Fair Employment Practices I believe this bill will help to make this kind of education more general throughout the country and the result within industry generally will be beneficial indeed.


Angus MacInnis: I wish to join with those who have welcomed the introduction of this bill. Credit has been given to certain people for their part in leading up to the introduction of the measure. However, I would rather believe that this bill is the result of the maturing of the Canadian people.
If credit is to be handed out I do not believe I should go without a certain amount of credit myself, because I have given many years of my life to the fighting of racial discrimination, in part in this house, when it was a pretty hard thing to fight. The hon. member for Spadina said that great credit was coming to the government for what they had done. I would say there is great discredit also coming to the government for what they did, because do not let us forget that it is only four or five years since people in this country were deprived of their vote simply because of their race and religion.
Many times I have been amazed and dismayed by the depths to which otherwise decent people would stoop to use racial prejudice against a political opponent. I believe that is a thing of the past in Canada; I do really believe it, and I am glad indeed that that is so. In my opinion racial prejudice and intolerance are not things that are a part of the human attitudes and human behaviour. In Vancouver I live near a high school, and I know that even when racial discrimination and racial issues were at their height in that part of the country, I could walk out any day and see youths of various colours, various nationalities and various racial origins walking together. I would see girls who were Chinese, Japanese, Scotch, English, Irish and every other nationality walking arm in arm along the streets, with no thought that one was different from the other.
I discussed this matter at one time with a high school principal. He said, "We have no / difficulty at all with the race question in this7 school. There is no feeling in the matter on the part of the pupils. It is only after they have been in the universities and are approaching graduation, and are beginning to look for jobs, that they notice someone is Jewish, that someone else is Japanese or someone else is of some other nationality." The feeling of prejudice, the intolerance between one racial group and another, is the result of ignorance and a lack of understanding of our common origin, intensified by! economic circumstances.


I believe I should know as much as anyone about racial prejudice, because I suppose no people in the world were more intolerant not only of other races but of different sections of their own race, than that from which I have come. The Macleods hated the Macdonalds, and the Macdonalds hated the Macleods; the Gordons hated the Stewarts and the Stewarts hated the Gordons; the MacFarlanes hated the MacDougalls, and the MacDougalls hated the MacFarlanes-and I imagine the Maclnnises hated all of them. But that is of the past. The clans are all agreed now that all of them are really the salt of the earth; and if what I am saying were not being reported I would like to say that I agree with them.
Then the question of enforcement arises. I am not greatly concerned about that, because I do not think it will be a big problem. This is as much a step in education as a step in statutory law. I believe we can eliminate racial intolerance and racial discrimination when, no matter what the circumstances may be, each one of us will denounce that sort of thing every time it raises its head, no matter when or where. So I am not greatly worried as to any difficulties that may arise in connection with enforcing this legislation. I think it will operate in much the same way as the traffic lights on our streets. People observe them automatically and almost universally. Sometimes a drunken or a reckless driver will drive through a red light; but most people observe them because they know there is something back of them. They know the police and the courts stand back of those red lights. They know, too, that it just is not the thing to do to disregard regulations which are helpful to everyone.
I am convinced that the great majority of the people will react in that way toward this legislation. I shall not detain the house further, but would only repeat that I am pleased indeed the minister is bringing this legislation before us, and I express the hope that/ it will become law before parliament prorogues.


Mr. Daniel Mclvor (Fort William):: Mr. /Speaker, I wish to add only a brief word, because there are some points I want to have clear.
First may I congratulate the minister upon the intelligent way in which he explained the principle of the bill; even I could understand it. The people today who are receiving the workers are the employers. That includes not only the dominion government, but those other employers engaged in carrying on work throughout Canada.
Then the unions must receive the workers. There are groups who will not receive all workers. For instance, a union may raise its

hand against some workers; a contractor may advertise by stating, "No coloured people need apply; no man or woman from the Orient need apply".
Both these restrictions should be ruled out. I know that at the lakehead we have contractors who are practising the principle contained in this bill. Some will recall that when the orientals were forced out of British Columbia some of them were wise enough to stop at the lakehead. They received employment there, and today they are just as good workers as we have, even as good as the Irishmen. Not only are the Japanese good workers, they are also good citizens. Today they are taking their place at the lakehead, and many of them have become some of our best athletes. One of the best umpires in our hardball games last year was a man of Japanese origin.
But the question is this: Will all the people of Canada, no matter what their ideologies may be, receive these citizens? I doubt it very much. We know that today many workers have been expelled from union executive positions. What does the minister intend to do with people who have not the inclination to be loyal to Canada and to Canada's queen? I think we should have an explanation along those lines.


Stanley Howard Knowles: Mr. Speaker, those who have spoken on this measure this afternoon have presented the case for it so well that those of us who come along at this stage of the debate hardly need to take very many minutes. However, I feel that this is one of those occasions when parliament is really dealing with something fundamental. In my view there is nothing more basic than the fact that all human beings are created equal and that our rights should be equal, not on the basis of race, colour, creed or religion but simply on the basis of the fact that we are human beings.
It has taken the human race a long time to approach the realization of that principle, that ideal, but I believe we have made considerable progress toward its realization. I believe that one of the allies in the battle against discrimination, in the battle for equality of opportunity among all peoples, is legislation. I agree with those who have suggested this afternoon that we need education, as well as other forces, but it is also true that something can be done by legislation. Therefore I am glad to see this legislation being brought forward at this time.
I happen to be a member of the committee to which this bill will go and I shall have an opportunity there to express my views on 68108-239J
Fair Employment Practices some of its sections. However, I did want to indicate my wholehearted support of this measure and to associate myself with the remarks of my colleagues the hon. member for Winnipeg North (Mr. Stewart) and the hon. member for Vancouver East (Mr. Maclnnis), and also with the support that has been indicated by members of other groups.
I noted in particular the suggestion made by a number of members that legislation of this kind being enacted at the federal level may well play a part in encouraging provinces that have not passed legislation of this nature to put such legislation on their statute books. As a matter of fact I feel that that has happened already in the case of my own province of Manitoba. Unions and other interested groups in Manitoba have been trying for a long time to persuade the government of that province to enact fair employment practices legislation. That government has shown itself interested, but has been reluctant to act.
When we met on November 20, 1952, to hear the speech from the throne that opened this session of parliament it was indicated that there would be fair employment practices legislation at the federal level. Lo and behold! when the Manitoba legislature met a few months later it was announced by the government there that they would follow suit. So I suggest that there is validity in the hope that although this legislation applies only to workers who come under federal labour jurisdiction, it will encourage those responsible for labour matters at the provincial level to follow suit. I hope it will not be long until legislation of this kind, or even better, will be the rule throughout the country.
I am glad the decision has been made to refer this bill to the committee on industrial relations so we can study it carefully, and so interested bodies, particularly the trade unions which have been so keen on this legislation, will have an opportunity to appear before the committee. Indeed that committee will have some interesting sessions when it meets, which I take it will be shortly, because we will have before us not only this bill but also the subject matter of another bill, namely the one in my name which provides for the check-off of trade union dues, in support of which various labour groups will wish to make representations.
With these few words I am happy to indicate my wholehearted endorsation of the principle of the bill now before us.


Mr. J. W. Noseworthy (York South):: Mr. Speaker, before the minister closes the debate
3776	HOUSE OF
Fair Employment Practices I want to say that I support this legislation. Like the hon. member for Vancouver East (Mr. Maclnnis) I fail to see any great reason for expressly congratulating the government upon the introduction of this particular piece of legislation. As in so many other instances to which we have called attention in this house, the government is following public opinion rather than giving progressive leadership. It is because legislation such as this has become reasonably popular, it is because the need for it has been shown by trade unions across this country, it is because a great deal of basic educational work in this field has been done by the trade unions that the government comes along with this legislation. Nevertheless we welcome it and shall support it.
I would suggest that the government could assist in this field by giving financial aid to those agencies whose primary purpose is the breaking down of racial and religious bigotry and prejudice in this country. There are some organizations which have done a great deal toward this cause. But unfortunately there are other organizations of good repute which contribute to disaffection between peoples of different religions and beliefs. I think the government should give consideration to rendering assistance to such organizations as exist for the primary purpose of breaking down this prejudice and bigotry.
It is important to a country of minorities such as Canada that there should be a greater degree of national unity established. I am one of those who believe that eventually this must become part of our Criminal Code, and that injury or mischief to public interest shall include the promotion of disaffection or ill will or hostility between peoples of different religions and beliefs.
In the meantime education can be assisted by legislation. Those who are engaged in the educational field and the breaking down of these prejudices find it most difficult when children, for instance, are taught tolerance in the school and then find intolerance in their homes, in business circles, and in other fields as the rule of life in the world in which they have to live. Anything the government can do by way of legislation such as this to give assistance to organizations promoting unity will help to build Canadian unity.
There is one omission with which I am concerned and which has been called already to the minister's attention. That is the omission of the word "sex", and of any reference to the elimination of discrimination in regard to employment because of sex. The minister has told us that the legislation is in line with the United Nations charter and the


universal declaration of human rights. I am sure I do not need to remind the minister that the preamble to the United Nations charter includes among other things a reference to the equal rights of men and women. The universal declaration of human rights says in article II:
Everyone is entitled to all the rights and freedoms set forth in this declaration, without distinc-. tion of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.
The fact that the bill is going to the industrial relations committee encourages us to believe that possibly the government may be willing to accept a suggestion from the committee that the word "sex" be added to the bill so that it will include discrimination on the basis of sex as well as on the basis of national origin, race or religion. Certainly our C.C.F. representatives on the committee will put forth that plea to the government, and I am confident that others will also do so.
I can only hope the minister will lend an ear to that request, and that such a provision may also be included.


Clarence Gillis: Mr. Speaker, before the minister closes the debate I have a few thoughts on the principle of the bill that have not been expressed by anyone so far, and I should like to give voice to them at this time.
I agree with everything that has been said about the bill being a step in the right direction. The fact that there will be a national basic law on the matter of discrimination will be a deterrent to those who might practice it. A good example of that is the federal statute on civil reinstatement of members of the armed forces, which is enforced by the Department of Labour. We have not had many cases arise but there have been some, and I am reasonably sure that if there was not an act compelling employers to employ returning service personnel we would have had a great deal of difficulty in having many returned servicemen re-employed.
As an example of how that legislation is enforced, I had a case recently-as a matter of fact I have had several since the legislation has been in effect-of a boy from Korea. When he returned and made, application for his old job he was told that there was no employment for him because someone had filled his place. He asked the personnel manager of the company if he knew about the Reinstatement in Civil Employment Act, and pointed out that he had a right to re-employment under that act. The answer he got was that the government was not going to tell them whom they were going to employ. That young fellow came to see me. I got in touch with the Department of Labour in Ottawa,

and inside of 48 hours there was a man in that area who definitely told the manager of the company that it was the law of the country, and that it was enforceable and would be enforced. The boy was back at his job within 48 hours.
The fact that this legislation will be on the statute books in my opinion will have the same result that the hon. member for Vancouver East (Mr. Maclnnis) described. It will be generally observed as our traffic laws are.
I have looked over the organizations to which the bill applies, and I am disappointed to see that so far as the application of the legislation is concerned the words "political discrimination" have been omitted. In the United Nations bill of rights discrimination on political grounds is also included, and as a member of the industrial relations committee which will consider the bill now before us I am going to attempt to have that provision included. I think it is badly needed because, while government members look upon the bill as a desirable thing and many of them have expressed their approval of it, I want to remind them that there is considerable political discrimination in this country on the grounds of patronage.
I do not have to leave my own riding to give instances, and it applies right across the country. Many times government contractors have come there on some large project, and one of the conditions laid down by the contractor has been that the applicant for work get a slip from the chairman of the patronage committee in the area before he will be employed. Therefore I am looking forward with interest to the enforcement of this legislation along that line. The very government that is passing the act condones, unofficially at least, a system of employment by contractors whom they employ that I think could very well be discontinued under the terms of this legislation if the words "political discrimination" were included.
Then there is another omission that was mentioned by the hon. member for Bow River (Mr. Johnston), that of the man who is 40 years of age. Employers right across the country have a policy at the present time under which they will not hire anyone in their plants, factories or mines who is over 40 years of age. That is discrimination because of age.


An hon. Member:: Governments, too.


Clarence Gillis: Governments take the same stand. While we are doing a desirable thing in trying to eliminate racial and religious discrimination, let us not forget for a minute that thousands and thousands of Canadians are walking the streets today because of discrimination against them on the ground
Fair Employment Practices of age. The reason for that of course is that companies that have established pension plans are not employing anyone who is not young enough to make a substantial contribution to the pension fund before he reaches retirement age. A citizen of Canada who has reached the age of 40, and who still has about 20 good productive years ahead of him, should not be discriminated against because he happened to become unemployed when he was approximately 40 years of age.
Another instance of discrimination so far as employment is concerned very badly affects ex-servicemen. The minister, who was minister of veterans affairs for some years, realizes that in every part of the country where there is heavy industry young men may come back from service with war wounds and disabilities incurred during service entitling them to a pension at the rate of 5 or 10 per cent, but in the areas in which they live they are 100 per cent disabled as far as employment is concerned. That is because one of the requirements for employment is that the man pass a medical examination, and when the company's doctor finds that he has a 5 or 10 per cent pension then he is not considered fit for employment in heavy industry and he is not employed. I am sure that members of the house representing ridings where there is nothing but heavy industry have many such young fellows come to them trying to find some way of securing employment.
Provision should be made in the bill to cover the three points I have mentioned, political discrimination, discrimination against young men who may have a 5 or 10 per cent disability, and discrimination against men who having reached the age of 40 still have 20 years ahead of them in which they can produce, but are debarred from employment as a result of the general policy adopted by employers.
I wanted to make these points, Mr. Speaker, because I intend to press for their inclusion in this bill when the committee is set up. I see no difficulty in enforcement of these things. I think the bill will work just as the Reinstatement in Civil Employment Act works.
Members can help in this matter of education. Members can talk about it, and they can assist in cases where there is discrimination. If employers across the country are not living up to the terms of this bill the best medium of education is the member of parliament in his riding publicizing its provisions and assisting those who may be affected.
It is not easy for people across the country to understand the mechanics of the bill and
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Fair Employment Practices to know how to go about obtaining redress under it. The member of parliament is the best agency in the matter because he knows the necessary mechanics for getting redress under the terms of the bill. Example is the best method of education. If the employers of this country desire to implement the terms of this bill all they have to do is put it into practice in their industries, plants and mines across the country.
On the other hand, trade unions have been pressing for this for 50 years. I remember it being a subject matter of debate and resolution in local unions at least 30 years ago. The trade unions too can practise the virtues of this legislation by opening their doors and admitting suitable people where they can be found; and I have particular reference to the coloured people in this country who have been discriminated against for a good many years.
If the unions and employers set the example across the country there will be no difficulty in working out the problem. I am not really concerned about the broad problem of racial and religious discrimination, but I am concerned over the discrimination cropping up in connection with our own citizens, people who were born in this country, because of age, war disability, or the other matters that I mentioned.
I shall not take up more time, but I wanted to let the hon. member for Spadina know that as a member of the committee I will seek his assistance in having these points covered in the bill. If we are going to give the provinces and others a guide in this field, then we should make this bill as tight and all-inclusive as possible. I do not think the time is far distant when most of the provinces in Canada will be following the lead of the federal government in this matter.


William Joseph Browne: I would like to make a few remarks on this subject before the minister replies. First I would like to congratulate those responsible for the introduction of this legislation: The hon. member for Spadina (Mr. Croll) who has worked for and advocated this for such a long time; the minister, for his fine sentiments expressed when introducing the bill; and the hon. member for Hamilton West (Mrs. Fairclough) for the work she has done on this subject.
I think everyone here is in perfect agreement about the 'desirability of this legislation. As some hon. members have pointed out, there has been a gradual recognition over the years of the fundamental human right that all men are born equal in the sight of God; and this bill gives legislative effect to the aims of the second commandment to love your neighbour as yourself for the love of God. We are all children of the same Father and


therefore ought to treat each other as brothers.
It is a long distance from the old days about which I have heard in my own family. When immigrants went to the United States they saw signs on the factories saying "No Irish need apply" or "No Catholics need apply". I think every one of us in our own experiences has come across examples of prejudice either toward ourselves or toward others on account of race, religion or colour. I remember very well an example which occurred over 35 years ago, and I am glad to say that I took the part of a negro who was refused admission to a certain organization with which I was connected and in which all the others were white. I remember that I advocated that he should be allowed to enter.
I would also say that this legislation owes much to the influence of the trade unions and those who have been connected with the co-operative movement. We had today an appeal by the member for Kootenay West (Mr. Herridge) on behalf of the co-operative movement addressed to the Minister of Finance (Mr. Abbott). I must say, having been connected with the co-operative movement for many years, that I believe one of the chief attractions to the movement for those who have joined has been the principle of universality, that everyone is entitled to join no matter what may be his creed, colour or race. That gives a feeling of brotherhood, and people work together. I believe it is one of the reasons for the success of the cooperative movement during the last hundred years. They have recognized universality as the first of their principles.
I agree with the hon. member for Cape Breton South (Mr. Gillis) that consideration should also be given to the inclusion in this legislation of a clause dealing with political discrimination. Although the minister may have used his influence to have inserted in government contracts a clause that no one shall be discriminated against on account of his political affiliations, I feel quite satisfied, from my own experience, that men have been debarred from employment on government jobs or jobs undertaken for the government by contractors, whose reputation is that they are supporters of the government; and such men have not been given employment. I think that in the committee stage consideration should be given to that question.
I should also like to state that I have received, as no doubt other hon. members have received, communications from women's organizations across the country, and especially from my own part of the country, asking for the inclusion in this bill of a clause dealing with discrimination on account of sex. I believe, and I have been informed by those

in authority, that it is not suitable to have such a clause included in a bill of this kind; however, the hon. member for Hamilton West has on the order paper a bill which deals with this problem and which would provide equal pay for equal work regardless of sex.
I have nothing more to say except that I hope the function of this committee will be performed in perfect harmony, and that we shall have brought back to us a bill which is improved in every respect.


Mr. Deputy Speaker:: If the minister speaks now he will close the debate.


Milton Fowler Gregg: Mr. Speaker, in closing the debate I need only refer to one or two particular points that were made this afternoon.
First I would like to touch very briefly upon the point made by my hon. friend from Fort William (Mr. Mclvor). I want to assure him that this bill will not, and I repeat "not", require our trade unions to accept persons who have proved their intention to propagate subversive activities in Canada, whatever the background of those people may be.


Daniel (Dan) McIvor: Thank you.


Milton Fowler Gregg: We can deal with that further if necessary when the bill comes back to the committee of the whole, but I want to make that point quite clear at the present time.
Equally briefly may I refer to the remarks made by the hon. member for Cape Breton South (Mr. Gillis) in which he referred to political discrimination. Whatever one may say about political discrimination in general, in so far as my bill is concerned I want him to read section 3. That section sets out those undertakings and activities to which this bill will apply; and I am quite sure he would not want this government, or the Minister of Labour, to look into the activities of various firms who are free and independent and to dictate to them whether their employees should be supporters or non-supporters of the Liberals, Progressive Conservatives, or members of the C.C.F. or Social Credit parties.
On the other points he made, namely that sex, disability, age

and I would add disabled civilian workers-should be included here, I should like to ask him, between now and the time this bill goes before the standing committee, to consider whether or not that cannot be more effectively accomplished by sharpening up the placement services of our national employment service. For administrative purposes I should like to keep this bill as simple as possible, so we can get a background of experience in carrying its principle into effect. However, I leave that thought with my hon. friend.
Now, Mr. Speaker, this afternoon I gained the impression that it was the general desire
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that this bill should go to the committee on industrial relations. I am in accord with that. In closing might I express my gratitude not only for the very kind words that were said in favour of the principle of the bill, but also for the very high standard of the debate in which the members took part this afternoon.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee oh industrial relations.


Douglas Charles Abbott: the second reading of Bill No. 329, to amend the Emergency Gold Mining Assistance Act.
He said: Mr. Speaker, with your permission and with the concurrence of my colleague, the Minister of Mines and Technical Surveys (Mr. Prudham), who is unable to be .present today, I should like to make a statement concerning the bill to amend the Emergency Gold Mining Assistance Act which is before the house.
Hon. members will recall that on November 24 last I announced that the government would introduce legislation to increase the amount of assistance payable to the gold mining industry for 1953 gold production. I explained at that time that rising costs and other factors during the past year had further increased the special difficulties affecting the industry. These developments had placed a number of mines in a position where they might be compelled to close down. The government decided that some upward adjustment in the assistance payable under the Emergency Gold Mining Assistance Act was desirable in order to help prevent the further closing of mines and the consequent hardship which this would cause to communities largely or wholly dependent upon them.
The Emergency Gold Mining Assistance Act has been discussed many times in this house and hon. members are generally familiar with the formula by which assistance is calculated. In brief, the amount of assistance a mine receives depends both upon its costs of production and upon the number of ounces of gold it produces. The bill now before the house will broaden the formula for calculating the amount of assistance for the calendar year 1953 by changing the rate of assistance element in the formula. The act in its present form defines the rate of assistance as one-half of the amount by which the cost

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of production per ounce exceeds $22, with a maximum of $11.50. The proposed amendment will change this definition of the rate of assistance to one-half of the amount by which cost of production per ounce exceeds $18, with a maximum of $13 50. In effect, most mines eligible for assistance will receive an additional $2 for each ounce produced to which the rate of assistance applies.
No change will be made in the other component of the formula. The new rate will apply to the number of ounces of gold produced by the mine in 1953 in excess of base year production, or one-half of 1953 production, whichever is the larger. I would remind hon. members that the mines have a choice of 1948, 1949 or 1950 as base year for purposes of this calculation.
In submitting this amendment for the consideration of the house, I express the belief that it will be of material assistance to the industry generally in meeting its special difficulties, and that it will enable the continued operation of many mines in communities which are dependent upon them.


Mr. Rodney Adamson (York West):: The
brief statement made by the Minister of Finance (Mr. Abbott) deals with the factual situation concerning the formula for assistance. In my opinion, however, the question on this act goes a great deal further than merely the production of gold and the salvation or the continuance of the gold mining industry in Canada. Vitally important as that is, this bill asks for an expenditure of money to assist in the production of gold. It must, therefore, be considered from two points. First and most important, is gold worth producing? Is this expenditure of money as a subsidy to one industry justified? The second question is, will this palliative preserve the Canadian gold industry?
The first question is the governing one, because if gold has no value to the Canadian economy we certainly should not be wasting manpower and material producing gold, nor should we be asking the Canadian taxpayer to spend this money on it. The question of the usefulness of gold depends almost entirely on its monetary purposes. Here the questions are, can gold help make currencies convertible, particularly the so-called soft currencies? Will freely convertible currencies aid world trade; and can Canada, a small country, do anything in a positive way to assist by her fiscal policy? In my opinion, the answer to those questions is yes. It is because of the importance of this problem which can be called world trade that I venture to take the time of this house to discuss the matter in some detail.

As was evident, and as I forecast last year when the present Emergency Gold Mining Assistance Act was introduced, the cost of this legislation to the Canadian taxpayer is increasing. This bill is immediate and concrete evidence of that fact. The new proposals are a reversion to the old $18 per ounce cost from the present $22 basis, and the maintenance of the present cost bracket at which the assistance is paid by changing the maximum payment per ounce from $11.50 to $13.50. This means an increase in assistance of about $1 an ounce, as the minister said, on the ounces coming under the provisions of the bill. What this will cost is a matter of estimate, and depends upon production and a further rise in the cost of gold mining. I feel, however, that I would not be far wrong in hazarding the guess that it would be in the nature of $14 or $15 million for the current year.


Douglas Charles Abbott: Not the increase?


Agar Rodney Adamson: No, that is the total; that is what it would cost this year. I would be surprised if it did not cost a little more than that, with the increased cost of steel and other materials. I must repeat that the gold mining industry has never asked for a bonus, but only that their product be sold freely on the open market. Unfortunately, owing to deterioration in the industry and the continuing rise in the cost of mining, there are few gold mines in Canada today that could continue operation without this subsidy. In other words the great gold industry, which was last year the greatest producer in terms of dollars of all mineral industries, including oil, is now a creature of the federal government and beholden to it for its very existence. I repeat that the gold industry today is the creature of the federal government. This is the inevitable penalty-it is true of any industry in the world-when an industry abandons the open market economy and accepts subsidies from the government. If this bill has done nothing else, if that simple point can be got across to Canadian industry and Canadian mining, it may have justified itself. This was pointed out by myself and a few others, notably the Northern Miner, at the time the principle of bonusing the industry was introduced.
Gold, as far as Canada is concerned, has three main uses. The first use is as a metal of development. Today, when our frontiers are just opening up with regard to iron and uranium, we should look back and see how these deposits were found and where the development money in the first place came from. Steep Rock may be a vastly larger iron ore deposit than as yet we have any idea.

It may be so large, in fact, that it will actually exceed the great Mesabi iron range on which was built the United States industrial machine of the last half of the nineteenth century and the first half of the twentieth century. This range-and I shall call Steep Rock a range, for that is what it is-was discovered by the efforts of two men, Joe Errington and Don Hogarth; they with imagination and capital disclosed this vast asset. Their venture capital came largely from a gold mine which is now closed down at Little Long Lac.
The Labrador finds would have been impossible without the capital of men like Jules Timmins, which was in turn based on the Hollinger gold mine. The nickel finds at Lynn Lake were also discovered by men looking for gold. The Eldorado pitchblende uranium deposit was discovered because the gold deposits provided the funds for La Bine to continue his search. The new Frobisher exploration in the Yukon, as well as what appear to be amazing base metal discoveries by Hudson Bay Mining and Smelting Company, Ventures, Consolidated Smelters, Prospectors Airways and others, are in large part the result of men looking for gold which started, incidentally, in the tough, romantic days of the gold rush of 1898.
Shades of Robert W. Service and Dangerous Dan McGrew! Today there are, as far as I know, no active, straight gold explorations going on in Canada. Gold prospecting is a thing of the past. There is no surer way to close down the frontier than to destroy men's incentive to look for gold. This is the first penalty Canada suffers because of the belief that governments can manage currencies.
So much for the first value of gold to Canada; and I wish to give fair warning that if the Canadian frontier is to be pushed farther north, if we want new Steep Rocks, new Lynn Lakes, new Eldorados, new Labradors, we must have a prosperous gold industry to help us find them.
I come now to the second value of gold to Canada, and that is as a curb against internal inflation. No matter what the short-term situation may be, there is no real evidence that we have checked inflation. In fact there is concrete evidence to the contrary. The recent settlement of the railway dispute will unquestionably mean greater costs of transportation, and costs of transportation are written into every single thing that is bought or sold. If transportation becomes more expensive, the goods which are carried must also become more expensive. The recent 7 per cent increase in freight rates is, in my opinion, merely the start. The security of 68108-240
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the people can never be guaranteed by government promises. It can never be guaranteed through pension plans, and it can never be guaranteed through any form of insurance, so long as the national currency has a constantly decreasing purchasing power.
I have pointed out from statistics of the Bank of Canada that the wholesale price index has shown an annual increase of about 5 to 7 per cent for approximately the past quarter of a century, or ever since the Bank of Canada was brought into being. The wholesale price index has risen, with only three exceptions, in every year since the bank was established. These three exceptions were the panic years prior to the outbreak of the last great war, and the readjustment brought about after the outbreak of the Korean war which, in the year 1951, brought about excessive buying and caused what is known as a high erratic in the graph. From the most recent information, the figures for 1953 will equal or even pass that of 1950, putting it somewhere well above the 220 mark. I gather that the February 15 figure for the wholesale price index was 220-9. With this continuous and continuing rise in the cost of wholesale goods, which is a reliable base index, there can be only one result; that is that the purchasing power of the Canadian dollar is continuously falling.
The fact that our budgets are balanced, the fact that our currency sells at a premium over the United States dollar, the fact that we have a favourable balance of payments in world trade, the fact that we have a good pattern of personal savings in the country, do not alter the fact that we also have inflation. With inflation no man is safe, and nothing the average man can do, irrespective of new and greater pension plans and higher and higher wages, of more and more social security, can prevent his eventual pauperization.
With the shorter working week, with the rise in direct and indirect taxation, and with a constantly lengthening life span, it is now impossible for any man who is not wealthy enough to amass common stocks or other equities, commercial properties or a productive agricultural plant, to retire with any degree of security whatsoever; and it certainly makes it almost impossible to provide for his family. This hits directly at the workingman, the man on an hourly wage. Unless we can prevent further destruction of the purchasing power of our currency, we are destroying his security, no matter what glib political promises we make about it and no matter what wages he may now be receiving. I contend, Mr. Speaker, that unless our currency can have a fixed value in gold we shall never be able to assure our retired and pensioned people adequate security.

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I have discussed the question of inflation. There is, however, the other side of the coin, namely deflation, caused by the fantastic panic in men's minds over the possibility of peace. The communist propagandists must be having an absolute festival over the behaviour of the New York stock exchange, which has virtually panicked over the proposals put out by Moscow for peace. If ever the capitalist system handed the communists a heaven-sent piece of propaganda, Wall Street certainly has done it this time. I would like just to make one comment about this, and that is no country in the world will prosper by peace so much as Canada. The idea that it is profitable to tax ourselves at the rate of $2 billion a year to produce equipment and material the sole purpose of which is destruction and which in turn is destroyed itself after a very short life, is one of the strange mental processes of the present generation which historians may argue about for centuries to come.
If, however, we do have deflation leading to a depression and the panic fear drives frightened capital into rabbit holes, then as gold in the final analysis is the only real money, the paper value of currencies, stock prices, bond prices, commodity prices and, in fact, the price of everything else will be driven down by this action to a point where the ratio of gold to paper approximates the empirical equilibrium formula of about one to four. This will mean that security prices will decline about 80 per cent. I leave it to the imagination of members of the house as to what sort of depression that will bring about. Anyone who says today that the $35 price for gold is adequate is merely asking for this calamity to happen.
The third factor is, of course, international trade. Quite recently the president of the Canadian Chamber of Commerce stated that in point of view of gross value Canada was the third trading nation of the world. Whether this is correct or not, there can be little doubt that on a per capita basis we are far out in front. Therefore international trade means more to Canada than it does to any other country in the world, and a solution to the currency problem is more vital to us than anyone else. Canada must trade to exist, and any individual or organization who questions this is a voice from the past and a throwback to nineteenth century Whig colonialism.
In this regard I wish to mention specifically the Winnipeg Free Press which, for political reasons, has been trying to accuse the Conservative party of advocating trade restrictions. Let me say to this croaking voice from the past that were it not for high taxation and the cost of transportation many manufactured

goods could be sold in Canada cheaper than in the United States. I have several instances in my own industrial constituency where subsidiaries of United States companies are making goods cheaper than their parent companies in the United States; but because of taxation and distribution costs the final cost is higher.
The question of trade, however, has little to do at the present time with tariffs. The chief stumbling block to world trade is the lack of convertibility of currencies, and that supreme evil, exchange control. I do not wish to be in any way critical of the United Kingdom government, and no doubt they honestly believe they are doing the right thing, but never in history has exchange control brought anything but ruin. Exchange control is a form of price fixing applied to money. The government attempts to fix the rate at which its nationals are allowed to buy its paper currency in terms of other currencies. The result of this is that, if the price fixed is too high, there is a shortage of other currency. It further creates a chronic excess of imports over exports, which has to be prevented by such measures as embargoes, quotas and absolute prohibition of imports. It diverts production into wrong channels by reducing relative incentives to export. It makes it more desirable to export to soft currency countries than to hard currency countries where there is greater competition. It encourages the continuance of internal inflation; it destroys the safety valve readings by which people can measure the extent of inflation and the degree of world confidence in the currency.
To say that there is a dollar shortage in the United Kingdom is to say that the pound has been pegged at too high a price, and to tacitly admit the error of the $2.80 pound. This I hope to show is wrong. The United Kingdom made two previous fantastic errors with regard to currency convertibility, and for the same reason; they tried to convert at too high a price.
In 1926 the gold standard was restored in England at the 1913 level of around 80 shillings an ounce, equivalent to our old $20.67 price. With a greatly inflated currency base, as well as an enormously increased national debt, there simply was not enough gold to go around at the old rate and, consequently, there was a run on the United Kingdom gold holdings, particularly by France. The United Kingdom lost gold so fast that she was driven off the gold standard in 1931 after the publication and the implications of the May report became understood.

In 1947 the United Kingdom again attempted convertibility at the overvalued rate of $4.03 United States to the pound. This was such an obvious mistake that it caused such a rapid loss of gold and dollars that the most drastic reduction in the price of the pound had to be taken in September, 1949, from $4.03 to $2.80. Whether these two moves, the return to the gold standard in 1926, or the $4.03 convertibility of 1947, were brought about by pride or for whatever reason, they were both fantastic mistakes. Consequently there is today in the United Kingdom an enormous public feeling against convertibility because of these two tragic experiences. It seems strange that a country whose whole life and prosperity were built on free trade should twice in less than a quarter of a century stray so far from the basic principle of free trade in connection with the most important article of all in connection with free trade, namely the national currency, the pound sterling.
Trying to make the pound convertible at an artificially arrived at price is just as ridiculous as trying to sell goods at a price away above the world market. The employment of exchange control, quotas, embargoes and all the other devilish devices of scarcity is the inevitable result. If a currency is to be convertible it must be convertible freely, and the price in terms of other currencies must be decided by the action of the market. Surely our own experience in Canada should be an example for all countries still using exchange control. And here may I say that I advocated, and this party advocated, a return to free convertibility of the Canadian dollar long before the government haltingly adopted it.
To peg a currency and employ control to keep it at that point is like using a fever thermometer which is stuck at 99 degrees. I realize, of course, there are extremely difficult situations in the United Kingdom, and that the problem of the sterling balance held in India and Egypt is a severe deterrent. It is, however, because I have faith in the United Kingdom that I am convinced that allowing the pound to find its own level on the world market would bring about not a decrease in its value compared with the United States dollar but an actual increase, and I am further convinced that if exchange control were done away with there would be a flow of capital into England rather than out of it.
Just the other day I talked to a leading British steel industrialist in the company of a United States banker. I asked them both if exchange control were abolished, did
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they think United States capital would flow into the denationalized, now privately-owned, steel industry and provide the capital which is apparently lacking within the United Kingdom itself. They both were of the opinion that this would be so and that once capital was allowed to move freely it would find work to do. Idle capital and idle gold benefit no one. Exchange control destroys the usefulness of both.
The sterilized hoards of gold, whether held by governments or by private individuals, do nobody any good; and it is the evil genius of the money managers, particularly in the central banks, which has brought this about. They were ardently encouraged by politicians of all parties who, by managing the currency, could show at least on paper a fictitious condition of prosperity. I ask anyone in this house what sort of prosperity we would be having in Canada if -we had to go back to 1938 prices. It would not be national prosperity, it would be national bankruptcy.
It is in this regard that the sterilization of gold is doing so much harm. The world's currencies must have a common denominator, and that common denominator must be freely available to the holders of the world's currencies. In no other way can true international convertibility be brought about. To bury gold in a national fortress, in a private hoard in Tangier, in a bank in Paris or in an old sock under the bed is to destroy its power to help world trade.
I have great sympathy, however, for the man or woman who wishes to keep a personal holding of gold. The little man with his defenceless family who has been ruined through inflation from time to time has full realization that the only way in which he can protect his capital, amassed over the years by the exercise of thrift, which we are all taught is a sound virtue and the essence of good citizenship, is to change his paper currency into gold. With proper functioning, monetized holdings are not sterilized hoards in the ordinary sense but are rather the base on which sound paper currency is issued.
Many of the present critics of gold and some economists have overdone the danger of individual gold holdings. They go back to the fable of King Midas and forget that savings in the form of currency, insurance policies or bonds are subject to raids by governments through planned inflation.
The prime agency destroying the usefulness of gold and delaying free convertibility of currencies is the international monetary fund. It seems ironic that this body, set up primarily to bring about convertibility, has acted as the greatest deterrent to this and to world

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trade. The pattern of the operations of this organization is so sinister that some consideration of the bona tides of the personnel should be given. First of all, at the beginning of the international monetary fund at Bretton Woods there was a man called Harry Dexter White, who was reported to have changed his name from Weiss, and who at that time was assistant secretary to the United States treasury and a major framer of the international fund set-up. He was a friend of Alger Hiss and was charged with being a communist and slated to appear before the United States Senate committee. Unfortunately, however, he died before he could give any testimony.
The next communist to be associated with the international monetary fund was Frank Coe, who has been secretary for many years and has only recently been discharged. This man refused to answer charges before the United States senatorial committee as to his communist affiliations. Another man in the organization, Edward Posniak, apparently is still working for the fund. He was called by the committee, but as yet has neither refused to testify nor has he been before them.
Here are three men, two of them definitely known communists and the other under suspicion, who were key personnel in the international monetary fund. I do not say that the international monetary fund is a communist-dominated organization, but put yourself in the place of a communist with executive authority in that organization. What would the communists most wish to do? Surely they would have two objectives. The first would be as far as possible to impede world trade, particularly between the sterling and the dollar countries. The second would be to make ineffective a great United States asset, namely the $23 billion of gold held idle in the United States. Surely the fund, since its inception, has been a prime factor in preventing convertibility and has, through its restrictions, made it extremely difficult for non-dollar countries to buy in the United States. While world trade has shown great growth, it must be remembered that this growth is expressed in depreciated dollars and other currencies whose real purchasing power is now about a third or less of what it was prior to the war.
The other action of the international monetary fund, which is obvious, has been to prevent any use being made of $23 billion worth of gold held idle in Fort Knox. The slogan "Trade, not aid" will be nothing but a pious hope unless some method is found by which the present non-free or controlled currencies can be made freely convertible.

I am convinced, therefore, that long ere this Canada should have stood out against these trade-strangling regulations and demanded that the international monetary fund repeal them or else we should have withdrawn from the fund completely. I believe that just as our dollar, when allowed to go free, has maintained itself as the primary currency in the world, so too, had we the courage, could we have established ourselves as international bankers and made either Montreal or Toronto a world clearing house. It is likely that the United Kingdom will restore the free bullion market sometime in the future, and when this happens Canada will have lost a great opportunity, in fact a golden opportunity.
With the passing of every year the amount of monetary gold available decreases and thus makes international trade that much more difficult. It is estimated, even by figures published by the international monetary fund, that gold made available for monetary purposes runs a bad third behind gold for industry and gold for hoarding. Whether or not the figure for gold being absorbed into industry is a true figure, and does not represent at least in part gold going into hoards in the shape of jewelry, particularly in Asia, is an interesting question. However, the main point is that gold is not being used for monetary and trade purposes, which is what concerns us here.
The figures for gold going into national treasuries or to central banks show a rapid decline, both in total as well as in percentage of production. Prior to the war gold production ran at about a billion to a billion and a quarter dollars per annum based on the $35 United States price. It has shown a decline of about 20 to 25 per cent in the last ten years. From 1946 the international monetary fund has published the free world production, together with the amount of gold going to the central banks. The figures are interesting because they show this point quite clearly. The figures are as follows:
World Gold Production		Increase to Monetary Reserve
	million	million
1946 	.. $752	$5801947 	.. 767	7401948 	.. 785	3901949 	.. 817	3831950 	.. 844	3841951 	.. 826	2121952 (estimated) 	.. 825	330
Thus it is seen that in the years of the operation of the international monetary fund, gold going to useful purposes had declined from between 75 to 80 per cent of total production to an estimated 40 per cent for

this year, or an actual 26 per cent in 1951. If there is anything which should damn the operation of the international monetary fund it is this decline in the availability of gold for monetary purposes.
Compare these figures with the situation in the ten year period prior to 1939, when the total world gold production was $11-3 billion and the increase in monetary holdings was $10-3 billion. This means that in that period 91 per cent of the total world current production went directly into monetary hold-
Gold Mining
ings and only 9 per cent, or approximately one billion ounces, went into industrial use and private holdings. I should like at this point to put a short table on the record which comes from the report of the bank for international settlements, showing the disposal of gold since the year 1946.


Mr. Speaker:: Has the hon. member
permission?


Some hon. Members:: Agreed.


Agar Rodney Adamson: The table is as follows:
(All figures are millions of dollars (U.S.))
Inc. in Produc- official
Year	tion	reserves1946	
763	3501947	
774	4301948	
798	3801949	
833	4801950	
858	4101951	
844	130Total	
4870	2180
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
Agar Rodney Adamson: Mr. Speaker, just before the dinner adjournment I had put on Hansard the figures of the bank for international settlements giving the disposal of newly mined gold since the year 1946. As will be seen from the figures which the house gave me permission to table, they differ slightly from those of the international monetary fund, but I am quoting both authorities to show that while there is a difference in some of the figures the difference is slight, and they are both in agreement as to the main point at issue, which is that gold is not being monetized and therefore is not fulfilling its basic function. It is particularly significant that these figures show that 85 per cent of the 1951 production was lost to the central banks whereas prior to the war 91 per cent of gold production went into monetary reserves.


Mr. Cote (Malapedia-Maiane):: I should like to ask a question. I know that the minimum number necessary for a quorum are present, but I should like to know if it is according to the rules to have only two members of the opposition sitting in the house.


Mr. Speaker:: If there are twenty members in the house there is a quorum.
To indi-	To	Total to	Percentvidual	private	other	age of prouses	holdings	sources	duction280	133	413	54120	224	344	45170	248	418	52200	153	353	43210	288	448	52220	484	714	851200	1490	2690	55-


Agar Rodney Adamson: I think the opposition is much larger than two.


Stanley Howard Knowles: The hon. member must be referring only to the official opposition-


Alcide Côté: I thought you
were with us.


Mr. Speaker:: Order. It makes no difference which side of the house members are on. If there are twenty members in the house there is a quorum.


Alcide Côté: Thank you, sir.


Agar Rodney Adamson: The answer to the question of the disposal of monetary gold is obviously that the controls on gold envisaged by the international monetary fund, which developed out of the Bretton Woods agreement, simply broke down. The demand for gold in the face of the world-wide planned or unplanned inflation was so great as to push aside the barriers. Virtually the sole remaining impact of the action of the international monetary fund in holding the price of gold at $35 U.S. per ounce is on the gold producers and the gold producing countries, by which Canada as the second greatest suffered. We are subsidizing the middleman and the brokers, and a great deal of our production does not go to our friends.
I come now to the question of price. Here I wish to take most violent disagreement with those people who say that a government, generally referring to the United States

Gold Mining
government, should raise the price of gold. In my opinion the United States government should do nothing of the sort and in fact cannot do anything more calculated to continue the present difficulties than to unilaterally raise the price of gold. The price of gold can only be determined by the action of the open market. What this will be, no man can say. The important thing, however, is not the price. The important thing is the stability of the price, and that can only be found by the free market. Unless gold can be bought, sold, exported or imported freely and without government restrictions of any kind whatever, it will not fulfil its function as a lubricant of trade or as a standard of value.
To say gold is worth so many dollars or so many pounds an ounce, without allowing the free play of the world market, is being dishonest unless at the same time the country which says that removes all restrictions from gold and allows anyone to obtain gold anywhere at any time and do anything he likes with it. That is a complete restoration of the full fixed gold standard. This, in my opinion, is an impossibility for a considerable period. There is some belief that the United States dollar is a gold currency. This is not so. The United States dollar, because the United States government prohibits its own nationals from owning gold, is not a gold currency and should not be so considered.
Coming now to the question of the United Kingdom, I fully realize that the United Kingdom and all the sterling area are extremely anxious for the United States to raise the price of gold, and it has been suggested that $52.50 an ounce should be the price. If, at the same time, the United States would return to the full true gold standard at this price the move might be logical. I believe that possibly it might be sound. Certainly it would be honest. However, it would be a very brave man or administration who would stake the future stability of the United States dollar on this price for gold. My own view is that it would be foolhardy to do so with a past record of many years of deficit financing on a national basis and a fantastically expanded national debt. This move may be made and I can only say that if it is I hope, although I doubt very much, that it will succeed.
There is a school of thought headed by a group of economists in New York advocating that the United States return to the gold standard at the present price of $35 an ounce. I have only one thing to say with regard to this, and that is that for the past five or six years the United States has been having an annual deficit of many billions of dollars and

it is estimated that the legacy of the Truman administration will mean a deficit of no less than $10 billion this year in United States federal accounts. Unless the Eisenhower administration makes drastic cuts in expenditure, with a deficit of $10 billion, or a sum equal to nearly half the total gold hoard in the United States in one year, and with a series of deficits of very considerable size in the last ten years, how long does anyone think the hoard at Fort Knox would last if it were available at the $35 price? To talk about raising gold to $50 or $52 alone will not assist in the convertibility of currency. It may bring about a temporary stimulus, but we have been too prone to look for temporary stimulants in international trade and to believe that favourable figures for a month or so mean a reversal of the imbalance of world trade or an end to world inflation.
The price at which gold should be sold is the price men will pay for it in the truly free market. Prior to the war gold and platinum had approximately equal values. Platinum, which has remained free, is selling at about $100 an ounce. Platinum of course is a war metal with strategic value, and is therefore in demand not only as a precious metal but as a war metal, and possibly is an unreliable index with regard to gold. The purchasing power of the dollar, however, is considerably less than 50 per cent of the 1935-39 value. The price at which gold will be stabilized will probably have some bearing on this, and it may be that something in the nature of $70 to $100 an ounce will be the price at which it will finally be stabilized.
As I have said, the price is actually unimportant except to our Canadian gold mines. The important thing is that gold's usefulness as a trading medium shall be restored. Any attempt to peg it at any price, without a full restoration of the gold standard at the same time is useless. Much as I believe that the return to the gold standard is necessary and desirable, it cannot take place unless it is brought about by the play of the free market.
While I have dealt in some detail with the use of gold-and let me say that if gold has no use we certainly should not be considering this measure-I have consequently discussed the international aspect of the subject. There are now two specific recommendations I would like to make to the government. They are: (1) The government should permit the sale of fine gold in bar or other form under these provisions. Without any other change this would automatically mean an increase in the price to the gold producers on the sale of this gold of from 30 to 50 cents per ounce, an important addition under present circumstances. (2) The government should announce its willingness to permit foreign purchasers

of gold to store their gold for safekeeping in our banks, and should give assurance that if, as and when export of such gold is desired by the purchasers, exports permits will not be withheld. This would have the effect of opening up a restricted gold market in Canada immediately and would, I feel sure, have the effect of increasing the price at once to our struggling gold industry.


Mr. Deputy Speaker:: Order. I am sorry to interrupt the hon. member, but the time allotted to him expired at ten minutes past eight.


Stanley Howard Knowles: Speaking in reply to a
government measure he has unlimited time.


Agar Rodney Adamson: Am I not speaking in reply to a government measure, and do I not have unlimited time?


Mr. Fleming:: He is the first opposition speaker.


Agar Rodney Adamson: I am the first opposition speaker.


Mr. Deputy Speaker:: I did not hear the remarks of the hon. member for Winnipeg North Centre but in any event, as the hon. member knows, normally a member is entitled to a forty-minute speech. It had not occurred to me that the hon. member was the first member to speak in reply.


Agar Rodney Adamson: Thank you, Mr. Speaker.


Douglas Charles Abbott: Is he enunciating official opposition policy or is he giving his own private view?


Agar Rodney Adamson: I am enunciating policy. I wish to bring certain evidence to support my plea for a free gold market and its usefulness with regard to solving the problem of currency convertibility. My first witness is the monthly letter of the National City Bank of New York for January this year. I quote:
On the continent, there is a growing feeling that the ultimate objective of convertibility must be achieved in terms of gold. To restore faith in paper money a number of governments on the continent have tightened up their spendings and money markets, raising interest rates and also the respect for money. Free gold markets have been permitted to develop in Paris and other centres. Government participation to stabilize free market prices of gold could be one path toward a de facto gold standard.
In the past people have enjoyed the fullest degree of freedom and convenience in international intercourse when principal nations were on a full-fledged gold standard. Often when people talk about reintroducing gold into circulation they think of hoarding by individuals. Actually, in a nation that follows sound financial policies, hoarding is practised only by the most cautious individuals, willing to forsake interest rate return for an absolute degree of security. In such a nation the availability of gold for circulation is primarily of importance to foreign trade, travel and investment.
Gold, Mining
This traditional use of gold was presumably in mind when the Republican party platform set out the aim of "a dollar on a fully convertible gold basis."
My second witness in favour of a free gold market is Professor Willard L. Thorpe, assistant secretary of state for economic affairs in the Eisenhower administration. In his article in Foreign Affairs of April, 1953, at page 414, he said:
At least in theory the gold provided an automatic mechanism to correct disequilibrium through movement of gold from one country to another and consequent changes in relative price levels. Today price levels are the result of national fiscal policies rather than automatic adjustments. Somehow a force must be put to work which will bring about the results achieved by the gold standard. In other words convertibility in today's world will require international monetary management of some sort or other with national co-operation. It is a goal well worth striving for.
Later in discussing the international monetary fund, he said:
Primary responsibility for matters in the monetary field lies in the international monetary fund, which is seriously handicapped by charter provisions limiting its operations. Since the international trade organization was stillborn, responsibility in the trade field has fallen to GATT. The United States membership rests on GATT's activity in the field of trade agreements and it has never received congressional approval.
I think the strange attitude of the United States with regard to the dairy industry, under the general agreement on tariffs and trade, is an indication of what we may expect on this matter. In 1950 the United States had a favourable trade balance of $5-2 billion and in 1951 a favourable trade balance of $5 billion.	In the same years they gave away
$4 [DOT] 7 billion and $5 billion respectively. Apparently it is the policy of the United States to have an enormous surplus of trade and to act as a creditor nation by giving away money, goods and material to balance it. That, apparently, is their policy; and what the American taxpayer may think of it, I do not know.
In conclusion I would like to quote as my third witness the report of the Bank of Canada concerning currency controls, and may I say in this regard that I commend this report to hon. members for its clarity and its forthright statements, two of which I shall give. The first is:
More than seven years have now passed since the end of the war and it must be acknowledged that the world is still far from the goals of currency convertibility and non-discrimination:	indeed,
restrictions on trade and payments are in many cases more rather than less severe than they were some years ago.
The second quotation is:
Major reliance in dealing with these difficulties has been placed on trade and currency controls

Gold Mining
which have, however, merely been able to suppress for a period the symptoms without eliminating the underlying causes of the exchange difficulties. Indeed, there seems little doubt that over a period of time the effect of these restrictions is to aggravate the exchange problem, since they encourage the uneconomic use of resources by providing shelter for inefficient production in protected markets and by rendering production for "hard currency" markets less profitable.
Nothing I have said in condemnation of currency controls goes farther than this. The question of gold is not an academic one. Its solution is fundamental to international trade, particularly trade between Canada and the sterling countries. It should be emphasized constantly that over half the trade of the world is still being done in sterling. The sterling markets are most important to us for agricultural produce because the sterling area is largely complementary to our agricultural economy, whereas the United States is competitive. Practically nothing is grown in Canada that is not grown in the United States. Depressed Canadian prices generally coincide v/ith depressed United States prices.
If our agricultural produce is to find steady, continuous and adequate markets, a large part of them must be sold outside the North American continent. To do this we must And some way to enable non-North American countries to provide the machinery whereby convertibility of all currencies is free and open and not at the behest of any government. The solution, therefore, of this problem of gold and convertibility is more important than any other to the Canadian farmer. If our economy is going to be truly balanced, then we must strive for convertibility so we can sell freely in the sterling area and throughout the world.
My plea is that gold, because of its universal acceptance, has an essential part to play in making currencies convertible. My plea for a free market is because it would start setting up the machinery-I do not say that it is the whole answer-whereby we in Canada could provide the necessary means for true convertibility of currencies, and upon that depends our whole intercontinental trade.


Mr. Armand Dumas (Villeneuve):: Mr. Speaker, those who are interested in gold mining, and more particularly those who are dependent upon the industry for their livelihood, welcome the amendment outlined in this bill. Since its promulgation in 1948 the Emergency Gold Mining Assistance Act has been amended from time to time, and it has proven to be of great help not only to the industry but also to the miners, the farmers and all those who have invested their savings in the gold mining communities and surrounding districts.

At no session of this parliament have I missed an opportunity of telling the house of the difficulties the gold mines have encountered. I have done everything I could to co-operate with the government and other members who have the betterment of the industry and the welfare of the gold mining communities and their inhabitants at heart. Every time I rose to say something on this subject, I did so for the sake of an industry which has played a great part in the opening up of northern Canada and the building of our national economy. I did it for the sake of those who have taken the risk of investing the necessary capital, whether in large or small amounts, for the development and bringing into production of new gold mines. I did my share of pleading for higher prices for gold, more particularly for the sake of the
22.000	Canadian miners, the breadwinners of
130.000	people living in some 30 mining communities across Canada.
I worked hard in this respect for the sake also of the small property owners who have invested more than $125 million in these communities. In my constituency of Villeneuve more than 50,000 people are directly dependent upon the mining industry, and another 25,000 are living on farms which would not be worth cultivating if it were not for the ready market which is being provided by this same industry. I am satisfied that in pleading the case of the gold mines I am working in the best interests of each and every person in the constituency of Villeneuve, whether he is a miner, a farmer, a storekeeper or a small property owner. In doing so, Mr. Speaker, I am satisfied that I am doing my duty, and you can rest assured that I intend to continue to do it.
While there have been many cross currents in the mining business lately, such as lower prices for gold, sharply lower prices for base metals, and so on, Canadian mining is already a great industry and its future is even more impressive. The progress realized in Canada during the past 10 years was dependent upon the development of the natural resources of the country, and mining has been spearheading much of the expansion that took place during that period. The discovery in Canada in recent years of some of the richest and largest mineral deposits so far found on this continent has given rise to a marked realignment of ideas as to Canada's mineral future. The present pace of mining operations throughout the country strongly supports the new conceptions that have been gained.
During the past six years, however, to our great disappointment, we have had to face the fact that the swing of the pendulum has been away from gold mining. The industry, though still the chief single contributor to

Canada's mineral output, has been adversely affected since the war by rising costs and the fixed price for gold. In recognition of this, and in order to help the gold mining communities, in 1948 the government introduced the Emergency Gold Mining Assistance Act. Before the expiration of its original three-year term, the act was extended to 1951, and at the end of that year the present government announced its further extension for the years 1952 and 1953.
Without going into an elaborate analysis of the effects of the Emergency Gold Mining Assistance Act, there can be no question but that it has enabled the majority of the gold operations to continue in production. This act really rescued the declining gold mining industry, and many producers owe their continued operation to this assistance. The Canadian mining communities have greatly benefited also from this measure.
However, a new development in the Canadian economy has impaired the usefulness of this measure. The appreciation of our dollar caused a sharp decline in the mint price for gold, so much so that during 1952 the gold mining industry has been reduced to a condition of acute crisis.
If any proof is needed of the current precarious position of the industry, the reading of last year's annual reports of the Canadian gold mining companies provides it. These reports reflect the seriousness of the situation: difficulties of meeting wage demands, higher prices for almost everything the individual gold mine has to buy, and the discouragingly low price for the final product. This last item is the direct result of the appreciation of the Canadian dollar in terms of United States funds.
In order to realize the damaging effect of this on the gold mines, one has only to compare the mint price of $38.05 in 1950 and $36.86 in 1951 to the very low price of $34.28 in 1952. At the last annual meeting of Hollinger Consolidated the president of the company had this to say:
The serious drop in the face of rising costs of labour and supplies, will inevitably result in forcing closure of many of the gold mines, curtailment of development in others, as well as lessening of ore reserves. Another effect-and probably of equal consequence-will be the end of prospecting for the yellow metal.
The content of other reports discloses the same situation and gives the same warning. The year 1952 was definitely a rugged year for gold mining. Some mines have been forced to close down and others were being placed in a position where they might have to take the same step were it not for the amendments contained in this bill, and which were outlined in a statement made in the
Gold Mining
house last November by the Minister of Finance.
The government's interest in gold mining is evidenced by the assistance it provides, and the facts show that it has done and is doing a real job in keeping alive a considerable number of mines which otherwise would have had to close their doors. The sympathetic consideration received from this government is gratefully acknowledged by the producers, by the miners, by the mining communities and by all those who have some kind of interest in gold mining.
I wish to say again that the producers have always been aware of the willingness of the government to co-operate, and to this end they themselves have done everything possible to increase the efficiency of their operations in order to keep down costs. Extraordinary efforts have been made to stem the rising tide. Expansion of mill capacity, aggressive exploration programs and a high degree of mechanization have only partly offset the tightening squeeze. Every practicable method has been adopted to improve efficiency.
The miners are also doing their share in trying to help the situation. They understand that the gold mines are not in a position to increase wages and they are willing to co-operate by being patient and hoping that better days are not too far ahead. A large number of them remember the time of the depression in 1931 when the gold mines did not take advantage of the situation, but instead kept on paying the highest wage rates in the country. Our miners are working hard in order to produce more. In co-operation with management they are doing everything they can in order to keep costs down as much as possible.
Our gold miners do their jobs with care and ability, they are safety conscious; and on this subject I wish to mention that only two weeks ago the personnel of Canadian Malartic Gold Mines Limited won the John T. Ryan national awards for safety for the second year in succession. Last year's presentation of the trophies to the employees of Canadian Malartic was made by the Minister of Mines and Technical Surveys (Mr. Prud-ham) on the occasion of his visit to the district. In 1950 the trophies were won by Sigma Mines of Val d'Or and in 1948 and 1949 they were awarded to two gold mines in Ontario. Everyone interested in the industry feels a glow of satisfaction that a gold mine has again won nation-wide recognition as the safest metalliferous mine in Canada. This is an outstanding record, and without the co-operation, interest and ability of the miners and surface employees of Canadian Malartic such a record could never have been won.

Gold Mining
Obviously there is a limit to such process of increasing efficiency and improving methods of working. The time will come when there will have to be another readjustment of wage rates, and in view of this I want to. point out again the urgent need to stabilize and if at all possible improve the prospects of the gold mining industry.
It is recognized that it is impossible for Canada, as a producer and seller of gold, to dictate a price to the buyers. It is also recognized that an increase in the official price of gold cannot be accomplished without the co-operation of the United States and that may not be easily obtained. However, we feel that if Canada is not to lose its gold mining industry and the communities dependent on it, a revaluation of gold is a vital necessity.
As a result of the present unrealistic price of gold the total world production is not very much more than 60 per cent of what it was before the war; and, moreover, a large percentage of the newly mined gold is passing into the hands of hoarders. Very few people realize that the total production of gold amounts to about only fifty cents per head per year in the west, and it takes very little public buying to eat that up. In a sense, the western people are being returned slowly but surely to the early days when gold was practically unknown, and when the monetary system was primitive.
We are not the only ones concerned with this problem. A rise in the price of gold would be beneficial not only to a few but to all the western world. The world productive invested capital has more than doubled during the past two decades. The economic production in many war-torn nations has, in monetary volume, increased as much as 40 per cent over pre-war. The costs of goods and services have also about doubled. In contrast, the dollar value of government gold has only increased a fraction as compared to the increase in dollar volume of international trade settlements.
With higher prices for commodities and an ever-growing volume in world trade, the balance of payments between countries has become an acute problem. As a consequence of this, trade has been restricted with some countries and unrealistic barter agreements have been made with others. Obviously an increase in the price of gold is the only solution to obtain proper balance of trade.
Increasingly lower production of the yellow metal and the loss of newly mined gold are serious matters, and they should be remedied. At this point I wish to quote from an article

which appeared in the October 1952 issue of the Pre-Cambrian. It says:
It is felt that the remarkable growth of populations, the tremendous increase of governmental financial responsibilities cannot be reconciled with the loss of new gold.
Military defence of our way of life requires strong moneys, hence an ample supply of gold.
There is little hope of bringing about a dishoarding of gold at the present price levels. The unproductive French attempt, by way of a gold-plated loan was dramatic evidence of this-it brought in one per cent of French private hoards.
To activate gold production, to encourage dishoarding, to lessen private buying, and thus bring gold into the hands and uses of the governments there is one procedure open. It is the simple one of raising the official price, uniformly.
Leading economists feel that a higher statutory price will not induce inflation. It will recognize the inflation which we already have. It will bring uniformity to the economies of the western world.
There is another school of thought concerning the revaluation of gold, and that is raising the price of only the newly mined gold. However impractical this may seem to be, I wish to quote from an article by Patrick Maitland writing from London in the Toronto Telegram. In part Mr. Maitland said this:
One difficulty facing the British negotiators is the strongly deflationist attitude of Mr. Humphrey, the new secretary of the treasury. He is anxious not to be caught giving anything away, and his entire outlook is hostile to one particular remedy for the dollar crisis agreed upon at the commonwealth economic conference last November. The remedy is to raise the price of gold.
A report published in New York last summer by a group of former Marshall aid officials in London insisted that the price of gold was a cardinal feature of the whole problem.
They pointed out that before the war the sterling area only balanced its trade with the dollar area thanks to sales of newly mined gold at the rate of $500 million a year.
These sales, concealing the true trading position, meant that even then there was a dollar problem. For newly mined gold apart, the sterling area would have been in deficit with the dollar area, despite the flow of income from foreign investments.
However, it was a significant enough feature of the relations between the two areas to be singled out by the former Marshall aid mission in London.
The implied conclusion was:	Since the price
of every other commodity on the world market had risen meantime, a comparable rise in the price of newly mined gold would go far to correcting the present state of unbalance.
It is fully appreciated that this question of raising the price of gold is a highly complex problem concerning which the Canadian government is not in a position to take entirely independent action. However, during the last five or six years, on different occasions, Canada has pressed upon the monetary fund the difficulties encountered by the Canadian gold mines. We are also aware that Canada supported a request for a higher

price for gold during the commonwealth conference of last fall. The government is to be congratulated.
Canada and other countries of the commonwealth are the principal gold producers of the world, and they would certainly derive advantages from an increase in the price of gold. For that reason it is to be hoped that this very important question was included in the recent talks in Washington. We are hopeful that an increased price will result from these negotiations. When interest in gold revives, as I am confident it will, Canada will have a much better chance of turning up new base metal mines as well as new gold mines. It was the search for gold that turned up 90 per cent of the base metal mines we now have. This is the kind of history that could repeat itself.


Herbert Wilfred Herridge: Mr. Speaker, I wish to say only a few words. I must say I listened with considerable interest to the remarks of the hon. member for York West (Mr. Adamson). I was particularly interested when he said that he was speaking for the Progressive Conservative party, because I have had a number of inquiries as to the program of that party concerning-


Agar Rodney Adamson: I did not say that.


Donald Methuen Fleming: No, he did not say that.


Herbert Wilfred Herridge: Then if I am wrong I apologize. But I understood the hon. member to say that he was speaking for his party.


Mr. Fraser:: No, he did not say that.


Agar Rodney Adamson: Mr. Speaker, the rules of the house should be properly understood. An hon. member in the opposition speaking immediately after the introduction of a government measure is allowed unlimited time. That is the rule of the house I was invoking. I think you will realize, Mr. Speaker, that I was quite correct.


Mr. Deputy Speaker:: Perhaps I could clarify the position by saying that it was by inadvertence I rose and indicated to the hon. member that his time had expired. It had not occurred to me that he was the first member speaking in reply to the motion sponsored by the minister.
While I would not wish to elaborate upon the matter at this time, perhaps in order to clarify what has been said about standing order 37 hon. members would refer to page 797 of Beauchesne's third edition, and the ruling of Mr. Speaker Lemieux, where he said that to speak in reply one is bound to argue against the measure.
Gold Mining
Therefore the meaning of standing order 37 is not exactly what the hon. member for York West had just indicated. The Prime Minister and the Leader of the Opposition may always speak more than forty minutes. A minister moving a government order always has more than forty minutes. An hon. member moving a vote of want of confidence has more than forty minutes. An hon. member speaking in reply to a government order moved by a minister has more than forty minutes, if he does speak in reply; and if he is speaking in reply he must be arguing against the measure.
Hon. members will recall that I had to give a ruling along these lines when the hon. member for Temiscouata (Mr. Pouliot) spoke immediately after the Minister of Transport (Mr. Chevrier), on a motion having to do with the Canadian National Railways. As he was not arguing against the measure, and therefore was not speaking in reply, I denied him the right to speak for more than forty minutes.
The hon. member may continue.


Herbert Wilfred Herridge: I apologize if I misunderstood the situation. I understand now that the hon. member was not speaking for the Progressive Conservative party.


Agar Rodney Adamson: You can understand anything you like.


Herbert Wilfred Herridge: This group supports this measure because it does seriously affect the lives of a large number of Canadians under present conditions and circumstances. As the hon. member who preceded me said, it affects the lives of, I believe, some 130,000, including miners and their dependents. It also affects those who service the various mining communities and those who make a living by supplying agricultural and other products to those communities. We support it because of the large investment in homes in the gold mining communities. We support it because of the large investment in business premises and service facilities. We support it because of the municipal, provincial and federal government expenditures that have been made. On those grounds, and as a temporary palliative to meet a peculiar present situation, this group supports this measure.
I understand that the amount of the subsidy paid out last year in the way of gold mining assistance was something in the neighbourhood of $10 million. On that basis the gold mining industry, in relation to the size of other industries, is the most highly subsidized industry in Canada. I think that is a correct statement.
Before concluding my remarks I should like to point out that here is a well-established

Gold Mining
industry which finds it necessary to come to the government for assistance under these circumstances and conditions. We hear much about free enterprise from hon. members, but in reality it does not exist today when you have an industry like this which cannot survive unless the government provides some assistance. That is why we consider that this is simply another illustration of the fact that those who insist that we live in a free enterprise country are speaking in the terms of midVictorian days.
We of this group want to add briefly to what we have to say in support of this measure at this time that if the government would subsidize agricultural production to the same extent, to the same percentage and degree as it finds it necessary to subsidize the gold mining industry at this time, we would have stability in agriculture. We suggest that if it can be done for the gold mining industry, it can be done for the agricultural industry.
There is a great need for houses in Canada at this time. For years we in this group have urged the government to subsidize low rental housing. We say that if we can subsidize the gold mining industry-and we support the measure-we can subsidize low rental housing and do something about having the homes built that are necessary at this time.
With these brief remarks I once again emphasize the fact that as a particularly necessary palliative of capitalism under present circumstances we endorse and support this measure.


Victor Quelch: There are just a few words I want to say on this measure. I notice in the report on the administration of the Emergency Gold Mining Assistance Act for March, 1952, that the purpose of the act is stated in these words:
It was designed primarily to assist the high-cost or marginal mines to continue in operation over a difficult period and to maintain their dependent communities.
The question one is bound to ask is how many communities are we going to maintain in Canada and at how great a cost are we prepared to maintain them? For how many years are we going to continue to maintain them? I recall that last year when we were discussing the question of selling wheat in the domestic market in Canada at the world market price rather than the international wheat agreement price, the Minister of Trade and Commerce (Mr. Howe) stated that he was not prepared to tax the people of Canada for the purpose of subsidizing the wheat grower. Apparently we are quite prepared to subsidize the gold mining industry in order to make it possible for them to meet their costs of production. When it is suggested
[Mr. Herridge.l
that we subsidize certain other industries it is said that we would not be justified in taxing the people of Canada in order to do it.
I was quite interested in an editorial which appeared in a good Conservative paper, the Calgary Herald, dealing with this question of gold. I draw it especially to the attention of the hon. member for York West (Mr. Adamson). This was published in the issue of November 8, 1952, and reads:
How Much is Gold Really Worth?
According to Mr. Drew, the Leader of the Opposition in Ottawa, it is an "extraordinary course" for Canadian gold to be sold to the United States at "less than the cost of production". Mr. Drew argues that this is, in effect, a subsidy paid by Canada to the United States government.
It is natural, we suppose, for a politician with an Ontario background to be concerned over the price of gold. Gold mining and the Toronto financial market have always been closely interlinked. It is true, also, that the gold mining industry provides a considerable amount of employment in northern Ontario. But we have never really been able to see why the business of mining gold should get such special treatment from governments which do not seem to care particularly whether the Alberta coal mining industry, say, goes under from lack of markets.
Except in the monetary sense, gold is not a particularly useful commodity. It makes pretty jewellery, tarnish-proof wedding rings (which do not, however, wear very well unless the gold is subjected to considerable adulteration), satisfactory fountain-pen nibs and gilt for the sign on lawyers' office doors. Beyond this, it is hard to think of any purely functional uses for gold. The world, in fact, could probably survive very nicely if all the gold in it disappeared tomorrow morning.
The only factor which makes it worth while mining gold at all is the fact that governments are prepared to accept it as a medium, of exchange. In the most literal sense it is true, today, to say that gold is as good as dollars-at any rate so long as the United States government, with its vaults at Fort Knox already bulging with the stuff, is prepared to go on importing it, in unlimited quantities, at 35 American dollars per fine ounce. But if both the U.S. and British governments announced tomorrow that they were no longer prepared to accept gold at any price, every gold mine in the world would shut down, since the supply of industrial gold is already fully assured for thousands of years.
Gold, in fact, is a colossal (though quite useful) fiction. As a utilitarian metal, its values are restricted. The only reason it is worth even as much as $35 U.S. an ounce is that this is what the U.S. government is prepared to pay. We should probably be grateful to Uncle Sam for offering to pay as much as he does.
I agree wholeheartedly with that argument. That was a good Tory paper, the Calgary Herald.


George Harris Hees: That is not a Tory paper.


An hon. Member:: Where do you come from?


James MacKerras Macdonnell: It is an independent.


George Harris Hees: Very independent.


Victor Quelch: I would point out that gold
mining is the most highly subsidized industry in Canada today. Last year the hon. member for Maple Creek (Mr. Studer) criticized a member of the C.C.F. for suggesting that the subsidy paid to gold mines was greater than that paid to the wheat growers. He referred to the fact that during the past ten years agriculture had received something in the neighbourhood of $900 million, taking into consideration all payments such as those for drought relief, freight assistance, P.F.R.A., foot-and-mouth disease and various consumer subsidies.
I would point out that the amount paid to the gold mining industry is very much greater than the amount paid to agriculture, because if the subsidies to agriculture were in proportion to those paid to the gold mining industry, on the basis of population, in those ten years agriculture would have received $4,000 million instead of $900 million. I say that because on April 6, 1951, the Minister of Mines and Technical Surveys (Mr. Prudham) is reported on page 1705 of Hansard, as having said:
The gold mines now in operation give employment to about 23,000 people.
Mind you, only about 23,000 people. Farm workers, on the other hand, according to the statistical review for March, 1951, totalled around one million. In other words, gold mine workers are less than one-fortieth of the total number of workers in agriculture. Therefore on the basis of $40 million for an industry employing 23,000 workers over a period of four years, the farming industry with a million workers should have received over $4 billion over a period of ten years to be on a parity, instead of receiving just $900 million. Again I say, how many communities are you going to subsidize, how far are you prepared to subsidize them and for how long are you prepared to go on doing it?
When I recall the kind of discussions that took place in the house at the time the $65 million for the wheat growers was being voted, especially the comments of one or two of the Conservative members, I am surprised that they should be so enthusiastic about subsidizing the gold mines. On the other hand, we realize that apparently it is government policy to encourage the production of gold in this country. In view of the fact that it is government policy to encourage the production of gold, and at the same time the price of gold having been tied down as a result of the Bretton Woods agreement to which this government subscribed; and in view of the fact that the price of gold has been tied down
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to a level far below the present cost of production, then I say to that extent the gold miners of Canada are entitled to demand a subsidy.
If it is the wish of the government that gold be produced in Canada, and if at the same time the government will not allow the gold mine operators to get a fair price for their product, then I think they are justified in asking for a subsidy. But we suggest that a far better solution to the whole question would be to divorce gold entirely from our monetary system. I know that is the case internally, but it is not true so far as the Bretton Woods agreement is concerned. If you divorce gold entirely from your monetary system, both nationally and internationally, then you can establish a free market for gold and let it sell for whatever it is worth.
Of course if that were the case, if it was divorced entirely from national and international trade, in all probability the price of gold would fall to a very low level and no doubt many gold mines would very shortly close down. But on the other hand let us not forget that today there is a shortage of labour. There is a shortage of mining engineers and skilled workers, and if the gold mines had to close down there would be employment for these workers in other industries. After all, of what use is it to employ thousands of men throughout the world producing something that has little or no value, merely in order to maintain a myth? The idea of gold as a true monetary yardstick is just a myth, and even that Conservative paper, the Calgary Herald, realizes that the true worth of gold is pretty low.
However, in view of the fact that we have tied down the price of gold under the Bretton Woods agreement, and in view of the fact that the government is encouraging the mines to continue in operation, we feel that the gold mine workers are justified in asking for a price that will return the cost of production. Therefore on that basis we will support the measure.


Donald Methuen Fleming: Mr. Speaker, I have spoken on this measure annually in recent years when it has come up for consideration in the house. The views I expressed on those occasions are unchanged. I think whatever may have happened in the meantime has gone to vindicate the views I sought to express before. Accordingly, I shall be very brief tonight in what I have to say on this bill to extend the effect of the act and to modify the basis upon which aid is to be provided under its terms.
I wish to say first that the way in which the government has brought the bill to the house is very disappointing. We have been given no

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essential information whatever with respect to the operation of the act since the last report on its operation was issued on March 31,
1952.	It is noteworthy that when the resolution preceding the introduction of the bill came before the house on April 2 there was no discussion, of course, in the house, and there was virtually none in the committee. The reason there was no discussion in the committee and no questions were asked with a view to eliciting the information that ought to be before the house with respect to a measure of this kind is that certain members at any rate were given the assurance by the Minister of Mines and Technical Surveys (Mr. Prudham) that he would supply them with the information.


Douglas Charles Abbott: That can be given as soon as we are in committee. I have it all here.


Donald Methuen Fleming: I wish to comment upon that. The arrangement I referred to, which was designed to facilitate the business of the house, was entered into at that time and the promise then made was not fulfilled. That information should have been available to members before the bill was called for second reading. The Minister of Finance (Mr. Abbott) has said that the information will be available in committee.


Douglas Charles Abbott: What is the purpose of committee?


Donald Methuen Fleming: Very well, Mr. Speaker, but members ought to have that information before second reading.


Douglas Charles Abbott: Why?


Donald Methuen Fleming: That, as I understand it, is the purpose of having a resolution stage, with consideration of the resolution in committee, on any money bill before the bill is introduced and before second reading is moved.


Douglas Charles Abbott: Wrong again.


Donald Methuen Fleming: The Minister of Finance could have given that information to the house this afternoon, but he contented himself merely with practically reading the explanatory notes in the bill. Therefore we come to the second reading without any recent information with respect to the operation of the act.
The situation, Mr. Speaker, is simply that a grave crisis does exist in the gold mining industry. The statement made by the Minister of Finance on November 24, 1952, as found at page 16 of Hansard, recognized the critical condition that exists today because he felt it necessary at that time to announce government policy in advance of the year
1953,	even though the measure of assistance to the industry was not to begin until the calendar year 1953.

As to the bill and the proposal to continue the Emergency Gold Mining Assistance Act, may I say that of course we in this part of the house accept the bill. It is better than nothing. It is absolutely necessary for even the minimum, bare survival of the gold mining industry; but having said that for the measure, that is virtually all that can be said for it. It is simply a survival measure in the light of a serious crisis. Having regard to what has just been said by members who have immediately preceded me, I can share with them the regret that the taxpayers should be called upon to provide a subsidy for this industry; but the fact of the matter is, Mr. Speaker, that unless this subsidy is provided the industry cannot survive. Its plight is just as serious as that today.
The subsidy was not asked for by the gold mining industry. They asked for a solution of their problem, a problem largely created by government action. That is a factor which I think the hon. member for Acadia (Mr. Quelch) failed to recognize in his statement tonight.


Victor Quelch: But the Conservative party supported that action.


Donald Methuen Fleming: It is a situation created bj government action.


Victor Quelch: And supported by the Conservative party.


Donald Methuen Fleming: This crisis having been
created by the government, it is necessary in the existing situation either to let the gold mining industry die or at least do this much for it.


Victor Quelch: Do not forget that the Conservative party supported the Bretton Woods agreement which tied the.price of gold.


Donald Methuen Fleming: The hon. member can take what satisfaction he likes out of crowing now-


Victor Quelch: It is a fact.


Donald Methuen Fleming: -over the position he took on Bretton Woods in 1945. In recent years I think I have been as critical of the way the international monetary fund has worked out as any other member of the house, but I do not credit myself with the ability to have foreseen in 1945 all the trends that have occurred in the world since with respect to trade, with respect to monetary movements and also with respect to Russia's challenge to world peace. I do not think any of us foresaw in 1945 what we have seen in the unhappy years since.


Mr. Low:: We saw that Russia would not join then.


Donald Methuen Fleming: We did not see that at all at the time the measure was under discussion.


Solon Earl Low: We told you so.


Donald Methuen Fleming: My hon. friend can take what comfort he likes out of saying he told us so. The fact of the matter is that I think the majority of the members of the house acted reasonably with respect to the measure in 1945. I am not prepared to go back now and be critical of the decision that was taken then.


Solon Earl Low: You don't have to be critical.


Donald Methuen Fleming: I did not criticize the government over the decision any more than I -criticized those in the house who have not supported the government in general but nevertheless supported its legislation on the Bretton Woods agreement and international monetary fund. One can say that and yet, at the same time, express regret that the international monetary fund has not been made effective to serve the purpose for which it was designed. It has come in these years increasingly under the domination of United States fiscal policy, and that seems to me the reason the international monetary fund has failed to live up to the legitimate hopes held for it in 1945.


Solon Earl Low: That was the reason we opposed it in the first place.


Donald Methuen Fleming: Now, sir, I mentioned that the industry is languishing. Indeed, there are so many mines that are just being kept barely in production today that I am glad the minister has recognized the situation in the change he is proposing in the formula.
We hear members in this house talk so glibly about gold having no value and of the ability of the world to get on as well without gold as with it. I am afraid they have forgotten a lot of history. They have forgotten what gold has meant to this -country as an important element in our international trade. They have forgotten what gold production in this country has meant in former years in meeting deficits that this -country -has had in its commodity trading account. They have forgotten what this gold mining industry has meant in the development of the great northern regions of this country, not only northern Ontario but northern Quebec, northern Manitoba, Yukon and the territories and other areas of the country as well. They have forgotten also what the prosperity of the gold mining industry in the days of the depression meant to the survival of the economy of this -country, when days were very dark indeed. They have forgotten a good many other things which one could mention at a time like this.
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The fact of the matter is that unless a measure of relief is brought to the gold mining industry right now those communities in the northern parts of several provinces in this country simply -cannot survive. Those communities are dependent on the mines and cannot exist without them. Those communities have been experiencing great difficulties for some years -past, as the gold mining industry has struggled with the problem of a price fixed by government action on the one hand and rising -costs on the other. Yes, Mr. Speaker, it would be well to recall the debt that the economy of this country and its development owe to the gold mining industry. We have heard talk tonight about free enterprise. The reason free enterprise cannot operate freely today with respect to the gold mining industry, Mr. Speaker, is that government interference has prevented it. There is no play there for the force of free enterprise principally because it is an industry that is working under the ceiling of a price fixed for its product by government It is not a freely negotiated price in the ordinary sense at all; it is a price fixed by the government.


Douglas Charles Abbott: And always has been.


Donald Methuen Fleming: Not in the same way as it is now; and the minister is not going to argue that point. What we are working under today with respect to newly mined monetary gold is, in fact, a price fixed by the United States government and concurred in, broadly speaking, by the international monetary fund. That is the situation, and it is the situation that has existed since the war.
Now, sir, we in this part of the house have criticized the Canadian government before for not taking more effective action to meet the essential, deep-seated problem of the gold mining industry. While I have said that this measure is necessary today for the survival of the industry, it cannot be regarded as anything more than an artificial, temporary, stopgap, hand-to-mouth palliative. It is certainly no solution and, as the hon. member for Villeneuve (Mr. Dumas) very properly said tonight-and he speaks with knowledge of the problem-there must be a substantial increase in the price of gold if we are going to deliver the gold mining industry of this country from the threat of extinction, and relieve the taxpayer from being called upon to provide aid in stopgap measures of this kind.
Now, Mr. Speaker, since this measure was last under debate in May 1952, three things have happened which have a bearing upon the problem of finding a proper solution for the plight of the gold mining industry. The

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first was the prime ministers' conference which met in London last fall. There it became clearly recognized, if one may follow the press-although the statements which emanated from the conference were very meagre-that on balance the British commonwealth of nations has a very deep-seated interest in a higher price for gold. South Africa in relation to its total economy probably has the biggest interest, and Canada has a very great interest indeed. There became apparent a unity of interest among the nations of the commonwealth with respect to this question, a unity that had not been fully apparent or fully recognized previously.
The second factor, Mr. Speaker, was the change of administration in the United States. Now it is not, I am sure, for any one of us to offer criticism of the policy of the United States. That is a matter for the proper authorities of the United States; nevertheless we are concerned about the effect of that policy on Canadian interests. The Republican party in the election platform which it wrote in July, 1952, included this among its monetary policies:
To restore a domestic economy, and to use our influence tor a world economy, of such stability as will permit the realization of our aim of a dollar on a fully convertible gold basis.
Of course that did not say explicitly that the Republican party was committing itself to a higher price for gold.


Douglas Charles Abbott: I'll say it doesn't.


Donald Methuen Fleming: No, but at any rate it does recognize the importance of gold in establishing stable monetary policies in the world. There can be no answer, it seems to me, to that interpretation of these words:
. . . and to use our influence for a world economy, of such stability as will permit the realization of our aim of a dollar on a fully convertible gold basis.
Whatever hopes may have been conjured up by the statement that the United States government would change the policy that had been previously in effect when Mr. Snyder was secretary of the treasury, certainly there has as yet been no indication that the United States government is prepared to enunciate any policy looking to an increase in the price of gold. But, Mr. Speaker, it is the duty of the Canadian government to put such representations as it can before the government of the United States, and before the international monetary fund, as will represent the total exertion of all the influence the government of Canada does command, with a view to bringing about an increase in the price of gold.
The United States government is holding something like $22 billion of gold of which, we are told, $16 billion are needed for currency backing. There have been rumours

that even in the face of representations from the British government and from the governments of the commonwealth countries, the United States government hesitates to increase the price of gold because they have a haunting fear that such action might somehow help Russia. Well, Mr. Speaker, there is so little that has come on this subject from really authoritative sources that I do not intend to speculate on the subject. I do say that our interest as a country, as a leading gold producer, lies with or in the direction of an increase in the price of gold; and that is also where the interest of the British commonwealth lies.
The third factor of the three I mentioned as having occurred since May last is, of course, the conference Mr. Butler held recently in Washington with Mr. Humphrey, the United States secretary of the treasury. Again there has been little by way of announcement from that conference to indicate what action, if any, may be expected to emanate from Washington with respect to the price of gold as an aid to the furtherance of the "trade, not aid" policy. The Canadian government must have some knowledge of this subject, Mr. Speaker. I think they must have been in consultation in relation to these negotiations at Washington. They must have discussed this matter with Mr. Butler when he was recently in Ottawa. To the extent to which he is free to communicate the information to the house, may I say to the Minister of Finance (Mr. Abbott) that I hope he will make as much information as possible available to the house on this important subject.
On the subject of convertibility, Mr. Speaker, let us recognize that gold has an indispensable part to play in convertibility, and in shaping plans for restoring convertibility of currencies throughout the trading world. There is not very much to warrant our being satisfied or complacent until we shall have brought about at least a substantial measure of convertibility of currencies which does not exist today among the great trading nations of the world.
This is an urgent matter. On September 17, the association of Canadian provincial mines ministers asked the federal government to raise the price of gold. From a Canadian Press dispatch which was issued from their conference in Quebec, we read this:
The association of Canadian provincial mines ministers decided today to ask the federal government to raise the price of gold. The step was in one of three resolutions adopted at closing sessions of the ninth annual convention of the association which asked aid from the federal government to the gold mining industry.
The resolutions were: (1) that the government take every step possible to increase the official price

of gold; (2) fine gold be given freer circulation and wider ownership; (3) government assistance be more regulated than provided under the law of federal emergency assistance to gold mines.
Mr. Speaker, that resolution comes from the provincial ministers of mines. They are speaking from knowledge of the problem with which they have firsthand contact, not only the problem of keeping the gold mining industry alive but also the wellbeing of the communities that are directly dependent upon the gold mining industry for their survival. Gold has lost none of its importance as a medium of international exchange. If it had, as was suggested by one hon. member tonight, why is it that every country in the world, including Russia, is trying to obtain gold? If any country's internal policy might be thought to be designed to eliminate any necessity for gold as a medium of exchange, one would have thought surely it was Russia, and yet Russia is seeking gold. The fact of the matter is that gold is, as it has been for centuries, an indispensable element in international exchange.
This measure is necessary, but it is no solution. It is at best an artificial, temporary, stopgap, hand-to-mouth palliative. What is needed in the national interest is a solution.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
On section 1-Rate of assistance.
Donald Methuen Fleming: Is the minister going to make a statement?


Douglas Charles Abbott: Is there any special information my hon. friend wants? The last report that has been tabled is the report for the fiscal year ended March 31, 1952. This gave the number of mines receiving assistance during that period and the preceding period, and pointed out that there were 74 auriferous gold mines and 22 placer mines receiving assistance. There were 13 on the free market in 1952. There are only 5 mines selling on the free market now, and 8 have gone back under the Emergency Gold Mining Assistance Act after selling on the free market.
The estimated cost of the Emergency Gold Mining Assistance Act in 1952-the accounts are not yet completed-is $10-8 million. For 1953 it is estimated that the new formula for mines which received aid in 1952 will involve an additional $3 million, and for the 8 mines returned to the Emergency Gold Mining Assistance Act after selling on the free market in 1952, an additional $2 million. This will mean a total of an additional $5 million, so my friend the hon. member for York West was about right when he suggested
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this new formula would cost about $14 or $15 million. These figures would indicate that it will be about $15-8 million, or somewhere between $15 and $16 million. The payments will not all be made in 1953 or perhaps even in the fiscal year 1953-54, because of the time lag in assessing claims.
I pointed out that the additional $5 million is not all due to the amendment which the house is now considering. Approximately $2 million is due to the fact that 8 mines have found the free market less profitable than assistance under the Emergency Gold Mining Assistance Act. Only 5 mines, as I say, are now selling on the free market compared with 13 in 1952. The total sales are estimated at 500,000 ounces in 1953, compared with 1 million ounces in 1952. The current free market price is $36.75 U.S., or about $36 Canadian, and that has remained substantially the same during the past year.
The following summary of production may be of interest. These are estimates, and they are in thousands of ounces. For 1952 mines under the Emergency Gold Mining Assistance Act, 2,970; mines opting for the free market, 1,000; base metal mines production of gold, which is all sold on the free market of course, 530. The estimated total production, 4,500 thousand ounces. We estimate the same production for 1953, but the distribution will be different. It is estimated that 3,470 will be eligible for emergency gold mining assistance; 500 only for mines opting for the free market, and the same 530 for the base metal mines.


Donald Methuen Fleming: I thank the minister for the information he has given. Is it any part of the policy of the Canadian government to seek an increase in the price of gold?


Douglas Charles Abbott: I have repeatedly stated in this house, Mr. Chairman, that the Canadian government, as the second largest gold producer in the world, would be delighted if the price of gold were increased. If my hon. friend is asking, as I think he is, that the United States increase the price of gold, in other words increase the gold content in the United States dollar, then of course what he and others are suggesting is really the devaluation of the United States dollar. The gold content of the United States dolkir is established by an act of congress, just as the gold content of our dollar used to be established by act of parliament. What he is suggesting when he suggests that the price of gold be increased is that the United States congress should increase the gold content of the United States dollar; and that, in effect, is devaluation of the United States dollar.
Obviously, this would be advantageous to Canada, as a large gold producer, just as it

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would be advantageous to South Africa and other gold producing countries. But that is essentially a matter of domestic policy in the United States.


Solon Earl Low: What would it do to your foreign exchange fund?


Douglas Charles Abbott: I do not know. I suppose the book value of our holdings of gold would be increased, and so would the value of the gold reserves of the United Kingdom and of the other countries. The point I want to make is that of course Canada is in favour of an increased price for gold. Why should we not be? But when we are talking about it we are talking about an increase in the gold content of the United States dollar, and we are saying that it would be a good thing for us if the United States would devalue its dollar. That is all we are doing, and if anybody suggests that I should stand up in the house and advocate that I will tell them I am not going to do it.


Donald Methuen Fleming: Will the minister then confine himself to what I think he acknowledged to be his proper function in relation to Canadian policy, and tell us what the Canadian representatives at the international monetary fund have been instructed to do or say on this subject within the last year or two at the meetings.


Douglas Charles Abbott: My hon. friend I hope appreciates that the international monetary fund does not fix the price of gold. The international monetary fund agreement provides that the countries that are members should fix a parity for their currencies, and that it should be in terms either of gold or of the United States dollar. We did have a fixed parity for a time, and we fixed it in terms of the United States dollar, which in fact was fixing it in terms of gold, because the United States dollar is fixed in terms of gold. But for reasons which I explained to the house some time ago we found it necessary to withdraw from a fixed parity for our dollar, and at the present time there is no parity.
The international monetary fund, as I have explained, does not fix the price of gold. As I have said in this house time and time again, in fact the value of gold for monetary purposes is determined by the country which holds the largest quantity of monetary gold, and which fixes its currency in terms of gold. That country is willing to take unlimited quantities of gold at $35 an ounce in exchange for United States goods and services. That is what fixes the monetary price of gold; and this free market has developed just exactly as I expected it would, and just exactly as I have told the house it would. Any substantial quantity of gold which is

thrown on this so-called free market simply has the effect of lowering the price. South Africa deliberately rations the amount of gold that it will sell on this free market at, I think, 40 per cent of its production; and even that quantity of gold being put on the market has had the effect of lowering the price.


Donald Methuen Fleming: The minister is aware that South Africa rationed the sale of newly mined gold on the free market even before the action taken by the international monetary fund in September, 1951.


Douglas Charles Abbott: The international monetary fund did not take any action at all. South Africa did it entirely independently of the international monetary fund. I think we should not confuse this question of the price of gold with the international monetary fund agreement, because they are not really related.


Donald Methuen Fleming: Fortunately, it is not very often that the Minister of Finance undertakes to address the house in the tone of a schoolmaster.


Douglas Charles Abbott: The hon. member has been lecturing, only he has been doing it on a false premise.


Donald Methuen Fleming: No, I have not been lecturing the house, and not on a false premise. I wish to put the minister right on that, and I wish to put him right on something he has just said, namely that it was after the action taken in September, 1951, by the international monetary fund that the South African government for the first time proceeded to ration the sale of its gold on the free market. It was selling a rationed proportion of its gold on the free market long before that.


Douglas Charles Abbott: The same proportion.


Donald Methuen Fleming: Regardless of what the monetary fund-


Douglas Charles Abbott: Exactly the same proportion; it is selling 40 per cent.


Donald Methuen Fleming: Yes. Why does the minister say this as though it happened only since October, 1951?


Douglas Charles Abbott: I did not mention October, 1951.


Donald Methuen Fleming: Why does the minister mention that as the date on which the government of South Africa started rationing gold? They were rationing their sale of gold on the free market before that.


Douglas Charles Abbott: If what I said misled my hon. friend, I had not the slightest intention to do that. South Africa's action had nothing to do with the international monetary fund, because

they started to sell on the so-called free market long before the question was discussed in the fund.


Donald Methuen Fleming: Quite; and we were urging in the house that Canadian mines should be similarly free to sell their gold in the free market and obtain what they could for it. If they could do better that way than selling newly mined gold to the United States government, then they should have the privilege of doing so; and it was only after we lifted up our voices on that subject for a long time that this action was taken finally in October, 1951.


Douglas Charles Abbott: Will my hon. friend permit me?


Donald Methuen Fleming: What is it?


Douglas Charles Abbott: I do not know exactly whether my hon. friend is aware of the chronological sequence there. May I explain?


Mr. Dickey:: He is not aware of anything.


Donald Methuen Fleming: Yes, without interruptions from the smart aleck member for Halifax.


Douglas Charles Abbott: Well, prior to October, 1951 the international monetary fund issued a statement of policy in which it said it felt that it was in the interests of the members of the international monetary fund that gold should not be sold by members into these free markets which were essentially for hoarding purposes. That was not part of the fund agreement; it was a statement of policy issued by the fund, to which Canada subscribed because we believed and we still believe that the real future of gold is as a monetary metal, not as a commodity. We subscribed to that and we respected it.
South Africa, for reasons with which I do not quarrel, decided that it should not adhere to that statement of policy, and it proceeded to sell in the so-called free market, as my hon. friend and I both agree, a substantial portion of its production. Then at the meeting of the international monetary fund in September 1951, I think it was, the Canadian representatives and others pointed out to the fund that if one member of the fund was going to do this selling on the free market, then others should be free to do so, and we took that position quite firmly and clearly. I made it quite clear that we must be free to do the same thing, and we have. My recollection is that the fund issued a statement that this declaration of policy was no longer in effect. That is the history of that.


Donald Methuen Fleming: There is nothing new in what the minister has just said.


Douglas Charles Abbott: That has nothing to do with the price of gold as such.
Gold Mining


Donald Methuen Fleming: We fully approved what was done at that time, the decision that was taken at the international monetary fund on September 28, 1951. It was followed on October 7, 1951 and put into regulations issued by the Canadian government.


Douglas Charles Abbott: That is right.


Donald Methuen Fleming: With respect to the sale of gold; let us have this quite clear. There was a position taken by the Canadian representatives at the meeting of the international monetary fund in September, 1951.


Douglas Charles Abbott: That they all must be treated alike.


Donald Methuen Fleming: Quite right. That is what we had been asking for on this side of the house. We had been pointing out that notwithstanding the policy of the international monetary fund, here was the biggest gold producer selling a large proportion of its production in the free market. Canada, a large gold producer, should not have its hands tied in the way in which they were being tied at that time. We pressed for the kind of action that was taken by the international monetary fund, which the minister has just described, and taken I believe on the initiative of the Canadian representatives.
That was the kind of action we in the opposition had been asking for and pressing for, for a long time. We approved the consequent step taken by the Canadian government in issuing its order in council in October,
1951,	although some of us had reason to criticize, as I said here in the house on May 14,
1952,	some of the conditions attached to the permission given by the Canadian government at that time to Canadian gold producers to sell their gold in the free market. I said then that the terms were too rigid. I still think they are too rigid.
Let it not be said, therefore, Mr. Chairman, that what was done at the meeting of the international monetary fund has no bearing on this question. What happened on that occasion has had a very substantial bearing on this whole question, and I have no doubt that what happens at succeeding meetings of the international monetary fund, whether by way of decision or by way of discussion there and putting forward of points of view, will still exert an important influence on the whole course of events, on the position of gold as a means of furthering international exchange and as a backing for currency, and in relation to the vexed question of the price of gold.
I repeat what I said earlier, that I hope the Canadian government, with due regard for the public interest and with due regard for what the gold mining industry has meant to

Gold Mining
this country, will lose no opportunity to do all it can to secure a better price for the gold produced by Canadian mines.


Stanley Howard Knowles: I should like to ask the minister a question that, 1 think, relates to the clause-and that will be a change. I notice that the proposal is to increase the rate of assistance in two ways. At the moment I am not arguing the merits or demerits of the proposed change, but I would like to know why the minister decides to start the assistance at a lower figure in relation to the cost of production.
He has argued, and the explanatory note says, that the reason for this increased assistance is the increase in the cost of production. Formerly the arrangement was that assistance was given in relation to that portion of the cost of production which was in excess of $20 an ounce. I can understand the minister arguing that there should be further assistance for the upper brackets of increased production costs. But why does he lower the point, from $20 an ounce to $18 an ounce, where he begins to provide this assistance?


Douglas Charles Abbott: My recollection is-and I am speaking from memory-that when the Emergency Gold Mining Assistance Act was originally introduced the low point was $18 and the high was the actual cost of production. Then when it was renewed for the first time, in the hope that we could taper it off we cut down the rate of assistance by raising the lower limit from $18 to $22.
It is a very complex formula, as my hon. friend appreciates. The rate of assistance is half the difference between $18 and the top production cost. If it costs $60 to produce an ounce of gold, the difference between $60 and $18 would be $42. Half of that would be $21, and it would apply to either half the production or the production in the base year, whichever is greater. Now, there are at least three variable elements in there. I have taken the extreme case.
It is clear that the $21 per ounce would only bring the cost down from $60 to $39, even if it applied to all the gold. But it applies to only part of it. So, as I said in my statement this afternoon, this in fact increases the potential rate of assistance by $2 an ounce. But it does of course benefit more the high-cost producers, because they are the ones at the very top who will get the full benefit. Then it tapers down. At a given point the low-cost producers, those still on the free market, would get no benefit at all from the formula. The maximum benefit is given to the high-cost producers at the very top of the range.


Donald Methuen Fleming: I have one other question to ask on policy. It relates to the proportion of

gold and U.S. dollars acquired for the exchange fund of this country. I notice on page 25 in the table the minister submitted to the house on February 19 that the proportion of United States dollars has been decreasing, while the proportion of gold holdings has been increased.


Douglas Charles Abbott: That is right.


Donald Methuen Fleming: At December 31, 1950 the amount of gold was $580 million and the amount of U.S. dollars $1,144 million. On December 31, 1951 the amount of gold was $841 million and of U.S. dollars $899 million. On December 31, 1952, the amount of gold was $885 million, and of U.S. dollars it was $961 million. May I ask the minister if this is the result of deliberate government policy to increase the proportion of holdings of gold vis-a-vis United States dollars, and if that policy will be continued.


Douglas Charles Abbott: Oh, yes, I think it has been. It was felt it might be desirable to increase moderately the proportion of gold as compared with U.S. dollars. It is an exercise of judgment. On the U.S. dollar portion of the reserve we earn something, because those moneys can be lent. They are lent on a shortterm basis on the New York market, and we receive interest on them. But on our gold holdings we earn nothing. So it is obviously desirable to have some earning assets in the fund, and it is a matter of judgment what the proportion should be as between gold and U.S. dollars.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Louis-René Beaudoin: Shall the corresponding sections in part II be agreed to?
Sections 3 and 4 agreed to.
Bill reported.


Mr. Deputy Speaker:: When shall the bill be read the third time?


Some hon. Members:: Now.


Stanley Howard Knowles: By leave.


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



PRAIRIE FARM ASSISTANCE ACT


Right Hon. J. G. Gardiner (Minister of Agriculture) moved: the second reading of Bill No. 333, to amend the Prairie Farm Assistance Act, 1939.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
On section 1-Lease option deemed agreement for sale.
Mr. Fair:: Mr. Chairman, in connection with this legislation, may I say we have no objection to it and will support it. Something similar was done for Alberta some months ago, and at that time we said that when the minister brought in legislation dealing with Saskatchewan and Manitoba he would have our support. We are now giving it.


Ernest George Hansell: Is this the only amendment the minister expects to make in the act this year?


James Garfield Gardiner: Yes, Mr. Chairman, this is the only amendment to the Prairie Farm Assistance Act we will bring in this year.


Ernest George Hansell: I think there should be some other amendments. However, I might be out of order if I were to discuss them at this time. What I have to say can be said in the discussion of the estimates.


[Stage Direction]
Section agreed to.
Sections 2 and 3 agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the bill be read the third time?


Some hon. Members:: Now.


Stanley Howard Knowles: By leave.


James Garfield Gardiner: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



INDIAN ACT


Hon. W. E. Harris (Minister of Citizenship and Immigration) moved: the second reading of Bill No. 37, to amend the Indian Act.
Prairie Farm Assistance Act


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
On section 1-Loans to Indians.
James MacKerras Macdonnell: The leader of the house has got up such a head of steam that I think he is taking a good many people by surprise. I believe the hon. member for Calgary East (Mr. Harkness) would like to have something to say on this. Do we have to rush things through so much?


Alphonse Fournier: I did mention to the hon. member for Calgary East that after we finished the Prairie Farm Assistance Act we would take up the Indian Act. I do not want to insist, but it is a short bill containing minor amendments to the act.


James MacKerras Macdonnell: I am not sure how much the hon. member has to say, but this lightning speed may have taken him by surprise. It is five minutes to ten, and perhaps the minister would call it ten o'clock and give him a chance.


Alphonse Fournier: I will not insist.
Section stands.
Progress reported.



BUSINESS OF THE HOUSE

Alphonse Fournier: the adjournment of the house. He said: Tomorrow we will move to go into supply and call three departments, the items to stand. We will then continue in coxnmittee of supply on national defence estimates.


Donald Methuen Fleming: Which three departments?


Alphonse Fournier: Post office, national revenue and veterans affairs.
Motion agreed to and the house adjourned at 9.55 p.m.


Tuesday, April 14, 1953