1953-05-06

Mr. Shaw:: 1.	What was the total amount of each contract awarded to Alexander Construction company for the following work at Penhold, Alberta: (a) construction of ground instructional school; (b) construction of water, sanitary and storm sewer distribution system?
2.	What payments have been made to date under each of the above?
3.	What was the total amount of contract awarded to Alexander Construction company for work at Penhold for buildings other than those included in (a) and (b) of question 1?
4.	What payments have been made to date under the contract referred to in question 3?
5.	Was any portion of the contract referred to in question 3 awarded on a cost plus basis?
6.	If so, what rate of cost plus fee is payable on said contract?


Mr. Dickey:: 1.	(a) $335,506; (b) $120,890, (as of April 30, 1953).
2.	(a) $130,247; (b) $95,061, (as of April 30, 1953).
3.	Five contracts other than those included in (a) and (b) of question 1 were awarded to Alexander Construction company for work at Penhold. The total amount of these contracts is $5,303,264 (as of April 30, 1953).
4.	Payments to date (April 30, 1953), on contracts referred to in 3 above, amount to $3,797,528.
5.	The firm price contract for 12 buildings in the amount of $3,256,973 was amended to provide temporary heat to enable winter construction. Subject to cost audit, the amendment is based on actual cost plus a fee of 5 per cent to cover overhead and profit, provided that in no event shall the total payment, including fee, exceed $110,000. The work was completed at a cost of $94,886.12, including fee.
This contract was also amended to provide for extra labour and materials, overtime and equipment to accelerate construction to meet R.C.A.F. requirements. This amendment, for which the final audited cost was $28,254.67, includes a fee of 5 per cent to the contractor.
6.	Answered by No. 5.


Mr. Shaw:: 1.	What was the amount of the contract awarded to Assiniboia Engineering Company Limited for work at Penhold?
2.	What payments have been made to date under the contract?


Mr. Dickey:: 1.	Contracts awarded to the Assiniboia Engineering Company Limited for work at Penhold, Alberta, were as follows:
(a)	Construction of roads, parking areas, curbing, catch basins, and concrete walks in the amount of $241,820.
(b)	Repairs to runways, aprons, taxi strips and drainage were awarded September, 1951 in the amount of $549,331.41, later increased to $909,540.69.
(c)	Improvements to roads leading from Calgary-Edmonton highway to R.C.A.F. station, Penhold, in the amount of $42,452 awarded January 19, 1953.
2.	Payments made on the above contracts were as follows:
(a)	$107,920 (to April 28, 1953).
(b)	$897,461.09 (to April 28, 1953).
(c)	$13,547.61 (to April 28, 1953).


CANADIAN ARSENALS, SCARBOROUGH
Mr. Harkness:: 1.	What was the total cost of the Canadian Arsenals plant In the Toronto suburb of Scarborough?
2.	How many square feet of factory space and how many feet of office space are contained in this plant?
3.	What was this plant built to manufacture?
4.	What company, or companies, constructed this plant?
5.	Was the contract or, if more than one, were the contracts let by tender?


Mr. Dickey:: 1.	This plant is at present under construction. The total cost to date (March 31, 1953) is $2,161,201. This includes payments to the contractor plus payments to the consulting architect for design and supervision.
2.	Office space 25,803 sq. ft.; factory space 168,768 sq. ft.
3.	It is an assembly plant for radar equipment.
4.	Carter Construction Company Limited, 419 Cherry street, Toronto, Ontario.
5.	The contract was let as a result of a publicly advertised competitive tender

Questions



DEFENCE PRODUCTION


Mr. Pearkes:: What funds were paid to the Piggott Construction Company Limited, through various agencies, on commitments authorized by the treasury cost and audit division, Department of Defence Production, for each year since January 1, 1949?


Mr. Dickey:: The cost inspection and audit division of the office of the comptroller of the treasury has no authority to make any commitments on behalf of the Department of Defence Production or any other government agency. It is the responsibility of the cost inspection and audit division to inspect and audit, under the direction of the comptroller of the treasury, all costs incurred by any contractor on a cost plus contract negotiated by a department or agency of the government.
Payments to the contractor which were under audit by the cost inspection and audit division of the comptroller of the treasury, have been as follows:
!951	$ 966,190.22
1952	$1,961,096.38
!953	$ 172,589.38
Total	$3,099,875.98



NATIONAL DEFENCE


Mr. Higgins:: 1.	In what cities in Canada are armouries situated?
2.	Is there more than one armoury in some cities?
3.	If so, in what cities and how many in each such city?


Mr. Claxton:: Mr. Speaker, I have pointed out to the hon. member that there are some 1,459 active and reserve units in Canada, most of which have armouries. There are armouries in probably 350 different cities and towns across the country. In view of this, I wonder if the hon. member would consider the question as being answered. If he requires additional information I shall be glad to provide it.


Mr. Higgins:: I am quite content. I trust that we will have an undertaking by the minister for a new armoury in St. John's.



INCOME TAX, VANCOUVER DISTRICT

Mr. Maclnnis:: 1.	In the Vancouver taxation district in the year 1951, how many employers' deduction slips, form T4, were received?
2.	How many persons for whom deduction slips were received filed income tax returns?
3.	How many persons for whom deduction slips were received did not file income tax returns?
4.	To how many persons were refunds paid because (a) they had overpaid the tax; (b) they did not have sufficient income to make them liable to taxation?
fMr. Dickey.1
5.	What amount of money remains with the income tax branch because returns were not filed or refunds requested?


Mr. McCann:: 1,	2 and 3. No information available.
.4. A statistical analysis of 1951 income tax returns received in the Vancouver district taxation office indicates:
(a)	that approximately 106,000 individuals were eligible for refunds of tax by reason of having overpaid their tax; and
(b)	that approximately 55,000 additional individuals were eligible for refunds of tax by reason of not having taxable income.
5. The amount of money which remains to be paid to individuals who have not filed income tax returns or requested refunds cannot be determined until income tax returns have been filed.



DEFENCE PRODUCTION


Mr. Balcer:: 1.	Have any stretchers been ordered for the armed forces, since 1945?
2.	If so, how many?
3.	What are the names of the firms to whom these contracts have been awarded?
4.	What are the amounts for each contract?


Mr. Dickey:: 1.	Yes.
2.	57,185 (since April 1, 1951).
3.	See list below.
4.	See list below.
Name and address of	Cost
supplier
Department of the army,
United States government .... $108,612.00
(U.S.)
Department of the navy,
United States government ....	5,657.63
(U.S.)
C. H. Petch & Sons Ltd.,	 6,675.00
Ottawa, Ontario.
The Holden Mfg. Co. Ltd	 10,260.00
Ottawa, Ontario.
Department of the army,
United States government ....	11,177.25
(U.S.)
Clark Caster Co. Ltd	 471.00
Weston, Ontario.
Cobra Industries Inc.,	 875,451.27
Quebec, P.Q.
Dowswell, Lees & Co. Ltd., __________ 155.40
Hamilton, Ontario.
Metal Craft Co. Ltd	 8,932.50
Grimsby, Ontario.
Gourock-Bridgeport Ltd	 12,235.30
Montreal, Quebec.
Jones Tent and Awning Ltd., ....	1,200.00
Vancouver, B.C.



SOUTHAMPTON, ONT., POST OFFICE

Mr. Diefenbaker:: 1.	Is a post office being built at Southampton, Ontario? If so, who secured the contract to do the work?
2.	Was the said contract let by tender? If so, who were the tenderers and what was the amount of each such tender?
3.	Did the said contractor complete the work? If not, when did he discontinue operations?
4.	What was the amount paid to the said contractor on account of his contract?
5.	Were all the subcontractors paid by the said contractor? If not, to whom was the said contractor indebted and what were the respective amounts of such indebtedness?
6.	Have the said subcontractors been paid by the Department of Public Works?
7.	What is the estimated amount required to complete the said post office, and who is in charge of the work to that end?


Mr. Fournier (Hull):: 1.	(a) Yes; (b) John D. Trumbley, Kincardine, Ontario.
2.	(a) Yes; (b) one tender only-from John D. Trumbley in the amount of $178,886 which was revised by the contractor to $166,100 (original tender considered high).
3.	(a) No; (b) he continued operations till May 1.
4.	$118,434.75.
5.	(a) No; (b) to date the following have notified the department, without providing proof of claim, that the contractor owes them the following amounts:-Cresswell Pomeroy Ltd., Montreal, $2,431; Robert McKay, Southampton, $333.94; Dennisteel Corporation Ltd., London, $430; Hobbs Hardware Co., Ltd., London, $2,884.31.
6.	No.
7.	(a) Difference between amount paid and contract price; (b) John D. Trumbley.



NEWFOUNDLAND HARBOURS

Gordon Francis Higgins: What progress has been made in the matter of turning over control of harbours in Newfoundland to the marine services of the Department of Transport?


Mr. Benidickson:: Boundary limits of a number of harbour beds in Newfoundland, which became the property of the crown in right of Canada under the terms of union of Newfoundland with Canada, have been suggested, and the matter now rests with the government of the province of Newfoundland which, it is understood, has referred it to the attorney general of Newfoundland for examination and report.
The management of certain harbours in Newfoundland was entrusted to harbour boards established by legislation, which legislation continues in force after the date of union, and under the terms of union, is now administered by the Minister of Transport.
Questions
These harbour boards have been permitted to exercise their functions until it is determined which boards are to be replaced by harbour masters, under the Canada Shipping Act, 1934, and which boards are to operate as harbour commissioners under new acts of incorporation. The harbour of Goose Bay has been proclaimed under the Canada Shipping Act, 1934, and a harbour master has been assigned there to enforce the regulations pertinent to public harbours.



INCOME TAX


Mr. Knowles:: 1.	Does the Department of National Revenue, In some cases, recognize contributions made by contractors to a political party as a necessary business expense?
2.	Are contractors, in some cases, allowed a deduction for corporation income tax purposes with respect to contributions made to a political party?
3.	If so, how many contractors were allowed such deductibility in each of the last five years?


Mr. McCann:: 1.	No.
2.	No.
3.	Answered by Nos. 1 and 2.



A. K. MILLS

Mr. Coyle:: 1.	Is A. K. Mills an employee of the Department of Public Works?
2.	If so, what is his title and salary?
3.	Was he appointed by the civil service commission after a competitive examination?
4.	If not, how was he appointed and on what date?
5.	Is he a permanent employee of the government?


Mr. Fournier (Hull):: 1.	Yes.
2.	(a) Assistant chief architect, (b) $7,800 per annum.
3.	No.
4.	(a) By the civil service commission as a temporary employee under the reconstruction program of this department.
(b) June 12, 1945.
5.	Yes.



J. C. PARADIS

Mr. Coldwell:: 1.	Is J. C. Paradis manager or superintendent for the Ottawa area of Central Mortgage and Housing Corporation?
2.	If so, since when has he occupied that position?
3.	Has he been removed or transferred? If so, when did he receive notice of his removal or transfer?
4.	On assuming his duties in Ottawa, did the Campeau Construction Company build, sell or otherwise provide a dwelling for him?
5.	If so, where and upon what terms?


Mr. Winters:: 1 and 2. Mr. J. C. Paradis was Ottawa branch manager of Central Mortgage and

Orders for Returns
Housing Corporation from May 15, 1950, to May 1, 1953.
3.	Mr. Paradis was notified on April 23. 1953, that he was being promoted, effective May 1, 1953, to the position of assistant regional supervisor, Quebec region, with headquarters in Montreal, P.Q.
4.	His house was started about August 1, 1950, and completed about November 30, 1950.
5.	1288 Livingston avenue, Ottawa, Ontario. The house was financed by a joint loan made to Mr. Paradis by the Canada Life Assurance Company under part I of the National Housing Act, and it was processed through the Ontario regional office of C.M.H.C. in Toronto in the usual manner prescribed for joint loans. The amount of the loan was $9,900 and the final cost of the house was $12,300.



QUESTIONS PASSED AS ORDERS FOR RETURNS

[Stage Direction]
MAIN, RENSAA & MINSOS
['1.\tHas Rosehall Nurseries Limited, Brantford, Ontario, had contracts with Central Mortgage and Housing Corporation or any other branch of the government since 1949?\n2. If so, how many and what was the total amount of money involved?\n3.\tHas Rosehall Nurseries Limited, Brantford. Ontario, contracts being performed at the present time?\n4. If so, how many and what is the amount involved?\n5.\tWho are the directors of Rosehall Nurseries Limited, Brantford, Ontario?']
Mr. Bradley:: Return tabled.



Mr. Shaw:: 1.	What was the amount of contract awarded to Shoquist-Wickland Construction Limited for work at Penhold, Alberta?
2.	What did the contract cover?
3.	What payments have been made to date to this firm?


Frederick Gordon Bradley: Return tabled.


DEFENCE PROJECTS, NEWFOUNDLAND
Mr. Higgins:: 1.	What defence projects are presently being undertaken in Newfoundland by the Department of National Defence?
2.	Where are they located?
3.	What is the estimated cost of each such project?
4.	Who are the contractors for the projects?
5.	What is the basis of payment?


C-5 AIRCRAFT A.O.P.-10,000
Mr. Cardiff:: 1.	On what occasions since January 1, 1951, has the C-5 aircraft bearing registration A.O.P.-IO.OOO been dispatched on flights outside of Canada?
2.	What was the mileage, destination and route flown on each such flight?
3.	Were passengers other than members of the Royal Canadian Air Force personnel carried on any such flight?

4.	If so, what are the names of such passengers and in each case what was the status and reason for travel?
5.	Were such passengers carried throughout the flight and if not, between what points was each passenger carried?
6.	Having regard to the number of passengers carried and the over-all cost per mile of operating the aircraft, what was the estimated cost of such trips for each passenger named?
7.	What was paid by each of the passengers named for such flights?


ROSEHALL NURSERIES LIMITED
Mr. Rooney:: 1.	Has Rosehall Nurseries Limited, Brantford, Ontario, had contracts with Central Mortgage and Housing Corporation or any other branch of the government since 1949?
2. If so, how many and what was the total amount of money involved?
3.	Has Rosehall Nurseries Limited, Brantford. Ontario, contracts being performed at the present time?
4. If so, how many and what is the amount involved?
5.	Who are the directors of Rosehall Nurseries Limited, Brantford, Ontario?



BUSINESS OF THE HOUSE


Right Hon. L. S. St. Laurent (Prime Minister) moved:: That on Saturday, May 9, 1953, the sittings of the house shall in every respect be under the same rules as are now provided for other days under the special order passed on Thursday, April 2, 1953, and the order of business and procedure shall be the same as for Thursdays.


Mr. E. D. Fulton (Kamloops):: Mr. Speaker, before this motion is adopted I think the house is entitled to ask for an assurance from the Prime Minister with respect to one matter particularly. Although the motion provides that the order of business and procedure shall be the same as for Thursdays, we might have an undertaking, rather than an amendment, that questions will be called first. I beg your pardon, Mr. Speaker, the point is not that they will be called first; rather, the assurance I am after is that some of the questions which have been standing on the order paper for an extreme length of time will be answered.
I point out to you that question No. 1 has been on the order paper since February 25, two and a half months. Question No. 6 has been on the order paper since March 3, and question No. 12 has been on the order paper since March 23. Those are questions standing in my name and there are, in the names of other hon. members, others which have been standing since March 2, March 6, March 9, and so on. I would first like to protest against the length of time which has passed without these questions being

answered; and secondly, I would ask for an assurance that these questions will be answered before this session closes. I would ask that the question passed today as an order for return-question No. 6, which has been standing on the order paper since March 3-also be dealt with and the return brought down before the close of the session.


Louis Stephen St-Laurent: I think it would be quite proper to have it agreed that questions might be called on Saturday at the appropriate time, but it is quite impossible to give the assurance asked for by the hon. member. I can give the hon. member the assurance that there was no intentional delay in dealing with any of these questions. He will recognize, as most members do, that there has been more work imposed upon the departments with respect to preparing answers and returns during this session than during any previous session I can remember. The work has been done just as expeditiously as it could be done by the staffs in the offices.
Everything that can be produced will be produced, but I cannot give assurance as to how much further time may be required to obtain the information that is sought.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. L. A. Mutch (Parliamentary Assistant to the Minister of Veterans Affairs):: Mr. Speaker, on Monday last the hon. member for Nanaimo (Mr. Pearkes) asked the following question:
Are Korean army veterans who have not had service in world war II eligible for assistance under the army welfare fund?
I promised at that time to secure an answer for him, and I now propose to give it.
The army benevolent fund was established by act of parliament to administer funds remaining from canteen operations during world war II. It provides assistance for veterans who served in the Canadian army during world war II and who may or may not be still serving. It also provides assistance for the dependents of these veterans or the former dependents of such veterans who have died.
The Canadian army welfare fund became available on April 1, 1953, and is being administered by the army benevolent fund on behalf of a board of directors. Assistance can be provided only for a person who is
Inquiries of the Ministry serving in the Canadian army, regardless of whether or not he served in world war II.
Owing to the limited funds available, the directors of the Canadian army welfare fund have not found it possible to extend this assistance to ex-members of the army, except that where a soldier dies, who had service in Korea, assistance will be available for a period of twelve months.
In the cases of veterans who require assistance but are not entitled to the Canadian army welfare fund assistance, the welfare officer does his best to obtain help through community resources, such as service clubs, Canadian Legion branches, army and navy branches, and such organizations as make it a practice to assist people in distress. A few of our district offices have at their disposal small trust funds, from which limited assistance can be provided.
The possibility of extending the scope of the Canadian army welfare fund to cover veterans who served in Korea is being discussed between the Department of Veterans Affairs and the Department of National Defence.


Mr. Green:: May I ask the parliamentary
assistant a question about his statement. Does he mean that Korean army veterans do not have the same access to a benevolent fund as Korean navy veterans and Korean air force veterans have?


Leslie Alexander Mutch: Mr. Speaker, as the hon.
gentleman knows, the three benevolent funds-that is, the army, navy and air force benevolent funds-are separately set up and separately administered. In the case of the army benevolent fund there is no provision for extending benefits to serving personnel unless they served in world war II. That provision does not apply, I understand, to the other funds which continue to accept contributions from serving personnel.



THE GENERAL ELECTION


[Stage Direction]
On the orders of the day:
Mr. A. W. Stuart (Charlotte):: Mr. Speaker, I should like to address a question to the Prime Minister. Since the hon. member for Eglinton (Mr. Fleming) in his remarks yesterday conceded the forthcoming election to the Liberals, has this statement been endorsed by the Leader of the Opposition (Mr. Drew), and would it perhaps eliminate the necessity of calling a general election this year?


Mr. Gordon Graydon (Peel):: Mr. Speaker, on a question of privilege, I think everyone

Inquiries of the Ministry on this side of the house can quite understand the desire of the hon. member, and a good many others, to avoid the necessity of a general election.


Mr. Donald M. Fleming (Eglinton):: Also on a question of privilege, Mr. Speaker, no one will deny to the hon. member for Charlotte (Mr. Stuart) his wish to be facetious on this occasion.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: I could not help but be impressed yesterday, Mr. Speaker, when I asked the Prime Minister a simple question on this subject, with the extreme touchiness and sensibility to the matter of a general election which was demonstrated by many members opposite in their noisy rejoinders.



THE CORONATION


[Stage Direction]
On the orders of the day:
Mr. G. K. Fraser (Peterborough West):: Mr. Speaker, I would like to address a question to the Prime Minister (Mr. St. Laurent). Owing to the fact that different organizations across Canada have not been able to finalize their arrangements for the coronation, is the government going to declare June 2 a legal holiday?


Louis Stephen St-Laurent: I think that was announced some months ago, Mr. Speaker.


Gordon Knapman Fraser: No. The various organizations across Canada do not know it, because I have had letters from different parts of Canada asking for the information.


Louis Stephen St-Laurent: I will get the official references and, in answer to the hon. gentleman's question, I will mention them here so that they may become better known.


Mr. Knowles:: A proclamation was issued.


Gordon Knapman Fraser: Yes, but it is not known. [Later:]



ANNOUNCEMENT OF ARRANGEMENTS FOR TRANSPORTING FILMS TO CANADA

Brooke Claxton: May I have the consent of the
house to revert to motions to make a brief announcement in connection with the coronation arrangements? I ask for that permission at this time because I understand a similar announcement is to be made at this time in London.


Some hon. Members:: Agreed.


Brooke Claxton: The announcement is in connection with flying out to Canada of 
telerecordings of the coronation. Arrangements have been completed with the air ministry and the British Broadcasting Corporation on the one hand, and the Royal Canadian Air Force and the Canadian Broadcasting Corporation on the other, whereby films will be flown by helicopter from the centre of London to Weald airport and flown out by Royal Air Force Canberra jet planes to Goose Bay. There they will be picked up by R.C.A.F. CF-100 aircraft and flown to Montreal. This arrangement has been worked out by the Canadian Broadcasting Corporation, and will provide television films, not only for the corporation but for five United States networks. They are the American Broadcasting System, the Columbia Broadcasting System, the National Broadcasting Company, Dumont and the Mutual Broadcasting System and one television news agency, U P Movietone.
These flights will, of course, be dependent on the weather, but they are timed so that delivery of the films at Montreal should take place at 4 p.m., 5.30 p.m. and 8.30 p.m. local daylight saving time. This would permit these films being shown in Montreal and Toronto, and would also permit their use for other purposes, broadcast and the like, within a few hours after the coronation itself takes place in London. It should permit also of their general dissemination throughout the United States through the arrangements initiated by the Canadian Broadcasting Corporation and carried out through the co-operation of the R.A.F. and the British Broadcasting Corporation, for which we are very grateful indeed.


Mr. Adamson:: Will there be any charge
for these films to the American broadcasting networks?


Brooke Claxton: Yes, the cost of that operation will be paid for by the Canadian Broadcasting Corporation, and contributions to that cost will be received from these others.



SUPERANNUATED CIVIL SERVANTS


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a
question to the Minister of Finance (Mr. Abbott)? Has the minister received a request from Mr. Fred Knowles, national secretary of the Amalgamated Civil Servants of Canada, that before this session ends a supplementary estimate be tabled in this house providing for a bonus to retired civil servants receiving less than a certain figure? Will consideration be given to this request from this organization?


Hon. Douglas Abbott (Minister of Finance):: So far as I am aware, Mr. Speaker, I have not received such a request. It is possible that there may be one in my office. Owing to the long hours we are sitting in the house I am perhaps a day or two behind in going over the correspondence. So far as I am aware, however, there is no such request. In any case, the supplementary estimates have been tabled.


Stanley Howard Knowles: Will any further supplementary estimates be tabled?


Douglas Charles Abbott: Not so far as I am aware.



REOPENING OF LIVERPOOL CORN EXCHANGE


[Stage Direction]
On the orders of the day:
Mr. P. E. Wright (Melfort):: I should like
to direct a question to the Minister of Trade and Commerce. In view of the announcement that the Liverpool corn exchange is being reopened, is it the intention of the Canadian wheat board to use the facilities of that exchange in selling Canadian wheat and coarse grains?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: I have not even heard that the Liverpool corn exchange is to be opened. If it is, I am sure there will be no change in the method of selling wheat, so far as the Canadian wheat board is concerned.



FISHERIES


[Stage Direction]
On the orders of the day:
Gordon Francis Higgins: Will the parliamentary assistant to the Minister of Fisheries comment on the article appearing in the May 2 edition of the Sunday Herald entitled "Fish pirates in Newfoundland"? I sent a copy to the minister, but the minister is not here.


Mr. J. Watson MacNaught (Parliamentary Assistant to the Minister of Fisheries):: I have not had the advantage of reading this article, so I am unable to make any comments on it at the present time. I shall call it to the attention of the minister when he returns tomorrow, and no doubt he will make the proper comments.



UNEMPLOYMENT INSURANCE


Hon. Milton F. Gregg (Minister of Labour) moved: the second reading of Bill No. 366, to amend the Unemployment Insurance Act, 1940.
Unemployment Insurance Act


Mr. H. W. Herridge (Kootenay West):: Labour organizations, members of this group and other members in this house, during recent years in particular, have urged an amendment to the act to provide for benefits for those who are taken ill while in receipt of benefits. I have personal knowledge of a good many cases in which there was unnecessary hardship created by the present legislation, where people were taken ill while unemployed and at the same time there was no possibility of their obtaining employment even if they had remained well. We in this group are, therefore, glad that this amending bill has been introduced by the minister, and that by introducing the bill the government has recognized to some extent the validity of the arguments, requests and petitions presented by organized labour and supported by members in this house.
Personally, I rejoice in this further protection provided by this very short bill for our industrial and economic casualties and those who suffer from sickness. I trust, Mr. Speaker, that the government's partial recognition of this problem of sickness and disability is a forerunner of a health insurance plan for all the Canadian people.


Mr. George H. Hees (Broadview):: I am
very glad to see this bill being brought before the house, Mr. Speaker. During the past two years I have brought this matter to the attention of the government and the minister and urged the government to bring in just such a measure as this. I, therefore, naturally feel very pleased that it has come before us. I feel that it is a very good move, which will benefit a great many Canadians in the future.


Stanley Howard Knowles: As has been indicated by the two members who have already spoken this morning, Mr. Speaker, and as was indicated by those who spoke on this matter when it was at the resolution stage, this bill is a welcome piece of legislation. As has been stated already, it covers a point which has been raised in the house repeatedly, and we are glad that point at least is being covered.
However, Mr. Speaker, I feel that before the bill passes we should take this opportunity of indicating the further steps that have been necessary for a long time, but which will be even more necessary after this bill becomes law. As I said the other day when we were in committee of the whole on the resolution preceding this bill, the benefit to be provided under this legislation can be called a form of sickness benefit. I realize that technically that is not the correct name to apply to it. Technically speaking

Unemployment Insurance Act what will happen when this bill becomes law is that an insured worker, who has already started drawing unemployment insurance benefits because he is off work due to the fact that there was no work for him, will, when he is taken sick, be entitled to continue drawing these unemployment insurance benefits. Technically speaking, therefore, that sick or injured worker will be drawing unemployment insurance benefits. But I think we are justified in saying that it is the beginning of a form of sickness benefits, because to that extent, limited though it may be, we will have workers who are at home because of illness or injury drawing benefits out of a fund to which they have contributed.
As I suggested the other day this is a step from which there is no turning back. In common with the position taken by the labour congresses of this country, I urge upon the government the necessity of going further and extending this principle of sickness benefits to all workers covered by the unemployment insurance fund. In introducing this legislation the other day the minister made an oblique reference to the representations of the labour congress. I should like to draw to his attention a partial report of these representations which is contained in the most recent issue of the Labour Gazette, the issue for April, 1953. This is of course put out by the minister's own department. I find, for example on page 532 of this issue, included in a summary of the brief presented to the cabinet this year by the trades and labour congress of Canada, these interesting sentences:
The major change in the act requested by the delegation was the extension of the act to provide benefits to workers who are out of work because of illness.
In the TLC's view, administration of such a provision could be carried out by the present unemployment insurance commission. The provision would apply to the same employees now covered by the act; the system of contributions and benefits would be similar; the benefits would be paid to insured employees when sickness resulted in loss of earnings, on presentation of a doctor's certificate.
"Those who are unemployed through sickness should receive benefits as a right," Mr. Bengough emphasized in a departure from his prepared text, "and there should be no suggestion of any means test."
That summary in the Labour Gazette is a faithful and fair report of one section of the brief from the trades and labour congress of Canada submitted to the government this year. It can be found on pages 12 and 13 of that brief.
Then over on page 537 of the same issue of the Labour Gazette, one finds references to the brief presented by the Canadian

congress of labour under the heading "unemployment insurance". There are two paragraphs I should like to place on the record. The first one reads as follows:
Reiterating its assertion that the unemployment insurance fund is over-funded, the congress prophesied a balance of a billion dollars in the near future if the present rate of employment is maintained. There is room for substantial improvements to the act without the need for further contributions, it said.
A little bit further down on the same page we find this:
The time has come, the brief stated, to introduce a sickness disability scheme to protect workers against loss of income during illness. Such a scheme, it suggested, could supplement unemployment insurance, be administered by the commission and be financed in part out of the "large balance" in the unemployment insurance fund.
Similarly on page 546 there appears a report of the representations of the transportation brotherhoods. I find that there are six improvements to the Unemployment Insurance Act which the brotherhoods suggest, and the last one reads as follows: . . . sickness disability insurance for all insured workers.
In other words, Mr. Speaker, this bill we now have before us, while welcomed by all of us in the house and by organized labour, is after all but a step in the direction of what the labour congresses asked for at the time they met the government this year. I suggest that this legislation should be looked upon as merely the beginning, merely as establishing the principle of the right of insured workers-workers who are contributing to a fund-to receive benefits in time of illness. They will be receiving these sickness benefits under this legislation but they will be receiving them not really by virtue of the fact that they are sick but rather by virtue of the fact that they are unemployed, that they started to draw their unemployment insurance benefits and then took ill while drawing those benefits.
I think the government is aware of the fact that this legislation will force action on the broader question; and that situation will come about because of some of the difficulties the government will run into in administering this scheme. Let me suggest the kind of difficulty that will arise by picturing the case of two workers. Here is John Smith and Bill Brown-


Mr. Browne (Si. John's West):: Just a
minute.


Stanley Howard Knowles: All right. I will change it to Bill Smith and John Brown if the hon. member for St. John's West (Mr. Browne) would like it better that way. Bill Smith and John Brown both work at the same

plant. Let us assume that Bill Smith and John Brown are both laid off work on the same day, for the same reason, namely that there is no more work.


Mr. Sinnott:: What about Stanley Knowles?


Stanley Howard Knowles: He is not going to be laid off work. He is going to be re-hired on August 10. Let me get back to Bill Smith and John Brown. They both lose their jobs on the same day, both for the same reason, namely that there is no more work for them in the particular plant in which they are working. On the fourth day that John Brown is unemployed, he takes ill. Bill Smith does not take ill then but takes ill let us say on the eleventh day. Maybe he caught his illness from John Brown but at any rate it was a week later before he was ill.
Let us look at the situation that will develop. John Brown who, because he took ill on the fourth day, before he had the opportunity to qualify for unemployment insurance benefits, will not draw those benefits at all. But Bill Smith who did not take ill until after he had qualified for unemployment insurance benefits by having fulfilled all the waiting days, will continue to draw his unemployment insurance benefits even though he is ill. Let us suppose that these two men have built up quite a considerable period of entitlement and let us suppose that their illness keeps them incapacitated for a quite considerable time. We might even suppose that they are next-door neighbours. None of this is too hypothetical; it could all happen, and will. Then you would have John Brown and Bill Smith both laid off from the same plant, living side by side, both of them ill, one of them drawing his unemployment insurance benefits and the other not. It is going to be possible, on a legal and technical basis, for the unemployment insurance officials to explain to John Brown why he is not getting the benefits whereas Bill Smith is getting them. But John Brown just is not going to take it any more than the member for St. John's West would.
That is not an argument against this legislation; not at all. We have asked for this legislation and we have urged for a long time that it be brought in. I suggest, however, that it shows that you cannot have legislation of this kind for long without improving upon it and providing for sickness benefits for all workers who are covered under the unemployment insurance fund. In other words, Mr. Speaker, if ever it was true to say that having put the hand to the plow there is no turning back, it applies in this instance. Having started on the new road of providing 68108-306
Unemployment Insurance Act sickness benefits for workers who are unemployed and ill, there is no direction to go but on toward a program such as that suggested by the labour congresses, indeed on toward a complete program of health insurance including sickness benefits as one of its important items.
As I say, Mr. Speaker, we welcome this legislation. We are glad to see eliminated this unfairness which has existed all these years, in that from now on a worker who has started to draw unemployment insurance benefits will not be cut off because he takes ill. Not only because of difficulties that are going to arise in administering this legislation, but because it is right and because the labour congresses have given a great deal of thought to it and are perfectly right in asking for it, I urge most strongly that the day be hastened when this legislation will be broadened into a complete sickness benefit program and that it be made part of an over-all health insurance program for all Canadians.


William Joseph Browne: Mr. Speaker, I just want to make one or two points.


Edmund Davie Fulton: You want to be sure that you are not getting sick.


William Joseph Browne: I hope not. Cases of this kind have come to my attention in my constituency as there is quite a large labour force there. I think everyone will agree with the necessity for introducing legislation of this kind. In fact, it has been too long delayed. I note that it is to come into force on a day that is to be fixed by the governor in council. I hope that day will not be long delayed.
In reference to the point brought out by the hon. member for Winnipeg North Centre (Mr. Knowles), may I say that I think that it could be overcome by a liberal interpretation of the section; and I hope that those who will be charged with the responsibility of administering it will take that attitude.


Mr. Martin:: It is going to be a Liberal
government administering it, so the interpretation will be liberal.


William Joseph Browne: No, not a
Liberal government.


Donald Methuen Fleming: Sheer fancy.


Mr. Clarence Gillis (Cape Breton South):: Mr. Speaker, there are one or two things I should like to say about this bill. We welcome it as far as it goes. However, it certainly does not go far enough to suit me.
During the last discussion we had on unemployment insurance I brought to the

Unemployment Insurance Act minister's attention a matter which dovetails fairly realistically into this amendment but which is not covered. I pointed out to the minister the position of the employees of the Dominion Steel and Coal Corporation. They pay into a sickness benefit fund. That is a form of insurance that protects them against sickness. The employment in which they are engaged is heavy employment. A man may be too ill to carry out that type of heavy work, and so he is unemployed. But hir doctor tells him that he is in a position where his health will permit him to take lighter work. Under those circumstances that man, in my opinion, is legitimately entitled to apply for unemployment insurance. But if he does he immediately places himself in the position of severing his connection with the coal or steel company. Their attitude is that when you apply for unemployment insurance you automatically sever your connection with them, and the individual in turn not only loses his employment but he also loses his pension rights, because he has pension rights with that company. It has been a matter of controversy between the unions and the companies, both coal and steel, for some time. I drew that to the minister's attention, and the minister suggested that his department might have a talk with the coal and steel company on that particular point. This amendment certainly does not cover it.
I believe an employee in the circumstances that I have described is paying for insurance to protect him against sickness. He is legitimately entitled to draw insurance because he has paid for it. On the other hand, if he is not physically able to mine coal or to carry on heavy work in the steel plant but is able to engage in some other kind of employment that he might secure through the employment offices, he is legitimately entitled to collect his unemployment insurance, because he is paying for that also, and is capable of taking some type of work. That is not covered by this amendment. I am merely bringing that to the minister's attention again so that he can do something about it in the future. I think that type of case is being pretty badly discriminated against, not altogether by the government in the regulations but by the attitude of the company in the matter of employment and pension rights.
The second point that I should like to bring to the minister's attention-and it is not a new one-has to do with the discrimination practised against married women under regulation 5A. This goes back to the matter of illness. I have brought several cases to the minister's attention, or to the attention of the department, and I have argued

some of these cases before the board of referees and have even taken one to the umpire in Ottawa without getting any redress. I still get complaints. The difficulty appears to be that in a majority of the cases, so far as the young married women are concerned, they have no knowledge of the regulations. They are unorganized and they have no one to advise them in the matter until they get sick.
The last complaint I received was pretty bad. A girl was employed in a clerical capacity for ten years. She paid unemployment insurance during that time. She got married. She did not take any time off to get married; she continued on in her employment for some considerable time. Under regulation 5A, a young girl who is employed and wants to get married must take a separation from her employer and then re-hire and be employed for at least sixty days either in that employment or in some other. Why force a girl to discontinue her employment? Why force her to take separation because she wants to get married? Under the regulations they do. In this particular case she continued her employment for some considerable time. Then she carried out the instructions of the Good Book and did her share in populating the world. When that time arrived she took her separation from employment, not knowing anything about regulation 5A. Remember, this girl is ill within the meaning of the present regulations, except that she did not establish a benefit year. She makes her application for unemployment insurance. The unemployment insurance officer tells her that he cannot take an application from her; she is not entitled to unemployment insurance. She writes to the district office and they tell her: Well, you can appeal but there is no use your appealing; the board of referees will turn you down anyway under this regulation.
I think that is rank discrimination. As I said before, a married woman under the circumstances I have described should have the protection of the act when she is unemployed for the reason that I have stated. It is pretty hard for a girl to understand why, after paying for the insurance for ten years, and working a lot longer than the time required by the regulation, namely sixty days, when she is obliged to lay off work temporarily she is not entitled to that unemployment insurance. The cases that I am citing are cases of young married women who are starting out to establish a home and who are going to face within a few months abnormal expenses in trying to carry out the duties of citizenship. In that time they need extra money in order to accomplish what

they have in mind, but they find that the insurance that they thought would help them out in these circumstances is denied them.
In my opinion, regulation 5A should be cut out completely. In the circumstances I have mentioned, the girl should be given the protection she paid for, or the unemployment insurance commission should not take her money. It should be one thing or the other. In my opinion this regulation has caused a lot of resentment with regard to unemployment insurance.
I have another point to make on the same regulation. Take this city for example. There are employed by the Department of National Defence many persons who are subject to removal from one part of the country to the other.


Mr. Speaker:: Order. Is the hon. member
not getting away from the terms of the amending bill? The Unemployment Insurance Act is not before the house at the present time. I do not want to be too strict, but I do feel that at this time the house should discuss the amending bill which is before it.


Clarence Gillis: The principle we are discussing now is the amending of the Unemployment Insurance Act.


Mr. Speaker:: Just in respect to section 27, which provides for the payment of unemployment insurance benefits to insured persons who, while otherwise unemployed and entitled to benefit, become incapacitated for work by reason of illness or injury.


Clarence Gillis: Mr. Speaker, for the last ten minutes that is exactly what I have been dealing with.


Mr. Speaker:: I was anticipating what the
hon. member was going to discuss now.


Clarence Gillis: Well, you had better wait a
minute or two until we get to that point.
I could have finished, in less time than this exchange has taken, what I was about to say.
On the point I was discussing, namely the question of a married woman, the government ships her husband across the country and naturally she wants to go with him. She lands in Halifax or in Vancouver. She is unemployed. She left employment here, and had paid into the fund for twelve years. When she arrives in Vancouver she cannot find employment but she cannot draw any unemployment insurance. That particular angle should be looked into, Mr. Speaker. We may have a lot more to say on this subject when the minister's estimates are oefore the house.
Unemployment Insurance Act


Mr. Daniel Mclvor (Fori William):: Mr. Speaker, I support this amendment because it tells me that the minister sees that when a man is employed and becomes sick he has to eat just the same and his family has to eat; therefore he is taking care of them. I also realize that the present minister and his predecessors have tried to keep unemployment insurance in a sound position, so that those who require it will never be denied because of a lack of funds. I do not think this amendment requires further discussion, because it is quite clear.
(Translation):


Mr. Auguste Mallais (Charlevoix):: Mr. Speaker, since the Unemployment Insurance Act was first passed in 1941, the government has brought in several amendments designed to fill certain gaps in that legislation. Today we are asked to approve another amendment. I must say that I am very glad of this and believe that the majority of workers will approve of it.
I would like, however, to call the government's attention to a problem that exists in my district and the surrounding districts. It may well be that my remarks are not strictly in line with the principle of the amendment now before the house, but I think they could apply.
Prior to the presentation of that amendment, when a worker became sick after starting to draw unemployment insurance benefits, he could not keep on drawing such benefits if he reported himself sick. There is another kind of sickness which affects not the workers but the officials of the unemployment insurance commission. The unemployment insurance officials in the districts where there are many lumber workers seem to have devised a certain interpretation of section 27 (1) (a) of the act. Apparently, those gentlemen do not realize entirely the conditions which obtain in certain parts of the county of Charlevoix, where a great many farmers unfortunately own marginal lands, which yield them enough revenue to live on only when prices are high and market conditions are good. When prices are unstable, the low yield of those farms forces them to seek elsewhere the revenues they need to make both ends meet.
And so, in that district where families are large and the land is poor, farmers' sons must sometimes seek other employment. Quite a few of them take up lumbering and, when they have accumulated the contributions necessary to get unemployment insurance benefits, that is to say 180 days, or 90

Unemployment Insurance Act days, for the supplementary benefits, they have a hard time getting them, since the district representative of the unemployment insurance commission disqualifies them in the following terms:
Since your main occupation is farming, you have not proved yourself to be unemployed within the meaning of section 27 (1) (a) of the act.
Of course, Mr. Chairman, I realize that the question I am raising does not pertain to the amendment at present before the committee. Still, I would like to suggest to the government that the unemployment insurance commission should divide certain districts into zones so as to determine what a worker should be called, whether he should be called a farmer, a lumberman or a day labourer.
Finally, I hardly think one has to be an expert to know that to own a few acres of land and three or four cows, when one has six or seven children over 21 who, naturally, live in their father's house, is hardly enough to balance a family budget without the children working outside. I do not think, therefore, that sons of farmers should be considered as farmers, even though in a period of unemployment, they retire to their father's home and remain on the land. In my opinion, the unemployment commission would greatly improve the situation if it divided certain areas into zones and if it determined once again what is a farmer and what is a lumberman. That was the first point I wanted to raise.
The second point, Mr. Chairman, is concerned with the practice of the unemployment commission which consists in depriving of benefits an employee who works as a lumberman on his father's land. There again we have an anomalous situation. When farmers have forest limits at the other end of their land and when their sons, during the lay-off season, work at developing that part of their father's land for a salary paid by their father, they are not entitled to unemployment benefits when they become unemployed.
That is one of the problems facing the district where I live, as well as the neighbouring districts. I feel that we should be more broad-minded in regard to this situation and I do hope that after the few remarks I have just made, the hon. minister will give due consideration to this problem.
(Text):


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
[Mr. Maltais.l
On section 1-Illness during benefit period.
Milton Fowler Gregg: Mr. Chairman, I propose to make only a very brief statement. I do not intend to follow the course of Bill Brown and John Smith-


Stanley Howard Knowles: John Brown and Bill Smith.


Milton Fowler Gregg: -mentioned by the hon. member for Winnipeg North Centre. The point raised by the hon. member for St. John's West is a very difficult one; but it will be interpreted and dealt with in a liberal fashion-and the hon. member may use a large "L" or a small "1", whichever he wishes.
I am sure the hon. member for Winnipeg North Centre realizes full well that under the terms of the amendment, which uses the expression "no person who has become entitled to receive benefit", there has to be a fixed date or a cut-off line somewhere. He will understand that, as in other measures, there are bound to be cases which, on the surface, do seem inequitable. However, we will deal with them as best we can. That is one factor which received a great deal of consideration at the time the amendment was under discussion.
Another point was touched upon by the hon. member for Hamilton West. It has to do with the availability of suitable work for an unemployed worker when he becomes sick. On that point I shall make a brief and carefully prepared statement. As is evident, the amendment has to do with section 27 of the act. That section contains three basic conditions precedent to the payment of benefit. These three conditions must be met for every day the benefit is paid. They are, of course: (a) that a person must be unemployed; (b) that he must be capable of and available for work; and (c) unable to obtain suitable employment.
The first of these, as I have indicated, is that the claimant must be unemployed, and the second and third are as I have stated them. The amendment modifies the second condition and allows the payment of benefits while he is incapacitated by reason of illness, injury or quarantine. The two other conditions, namely, that he must be unemployed and unable to obtain suitable employment, remain exactly as they were. The claimant must still prove that he is unemployed and he must still prove that he is unable to obtain suitable employment. When a job is offered to a claimant he will not be disqualified if he proves that he is genuinely ill. But if he fails to prove that he is ill, he will then be disqualified under the normal procedure of the act.
I am sure that the work test that was and is still in the act will be used by the

commission in a judicious manner in order to prevent any abuses of the fund. Generally I am quite confident that the insured population will not abuse their rights under the amendment to the act. On the other hand, the commission will apply the extensions fairly and generally and in a humane manner but will stand ready to use its powers to prevent any unwarranted claims on the fund.
I realize that the statement I have made is in general terms. Frankly, I would rather at this stage not be drawn into attempting to state what will be done in the given cases of John Smith or Bill Brown. The commis sion and its advisers have given a great deal of thought to the preparation of this amendment and they are exceedingly anxious that they be given a little time, not only in which to give more thought to these matters but in order to get directives in such shape that they may be placed in the hands of the 200 offices across the country so that the amendments may be put into operation as quickly and as uniformly as possible from one end of the country to the other. That explains why it is provided that the amendments shall come into force at a time to be set by the governor in council. I can assure the committee that that time will be made just as early as possible.


Mrs. Fairclough:: I take it from what the minister has said that a beneficiary who is ill must prove his illness in some manner or that he cannot make his regular report because of illness. That means practically that he must have a doctor's certificate to that effect.


Milton Fowler Gregg: May I interrupt? What I said was that when a job is offered to a claimant who is ill he will not be disqualified if he proves that he is genuinely ill.


Ellen Louks Fairclough: That is a different point
entirely. It is not necessary for him to prove that he really is ill. In other words, he still collects the benefits on his word that he is ill provided no employment is available. But when employment becomes available it is necesary for him to prove that he is genuinely ill. That really adds considerably to the scope of this amendment because it means that if work becomes available and he is genuinely ill he continues to collect those benefits for the period of time for which he is entitled to benefits.


Milton Fowler Gregg: That is correct.


Ellen Louks Fairclough: In that case I would
think that the amendment has gone far beyond the scope of what appeared on the surface when it was first brought down. I think it is a good step in the right direction.
Unemployment Insurance Act


Stanley Howard Knowles: What machinery is provided to enable a person, who continues to be eligible to draw benefits, actually to collect those benefits? At the moment an unemployed person who qualifies for benefits collects those benefits by reporting each week. What will be the machinery for collection in the case of a worker who has qualified, starts to draw benefits, and then because of illness is not able to report? Can someone else report for him? Can it be done by mail? What is the plan?


Milton Fowler Gregg: It is not with any intent of
avoiding answering the question, but I hesitate since that is one of the things the commission is working out. I would not want to tie their hands or embarrass them by giving a spot answer. All I can say is that the best and quickest possible method will be worked out and put into effect as soon as possible.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
On section 3-Illness during benefit period.
William Joseph Browne: Is the minister in a position to say when the Revised Statutes of Canada, 1952, will be available?


Milton Fowler Gregg: No.


The Chairman:: I suggest that that question should be put to the Minister of Justice.


William Joseph Browne: No, I think it is appropriate here. I am simply asking when part II will be obsolete.


Milton Fowler Gregg: I cannot say. As I understand it, it is a legal formality and will not affect the coming into force of this particular amendment. It will come into effect just as soon as arrangements can be made for its administration. At that moment it will be brought into force by order in council.


[Stage Direction]
Section agreed to.
Section 4 agreed to.
Bill reported.
Milton Fowler Gregg: the third reading of the bill.


Stanley Howard Knowles: By leave.
Motion agreed to and bill read the third time and passed.


Hon. Alphonse Fournier (Minister of Public Works) moved: that the house go into committee of supply.



UNITED STATES RESTRICTIONS

Donald Methuen Fleming: Mr. Speaker, there is a matter of some importance

U.S. Trade Restrictions that I should like to raise at this point. I shall endeavour to be brief, but I would not wish the brevity of my remarks to be interpreted as reflecting upon the importance of the matter. As I conceive it, it is a matter of very great importance.
I believe the Prime Minister (Mr. St. Laurent) leaves tomorrow for a meeting in Washington with President Eisenhower in response to an invitation from the United States president. I think all hon. members are glad indeed that President Eisenhower has invited the Prime Minister to this conference and that the Prime Minister has chosen to accept the invitation. Canada and the United States are the best neighbours in the world, but the fact that we are the best neighbours does not mean that there are not matters of mutual interest and high importance that must be discussed from time to time. I think that all hon. members will desire that these present discussions which will continue during the balance of the week will be fruitful of success.
There is one matter which I hope will be included in the list of subjects to be discussed in the course of these conversations; I refer to trade relations between Canada and the United States, particularly in the light of certain actions taken at Washington, the unhappy effect of which has been to restrict the importation into the United States of Canadian agricultural products.
There have been in the course of the past year and a half two palpable breaches on the part of the United States of the general agreement on tariffs and trade which in each case have directly affected the importation into the United States of the agricultural products of Canada and other countries.
The United States entered into the Geneva agreements by executive action under authority of congressional legislation. The extensions of the agreements as a result of the subsequent conferences at Annecy and Torquay were also carried into effect on behalf of the United States by executive action under authority of legislation passed by congress. But, Mr. Speaker, in the year 1951 the United States congress took a step which had the effect of violating not only the spirit but indeed the terms of the general agreements on tariff and trade. I refer to section 104 of the defence production act of 1951. An amendment, known as the Andresen amendment, was tacked on to the defence production act with a view to excluding from the United States market Cheddar cheese, butter and other dairy products.

The then president of the United States, Mr. Truman, expressed his strong disapproval of that amendment but in the end he felt himself unable to veto the amendment on account of the fact that the remainder of the defence production act was urgently needed legislation which he felt obliged to support and to put into effect by presidential signature. That amendment, as I have said, not only violated the spirit but it directly violated the letter of the general agreements on tariff and trade; because under those agreements it was provided that there should be on the part of signatory nations no action taken to raise barriers against trade in commodities which I have mentioned.
However, that is not the end of the story. The Canadian farmer did feel the effect of that Andresen amendment, and as of January 1, 1953, further Canadian agricultural products were affected by action in Washington. As of that date quotas were imposed on dried whole milk, dried buttermilk, and dried cream, which will have the further effect of restricting exports of those Canadian agricultural products to the United States. As is well known, that action affects of course the export of similar products to the United States from other countries which are parties to the general agreements on tariff and trade. Very strong protests have been lodged and indeed, in some cases, threats of retaliatory action have been heard from Australia, New Zealand, Denmark and the Netherlands.
The matter apparently does not end there, Mr. Speaker, because we hear reports from Washington at the present time that in congress additional steps are being debated to impose further restrictions on the import of Canadian agricultural products into the United States. This time it applies to grains, and while it is to be hoped that the debate on that matter will not result in restriction of importation into the United States of Canadian grain products, nevertheless it could become a very serious matter for the Canadian farmer. Lest hon. members should think that the export of Canadian grain to the United States market is not a serious matter, may I remind the house of some figures which were placed on the record by the Minister of Agriculture (Mr. Gardiner) on May 1, 1953, which are to be found at page 4652 of Hansard. They indicate that in the year 1952 our exports of grain to the United States were as follows:
Wheat, $72,500,000; oats, $61,000,000; barley, $27,300,000.
Exports of those grains to the United States for the first two months of 1953 showed

a very substantial reduction; but the figures for the full year of 1952 are sufficient, I think, to indicate that when congress debates proposals to impose restrictions on the importation of Canadian grain into the United States it is a serious matter indeed for the Canadian farmer.
Some of these restrictions take the form of quotas, Mr. Speaker, and I think in that respect recognition should be given to the fact that quotas can be a much more effective barrier to trade than some of the more conventional tariffs imposed in other days. A distinguished Canadian businessman, Mr. Rhys Sale, president of the Ford Motor Company of Canada, in a speech in January, summed the matter up in these words:
"Tariffs are of much less significance today than the multiplicity of import controls imposed by many countries," Mr. Sale declared, and added that these restrictions "often throttle trade much more effectively than any tariff."
Recognition must be given, I think, Mr. Speaker, to the danger that is involved in this action on the part of the United States in 1951 and again in 1953-with further restrictions now under debate. The matter is raised at a time when a good deal of concern is being expressed in this country for the future of the general agreement on tariffs and trade.
In the debate which we had in this house ten days ago on the subject of trade, when discussing the estimates of the Department of Trade and Commerce, I recall that there was general agreement expressed in all parts of the house in favour of the extension of the general agreements. It must cause a feeling of very serious disquiet, Mr. Speaker, when we anticipate expiry of these agreements at the end of the calendar year, to see that departures from them not only have been taken in Washington but apparently there are further departures under debate in the United States congress. The feeling in this country should be brought to the attention of the authorities in the United States in a most vigorous way.
We have had made available to us in the last several days the figures of trade for the first three months of this calendar year. May I read some paragraphs from the dominion bureau of statistics daily bulletin of April 28, 1953:
Total exports-domestic and foreign-in March were valued at $313,000,000, down nearly 13 per cent from the value of $359,300,000 for March, 1952. Aggregate value for the three months ending March was $913,900,000 as against $1,001,800,000, a decrease of 8-8 per cent. In contrast, the value of imports In the month rose over 10 per cent to an estimated $360,400,000 compared with $327,000,000 last year, raising the three-month aggregate almost 9 per cent to $998,200,000 as against $916,100,000.
U.S. Trade Restrictions
Based on the estimate for imports, Canada thus had an import surplus of $47,400,000 in trade with all countries in March and of $84,300,000 in the three months. These figures compared with an export surplus of $32,300,000 in March and $85,700,000 in the quarter last year.
Commodity exports to the United States were up in value in March to $206,400,000 from $188,700,000 a year ago, bringing the total for the quarter to $575,000,000 against $551,700,000. Estimated value of imports, however, showed a greater rise to $274,300,000 for the month from $253,500,000 and to $764,700,000 in the three months from $694,000,000 last year. The import balance with the United States rose moderately in the month to $67,900,000 as against $64,700,000 and for the three months climbed to $189,700,000, in comparison with $142,300,000 for the first 1952 quarter.
Total exports to the United Kingdom in March were down sharply to $38,800,000 from $69,000,000 a year earlier, accounting for most of a decline in the three-month value to $124,600,000 from $157,400,000 last year. On the other hand, imports rose in value to an estimated $37,600,000 in the month from $22,600,000, and in the three months to $95,300,000 from $68,200,000.
The result was an export surplus of only $1,200,000 in March as against $46,300,000 last year, and of $29,300,000 for the quarter as compared to $89,200,000.
Total exports to other commonwealth countries and to other foreign countries, and also imports from these countries, were down in value from last year both in the month and three months.
Mr. Speaker, while we may take some comfort from the fact that exports to the United States in this three-month period increased as compared with the three-month period of last year, the house will have noticed that our imports during the three months rose very substantially as compared with the same three-month period for 1952, and that our import balance in those same three months in 1953 shows a substantial increase over the same three-month period in 1952. All this must be considered against the background in which our exports to all countries are showing a decline. Let us hope this will impress upon the Canadian government the necessity for doing everything in its power to reduce this import balance with the United States by increasing the export of our Canadian agricultural surpluses to the United States.
I think that we, as a House of Commons, should tell the government that we expect the government to take the most vigorous action possible, in the light of these direct and deliberate breaches on the general agreement on tariffs and trade by Washington. At a time when the western nations carrying the banner of freedom in a world struggle, whether it be on hot fronts or cold fronts, are pinning their standard to the principle of good faith in international agreements, then I say there never was a time when it was more important that the nations of the world which have entered into an agreement such as the general agreement on tariffs and

U.S. Trade Restrictions trade, and particularly the United States as a world leader in trade, should adhere with the most scrupulous respect to the agreements into which they have legally and voluntarily entered. This general agreement on tariffs and trade was entered into with the full sanction of law at Washington.
Nothing less than the most vigorous action, the most vigorous presentation of the claims of Canada in this respect, will do justice to the Canadian farmer and the legitimate grievances that he and all Canadian citizens have in the face of the deliberate breach by Washington of the general agreement on tariffs and trade. It is timely therefore, I think, that the Prime Minister should be going to the United States to discuss with the president matters of common concern.
In the hope of giving to this subject a place of high importance on the list of subjects being discussed at that conference, and in the hope that the House of Commons will express itself in a manner that will indicate to the parties at Washington that Canada does take a very serious view of the action of congress in violating the letter and the spirit of the general agreement on tariffs and trade, and underlining the importance of this matter of the export of Canadian agricultural products to the United States, I should like to move, seconded by the hon. member for Kamloops (Mr. Fulton), the following amendment:
That all the words after "that" to the end of the question be deleted and the following substituted therefor:
in view of the impending departure of the Prime Minister for Washington this house desires to record its opinion that further and more vigorous efforts should be made by the government to bring about the removal of the restrictions imposed by the United States on the importation of Canadian agricultural products, in violation of the general agreement on tariffs and trade.
May I have the indulgence of the house for a moment to mention two figures which I have worked out, with some strain on my mathematics. The figures for the first three months of this year concerning our trade with the United States show that the United States took 63 per cent of the total Canadian exports, and that our imports from the United States compose 77 per cent of our total imports. These figures show a substantial rise in the proportion of our imports which we took from the United States in this three-month period of 1953 as compared with 1952.


Mr. M. J. Coldwell (Roselown-Biggar):: shall be very brief, Mr. Speaker. This matter has been discussed in the house on a number of occasions this session, although no motion has been moved similar to the one now before the house, and therefore we shall support the amendment. I want to say, however, that
IMr. Fleming.]
we endorse the suggestion made by the hon. member for Eglinton (Mr. Fleming) that every step possible should be taken, and every representation possible made, to see if some alteration may not be made in United States policy regarding trade, and particularly the importation of farm commodities into that country.
I think we have all been alarmed not a little by the reports that have come to us from Washington. It is true that when President Eisenhower took office most of us thought that what he had to say indicated he was in favour of a liberalization of trade and commerce. However, his recent appointment to the tariff commission of the United States of a gentleman who is known to be a high protectionist fills some of us with misgivings. Then, the requests for further powers to control import of farm produce being made by Mr. Benson, the secretary of agriculture, still further emphasize the misgivings that we have. Recently suggestions have been made that the profitable market we have enjoyed for coarse grains over the border from western Canada may be denied to us at least in part. That would be a serious thing for western agriculture.
It was remarked in the house the other night-by the Minister of Agriculture (Mr. Gardiner)-that there is something that we have become so used to that we have overlooked it, namely that already there are substantial barriers against the importation of Canadian wheat into the United States. It is true that under the GATT agreement the duty-and I am speaking from memory- was reduced from 40 cents to 20 cents a bushel, or cut in half in any event; and that was looked upon as a concession to us. But in the regulations dealing with flour, the milling of wheat and so on in the United States, provision is made that domestic grain must constitute the major part of any flour milled there. Those are protectionist measures that affect our agriculture, apart altogether from the recent violations of the Geneva agreement on tariffs and trade that our government put into effect-without the authorization of parliament but in good faith -when they interfered with the importation of cheese and other dairy products into the United States.
I think it is time that this house and this country spoke in no uncertain terms. We owe the United States nothing as far as aid to this country is concerned. We have paid our own way. We are in a different position from that of almost any other country trading with them in the world. Most countries are beholden to the United States for substantial aid. We are not. I think

we can speak out clearly. The figures given in the last sentence by my friend the hon. member for Eglinton (Mr. Fleming) are, I believe, within one per cent, the same figures I put on the record in connection with the debate on trade and commerce a short time ago.
I want to say that when the Prime Minister goes to Washington, no matter how strongly he makes our representations-and I know he will make them courteously-I feel confident that he will have behind him in those representations the entire membership of this house.


Mr. Victor Quelch (Acadia):: 1 just wish to say a few words in support of the motion, Mr. Speaker. I think we have every reason to be extremely critical of the attitude of the United States with regard to placing further prohibitions against the importation of goods from this country. After all, the United States were the promoters of the idea of non-discrimination in the Geneva trade agreement. They were the ones who were so insistent upon that principle being included in the Geneva trade agreement. That fact made it almost impossible for the nations of the sterling area to balance their payments.
Consequently, escape clauses were put in the agreement and the nations of the sterling area were allowed to place restrictions against imports. They were obliged to do that on account of the fact that they lacked dollars. Therefore they had to place restrictions against imports from the dollar area and to try to expand their imports from the sterling area.
But that is not an excuse that the United States can make. The United States have not an unfavourable balance of trade. On the contrary, they have an extremely favourable balance of trade. Therefore, if the United States want to continue to export on a heavy scale, they must be prepared to accept imports from the other nations or, on the other hand, be prepared to make large-scale foreign investments in those countries that need their goods, or make gifts in a manner similar perhaps to that of the Marshall plan.
I am therefore hoping that when the Prime Minister (Mr. St. Laurent) meets the President of the United States he will stress this point strongly, pointing out the need for making it possible for the nations in the sterling area to buy goods from the dollar area either by a policy of foreign investment or of gifts to those nations.


Mr. H. R. Argue (Assiniboia):: Mr. Speaker, I too want to support this motion. I am hopeful that the government may allow this motion
XJ.S. Trade Restrictions to pass without opposition, because I think it would strengthen the hand of the Prime Minister (Mr. St. Laurent) when he discusses this question in Washington. I believe that the United States embargoes on agricultural products and the trend in the United States toward greater restrictions and more protection are extremely serious for Canadian agriculture and for our whole Canadian economy.
I cannot allow this moment to pass without saying that we in this group over the years, ever since I have been a member of it, have been warning this government that this is exactly what would happen, namely that as soon as we lost the British market and came to depend upon the United States market we were depending upon a market that was competitive in many respects, that was uncertain, and that was liable to future restrictions. I cannot for the life of me understand the United States breaking a serious agreement with democratic nations such as the agreement on tariffs and trade. How they can hope to promote co-operation in economic matters, when they set such a terrible example as they have set in recent months, is something I cannot understand. I think Canada is justified in talking to the United States in the strongest possible terms.
I do not profess to be an economist, but in the study I have made of economics one point is emphasized time and time again, namely that if the world ever again faced a major depression it would be because of the economic policies of the United States. If these restrictions on imports affected only the United States, we would not have to worry about the matter. But United States economic policies affect the whole world. I think Canada would be justified in taking the strongest possible measures to see that some improvements are brought about.
Our market in Britain-and I have said this time and time again-for cheese, bacon and eggs is gone. We are depending now more and more on the United States market. I totalled up the quantity of Canadian grain which the United States purchased from Canada last year. It amounts to $160 million. That is an increase of over $100 million in our exports in those products to the United States since 1949. We are glad to see that increase, but I think that fact demonstrates how important it is to Canada that further restrictions by the United States should not be placed against our agricultural products. Our economy in Canada today is relatively prosperous in most industries with the exception of agriculture. I think it was most revealing, in the discussion of the agriculture estimates, to see one Ontario Liberal member
4852

U.S. Trade Restrictions after another-and I compliment them for it-getting to his feet and bringing before parliament the farm problems of his constituency. If one read only those speeches of members on the government side of the house from Ontario, one could not come to any other conclusion than that agriculture is in a serious way today and that things are becoming increasingly serious as time goes on.
I am glad the Prime Minister (Mr. St. Laurent) is going to Washington. I hope he will be able to accept this motion as one conveying the unanimous feeling of members of parliament in all parties from all parts of Canada. We request the United States to free trade barriers, to refrain from further restrictions and to allow freer exchange of commodities between Canada and the United States.


Louis Stephen St-Laurent: Mr. Speaker, it is of course possible, on the motion for the Speaker to leave the chair for the house to go into committee of supply, for resolutions expressing opinions of the house to be adopted without there being necessarily a vote of no confidence, because the rule is that when that kind of motion is accepted and disposed of, the motion that the Speaker leave the chair can be immediately renewed and dealt with again. I take it that this was not intended to be a motion of no confidence; it was intended to be an expression of the feeling of all members of parliament that further vigorous efforts should be made by the government to bring about a removal of these restrictions which are causing serious concern and even embarrassment. Of course when we discuss matters of this kind some of us go farther than others. I do not want to be taken as admitting that we have lost the British market. Circumstances have developed which have made it difficult, if not impossible, for the British consumers, because of their balance of payments situation, to take from us all they would like to get from us. I would not like to admit that we have been moving towards dependence on the United States market. We are anxious to be world traders and we are glad to find opportunities to trade wherever these opportunities may be developed.
It would be quite helpful if a unanimous expression of opinion were registered in this house before I have these interviews that I am looking forward to with the President, the Secretary of State and perhaps other members of the administration, and I hope some members of the United States senate and congress. I would hope that those discussions could be carried on in the friendly

spirit in which all our mutual problems have been discussed over many years now.
Perhaps the hon. member who has moved this would not mind striking out of the third line these two words "and more". It might have implications both as to the tone and as to the kind of measures or efforts that have been made up to the present time; it might have implications that I would prefer not to have to put forward unless circumstances became such that it was obvious that friendly efforts to bring about a more acceptable situation were doomed to fail. So, I suggest it should read:
In view of the impending departure of the Prime Minister for Washington this house desires to record its opinion that further vigorous efforts should be made by the government to bring about the removal of the restrictions imposed by the United States on the importation of Canadian agricultural products, in violation of the general agreement on tariffs and trade.
I hope the hon. gentleman who has moved the amendment will be prepared to suggest that these two words "and more" might be dropped and the house would consent to their being dropped. The motion could then be regarded as an expression of the unanimous opinion of all hon. members. I would feel more comfortable in exhibiting the message to have it without these two words, and to have it as an expression of the unanimous opinion of the Canadian House of Commons.


Donald Methuen Fleming: It appears that for the first time in my experience of eleven sessions in parliament I am the father of a motion which is on the verge of being carried unanimously in this house.
I am sorry the Prime Minister did not hear my remarks in introducing this motion because I think he would realize that the spirit in which I brought the motion forward was in harmony with the wish that he has just expressed.
I may say at the outset that I did express great satisfaction that the Prime Minister is going to Washington for these conversations, and that they are indeed matters of very great importance. This motion is introduced with the hope that it will help to focus attention on the importance of this matter, and the very serious view that all parties in this house, and the people in all parts of Canada, take of what we regard as a very unfortunate but very deliberate breach of the general agreement on tariffs and trade at Washington, that we lay at the door of congress.
I am glad indeed that the Prime Minister has indicated an attitude which will make it possible for this house to give strong, and I hope unanimous, expression to a conviction

that this is a matter of very serious import to Canada, the breach not only of the spirit but even of the letter of the agreements, with grave consequences for the whole Canadian agricultural economy.
We hope that the adoption of this motion in the unanimous way that one may hope for will greatly strengthen the hand of the Prime Minister in putting the Canadian point of view before the President at Washington and, we hope, before leaders in both houses of congress.
I am not going to hesitate at all about withdrawing the words "and more" if it meets with the approval of the house. They were put in my amendment with a view to emphasizing to the parties at Washington that Canada takes an extremely serious view of this matter, and while, as the Prime Minister has indicated from time to time in this house, representations have been made to Washington as to the serious view that Canada takes of this matter, I think we wish to show to Washington that we are prepared to express that serious view in even more vigorous terms. I am not suggesting anything like the retaliation that has been proposed by some countries following the breach of GATT by Washington. But it being understood that the Prime Minister has acknowledged this is not going to weaken the purport of the amendment, but means that we as a Canadian House of Commons, representative of all parties and of all parts of this country, express the view that this is a serious matter and look to the United States to remedy as quickly as possible the breaches that they have committed, I indicate, Mr. Speaker, if the house approves, my willingness to take out these two words "and more" as the Prime Minister has indicated.


Major James William Coldwell: We understand the words are withdrawn?


Mr. Speaker:: If the hon. gentleman has leave of the house, it will not require a subamendment, it can be done by consent.


Major James William Coldwell: It is agreed by the house? That is the point I am making.


Mr. Speaker:: Does the house approve of the proposed change in the amendment by striking out the words "and more" in the third line?


Some hon. Members:: Agreed.


William Joseph Browne: Mr. Speaker, this is certainly a matter of great concern to all hon. members who notice the trend that trade with the United States has been taking during the past eighteen months. But not only agricultural trade is concerned. Those interested in the fishing industry are 08108-307i
U.S. Trade Restrictions also very much concerned with the reported possibility of the sudden introduction of drastic import quotas on fillets.
In view of the expanded and to be expanded dependence of the fishing industry of Newfoundland and of the maritimes on the great fish market of the United States, I bring this matter to the attention of the Prime Minister now. I hope this matter will be kept in mind and, if necessary, that suitable representations will be made to the competent authorities.


Louis Stephen St-Laurent: I give the hon. member the assurance that no sector of the Canadian economy affected, and about which I have any information, will be ignored.


Agar Rodney Adamson: And I hope the Prime Minister will not forget base metals, as well.


Stanley Howard Knowles: Mr. Speaker, I have just a few words to say. First of all I wish to join with others in welcoming most heartily not only the introduction of this amendment but also the readiness of the Prime Minister (Mr. St. Laurent) to accept it, with the slight change he has suggested.
I am sure the house deeply appreciates the Prime Minister's attitude. I gather he regards the passing of this amendment in its altered form as what it was intended to be, namely the strengthening of his hands in connection with his trip to Washington for the balance of this week. I am sure we all appreciate the tremendous importance of the economic policies of the United States, not only as they affect our own economy in Canada but as they affect the economic well-being of the entire world. And the Prime Minister carries with him the best wishes of the House of Commons and of Canadians generally, in his mission to Washington.
The other reason I felt it was appropriate for me to rise at this time was to suggest that this day must be regarded as a red-letter day in our parliamentary history, and must be placed alongside June 12, 1951, and August 27, 1946.
This will make three occasions in the last seven years when amendments to motions to go into supply have been carried by the house without involving want of confidence in the government, or defeat of the government of the day. As the Prime Minister knows, we have made frequent references to those two other occasions, particularly when the argument has been put forward by the government or its supporters that they could not vote for some amendment moved by the opposition because it involved a want of confidence in the government.

U.S. Trade Restrictions
The action taken today is similar to that taken on June 12, 1951, when an amendment asking for a committee on procedure was before the house, and similar also to the action on August 27, 1946, when we were discussing the question of a milk subsidy. It becomes clear that if the government agrees with and is prepared to consider a proposal put forward by the opposition by way of an amendment to the motion to go into supply, it need not involve want of confidence in the government. In other words amendments of this nature are opposed by the government only when the government is opposed to their substance.
As some hon. members may have observed,
I have already indexed this incident in my own little black book for -use on future occasions. As I say, we now have three instances in the last seven years when the house will have passed amendments to motions to go into supply. This is an exceptionally appropriate occasion for that procedure, and I would hope that in the future when other similarly worth-while proposals are offered to the house in the form of amendments to go into committee of supply we will not be confronted repeatedly with the argument that they are motions of no confidence and that therefore they cannot be accepted.
Let us have more of this facing up to issues on their merits. The proposal made today by the hon. member for Eglinton (Mr. Fleming) has been recognized as one that is good, on its merits, and because of that the government has agreed to it. I hope there will be more of this when other amendments are moved in the future. Meantime we are pleased the amendment is to be accepted. I thought, however, that this statement should be put on the record in light of the fact that, along with the other occasions I have mentioned, this is another red-letter day in parliamentary procedure.


Herbert Wilfred Herridge: Mr. Speaker, I should like to have only a moment to say that I have followed this short debate very closely, and found it most interesting.
I was delighted with the approach of the Prime Minister (Mr. St. Laurent) to the amendment introduced by the hon. member for Eglinton. We in British Columbia are interested in this question because of our lumber, our fruit, our paper and base metals.
I am particularly pleased that, prior to the Prime Minister's going to Washington, the House of Commons has spoken with unanimity on this question. He is now assured that when he speaks in Washington he will speak as one representing the views of all Canadians on this question.


Amendment (Mr. Fleming) agreed to. At one o'clock the house took recess.
The house resumed at 2.30 p.m.


Alphonse Fournier: I move that this house do immediately resolve itself into committee of supply.


[Stage Direction]
Motion agreed to.
Alphonse Fournier: I move that Mr. Speaker do now leave the chair for the house to resolve itself again into committee of supply.



REQUEST FOR ANNOUNCEMENT OF INITIAL PAYMENT

Hazen Robert Argue: I rise at this time to ask that the initial price for wheat be established immediately. Not only is it necessary, as far as the farmers are concerned, to have a firm price announced at this time now that seeding operations are becoming general; I feel that the government owes it to this house to say what that initial price will be.
We in the C.C.F. group believe that any suggestion that the initial price that prevailed last year will be satisfactory again this year is not correct. We believe that the selling price under the international wheat agreement, together with the increase in the floor price, is sufficient to justify a substantial increase this year in the initial price for wheat. The ceiling under the international wheat agreement has been increased from $1.80 per bushel to $2.05 per bushel; the floor price has been increased from $1.20 per bushel to $1.55 per bushel; and even if one subtracts the 6 cents per bushel handling charge that will no longer be paid after July 31 there remains a substantial increase in both floor and ceiling prices.
With the deduction of the 6 cents per bushel the ceiling price is increased by 19 cents per bushel, and with the deduction of the 6 cents per bushel the floor price is increased by 29 cents per bushel. The Minister of Trade and Commerce (Mr. Howe) said that he expects that even though Great Britain has stayed outside the wheat agreement they would still buy substantial quantities of wheat from Canada. In every statement that the minister has made to parliament during this session in regard to wheat prices he has said that prices will be higher this year, that the wheat board will receive a higher return for wheat.
That being the case, I think the $1.40 per bushel that was paid as an initial price last year is too low and that the initial price should be increased by 25 cents per bushel

to $1.65 per bushel. The announcement of such an initial price should be made immediately. As I say, the farmers are now on the land in western Canada carrying on their seeding operations. They are deciding at this time what acreage they will sow to bread wheat, to durum wheat, to oats and to barley. The Minister of Trade and Commerce has announced the initial price for oats; he has announced the initial price for barley; but he has not announced the initial price for wheat.
He has said that it will not be lower than last year, but he left the actual initial price that will be paid up in the air. That is a different stand from that taken by the government in connection with this matter in the last three years since the conclusion of the United Kingdom wheat agreement. In 1950 the initial price for wheat was announced on April 5; in 1951 the initial price on wheat was announced on May 4; last year, 1952, the initial price for wheat was announced on April 8. In other words, in those last three years the government announced the initial price before seeding became general, at a time which would give an opportunity to the farmer to plan his production on the basis of the initial prices that had been established.
But for some reason the announcement is being delayed this year. The Minister of Trade and Commerce says that he is going to wait until the end of July when all the factors can be taken into account. If he can wait until July, he could wait until August or any other time and all the factors of supply and demand will not be known even then because they vary and change from time to time.
We had an experience in western Canada with wheat prices in 1949 which I do not want to see repeated. Just a few weeks before the election in 1949 a final payment of 20 cents per bushel was made. The farmer went to the post office and received a cheque for 20 cents per bushel on wheat which had been sold perhaps three years before. Next week there was another cheque for 20 cents per bushel, and following that still another one for 20 cents per bushel. They were all jammed in just before the election date. In addition the expectation was held out that there was going to be another substantial final payment.
It served a good political purpose but I do not think it did the wheat board system of marketing grain any service. It may have increased the number of votes for the Liberal party at that time, but it probably decreased the votes by twice as many when the farmers finally discovered that the last payment available for the five-year pool was only
Wheat-Initial Payment 3 * 8 cents per bushel before the additional $65 million was paid.
I say that now is the time to announce the initial payment for wheat for this year, not a floor initial payment that can be jockeyed around late in July just two or three weeks before August 10, a probable election date. There should be an announcement now that the initial price will be increased in view of the increase in the ceiling price under the international wheat agreement. The increase in the initial price should be a substantial amount. I think that that suggestion is perfectly justified.
It used to be said and it can still be said that one of the advantages in making an initial payment, an interim payment and a final payment was that the farmer had his income spread throughout the year. That is not nearly as important now because farmers are unable to market all their grain in the fall. Farmers have to spread out their income from grain receipts because of the quota system. It used to be that a farmer could market all or nearly all of his grain in the fall; but when the interim payment came just before seeding it was very helpful and highly acceptable to the farmer. The final payment probably came about Christmas time. The experience we have had this year is that we had an initial quota of five bushels per acre-so that is all the income we could get early in the fall. Then that quota was gradually increased and the income from selling the wheat has been spread out quite evenly because the small quotas were gradually increased.
I am one in this house who is very optimistic about crop prospects this year from information I have received through conversations and in mail which I am getting from western farmers. The recent rainfall and snowfalls in March, April and early May have provided a substantial moisture reserve. If we get a reasonable amount of rainfall in June and July we could get another very large crop of grain. If we do get another large crop of grain, in addition to the carryover farmers will have on their own farms, then we are certain to have only a small quota when the harvest begins.
It is not only farmers who need increased income by way of an increase in the initial price, but our merchants in western Canada, who throughout the summer months advance money to farmers on the basis of the crop that is going to be harvested, need to get their accounts paid as quickly as possible. I suggest that an increase of 25 cents per bushel in the initial price, bringing it from $1.40 to $1.65 a bushel on the basis of No. 1 northern in store at Fort William, is fully

Wheat-Initial Payment justified as far as the farmers are concerned. The wheat board's income is sufficient to justify initial payments in that amount and to allow for further additional payments. A higher initial price is needed to increase the farmers' income in the fall when he must pay his accounts with local merchants.
We would not be nearly as interested in this particular aspect of wheat marketing if the government had made some provision for loans for grain stored on the farm in suitable farm storage. If that had been done farmers would have had a means of obtaining the income they need. We have asked for that provision but the government has said no. Today we are asking, first, that the announcement of the initial price for wheat for this year be made firm, and second that it be increased by a substantial amount. I do not think that the initial price for wheat should be left up in the air until the end of July. From what we heard yesterday, that is likely to be only two or three weeks before the general election.
Because I feel that this is a necessary provision, and that it is a reasonable provision, I propose to move the following amendment, seconded by the hon. member for Melfort (Mr. Wright):
That all the words after the word "that1' to the end of the question be struck out and the following words be substituted therefor:
"this house is of the opinion that consideration should be given to an increase of 25 cents in the initial payment for No. 1 Northern wheat basis in store Fort William/Port Arthur or Vancouver for the crop year beginning August 1, 1953, so that the said initial payment will be $1.65 per bushel."
I hope this motion will commend itself to the government in the same way as the motion adopted this morning.


Some hon. Members:: Hear, hear.


Hazen Robert Argue: As I have said, the Minister of Trade and Commerce (Mr. Howe) has made a firm commitment on the initial price for oats and the initial price for barley. He has said that the initial price for wheat will not be less than $1.40 a bushel. I would like him to make a firm commitment as to the initial price this year, a firm commitment providing for an increase in the initial price.
I feel that in view of the statements which the minister has made to the house at various times over the last few weeks-statements he has made regarding the $2.05 ceiling under the international wheat agreement-an initial price of $1.65 per bushel for wheat produced this year is reasonable and fully justified.


Mr. D. S. Harkness (Calgary East):: I should like to support the representations made by the hon. member for Assiniboia (Mr. Argue)

that the initial price for wheat should be announced immediately and that there should be an increase in that initial price over what was paid last year. I am not prepared to argue whether that increase should be 25 cents a bushel or more or less than 25 cents a bushel. Certainly I think that an increase is justified on the basis that the maximum and minimum prices under the new international wheat agreement have been increased by approximately that much. Therefore, I would think that 20 cents or 25 cents a bushel would be a reasonable increase as far as the initial price is concerned, and it would be one which it would be quite safe to pay as far as the operations of the wheat board are concerned.
I am not going to repeat the arguments of the hon. member for Assiniboia which for the most part I think were sound-certainly with respect to the announcement of the initial price. In the last three years they have been higher and I would think that is a good precedent and points to the necessity of having this initial price announced immediately. It should have been announced before this time if we had followed the practice of previous years. The announcement of the initial price is necessary, as far as farmers are concerned, in order that they may decide what crops they will put in.
One of the most insistent demands by western farmers, wheat farmers particularly, over quite a long period of time, has been that they should know what floor prices they will get for wheat before the crop is planted. They have had that floor price announced with the announcement of initial prices in the three previous years. I cannot see any reason why they should not be placed in that position this year so that they can make better plans about what they are going to do.
I would also hope that the government would be prepared to accept this amendment or at any rate the first part of the amendment, as far as the announcement is concerned, and as I say I would not quarrel over the exact amount of any increase.


Mr. Solon E. Low (Peace River):: I think
perhaps I should say just a word about the amendment that has been moved by the hon. member for Assiniboia. I followed carefully the statement he made in support of this amendment, and the arguments that he used.
At the moment I am looking at the amendment entirely from the point of view of the people of my own constituency, Peace River. I think the people in that area would ask for an increase in the initial payment partly on the ground that their quota, even though it may be set at a fairly high rate during a certain year, is not able to be filled because

there is not enough storage space in the whole Peace river country to allow them to deliver their wheat. As a consequence, most of our farmers up there have to hold their wheat over for quite a long period of time.
We know from experience that the Peace river country is about the last from which grain is taken for filling our commitments overseas. As a consequence, when there is a shortage of cars or when the terminals are filled with grain, these people are forced to hold their grain much longer than they are in other places in the dominion. They are the last to be considered. As a consequence, a higher initial payment would be of great benefit to them. I am supporting the amendment on that basis alone.
I do not know just how the people in other areas would look upon it. I suppose that in some sections of the wheat growing area they would say: Well, if we get a higher initial payment it may force the wheat board to borrow more money and if they borrow more money they will have to pay more interest; then, if they pay more interest that money will come out of the returns to us. It would not be, therefore, a matter of tremendous concern to some of them, especially in areas where they have a good quota and shipments are taken out very rapidly to fill our export commitments. I cannot speak for those people.
Speaking entirely from the point of view of the people in the Peace river country, I feel that it would be very helpful if the initial payment were raised somewhat. What that figure is I would not be prepared to say. The amendment calls for 25 cents a bushel, and I think that would be reasonable and my people would want me to support the request made by the hon. member for Assini-boia (Mr. Argue). I ask the minister to give it careful consideration.


Clarence Decatur Howe: I think perhaps, Mr. Speaker, I should distinguish this amendment from the one that was adopted before the luncheon hour. This amendment is definitely a motion of lack of confidence, and must be treated as such. As I understand it, the hon. member complains that I did not make a specific announcement of the initial price for wheat when I spoke in the debate on ratification of the wheat agreement. I think that I was as definite at that time as the circumstances would allow. It is taken for granted that we have a renewal of the wheat agreement for the next year; that is not strictly true. All the countries except Britain have voted in favour of an agreement, but to date no country has ratified the agreement. Canada expects to do so within the next
Wheat-*Initial Payment week or two. I am sure the other countries will move in that direction, but it must be kept in mind that certain parliaments are not in session and it may be difficult to get all the ratifications within the time limit that is required to make the agreement operative.
Fifty per cent of all the participants, including the United Kingdom, need to ratify the agreement before July 15 in order to make the agreement operative. I think, in announcing a price that will be no worse than $1.40 as an initial price, and may be a larger amount, the government was going about as far as it could under present circumstances. It accepted the advice of the wheat board, as it is bound to do under the wheat board act, and made the reservation that if after July 15 the situation warranted a higher price a higher price would be announced. I think the farmers of western Canada who have had experience over the years in pooling wheat are not wedded to an unduly high initial price. I think most of them recall the serious difficulties that the pools encountered in earlier days through announcing too high an initial price.
We have set up a pattern to which we have been able to adhere, that is an initial price of $1.40 and an interim payment in the month of March before seeding, then a final payment after completion of the final accounting for the crop year. I believe that pattern has commended itself to our producers. I am sure that a substantial payment in the month of March is just as valuable as would be higher payments in the months of September and October when wheat is being delivered. I question very much whether the mover of this motion has the support of any large segment of western producers in asking for a substantially higher initial price. However, that is my opinion as against his.
The hon. member has been advocating storage on the farm for a long time, and he has advocated it again today. May I point out to him that the opportunities for storage on the farm will never be so richly rewarded again as they are at the present moment. If anyone cares to carry his wheat over into the next year and deliver it after the first of August, I am quite sure he will be well rewarded when the receipts for the next crop year are distributed. At the moment, I think he cannot complain very much about lack of payment for storage on the farm.


Hazen Robert Argue: I am asking for the initial price to be increased.


Clarence Decatur Howe: Whether or not the initial price is increased, the final settlement will, I think,

Wheat-Initial Payment reward anyone who cares to hold over his wheat. It will be interesting to see what class of farmer takes advantage of this opportunity to profit by storing wheat on the farm.
I might point out that the government does not set the initial price. It approves the initial payment, but the initial payment is recommended by the wheat board, and properly so. It is recommended by the board after the board has assessed the possibilities of selling the crop. It is a payment which the board can assure the government is a proper payment to be made. Hon. members know that in undertaking the marketing of crops of western Canada, the government did not undertake to proceed on other than a business basis. I am sure hon. members would not expect the government to set initial prices that it believes could involve a loss. I am rather surprised, after the statements my hon. friend made in his early remarks about the huge surpluses of wheat in the world, that he would now feel justified in saying that the government should enlarge the initial payment. If the situation is as bad as he represented it to be, and if there is to be no wheat agreement, possibly the present initial payment of $1.40 will be found to be fairly satisfactory before the year is over.
In other words, I suggest he is arguing both sides of the same question. However, I suggest to him that nothing will be gained by putting this question to a vote. We have discussed the subject matter. We have varying ideas, and perhaps he would not mind withdrawing his amendment.


Mr. Speaker:: Do I understand the hon. member is withdrawing his amendment?


Hazen Robert Argue: No, Mr. Speaker, I have not said a word. I was asked to withdraw, but I think it is a good amendment.


Mr. Goode:: Mr. Speaker, I was paired with the hon. member for Medicine Hat (Mr. Wylie).


Mr. McCubbin:: Mr. Speaker, I was paired with the hon. member for Middlesex East (Mr. White). Had I voted, I would have voted against the amendment.


Gordon Graydon: Does that vote include the people who came in late?


Mr. Speaker:: I have been asked if the vote of the hon. members who came in late should be recorded. I should remind hon. members that in Beauchesne's Parliamentary Rules and Forms, third edition, citation 89, the following words appear at the end, which I shall read:
When the question is put, a member must be in his seat or else his vote cannot be recorded.
The beginning of the citation reads:
''Putting the question" means the reading of the motion or amendment from the chair before the votes are called and recorded.
Hon. members should make a practice of being in their seats, if they intend to vote. I am not disallowing any votes but hon. members should observe the rule.


Mr. Parent:: Since I came in late, I did not vote.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.
DEPARTMENT OF EXTERNAL AFFAIRS Departments and missions abroad-
87. Representation abroad-operational-including payment of salaries of high commissioners, ambassadors, ministers plenipotentiary, consuls, secretaries and staff appointed as directed by the governor general in council, notwithstanding anything to the contrary in the Civil Service Act or any of its amendments, $5,758,874.


Andrew Wesley Stuart: Before this item
carries I should like to say a few words in connection with a visit I made to the United Nations during March. I shall describe my experience at New York as briefly as possible, but I do feel it my duty to say just a few words in this connection.
My first comment would be a few words of well-deserved praise or credit to those who so well represent this country at the United Nations. The contributions made by our Secretary of State for External Affairs and by our Minister of National Health and Welfare are very well known the world over. These gentlemen are held in the highest esteem by all democratic countries represented at the United Nations. I believe I should also include David M. Johnson and the staff who are with him in New York. I believe they would all be placed in that same category.
Previous to my visit at the United Nations I had been led to believe that those representing this country at the United Nations and
Supply-External Affairs at other international assemblies had been chosen perhaps for a very soft assignment where a good time was enjoyed by all with very little work or responsibility. I want to say that after my short experience there I most certainly have changed my views. I wish to congratulate those efficient representatives and indeed the entire staff who are with the Canadian delegation at the United Nations. Those outstanding civil servants are working very long hours.
For example, the first meeting would be called at nine o'clock in the morning; and at no time did we have to wait for a quorum. They were all ready to go to work at that hour. Then, at ten o'clock they moved away to the sessions of the United Nations, which were carried on from eleven o'clock until one o'clock in the afternoon. Then there was the afternoon session, which would last until nearly six o'clock. Then at night the delegates would get together and more or less prepare their agenda for the next day.
I well remember one evening while I was there a complaint being made by one member of the delegation because he was not able to get a stenographer at eleven o'clock at night. Those are the hours that the civil servants with this delegation are obliged to work. I must say they are most efficient and most courteous to all members of the delegation, and I believe they are doing a most creditable job and one which should be appreciated by all Canadians.
Before resuming my seat I wish to say a few words in connection with the United Nations-and in what I have to say I shall be very brief. On many occasions we read criticisms of the United Nations. It is true that many of the things we had hoped they might be able to accomplish have not been accomplished. I believe however that they deserve a great deal of credit for what they have already done.
Let me list just a few of those accomplishments:
The United Nations effected peace between Israel and the neighbouring Arab states.
They stopped armed hostilities between India and Pakistan over Kashmir.
Through their efforts warfare was stopped and a free and independent United States of Indonesia was established.
They were also responsible for the withdrawal of British and French troops from Syria and Lebanon in 1946.
In the same year soviet forces also withdrew from northern Iran.
On the recommendation of the general assembly the former Italian colony of Libya became an independent nation.

Supply-External Affairs
In the Balkans they were responsible for a much improved condition on the northern borders of Greece.
In Korea they have taken history's first collective action against aggression.
The United Nations have also universally adopted a declaration of human rights, the first international proclamation of the fundamental rights of human beings.
Through its various agencies the United Nations have fed nearly ten million children.
I believe this wonderful organization is doing a wonderful job. When one sits in the United Nations and looks around, seeing the representatives of 60 different countries, realizing that 55 of those 60 are of one mind, and that they are fighting for world peace, it gives him a grand feeling of security. I believe it is the only thing we have today upon which we can depend, so far as our hopes for world peace are concerned. We should cherish it, and do everything in our power to support it in every way.


Mr. Stewart (Winnipeg North):: Mr. Chairman, I should like to make one or two comments following what was said by the hon. member for Charlotte. No one questions the correctness of what he has said about the hard-working ' members of our permanent staff. I had the opportunity and the good fortune to be at the UN last fall for about five weeks, and I realize that five weeks does not give anyone the right to speak with authority on the subject. I do not pretend to do so at this time. However, I have one or two suggestions to make, and I trust they will not be construed as criticisms. Far from it; they are suggestions which have crossed my mind, and which I now offer tentatively to the minister.
In the first place I did feel that many of the key members of the staff were overworked. I have been told that if our delegation at the UN were to be properly manned it would almost denude the east block. I do not know whether that is so or not. But I do know that when an individual has to make a decision, the consequences of which may be far-reaching, he is not best able to do so when he is tired and fatigued. I have seen members of our permanent staff frequently in that state.
If one is going to think with crystal clarity, such as at times is demanded in connection with certain problems discussed at New York, one has to be fresh, to be physically fit. to do so. The decisions arrived at may be important.
Then I have another suggestion to make to the minister. Again, this is not by way

of criticism of members of parliament who go to the UN, especially members on the government side of the house who serve as chairmen representing Canada on particular committees. My own experience, as an observer, was that I learned very much more by going where I wanted to go and when I wanted to go, rather than being tied down to one particular seat or committee. In view of the fact that whoever represents Canada by occupying a seat at a committee is going to say what government policy is to be, would it not be a better idea, particularly from the point of view of members of the Commons and of the Senate, if a permanent civil servant were to occupy the chair and members of parliament were to act in an advisory capacity behind him, freeing themselves at the same time to go on occasion to other committees and thus acquire a greater grasp of what is taking place?
As the hon. member for Charlotte pointed out, the delegation holds morning meetings. Sometimes I have wondered if those meetings were not in the nature of a re-hash of what happened the day before, when the person occupying the chair in each committee would give a brief analysis of what had taken place on the previous day. After all, one could get all that information from the pages of a daily newspaper. I am wondering if it would not be more profitable if the delegates were to discuss important problems which were likely to come up in the near future.
These are only suggestions which I put forward tentatively, and without any intention whatsoever of criticizing. I offer them, without knowing too much of the ins and outs of what goes on. However, what I have suggested may have some value.


Louis-René Beaudoin: Perhaps I should remind the hon. members that item 85 is not now before the committee. That was the general administration item, and it is my understanding that the item was passed last night. Therefore, the general discussion having been concluded, I would ask hon. members to confine their remarks to the item before the committee.
Furthermore, as has already been stated, these estimates were given careful consideration in detail by the standing committee on external affairs. I would presume that once the discussion on one or two items has been concluded, I might call the items rather rapidly, with that thought in mind. They have already received consideration in the committee to which I have referred.


Mr. Gagnon:: I should like to ask the minister if the government intends to appoint an ambassador to the Vatican this year.


Mr. Pearson:: From time to time the
government gives consideration to the opening

of new diplomatic posts. Those posts are established as considerations of finance and personnel and their importance to Canada would seem to warrant. An appointment to the Vatican of course is one of those matters which are continually under consideration; but no decision has been taken by the government to appoint a Canadian representative at this time to the Vatican.


Mr. Robichaud:: I should like to ask a further question in line with the one just asked by the hon. member for Chicoutimi. What are the objections to the appointment of an ambassador or other diplomatic representatives from Canada to Vatican City? I may say that I have heard this matter brought up on the floor of the House of Commons for many years and I should like to know the objections to appointing such a diplomatic representative.


Lester Bowles Pearson: I did not say that there were any objections to this particular appointment. There are a good many states in the world where we have no diplomatic representation at the present time. Speaking offhand and subject to correction, we are represented in about 35 countries out of 60 or 70. As I have pointed out, the extension of our representation is based upon finance, personnel and importance to Canada. The Vatican is one of those posts to which such consideration is continually being given. All I have said is that no decision has as yet been taken in regard to it. There are many places where we would like to have diplomatic representation but where this has not been possible because our expansion during the past four or five years has been rather rapid as it is.


Albany M. Robichaud: Do I take it that there is no serious objection to the appointment of a representative at the Vatican?


Lester Bowles Pearson: I do not want to go into the question of advantages or disadvantages in connection with particular posts. All I can say is that this is one post which has been and is being considered by the government as one where Canada might usefully be represented in the future.


Albany M. Robichaud: Do I understand that the proposed new building in Rome to cost over $900,000 will be spacious enough to house any representation which might be appointed by Canada to represent us at the Vatican?


Lester Bowles Pearson: My hon. friend's impression about the new building in Rome is not correct. Even the plans which we have put tentatively in the estimates do not call for the expenditure of any such amount. As I tried to explain yesterday, we put that amount in the estimates but that did not mean that we
Supply-External Affairs were in fact going to put up a new building in Rome during the coming fiscal year, for the embassy and for the other Canadian government offices as well.
If such a building were constructed for our embassy in Italy it would be something quite apart, for reasons which I think must commend themselves to the hon. gentleman, from any establishment we might set up for the Vatican. He must know that two such establishments in Rome, one for the Vatican and one for the government of Italy, are quite separate and it is not the wish, either of the Vatican or of the government of Italy, that they should be confused in any way.


[Stage Direction]
Item agreed to.
90. To provide for official hospitality, $20,000.
Gordon Francis Higgins: The details on page 170 would appear to indicate that in 1951-52 a total of $39,620 was expended, whereas in 1952-53 the amount was $9,537.


Lester Bowles Pearson: Last year we had an
unexpected and very pleasant addition to that expenditure caused by the visit to Ottawa of the President of France. That accounted for the increase in the total. We do not expect that expenditure to be repeated this year.


[Stage Direction]
Item agreed to.
B-General-*
96. To provide for the Canadian government's assessment for membership in international and commonwealth organizations, as detailed in the estimates, including authority to pay the amounts specified in the currencies of the countries indicated, notwithstanding that the payments may exceed or fall short of the equivalent in Canadian dollars, estimated as of January, 1953, which is, $2,689,902.
Alistair McLeod Stewart: I should like to say a word which is in the nature of a postscript to what I said in this house a few months ago. At that time I dealt extensively with the situation of the secretariat at the United Nations. Since then there has been a new secretary general appointed. I have in my hand the verbatim record of a speech made by the acting leader of the Canadian delegation, the Minister of National Health and Welfare, on March 30 dealing with the situation of the secretariat. One statement in that speech dealt in part with the report of the alleged jurists which was presented last December and also with the report of Mr. Trygve Lie. The minister said:
My delegation feels that the secretary general is to be commended for the way in which he has set out the issue in his report. We believe his report represents an advance upon, and indeed supersedes, the report of the commission of jurists.
I should like to know whether the new secretary general has accepted the report of the jurists as a basis of policy or whether
4862	HOUSE OF
Supply-External Affairs that report has been thrown back from where it should never have emerged, the garbage can.


Lester Bowles Pearson: The report of the commission of jurists to advise the former secretary-general of the United Nations was accepted by the former secretary general as a basis for action. But he indicated at that time that he did not accept all the provisions of the report. I do not know what the decision of the new secretary general in respect of that report will be, as he has not indicated his views in the matter, but I would expect that any action which may have been taken by his predecessor would not necessarily be binding on him.


Solon Earl Low: I should like to say something to the minister which I am sure would have been said by the hon. member for Camrose had he been here. When the hon. member returned from New York he told me about his experiences at the United Nations assembly and that he had enjoyed the time he had spent there. He said that he had been accorded every courtesy and assistance by the leaders of the Canadian delegation and the members of the permanent staff. He reported that he had learned much and indicated that he appreciated the opportunity to go there.
I wanted the minister to know how he felt and to thank him for issuing the invitation.
My colleague, the hon. member for Cam-rose, stated also that while in New York he had gained some idea of the difficulties which are encountered when nations are trying to work together in an effort to accomplish a purpose. He came away having a far better appreciation of the great difficulties that are faced in making that effort. It was not possible for the hon. member to be here today and I felt it was my duty to report to the minister what had been reported to me.


[Stage Direction]
Item agreed to.
97. United Nations expanded program for technical assistance to underdeveloped countries, $850,000.
Major James William Coldwell: Mr. Chairman, I have some remarks to make on this item and I may be longer than I might otherwise have been at this stage of the session.
During the past few weeks we have discussed the necessity for national defence and how best to co-operate in that field with those who are determined to prevent aggression. We spent some time considering Canada's domestic and external trade, and again how best to protect and expand it for the improvement of living standards in Canada and the world. Yesterday we discussed some recent statements which have


been made by the Soviet union and by President Eisenhower concerning international matters.
Now we turn to the external affairs estimates which have been thoroughly discussed by the standing committee and recommended to the house for adoption. I wish to emphasize one point today in connection with our external activities which in my opinion ultimately will be our best form of defence against communist, fascist, or indeed any other form of aggression against our democratic way of life.
In our domestic relationships we must continue to provide and include social services, including a national health plan, but we live in a world where we cannot hope to maintain high standards ourselves unless we assist in the rapid development of the underprivileged and underfed in the rest of the world as well as in our own land. That was the purpose of our adherence to the Colombo plan. Under it we agreed to appropriate $25 million for a commonwealth scheme to assist certain of our fellow citizens in southeast Asia. Our appropriation this year of $25,400,000-$400,000 to be used in our country to assist students and technicians to learn something of our resources, our social services, and so on-is organized in the interests of our own people as well as of others.
The Colombo plan is the most imaginative of plans approved and adopted by the commonwealth countries and we are very glad to support it wholeheartedly. However, the annual report of the Department of External Affairs for 1952, at page 29, states that the Colombo plan is designed to supplement assistance being given to south and southeast Asia under the United Nations program. It is also designed to implement capital development schemes being undertaken under that plan by increasing supplies of trained men and women in southeast Asia. It points out that the Colombo plan differs from the United Nations program because assistance is arranged on a purely bilateral basis by agreement with the governments co-operating. It is organized entirely apart from the United Nations; the co-ordination of the program and the general supervision of its operations being exercised toy the council for technical cooperation in Colombo, which is made up of representatives of participating governments assisted by a small bureau.
Canada's part in the Colombo plan, I want to say, has been well worth while and, under an able administrator in the person of Mr. Cavell, is doing excellent work; but the Colombo plan was originally designed to supplement assistance in the areas of south and

southeast Asia under the United Nations program. Indeed, and I want to impress this upon the minister and the house, we believe that as soon as possible it should be more closely integrated with the United Nations plan for technical assistance for underdeveloped countries.
In a speech which the Secretary of State for External Affairs (Mr. Pearson) made in November, 1952, he made this quite clear. Indeed he said that technical assistance for underdeveloped countries was the one firm and clearly defined basis upon which to build mutual understanding "between east and west". The minister noted that there were two programs of technical assistance to which the Canadian government adhered and which many Canadians were actively participating in, and then went on to say, and I quote him:
The first and more important of these is the United Nations expanded technical assistance program.
He then went on to outline what is being done under the United Nations plan and noted that in addition to the $25 million, which parliament approved as a contribution to the Colombo plan for economic development, the government had also asked parliament-as it does again this year-for an appropriation of $400,000 to the commonwealth technical cooperation program for south and southeast Asia. In this speech the minister emphasized that the Canadian government regards the Colombo program for technical co-operation as a temporary supplement to the technical assistance activities of the United Nations and specialized agencies in south and southeast Asia. He said that it was important to ensure that every effort is directed towards integrating them to as large an extent as possible. Then he went on to express the hope that the United Nations, if it is given appropriate support for its activities in this field, will be able to assume in three or four years the major responsibility for technical assistance in southeast Asia. He tells us that Canada is urging the greatest possible use of all United Nations agencies offering technical assistance to south and southeast Asia. That, I believe, should be the aim which the minister and the government and all of us should keep in mind.
However-and now I am going to make a few criticisms-Canada's part in discussions at the United Nations, in connection with the expanded technical assistance program and the specialized agencies, does not, I think, begin to fulfil what we expect of our part in it or what our people believe we are actually doing. Indeed, none of the United Nations countries seem willing-not only Canada; none of them seem willing-to provide the necessary financial assistance to carry out
Supply-External Affairs what must be a comprehensive and worldwide plan. In the first period from July 1950, to December, 1951, 56 nations, including one of the recipients, India, contributed together just over $20 million. Canada's contribution was $850,000 in Canadian currency.
In the second period, which comprised the whole of 1952, less than $19 million was subscribed by 65 nations, but only just over $17 million was actually collected. This time Canada subscribed $750,000 or $100,000 less than would have been the case had the total contribution for that year exceeded $20 million.
In 1953, the third period, the economic and social council recommended that a minimum of $25 million should be provided. Actually, subscriptions have amounted to just over $21 million. Canada this year promised to contribute $750,000 and obligated herself to subscribe an additional $100,000 if the total should reach $25 million. This total was not reached but I have already stated in the figure I have given that the amount exceeded $20 million and, subsequently, Canada agreed to pay $50,000 more or $800,000 because the total pledge had exceeded $20 million-and our present estimate is for $850,000 in Canadian funds.
Now, if we look at Canada's record we find that in the first period of 18 months Canada gave an unconditional $850,000. In
1952,	however, we gave $750,000 with the promise of an additional $100,000 if the total reached $20 million. We thus made a portion of our contribution conditional, but in
1953,	in spite of the fact that the target was $25 million, Canada promised exactly the same $750,000 plus the same $100,000 if the total reached not $20 million as in the previous year, but $25 million for this year.
Thus the government's actual enthusiasm for this most significant of all the United Nations plans lessened each year in spite of the eulogistic speeches made by the Secretary of State for External Affairs, the Prime Minister and indeed other members of the government at the United Nations and in various parts of Canada. Each year the Canadian position became worse rather than better. Surely this is not a record of which this parliament can be proud, particularly as we boast of having the largest per capita trade in the world and standing third among all the nations in the volume of world trade.
I want to say something in connection with these contributions. There is something here which appears to be about as small as one can possibly conceive. I want to say at once that I cannot imagine that it was done at the direction of the Secretary of State for External Affairs, the Minister of Finance or

Supply-External Affairs indeed the government. I think perhaps it was done by a zealous official who was trying to save a little money on the exchange.
In 1951 and 1952, when our dollar was at a discount, our contributions were stated to be payable in Canadian dollars. Last summer, however, our Canadian dollar was above par and still is, so that this year we have pledged ourselves to contribute the equivalent of 750,000 United States dollars. In other words, in the eyes of the world we shall appear to have been mean enough to try to save for Canada a relatively small amount of $10,000 or $15,000, at 2 per cent, by way of exchange at the expense of the technical assistance organization of the United Nations. As I say, I do not think the Secretary of State for External Affairs was responsible for that. I do not believe the government is, and I doubt very much whether any member of the government is aware of it.
1	rather expect that an opportunity to save Canada $10,000 or $15,000 was seized by an overzealous official. The estimate of $850,000 now before us is in Canadian dollars. Surely the attempt at such a saving places Canada in a very false and unfavourable light when this is realized by other contributing countries. When we consider that no real attempt has been made to put into full effect article
2	of the NATO agreement, which calls for economic integration among the participating countries, we have little to be proud of in the field of economic aid to the United Nations program.
Now, Canada participated in the discussion in the economic and social council, and I understand we actually supported the recommendation that the budget for technical aid for 1953 be increased from the just over $17 million collected in 1952 to the target of $25 million for 1953. In other words Canada recommended a general target increase of approximately 31 per cent, but has finally agreed, according to the estimate now before us, to increase our own contribution by only 13 per cent, less a 2 per cent difference in exchange, making it 11 per cent.
This is no example for a comparatively rich country to set to countries that have less financial ability and fewer resources. It may be said that during the first period only about one-third of the money collected was actually spent; that is true. The rest, however, was carried forward and therefore gave the technical aid organization additional money in the second period. Failure to expend all the money, of course, was due to the fact that the organization was not fully equipped to do the job effectively, and governments which were expected to take advantage


of technical aid were not alive to the possibilities of the program. This was indicated very clearly during the second period, 1952, when approximately $17 million was collected and nearly $23 million was spent. The program of the United Nations in this field has now got under way and the underdeveloped nations are beginning to ask for the kind of assistance the organization should be prepared to extend.
I was at the United Nations recently, but only of course for a week end. While there I went into some of these matters, and I learned that this year, 1953, requests from the underdeveloped countries are literally pouring in. I was told that there are at least twice as many requests already as it will be possible to meet with the funds available. By the end of the year, without any encouragement from the technical aid agency, there will probably be four or five requests for every one that can be met.
At the general assembly, at which I was present in 1950, it was emphasized that the operations of the technical aid agency would be of an expanding character. It was said that as the programs proved their value and as countries increased their requests for additional aid, additional funds would naturally be provided. The considerations, as I remember, outlined at the assembly, were primarily proof that the countries wanted assistance, and that the specialized agencies were capable of providing it.
Now, after almost three years, a study of the operations of the technical aid agency shows clearly that both these conditions have been fully met. But just at the time when the countries which need the aid have become vitally interested, and just when the agencies have been established to'do the job, adequate funds are not being provided by the nations -I am not saying by Canada, but by all the nations. Additional funds promised as the agencies expand are not forthcoming, but are remaining, as the figures indicate, practically static. Let me repeat that Canada joined in the recommendation for an increase in the amount to be budgeted by 31 per cent, but under the estimate now before us is promising an additional 13 per cent.
If we believe, and I think we do, that technical assistance is as important as we say it is, we should demonstrate the fact by contributing more than the cost of hauling the soil to fix up the land around the new bureau of statistics building on Tunney's Pasture, and other buildings in this city. I am subject to correction on that. When it is put that way, we begin to realize how pitifully
MAY e, 1953
small our own contribution is, and why we have very little to boast about in connection with this plan.
Again I am going to say that we may have something to boast about in connection with the Colombo plan, though we should do more. But we contribute $800,000 to the United Nations technical aid, and we spend as much annually or more in hauling soil to cover Tunney's Pasture and to landscape grounds around some of our buildings. Indeed, all the nations together are proposing to spend on this important plan only $25 million. This was regarded as being a very important plan. If the target were reached, $25 million a year is certainly not significant enough to justify all the fine talk that Canada and other countries indulge in about the importance of this activity. If we think that our countries really believe technical assistance is important, we should demonstrate it by being willing to contribute altogether more than the cost of a single destroyer for each year's activity.
Now, the minister may say that we are giving $25,400,000 a year to the Colombo plan. This, however, is being used for technical and financial assistance in a few but admittedly quite important areas in southeast Asia. Contrast this, however, with only three-quarters of a million or thereabouts which we are willing to pledge for the United Nations agency for work which we voted to begin, which we voted to expand, and for which we promised additional funds as the expansion proceeded. Not only the minister of external affairs but the Prime Minister (Mr. St. Laurent) and others, have several times indicated that the real hope for the future peace of the world is in the field of assistance to the underdeveloped areas.
I believe, and when I say this I speak for those associated with me, that we are not going to defeat communist aggression, communist propaganda, by force of arms. The only way in which we can defeat the propaganda and that aggression is by the extent to which we are able to increase the standards of living of the underprivileged, underdeveloped people in the world. As long as from one-half to two-thirds of the human race go to bed hungry every night, they are not going to listen to all our theories and talk about democracy. To them a handful of rice, a bowl of gruel is far more important than the right to speak freely or to vote or to do any of those things. It seems to me this is the crux of our defence against communism. Wherever it has shown its head, wherever it has gained its control, it has
Supply-External Affairs been where there was poverty, misery and want.
I should like to say that I am quite sure the Canadian people agree with that point of view. In support of this opinion I should like to quote just one resolution by a public body and another by a legislature in Canada, which indicate the support of Canadians for the technical assistance program. The one I am about to quote was passed on January 17 at the annual convention of the Canadian Federation of Agriculture. This is how it reads:
Whereas we believe that the best hope for ultimate world peace lies in an expansion of the program of technical assistance to underdeveloped countries now under way by the United Nations;
And whereas Canada's annual contribution to this program amounts to only $850,000 or less compared with Norway's contribution of more than $3,000,000;
And whereas Canada is contributing $25,000,000 a year for six years to the Colombo plan;
And whereas Canada's combined contribution to these two programs amounts to approximately one per cent of the annual defence appropriations;
And whereas we believe the technical assistance program of the United Nations is in need of a substantially greater sum than its annual budget of $25,000,000;
Therefore be it resolved that this annual meeting of the Canadian Federation of Agriculture strongly urge the government of Canada to appropriate substantially greater annual amounts for the technical assistance program of the United Nations.
May I say that since that resolution was passed I have had letters from at least one farm organization and others from farm people in western Canada who have urged that, in addition to this, we should do something to supply actual food requirements even as gifts to some of the needy nations of the world. Usually Pakistan and India are mentioned in the correspondence that I have received. As far as Norway is concerned, may I also say that in addition to that national gift-and this is a highly interesting piece of news-there is an all-out drive to further boost that effort by a plan called "From People to People" where the ordinary people-a population of 3-2 million-are asked to contribute further sums for aid to the underprivileged, by giving at least one day's pay or income. His Majesty King Haakon in launching the program said this:
Let us start this program in the firm conviction that the thing we are doing is the only road that leads to a happier world, better international understanding, and the fulfilment of humanity's great prayer: freedom from want.
Surely what Norway is doing we, with our resources, can do as well.
I also want to emphasize the statement- which I believe is correct-that Canada's contribution both to the Colombo plan and

Supply-External Affairs the United Nations technical agency amounts to 1 per cent of the defence appropriation which we have already adopted in the estimates now before us. I say that this does not, I am sure, convey an accurate picture of the desire of the Canadian people.
With regard to the resolution passed in a legislative assembly, the following resolution was moved by W. J. Berezowsky, M.L.A., in Regina on Thursday, April 2, 1953. It is rather long and I may not put all of it on the record, but I will put on the relevant parts. May I say that this resolution was passed unanimously. Both the C.C.F. members on the government side and the Liberals on the opposition side voted in favour of it. The resolution was as follows:
This assembly, recognizing the critical situation that endangers the peace of the world and the need for governments to assess and reaffirm their position in regard to international affairs,-
(1)	affirms its full support of the principles of the United Nations which, despite its shortcomings, remains an essential agency for building world peace;
(2)	reaffirms its belief that mankind's hope for lasting peace can be realized only through a comprehensive and spectacular program of economic and social advance in every part of the world, since military preparedness, deemed necessary by U.N. in the present international situation, cannot take the place of positive action to end poverty and exploitation;
(3)	urges the federal government to press for world economic progress and world peace by:
Then there are a number of clauses which I will read.
(a)	allocating available raw materials in accordance with need;
(b)	planning the development of world resources to the highest possible degree;
(c)	providing technical and capital assistance to underdeveloped areas on a scale many times greater than the amount now available for these purposes;
(d)	taking international action to achieve maximum production of food and providing for its equitable distribution;
(e)	establishing international development corporations for these various purposes, which would be free from control by private capitalism or by any one country;
(f)	increasing the scope and resources of the Colombo plan;
(g)	planning an expansion of world trade based on consideration of world needs;
(h)	achieving greater equality, on a high level, of living standards everywhere;
Perhaps I should put the other four clauses on the record as well, although they do not deal with the same matter:
(i)	resisting attempts by any nation to use the U.N. for selfish ends;
(j)	supporting the inclusion of all nations who will support the charter of the U.N.;
(k)	insisting that any action against aggression undertaken by the U.N. be completely under the control of the U.N.;
(l)	working towards the abolition of the veto in the United Nations.

As I say, that resolution was passed unanimously on Thursday, April 9, 1953.
What I have done just now is place on the record a resolution from the federation of agriculture, representing an independent farm group in the country and the resolution passed in one of our legislatures dealing quite largely, although not entirely, with the matter under discussion.
As the committee knows, ever since the United Nations was set up, I have been interested in these matters. I had the great privilege of representing Canada for a great deal of the time on the committee which set up the economic and social council of the United Nations. I take little credit for what Canada did at that time because, after all, the able advisers who were assisting-although I might have spoken the words-were the people who really were responsible for much that I proposed at that time.
I should like to join with others and pay tribute to our staff in the Department of External Affairs-and in the Bank of Canada, incidentally, in this instance-because we have an extremely able group of people there. I have been interested in these matters; and because I was absent from the committee and from the house owing to illness when these questions were under consideration by the standing committee on external affairs, I wished to say something about them even if I have perhaps trespassed on the time of the committee when hon. members and the minister are extremely busy indeed.


Stanley Howard Knowles: Mr. Chairman, I am sure it is not necessary for me to emphasize the fact that we have just listened to one of the most important speeches to have been made in this session of parliament. I am satisfied that nothing is more basic to the future peace of the world than that we take far more seriously than we have done to date this question of our responsibility to try to assist the underdeveloped portions of the world to get on their own feet and to raise their standards of living to something comparable to what thus far has been achieved in the west.
I shall not take the time of the committee to repeat what has been so well put by my leader, the hon. member for Rosetown-Biggar. However, I should like to say something about one aspect of this attempt to provide technical assistance under various United Nations programs and also under the Colombo plan. I refer to the question of bringing young men and young women from these underdeveloped areas to Canada in order to educate and instruct them so they might be able to go back and play a significant part in helping to develop their own countries.

This is just one aspect of the broad program of technical assistance concerning which my leader has sought to challenge the thinking of the committee this afternoon, but it seems to me that it is an exceedingly important aspect of the problem. Indeed, the chances of underdeveloped areas getting on their own feet and to the point where they can produce sufficient food so that hundreds of millions of people need not go to bed hungry every night depends upon our transmitting to a large number of people in those areas the advantage of the education and the training that we have here in the west.
As my leader has pointed out, the number of human beings who go to bed hungry every night of their lives is staggering. We know that in countries like India, one of the members of the commonwealth to which we belong, there are millions of people who enjoy only one meal a day throughout their lives. We cannot solve that problem adequately only by sending food, much as we should do along that line. But it is our responsibility because it is the right thing to do, and it is the crux of our own defence, to try and play our part in helping to educate these people so they can do the job themselves. If we could provide an imaginative educational program I believe we would see a change in the living standards of a country such as India and other areas in south and southeast Asia within the space of a generation. But, Mr. Chairman, what have we done with respect to this educational part of the technical assistance program?
I am going to give the committee a few figures. I will not bother in each instance to say which page of Hansard they will come from but I shall give four different references in Hansard now and hon. members will know that the figures I shall give shortly are to be found on those various pages. The Hansard references are March 9, 1953, at page 2730; March 18, 1953, at page 3051; and February 26, 1953 at page 2415. One of these references, namely the first one I gave, involves a cross-reference to Hansard of March 28, 1946, at page 357. On these pages will be found order paper questions of mine and the answers given by various departments, and in the case of the reference to 1946 an order paper question of the hon. member for Quebec South and the answers that were given to him on that occasion.
As one looks at the information contained on these various pages he will find that today under the technical assistance program of the United Nations, under the Colombo plan and under other plans of that sort, we have brought to Canada, for training here, students from foreign countries to the number of only 243. Ninety-nine of these are under
Supply-External Affairs the Colombo plan; 123 under United Nations programs; 16 under UNESCO, 3 under FAO and 2 under ICAO, adding up to 243.
Canada has spent all told, including the supplying of facilities for these 243 people whom we have brought to Canada for this purpose, $338,748.88 which can be earmarked as such; but it would appear that to be fair there should be added to that another figure of about the same size which would bring it up to something of the order of $750,000. But, Mr. Chairman, that is the total figure. That is all we have done under this technical assistance program. All credit to those who have got this program going and have done this much, but by comparison just look at what we have done under some other programs which we appear to have taken much more seriously.
For example, under NATO we have entered into certain agreements to bring people to Canada for military training. The number we have brought under these agreements to date is 3,063, and we have spent on their training $140,734,857.92. In other words, we have these two programs going along more or less concurrently, training under NATO agreements and training under United Nations technical assistance and similar programs, but we have spent out of Canadian funds 190 times as much on the training of foreign military personnel under NATO as we have spent on the training of foreign students under various forms of technical assistance.
If one were to go back, still looking at the Hansard references I have already given, to the tremendous job that Canada did under the British commonwealth air training plan during the war, he would find that under that plan we trained in Canada from other countries of the commonwealth 68,174 persons, and Canada spent on their training, apart from what was spent by other countries, $1,589,954,609.94. In that instance we spent more than 2,000 times as much as we have spent all told on the education and training of young people from other countries under technical assistance programs.
I suggest, Mr. Chairman, that these figures as to what we did under the British commonwealth air training plan and what we have done and are doing under NATO indicate what can be done when there is the determination to put the program over. Real accomplishments were made or are being made under those programs, and Canada has credit coming to her for that, but here apparently the old maxim applies: "where there's a will there's a way." There was a will to do something under these programs, and it was done.

Supply-External Affairs
It would look to me, Mr. Chairman, as though we have not yet faced up to the challenge of this other task of helping to train people from these underdeveloped countries so they might be able to go back and do a job in helping to raise the living standards of their own countries in a way that could be done by improving their methods of agricultural production and by expediting their industrialization. I urge most strongly that the remarks of my leader today be given very serious consideration not only by the government but by members of the house in all parties and by Canadians generally, and that we put some real drive into these very important programs.
We hear this slogan used a good many times these days: "Trade, not aid". I was interested in what the Secretary of State for External Affairs had to say about that yesterday. It seems to me that though the slogan in a very good one, and certainly very plausible, the fact of the matter is that aid may be necessary for a long time, and I hope that the valid emphasis which is being put upon trade will not result in our thinking that something is being done about trade when it is not, and that therefore we may lessen our aid. It seems to me that aid is going to have to take the form of food and the material supplies that are necessary. It is going to have to take the form of machinery and goods to assist these people in other areas, and I suggest also that a very important contribution that Canada could make would be to increase tremendously the bringing of students from these other countries right here to Canada for the type of training that would really benefit these other lands.
It is a disgrace that the amounts we have spent on this important work are so small. I believe it is up to the government, it is up to all of us in the house, all of us who are in public life, to try to give, if that is what is needed, leadership to our own people, to encourage support for programs of this kind. We should do it because, as has already been pointed out, it is the crux of our defence. We should do it because it is good in itself; it is the right thing to do to try to help the peoples of other areas of the world to rise at least to the living standards that we enjoy in our own country.


Milton Fowler Gregg: May I be permitted at this time on behalf of the Minister of Trade and Commerce and myself to make a statement regarding the Vancouver strike?


Louis-René Beaudoin: Has the minister leave?


Some hon. Members:: Agreed.
Item stands.
Progress reported.



LABOUR CONDITIONS


Milton Fowler Gregg: I am glad to announce the termination of the dispute between the five grain companies in Vancouver and New Westminster, namely, Searle Grain Company, Limited; Pacific Elevators, Limited; United Grain Growers Limited; Kerr, Gifford and Company, Incorporated; Alberta Wheat Pool, and their employees represented by the international union of united brewery, flour, cereal, soft drink and distillery workers of America, local 333, who have been on strike since February 16.
Settlement terms were agreed upon early this week and were ratified by the union at a general meeting of the membership held at Vancouver this morning at 10 o'clock Pacific time. The men are returning to work today.
The settlement of this dispute has been very difficult. There are a number of reasons for this which need not be discussed at the present time but which contributed to the discouragements encountered in our efforts to mediate the dispute.
In the latter stage of the strike, with the closest possible co-operation of the Minister of Trade and Commerce, the government was fortunate in enlisting the services of the transport controller, Mr. Roy Milner, and I should like at this time to say how much we are indebted to him for the contribution he made to the final result.

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


DEPARTMENT OF EXTERNAL AFFAIRS
[Stage Direction]
97.	United Nations expanded program for technical assistance to underdeveloped countries, $850,000.
Herbert Wilfred Herridge: Mr. Chairman, I am interested in this subject and had intended making a 30-minute speech. However, in view of the fact that the hon. member for Rosetown-Biggar and the hon. member for Winnipeg North Centre have already mentioned many of the things I intended to mention, and in view of the fact that I heartily endorse and

support in full the remarks they have made in this debate, I shall save the time of the committee by simply saying amen to everything they said, and take my seat.


[Stage Direction]
Item agreed to.
98.	To provide, subject to the approval of the governor general in council and notwithstanding anything to the contrary in the Civil Service Act, for special administrative expenses, including payment of remuneration, in connection with the assignment by the Canadian government of Canadians to the international staff of the North Atlantic Treaty Organization (part recoverable from the North Atlantic Treaty Organization), $30,000.
Gordon Francis Higgins: Is the growing strength of NATO the real cause of the present Russian attitude?


Lester Bowles Pearson: I said yesterday I thought it might well be the reason for the change in attitude. However, I would not go beyond that, and would not be more categorical in my statement. If that is true, we should not throw away the weapon which has brought about that change.


Mr. Macdonnell (Greenwood):: Was that item 98?


Agar Rodney Adamson: We are still on item 98.


James MacKerras Macdonnell: I do not
know whether I would be in order under this item to ask a few questions with respect to savings in the most recently established embassies.	.


Lester Bowles Pearson: We have gone past that.


[Stage Direction]
Item agreed to.
International civil aviation organization-
99.	To provide the international civil aviation organization with office accommodation at less than commercial rates, $200,596.
Gordon Francis Higgins: What is the situation in respect of ICAO in Montreal? Will there be a change in the headquarters there?


Lester Bowles Pearson: I take it that the hon. member is referring to the situation regarding the relationship between ICAO and the Canadian authorities, about which there had been some difficulties. I may say that so far as the federal government is concerned those difficulties to a large extent have been removed. I believe the international organization is now satisfied with the situation. There have been some outstanding problems between the organization and the province of Quebec in regard to certain privileges and immunities customarily granted to international organizations, but which in this instance fall within the jurisdiction of the province. The organization and the provincial authorities have
Supply-External Affairs been discussing the matter and I hope, as a result of that discussion, those problems will soon be solved.


[Stage Direction]
Item agreed to.
International joint commission-
100.	Salaries and expenses of the commission, $95,800.
Agar Rodney Adamson: Mr. Chairman, this item deals with the international joint commission which, in turn, deals with the St. Lawrence deep waterway. In view of the fact that the Secretary of State for External Affairs and the Prime Minister are both going to Washington tomorrow, I think something should be said in the house on this matter before they leave.
This morning we had what amounted to a protest against the attitude of the United States with regard to trade. I wish now to make a protest with regard to the attitude of the United States concerning the St. Lawrence deep waterway. But before I do so I wish to speak very briefly about the suggestion that two canals can be built. That is fallacious, because the situation on the St. Lawrence is completely different from the situation at the Soo. At the Soo there is a narrow isthmus between two great lakes. One side of that isthmus is wholly in Canadian territory and the other side is wholly in United States territory. Therefore parallel locks or parallel canals could be built running wholly in United States territory and wholly in Canadian territory.
On the St. Lawrence that is not so; because on the south bank it is partly in United States territory, being in the state of New York, and it is partly in Canadian territory in the province of Quebec. And, I may say, I would be very much surprised if anyone would start off to build a canal where the premier of Quebec knows no other Caesar. In the United States, if the canal were built from the Quebec boundary to lake Ontario it would be a perfectly useless structure, because it would lead from the blank wall of the boundary of Quebec and the international boundary in Canada to lake Ontario. In other words we would be duplicating half a canal, and building a whole canal on the other side. Therefore that suggestion in my view is ridiculous.
Coming now to the action of the United States, I wish briefly to chronicle what has happened in the last quarter century in this regard. In 1926 there was a report of a subcommittee of the senate to the committee on foreign relations, dealing with the great lakes-St. Lawrence basin. They went back virtually to the original report produced in the time of the Coolidge administration and submitted to President Hoover. In 1926 these

Supply-External Affairs were the findings of that committee, and I think for the purpose of my protest I should place them on record:
The conclusions of this commission are therefore:
First. The construction of the shipway from the Great Lakes to the sea is imperative both for the relief and for the future development of a vast area in the interior of the continent.
Second. The shipway should be constructed on the St. Lawrence route, provided suitable agreement can be made for its joint undertaking with the Dominion of Canada.
Third. That the development of the power resources of the St. Lawrence should be undertaken by appropriate agencies.
Fourth. That negotiations should be entered into with Canada in an endeavour to arrive at agreement upon all these subjects. In such negotiations the United States should recognize the proper relations of New York to the power development in the international section.
That was the 1926 report to the president by the body set up under the United States senate, and favouring in four specific instances and for four specific reasons the construction of this St. Lawrence seaway, and the construction of the hydroelectric power development. The United States senate committee had this to say in its report in 1946, referring to the earlier committee:
The overwhelming majority of the Senate foreign relations committee reported that the Senate advise and consent to ratification of the treaty.
That was in the days when we were endeavouring to have the St. Lawrence deep waterway constructed by means of a treaty. There you have a committee advocating in the strongest possible terms that an immediate start should be made on the St. Lawrence deep waterway and hydroelectric power development. That was 27 years ago, over a quarter of a century, and the economy of the North American continent has been bedevilled by selfish interests which have been able, because of the peculiar set-up of the United States constitution, to set at nought the wishes of the sovereign United States government. Not only that, they have been able to subvert completely and destroy the wishes and desires of three Canadian governments as expressed in this house.
There comes a time when the patience of a people becomes exhausted, and I suggest that that time has arrived. The United States senate committee report of 1946 made reference to the groups which were opposed to this, and I think the following words are significant because they reinforce the protest I am making at the present time:
Many groups have claimed that the seaway will be injurious to their vested interests. Among these are the railroads, port cities, coal interests, and lake carriers. The claimed disadvantages spring primarily from the age-old tradition of preferring the status quo. It is noteworthy that every technical and mechanical advance in the history of the world has been viewed by some with

alarm. This was true of the railroad, the automobile, the aeroplane-of the development of each new resource and each section of this country. But the nation has become great by utilizing every natural and human resource at our command.
There is reason to believe that the main opposition to the seaway comes from the eastern railroads.
I emphasize again that that is the report of a United States senate committee, made in 1946. Before I refer to the findings of that committee I should like to deal briefly with the question of power development. We are now in the fifth month of 1953, and have virtually lost all chance of construction during the summer season. The province of Ontario will probably be facing a power shortage in two years or possibly less. The industrial growth of this country will be penalized even if construction were to start immediately. Every month, every day, every hour this project is delayed costs the economy of Canada large sums of money. That is the result of the actions of selfish interests elsewhere.
At that time the senate committee-I mention this merely because I have heard the argument-went into the question of the possibility of developing power by atomic energy. Perhaps I should quote just one or two sentences in their findings, because there is a growing feeling that atomic energy will replace all other forms of energy in the production of power. They said:
The concern expressed by the opposition that atomic energy for commercial purposes would be likely, in the foreseeable future, to render hydroelectric energy obsolete was minimized and answered by the proponents. The crux of the proponents' case was that, according to the best current estimates of the experts on atomic energy, the cost of producing this new energy cannot very well be less than that of fuel-burning steam plants, and it is likely to be much higher. Since St. Lawrence power costs less than the cost of producing power at steam plants with fuel costs disregarded, there does not seem to be much reason to fear that atomic energy would be cheaper than St. Lawrence power.
A number of quotations from authoritative sources relating to atomic energy were introduced into the record.
They mentioned the General Electric Company and many others whose representatives gave testimony in that regard.
I come now to the report of this committee, which found in favour of the development of the St. Lawrence deep waterway. It found that the estimated saving in the cost of transportation would be as high as 50 per cent in the case of joint rail and water rates and much higher in the case of all-rail rates. I should like to bring to the attention of the minister their final statement, which was as follows:
The committee has also considered the question of the navigation rights of the United States in the

wholly Canadian sections of the great lakes-St. Lawrence system in the light of fears expressed by the opposition that present treaties do not vest in the United States adequate rights in these waters. The committee has concluded that these fears are totally unwarranted in view of the express terms of the treaties on this point.
That is true because the 1909 boundary waters treaty specifically granted equal rights to the United States and Canada in boundary waters and in canals on the great lakes.
What can be done about this? We have waited 27 years, and apparently we are very little nearer to our goal. Because of the constitution of the republic known as the United States of America the opposition are able to thwart the wishes of a huge majority of the people of the United States. They thwart not only the unanimous wishes of the United States but those of their best friend and best customer.
We are given highest hopes; we are given publicity in newspapers, but we are not given any concrete evidence that the attitude of those interests who can, and probably will, thwart the desire of our joint countries has changed. I can give one example of this, and I wish to quote Mr. R. J. Ireland, president of the D. B. Hanna Company, which is interested of course in coal but also in the Labrador iron development. He said, regarding the St. Lawrence deep waterway that- -people . . . are unanimous in the opinion that the St. Lawrence waterway project would be a detriment and not a help to us; so I can tell you, sir-
And those are his words to the committee.
[DOT]-in so far as the Labrador project is concerned, my company is much more interested in it as an investment for the future, without a seaway, than with a seaway-
The D. B. Hanna Company is interested in the development of the Labrador iron deposits. At the time this statement was made the company was interested in the Mesabi iron range as one of the greatest ore-carrying fleets on the great lakes, as well as one of the greatest individual coal producers in the United States.
What did Mr. Ireland mean by that statement some years ago? If he meant anything, he meant that as far as he was concerned the Labrador iron deposits were going to be held dormant. No other interpretation can be taken from that statement. What has changed that opinion is simply that the Mesabi iron range is running out. The supply of high grade iron ore in the continental United States is rapidly being exhausted, and the D. B. Hanna Company as well as many others will have to look elsewhere for their supplies of iron ore. They have had a change of
Supply-External Affairs conscience, and they are all for the St. Lawrence deep waterway.
Mr. Chairman, I mention that to show the sort of thing we are up against, the sort of interests we are up against in this St. Lawrence deep waterway. There has been the ability to rally just enough members of congress and members of the senate to defeat this thing every time it has come up. Twenty-seven long years have we waited. Twenty-seven long years have we put up with procrastinations, with "wait a little more", and "give us a little more time" and "let us see a little more about this".


Mr. Mcllraith:: Hear, hear.


An hon. Member:: That is free enterprise.


Agar Rodney Adamson: Mr. Chairman, how long are we going to wait? I tell you that the situation requires action, and it requires action in this way. I think there must be a deadline stated, that we must be prepared to state it now, after which deadline we shall give notice-as we are quite entitled to do-that the 1909 treaty shall be terminated within a year. After that treaty has terminated the rights of United States ships in our canals, on an equal footing with our own, are also terminated. We then can impose on United States traffic such discriminatory tariffs, such embargoes, and such other methods as will make them see what they are paying for the strange attitude they have followed.
I believe, Mr. Chairman, that the time has come when we cannot longer leave this to promises of good will. We have seen every president since Coolidge thwarted in his desire to go ahead with this development. We have seen every national convention of both major parties in the republic to the south include the development of the St. Lawrence waterway as a fundamental plank in their program. We have seen, irrespective of whether there were Republican or Democrat governments in the United States, that there were interests which were powerful enough to thwart the desires of the people. I do not believe that we in Canada can put up with this sort of thing any longer. I think we should say so in the possible hope that somebody will see the danger.
Today the general belief in Washington and New York is that Canada is bluffing. I assure you, Mr. Chairman, that we are not bluffing. The canal can be built without the hydroelectric development. It can be built without in any way encroaching on the sovereign soil of the United States. It would be fantastically expensive from an engineering or an economic standpoint to build the canal without the hydroelectric power development;

Supply-External Affairs it would be ridiculous, but all the same it could be done. A canal could be built around the international rapids, without touching the international rapids. A canal could be built wholly and completely in Canada by Canadians with Canadian capital and machines. We would be loath to do such an uneconomic thing, but if we are going to be kicked about and if the sovereign desires of this parliament and this country are going to be thwarted by interests which are inimical to the welfare of this country, then we may have to consider that line of action.
The minister is going to Washington and the Prime Minister is going to Washington, and I know they will receive the welcome from the United States government and the President of the United States that all our prime ministers and secretaries of state always do. It should be pointed out that it is not the government of the United States which is at fault. They are doing everything they can to assist in the mutual development. The statements of the secretary of state of the United States about international trade could not have been fairer or freer. But it is that strange minority who are apparently able, because of the constitutional type of government enjoyed-perhaps "enjoyed" is not the right word, but that is what it is-by the United States, to throw a monkey wrench into the desires of both our countries which causes our patience to be damn near exhausted.


[Stage Direction]
Item agreed to.
Terminable services-
102. Colombo plan, $25,400,000.
Major James William Coldwell: Is the minister going to say something about technical aid on this item?


Lester Bowles Pearson: I was going to say just a word about technical assistance under the other item, but perhaps I can do so under this item. In view of the remarks that have been made by hon. gentlemen opposite, I should like to say something.
I am not going to boast about the record of the government in the field of technical assistance, because it does not warrant boasting. I am not going to apologize for it, because it does not deserve apology. The government appreciates the importance of technical assistance to underdeveloped countries. Some years ago we expressed the feeling that, when practicable, that kind of work should be done through the United Nations. Since I made that statement we have had a great deal of experience with the operation of the Colombo plan, the item which we are now discussing. I feel that operation has been very successful in its technique, and 
that leads one to wonder whether or not- other things being equal-from the practical point of view more results might not be achieved more quickly by bilateral arrangements between the country making the contribution and the country receiving the contribution.


Major James William Coldwell: By-passing the United
Nations?


Lester Bowles Pearson: However, the United Nations certainly has a legitimate interest in this matter, and we support that interest. Whatever might be the best way of doing it, certainly there should be no overlapping with the United Nations work. One of the encouraging developments in recent years has been that the tendency to overlapping and duplication of two or three years ago has been reversed.
There is, I think, very effective co-ordination among the various agencies in this field. There are a good many such agencies. There is the United Nations technical assistance program. There is the Colombo plan, the item which is under discussion. There is the Point Four program of the United States, and there is the work being done by the international bank in the field of capital assistance. There is the work being done by FAO and other United Nations agencies. At the present time the economic and social council is discussing the setting up of another agency, the international development fund. It is, therefore, more important now than ever before that this co-ordination should be achieved. There should be a minimum of duplication.
So far as Canada's record in the United Nations is concerned we have subscribed, as has been pointed out by hon. gentlemen opposite, a fairly high percentage of the total amount raised by the United Nations. The only countries whose contributions to the United Nations schemes have exceeded those of Canada in amount have been the United States, the United Kingdom and France. Our contributions have been quite close to those of the last two countries. In relation to other countries, proportionately, our record is not bad. It may well be that the United Nations should have agreed to try to raise more than the amounts that have been agreed upon. On that point I will only say that the experience of the first year or so with the United Nations technical assistance program underlined the difficulties of spending effectively and practically the amount raised. But these difficulties, as the hon. gentleman pointed out, have been now substantially removed.
The Colombo plan, I think, is operating very effectively, and will be operating more

effectively as we get more experience. We are asking parliament this year to contribute $25 million, plus an amount of $400,000 for technical assistance itself.
There have been some general statements made in the discussion of these earlier items on the importance of technical assistance to underdeveloped countries, and I would agree with everything that has been said. I would certainly accept the viewpoint that starvation and misery are the breeding grounds of communism. But the corollary is not always true. We should not forget that a high standard of living does not, itself, necessarily mean peace. Before 1941 the Asian country which had by far the highest standard of living was Japan. But Japan brought more misery, destruction and suffering to Asia during those years after 1941 than any of the other countries of that continent. While starvation and misery should be fought and should be conquered if possible, because if we do not succeed in that battle communism may succeed, that victory will not of itself necessarily make for peace.
I should like to mention one other point before I sit down. Nearly every speaker on the other side who spoke on this subject made a comparison between what was called the "niggardly amounts" that we spend on assistance of this kind and the amounts we spend on national defence. This comparison is dramatic but, without further analysis and explanation, it could be rather misleading. I believe it is right for us to assume that the first obligation of the government and parliament of the country is to prepare for the defence of the country. If that is not done successfully, if with our friends we cannot through adequate preparation deter aggression, and if we then do have aggression because of our weakness, technical assistance will not be of much help. Recognition of this primary obligation of national defence is given by the very countries who are so much in need of help and technical assistance.
Some Asian countries who are being helped, who need and deserve our help, are spending themselves a very high proportion, perhaps as high as 50 per cent, of their national revenues on national defence, and not always defence against communist aggression. I believe that is one factor that might be mentioned.
The hon. member for Winnipeg North Centre pointed out how few students we have received from Asia under this scheme. He gave the figures and they were not, of course, very impressive. He talked about 300 or 400 times as much money being devoted to NATO military exchanges as to
Supply-External Affairs Colombo civilian exchanges. You could also, if you wish, make the rejoinder here that the very countries that need that kind of technical education so much also find it necessary to spend 200 or 300 times as much on military preparations in building barracks and things of that sort as they spend on building technical colleges. It is, therefore, a complicated problem. I do not think we necessarily clarify it by making the kind of comparison that is so often made between the amount now spent on defence and the amount spent on this kind of assistance.
I wholeheartedly agree with what the President of the United States said in that inspiring statement he made a week or two ago. If we could cut down our defence expenditures-and we must look forward to the day when we can do that-then any money that can be saved in that way could surely be devoted to schemes of assistance under the United Nations and under bilateral arrangements. If that can be brought about, the very fact that we are cutting down on our defence expenditures will be an indication that some of the tension, some of the fear and some of the anxiety in the world will have been removed. This will be conducive to profitable and constructive work in this field, and in that work I feel quite confident that Canada will play, as I think she is playing now, a worthy and useful part.


Major James William Coldwell: Would the minister comment on the fact that there has been a change in the method of payment to take advantage of the exchange?


Lester Bowles Pearson: I did mean to mention that point. It was the first I had heard of it, and I shall be glad to look into the matter of taking advantage of the rate of exchange in our contributions.


Agar Rodney Adamson: Before we leave this item, I should like to make my criticism of the D. B. Hanna Company clear as not being a complaint against private capital. I should therefore like to pay a compliment to Canadian capital and men like Jules and Noah Timmins, General Don Hogarth, Joe Erring-ton and Jack Hammell and others who were so largely responsible, in the initial stages, for our iron ore development.


[Stage Direction]
Item agreed to.
Louis-René Beaudoin: We now turn to the supplementary estimates.
General-
653. To provide for the Canadian government's assessment for membership in international and commonwealth organizations, as detailed in the estimates, including authority to pay the amounts specified in the currencies of the countries indicated, notwithstanding that the payments may

Supply-Defence Production exceed or fall short of the equivalent in Canadian dollars, estimated as of April, 1953-further amount required, $16,195.


James MacKerras Macdonnell: Mr. Chairman, I was not able to be in the chamber when item 87 was carried. I doubt whether I can really come under item 653, but there is a question which I think is in the minds of many people. If the minister would care to answer it briefly, I think it would make for the enlightenment of the committee and perhaps of those beyond here. What I should like to ask, although perhaps it could be put in a more convenient way-and as a matter of grace I must now put it in a convenient way-would be this. What are the last five embassies to be established by us? In cases where they have been established, do we have a consular staff and do we also have trade commissioners? Also, if the figures are available, could the minister give us the staff of each? If that information is not here, I am not going to delay proceedings by insisting on it. I could get it privately.


The Deputy Chairman:: Order. I am afraid I really cannot allow a discussion of this kind on item 653. I am sorry if the hon. member has not obtained the information which he would wish, but I might point out that these estimates were carefully considered in the standing committee on external affairs.
I do not think I should be asked to allow a question of this kind on this item.


Lester Bowles Pearson: Possibly we can get over the difficulty, Mr. Chairman, by this suggestion.
I can give the hon. gentleman the information he wishes after the committee rises.


[Stage Direction]
Item agreed to.
[Stage Direction]
79. Departmental administration and payments to Canadian Commercial Corporation and other corporate agencies for services provided in connection with defence purchasing and production, $6,710,933.
Clarence Decatur Howe: Mr. Chairman, for a number of reasons it is not my intention to make a lengthy statement at this time, as a good deal of information relating to defence production has been placed before the house in recent months.
Copies of the annual report of the Department of Defence Production for the calendar year 1952 have recently been made available to all hon. members. This report outlines changes that have taken place in the raw materials situation, and the progress that has been achieved in the defence production program. In addition, it indicates the effects that the changes in emphasis within the defence program have had on the organization of the department. At the end of the year,
[The Chairman.]

the progress we had made in decontrolling materials was reviewed by my parliamentary assistant in this house. Any further developments since that time have been publicly announced. One program that has properly attracted the attention of many hon. members is the CF-100 and Orenda engine projects at A. V. Roe. However, I made a detailed statement on this subject in the house as recently as February 16.
Another source of information on the defence picture has been the parliamentary committee on defence expenditure, which has met regularly since January 27, 1953. Finally, my department has answered 188 parliamentary questions which, when broken down into their subquestions, total 880 inquiries. For these reasons, I do not feel that the house would wish a lengthy statement from me at this time, and I shall confine my remarks to a few general comments.
We have now completed two years of our defence program, and it might be useful to consider the place of this program in our economy now and what it is likely to be in the next few years. Let us turn first to the materials side. Hon. members will recall that following the outbreak of hostilities in Korea a serious world-wide shortage of strategic raw materials developed as a consequence of the needs of accelerated defence preparations, as well as of scare-buying by the public at large. This shortage naturally caused a general increase in prices. Through the close co-operation of government and industry, increases in the prices of a number of strategic materials produced in this country were held to a level consistent with rising costs. This accomplishment made an important contribution toward the stabilization of world prices and therefore to the whole allied cause.
It was obvious, however, that in certain lines increased production was required above everything else and, in order to achieve this, some incentive price increases were permitted. In some instances additional capital cost allowances were granted in order to supplement normal incentives already provided by the special tax concessions available to various industries.
This policy of stimulating production of essential materials has been remarkably effective. Canadian output of petroleum, base chemicals, non-ferrous metals, iron ore and steel in the last two years has expanded significantly. Hon. members will be familiar with many of the major programs now under way which will still further add to the productive capacity of the country.

Today the free world is no longer suffering from the acute general shortage of strategic materials that existed 18 months ago. Indeed, of the dozen or more materials previously allocated by the international materials conference, only nickel and molybdenum are still under controlled allotment. Nevertheless there is a continuing market for these essential materials and I am confident, as I know the industry itself is confident, that Canada will continue to be an important world supplier of strategic materials. This is due to continuing heavy world demand for the products concerned, to the steady depletion of many alternative sources outside this country and, even more important, to the fact that this country is a competitive producer.
As far as control of strategic materials during the period of critical shortage was concerned, we were able to keep formal controls to a minimum; and as soon as the supply situation warranted it, these controls were removed. We have, however, maintained a minimum framework of machinery which would enable us to reinstitute controls on materials on very short notice if it were necessary to do so.
On the procurement and production side, the program has made steady progress over the past two years. As I have pointed out on previous occasions, the rate of progress has varied, depending on the type of equipment or armament to be obtained for the armed forces. Because of long lead lines and the need for specialized facilities, it has taken longer to get into production on the more technical items. The over-all impact of the program on the Canadian economy has not been very great.
At the present time, defence procurement expenditures account for about 5 per cent of our gross national product. As far as individual industries are concerned, those whose capacity is most heavily engaged in defence production are shipbuilding, aircraft and, to a lesser extent, electronics, together with the main suppliers in each of these fields.
Looking at the present defence program, we find it is now apparent that we have reached the peak and that defence expenditures in the fiscal year 1953-54 will level off. This year will see more deliveries coming out of Canadian production than was the case previously. In the next year or two current plans will support a somewhat higher level of activity in the aircraft industry than in the past fiscal year, with more substantial increases in shipbuilding, electronics, and in the output of guns and ammunition. With regard to defence construction, the unusually 68108-308
Supply-Defence Production mild winter has made it possible to accomplish more than had been hoped for. As a result, there will be a very sharp reduction in the rate of expenditure on construction in the current fiscal year. Miscellaneous procurement, particularly in the clothing, textile and leatherwear fields, will continue to decrease.
Looking further ahead is obviously more difficult. This government-and I am sure all Canadians-cannot help but be encouraged by recent evidence that suggests a lessening in international tensions. But this government -and again I am equally certain all Canadians are in agreement-will wish to ensure that we do not allow these hopeful signs to distract us from the all-important job of building and maintaining our defences. We must, therefore, expect to keep up an effective level of preparedness for some years.
What, however, would our position be if we were plunged into another war? The possibilities for destruction in another major conflict are so horrible that it is difficult to estimate the probable course of hostilities. Nevertheless, we are continuing to make our preparations for the defence of this country. My colleague, the Minister of National Defence, has outlined'-to the extent that national security permits-the details of the plans of four chiefs of staff and how these plans are co-ordinated with those of our allies for the defence of North America and, indeed, the free world. It is my responsibility to ensure that Canadian industry is in a position to provide the support our armed forces will need. This is a serious responsibility, but again I am heartened by the ready response I have received from industry, both through individual companies and through industrial organizations. In this connection, I would like particularly to commend the Canadian industrial preparedness association.
I have already referred to the expansion and diversification that has taken place in our production of strategic materials. Our manufacturing output in real terms has more than doubled since 1939. Nearly two thousand new plants have been established and many new skills have been introduced to this country. We have, of course, paid special attention to those industries which make a direct contribution to the defence effort. We feel that we have now created, or are in the process of creating, the basic facilities necessary for the production of a large part of the modern and intricate equipment and armament that will be required by our armed forces.
Much of the basic capacity for supporting our defence effort has resulted from private

Supply-Defence Production industry's initiative and financing. In some instances the government has assisted by granting accelerated depreciation. Where necessary we have provided capital assistance to set up specialized capacity having little or no residual value. In these cases we have either created completely new facilities, or else we have provided specialized equipment or machine tools to companies having basic facilities and specialized know-how. In these cases, of course, title to the assets remains vested in the crown. As I have said, we have now completed most of our basic planning for specialized defence capacity and, for this reason, the capital assistance funds being requested in this year's estimates are essentially for the completion of projects started in previous years.
The Canadian economy, and particularly our defence-supporting sector, is, I feel, well equipped to play an immediate and decisive role in the event of an emergency.
On the other hand, if there should be a real improvement in the world situation, and we are all sincerely anxious that there will be, I am satisfied that the effects of such a development on our defence program would not seriously disrupt our economy. Over the past few years Canada has continued to make outstanding progress not only in further development of our natural resources but also in building up our economy on a strong and diversified industrial base. While the present defence effort has contributed to this progress, it has only been one contributing factor. As I have said before, the whole program was only a fraction of our total national production. A decrease in Canadian defence expenditures would, I feel sure, have no adverse effect on the Canadian economy as a whole.
The situation the government faces in the immediate future is, however, one of preparing for either of two eventualities-all-out war or an extended period of peace. From a production standpoint, this immediately raises the question of what facilities for producing weapons of war are to be kept in operation. For some items, it is comparatively easy to obtain them quickly out of normal commercial production. For the more complicated types of armament this is not possible and, as you know, it has been our policy over the past two years to build up a defence potential in certain lines as insurance against any emergency.
The maintenance of these specialized facilities, which have been set up to meet potential requirements of the armed forces, presents difficult problems. Canada is not, of course, alone in facing these difficulties. In the United States, too, the authorities are greatly

concerned. As a partial solution, we are studying the possibility of maintaining certain of our production lines operating at minimum economic rates by offering the end items to our NATO allies as part of our mutual aid commitments, and thus making another immediate and important contribution to the defence of the United Kingdom and western Europe. Of particular importance, from the viewpoint of defence, is the fact that a production line actually operating minimizes delays in supply and hence reduces the need for stockpiling. It is well known that, for storage and maintenance reasons, stockpiling is normally an expensive precaution, and equipment stockpiled is always liable to deterioration or obsolescence. We are hopeful that by supplying military equipment to NATO out of production we shall be able to keep our own production potential on a sound basis of readiness and, at the same time, assist our allies.
These are the main observations that I wish to make at this time. I am satisfied that the defence production and procurement programs are being satisfactorily implemented. The main orders have now been placed. Since the Department of Defence Production has been set up we have, in fact, placed about $3 billion worth of orders on behalf of our armed services. Deliveries on some of these orders have already been made. In the present fiscal year deliveries on items requiring a longer lead time will, for the most part, be completed by the end of March, with the exception of certain major items such as the CF-100 and the escort vessels, where the programs extend well into 1954 or even beyond.
In the course of getting the defence program under way, we have met with difficulties and experienced delays. We have, however, now resolved most of our problems. Our record of achievement is one of which we can be proud.


Donald Methuen Fleming: One would not have to know the Minister of Defence Production very long to be sure that he would conclude the brief remarks he has just made on a note indicating satisfaction with what has been achieved. I propose in my remarks this afternoon to draw attention to some aspects of the achievements of this department, Mr. Chairman, and to call attention to certain matters which I think should engage the attention of this committee.
This department came into being on April 1, 1951. It has been in existence two years. So far as the estimates are concerned, the six items totalling this year $73 million do

not begin to reflect the extent of the operations of the department. One must turn to the annual report and to other sources really to understand the extent to which public moneys have been expended through the Department of Defence Production.
As the minister has indicated, the department has made purchases on behalf of the government totalling some $3 billion, and the department has acted as agent not only for the Department of National Defence in many of the purchases, but also for foreign governments in the purchase of defence materials on their behalf.
The staff of the department on December 31, 1952, numbered 1,744. The estimates make provision for 1,784 persons on the staff of the department this year.
I would turn now to the annual report of the Department of Defence Production for 1952. This report is based upon the calendar year, which I think is a distinct advantage to this committee in considering the estimates of the department. If we turn to this report we find at page 17 two paragraphs dealing with defence contracts, as follows:
New defence orders placed during 1952 were lower than during the 1951 period as the department's work, in many cases, changed to that of watching over the progress of orders previously placed and expediting the delivery of the finished products. Actual orders placed by the department in 1951 totalled approximately $1,600 million. During 1952, defence orders placed totalled approximately $1,300 million, making a grand total to the end of 1952 of about $2,900 million. While the rate of placing defence orders during 1952 declined by 20 per cent, procurement expenditures increased by 48 per cent as an increasing volume of actual production resulted in completed contracts.
About a quarter of the 1952 defence orders placed were for the aircraft program. Some $140 million went for defence construction and about $110 million for electronics and communications equipment. Large orders also were placed for vehicles and tanks, clothing and equipage, shipbuilding, weapons, ammunition and explosives, and fuels and lubricants.
And then at page 53 of the report, in appendix F, we see a breakdown of the expenditures. Canadian defence orders are broken down as follows for the 21 months between April 1, 1951 and December 31, 1952:
Aircraft	$ 993.323,000
Ships	 164,082,000
Tank-automotive	 135,744,000
Weapons and	ammunition _______ 388,806,000
Electronics and communication
equipment		 161,628,000
Clothing and	equipage	 191,381,000
Construction	 311,202,000
Other	 362,359,000
Total	$2,708,525,000
The second table on page 53 shows other orders placed by the department, presumably
68108-308J
Supply-Defence Production for foreign governments, during the same
21 months, as follows:
Aircraft	$107,785,000
Tank-automotive		 4,407,000
Weapons and ammunition	 91,775,000
Electronics and communication
equipment	 58,018,000
Building supplies	and	equipment	5,191,000
Food	 5,319,000
Other	 48,744,000
Total	$321,239,000
Therefore we are dealing, in connection with these estimates, with a department which is spending huge sums of public money. The attitude of the official opposition to the estimates of this department is just this, that we consider it our duty to make a searching inquiry to make sure that the public is receiving value for the huge amounts of money being expended.
We have accepted, as do all hon. members, the necessity for the defence program, much as we dislike seeing so much expenditure being made by and so much power vested in one department and one minister. One does not need to dwell at great length on these figures to realize what tremendous power is wielded in the national economy by a government spending sums of money like these, or the great power wielded by the minister at the head of the department spending these immense sums.
The first question I should like to ask is in relation to what has been purchased. The minister has made reference to the fact that there have been numerous sessional returns relating to purchases made by his department. I should like to place on the record- because otherwise it would not appear on the records of the house-some of the purchases which have been made, as they are disclosed in two sessional returns numbered 18 and 176, and brought down within recent days at the request of the hon. member for Wentworth.
So that hon. members may know I wish to be perfectly fair in this matter, I shall put on the record at this point all of the purchases made by the department as disclosed in these returns. I do not propose to make selections. Here they are, as set out in these two sessional papers. The figures I shall give in each case will show, first, the quantity and, second, the cost. I might say that the period covered in all these returns is from April 1, 1951 to December 31, 1952, the same 21 months covered in the table to which I have referred at the end of the annual report of the department.


Clarence Decatur Howe: What was the question? The
hon. member refers to purchases by the

Supply-Defence Production department. What was the question? It probably goes back to an earlier date, does it not?


Donald Methuen Fleming: The question was:
What were the total purchases, giving cost, quantities, and from whom purchased, of dishcloths for all branches of the armed forces, during the period from April 1, 1951, to December 31, 1952.
The same question is asked concerning different items, and covering the same period of time. The information is as follows:
	Quantities	Cost
Dishcloths 	5,792	$ 832Shaving brushes ..	72,248	70,662Razor kits (2) 	20,000	11,600Razor kits 	9,500	5,510Safety razor sets ...	168,000	115,360Razor, barber	1	4Razors, straight 	2	14The total quantity	of razors and kits	amounted to 197,503,	and the total cost for	those items was $132,488. Then	to continueto other items:	Quantities	CostFloor rugs 	41,724	$1,022,508Underfelts for rugs (plus 88 square	yards.) 	38	628Carpets (plus 2,435 square	yards.) 	4,033	23,726Ozite rug cushions	575	9,084Door mats 	3,305	9,563


Clarence Decatur Howe: On a point of order, I think
I am entitled to ask what conclusion my hon. friend is building up to. Is it that we have paid too much or that we have purchased too many items? If it is the second question, he is out of order. We have no control over the quantities ordered. We purchase the number the requisitions call for.


Donald Methuen Fleming: If the minister could be
patient I shall endeavour to deal with those questions when I finish reading this list.


Clarence Decatur Howe: Why not tell us now whether you are in order or not?


Donald Methuen Fleming: I will-


Clarence Decatur Howe: If you are drawing conclusions-


Donald Methuen Fleming: I shall make my own
observations without any censorship being applied by the minister, and I shall make them in my own way, and in the order I wish. These are purchases by the Department of Defence Production. As I said in
purchases on behalf of the government, particularly the Department of National Defence. These are returns showing information received from the Department of Defence Production. The information I am reading is contained in sessional papers which originated in that department.


Clarence Decatur Howe: Mr. Chairman, I would call
your attention to the fact that this department has no control whatever over quantities purchased. And I ask, if the hon. member is attempting to draw deductions from quantities purchased, that he be ruled out of order.


William Alfred Robinson: As I understand it, the hon. member for Eglinton is reading from a return made by the Department of Defence Production. I scarcely feel I could rule that out of order at the present time.


Donald Methuen Fleming: I shall continue:
Quantity	Cost
(a)	Men's raincoats
(b)	Men's waterproof
coats	
182,201	$ 3,840,541(c)	Men's greatcoats	279,515	11,803,152Women's raincoats ..	44,440	924,527Women's greatcoats	36,972	1,216,543Women's jackets ...	67,963	999,077I have made my own totals of these six items, which	are 611,091	coats costing
$18,783,840. Here are
Berets	
Field service caps ... Winter peaked caps ..
Women's berets	
Women's hats	
Cooks' caps	
Anti-blast helmets ..
Leather belts	
Canvas belts	
Canvas and leather
belts	
Boudoir lamps	
Bridge lamps	
Table lamps	
Trilight lamps	
Carving knives	
Serving forks	
Suitcases	
Trunks	
Kit-bags	
Men's overalls	
Women's coveralls ..
Mitts	
Gloves	
some more items:
Quantity	Cost
374,684	$757,240
93,294	219,130
201,568	663,336
10,000	23,500
96,663	186,485
48,930	20,505
2,000	5,500
421,036	328,252
96,399	65,982
12	20
nil	nil
2,066	14,066
41,887	200,643
1,979	23,057
424	950
17,570	9,731
3,174	32,137
3	225
302,346	1,882,612
383,024	2,267,534
20,842	109,337
878,031	1,665,639
825,529	2,529,805
The next question was this:
What was the total cost of packaging and marking depot stocks for all branches of the armed services, during the period April 1, 1951 to December 31, 1952?
my opening remarks, the Department of That is the same period, it will be noted. Defence Production is making these huge The answer given was $1,945,000. Then

further items follow,	and I	presume in the	case of footwear the	quantities given are	inpairs:	Quantity	Cost	Leather footwear ..	1,340,873	$15,263,508	Rubber footwear ..	220,025	388,499	Other varieties of	footwear 	777,531	3,154,177	2,338,479	$18,806,184	Face cloths 	29,018	$ 3,789	Towels 	1,400,412	1,136,420	Tablecloths	(plus 6,656 yds.)	40,634	147,774	Mattress covers ...	268,002	1,005,271	Nylon parkas	41,950'	1,459,012	Nylon wind pants .	34,978	476,519	Combat smocks ....	nil	nil	Haversacks 	237,620	866,432	Battledress blouses	533,796	8,451,066	Battledress trousers	600,792	8,992,424	Summer trousers ..	1,360,592	7,910,600	Summer jackets ...	667,866	8,290,605	Socks1 	4,673,648	5,055,351	Handkerchiefs 	1,752,696	258,807	Winter underwear..	1,554,672	5,533,865	Summer underwear	2,817,633	1,686,727	The final question	was:	How many pairs of half-hose	were supplied	tothe reserve army in	Canada,	from the period	
January 1, 1952 to December 31, 1952?
The answer given was 48,116 pairs of socks, general service.
The minister asked for an interpretation. I come back to an interesting comment which he made in his remarks ten or fifteen minutes ago, when he referred to stockpiling as being normally an expensive operation. He drew attention to the danger of the deterioration of stocks. I am not going to attempt to review all the items to which I have referred, but it is evident that there are going to be plenty of safety razors, there are going to be plenty of rugs and carpets-


Clarence Decatur Howe: Here I object. My hon. friend had the opportunity when the users were being questioned in the house, but he prefers to wait until this department is before the committee. This department knows nothing about quantities other than as stated in a requisition to buy them. I certainly object to this line of comment.	If we are to
review the requirements of the armed services on my estimates then I claim that the hon. member is completely out of order.


Donald Methuen Fleming: In my submission nothing
could be more completely in order, in discussing the operations of this department, as we are entitled to do on this first item, than to draw attention to the activities of the department and that more public money has been expended than can possibly be justified. I submit to you that there is no place more appropriate for comment of this kind than
Supply-Defence Production the first item of the estimates of the Department of Defence Production, the department which made these purchases.


William Alfred Robinson: As I indicated a
few minutes ago, I did not feel that I could rule out of order the returns which the hon. member for Eglinton was putting on the record. At the same time I now think that the point of order raised by the Minister of Defence Production is well taken, in that the discussion of quantities of goods ordered by his department and questioning along those lines would be more properly directed to the Department of National Defence, which after all makes the requisitions. The hon. member who has the floor would be perfectly in order under this item to discuss the cost of these various items, but I do not believe he would be in order to discuss the quantities. As I have indicated, that inquiry should have been directed to the Department o National Defence which in my opinion is the proper department to answer that type of question.


Howard Charles Green: May I point out that in his
opening remarks the minister dealt with the question of stockpiling as against having productive capacity made ready in Canada. That of course is a question which goes to the root of the whole business with which this department deals. For the minister to get up and say the hon. member for Eglinton cannot refer to quantities, except in so far as the cost of the goods is concerned, means that the hon. member is quite unable to adequately deal with the policy of stockpiling or having productive capacity.
I do suggest, Mr. Chairman, that the hon. member is in order in approaching this question from that angle. If we are to be told that we cannot discuss that broad policy at all, then there can be no proper discussion of the estimates of this department. If we can only see whether the shoe laces were bought at the right price, what is the use of discussing the estimates of the department?


Donald Methuen Fleming: May I make an observation?


Clarence Decatur Howe: No. Just let me say a word.


Donald Methuen Fleming: Mr. Chairman, I was not asking the minister's permission. I do not think we have reached the stage yet where any member speaks by permission of the minister.


William Alfred Robinson: Order.


Donald Methuen Fleming: I did not ask for the
minister's permission.


Clarence Decatur Howe: He is getting hysterical.
4880	HOUSE OF COMMONS
Supply-Defence Production
The Depuly Chairman: I understand that power of the Minister of Defence Production the minister is rising on a point of order, to answer.


Clarence Decatur Howe: I am addressing myself to the point of order raised by the hon. member.


William Alfred Robinson: The Minister of Defence Production has the floor.


Clarence Decatur Howe: Mr. Chairman, I can say that if there is any stockpiling of the items read by my hon. friend the Department of Defence Production has no part of that stockpiling operation, and not one dollar of the estimates of the Department of Defence Production are involved in the stockpiling of those items.


Donald Methuen Fleming: I take issue with that statement on the point of order. Here we are asked for $6,710,933 for departmental administration. The amount for departmental administration substantially goes to provide for people who make the purchases of these articles-for another department, it is true, but the Department of Defence Production makes the purchases. I submit that it is as clear as can be that we are entitled on this estimate to go into questions relating to the purchases which this department has made. We are called upon to provide funds to pay for purchasing agents and purchasing officials of this department. Are we not to be permitted to review the purchases that are being made? I submit that would be a very serious contraction of the rights of this committee to inquire into the purchases for which we are being asked to provide moneys in order that they may be made. I submit that we are entitled to consider costs and quantities and expenditures that are to be made through this department.


William Alfred Robinson: The ruling which I made a few moments ago does not in any way prohibit the hon. member from discussing costs, as has just been mentioned. Hon. members will realize that in a matter of this kind it is very hard to draw a line of demarcation between what is strictly in order and what is not in order, but hon. members will realize that it would be impossible for the Minister of Defence Production to answer questions as to quantities. Hon. members will realize that the quantities are requisitioned by the Department of National Defence. If questions along these lines were in the minds of hon. members they should have been asked of the Department of National Defence.
I have no desire whatsoever to curtail discussion. The hon. member is permitted to discuss general administration of the department to his heart's content, but specific questions as to quantities, as I think hon. members will realize, are not within the


Donald Methuen Fleming: May I point out that these questions, the answers to which I have been reading, were put on the order paper by the hon. member for Wentworth. He did not attempt to designate the particular department that was to answer, and they were simply asked of the government. They cover quantities purchased and amounts paid for those quantities. The answers came to the house not from the Department of National Defence but in every case from the Department of Defence Production.


Clarence Decatur Howe: They came from the government.


Donald Methuen Fleming: I must add to the minister's insufficient information that in every case the returns bear the notation "The attached information has been received by the Secretary of State for Canada from the Department of Defence Production".


Clarence Decatur Howe: They are delivered here by
the Secretary of State on behalf of the government.


Donald Methuen Fleming: In the face of the fact that
information comes to the house in the form of these returns from the Department of Defence Production, it is competent for any hon. member to raise any question relating to these returns on the estimates of the Department of Defence Production.


Clarence Decatur Howe: Again on a point of order-


Donald Methuen Fleming: I am asking for information-


Clarence Decatur Howe: -Mr. Chairman-


Donald Methuen Fleming: I have the floor. I am speaking to the point of order.


William Alfred Robinson: The ruling on
the point of order has already been given.


Clarence Decatur Howe: You are just making a
statement.


William Alfred Robinson: I think the hon. member for Eglinton should proceed with his discussion of item 79.


Edmund Davie Fulton: Mr. Chairman, I have a point to which I would like to draw your attention. I would ask, if Your Honour would permit-


William Alfred Robinson: If the hon. member is attempting to speak to the point of order, may I say that the ruling has been made.


Edmund Davie Fulton: The last thing I want to do at this stage is appeal your ruling but there are certain considerations, if you will just permit me to make this point, which were not present in your mind when you made your ruling. I would ask to be allowed very briefly to draw them to your attention.

What will be the effect of this ruling? I am sure you will agree with me, if you permit me to state my point, that it will have the effect of making it impossible to discuss these estimates intelligently. You will recall that any number of questions were asked, for instance those dealing with the production of the CF-100 aircraft, the amount spent on the production program and so on. The answers were eventually given by the Minister of Defence Production and not by the Minister of National Defence. Therefore all subsequent questions arising out of those answers, at least as far as I am concerned, have been deferred until the estimates of this department came up, because the answers to certain other questions and orders for returns were brought down in the name of the Department of Defence Production.
I take the liberty of suggesting, and I do not apologize for it, that you should reconsider your ruling in the light of the fact that if your ruling is complied with it is going to be impossible to discuss information and pursue questioning on information which has already been provided by this department and by the minister in the house on previous occasions in answer to questions the discussion of which we have had to defer until his estimates were reached. I do ask that you reconsider your ruling in the light of that argument.


Clarence Decatur Howe: The only question about the
CF-100 that is not in the hands of this department is the number ordered. The number ordered has nothing to do with the Department of Defence Production. How the aircraft were produced and what it cost are matters for the Department of Defence Production. A question about whether we paid too much for any item that has been referred to by the hon. member for Eglinton is perfectly in order, but the number of items ordered is entirely outside the jurisdiction of this department. We have nothing to do with that feature and, departmentally, we accept no responsibility for it.
The hon. member says that the return was brought in by the Department of Defence Production. May I point out that the return was delivered to this house by the Secretary of State on behalf of the government. We had the information available but it was put in on behalf of the government by the Secretary of State and not by my ministry.


James MacKerras Macdonnell: Splitting
hairs.


Edmund Davie Fulton: I would ask the chairman to reconsider.


William Alfred Robinson: I think perhaps hon. members are unduly apprehensive as to
Supply-Defence Production the ruling which I previously made. If I did not express myself clearly, I am sorry. My ruling is to this effect. The answers to questions such as the reason quantities of such and such a product were ordered, are not within the knowledge of the Minister of Defence Production. His department, as has been pointed out, is a purchasing agency. It purchases the quantities which it is required to do. Therefore the ruling I have made merely points out to the members of the house that the minister is not in a position to answer questions, nor are we on this item, in my opinion, in order when we discuss questions relating to quantities.


Donald Methuen Fleming: Mr. Chairman, returns such as the one I hold in my hand, which come to the house as a result of questions being passed as orders for returns, according to the practice of the house are tabled by the Secretary of State. He derives his information from certain departments. In every instance this information came from the Department of Defence Production.
Now, I am not going to ask the Minister of Defence Production any questions about quantities. I am not proposing to do that at all. I accept these returns containing information which came from his department as being correct. I have no occasion to ask for any further information about quantities. I simply question, Mr. Chairman, whether when you come to the administration item for a department like this, the public of Canada should be called upon to bear the expense that is involved in this item to provide big staffs to make purchases in quantities like these, which I say cannot be justified. The quantities purchased are equivalent to 23 pairs of shoes per man in the Canadian armed forces in 21 months; 46 pairs of socks per man for 21 months; 17 handkerchiefs and 15 sets of winter underwear and 28 sets of summer underwear.
It is for purchases like these that we are being asked to provide funds for this department, so it may have at its disposal funds to carry on purchasing activities on such a scale. This is especially true in the face of the statement made by the Minister of Defence Production a half hour ago, drawing attention to the dangers and the expense of stockpiling. I think the minister has given his own condemnation of the policy reflected in this information that comes from his own department.
Having asked those questions as to what is being purchased, and having turned to that source of information for this partial answer, I come now to the question of where the purchases are made. I think it is a

Supply-Defence Production sound policy for this department, in making the huge purchases that it is making, that it should in the first place purchase in Canada where possible. In the second place it should purchase in the United Kingdom, being given value for our money, in order that we may assist the people of the United Kingdom in the face of their dollar shortage. This would enable Britain to buy more of our goods, because the curtailment of British purchases in this country, particularly of our agricultural surpluses, is undoubtedly due to the shortage of dollars. Here is a very good place for us to help provide them with the dollars, while helping ourselves in the matter of defence purchases and obtaining value for our money.
I think that, in the third place, purchases may then be made in the United States if we cannot purchase, first in Canada or second in the United Kingdom, goods to equal or almost equal advantage.
Now I turn to the report of the department, Mr. Chairman, which has a good deal to say about quantities as well as expenditures. I turn to the tables at the back of the report. At page 54 one sees that Canadian defence orders placed in the United States during the period April 1, 1951 to December 31, 1952, amounted to $387 million. At page 55 of the report one reads that Canadian defence orders placed in the United Kingdom during the same period totalled $91,333,000.1 question, Mr. Chairman, whether the department is making purchases in the United Kingdom, in the face of those figures, as extensively as it might well do.
One could turn also, Mr. Chairman, to the comments in the body of the report itself concerning machine tools at page 25. One reads the following:
During 1952, some 1,900 machine tools valued at about $12'3 million were delivered. During the same period, new orders were placed for 1203 new machines, valued at approximately $6-3 million. Of such orders, about 52 per cent, by dollar value, was placed in the United States, about 23 per cent in Canada, 9 per cent in Germany, 6 per cent in the United Kingdom, 6 per cent in Switzerland and 3 per cent in France. Some machine tools also came from Sweden, Denmark and Italy.
Mr. Chairman, that is the first comment that I have to make on purchases abroad. I turn now to the placing of orders within Canada by this department. This is a subject of high importance, because here the government was offered a great opportunity to use the placing of defence orders-I do not say entirely, but nevertheless to a substantial degree-to assist in developing the economy of this country. Orders should not have been placed to assist in the concentration of
LMr. Fleming.!
industry, but to assist in the over-all development of the total economy of Canada. One would have thought the government would thereby have been making a sound contribution to the future by using these heavy expenditures that the people of Canada are making in order to help develop the economy, not simply of the great central provinces where industrial development is highly advanced, but also that of other parts of Canada where lack of secondary industries has been an economic weakness whose effects have been seriously felt from time to time.
Would you call it six o'clock now, Mr. Chairman?
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Donald Methuen Fleming: Mr. Chairman, prior to the dinner recess I had been reviewing certain sessional papers containing information supplied by the Department of Defence Production. I have been asked for certain information with regard to them, which I should like to place on the record now.
The first of these returns, which was the last one I mentioned, dealing simply with the pairs of half-hose, was tabled in the house on March 18. Of the others, the next three sheets were tabled on April 20; the next four on April 23; the next four on April 24; the next two on May 1, and the next four on May 5. Therefore, with the exception of this one return-the one relating to the 48,116 pairs of half-hose-all these returns were tabled in the house on or after April 20. The questions of the hon. member for Wentworth, which were made an order for return and which gave rise to this return, appeared on the records of the house for the first time on January 23.
May I remind you, Mr. Chairman, that the estimates of the Department of National Defence were reviewed in this house on April 14, 15, 16 and 17; so that with the exception of the one return concerning the half-hose, these returns, although first asked for on January 23, were tabled in the house after the conclusion of the debate on the estimates of the Department of National Defence in this committee of the whole.
Mr. Chairman, before the dinner recess I had also touched on the question of where these defence purchases were being made, and I drew attention to the relatively small purchases being made in the United Kingdom as compared with the purchases made in the United States, a fact which, in my submission,

should be taken into account against the background of our trading relations with these two countries as well as other matters more directly connected with the problem of rearmament. We have an unfavourable balance of trade with the United States, and this unfavourable balance is and has been a continuing problem; while on the other hand we have an extremely favourable balance of trade with the United Kingdom which, because of a shortage of dollars, has curtailed substantially its purchases of Canadian agricultural products. One would therefore think it to be perfectly clear that it is to the advantage of Canada to place our defence orders in the United Kingdom market, wherever possible, rather than in the United States market.
Just at the time of the dinner recess, Mr. Chairman, I had come to the matter of purchases within Canada. I said that, in my submission, these huge purchases through this department should be made in the first instance, where possible, in Canada; second, in the United Kingdom; and third, elsewhere as, for example, the United States.
What of these purchases within Canada? Earlier in my remarks I mentioned that appendix F on page 54 of the report of the Department of Defence Production for the calendar year 1952 shows that for the 21 months from April 1, 1951, to December 31, 1952, the department had placed orders in Canada to an aggregate amount of $2,229,838,000. At the adjournment I was developing the argument that this great volume of defence expenditure, the burden of which weighs so heavily on the shoulders of the Canadian taxpayer today, offered the government a challenging opportunity at least to use it with a view to stabilizing and balancing the development of the Canadian economy.
Apart from great emergent periods such as war and national emergencies of that order, there is a limit to what governments, in a free economy can actually do by direct investment to assist in the development of industry. But in this period we are speaking of an unexampled opportunity was given to the government, in a time other than a time of war, to use this great volume of expenditure with a view to assisting in the development of industry on a more widely dispersed basis than exists today.
In coming to this matter, let me say that I 'live in the central part of Canada. In Ontario and Quebec we have the greatest concentration of industrial development in Canada. We have seen the economy of other parts of this country suffering because of the lack of secondary industries. We have seen it in the 6'8108-309
Supply-Defence Production maritimes and in the west. Here the government was given an opportunity, such as has not been given to any other government in Canadian history, to use this spending program with a view to assisting in the development of a balanced economy throughout Canada.
What do we find to be the facts, Mr. Chairman? We do not find any information on this subject in the annual report. We know, for instance, from the annual report that capital assistance contracts-as appears at page 55-amounted to $175,486,000 in this 21-month period from April 1, 1951 to December 31, 1952. We have not the information as to where those contracts were placed, that is as to their geographical location, in the calendar year 1952. But by reference to the public accounts for the fiscal year ended March 31, 1952, we see where those contracts were placed in the period ended March 31, 1952. At pages DD-4 and DD-5 of the public accounts we find that this capital assistance program, amounting to $100 million in all, was distributed among various contractors, and the location of the contractors is given in every case. I do not know whether these contractors have any plants elsewhere in Canada than at the addresses given here, but certainly there is nothing in the public accounts or in the annual report of the department to indicate it. I think we may fairly draw the conclusion that these contracts for capital assistance went to assist these companies at the addresses given in the public accounts. And what do we find on these two pages? We find 51 contractors named who received the benefit of capital assistance in the fiscal year ended March 31, 1952. Where do the addresses in the public accounts indicate their location? They show, Mr. Chairman, that of the 51, one was located in Winnipeg and the other 50 in Ontario and Quebec.


Mr. Boisvert:: How many in Quebec?


Donald Methuen Fleming: My hon. friend can look it up and make the count as between Ontario and Quebec. I have not attempted to break it down because I was dealing with the question of concentration in central Canada, where the existing concentration is.


Clarence Decatur Howe: Will my hon. friend let me make an interjection?


Donald Methuen Fleming: Yes.


Clarence Decatur Howe: Your argument shows how erroneous it is to take the head office address of the company as the place of the investment. To suggest there is no capital assistance given to companies operating in Vancouver or in Halifax would be quite erroneous. For

Supply-Defence Production instance, take the Dominion Bridge Company. They had much more capital assistance provided for use in Vancouver than in Montreal. In fact I do not think they had any for the Montreal plant. I can list half a dozen firms where all the capital assistance was away from head office location.


Donald Methuen Fleming: That interjection is interesting, because I may say the Dominion Bridge Company does not appear in the list.
I thought I had made it quite clear, Mr. Chairman, that I did not purport to say, in reviewing this list, that these companies had no plants in other provinces. But I did indicate that I thought we could quite reasonably conclude that these companies received their capital assistance and used it for the development of plants at least substantially in the provinces indicated by the addresses given in the public accounts. If the minister wants to give the committee the complete information about the provinces in which this capital assistance program was actually used in the building or the equipping of plant, then I think the committee will be very interested in receiving it, and will also wonder why that interesting information was not made available in the annual report of the department.
Be that as it may, this list shows that of the contractors who received capital assistance in the fiscal year ended March 31, 1952, the addresses given in the public accounts for 50 of the 51 were in Ontario and Quebec, and one was in Winnipeg.
Then we come to the subject of investment in plant and equipment. Here again, Mr. Chairman, we turn to the public accounts and on pages DD-20 and DD-21 we find the list of companies in which the Department of Defence Production presumably has made investment by way of assistance. This list again gives the address of the company, presumably its head office. I am not undertaking to say, any more than I did with respect to the other list, that none of this money was used in the building or equipping of plant in other provinces. But, Mr. Chairman, I think the committee will be interested to know what the department has to say in that regard. If the correct deduction is not that the assistance received from the Department of Defence Production was very largely and substantially expended in the province in which the head office of the company was located, then let the minister give the information.
This list, Mr. Chairman, which also does not contain the name of the Dominion Bridge Company although it does give the name of
[Mr. Howe.)
the Dominion Engineering Works Limited, which may be a subsidiary of the Dominion Bridge Company, gives a list of 66 contractors, and the addresses given for those contractors are as follows: In the Vancouver area, 3; in Charlottetown, 1; in Saint John, New Brunswick, 1; in Trenton, Nova Scotia, 1; in Ontario and Quebec, 60.


Clarence Decatur Howe: I am sure my hon. friend does not wish to mislead anyone. For example, all the capital assistance items relating to the production of works for Canadair are placed with Canadair Limited. Some of it has been invested physically in the maritime provinces; for instance, a very large investment has been made by Canadair in Amherst, Nova Scotia; others have been made in Halifax, Nova Scotia. Similarly, A. V. Roe Company capital assistance extends as far west as Winnipeg. I do not mind the hon. member giving the source, but I do object to his drawing deductions. I am sure he does not want to mislead anyone, but I have a statement here from the provincial ministers of trade and industry which states that they have no quarrel whatever with the distribution of these orders.


Donald Methuen Fleming: So far as I am concerned, Mr. Chairman, I have a quarrel with this distribution, and I ask the minister-


Clarence Decatur Howe: You do not understand it.


Donald Methuen Fleming: -to give the committee complete information on this matter. I can appreciate that in the distribution of subcontracts the department may not have all the information as to where the benefit of subcontracts went, and I am prepared to make due allowance for that. But it surprises me, in reading the report of the department, which is a very commendable document in many respects-


Clarence Decatur Howe: Not a political document, though.


Donald Methuen Fleming: No, it is not a political document; but it has omitted something that is of very great interest to people other than those whose interests are political; and I think it is a matter that directly and very greatly concerns all sections of this country.
If the minister does not like the general inference which I am inviting the committee to draw-I am not tying it up directly to this conclusion or exclusively to these addresses- or if there is some further explanation of where the benefits of the placing of these contracts went with respect to the provinces and areas which on the face of these pages of the public accounts appear to have been ignored or overlooked, then I think the minister ought to give it to the committee.

There is another matter that arises in relation to this Department of Defence Production. The statute establishing this department, the Defence Production Act, chapter 4 of the statutes of 1951, makes provision in section 16 for the establishment of an account in the consolidated revenue fund to be known as the defence production revolving fund. Subsection 4 provides that expenditures charged to the defence production revolving fund shall not at any time exceed the receipts shown therein by more than $100 million or such further amount as parliament may authorize from time to time. On page 59 of the report of this department mention is made of the revolving fund. This revolving fund, as I take it, has been used to finance purchases of materials and commodities as well as in other ways.
In his statement this afternoon the minister reviewed some of the operations of this department in the field of direct purchases of materials in 1951 particularly, when there was keen competition for these materials. I should like to ask the minister-and I hope when he speaks further on these estimates he will give the committee a very full statement -the terms upon which these raw materials have been purchased and resold, because these commodities have been purchased, and then in part resold; but the public accounts indicate still a substantial net balance of purchases of these commodities as well as of goods directly related to the stream of armament production. We ask the minister for a very full report of purchases of that kind. Were they purchased by tender? That is a matter of some importance in relation to the safeguarding of the public treasury.
In that respect I should also remind the house that the same statute, by section 17, clothes the minister with power to make purchases in certain cases without tender. Section 17 of the act makes provision whereby the minister "may, on behalf of His Majesty, enter into contracts'' with respect to the purchase of goods of the kinds described in sections 14 and 15 of the act. And paragraph (e) of section 17 provides-
A contract may be entered into by the minister without the approval of the governor in council if,
(i)	in the opinion of the minister, the contract must be entered into immediately in the interests of defence,
(ii)	the estimated expenditure, loan or guarantee does not exceed twenty-five thousand dollars, or
(iii)	competitive tenders have been obtained and the lowest tender, involving an estimated expenditure not exceeding fifty thousand dollars, is accepted.
It is clear that under those provisions if a contract is under $25,000 the minister, without any further authority from treasury board or from the governor in council, may make 68108-309i
Supply-Defence Production purchases without calling for tenders. In the case of contracts for amounts between $25,000 and $50,000, if he purchases without tender then he must have the approval of the governor in council.
Let me now refer to the annual report of the department where, at page 11, we will see that there has been something of a change in the system. That paragraph reads as follows:
The system under which contracts are awarded was altered during the year.
That is the calendar year 1952.
The minister's power to award contracts not exceeding $25,000, or $50,000 if competitive tenders have been obtained and the lowest tender accepted, remains unchanged. At the beginning of the year, contracts for larger amounts were subject to the approval of the governor in council but this was changed by order in council P.C. 3209 of May 30, 1952, and now, generally speaking, all contracts are approved by the treasury board where they are for sums larger than the minister can authorize.
Therefore we are left in this position, the minister in amounts up to $25,000 does not need to call for tenders and does not need any further approval, and as to amounts between $25,000 and $50,000 he requires approval, not by the governor in council but by treasury board, only if he purchases without tender.
Now, I think the time is past when power as broad as that in connection with purchases without tender should be left in the hands of a minister. We have seen in the defence expenditure committee what can happen when contracts are let without tender. There is no more important safeguard for the public treasury of Canada than that, save in the most insignificant amounts, purchases on public accounts should be made by tender, and that the invitation to submit tenders should be made widely known. Therefore I submit that the time has come when there should be some effective change made in the minister's powers in that respect.
And now in conclusion I come to one matter on which I wish there were time for extended debate, because the matter in question is of cardinal importance both to the public treasury and to the people of Canada. The report of the committee on defence expenditure came to this house only yesterday, within a matter of what may be only three or four days before prorogation. Part of that report, Mr. Chairman, relates to matters concerned with the Currie report, on which the committee was directed to conduct a study. Much of the time in committee, however, was devoted to a study of certain construction contracts carried out on behalf of the Department of National Defence by the Department of Defence Production and its

Supply-Defence Production creature, the crown corporation known as Defence Construction Limited.
In the report tabled in the house yesterday by the hon. member for Spadina, who was chairman of the committee, I have to say- and I am sorry to have to say it-that so far as it purports to review the operations that were disclosed in evidence before us, in terms such as these, in the third from last paragraph in the report-
The construction program in the face of a number of difficulties has been well conceived and carefully supervised and the public has received good value for its money-
-it just does not square with the facts. The report in that respect is a whitewash.
The Progressive Conservative members on the committee brought in an extended amendment to this report. As hon. members know, the rules of the house do not permit the filing of a minority report by a committee. The report a committee makes, according to our rules, can be only one report. The one tabled yesterday is, technically, the report of the committee. In actuality it is the report of the Liberal majority on the committee. And so far as it purports to sum up the evidence that was submitted to the committee in any sentence such as the one I have just quoted,
I say it is whitewash.
I wish to place beside that report this paragraph introduced by the Progressive Conservative members on that committee which deals with the activities of the Department of Defence Production and its creature, Defence Construction Limited, as contained in our amendment which was voted down in that committee yesterday morning, at its final session, by a government majority. I wish to read the five final paragraphs of the Progressive Conservative amendment. Preceding paragraphs of the amendment are, I say, directly relevant to questions before the house; but by reason of limitation of time I shall content myself with reading the paragraphs beginning with No. 7. They are as follows:
7.	From the outset your committee was hampered by a ruling which prevented the reception of evidence as to anything which occurred prior to March 31st, 1950, regardless of whether it might throw light on events subsequent to that date. In particular, your committee was thereby denied access to any reports made prior to that date concerning irregularities in relation to defence expenditures.
It may be recalled that on March 16 the Prime Minister was compelled to admit the existence in government files of the MacNab report, made in 1949, which had been denied to your committee. This report, calling attention to the existence of conditions exactly similar to those found by Mr. Currie three years later, had been ignored by the government. The existence of this report establishes conclusively that the administrative breakdown preceded the outbreak of hostilities in Korea


in June, 1959, and that the government and the Department of National Defence have for a long period failed in the discharge of their responsibilities to safeguard public funds. Your committee therefore recommends that if such a committee should be appointed at any future session, it should be given powers of adequate breadth to carry on a comprehensive investigation.
8.	Your committee conducted a limited inquiry into construction work carried on by the Department of National Defence, and later on its behalf by the Department of Defence Production and its agent, Defence Construction Limited. Your committee was again impressed by the free and easy way in which large amounts of public money were spent. The many contracts awarded without tender, the many costly extras, the many contracts on a cost-plus basis, the many changes in plans and the many delays in completion have not been explained to the satisfaction of this committee. At Penhold, for instance, witnesses for the government departments sought to justify an expenditure of $25,000 on a speed-up, and equally to justify the abandonment of that speed-up program soon thereafter. Your committee has not been able to do more than scratch the surface of this subject in the limited time and with the limited opportunities at its disposal, and therefore recommends to the house that consideration should be given to undertaking a complete and impartial investigation into the construction program, including such matters as the construction of the R.C.A.F. station at Penhold, and including the awarding of the contracts, expenditures, delays in completion, and adequacy of the construction work performed, with power to retain such assistance from competent and independent engineers and contractors as may be considered necessary.
9.	At its meeting on April 7 the government majority on the committee defeated the following Progressive Conservative motion:
"That this committee recommend to the house that consideration should be given to retaining Mr. George S. Currie to undertake a complete investigation into the construction of the R.C.A.F. station at Penhold, including the awarding of contracts, the expenditures, the delays in completion and the adequacy of the construction work performed, with power to retain such assistance from competent engineers and contractors as he may consider necessary."
10.	Apart from hearing Mr. Currie at its two initial meetings, your committee was limited entirely to hearing evidence from witnesses from government departments. Your committee feels that if an adequate investigation is desired-and your committee considers such to be urgently required in the public interest-there must be searching, on the spot scrutiny by competent independent experts operating under competent independent direction.
11.	Your committee regrets that it has had no opportunity to inquire into expenditures on such vitally important matters as aircraft production, armaments, tanks, ammunition, guns, small arms, naval vessels, training costs, recruiting costs, military travelling costs, equipment and other installations. Having regard to conditions already disclosed, your committee considers imperative a comprehensive inquiry into such expenditures and into the vital question of the efficiency of our arms for the defence of Canada and the discharge of our international commitments.
That part of the report and the amendment of the Progressive Conservative members on the committee relates directly to the matters to which I have been referring, the activities

of this Department of Defence Production and its creature or agent, Defence Construction Limited. That amendment in all its parts was voted down by the Liberal majority on that committee.


Clarence Decatur Howe: And by the other opposition groups.


Donald Methuen Fleming: No, I think the minister had better get his facts straight. The hon. member for Melfort, who was one of the C.C.F. members on that committee, did not vote as the minister indicates, if I recall correctly. However, I shall let him speak for himself. What difference could two C.C.F. and one Social Credit vote have made in a committee made up of 17 Liberals out of a total membership of 26?
The fact of the matter is that the committee in this report has attempted to whitewash the government in this matter. The facts will not be hidden. It may be that a committee with a government majority of 17 as against 9 opposition members can carry a whitewashing report and defeat a Progressive Conservative amendment which stated the facts, but the committee in question is not the final court in this matter. It may be that this house with its overwhelming government majority will again seek to whitewash the government's record in this regard of profligate expenditure, of waste, of extravagance and of shocking inefficiency, but even that will not end this matter. This matter will be carried, whenever the government calls the time, to the people as the court of final appeal for an effective decision.


Percy Ellis Wright: Mr. Chairman, I should like to deal with this matter, but perhaps not at as great length as the hon. member for Eglin-ton. I think this is probably the most important department in the government today; at least it is spending the largest sums of money. Although its estimates this year are only $73,364,000 as compared with $123,452,000 last year, as the minister has stated, the department has spent approximately $3 billion of the Canadian taxpayers' money during the last two years and has purchased tremendous reserves of supplies and equipment for our armed forces.
When the hon. member for Eglinton was placing certain figures on the record with regard to the quantities of goods purchased and the prices paid, the minister indicated that we should be allowed only to discuss the prices of those goods, as that was the only thing in which he was interested. It would be nice if we could discuss intelligently the prices which the minister and his department paid for these goods, but I do not think we can when there is no indication as to the
Supply-Defence Production quality of the goods. That is a most vital matter.
The same situation obtained in the defence expenditures committee. We dealt with one item only, construction, and with only one part of the construction program, contracts. We were not able to go into the field and inspect the results of these contracts. One of the first things I sought when the committee met was that we should have some independent experts attached to it who could give us information as to whether the contracts which we were examining had actually been carried out in the field, whether the proper materials had been used and so on. A committee sitting here in Ottawa just could not perform that duty. Unless the committee had expert advice then I say that its work was not as efficient as it should be.
I am not saying that it was wasted, because we did get a lot of information from the departmental officials. We were all a lot wiser as to how contracts are let and the method of supervision used and so on, but the committee did not examine one thing in the field. We did not determine in one single case whether these contracts were actually being carried out efficiently and effectively as far as the construction was concerned.
I want to say that there was plenty of evidence that there were cases in which they might not have been carried out effectively and efficiently. I shall refer to only one or two small instances which the average person can grasp. At Penhold a valve was costing $44.85 used on a well. The particulars of this will be found at page 527 of the evidence. The well was drilled for 300 feet at a cost of $13,258. A small pumphouse 8x8 feet on a concrete foundation was built at a cost of $1,300.


Clarence Decatur Howe: I did my best to get the committee to go to Penhold. I offered to provide a government plane and pay for the entertainment out of my own pocket. We had heard enough talk about Penhold, so I thought the committee might have enough curiosity to want to see it. But I got no response. It seems to me that the committee ought to have done me the courtesy of going and looking at this so-called monstrosity they were talking so much about.


Percy Ellis Wright: I certainly would have enjoyed looking at it, but unless we had some expert advice I do not think the trip would have been worth it. Unless we had a construction engineer, an accountant and people experienced in construction work I doubt if the average member of that committee would have been competent to judge whether a contract had been carried out.
4888	HOUSE OF
Supply-Defence Production
I have some knowledge in regard to contracting, probably as much as any other member on that committee, but I do not consider myself competent to make a detailed investigation. I think when that committee was set up one of the first things the government should have done was to provide competent technical advice so they could make a real examination of the various items.


Clarence Decatur Howe: We had before the committee the most competent men in the government service.


Percy Ellis Wright: Exactly; in the government service. Was it likely that men in the government service were going to condemn the things that they had passed already? That was most unlikely. I would not expect them to do it. As the hon. member for Eglinton has suggested, the majority report of the committee states this:
The construction program in the face of a number of difficulties has been well conceived' and carefully supervised and the public has received good value for its money.
But read the next paragraph:
The deliberations of your committee have proved of constructive assistance to the Departments of National Defence and Defence Production in the administration of a large and complicated defence program and have served as a constant reminder to those responsible of the degree to which economy must be achieved in the making of public expenditures.
Well, in one paragraph they are saying that everything is lovely, and in the next they are saying the mere fact that the committee was there was a check on the expenditure of money. I think probably it was a check. I think it would have been a much better check if we had been able to go out in the field and examine some of these contracts. Take Churchill, for instance. At Churchill they built a ten-room school and it cost $583,000. They built a similar ten-room school down at Summerside for something just a little over $199,000.


Clarence Decatur Howe: A little different foundation in
permafrost.


Percy Ellis Wright: I may not know tl e work in ihe north as well as the minister, nut I have lived in northern Saskatchewan for the last 35 years and I have been at Churchill several times.


Clarence Decatur Howe: Did you ever do any work in permafrost?


Percy Ellis Wright: There is no good telling me it costs three times as much to build a building at Churchill as it does at say The Pas in Manitoba.


Clarence Decatur Howe: That is what it costs.


Percy Ellis Wright: The evidence was that a lot of the work was overtime work and they had to pay time and a half for that overtime. If materials had cost half as much again, and if you had given the men time and a half for all their time you still could not get to $583,000 for a ten-room school.


Clarence Decatur Howe: There is a little difference in the weather conditions.


Percy Ellis Wright: The same thing applies to a chapel which they built up there, and which cost $165,000. The same size chapel was built out in British Columbia for about $54,000.


Clarence Decatur Howe: You could build it in Florida for less than that.


Percy Ellis Wright: Three times as much. As I say, I can quite picture it costing half as much again with the differences in weather at certain times. I think it might even cost double; but I cannot picture it costing three times as much to construct a building there as it does in some other parts of Canada. I doubt very much whether it cost the minister three times as much to construct the elevator at Churchill as it cost him to construct the elevators at Port Arthur and Fort William. I do not know the figures, but I would not be afraid to lay a little bet with the minister that it did not cost three times as much to construct the elevator at Churchill as it did to construct elevators of equal capacity in other parts of Canada. I do not think it should have cost what it did cost to carry out the construction work done at Churchill. It was all done on a cost-plus basis.


Donald Methuen Fleming: There is the secret.


Percy Ellis Wright: That is the difference. Other schools were built under contract, and personally I think we failed to do a job in that committee. The committee was only able, as I said before, to deal with part of one item. We laid out a program when we started. We were going to look into armaments, tanks, ammunition, guns, small arms; naval vessels; operation Pine Tree; training costs of the service; recruiting costs; and soft goods-some of the goods which the hon. member for Eglinton was placing on the record this afternoon. The seventh item was military travelling costs. We spent too much time-several meetings-discussing the Currie report, something that had already been dealt with in the house and something on which I thought we were just wasting our time when discussing it in the committee.
I am not by any means satisfied with the results of the work of that committee; and

I do not believe the people of Canada will be satisfied after reading the report of the committee and the evidence that was placed before it, that the best possible job was done by the committee in seeing that the dollars we are spending on defence in this country are well spent. As I said before, the minister has indicated that we have purchased some $3 billion of goods. One of the things that should be done, and I moved this as a motion in the committee, is to see that the goods we are purchasing and stockpiling are actually being kept in proper condition, and that the goods we have bought and paid for are there.
In connection with the Currie report we had evidence that in some cases stocktaking had not taken place since the war, and in other cases not since 1947 and 1948. 1 moved in the committee:
Your committee recommends that parliament should ask the Auditor General to establish three teams of auditors, one for each branch of the service, navy, army and air force, to make such check audits of military establishments as are necessary to determine that proper stocktaking is being carried out and that proper records are being kept, also to determine the physical conditions of all stores and whether proper storage and maintenance methods are being followed, and that the Auditor General report the findings of these teams to parliament at regular intervals of not less than six months.
I think that is vitally important. What is happening to these goods we are stockpiling today? They are being placed in the various departments of national defence, the navy, army and air force, and each of those departments is drawing out of those stocks whatever goods they need for their day to day requirements. The only people checking those goods are those in the departments themselves. The chief auditors of the department report to the minister and, it is true, their reports are sent to the Auditor General. However, their first report is to the minister and then the report goes to the Auditor General.
I think it is vitally important that the goods we are stockpiling in Canada today should be under the control of parliament so we may know they are being properly preserved and that they will be available if an emergency should arise. I do not believe we know that today with the set-up we have in the Department of National Defence. I think the minister would agree that parliament itself should have a regular check on those millions and millions of dollars worth of goods that we are piling up in this country today. I think that is one of the things that the people of Canada are going to require.


Clarence Decatur Howe: May I just say a word? The Auditor General is an officer of parliament, and it is his duty to certify that those goods are there; and I am sure he does so. I am sure he satisfies himself that the goods that he
Supply-Defence Production inventories in a particular warehouse are in that warehouse.


Donald Methuen Fleming: He just takes a spot check.


Percy Ellis Wright: It is absolutely impossible for the Auditor General to check all the things that are in store in Canada. It is true that he may occasionally spot check, but that is all.
I am suggesting that the Auditor General, who is the servant of parliament and not of government, should be instructed to make more spot checks than are made at the present time. He should report directly to parliament at least twice a year, so that parliament itself will have assurance that these tremendous amounts of equipment, goods and raw materials are being properly stored; that they are not going to be drawn on by various departments of defence without any check by the Auditor General himself. I think that was a reasonable suggestion, but your committee turned it down.
I make the suggestion to the house, and I think every member of parliament has a responsibility in this. After all, we will pile up more of these goods. We have $3 billion worth already, and by the time we have completed our stockpiles we will probably have $4 billion or $5 billion worth of airplanes, tanks and other goods which might be required for immediate service. Until that is done I do not think we, as a parliament, are carrying out our duty to the taxpayers of this country.
I could go on at great length and deal with a lot of other things that are in the report. I do not suppose you, Mr. Chairman, will allow us to discuss the Currie report, which was a part of this report. It was shown in that report that, so far as the army works services were concerned, their stockpiling left much to be desired. When we suggested that we should have an examination into the stocktaking methods of the navy and the air force, we were turned down. We were told that the only things we could discuss were the items in the Currie report, the matters with which Mr. Currie himself had dealt. I do not think that is good enough. I believe parliament should have a direct check on those goods and services which we are putting in reserve today.
I believe that the defence expenditure committee should have expert advice to check on the contracts that are being let. They should be able to go into the field and check those buildings against the contracts that were let, thus determining whether or not we are actually getting value for the moneys we are spending. If that were done I am sure the taxpayers would feel a lot happier about the whole thing. I do not think they are
4890	HOUSE OF
Supply-Defence Production very happy about it, that is if the people I meet are any criterion. Perhaps we will not be able to determine that until after next August. Nevertheless, there is a feeling that there is something to be desired with regard to some of these contracts, and with regard to the care of the materials which we are purchasing at this time.


James MacKerras Macdonnell: Unfortunately, Mr. Chairman, I am not as well equipped as the member for Melfort, and I am not competent to discuss buildings. I do not propose to do that. But everyone likes to believe he has a little reservoir of common sense, and it does not seem to me that this matter of the business of the people of Canada has been conducted with common sense. I propose, therefore, to make a few observations on it.
Our present situation, of course, is an inheritance from the war. In wartime you have to spend money with very little check on it. Those of us who actually were in the forces know of the easy way in which everything there couid be covered by a return which said "Destroyed by shellfire"; that covered everything. I think that, mutatis mutandis, the accounting was very easy at home, too.
When the new cold war came along we were asked to give, and I think rightly so, extraordinarily broad powers to the minister who had power during wartime. I am not going to take more than a second of your time, Mr. Chairman, to set out the powers that were given to the minister. He was given almost absolute power over the industry of Canada to make it lend itself to the necessities of defence. That was done with the approval of parliament, and I think we did the only thing we could.
So we slipped again into a situation where huge amounts were being spent, very much like wartime. We had the minister come and tell us what he was doing, assuring us that everything was all right. We had the Minister of National Defence, who is one of the world's great optimists, and he kept assuring us that everything was going along well. Still it was extraordinarily difficult to feel that you had any opinion at all, except that which was coming from those who were spending these huge amounts of money. The minister had done a lot of useful public work in wartime, and we were more or less in the position where we had very largely to take his word for things.
Then we all remember what happened at Petawawa a year ago. That incident blew up and the Minister of National Defence engaged the services of Mr. Currie, with the approval


of everyone. Then came the Currie report. When that came I said to myself, well now, at last we are going to have someone from the outside have a look at the whole situation. Surely we will not go along just accepting the situation blindly as in the past, and having no one from the outside look at it at all. Then I discovered to my amazement that it was proposed not to carry this investigation further. I found it very difficult to believe my ears. This course seemed to me to be directly opposed to what I call the dictates of common sense. If a manager of a large business found that a branch of one of his departments was not functioning well, he would do only one thing and that would be to extend the inquiry throughout the business.
As I say, things do not seem to work that way in politics. I am not a politician; I am just an enthusiastic amateur, and I have not full experience in these matters yet. As I say, it was very difficult for me to grasp the fact that we were going to be asked to act as we did. What we did do in parliament was to refer the report to the committee on defence expenditure, which was to examine all expenditures of public moneys for national defence and all commitments for expenditures for national defence. We were ordered by the house, first of all, to examine the Currie report, which was unnecessary because it spoke for itself. Then we went on to examine into other things. We now have the report to which the member for Eglinton has made reference.
What I want to put on the record, and what I wish I could shout into the ears of every citizen in Canada is that, of course, a committee of the House of Commons, conducted as it is now, is rather a queer affair. I do not want to use the words "solemn farce", though sometimes I thought it approached that. The committee was conducted with good temper and all the appearance of fairness to both sides. I mean we were allowed to ask questions, in fact we were really encouraged to ask questions. But all the time we suffered from one absolutely fatal disability, and that was that the evidence that wias coming to us was coming from government servants.
I want to be the last in the world to criticize faithful civil servants. But I put it to any sensible man that it is extraordinarily difficult for a man who has done a job to come along and admit there are any flaws in it. It is ten times more difficult when he is a public servant and knows that any admission on his part is not going to injure merely himself but is going to recoil on the head

of his political chief, and he cannot face the thought that anything of that sort should happen. In that committee we went through all the forms of what might be called a judicial inquiry, but in point of fact we were like a prosecutor who comes into court and is not allowed to have any witnesses of his own; he has only the witnesses for the defence. In addition to that, he is not allowed to have the expert assistance he has asked to have.
In the case of Penhold, where we made a somewhat broad inquiry, we asked-since we had been refused a general inquiry by Mr. Currie-to have him make an inquiry into this case. But no, that did not fit in, and it could not be had. It is rather interesting to go to the background of the committee and to realize how deeply ingrained these things are in the minds of the ministers. I want to read just a few words uttered by the Minister of National Defence when this thing came up. It shows the extent to which we have reached the stage where the government, copying the old French king, has said, "The state, the state is us"-I suppose it should be "we"; the state is the government and the welfare of the government is the welfare of the state.
This is what the minister said as recorded at page 1173 of Hansard for January 20, 1953:
But I hope the defence expenditure committee will be able to look into the report, have the officials of the department there and see whether the views I have already expressed on the cost of implementing some of the recommendations of the report are correct or whether the estimates of cost are as low as they can be made.
In other words, what the minister envisages, and what any other minister envisages, is that we ought to be good boys. We are to go into the committee and we are to have the representatives of the political chiefs there-with all respect to them, what else could they be-and we are to be guided by what they say. It is therefore not surprising that everything we asked for was turned down and that we reached the place where we are now.
What happened to us there, mutatis mutandis, reminds me a great deal of the kind of thing we hear about people who go to Russia. They go to Russia and they are taken around and are shown whatever is safe to be shown. They have no means of making any inquiry of their own; and if they are gullible people they come back and say that everything is all right. In a sense, that is what happened to us. We went into the committee. We had nobody of our own to whom we could appeal. The minister suggested that we should go to Penhold. It would have been an absolute waste of the minister's money if I had gone
Supply-Defence Production to Penhold. I am not an engineer, and I would have come back just as wise as when I went. In fact it would have been worse, because people would have said, "You have been out to Penhold and you must talk no more because you have seen it for yourself."
I think anything further I have to say, Mr. Chairman, can be said during the course of questions as they come along; but I want to make it clear-and this is the one point I wish to register-that we reached the stage where it was perfectly clear that things were not well. It was perfectly clear that the rather Pollyanna accounts that we got of everything were grossly exaggerated in the direction of optimism. Yet when it came to the point, the government absolutely insisted-and I say "the government" advisedly because this matter was voted on in the house-that the inquiry be not extended. In effect it was voted on before it ever went to the committee.
I say the government was absolutely unwilling to allow the inquiry to be extended. Does anyone out of the cradle, or even an intelligent child in the cradle, have any doubt as to why that was done? Would they have had any objection to having that done if they expected the result would be good? Therefore we reach the conclusion that the people of Canada, whose affairs have been found to be in an extremely bad state with respect to one part of this area of expenditure, are to be denied the obvious right which in any common-sense way of carrying on would be accorded to them, namely to have a full inquiry carried out by independent persons so they can be satisfied as to the situation. How can we reach any other conclusion?
As to this report which says that everything is all right, all I can say is that no one who has his ears open and goes about the country believes that is so. I have always discounted the criticisms that one hears; I have never accepted them lightly. But certainly since reading what Mr. Currie has had to say I have been much readier to accept them than I was before. As I said, there is no man inside or outside of the House of Commons but knows that in the matter of these huge expenditures there are irregularities, waste and inefficiency; and those are matters that should have been pursued in the only sensible way in which it can be done.
The time will come, I hope and believe, when the people of Canada will ask this question searchingly from those who have had it in their power to allow this common-sense thing to be done and have refused to do so.


George Randolph Pearkes: Mr. Chairman, other hon. members have referred to the limitations which were imposed upon the committee

Supply-Defence Production which was examining into defence expenditures, and I therefore do not intend to elaborate on those points this evening. I merely want to say that in that committee I had a feeling of frustration and disappointment because we had not been able to investigate as completely as I felt we should have been.
This evening I want just to touch briefly on one aspect of defence production. I want to ask the minister if he will explain the policy being followed with regard to the construction of naval vessels in this country, the distribution of the contracts in so far as the construction of those vessels is concerned, and to explain why there has been a lag in that production program and why it is not as far advanced as we had every right to expect it would be by this time.
As the minister knows, there are shipyards out on the west coast. From all the reports I have received those shipyards are not working to full capacity. A certain number of these new vessels have been constructed in the Vancouver, Victoria and Esquimalt yards; but the construction of those vessels has not proceeded as rapidly as was hoped. Good work has been done in the construction of those vessels, but the yards have been faced with considerable difficulties and obstacles.
Earlier this year it was brought to my attention that for all three vessels which were being constructed, all the castings were being made in eastern Canada, and that work was being held up in the Victoria yards because castings were not then available. In a letter I received from the Victoria joint shipyard council it was pointed out that the foundry of the Victoria Machinery Depot Company was one of the best in Canada and was quite capable of doing the work, but that the castings were being made in eastern Canada in spite of the fact that members of the staff of the Victoria Machinery Depot Company were being laid off.
I referred that matter to the minister's department, and the parliamentary assistant advised me that, in the interest of standardization and economy, it is generally necessary for particular components required for all vessels of the class to be prepared at one source, which would appear to be the reason these various castings were being made in eastern Canada and shipped out to the west coast when they became available in the east, though there might be delays on the vessels being constructed on the west coast.
But that does not seem to be a firm policy as far as the department is concerned. When the estimates of the Department of National Defence were under discussion I made inquiries as to why the second type of vessel, namely
TMr. Pearkes.]

the Crescent, which was being converted from a destroyer into one of the new escort vessels, had been given to a different yard than the one which had carried out the work on Algonquin, which was the pilot ship of that type. As reported at page 3991 of Hansard of April 16 the minister-I do not think it is necessary to quote his words-pointed out that it was usually the intention to spread the work around to different yards so that different personnel would be experienced in the work and would be able to carry on in a greater expansion program should it become necessary. I am paraphrasing, but I think that was the substance of his remarks.
If that is so with respect to the conversion of ships, should it not be tried in the production of component parts? When it is possible to produce component parts on the west coast, why is it necessary to have these component parts made in eastern Canada and shipped to the west?
I do want to emphasize the importance of keeping our shipyards and the government drydock at Esquimalt fully occupied. It is just as important to have trained personnel out on the west coast as in eastern Canada. I do not know whether any of the shipyards are being subsidized by the government. I presume that some form of subsidy may be given. If so, I wish the minister would explain that, and also tell me whether the delays have been due in part to the fact that civilian craft are being constructed in some of the shipyards, thereby causing a delay in the construction of naval vessels.
I understand that in some instances foreign countries have placed orders for freighters, and that penalty clauses have been included in the contracts for those freighters. If they are not completed by a certain time the shipyard will have a penalty imposed. If that is so and there are any penalty clauses -I understand there are none in so far as naval vessels are concerned-it is not unreasonable for the shipyard to take off many of its key personnel and place them on the freighter of the country which is imposing the penalty. That may be one of the causes of the delay. But as long as there are shipyards in the country which are not working to full capacity, surely it should be possible to make better progress with our naval construction program.
I put in a plea for our shipyards out on the west coast, and I hope the policy which the minister announced when he was speaking in the defence estimates debate will be applied and all yards in this country will be given full opportunity to work, whether on conversions or the construction of new vessels, or whether it is simply the production of

certain component parts which can be made in the different yards. I hope that the program will be distributed as much as possible. I do feel that it is just as important for us to proceed with our naval construction program as it is to keep on with the program for aircraft or any other branch of defence production.


Mr. McLure:: I was not in at the beginning of this debate, but since coming in I have listened to a great many serious charges being made in reference to expenditures of the Department of Defence Production, and I am wondering how the minister will explain away these charges to the satisfaction of the committee.
I listened to the charges made by the hon. member for Melfort, and some of them seemed hard to believe. However, I want to say to the minister that I have a much more serious charge to make against his department. I refer to tne negligence of the department in not providing the machine shops at Charlottetown with more work than has been given to them. I charge the minister with overlooking our machine shops. Consequently they had little work to do on the repair of naval vessels and boats of different kinds. When that job was finished the minister forgot to give them any more. The result was that some 200 men have been laid off within the last few days. A telegram was sent to the Prime Minister by the city of Charlottetown, and no doubt the Minister of Defence Production knows what was in that telegram.
I do hope the minister will take care of the situation, because a large amount of money appears under different items in these estimates. Without increasing the amount, surely he could take some of these $5 million, $6 million and $60 million items and do something for these machine shops in the way of giving them work which they are capable of doing. If that were done the 200 men who have been laid off would receive their jobs back, and would continue to work so long as the machine shops received sufficient work from the Department of Defence Production.


Agar Rodney Adamson: While we are on this first item I should like to say >a few words about the production of arms. About a year ago I asked the minister for an invitation to visit all the defence production plants in Ontario and in certain parts of Quebec. I received the invitation and I visited those plants which are producing aircraft, naval vessels, guns, radar equipment and all the thousands of things that are produced. I must say that at every plant I visited I received complete
Supply-Defence Production co-operation from the management, and everything I asked for was shown to me. But in every case, whether it was the production of radar, naval vessels or aircraft, the management intimated to me in one way or another that they would like to state their cases on their problems of production to the defence expenditure committee.
As a member of that committee I had hoped they would be able to do so. In my opinion it was the greatest mistake that committee could make that those private corporations, in whose hands the tools of our defence rest, were not able to come before the committee and say: This is our problem of production. This is where we think parliament and the government could help. This is what we are up against.
When you want to go into, shall we say, the production of 'aircraft, you are met in the committee, as we were, with the question of security. Security is very important, but the people who are entitled to speak about security are not the private members of the House of Commons nor, with all due respect, the members of the government. The people who know about security are the people whose actual job it is to produce aircraft and the fighting equipment with which this country will have to defend itself, and every one of them wished to come to discuss the matter in Ottawa.


Clarence Decatur Howe: Surely my hon. friend will give me the names of two people who wanted to come to the expenditure committee and were not able to do so. Give me even one name.


Agar Rodney Adamson: The whole item of the production of arms was not reached. We could not have got them to the committee; and that is my complaint, that the whole business of the production of arms for the defence of this country was not arrived at.


Clarence Decatur Howe: How could you-


Agar Rodney Adamson: Wait until I have finished. How could you ask the president of A. V. Roe to come to Ottawa to discuss the production of the CF-100 when you are dealing with permafrost in Churchill, when you are dealing with Penhold, when you are dealing with Currie and his horses, when you are dealing with all those other things? How could you possibly do that?


Clarence Decatur Howe: This is the worst indictment of a parliamentary committee I have ever known.


Agar Rodney Adamson: Yes, that is exactly what it is; it is an indictment.


Clarence Decatur Howe: But I suggest the sins of the parliamentary committee overshadowed the sins of the Department of Defence Production.
4894	HOUSE OF
Supply-Defence Production Surely the hon. member could have cut the time a little short on discussions of Penhold because, in addition to answering some nine hundred inquiries from the floor of the house, we have answered three times that many from the committee. If you had made less inquiries about those matters you could have asked the management of A. V. Roe to come to the committee.


Agar Rodney Adamson: Those are exactly the words we on this side used when the Currie report was brought into the defence committee. We said-and we said it not once, not twice, but a dozen times-that the Currie report was dead horsemeat. We said that we had discussed it and that we had been proved right. We said we were spending the time of the committee discussing something which was proved, that there was nothing Currie had said in the committee that had not already been proved up to the hilt.
But the thing that was not done in committee, the thing the committee failed to do, was to go into the production of arms; not only to see whether the great bulk of money Canada is voting was properly expended, but to see if the actual defence of the country was being provided for. And that is where the committee failed.


Clarence Decatur Howe: A terrible committee, I would say; but I was not a member of the committee.


Agar Rodney Adamson: It failed because of government policy. It failed because we were inundated with an avalanche of papers, a regular Niagara of papers-


Some hon. Members:: Oh, oh.


Agar Rodney Adamson: And, Mr. Chairman, it may be a lot of fun; the house may get a lot of amusement out of it; but it was paper we were talking about-and not what you are thinking about, Alphonse. When you are inundated with an avalanche of paper-well, it is just like the situation we find with an inefficient staff. Minutes are passed today and minutes are passed tomorrow, and so on.
Did we go into the problem of whether our naval vessels are adequate, and whether there is a sufficient number of them? Did we go into the problem of the production of aircraft? No, we did not. That was left entirely in the hands of chance. Someone says, "Oh, everything is all right." Well, Mr. Chairman, on the minister's own admission everything is far from being all right. Everything is far from being all right in the production of naval vessels. Everything is far from being all right in the production of artillery, of guns, of ammunition. We are spending a great deal of money. We are spending millions, billions of dollars. But did the committee go into that? No, they did not. The


committee was met with an avalanche of paper. It considered whether a pumphouse was properly constructed.


Some hon. Members:: Oh, oh.


Agar Rodney Adamson: Yes, it is all very amusing. Pumphouses are things we all understand. There was $1,800 for a pumphouse roof. That was a fine thing. But the people of Canada want to know more than that. They want to know, first of all, whether they are properly defended; they want to know whether their money is being properly spent on defence production. We realize that whether a school costs $600,000 or $150,000 in Churchill, or somewhere else, is important. But that school merely educates the children of the servicemen. Of course that is important; but the school does not provide arms or protection for the people of Canada.
If you have a defence expenditure committee, then surely that committee has to go into the job of seeing about the defence of the country. That is where we failed; and that is where we failed by deliberate intention.


Gordon Knapman Fraser: Of the government.


Agar Rodney Adamson: I would have gone to Pen-hold except for the fact that I had to go to Borden, and somewhere else.


An hon. Member:: Why?


Agar Rodney Adamson: To see the radar.


An hon. Member:: Over to Hull.


Agar Rodney Adamson: No, I did not go to the printing bureau.
What happened when the report came down? It has been a whitewash report. But even if it was not a whitewash report, the committee did not do the job it was set up to do. It did not look into the business of the defence of the country. It did not look into the business of the production of arms. I repeat, it did not do the job it was set up to do and that it was proposed it should do, and that we had asked over and over again it should do.
Now I give the minister one question; that is the question of the design, production and development of aircraft in Canada. I will mention specifically the CF-100 and the CF-104 and the new flying saucer, which has been given such publicity in the press that it is no longer a matter of security. Mr. Chairman, there is one thing we can do to destroy the aircraft industry in Canada, and that is this. We can stop original design and original development by Canadians of aircraft designed for Canadian purposes. The CF-100, the jet liner and the Orenda engine were all Canadian-designed, all produced in

Canada. The reason their cost was as great as it was, and the delay was as great as it was, was that the aircraft company was not given its head and told to go on and produce these things, as were the aircraft companies at Wright held in the United States or at Farnborough in the United Kingdom, where the experimental stations were permitted to go ahead.
No, we had to interfere; we interfered at every conceivable stage with the A. V. Roe corporation. And today, Mr. Chairman, unless the A. V. Roe corporation can go ahead with the CF-100 and the future development of aircraft, we are going to find ourselves in a year or two behind the eight-ball, so far as aircraft production is concerned. You have to think two or three years ahead when you are producing aircraft; you have to have your design teams working two or three years ahead before you can go into production. That is the problem.
There seems to be considerable doubt whether our policy is to accept United States design, pay United States royalty and patent fees and destroy our own Canadian development, design and the originality of our own engineers. If we do that we put the clock back to where it was in the years prior to the second world war when no one, either in the United Kingdom or the United States, thought Canada could produce aircraft. We have proved that we can. We have proved not only that we can design them but that we can produce them as well as anybody in the world. That should be continued.
Let us look at this matter of naval ships. We are doing the same as we did prior to the first and second world wars. We are designing our armed forces to fight the last war. We are designing our navy as an antisubmarine navy, as though the submarine was all that we were going to have to fight. We have an anti-submarine job to do in some respects, but our principal job is to keep the sea lanes open. Our ships and our outlook toward design are based on 1939-45 thinking. I have contended several times in this house that we should have a submarine service in the Canadian navy. I contend that again. But there is no satisfactory reply. The answer is that our economy cannot do all things. True, we cannot do all things; but our thinking is such that we have a purely anti-submarine navy which makes us incapable of doing a real job of keeping the sea lanes open between us and our allies.
The committee did not go into these things. We did not have, as they have in the United Kingdom, technical officers of the armed services to give us an appreciation of-
Supply-Defence Production


Mr. Croll:: Don't forget; behind closed doors.


Agar Rodney Adamson: We did not have the officers who should have been there to give us the true and serious situation. All we had was a discussion of buildings, the construction of married quarters and the other things which a construction company can do. In my opinion the committee was derelict in its duties because its proper function was not understood. Instead of really looking into the defence expenditures of this country we dealt with only a minuscule part of the real job of Canada's national defence.


Mr. Thomas:: Mr. Chairman, when the report of the defence expenditure committee was brought up for adoption by the committee I voted against it, and I want to indicate why I was strongly against the report.
This report in many ways is an attempt to whitewash several of the findings of the defence expenditure committee. Far from proving that the people of Canada got good value for their money, I think the deliberations and findings of the committee proved conclusively that in many cases, if not in most, having to do with the defence construction end the people did not get their money's worth.
To deal with one particular project which was quite extensive, that at Penhold, I believe the prime contractor at Penhold was put in a preferred position. The final value of his contract amounted to far more than the highest tender. The Alexander Construction company made the lowest bid, but there were over $600,000 worth of change orders and extras attached to the contract after it had been let. In that way I submit that the contracting company was put in a preferred position.


Solon Earl Low: They got in under the wire and then pushed it up.


Ray Thomas: The thing that makes me feel rather strongly about this contract is that up until a few months prior to the calling for tenders the Alexander Construction company was known as the Prudham Construction Company. It would appear from the position this company was put in that there still might be some connection.
Then as to the actual work performed at Penhold by the Alexander Construction company, it was proved and admitted in the committee that they had forfeited under the time clause of their contract. The contract called for the completion of the 16 buildings in February, 1952. They asked for an extension to May 1. As of April of this year, one year later, they had completed only 5 of the 16
489S

Supply-Defence Production buildings. The interesting point is that during the period between February and May, when they were asking tor extensions because they were unable to complete the contract which they had signed within the nine months, they were given another $5 million contract at Cold Lake. Incidentally, the time of completion of that contract was September, although I cannot remember the exact date.


Mr. Prudham:: Would the hon. member repeat what he said just as I came in. I did not hear him.


Victor Quelch: You were not here.


Ray Thomas: It will be in Hansard.


George Prudham: If it was what I think it was, I rise on a question of privilege.


Ray Thomas: If the minister was not in the committee and did not hear what I said he should wait until tomorrow to read it in Hansard, and then he can raise his question of privilege.


George Prudham: I rise on a question of privilege. I have been told that this hon. gentleman stated that he doubts whether I still-that he suspects I still have some connection with the Alexander Construction company.


An hon. Member:: You are getting mixed up.


George Prudham: Some weeks ago I stated very clearly in this house on a question of privilege that at the time I was given the post of parliamentary assistant to the Minister of Resources and Development I sold all my interest in the Prudham Construction Company Limited and was paid cash in full. Since that time I have had no interest whatever in any construction company or in any persons who are doing construction work for the federal government.


Ray Thomas: Well, Mr. Chairman, I shall have to accept the statement of the minister, but it does not alter the fact that this construction company to all appearances has been put in a preferred position compared to that of any other contractors in Alberta who may have bid on those two projects. It is also a strange thing that when a company fails to fulfil its obligations under a contract, and' is asking for an extension of time, it is given another $5 million contract on a different project. It might just be interesting to note-


George Prudham: Purely Social Credit propaganda, that is all.


Solon Earl Low: No, it is on the record.


Clarence Decatur Howe: The charge was never made that Prudham Construction Company had any


interest in it. That has to be made on the floor of parliament.


Solon Earl Low: The hon. member is not making it now.


Clarence Decatur Howe: He made it.


Solon Earl Low: We will see that Hansard is not changed by either side. I have seen Hansard changed just recently by the member on the other side who has just butted in, and it was a change that was not warranted.


George Prudham: No, you have not.


Solon Earl Low: I will go down with the minister after this session is over and we will see that Hansard is not changed; and we shall prove what he said. The hon. member did not say what the minister accuses him of saying.


Clarence Decatur Howe: There is an implication there.


George Prudham: You had better clean up your own house in Alberta. I am surprised at you fellows mentioning this question. Clean up your own mess; it will come out pretty soon.


An hon. Member:: Pretty small, coming from a minister.


Ray Thomas: If this little interchange has been completed-


George Prudham: Clean up some of your horserace scandals.


Louis-René Beaudoin: Order.


An hon. Member:: Horses?


Ray Thomas: I would not mention horses in this debate. The fact remains, Mr. Chairman, that while this company was forfeiting money under a time agreement laid down in the contract, it was given another $5 million contract at Cold Lake. That was when it was being given extra time and $28,200 in extra money for a speed-up program, and over $664,000 in extra work at that one place.
One of the most interesting aspects of the changed orders in that Penhold affair concerned the drilling of two wells. I believe one of them was 105 feet deep and the other was 375 feet deep with 6i inch pipe throughout. The cost was $13,258 per well, on a cost-plus basis. I beg your pardon, Mr. Chairman; it was a firm price. The pump house for that construction was a frame pump house 8x8 with asbestos shingles on the outside. To hold up that shack-and it was nothing but a shack-they put in a 5J foot by 8 inch foundation.
I just want to say now what I said in committee, that if wells cost that amount there would not be many people in western

Canada able to afford them. Another thing under the same heading concerns well No. 1, which had not been used for five years. They spent $1,100 cleaning it and pumping out the silt and sand. When I asked if there was any oostructicn in the pipe which might require redrilling they said the main item was the de-silting of the well. In my opinion that cost was ridiculous.


George Prudham: You would not know anything about it. You had better stick to your truck driving.


Solon Earl Low: Any farmer knows that.


Victor Quelch: I have drilled several wells on my own place.


Mr. Wylie:: The minister had better stick to his wheelbarrow pushing.


Ray Thomas: One of the items which caused a good deal of discussion in the committee concerned the removal of slabs from the sites of buildings. I forget the amount which the government paid, but it was in the neighbourhood of $5,000 for two separate slabs. The departmental witnesses said they felt that because there was snow on the ground that winter they were obliged to pay for the removal of those slabs. Well, I take exception to that, because the tender form which I asked to have tabled lays down under "Instructions to Bidder" as item No. 4:
Each bidder must satisfy himself by his own study of the plans, specifications and other contract documents by calculations and by personal inspection of the site respecting the conditions existing or likely to exist in connection with the execution of the work. He is not to claim at any time after submission of his tender that there was any misunderstanding with respect to the conditions imposed by the contract.
The signed form which is returned to the department says this, in the first three or four lines of the tender:
Having carefully examined the site of the proposed buildings enumerated below at the R.C.A.F. station, Penhold, Alberta, as well as all contract documents relating thereto, including the plans, specifications, general conditions, form of agreement and instructions to bidders we hereby tender and offer to enter into a contract within the prescribed time to construct the said undernoted buildings in strict accordance with the said contract documents . . .
I do not think it is necessary to go on because the point I make is that the tenderer has stated that he has carefully examined the site of the proposed buildings. Now surely, Mr. Chairman, that would indicate that any irregularities on the site on which the buildings were to be erected would be the responsibility of the contractor. Because he did not dig down in the snow he might not find anything, but that is not the fault of the department.
Supply-Defence Production
In reply to a question by the hon. member for Kamloops, who asked whether Crown Assets Disposal Corporation had any condition in its sales order indicating that the purchasing people had to remove these slabs, an order was brought down which said this:
The sales order carried the following condition:
Requirement: Purchaser is required to either remove or demolish the building, removing all materials from the site, leaving it clean and tidy, levelling any excavations or mounds to the original contour of the ground to the satisfaction of a duly authorized representative of War Assets Corporation.
Surely, Mr. Chairman, the $5,000 which was spent for the removal of these slabs was not the responsibility of that department of government. It was in the first place the responsibility of the people who purchased these buildings from Crown Assets Disposal Corporation. When that was not done, it was the direct responsibility of the contractor who tendered for the erection of these buildings, as stated in the tender form.
One of the amazing speed-up actions taken by the department in this particular respect deals with the installation of the electrical distribution system. In order to speed things up the department allowed the Alexander Construction company to call for tenders for the supply and installation of that equipment. Then the department gave them a fee for their trouble, supposedly for the supervision of the installation and the trouble the company went to in calling for tenders. The total amount of that contract was $141,000, which was made up as follows: Sunley Electric Limited quotation, $134,175; Alexander Construction company, fee for supervision, etc., $6,285.
Surely, Mr. Chairman, the government had inspectors on the site from the time construction was started. Are those government inspectors not just as well qualified to supervise the installation of this electrical equipment as the Alexander Construction company, if not more so?


Donald Methuen Fleming: Perhaps they are the same inspectors who were on the Lunam Construction Company jobs.


Ray Thomas: Perhaps so. There are some other interesting facts that came out in the committee evidence. The first fact concerns Goose Bay and is found at page 424 of the proceedings of the committee. On that page it is shown that engineering fees for supervision and so on for the married quarters came to between $2,600 and $2,700 per married quarter. I think that is absolutely outrageous. I should like to refer briefly to a couple of points. At Cold Lake the department acquired 1,437 acres of land at a total cost of $78,900,

Supply-Defence Production or $54 per acre. Cold Lake, incidentally, is up' in the northeastern part of Alberta.


George Prudham: And one of the best farming areas in Alberta.


Ray Thomas: That is fine, but what do you pay for the best farm land in the central portion of Alberta? I expect that when it is purchased by the Department of National Defence for some of their work, a good price is paid. They paid $250 per acre for some 300 acres for Namao park, and for the airport at Namao they paid $115 per acre for 2,655 acres. Sure you can get a good price for these lands, provided you can find a government department that wants to buy them.
I feel that these things I have pointed out tonight, Mr. Chairman, prove conclusively that this government, the Department of National Defence and the Department of Defence Production, have failed miserably in giving the people value for the money spent on defence construction projects across this country. In view of the fact that the report which was brought in by this committee is not unanimous but is divided, I might say, between the government majority and the opposition, I say the report is nothing but a mild attempt to whitewash the true state of affairs within the Department of National Defence and the Department of Defence Production.


Edmund Davie Fulton: There are some things, Mr. Chairman, which I think require to be said on this item for the Department of Defence Production. They arise, in the first place, out of the minister's statement tonight. I have not yet had the advantage of seeing the text of it in Hansard; but as I recall, amongst other things the closing portion stated that the government had taken great care in connection with all aspects of the defence production program to make certain that money was not wasted, and also with respect to the stockpiling program, to see that the people got full value for their money. I should like to deal briefly with both aspects of the responsibility of the department, that is the actual construction and the stockpiling.
To refer to the first one, the construction program, just before we adjourn for tonight, now that the facts have been placed on the record by the hon. member for Wetaskiwin, it seems that the minister's assertion has been disproved completely. The minister said great care had been taken to see that no waste took place and that the people of Canada had obtained value for every dollar spent under the authority of the minister's department.

The sort of argument we are faced with, Mr. Chairman, when we try to analyse the attitude of the department and the actions of the department is summarized in the amendment moved by the Progressive Conservative members of the defence expenditure committee, as our suggestion of what should be in that report, where dealing with the activities of the department at Penhold and speaking of the speed-up to which the member for Wetaskiwin referred, we point out:
At Penhold, for instance, witnesses for the government departments sought to justify an expenditure of $25,000 on a speed-up program, and equally to justify the abandonment of that speed-up program soon after.
That is exactly the attitude of the government, and the Minister of Defence Production particularly. They are right when they are wrong, and yet when they are wrong they are right.
Will you call it ten o'clock, Mr. Chairman?
Item stands.
Progress reported.



BUSINESS OF THE HOUSE

['Mr. Speaker, tomorrow we shall go into supply and consider the estimates of defence production, health and welfare, veterans affairs, transport, mines and technical surveys, and post office.']
Alphonse Fournier: Mr. Speaker, tomorrow we shall go into supply and consider the estimates of defence production, health and welfare, veterans affairs, transport, mines and technical surveys, and post office.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.
[The following items were passed in committee of supply]:

[Stage Direction]
Department and missions abroad-
86.	Passport office administration, $254,124.
87.	Representation abroad-operational-including payment of salaries of high commissioners, ambassadors, ministers plenipotentiary, consuls, secretaries and staff appointed as directed by the governor general in council, notwithstanding anything to the contrary in the Civil Service Act or any of its amendments, $5,758,874.
88.	Representation abroad-construction acquisition or improvement of buildings, works, land, new equipment and furnishings, $911,850.
89.	Representation abroad-to authorize the construction, acquisition, improvement and furnishing of properties for Canadian government offices and residences abroad, payment therefor to be made in foreign currencies that are not convertible into Canadian or United States dollars and that may be used only for governmental or other limited purposes and that have been acquired in respect of reparations or pursuant to the settlement of claims arising out of military operations or war expenditures, or in exchange for other such currencies so acquired, $1,152,000.
90.	To provide for official hospitality, $20,000.
91.	To provide for relief of distressed Canadian citizens abroad and their dependents and for the reimbursement of the United Kingdom for relief

expenditures incurred by its diplomatic and consular posts on Canadian account (part recoverable), $15,000.
92.	Canadian representation at international conferences, $225,000.
93.	Grant to the United Nations Association in Canada, $10,000.
94.	Grant to the international committee of the Red Cross, $15,000.
95.	To authorize and provide for the payment from foreign currencies owned by Canada and available only for governmental or other limited purposes, in France, The Netherlands and Italy, of fellowships and scholarships and travelling expenses to enable Canadians to study in those countries, and for payment to the Royal Society of Canada of amounts not to exceed $10,000 in all to meet travelling and other administrative costs incurred by the society for those it may designate to act on its behalf in selecting persons to receive fellowships and scholarships, $125,000.
B-General-
96.	To provide for the Canadian government's assessment for membership in international and commonwealth organizations, as detailed in the estimates, including authority to pay the amounts specified in the currencies of the countries indicated, notwithstanding that the payments may exceed or fall short of the equivalent in Canadian dollars, estimated as of January, 1953, which is, $2,689,902.
97.	United Nations expanded program for technical assistance to underdeveloped countries, $850,000.
North Atlantic Treaty Organization-
98.	To provide subject to the approval of the governor general in council and notwithstanding anything to the contrary in the Civil Service Act, for special administrative expenses, including payment of remuneration, in connection with the assignment by the Canadian government of Canadians to the international staff of the North Atlantic Treaty Organization (part recoverable from the North Atlantic Treaty Organization), $30,000.
Supply-External Affairs
International civil aviation organization-
99.	To provide the international civil aviation organization with office accommodation at less than commercial rates, $200,596.
International joint commission-
100.	Salaries and expenses of the commission, $95,800.
101.	To provide for Canada's share of the expenses of studies, surveys and investigations of the international joint commission, $134,290.
Terminable services-
102.	Colombo plan, $25,400,000.
103.	To provide for the Canadian government's assessment for membership in the intergovernmental committee for European migration in an amount of $194,519 U.S., notwithstanding that payment may exceed or fall short of the equivalent in Canadian dollars, estimated as of January, 1953, which is, $188,683.
104.	Contribution to the United Nations international children's emergency fund, $500,000; total, general, $30,090,938.
B-General-
653.	To provide for the Canadian government's assessment for membership in international and commonwealth organizations, as detailed in the estimates, including authority to pay the amounts specified in the currencies of the countries indicated, notwithstanding that the payments may exceed or fall short of the equivalent in Canadian dollars, estimated as of April, 1953-further amount required, $16,195.
North Atlantic Treaty Organization-
654.	To provide, subject to the approval of the governor general in council and notwithstanding anything to the contrary in the Civil Service Act, for special administrative expenses, including payment of remuneration, in connection with the assignment by the Canadian government of Canadians to the international staff of the North Atlantic Treaty Organization (part recoverable from the North Atlantic Treaty Organization) - further amount required, $22,000.
[Stage Direction]
*
[Stage Direction]

[Stage Direction]


Thursday, May 7, 1953