1953-04-21

[Stage Direction]
Third and final report of special committee appointed to consider Bill No. 107, to amend the Post Office Act, and also the regulations, general administration and operation of the rural mail delivery service.-Mr. McCubbin.

Hon. Alcide Cole (Postmaster General):: Mr. Speaker, if I may be permitted to do so, I should like to answer a question put to me on the orders of the day last Friday by the hon. member for Winnipeg North Centre (Mr. Knowles), when he asked whether I had received from the historical and scientific society of Manitoba a request for the reopening of the post office in the old home of William Ross in Winnipeg.
I did receive such a request, but on account of the limited prospective business, it was not found possible to re-establish a regular post office at this point. However, an effort was made to meet the wishes of the historical and scientific society of Manitoba, and as a result a stamp permit was issued and a letter box erected at Ross House in which outgoing mail can be posted. As a further measure of assistance, the department has also authorized a special cachet to be placed on outgoing mail.


Mr. Knowles:: May I ask the Postmaster
General if he can indicate the effective date of these provisions?


Mr. Cote (St. Jean-Iberville-Napierville):: I am sorry, Mr. Speaker, but I cannot say at the moment. If my hon. friend will be patient I might phone him this afternoon as to when it would be possible for them to be put into effect.


Stanley Howard Knowles: Thank you.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver-Quadra):: Mr. Speaker, can the Minister of Labour bring the house up to date with regard to
the strike in the terminal elevators on the west coast?


Hon. Milion F. Gregg (Minister of Labour):: Mr. Speaker, since the matter was discussed in the house last, discussions have been going forward at regular intervals in British Columbia; and in close co-operation between the departments of trade and commerce and of labour, it was arranged that the controller of transport should go out there a few days ago. He has been out there. My officials have been working in the closest co-operation with him and discussions are continuing. Beyond that I cannot report today.


Howard Charles Green: When is it expected that there will be a report from him?


Milton Fowler Gregg: I cannot say, Mr. Speaker; soon, I hope.



THE CORONATION


Mr. George H. Hees (Broadview):: Mr. Speaker, I should like to direct a question to the Secretary of State, notice of which he received about ten days ago. Will the government permit members of the civil service who are also members of the reserve forces, and are attending the coronation as representatives of their units, to draw service pay in addition to their civil service pay while they are out of the country attending the coronation?


Hon. F. G. Bradley (Secretary of State):: Mr. Speaker, I have not yet received the answer to that question, but I presume that it will arrive in due course.



REPORTED EMBARGO BY UNITED STATES AGAINST OATS AND FEEDS  DAIRY PRODUCTS

[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: A
week ago, on April 14, I asked a question of the Prime Minister with regard to a reported United States embargo on agricultural products. Since that time President Eisenhower has asked the tariff commission to give consideration to the continuance of the embargo against certain Canadian dairy products, such as flaxseed, linseed, and the like. What reply has the United States given

Inquiries of the Ministry to the two notes of protest to which reference was made at that time? What further action does the government contemplate in order to remove what appears to be an injustice by the United States toward Canada?


Right Hon. L. S. St. Laurent (Prime Minister):: The Minister of Trade and
Commerce is prepared to answer my hon. friend's question.


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, in answer to my hon. friend's question of a week ago, reports have been received of discussions in the United States of possible restrictions upon the importation of oats and feeds. It is understood that these reports have arisen out of the appearance of the secretary of agriculture before a subcommittee of the Senate where general proposals are at present being subjected to study and investigation. To the best of my knowledge, no conclusions or recommendations to congress have as yet emerged nor is this subject dealt with as yet in draft legislation. In these circumstances, it is not appropriate at present for the Canadian government to make official representations or protests. I am, of course, fully aware of the importance to Canada of the trade in oats and feed grains. The numerous hearings before various committees of the United States congress, which are studying agricultural programs, are being closely followed here. The United States government is well aware of Canada's concern and of the importance of trade between the two countries in agricultural products. The Prime Minister is planning to visit the United States in the near future. When he is in Washington he will have occasion to refer to some of the important questions of trade relationships between Canada and the United States as well as to some of the questions affecting world trade and financial relationships.
With respect to embargoes and restrictions on the importation of dairy products into the United States, the government of Canada has made official representations to the government of the United States on a number of occasions, which have been publicly announced in both countries. These representations have taken the form of notes to convey the Canadian point of view, but so worded as not to require replies. The most recent of these representations was a note delivered on February 10 of the present year which referred explicitly to Canada's serious concern respecting import restrictions in the United States upon dairy products. This same subject has been raised by Canadian delegations to successive sessions of the con-

tracting parties to the general agreement on tariffs and trade. In addition, official Canadian representatives in Washington have frequently had occasion to refer to these restrictions.
I think that answers the second question of my hon. friend as well as the first question.


John George Diefenbaker: May I ask a supplementary question? I noticed that in the minister's statement, which was full, he said that the notes in protest were couched in such language as not to require replies. What was the reason that the notes were couched in that way? I ask that question as a matter of interest. I wondered why the United States was not asked to clarify the situation.


Clarence Decatur Howe: These notes had reference to the current legislation, and I think that if we were to receive a note from another government about legislation that we were contemplating we would not answer that note. It was felt the subject was one about which we could not expect an answer, but about which the Canadian views should be forcibly presented.


Mr. Macdonnell (Greenwood):: Did I understand the minister to say that the last communication with Washington was on February 10?


Clarence Decatur Howe: Oh, no; as a matter of fact, representations are being made almost every day. For example, at my request our chief delegate to the international wheat conference called on the Department of Agriculture and made protests on the subject matter that I have just discussed. He discussed the matter very fully with officers of the Department of Agriculture and also ways and means of correcting a situation that is disturbing to the Americans. The two countries are in such close contact in these matters that a formal note is not the only means of communication. Our ambassador and our officials are in constant touch with their opposite numbers in Washington.


Mr. Adamson:: Has the government com sidered any legislation similar to the "Buy American" legislation?


Clarence Decatur Howe: No.



INQUIRY AS TO PROTEST BY CANADA RESPECTING TENDERS IN THE UNITED STATES

[Stage Direction]
On the orders of the day:
Mr. M. J. Coldwell (Roseiown-Biggar):: notice that the British government is making a protest against the manner in which a tender by the English Electric Company was dealt with in the United States. I also under-

stand that at about the same time tenders for ships to be built in Canada were treated in somewhat the same manner. Can the minister tell us anything about that? Is a protest or a representation to be made in that regard as well by Canada on ships?


Clarence Decatur Howe: Yes, Mr. Speaker, there was a case where a Canadian firm was low tenderer on some small boats, and it was decided in the United States that the order would be placed in that country, owing to a slack situation in their shipyards. I think each country has the privilege of deciding its own purchasing policy. I can think of no grounds upon which Canada should protest the method by which the United States navy places its orders.


Major James William Coldwell: The government does not regard it as being in the same category as tenders submitted by the English Electric Company?


Clarence Decatur Howe: It may be in the same category, but whether the government of the United Kingdom is justified in protesting as to how the United States buys its electrical equipment I cannot say.



GANDER AIRPORT


[Stage Direction]
On the orders of the day:
Mr. G. F. Higgins (St. John's Easi):: I
should like to direct a question to the Minister of Transport. Is the minister aware that only one runway at Gander airport, No. 14,132, is open; that its taxiways to the terminal building are closed, and that Gander as a result has been designated as an alternate airport operationally by the air lines? Is anything going to be done in the matter?


Hon. Lionel Chevrier (Minister of Transport):: The condition that my hon. friend
refers to is due, I presume, to the break-up in the spring. In order to prevent that, we have already constructed one large runway at Gander, and we propose to build another one this year. Provision is made in the estimates for that purpose, and I am sure that something can be done about the present condition. I shall be glad to bring it to the attention of the officers.



ARMED FORCES


Hon. Hugues Lapointe (Minister of Veterans Affairs) moved: the third reading of Bill No. 336, to provide assistance for the
Food and Drugs Act
higher education of children of certain deceased members of the armed forces and of other persons.
Motion agreed to and bill read the third time and passed.



FOOD AND DRUGS ACT


Hon. Paul Marlin (Minister of National Health and Welfare) moved: the second reading of Bill No. 48, respecting food, drugs, cosmetics and therapeutic devices.


Mr. Blair:: Can the minister explain the
bill?


Stanley Howard Knowles: Is the minister going to
make a statement?


Paul Joseph James Martin: This bill, which seeks a
revision of one of the older statutes in our country, provides for a revision of the act and the consolidation of some of the sections and introduces some new features that will strengthen the measure. The bill was first introduced in the other place, and has had a full hearing in the committee on health and welfare of that place, giving an opportunity to industry generally to make representations in connection with some proposals that are now embodied in the measure before the house.
The Canadian Pharmaceutical Manufacturers' Association, the Canadian Manufacturers Association, the Allied Beauty Equipment Manufacturers Association and the Ottawa Truss Company were among those national trade organizations that made representations in connection with this measure. The present bill, as I say, is a revision and consolidation of certain provisions; and it seeks to remove certain anomalies which, in the light of experience during the last twenty years, it has been thought desirable to introduce.
The purpose of the bill of course is to protect the Canadian people in matters of health, as well as against fraud in the manufacturing and sale of foods and drugs. The administration of the measure depends upon the co-operation that the officials of the department are able to enjoy with industry. I cannot speak too highly of the co-operation we have had from industry generally in the administration of this act. There is no basic or essential difference in the present measure from the existing act except in a few particulars, one or two of which I shall point out. The bill is concerned with the prohibition of things that are injurious to health and that are unfit for use, and with the prevention of deception in the manufacture and sale of goods consumed by the public.

Food and Drugs Act
One important provision I should like to outline is the one to remove from ministerial power the discretion that now exists with respect to the forfeiture of goods. At the present time the powers of the minister under the act are great, and I have felt for some time that there should be a limit placed upon those powers, and that any interference with the use of property should be only after the exercise of judicial processes.
For example it frequently happens that goods having a substantial financial value are seized and forfeiture ensues, not upon a ruling by a court, but first through seizures by inspectors, followed by a decision of the minister in the exercise of this discretion, and based upon analyses made by an analyst. It has been thought that hereafter, except by the consent of the owner, no forfeiture of goods should take place unless there has been determination by judicial process as to whether or not the goods are in conformity with the act, and as to whether or not under the circumstances the forfeiture should be undertaken.
I think this is an important change in administration, and follows the due process of law clause in corresponding legislation in other countries.
This act is one of the important measures on our statute books. It affects the welfare and health of every person in this country, and I commend the measure to the house.


William Gourlay Blair: Mr. Speaker, I think the minister's explanation has cleared up the situation. While we agree with the principle of the bill I would suggest that those parts we wish to criticize should be taken up clause by clause in committee.


Stanley Howard Knowles: Mr. Speaker, we welcome the
introduction of this measure, and feel that its importance merited a longer statement than the minister has given this morning. No doubt he will make up for that when we get into committee on the various clauses.
As he has pointed out, it is extremely important for the protection of the health of the Canadian people that there be legislation of this kind, and also that its administration be carried out effectively. We wish to join with the minister in the tribute he paid to those who have had charge of the enforcement of this legislation. We are glad to note that the bill does in fact include provisions that will strengthen the hands of those who have that task.
I note in a number of places in the bill a new phrase which reads: "manufactured,
tMr. Martin.]
prepared, preserved, packaged or stored in unsanitary conditions". While I have quoted it from only one point in the bill, it appears in several places. My interpretation would be that the inclusion of that new phrase in a number of places in the bill would seem to give the inspectors who operate under the legislation wider powers to make sure that foods, drugs, cosmetics, appliances or devices which could be injurious to the health of the people because of the conditions under which they are produced, will not be allowed on the market. It is made clear in the bill not only that foods, drugs or devices themselves must not be impure or adulterated in any way, but that they must not come from any place which in any way could be considered unsanitary.
We are glad to note this attempt to tighten up the administration of this legislation. We feel that those in charge of it have been doing a good job, and we are glad to give them the further provisions contained in the bill.
We are also glad to note that there is a new phraseology in some sections of the bill dealing with the question of deception. As I understand it, once this new bill becomes law it will be unlawful for persons to advertise drugs, appliances or devices as having therapeutic or healing effects. Indeed the whole aim of the legislation as I understand it is to make sure that people who are suffering from certain diseases or disorders will not be deluded by false advertising, and as a result of that delusion be induced to stay away from physicians or doctors whom they should see.
We think this is all to the good. We are pleased with the progress science is making in all branches, particularly in the medical field. But we do believe that the people should be protected against any false assertions made in advertising. We know there are many occasions when the sellers of certain products are tempted to make all they can out of those products by advertising in very glowing terms.
I would hope that when we are discussing the sections of the bill the minister would speak in greater detail. At this point however I wish to say simply that we welcome these steps.
One other thought occurs to me-and with this I shall have concluded my remarks at this stage of debate-and it is that in view of the fact that this measure provides for a clearer and greater supervision over drugs, appliances and devices to be made available, the Department of National Health and Welfare should extend the list of drugs and appliances it recommends to the Minister of

Finance (Mr. Abbott) or to the Minister of National Revenue (Mr. McCann) for income tax deductibility.
I have no intention of developing that subject into what Your Honour might classify as a budget speech, and therefore would rule out of order. But it does seem to me that the subject does go along with the one now before us-and I am glad to note that the minister nods his head affirmatively. As parliament specifies greater control over drugs, appliances and devices, I am suggesting that on that basis the list of those allowed as deductible for income tax purposes should be greatly extended.
With those remarks, I conclude by saying that we welcome this bill and, so far as it goes, we heartily support it.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I have taken a great interest in this subject for a number of years and I want to say how pleased I am to see this bill being introduced by the minister. However, like the hon. member for Winnipeg North Centre (Mr. Knowles), I was somewhat surprised that the minister's statement on such an important piece of legislation was conspicuous for its brevity.


Paul Joseph James Martin: The minister does not usually enjoy that reputation.


Some hon. Members:: Hear, hear.


Stanley Howard Knowles: That is what made it such a surprise.


Herbert Wilfred Herridge: It was the exception that proved the rule. This indicates a definite stiffening of the pure food and drugs laws of this country and as such we in this group certainly welcome it. Since the major amendments of 1927 there have been great changes in manufacturing practices and procedures, in packaging and so on. Many new drugs and synthetic compounds have been put on the market and I think it is high time that this legislation was introduced.
Like the hon. member for Winnipeg North Centre, we want to pay a tribute to the excellent work done by the officials of the pure food and drugs division of the department. A great deal of scientific and painstaking work is carried on by this division behind the scenes, quite often with little public recognition. However, I think more and more people are becoming aware of the excellent pure food and drugs division we have in Canada at this time.
The minister's department has received excellent co-operation from the Canadian Association of Consumers. These women have taken the time to carry out investigations
Food and Drugs Act
in the various cities and small communities of this country and they make their recommendations and complaints to the division and have contributed a great deal toward the improvement and administration of the act. The development of this act and its amendments have been the result of considerable co-operation between the minister, his officials and the consuming public.
I have noticed a growing interest in these matters. I remember when I first came to Ottawa in 1945 there seemed to be few people who had any knowledge of this act and of the work being done by the division.
I find that that situation has changed. Letters that I receive indicate an intelligent and widespread interest in the work and I have no hesitation in saying again that the minister's officials in this department are doing an excellent and an increasingly important job for this country.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Beaudoin in the chair.
Section 1 agreed to.
On section 2-Interpretation.
William Gourlay Blair: The definition of "analyst" is given as follows:
(b) "analyst" means any person designated as a food and drug analyst under subsection (2) of section 24.
Section 24, subsection 2, reads:
The governor in council may designate as an analyst or inspector any person on the staff of the department for such time as that person is employed in the department or for such time during the period of such employment as he may direct.
There is nothing there to indicate that the analyst must possess certain qualifications.


Paul Joseph James Martin: I think my friend will appreciate that no one would be appointed as an analyst who did not have the qualifications. I think that implication is carried in the measure.


William Gourlay Blair: Would it not be better to have the word "qualified" or something of that nature in there?


Paul Joseph James Martin: It is not usual in legislation of this kind to put in such an adjective. This was cleared by justice. No one would be appointed who did not have the necessary qualifications and to have the word "qualified" would not of itself provide any guarantee. I assure my hon. friend that this is the usual draftsmanship.


Gordon Francis Higgins: Is it the intention to have an analyst in each province? At the present time there is no analyst in Newfoundland. If medicines come in that have to be

Food and Drugs Act
analysed, they must be returned to Halifax for analysis and then sent back to Newfoundland. It is very awkward and causes considerable delay.


Paul Joseph James Martin: That matter is under
consideration.


Mr. Browne (St. John's West):: What has happened to the food and drugs act in Newfoundland since 1949? That act was based on the English law and we had inspectors operating under it.


Paul Joseph James Martin: We have carried on there just as we have carried on in the rest of the country. We have appointed inspectors.


William Joseph Browne: Will there be any difference when this bill is passed?


Paul Joseph James Martin: It will make this difference: We think the measure is an improvement over the existing act, although we think the existing act is an excellent measure. The advantages that will accrue to the rest of Canada will accrue to Newfoundland.


William Joseph Browne: The minister is going to take the power under this act to make regulations that will cover many varieties of things.


Paul Joseph James Martin: He has that power now.


William Joseph Browne: Those will continue in force?


Paul Joseph James Martin: Yes.


William Joseph Browne: Paragraph (j) reads:
"Minister" means the Minister of National Health and Welfare.
I cannot understand why that definition is put there when it does not mean anything. The minister cannot be ubiquitous and be in every province at the same time. Prosecutions may be going on in every province at the same time.


An hon. Member:: Paul gets around.


William Joseph Browne: Should not the definition include the deputy minister, the assistant deputy minister and so on? I notice that when we were dealing with the foot-and-mouth disease the word "minister" was used when the minister did not know anything about it for two months. Is not the general interpretation section in conflict with this, in that it provides that the minister means the deputy minister, during the minister's absence, or his assistant or any other person who may be designated.


Paul Joseph James Martin: I can only say that this is
the usual practice. The minister in charge of a department is responsible for the acts of his officials as well as his own. This is 
the formal designation that is usual in Anglo-American communities and I am sure on reflection it will commend itself to the high legal attainments of the hon. gentleman.


William Joseph Browne: I do not
think that that explanation covers it. Perhaps I may be permitted to refer to section 12, which reads:
No person shall sell any drug described in schedule C or D unless the minister has, in prescribed form and manner, indicated that the premises in which the drug was manufactured and the process and conditions of manufacture therein are suitable to ensure that the drug will not be unsafe for use.
That does not mean that the minister is going to look at every premises where foods or drugs are being manufactured or displayed.


Paul Joseph James Martin: The word "minister" is used in the same sense as the word "crown" is used for other purposes.


Gordon Francis Higgins: I understand that at the
present time there are quite a number of patent medicines coming in from the United States and other countries.


Paul Joseph James Martin: Could we deal with that
under the appropriate section?


[Stage Direction]
Section agreed to.
On section 3-No food, drug, etc., to be advertised or sold as a treatment, etc., for certain diseases.
William Joseph Browne: This section reads:
No person shall advertise any food, drug, cosmetic or device to the general public as a treatment, preventative or cure for any of the diseases, disorders or abnormal physical states mentioned in schedule A.
In looking over schedule A, I see a number of diseases and so-called diseases mentioned there about which I have often seen advertisements. One in particular is obesity, and we need not look far for an example of a person who has responded to treatment. But we frequently see advertisements, especially in movie magazines and that sort of thing, addressed principally to young ladies and telling them how they may reduce their figures and get a more admirable one. Is it going to be an offence to recommend that a person should adopt the practice of slimming, eat Hollywood bread and more vegetables and adopt a change of diet?
I want to make a reference to some less conspicuous diseases. I notice that in the schedule venereal diseases and sexual impotence are mentioned. There is a provision in the Criminal Code which makes advertisements of cures for these particular conditions punishable. Another one is influenza.

I am very glad to see it referred to here because I remember reading an article in the Reader's Digest two years ago about a certain brand of pills that were a sure cure for influenza. I remember recommending them to one of my colleagues and taking some myself. I fell asleep with the window open and the temperature at 10 below zero and woke up with a more severe attack of influenza than when I went to sleep. I certainly think that the proper thing for a person to do is to go to a doctor when he feels ill and not rely on articles, even in such a prominent publication as the Reader's Digest.


Paul Joseph James Martin: This is an important section. In many respects it is perhaps the most important in the bill. My hon. friend has referred to one of the diseases mentioned in schedule A. I must say first of all that the particular item was in the schedule long before the recent historical developments in my own person took place. But apart altogether from my own achievements in that particular -and I do not want to be personal except for the fact that my hon. friend has referred to me as exhibit A-I simply want to say that obesity is included in the schedule on the advice of my technical people.


Stanley Howard Knowles: The minister used to be a fairly substantial exhibit.


Paul Joseph James Martin: I am sure the hon. member for Lanark will be pleased to give my hon. friend some advice. Obesity is a very serious thing. All sorts of advertising are being carried on in this country telling people how to reduce, and as doctors know that can be a fairly serious matter if not properly done and under proper supervision. No one should resort to the process of dieting without first consulting his doctor. There are pills and other things being advertised that are very dangerous. It is for that reason that obesity is included along with other diseases like cancer.
The main purpose of the provision is not to discourage initiative in industry or in professional activity but, having in mind the public interest, to make sure that no one shall advertise any food, drug, cosmetic or device as a treatment, preventive or cure for any of the serious diseases and conditions described in schedule A. This measure does not seek to disturb people advertising their wares, but they shall not advertise them as a treatment for those conditions. For instance, there are certain bodies in this country advertising preparations as a treatment and cure for cancer. That is a fraud on the public, and this measure seeks to prevent that. It does not mean that medical men may not recommend certain
Food and Drugs Act
things, but vendors of nostrums shall not be permitted to carry on that practice. I know of the case of an official who works on the staff of the House of Commons and whose wife died of cancer a year ago. She was taking a certain pill that had been recommended to her by a practitioner who was not carrying out the responsibility of his high office. He recommended it to her. It was advertised as a treatment in a little publication that came to our attention. This woman did not go to see a doctor who might have given her assistance, although I do not know whether he could have in the light of her condition. The section will deal with this kind of situation, and I am sure the importance of the provision will commend itself to every hon. member.


William Gourlay Blair: I think the list is very well
chosen. I went over it carefully yesterday. Some of the diseases included in the list may look rather innocent, but there is a reason behind every single one. For instance, obesity may appear to be rather innocent. ' I am not going to refer to anybody who has received treatment, but I remember very well that a certain type of pill was sold, particularly on the other side of the border, which caused a lot of trouble and brought about some fatalities in this country. The list is well chosen.


Paul Joseph James Martin: It caused blindness and
cataracts.


William Gourlay Blair: Yes. There is an inclination
to advertise a cure for almost everything, and while some of these diseases may appear innocent there is a real reason behind their inclusion in the schedule. I congratulate the department on having gone so far, and in the future I think that the list can be enlarged. I do not say this as a physician apposed to certain cures. These are things for which I know it is impossible to advertise a cure, and it is a dangerous practice to do so.


Stanley Howard Knowles: Can the minister say where
the line is drawn with respect to this matter? I would think it would be clear that any advertisement that said specifically that such and such was a cure for such and such a disease would be illegal. What about the type of advertising that indulges in the before and after technique? Suppose some firm advertised by simply publishing two pictures of the minister, one before and one after, and said that he had done so and so. Would that be unlawful? Where is the line drawn?


Paul Joseph James Martin: That might be embarrassing
but it certainly would not be unlawful. If a company advertises a particular product as a treatment, cure or preventive, that is
4146	HOUSE OF
Food and Drugs Act
contrary to this section. There are clever devices used in advertising but our officers are very much on the alert. I may say that industry in Canada co-operates almost 100 per cent. We have companies that come to us and say: Here is the proposed advertising upon which we intend to embark. Does this offend? As long as that kind of co-operation prevails there is no difficulty, and generally speaking that is the case. Unfortunately there are some exceptions, and it is those with which we are seeking to deal in this measure.


[Stage Direction]
Section agreed to.
On section 4-Prohibited sales of food.
William Gourlay Blair: With respect to the word "adulterated", there does not seem to be a clear explanation.


Paul Joseph James Martin: Perhaps I could explain. In the old act adulteration included (a), Cb) and (c) of section 4 as well as (a) in section 24. The word "adulteration" as used in section 4 is to be given the usual grammatical definition, the definition that would be found in any dictionary. If a court were called upon to construe what was meant by adulteration in this particular section it would give it the ordinary meaning. That is according to the rules of interpretation in law. This particular method was arrived at in the light of the experience we have had in some of our cases. If my hon. friend will look at section 24 (1) (a), he will see that by implication adulteration as used there means adding something that is a prescribed substance or withdrawing something that is a prescribed substance. The present arrangement arises out of our experience in the administration of this measure and it follows the practice in certain other countries.


William Gourlay Blair: The old definition, Mr. Chairman, is very good, but subsection (a) of section 24 does not fully cover the matter. The minister has cited the dictionary definition of adding or omitting something but I would suggest that the definition there be something like this:	That an article would
be deemed to be adulterated if something were added, subtracted or omitted lessening its therapeutic value or rendering it dangerous for human consumption.


Paul Joseph James Martin: That would be all right but we consider adulteration as something not so severe as that. In our effort to maintain and operate standards there is not only the question of whether something is injurious to health but also the question of whether it is contrary to certain prescribed standards within the over-all plan. My hon. friend has asked that we give careful consideration 

to this, but may I assure him this represents the best thinking in food and drug law experience at the moment. I will give it further consideration in the light of further experience as suggested.


[Stage Direction]
Section agreed to.
On section 5-Deception.
Mrs. Fairclough:: Mr. Chairman, I would like to bring up, under this section, a matter which affects a Hamilton processing firm with which the minister is thoroughly familiar. It concerns the sale on the market of a product known as oilless mayonnaise as against another article known as salad dressing. These people have been marketing this product for 16 years and it has popular acceptance on the market. It says:
Oilless mayonnaise-made of eggs, cream, sugar, vinegar, mustard, salt, spices and condiments.
There is no attempt there at any deception whatsoever. Anyone can read what is in the article and it has popular acceptance. I would like to protest very strongly against the department's action in trying to remove from the market an article which has popular consumer acceptance.
There was another Hamilton firm, as a matter of fact, which made oilless mayonnaise some time ago, but owing to pressure from the department they changed the name of their particular product and called it "Dressing Supreme". Mr. Chairman, that is just a lot of nonsense. If an article is a popular article and if it does no harm and is a wholesome product I cannot see any difference whether you call it a rose or a violet. It is still healthy. For the department to take the stand that under the term "mayonnaise" no product can be marketed unless oil is included is a lot of nonsense. As a matter of fact, I think that if you went back to the term "mayonnaise" in the broad sense you might describe it as something that was manufactured at the whim of a woman. There are no two cooks in the country who have exactly the same recipes for the foods which they prepare for their families.
I have had a good many cook-books in my house which had recipes for mayonnaise and for salad dressing and which required no oil whatever. There are some products on the market at the present time, under various trade names, which do not include oil and those apparently have the full approval of the department. I cannot see that the department has any right to force a manufacturer to remove from the market a product of this nature-particularly when you consider the amount of money which must go into the build-up of a trade name and the advertising which was necessary in

order to promote the sale of that article. In this case, after 16 years, the department decides that the description is a misnomer and they ask that the product be removed from sale. It does not seem to me, Mr. Chairman, to have anything to do with the health of this country whether any article is called salad dressing or mayonnaise, and if the public is fully aware of the ingredients I cannot agree that the department is correct in making such a stipulation. Apparently it has no such stipulation for other dressings but only on mayonnaise and salad dressings. They come in under B.07.034 and B.07.036, respectively, in the one case with 65 per cent vegetable oil and in the other case 35 per cent vegetable oil. I understand that these regulations were not enforced during the war for the simple reason that there was not sufficient vegetable oil. We do not know but what we will have to face that situation again. The department's stand seems to me to be entirely wrong and I want to protest most vigorously against their action in trying to force the manufacturer to remove from the market a healthful product which has had public acceptance for 16 years.


Mr. Goode:: Mr. Chairman, I am taking into account the experience of the hon. member but she will remember that some of us also have had experience in marketing these products. I would like to say that she knows from her experience and I know that the definition of mayonnaise in the retail grocery trade in Canada is an uncooked dressing with a preservative of oil to 65 per cent. Salad oil is not necessarily that. It can come in two classes, one with 35 per cent of oil and the other is a cooked dressing. As the hon. member very well knows, some people put out salad dressing under a peculiar name as a low-priced product. You can put out salad dressing in this country at 25 cents for an 8-ounce jar and market it very well under any peculiar or particular name, and some unscrupulous manufacturers are doing just that. They are trying to kid the public into thinking that they are buying a quality article at a cheaper price.
The department is absolutely correct in laying down these regulations. When you market mayonnaise in Canada you say to the public that you are putting a distinct amount of good oil in that mayonnaise. In selling salad dressing you do not. You may say to the public that you are selling this salad dressing under a particular name and the ingredients may be on the label, but I would rather think that very few women buying salad dressing in this country read the small print. I have sold many millions of jars of salad dressing and mayonnaise in my time
Food and Drugs Act
and I would doubt whether 1 per cent of the women who buy it know what is on the label-other than the large print.
The hon. member is entitled to present her views in this house, as I am, but I would ask her to reconsider the matter of the department telling the manufacturer to take an article off the market. I would be in agreement because in British Columbia where it has happened many times it has been for the good of the grocery trade.


Ellen Louks Fairclough: I cannot agree. In the first place the hon. member says that salad dressing is a cooked dressing, yet the regulations of the department call for 35 per cent vegetable oil. I do not know how he can reconcile that. It means that no one can put salad dressing on the market unless it has 35 per cent vegetable oil. This label says "oilless mayonnaisfe". I disagree, and I am not talking as a representative of the grocery association; I am talking as a woman and as a cook, and I know what I am talking about. We have been calling this type of thing mayonnaise for a good many years.


Tom Goode: May I correct the hon. member? I did not say that all salad dressing had oil in it nor that it was all cooked. I said that there were two qualities of salad dressing as you will see if you read Hansard tomorrow. I should take into consideration the experience my hon. friend has had? but she must remember that there are others in the house who have had just as much experience.


Gordon Francis Higgins: I am not getting into this
discussion about cooks. I want to discuss another matter which is equally important, I believe, to those who are not cooks. It is the question of rum or the description of rum.


Mr. McCann:: Does the hon. member know something about that?


Gordon Francis Higgins: I have had experience. In
the days prior to the time when Newfoundland joined this great nation-when rum was rum, I may say-we had a fine rum known as navy rum and it was sold under a trade name. On the bottle there used to appear the words "approved by the faculty". I never did find out who the faculty actually were. It also said that it was good for the prevention of chills and that it aided the circulation of the blood. Actually, I think it did both. Would the minister say whether or not that would be misleading advertising? There is another rum that we also have had misleadingly described by our friends of the United States forces as screech. I do not know whether that would be misleading advertising or not. I do not even know

Food and Drugs Act
whether the minister is competent to pass an opinion in these matters.


Paul Joseph James Martin: With regard to the latter, I am certainly not competent. I think that is well known. I think, however, we must maintain a little sense of humour in these matters. There is a difference between that kind of representation and the representation when it is seeking to sell something that it is not. The best example of the value of section 5 is this. The committee will remember that the hon. member for Winnipeg North Centre raised with me about a year and a half ago the question of whole-wheat bread. The fact that whole-wheat bread was being advertised but which in fact, in many instances, was not whole-wheat bread, was not necessarily injurious to health but it was deception and people were buying bread thinking that in fact they were getting whole-wheat bread but in a great many instances they were not. Our regulations have been changed, and now no one can advertise whole-wheat bread unless it is in accordance with the prescribed standard and contains a certain percentage of whole-wheat flour.
That principle applies throughout the measure. I was myself one of the victims of this constant use of whole-wheat bread. I was eating whole-wheat bread thinking that as a .result of doing so I was eating less of carbohydrates, only to find out that I was eating the same kind of bread with a different colour. Now it is not possible for that to happen under these regulations.
With regard to the case mentioned by the hon. member for Hamilton West, I can only say this. Mayonnaise does have, in the dictionary meaning, a definite standard. Any English dictionary will show that there has to be a certain amount of vegetable oil, and it has to be a substantial amount. It is not mayonnaise unless oil is in it. That is in the very nature of the product. To advertise mayonnaise as oilless is to advertise something that is not mayonnaise and to give to the public the impression that they are buying in fact mayonnaise. This particular problem did confront us. As my hon. friend knows,
I went into the thing carefully and I did once think that perhaps we were being needlessly strict. We called together in Ottawa representatives of the Canadian Association of Consumers. Mrs. Walton came down here and there were two other ladies from Ottawa who came in to the department, listened to the representations on both sides that were then made, and they agreed with the stand that we were taking.


Ellen Louks Fairclough: Is the minister sure of that? I understand that Mrs. Walton was not here.


Paul Joseph James Martin: Mrs. Walton was here, and Mrs. Kent and Mrs. Weir, representing the association, and they fully agreed with the stand taken.


Ellen Louks Fairclough: That is not the information I got over the telephone.


Paul Joseph James Martin: I am giving that information now.


Ellen Louks Fairclough: They told me they
definitely wanted oilless dressing.


Paul Joseph James Martin: How did we arrive at this standard? This was not a standard arbitrarily imposed. It was the trade itself which came to us in the first instance in 1936. We sat down with all of the people who were manufacturing mayonnaise and they all agreed that there had to be a prescribed standard in order to avoid misconceptions and deceptions that were being perpetrated, and we arrived at this one; and now the prescribed standard is that 65 per cent of oil must be used. That is the standard. As a result of that we feel that the public now, when they come to buy mayonnaise, will be in fact getting mayonnaise which in its very initial etymological meaning means the use of a substantial amount of oil. I cannot profess to be at all an authority on cooking.
I do not know anything about cooking except that in my heyday I knew something about the value of good cooking. I knew whether food was good or not.
I have before me a cook-book that my wife gave me this morning and I looked up mayonnaise. Here is what mayonnaise is:
This is a thick uncooked emulsion of edible vegetable oil, egg yolk or whole egg, vinegar or lemon Juice, or both, seasoned with salt and other seasonings that are commonly used in its manufacture. It contains at least 50 per cent of edible vegetable oil. The oil content of the average high-grade mayonnaise is about 65 per cent, while the egg content ranges from 5 to 15 per cent.
The technical books all indicate that. Webster's dictionary, which I looked at this morning, indicates that there must be a substantial amount of vegetable oil. However, the particular case that my hon. friend has raised so ably this morning is one that is based on regulation. We feel that our contention is sound. I should be happy at any time to discuss the matter further with my hon. friend.


Ellen Louks Fairclough: Mr. Chairman, it is true that the trade was consulted back in 1936.
I draw to the minister's attention the fact that that was 17 years ago, and a great many of the people who were making mayonnaise at

that time are no longer making it today. A great many of the people who were making mayonnaise without oil at that time have since gone out of the market. Today, as far as I know, this is the only product in Canada which is marketed under that term "oilless mayonnaise". You can bring in all the dictionaries in the country and out of the country, but when a term has popular acceptance as meaning a certain thing, I cannot understand why it should not be allowed. The minister knows right well that in a few years the dictionaries even may have a different definition of that particular term. That has happened before and it may happen again. It seems to me wrong that there should be notice of a regulation back as far as 1936, that nothing is done for 15 or 16 years, and then all of a sudden they dump it in the lap of the one remaining manufacturer in that field. It is discrimination of the highest order.


Stanley Howard Knowles: Mr. Chairman, I was interested in what the minister had to say with respect to the question of brown bread. As he indicated, this matter was raised in the house a number of times, starting back about two years ago. I pointed out to him frequently that deception was being practised. I am glad to know that the regulations which are made under this section were changed a short while ago so far as the labelling of whole-wheat bread is concerned. I think it is also good that the trade has gone in for vitamin enriched white bread. I personally still think that it is not as good as wholewheat bread, but maybe that is a matter of taste. In any event, in a country like Canada where wheat is one of our most important products it does seem to be a shame that so many of our people, in the bread that they eat, should not get the full value that is in the wheat itself.
However, this is the question I want to put to the minister, even under the revised regulations. He seems to be quite satisfied that there can now be no deception. I recognize that is the case where brown bread is wrapped and labelled. But what about the case of unwrapped, unlabelled brown bread? Most people, when they buy a loaf of brown bread -whether it is wrapped and labelled or not- assume that they are getting whole-wheat bread. My point in raising this matter a couple of years ago-and repeatedly during the last two years-was that unwrapped, unlabelled brown bread could be, and was in some cases, simply white bread dyed brown. I made it clear that the colouring used to dye the bread was not in itself harmful or injurious to health. The point was, as the minister indicated this morning, that that was a case of deception. Has any change been
Food and Drugs Act
made in the regulations so as to require that any bread that is brown must have in it a certain percentage of whole-wheat flour?


Paul Joseph James Martin: Well, one of the reasons of course is that we have our inspection service, which has to deal with the things that cannot be dealt with by regulation, and we are following that aspect of it very closely. As my hon. friend knows, we have an inspection force-I would not want to say how many, because in the very nature of things it is a very important service and we try to keep as much information to ourselves as possible in so far as our detection service is concerned. We have inspectors going around continually, and that is one of their jobs.


Stanley Howard Knowles: I take it from what the minister has said that the matter has not been completely cleared up yet. I take it it is still possible for certain firms to put on the market-


Paul Joseph James Martin: I do not want to say any more at the present time.


Stanley Howard Knowles: That is an admission that it is still happening; that brown bread is still being put on the market which, when it is not wrapped and not labelled, is not necessarily whole wheat bread. At the moment the only protection the consumer has is to buy wrapped and labelled bread. I think the consumer is entitled to full protection. I think the people who are working on this should see to it that all bread that is brown in colour is whole wheat bread.


Paul Joseph James Martin: I think the public should feel that they are getting the fullest protection that it is possible to give them. I would not want to give any other impression.


Mr. Charlton:: Are the margarine manufacturers going to be entitled to use the words "pasture sweet"?	.


Paul Joseph James Martin: That is a matter to which I should like to give further consideration before replying.


Mr. Hansell:: I have one question in connection with the struggle that the minister has had with whole wheat bread. Do I understand that when the manufacturer of whole wheat bread puts a wrapper on his loaf and advertises it as whole wheat bread the actual wheat germ is in the flour?


Paul Joseph James Martin: When a man sells bread and he advertises it as whole wheat bread it must conform to the prescribed standard, which is that it must have a percentage of whole wheat flour. If it has not, he has no right to advertise it as whole wheat bread.


Gordon Francis Higgins: There are two points that I should like to bring to the attention of the

Food and Drugs Act
minister. I believe the essence of this offence is sale in Canada. Does the minister feel that it might be advisable to include the word "export" as well as "import"? I think it would be necessary; otherwise you would be selling products that you would not want to go out of Canada.


Paul Joseph James Martin: This point arises in another section. I am not saying this boastfully-it was long before I had anything to do with this thing-but we have I think what is regarded as an exemplary Food and Drugs Act, the best of its kind in the world. Our act preceded the United States act by some 32 years. All countries do not have the same standards, and obviously if a country's standards are different from ours there is no reason why we should not sell in that country a product that conforms to their standards. And likewise it may be that there could be conflicting standards, so one is faced with the only alternative that the goods should conform to the law of the country to which they are consigned.


[Stage Direction]
Section agreed to.
Section 7 agreed to.
On section 8-Prohibited sale of drugs.
William Joseph Browne: I note that this clause is described as being new. It says:
No person shall sell any drug that
(a)	was manufactured, prepared, preserved, packed or stored under unsanitary conditions; or
(b)	is adulterated.
There must have been some similar provision in the law before this.


Paul Joseph James Martin: There was not.


[Stage Direction]
Section agreed to.
Sections 9 to 20 inclusive agreed to.
On section 21-Powers of inspectors.
William Gourlay Blair: In the matter of taking samples, the section says that the inspector may take samples and examine them. No provision is made in section 21 for leaving the sample. Later on in the bill we are going to come to the point of a court case on the analysis of a sample.


Paul Joseph James Martin: When an inspector takes the sample he pays for it, of course.


William Gourlay Blair: The sample taken should be
sealed by the inspector, because there will be a case on it afterwards.


Paul Joseph James Martin: That is done by regulation.


William Gourlay Blair: Where in the regulations?


Paul Joseph James Martin: The regulations are not in the bill. The regulations are contained in a very thick document which I table every year.


William Gourlay Blair: That is covered?


Paul Joseph James Martin: Yes, it wiE be.


William Gourlay Blair: The sample is sealed by the
inspector?


Paul Joseph James Martin: Yes.


William Gourlay Blair: And left with the firm?


[Stage Direction]
Section agreed to.
Sections 22 and 23 agreed to.
On section 24-Regulations.
William Gourlay Blair: With regard to the preparation, there is nothing here which says that a firm may devise a new method of preparation instead of the old method and produce a quality that is equal in potency and has sufficient therapeutic value.


Paul Joseph James Martin: There is the most continuous consultation. I would be very happy if my hon. friend, particularly because of his professional interest, could find time to come down to the laboratory where he could see the great consultation that goes on daily between our laboratory people at the food and drug laboratory and the trade. There is a continuous series of exchange of views on all sorts of developments.


[Stage Direction]
Section agreed to.
Sections 25 to 28 inclusive agreed to.
On section 29-Certificates of analysis.
William Gourlay Blair: This is one of the most important clauses of the whole act. It has to do with the matter of evidence. It seems to me that this is peculiar as regards the law of evidence. As it stands, the man who makes the analysis on behalf of the department does not need to appear in court. His certificate of analysis is accepted by the court. It seems to me that the defendant, who may be a pharmaceutical house or a drug company, should have the opportunity to cross-question an analyst in the court regarding the analysis he has made.


Paul Joseph James Martin: I should have Indicated that I propose introducing an amendment. I completely forgot. I am glad my hon. friend has spoken of it. I think the point is covered now. I would ask my colleague, the Secretary of State, if he would be good enough to move that in line 36, after the word "certificate", the following should be inserted:
The party against whom it is produced may require the attendance of the analyst for the purpose of cross-examination;
That is done at the request of the Canadian Pharmaceutical Manufacturers Association who thought that this should be in. This is put in so that there will be no misunderstanding.


Frederick Gordon Bradley: I move accordingly.


[Stage Direction]
Amendment agreed to.
William Gourlay Blair: I want to be sure of this, Mr. Chairman. The minister has explained that the amendment gives the defendant in the case the right to ask for the production of the analyst.


Paul Joseph James Martin: The analyst, yes.


William Gourlay Blair: And he is subject to cross-examination?


Paul Joseph James Martin: Yes.


William Gourlay Blair: I am quite satisfied.
Section as amended agreed to.
Section 30 agreed to.
On section 31-Coming into force.


Stanley Howard Knowles: Since this is the last clause in the bill I wonder whether I might just say a word or two, and urge upon the minister the point which I made when we were at the second reading stage of the bill. This legislation, when it is on the statute books, will give the Department of National Health and Welfare greater control and supervision over drugs, devices and appliances. I am thinking particularly of those in the medical field. In view of that, I hope that the minister, on his own initiative, without waiting for requests from the Minister of Finance, will look at and reconsider the list of drugs and appliances which are scheduled for income tax deductibility. It seems to me that list could be greatly extended. As the minister knows, in my view it should include all drugs prescribed by doctors. The Minister of National Health and Welfare could do a great deal along this line if he would make stronger representations in connection with this matter to his colleagues, the Minister of National Revenue and the Minister of Finance.


Paul Joseph James Martin: The hon. member may be assured that the minister in charge of this department, and the government as a whole, are always alive to the interests of the public in these matters.


Stanley Howard Knowles: This government may soon be dead.


[Stage Direction]
Section agreed to.
Schedules A, B, C, D, E and F agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the bill be read the third time?


Some hon. Members:: Now.


Stanley Howard Knowles: By leave.
National Housing Act


Paul Joseph James Martin: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



NATIONAL HOUSING ACT


Hon. Robert H. Winters (Minister of Resources and Development) moved: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the National Housing Act, 1944, to increase the appropriation provided by section 7 for loans under part I from $300,000,000 to $500,000,000, and the appropriation provided by section 13 for loans under part II from $150,000,000 to $250,000,000, also with respect to grants in aid of slum clearance and to certain other matters deemed necessary for the proper administration of the act.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


Robert Henry Winters: Mr. Chairman, the resolution before the house seeks authority for the government to introduce certain amendments to the National Housing Act. I will at this stage confine my remarks to the subject matter of the resolution.
When the present National Housing Act was passed in 1944, $100 million was authorized for home ownership loans under part I and to take care of possible losses under the previous housing acts of 1935 and 1938. In 1949 this amount was increased to $300 million. It is now proposed further to increase this appropriation by $200 million, making a total cumulative statutory vote of $500 million for home ownership loans under part I of the act.
For rental housing under part II of the act the original appropriation was $50 million. This was increased to $150 million in 1945. It is now proposed to increase this appropriation by $100 million to $250 million, making a total cumulative statutory vote of $250 million for rental housing loans under part II of the act.
Since 1945 over $1 billion of loans have been approved under the National Housing Act for residential construction in Canada. Of this amount the share of the federal government, including loans made by Central Mortgage and Housing Corporation on direct account, is $379 million.
The reason for asking for increased appropriations at this time is that, of the $300 million appropriated for part I loans, $285 million has been committed, including the amount held to the credit of lending institutions under the pool guarantee arrangement. As hon.

National Housing Act
members know, when a loan is made jointly with a lending institution under the act a certain amount is credited by Central Mortgage and Housing Corporation to an account held by the corporation in the name of that lending company. This account is for the purpose of making provision for losses that the company may in the future sustain in respect of its share of joint loans. Commitments for rental housing loans under part II, including that credited to the pool guarantee account, approximate $126 million. The balances remaining would not be sufficient to carry the operations of the act through the year 1953.
During the last session the standing committee on banking and commerce examined the annual report of Central Mortgage and Housing Corporation which administers the National Housing Act. That committee, after its deliberations, recommended that the slum clearance provisions of the National Housing Act be amended. It is now proposed to broaden section 12-the slum clearance section -to provide that the slum area when cleared may be developed under section 35 of the act as a federal-provincial housing project. Under the present legislation the area may be developed by a limited-dividend company, as provided by section 9 of the act, or a life insurance company operating under section 11 of the act. The amendment will further provide for the development of a housing project on an alternative area to be provided by the municipality. This alternative area may be developed by a limited-dividend company, a life company or as a federal-provincial project. There is a condition imposed in the proposed amendment, to the effect that the cleared area must be used for a municipal, provincial or federal public purpose. In other words, the provision relating to the use of an alternative area will apply only if the slum area is designated on the master plan of the municipality for public use. The committee recommended also that the cleared area might be used for commercial or other purposes. It is considered that if land is to be acquired and cleared for commercial or industrial uses the responsibility for its acquisition and clearance should rest with the commercial or industrial interests concerned, and authority to make the cleared land thus available is not being sought in the proposed amendments.
Other amendments contained in the proposed legislation are of a procedural or technical nature. I will at this time refer briefly to them.
It is proposed to include a clause in the act that will remove any doubt that lending companies operating under the act have the

corporate power to make and administer loans on an agency basis on behalf of Central Mortgage and Housing Corporation.
The government is by the proposed amendments also seeking authority for the corporation to make supplementary advances in connection with existing loans which it has made on its own account. This will allow the corporation to advance borrowers' charges where it becomes necessary to do so. At the present time the corporation has this power jointly with a lending institution in respect of a joint loan, but it does not have the same authority with respect to direct loans.
The section under which the integrated housing plan was operated and under which the arrangement in respect of defence workers has been made is being amended. The proposed amendments will require that a builder pay a premium for the undertaking of the corporation to purchase from him any house that he is unable to sell on the market. The section is also being amended with reference to the class of persons to whom a builder must first offer a house for sale. The present provisions refer to veterans. It is proposed to add specifically defence workers.
Finally, an amendment is proposed regarding rental insurance. As hon. members know, there is a three-year rental control on projects financed under the rental insurance plan. This control is imposed by the builder in his agreement with Central Mortgage and Housing Corporation. Pursuant to the present legislation, such three-year period runs from the completion of the whole project. This imposes a hardship on builders of large projects where upwards of a year may elapse between the renting of the first units and the final completion of the project. The proposed amendment will have the three-year period running from the completion of each unit or group of units.


Mr. Fleming:: Mr. Chairman, this, rather strangely, is the first time in the course of the entire present session of parliament that there has been a debate on housing. We have been in session since November 20, 1952, yet this is the first occasion on which housing has been the subject of a debate in the house. There were some comments on it during the debate on the address in reply to the speech from the throne and on the budget, but apart from that housing has not been the subject of debate during this session.
This is a resolution looking to the introduction, as I gather from the minister's statement, of what will be a rather extensive bill amending the housing act. It is not my purpose this morning to discuss at any length the contents of the minister's state-

ment nor the type of amendment that he has indicated. On the motion for second reading, when we have the contents of the bill before us, we shall have a much more suitable opportunity for that discussion.
I intend this morning to content myself with some brief observations concerning the housing problem in general. This problem has not receded in importance; it is still a prime problem facing all of Canada. On the last occasion when we had a debate on this subject in the house, on July 3, 1952, I reviewed the evidence that had been given before the committee on banking and commerce in the 1952 session. At its meetings during that year the committee had made an extensive inquiry into housing and the administration of Central Mortgage and Housing Corporation. I summed up the evidence which had been given to the committee, for the years 1946-1951 inclusive, as will be found on page 4176 of Hansard of July 3, 1952, as follows: For the six-year period the totals are these:	net family formations,
513,000; new housing units completed 495,887.
That means that in the six-year period we had not even kept abreast of new housing needs, let alone make any reduction in the very substantial backlog of housing needs which existed at the conclusion of the war. In other words, house construction in Canada had fallen behind current family formations in the same period to the extent of 17,113 units.
We have had no authoritative estimate of the extent of the housing shortage in Canada. Mr. Mansur, president of Central Mortgage and Housing Corporation, stated before the banking and commerce committee a year ago that he was not prepared to commit himself to any estimate on that subject. He did indicate that he had reservations concerning the estimate of housing shortage by the Curtis commission in 1944, but he himself was not prepared to commit himself to any estimate in that regard.
Whatever may be the best estimate, the fact is that there is still a great and pressing backlog of housing need in Canada. I have said "housing need" because there seems to be something of a change in emphasis as between housing need and housing demand. Housing need is not to be measured simply in terms of effective housing demand. When we speak of effective housing demand we are speaking in terms of economic demand on the part of those who have the means to satisfy their need if houses were available.
Of the various factors which over the post-war period have been responsible for
National Housing Act
retarding house construction, these have been mentioned from time to time: shortage of labour, shortage of materials, high prices, shortage of mortgage funds, shortage of serviced land and others. Under present-day conditions there has been a change of responsibility as between those different factors. Today it cannot be said that a shortage of labour is responsible for any retardation of house construction in Canada. As a matter of fact, while the minister has not given figures on expected house construction as estimated for this year, as I followed his statement, the figure that will be attained this year, according to estimates of officials of Central Mortgage and Housing Corporation, will be substantially below the capacity of the Canadian construction industry which competent officials of that industry have claimed, namely, a total of 130,000 housing units. Whether that figure be accepted, or some figure closely approximating it, the fact of the matter is that it is abundantly clear that the capacity of the Canadian construction industry is very substantially in excess of the rate of construction of houses.
The next factor deserving of comment is the supply of materials. Happily we are no longer faced with a shortage of materials; no longer can a shortage of materials be regarded as a factor delaying house construction. In a recent publication of the Department of Trade and Commerce entitled "Supply of Building Materials in Canada. Outlook 1953" we have a review of the 1952 position and a sketch of the outlook for 1953. The 1952 position is summed up in these words:
The supply of building materials in relation to requirements was better in 1952 than in any previous post-war year, and such shortages as did exist did not affect to any great extent the overall volume of construction achieved. Even so, with construction at an all-time high, a few strategic materials remained very scarce and a number of small projects for which supplies had not been obtained in advance were delayed. At the same time the decline of house building activity during the first six months of the year brought on a sharp drop in demand for a wide range of materials, forcing manufacturers to cut back production.
Then the publication proceeds to comment upon the extent to which shortages appeared during the year in cement and heavy structural steel beams, and it continues:
Despite these shortages, 1952 saw a fairly general movement of building materials into good supply. In fact, for the first time since the war, the production of a large number of building materials was cut back early in the year due to reduced demand and to temporarily inflated inventories. Thus, of the materials covered in this report, the production of 20 declined while the production of only 12 increased. Moreover, some of the shortages which appeared following the upswing in house building were due more to the fact that

National Housing Act
stocks had been unduly depleted by mid-year than to insufficiency of productive capacity.
That is its review with respect to building materials during 1952. What of the outlook for 1953? This publication sums it up in these words:
The outlook for the supply of building materials in 1953 is distinctly favourable. While the volume of construction is expected to be even larger than in 1952, its composition will be more balanced from the standpoint of the Canadian building materials industries.
That is an encouraging outlook with respect to building materials.
Commenting on prices in a recent speech to the house builders' association in Toronto on March 24, Mr. Mansur said that in 1952 the prices of houses were relatively stable. It is a happy circumstance if the cost of housing has ceased its upward climb. Whether that proves to be too optimistic an estimate we shall not be long in learning. Nevertheless it is, if this statement is justified, a hopeful augury that at least we have achieved stability in house building costs. The fact remains, however, that house building costs are extremely high, and in all fairness this is the factor which has created that difference that I mentioned earlier between housing need and effective economic housing demand, because unquestionably if the cost of construction of houses were lower they would be within the economic reach of many more people than can purchase them today.
Now, sir, I should like to say a word about mortgage funds. The minister did not make any comment on this subject in his statement. He asserted several days ago, in reply to a question, that there was no justification for the charge that in one particular municipality there had been a strike on the part of the lending institutions. In fairness, Mr. Chairman, it is a fact that must be recognized that there has been very general co-operation on the part of the lending institutions with respect to the policy that parliament has approved and which is written in the terms of part I of the National Housing Act. It is a fact that many people have not been able to obtain loans to the extent that or in the localities where they desired them, and for that reason some have sought to criticize the lending institutions. The fact of the matter is that in this country today the financial resources of the lending institutions are being used to their limit in assisting house construction under part I of the National Housing Act.
Because of the rise in the cost of house construction, the investment of the same amount of money today in loans under part I of the National Housing Act does not provide as many loans as was the case two [Mr. Fleming.!
years ago or even one year ago. The fact of the matter is that the average amount of mortgage money committed per loan is higher than it has been previously. Therefore the same total of investment through part I of the National Housing Act on the part of the lending institutions has not made available as many mortgage loans even though the total of money so made available is as large as and actually larger than in the previous year.
The present system under part I has many satisfactory features about it. On the other hand, there are unquestionably very great strains today upon the resources available for house construction through part I of the National Housing Act. One is the physical limit that exists on the resources of the lending institutions available for lending on mortgage security. Others take the form, and naturally, of a selective approach on the part of the lending institutions. We will look with interest for a report from the minister on the extent to which Central Mortgage and Housing Corporation has itself attempted to step into the breach in the case of municipalities up to 50,000 population where adequate mortgage loans from lending institutions have not been available under part I of the National Housing Act.
I should like to draw attention to this fact, and I think it is a fact that either is not generally known or is not generally appreciated. When the lending institutions under part I of the act are called upon to provide a loan it means a tremendous amount of detail work on their part. I am told that there are no fewer than 45 pieces of paper that have to be handled in placing every loan by one of these lending institutions under part I, and these 45 pieces of paper do not include the mortgage itself. Therefore it is not unnatural that the lending institutions, faced with a load of administrative work of that kind, are seeking to reduce the work that is thrown upon them in that regard, and it is not unnatural that their approach should become selective in this field in the face of a very great demand. I should like to hear some statement from the minister as to the policy that the government proposes to offer in the face of that admitted problem.
I come now to a brief statement of what is today unquestionably the most serious and difficult of all the problems contributing to the retardation of house construction in Canada. I refer to the shortage of serviced land. The great need for housing today is in our urban areas, and the acceleration of the program of defence production has contributed greatly to the sharpening of the need of more homes in the large urban areas,

particularly those industrial centres where defence production has been a noticeable factor in the local economy. It has reached a point where indeed, Mr. Chairman, some municipalities are so overwhelmed with the burden of providing services for land that they are doing what is within their power to discourage house construction within their municipal borders. In some cases this takes the form of requiring the builder or subdivider of land to pay in advance the costs of installing all services. The burden on our municipalities today, particularly on fast growing urban municipalities or those suburban municipalities that surround the great metropolitan centres, is very great.
They are still working under the handicap of a very limited tax base, a tax base which has remained virtually unchanged since 1867, a tax base that is utterly inadequate to enable municipalities to cope effectively today with the problem which has in part at least been left on their doorsteps by senior governments. If we wish to make an effective contribution to meeting the housing problem in Canada today we will need to do something effective to assist municipalities. I tried to sum it up in these words in the last housing debate on July 3, 1952, as found at page 4178 of Hansard:
If we want to help the housing problem in Canada, we cannot have a better slogan than this: Help the municipal governments!
We are not helping the municipal governments enough under the terms of this legislation. The minister has indicated that there are going to be some amendments with respect to section 35 of the act. The extent to which they are going to bring any help at all to municipalities was not clear from his statement, and I am not going to comment upon that subject until we see the text of the bill. It may well be that in some respects the effect is going to be to increase the burdens on municipalities, but I shall not attempt to venture comment on that subject until I see the bill. But the fact remains that the municipalities today, particularly the fast growing metropolitan and suburban municipalities surrounding industrial centres, are simply not financially able to cope with the housing problems that are being thrust upon them. And what is needed today, as imperatively as ever in this country's history, is a dominion-provincial conference to work out an understanding with respect to taxation sources which will assure to the municipalities sources of revenue in this respect that will assist them adequately to meet whatever share of the burden of the housing problem may be left to them to discharge.
Sir, slum clearance is a problem of great importance. Progress has lagged lamentably
National Housing Act
in this respect. Hopes that were held out in this house in 1949 when section 35 of the act was enacted have been disappointed. Much needs to be done in this respect. It is difficult of course to make the scheme of section 35 work when it requires co-operation with respect to each project on the part of the three levels of government involved. In that respect the section is cumbersome in its operation and I hope that the amendments to section 35 that are to appear in the bill will hold out some measure of hope that some of the difficulties which now surround the operation of section 35 will be met and removed. There certainly must be a more effective marrying of sections 12 and 35. I know it is a matter that the minister has had under study since the committee on banking and commerce made its recommendations on this point a year ago. I look for effective amendment in this respect when the bill is introduced.
There are just two other matters, Mr. Chairman, which I shall mention briefly in closing. There is one subject which has not been adequately examined in this house or justified. It relates to expenditure of a kind which is not of itself calculated to assist the housing problem in this country very much. On December 17, 1952, at page 820 of Hansard the minister brought in answers to certain questions asked by the hon. member for Wentworth concerning the cost of construction of the handsome new head office of Central Mortgage and Housing Corporation. Let me say at once that Central Mortgage and Housing Corporation has itself to be housed adequately. It has to carry on very important business and I should be the last one to say that it should not be properly accommodated. However, Mr. Speaker, in times like these when the levels of government that are greatly concerned with the provision of municipal services for housing are faced with very great difficulties, and when the provision that has been made by the federal government to assist in meeting the housing problem has not always been generous, I ask, Mr. Chairman, if the taxpayers of this country will regard it as justifiable that Central Mortgage and Housing Corporation have constructed in this building-


Louis-René Beaudoin: Order. I must point out to the hon. member that matter is not contemplated by the resolution and the bill to follow. We are studying amendments to the housing act and I do not think that the hon. member can bring in the construction of a building to house the services of Central Mortgage and Housing Corporation. That is not allowed.

National Housing Act


Donald Methuen Fleming: With respect, Mr. Chairman, in these post-war years, whenever we have had a resolution in this house looking to the introduction of legislation or amendments to this act there has been permitted at the resolution stage a very free discussion of all aspects of housing. Normally, or at least until recently, that discussion has taken place in the house at the resolution stage. That stage, as far as opportunity for discussion is concerned, is now virtually eliminated by the recent ruling of Mr. Speaker. In committee, however, I understood that we were to be accorded the same freedom of discussing the problem in general as we were formerly accorded in the house.
I was not proposing to make an extended comment-


Louis-René Beaudoin: Perhaps I might make a comment. My recollection is that by general agreement in the past all matters pertaining to housing have been left to a time when a resolution was to be introduced. That was when the main legislation was introduced or when substantial amendments were brought in. This act has been in operation for some time and I would like the hon. member to bear in mind that the estimates of the minister will soon be before the house, at which time, on the first item of administration, hon. members will be perfectly in order in discussing housing questions-particularly that one.


Donald Methuen Fleming: I will come back then on the estimates to what I conceive to be an extravagance in constructing the dance floor in this building.
The final matter I would mention at this stage, Mr. Chairman, concerns a housing project in the immediate vicinity of Ottawa. It is the Merivale road project which has come to the fore again as a result of some current action being taken by Central Mortgage and Housing Corporation. The project consists of 428 homes, all of which are occupied and are either owned or rented by ex-servicemen. They are married ex-servicemen in all cases. Those houses have been occupied by the residents for periods of up to seven years.
When they were first constructed they were all rented and then, in keeping with the general policy, the corporation in 1951 offered those homes for sale to the tenants and a number of the tenants purchased.


Louis-René Beaudoin: Order. I am afraid that this is another matter which the hon. member can bring up when the estimates are before the house. In other words, there is no general agreement at this time that the whole of the housing question will be debated on this resolution. There was no such undertaking
[The Chairman.]
given at any stage and therefore I would ask the hon. member to confine his remarks to the resolution now before the committee.


Donald Methuen Fleming: If you are in the process of making a ruling on this subject I would ask an opportunity of saying a word about it and of making a submission to you.
In the first place I wish to say that it was in no sense by general agreement in previous sessions that there was a general discussion on the housing question at the resolution stage. It was not as a result of any agreement that it was permissible but, in my submission, it was in order under the rules of the house. When Mr. Speaker made his ruling recently that on a resolution contemplating the introduction of a money bill there was to be no opportunity for discussion in the house he did not in any way purport to curtail freedom of discussion in the committee at the resolution stage. Mr. Chairman, I submit to you that to attempt to curtail discussion regarding the housing problem and to say that it must relate specifically to some words in the resolution under discussion is not only quite contrary to the course and practice that have been followed in this house, but I say with respect, it would be an unwarranted confinement of the rights of members to discuss this matter in this house.
After all, this resolution is a very brief statement, Mr. Chairman, of the intention of the government with respect to the contents of the bill that is to follow. It is exceedingly brief, and the statement made this morning by the minister indicates how utterly brief it is as a synopsis of the provisions of the amending bill. He referred to numbers of matters that were to be dealt with in the bill to be introduced and therefore, Mr. Chairman, to base a ruling now on the terms of the resolution, when that resolution is simply the barest kind of synopsis-to the effect that certain amending legislation is to follow-is in my submission going to result in a very serious and unwarrantable interference with the freedom of members to discuss this question in this committee.
May I add this in connection with what I was going to say. I was discussing a situation in this particular housing project. It is something that relates directly to the housing problem, and it is something that relates very directly to the financial provisions which the minister proposes should be made in the amending legislation by way of addition or supplement to that which is provided for in the housing act. In my submission they relate directly to the request that the minister is making for a financial supplement to the provision made in the act today for the assistance of house construction whether

under part I, of owner-occupied houses, or under part II, of houses constructed for rent. The project that I wish to refer to-and I had no intention of being lengthy about it; as a matter of fact I would have been through before this-


Stanley Howard Knowles: It is now one o'clock.


Donald Methuen Fleming: -began as a rental project and has, in the course of time, been turned into an owner-occupied project as a result of sales made by the Central Mortgage and Housing Corporation to the tenants, the ex-servicemen. I am not going to be long about it and, with respect, I think it is quite in order.


Louis-René Beaudoin: As the hon. member is explaining what he wants to talk about, I understand he is making his point.


Donald Methuen Fleming: Not yet.


Louis-René Beaudoin: I want to assure the hon. member that there is no attempt on my part to curtail the discussion; but if he looks at Beauchesne's third edition, citation 439, he will find the following:
The object of the resolution recommended by the crown is to give the house a first opportunity to discuss the advisability of making a certain expenditure. The details of the projected measure are not then disclosed and debate is confined to the resolution which should not be lengthy, although care must be taken that the terms used are sufficiently wide to cover the whole of the bill which will be subsequently introduced.
This is a resolution preceding an amending bill, and it stipulates that it is to amend the National Housing Act in certain particulars, namely to increase the appropriation provided by section 7 for loans under part I and the appropriation provided by section 13, and also with respect to grants in aid of slum clearance and to certain other matters deemed necessary for the proper administration of the act.
It is difficult of interpretation. When the hon. member begins to discuss a certain problem, it is difficult for the Chair to know exactly whether it falls within the specific terms of this amending resolution. If the hon. member is of that opinion, I should like to hear what he has to say. I think he has said enough to convince me that perhaps it is relevant. I should like him to know that if, in the past, under a limited resolution of this kind the whole of the National Housing Act has been discussed or if housing problems in Canada have been discussed, it may be that the chairman had been the victim of his generosity and that it is not necessarily to be the course followed on every occasion. The hon. member should not be surprised if, on this occasion, I feel that the rules should
National Housing Act
be observed. As I said before, the hon. member will have another opportunity to discuss housing when the estimates of the minister come before the committee, and that should be shortly. At this time all we have before us is a resolution to precede not the National Housing Act but a bill to amend the housing act in only certain particulars. I should therefore like the hon. member to observe the rules.
At one o'clock the committee took recess.
The committee resumed at 2.30 p.m.


Donald Methuen Fleming: Mr. Chairman, I was seeking to bring my remarks to a close with respect to the matter I was last discussing, namely, the Merivale road project in Ottawa. I had mentioned that, in keeping with the policy which Central Mortgage and Housing Corporation was following in a good many of these projects, in 1951 they offered these houses for sale to the occupants of them.


Robert Henry Winters: On a point of order, I am not at all sure that the subject being discussed by the hon. member for Eglinton is covered by the bill which will be introduced as soon as this resolution is disposed of. I am inclined to think it is not within the scope of this resolution. I would therefore make two suggestions:	One is that the hon. member defer his remarks on this point until the bill is introduced, at which time he can decide for himself whether or not his subject does fall within the scope of this legislation. Second, there will be, as you mentioned earlier, Mr. Chairman, an opportunity very shortly to discuss this and other matters when the estimates of the Department of Resources and Development are before the house. I wonder whether on that basis the hon. member might defer his discussion on this point until later, to save time.


Donald Methuen Fleming: The last three words that the minister used were: "to save time". May I assure him and you, Mr. Chairman, that I would have concluded this subject a long while ago, before lunch, had it not been for the interruptions. It is not a matter that I intend to discuss at great length. It is my submission that it is relevant to the resolution. The minister does not hold out any hope that it would be relevant to the bill. I cannot therefore accept his invitation to defer my observations on this subject until we reach the bill when he tells me almost in the same breath that he does not think the discussion would be relevant on the bill. I shall be very brief, Mr. Chairman.
A number of the veterans who purchased their houses from the corporation, as I have

National Housing Act
indicated, about 160 of them, continue to pay rent. On March 30 of this year, while still paying rent, they received a notice from Central Mortgage and Housing Corporation which I think is not a model notice to be followed by landlords in such cases. On the contrary, it seems to me to be couched in very harsh terms as applied to these veterans who have obviously been satisfactory tenants. The notice is signed for the corporation by F. J. Melvin, administrator. It is dated March 30, 1953, and reads as follows:
Dear Sir:
We hereby give you notice to quit and deliver up to this corporation on the 30th day of April next, quiet possession of the premises situated at now held by you as our tenant.
We offer to lease to you these same premises at a monthly rental of $	commencing on
the first day of May 1953.
Included in your present rental payment for the house you occupy is an amount of $84.84 per annum which is turned over to the municipality as payment in lieu of taxes. In accordance with a request from the corporation of the city of Ottawa, we have now agreed to collect full taxes from the houses remaining unsold in these projects and this necessitates the new rental stated above. This, we think, is only fair since those persons thrifty enough to purchase their homes earlier have of course been liable to full taxes from the date of purchase.
A new lease, at the new rental, will be ready for your signature at our office any time after May 1, 1953.
If the corporation is now under legal obligation to pay the city of Ottawa the full taxes on these properties, and they are no longer covered by the kind of agreement under which first of all Wartime Housing Limited and later Central Mortgage and Housing Corporation were making payments to the municipalities in lieu of taxes and at a rate usually lower than taxes, whatever they may be, and whatever considerations ought to arise out of that, it seems to me that is a very harsh way to proceed. I should like to ask the minister, as the minister responsible for the administration of Central Mortgage and Housing Corporation, whether instead of taking this harsh course he does not think that this is a matter to be proceeded with on the basis of conference and an attempt to bring together those 160 veteran tenants.
They resent, and quite naturally, the suggestion that they were not thrifty because they did not purchase their homes. I think the minister will agree that is a very invidious sort of comparison to put in a letter of this kind. A notice to vacate or a notice to treat for a hew lease or new rent is one thing, but to suggest to the recipients that they have not been thrifty is I think an insult to many of them. As a matter of fact, many of them have not bought because they were not in a position to do so. There is this further fact.

I am told that many of them say that they were orally assured by officials of Central Mortgage and Housing Corporation at the time when the tenants were invited to purchase their homes that whatever they paid by way of rent would be taken into account in establishing the price in the event of purchase. They are now told that the corporation does not acknowledge that in the case of those who did not buy at that time; that no right arises in their behalf in consequence of having paid rent.
I say to the minister with respect that that is something he should look into and make sure that justice is going to be done to these veterans. Certainly there is no occasion for giving summary notice to a group of worthy veterans, 160 in number, who have obviously been very satisfactory tenants. Therefore if the tax position is changed, if it is costing the corporation more to carry these properties, then that of course must be taken into account, but it is not a justification for treating these veterans harshly and summarily in the tone of this letter.
I bring that matter to the minister's attention and ask him to delay proceedings of this kind and to negotiate with these veterans and find a better way of meeting the problem than is indicated in the way it has been handled heretofore.
In conclusion may I ask the minister for a fuller statement of policy than he gave the house this morning. The house and the country are entitled to know what proposals the government has to make to the house for making more progress in meeting the housing problem than is being made at the present time. Whatever may be said of these amendments-and there will be fuller opportunity to discuss them when the bill is before the house-the house is entitled to some clear statement of policy that will indicate that something more effective is going to be done than is being done at the present time.


Mr. Noseworthy:: I make no apologies for speaking at some length on this resolution. Housing is still one of Canada's most baffling social problems. This resolution has been on the order paper since December 5, and I submit that if the government had assigned to it the place and time that its seriousness merits it would have been called earlier. It would not have been hurried through parliament in the last week or two of a parliamentary session. It would have been passed on to a committee where ample opportunity would have been given for the study of this very serious problem.
With the single exception of national defence there is no subject today of any more

vital importance to great numbers of Canadian people than is that of housing. Every year since I came to parliament we have had a debate on this subject. In session after session hon. members on this side of the house, as well as hon. members on the other side, have put forward suggestions to the government as to how this problem could best be met. But we have gone on year after year without being any closer to reaching a solution than we were some years ago.
The amendments which will be introduced as a result of the legislation before us may help, in so far as they make more federal funds available. To that extent the measure will help the situation. But I submit that although for years Central Mortgage and Housing Corporation has been trying to work with private lending organizations, with real estate boards, with associations of speculative builders and with provincial governments, it has not yet reached any solution to our housing problem. The situation today is as bad as it was at the end of the war.
There are no official figures as to just what the need is; but officials have estimated that today in Canada we need anywhere from
600,000	to 700,000 homes. The 500,000 which have been built since the war have not provided for the new families created in that time. The backlog has increased, and under today's policy nothing is being done to catch up with that backlog.
Housing is something more than just the process of obtaining places in which to live. As I have said, it is a social problem. In a special issue on housing dated December 15, 1952, the Canadian Welfare Council has much to say about the effects of poor housing upon our community life. In part the article states:
It has become well known from studies made in large and small cities that the rates of juvenile delinquency, disease, retardation and other difficulties at school, serious home accidents and fires, are higher in neighbourhoods of poor and overcrowded housing than in others.
Newark, New Jersey, has made a study, published under the title "Social Effects of Public Housing" in which the following conclusions are reached:
The disease, accident and juvenile delinquency rates, which could be measured exactly, were better among the re-housed groups than among the control groups. In the things which could not be measured exactly, and in which the re-housed group could not be compared statistically with the control group, the study had to rely on reports from the mothers: The majority of the mothers said their children had improved in their school work, were easier to keep clean, had better places to play; that their families were happier, and had been able to save money or purchase equipment for their homes. One hundred per cent reported no fires or serious home accidents.
68108-263i
National Housing Act
That report goes on to look at the other side of the picture, housing as a social problem.
What is the other side of the picture? When housing is poor, health suffers, there is friction among members of families; budgets are thrown out of gear, families are often separated, social agencies find that they are frustrated in their efforts to help, children cannot play properly, new Canadians get fed up, and the costs of health and welfare services are too high.
And then are set out page after page of details from investigations held in Montreal, Hamilton, Toronto, Halifax and other Canadian cities, pointing out the disastrous effect upon society of bad housing conditions.
I believe the trouble with our housing policy under this government is that the government has placed the cart before the horse. In its anxiety to bolster private enterprise the government has placed the interests of lending institutions before the interests of the community at large. As a result we are not getting housing at a price that the majority of Canadians can afford, either to purchase or to rent. We must recognize that housing is a social problem, and that the provision of government assistance in housing for people who cannot afford either to buy or to rent accommodation is no more socialistic than the provision of hospitals, schools and pure water on a community basis.
I think we must change our entire point of view in connection with this whole business of government assistance in housing. This is not a field that should be left free for private enterprise to exploit. It is of far too great importance in the life of the community to be left to exploitation for profit by private enterprise. It is one field in which the government is justified in giving a public service through the provision of homes at prices people can afford to pay.
_ The social cost involved in government subsidies for low-rental housing, or the cost which would be involved in a government policy which would make loans at a much lower rate of interest than offered by the private lending companies, would be more than offset by the savings that would be effected in other services communities are called upon to give, by reason of the fact that there are poor and overcrowded housing conditions.
Let us look at the results of the government's housing policy to date, so that we may realize just how far short of providing a solution this resolution falls. Since 1950 there -has been a decline in the actual number of houses being built. I submit that a successful government policy, a realistic policy designed to meet the needs of the people instead of the interests of the lending

National Housing Act
institutions, would be a policy that year after year would bring about an increase in the number of houses being built.
The second indisputable fact is that the backlog of housing which existed at the end of the war has increased. We have not been able to close the gap between the need which existed at the end of the war and the supply. As a matter of fact, we have not been able to provide enough houses to house the new families of Canada.
The third fact that must be recognized is that as a result of the present government policy the cost of houses today places them beyond the means of most Canadian people. We have it on the authority of Mr. Mansur that only those with incomes of $3,500 a year or more can avail themselves of the benefits offered under the National Housing Act, that only those with incomes of $3,500 and more have sufficient income to meet the carrying charges on some of the cheapest houses, those costing in the neighbourhood of $10,000 which is the cheapest house being built under the National Housing Act.
The fourth fact which I think we must recognize is that there is a desperate shortage of rental housing. Mr. Mansur again tells us that $85 per month is the lowest economic Tent that can be charged for a 4-roomed fully serviced dwelling house. Eighty-five *dollars a month is just more than the average workingman can afford to pay today. Any housing policy that is designed to meet the needs of the people of this country will make some provision for rental housing because we are told on good authority that at least one-third of the people of Canada cannot buy or expect to pay for homes.
I know that section 35 of the housing act provides for rental projects being undertaken in co-operation with the provincial and municipal governments, but for some reason these projects are not making very much headway. They are not meeting the needs of the people. They are not meeting the situation. The government says that the initiative must be taken by the local municipality. Surely there is a place here for more dynamic leadership on the part of the federal housing authorities. Surely there is room here for the federal housing authority taking steps to encourage municipalities to get into this field in cooperation with the provincial and federal governments so that low rental housing may be provided.
Next, we have not as yet had any comprehensive planning on a community basis. What work the government's housing authority has done has been on a piecemeal basis. It has been project by project, street by street, and a bit here and there to relieve the direct

conditions. There has not yet been evolved by the government or the housing authority any comprehensive housing plan on a community basis to meet this problem.
There is another aspect of this matter which is sometimes lost sight of. Over the last few years tens of thousands of Canadians have bought homes and assumed mortgages. Should we have a business recession, should there come some unemployment or reduction in wages, these people will lose the homes they have acquired and into which they have put their savings, just as surely as they lost them by the thousand in the early thirties.
This is not an impossible situation. Only a few days ago when the first news of a possible peace came there was a slump on the New York stock exchange which indicated how sensitive modern business is to present conditions. As a matter of fact there are those who wonder whether we can afford peace and maintain prosperity under our present economic system. People by the thousand have assumed mortgages over the past few years on houses costing $10,000, $11,000 and $12,000 which they will be able to hold only so long as we maintain prosperity, full employment and high wage levels.
I submit that the present situation with regard to housing is all the positive proof that is required that some radical changes in the government's policy with regard to housing is necessary. The present policy, whereby the federal government agency, Central Mortgage and Housing Corporation, enters into contracts with private lending institutions to make loans available to builders, has not proved to be a workable solution to our housing problem. That approach to the problem may be good for the lending institution but it is not getting homes built at prices at which most Canadians can afford to buy or rent. I submit that the supreme test of any housing policy is not its financial benefits to the private lending institutions, it is whether or not it gets houses built at prices at which people can afford to buy or rent. Judged by that standard the government's policy in connection with housing since the war has failed, and failed miserably.
Interest rates on loans are one of the most important factors in carrying charges on homes. We hear a great deal about the increased cost of labour, the increased cost of materials and so on, but we hear little about interest charges. Mr. Nathan Strauss in "Seven Myths of Housing" tells us that a reduction in financial charges, interest and amortization by one-half would effect a greater reduction in annual cost than cutting

in half the cost of both material and labour. The reduction by one-half of interest and amortization charges would reduce the overall cost of a house more than it would be reduced by a one-half reduction in the cost of both material and labour.
Catherine Baur, another housing authority, tells us in the International Labour Review of July, 1945, and she gives a statistical table to support her statement, that a reduction of 2 per cent in interest rates will mean a bigger saving in the total cost than a 20 per cent reduction in the cost of the structure itself. In my opinion it is not reasonable to expect the private lending institutions to lend their money for housing projects at interest rates which would bring the cost of these houses within the reach of those who need them. I submit that is the function of government. The private loan companies exist for the express purpose of making a fair return on their investment for the benefit of their shareholders. There is no one criticizing them for doing that. It is not their function to provide a social service to the community. I submit that is the function of government.
Another drawback to the government's policy on housing, in addition to the high interest rate which is required by reason of the government's policy, is the burden which is thrown on the municipalities. Mr. Mansur has told us that one of the great drawbacks is the lack of serviced lands. The municipalities are loath to provide serviced land, to provide school facilities and so on for the new communities where large housing projects are undertaken. It has been estimated that, under such circumstances, a municipality is called upon to be responsible for about $2,000 per home through the provision of serviced land, various other services, school accommodation, and so on. Today, the municipalities are loath to undertake that responsibility. That is one aspect of the housing problem which this government's policy fails to meet entirely.
In order to help the drastic housing problem, I want to place on the record a few suggestions advocated by the C.C.F., suggestions that have been approved by our national organization and which may be considered as official C.C.F. policy on the matter of housing. I shall outline these briefly and comment on them later. In our opinion a policy that is to meet the needs of the Canadian people regarding housing must, first of all, provide a reduction in interest rates to 2 per cent by having Central Mortgage and Housing Corporation solely responsible for the issuing of these loans. We recom-
National Housing Act
mend that the federal government should set up a special fund1 for this purpose, and that money from this fund should be available not only in the industrial centres in which lending institutions now lend money, but in the small communities and farming districts where private lending institutions will not lend money at all for these purposes.
Secondly, we suggest that there be an increase in loans from 80 per cent to 90 per cent of the lending value of the housing project. Third, we recommend an increase in the amortization period. Most of the current loans now run for twenty years. There have been some forward steps taken recently whereby the period has been increased to twenty-five years. We recognize that good housing authorities now maintain that that amortization period should be extended to thirty or thirty-five years in the case of houses of brick or similar construction.
The fourth suggestion is the inauguration of rental subsidy funds on condition that only municipalities or public housing authorities should receive the subsidy. Such a subsidy would be granted on condition that the municipality or recipient would comply with the requirements of a comprehensive housing program. This subsidy would permit a sharp reduction in the present high rents so that the low income dwellers, who cannot afford to build homes under even the most favourable conditions, would benefit. The fifth point we suggest is that the federal government make grants to the provinces to be turned over to the municipalities for the construction of schools and other public facilities which are presently a heavy expense charged to the municipality when a new housing site comes into being. On this point I am in complete agreement with the hon. member for Eglinton when he suggests there should be a conference of federal, provincial and municipal authorities in an effort to work out some plan whereby the federal government will come to the assistance of municipalities in meeting the cost of school construction and the provision of other facilities.
We submit that housing is of sufficient national importance to warrant the federal government faking some action in this connection. Finally, we submit that there should be an increase in the number of scholarships provided under the National Housing Act to train a larger number of badly needed administrators in the housing field. We commend what is being done already in that field. I understand that somewhere between nine and ten scholarships are granted annually. Our suggestion is that the number of scholarships should be increased and that

National Housing Act
more housing administrators should be trained.
We put forth these suggestions on the premise, as I said before, that housing is a social problem. It is not just an economic problem, but it is a social problem of great national importance. It is not simply a matter of finding a place in which people may live. It is a matter which will have a direct bearing upon the lives and upon the happiness of our Canadian people.


Mr. Johnston:: Mr. Chairman, this is not the first occasion upon which I have had the privilege of speaking about housing. I do not think there is a question which is of greater interest to the Canadian people than housing, because nothing gives greater dissatisfaction to the people across this country than living in poor housing accommodation.
On many occasions, Mr. Chairman, I have condemned the type of housing which the government has built in the past. That goes back from the very inception of the national building program. After the war when we started to build wartime houses some of the most terrible structures were built in the name of houses. We come to the veterans' housing, V.L.A., and that too, a government-sponsored affair, was a disgrace across the country. I know that it did provide some shelter for the returned men but I said at the time that it would not be long before that kind of house would be a disgrace to the community in which it was built. Even now you can go through the city of Ottawa, the city of Winnipeg, the city of Calgary or any other large city and you can pick out those V.L.A. houses as far as you can see them. People are somewhat reluctant to buy property in the vicinity of V.L.A. houses because they are eyesores in the community in which they are built.


Mr. Prudham:: They are all right in
Edmonton.


Charles Edward Johnston: Well, perhaps you had something to do with building them, I do not know-and I do not know whether contracts for them were let out to tender-and that is just a passing reference.


Mr. Cruickshank:: Where are these houses?


Charles Edward Johnston: I am serious, Mr. Chairman; they are not a good thing for the communities in which they were built. They do serve a purpose, which is shelter, but surely in this day and age we can build more than shelter for our people.


George Alexander Cruickshank: We are mighty proud of them.


Charles Edward Johnston: It seems to me, Mr. Chairman, that our attention is being centred

too greatly on apartments and rooming houses and such like rather than having the main emphasis put upon private homes. I am not overlooking the necessity for having low-rental projects, I think they are necessary; but it seems to me that the greatest effort should be put upon building homes for families. It is not a good thing in my judgment to have a number of families housed in a rooming house project. That is not conducive to the good bringing up of children. There is no adequate place for the children to play and the grounds are not adequate for beautification of the structure after it is built. I think that one of our big mistakes is that we are not paying sufficient attention to home structure for the single family unit.
Again, Mr. Chairman, the housing programs which we are undertaking now are not doing the job they were intended to do. We are not building homes for the people who need them. It is senseless to say that you have to have a Central Mortgage and Housing Corporation set-up costing over $80 million a year, and that you have got to have a lending institution to lend money to a man who is drawing $15,000 or $20,000 a year. He can look after his own problems and so can the fellow who is getting $7,000 or $8,000 a year. The people we are concerned with are those who are not in a financial position to have available that kind of money. The minister himself realizes this, for when he was speaking not long ago at the banquet of the Appraisal Institute of Canada, as reported in the Ottawa Citizen of Thursday, April 2, 1953, he had this to say -and I wholly agree with him though I am amazed that he is not doing anything about it. It is headed, "Low Rent Aid":
Mr. Winters said that not more than one-third of Canada's families could afford new houses-
I heartily endorse that.
-either to rent or to own. In the past, this had been overcome by families living in houses that were second, third, fourth or even fifth hand.
But if enough new houses weren't found, he stated, it would affect the people at the bottom of the scale-the people who were living in dilapidated and obsolescent housing.
I would not dispute that for a moment. I think it is exactly the case, and those are the people whom the National Housing Act is supposed to be assisting.
What are we doing about it? Not a thing. We cannot use the excuse that there is a shortage of material because all of the builders' organizations in the country, and the department too, have stated on many occasions that there is ample building material in the form of lumber, plumbing equipment and so on. In days gone by, there might have been the excuse of shortage of materials but that condition does not exist today.

I have here a clipping from the Ottawa Citizen of Monday, February 16, 1953, headed: "The Government's Modest Housing Target".
With labour and materials again in good supply, it has become physically possible to start building more homes than at any time since the start of the Korean war. Yet the government's program does not seem over-ambitious. Speaking in Winnipeg, Mr. Winters, the resources minister, said merely that 1953 construction might reach the "high" levels of pre-Korea years. In 1950, 92,000 dwelling units were built. This construction about kept pace with new demand, but did little to reduce the backlog. Since then, home building has fallen. In 1951, only 68,000 new units were started. Last year, the figure was 76,000. Yet the need is greater than ever, for family formation and immigration have continued at a high rate.
So once again the minister says that we are not doing the job as it should be done.
In speaking of materials and how we are keeping our program up with the times the National Housebuilders Association in a circular dated February 25, 1953, gives "Facts and figures for your use in the debate on housing".
House production is dropping. Despite an upward trend in the last half of 1952, production for the year was only 75,000 units, 10,000 less than in 1951 and 17,000 less than in 1950.
Those are dominion bureau of statistics figures.
Our backlog of unbuilt housing is growing. The total is now 490,000 units made up as follows:
Backlog, 1944 (Curtis report):	 320,000
Excess, net families formed over houses
built, 1944-52 (DBS) :	 50,000
Allowance for obsolescent houses not
replaced, 1944-52 (Curtis report) : _____ 120,000
490,000
That certainly does not indicate that we are making any progress in this housing field. The minister has pointed out on many occasions, as have others, why the condition exists. There are apparently some obstacles in the way of home building but certainly labour is not one of them, because I remember seeing a report put out not so long ago by the contractors organization where there were something like 40,000 or 50,000 unemployed carpenters looking for jobs. One of the obstacles that have been brought forward is the lack of serviced land which is said to be holding back our building program. I do not think that should be a serious problem, but I will discuss it later on. The second obstacle to home building is the down payment; and the third is the shortage of mortgage money.
Let me speak about the serviced land for a moment and see whether that should offer such a great obstacle to our house building program if it is properly conducted. Here is what was done in the province of Alberta;
National Housing Act
and you will excuse me if I keep referring to the province of Alberta because it is one of the most outstanding provinces. When you are talking about progress you just cannot help referring to it. It was in 1950 that the province of Alberta started what they called a program of self-liquidating projects. Under that program of self-liquidating projects they included such things as water systems for municipalities, electrical supply for municipalities, construction in part of schools and so on. They set up a $5 million revolving fund and they lent that money to the municipalities at 2 per cent. As far as my figures go, up to the present time of that money $460,000 has been paid back and they have not lost a penny of it yet. The fund was established in 1950 and since that time $17 million has been placed in it.
I do not see what better security you could have, under the heading of a self-liquidating project, than a man's home. If a man gets into fairly tough straits, he will even sell his car in order to keep his house intact. He will cut down his standard of living to make his monthly payments on his home. It forms the very basis of security. This year, in 1953, the province of Alberta has budgeted for a little bit over $174 million. Out of that amount there has been set up an additional fund of $25 million to further assist the municipalities. I have heard some talk here this afternoon about the municipalities being overburdened. I suggest to you, Mr. Chairman, that they are overburdened; but I also suggest that the province of Alberta is assisting the municipalities in developing self-liquidating projects at an extremely low rate of interest.


An hon. Member:: They have oil.


Charles Edward Johnston: Oil is not the main factor at all. In 1951-and my mind goes back to those figures because they are given by the dominion bureau of statistics-if I remember correctly our total income on oil that year was $121 million. That did not begin to equal the revenue which was obtained from cattle and hogs in the province of Alberta. It is true that oil has been of assistance to us, but it has not been the main factor of our prosperity by any manner of means. Agriculture is by far the leading and basic industry of western Canada and it is the backbone of Canada as well. Let nobody say, "Oh well, it is because you have oil out in Alberta." Certainly oil has helped us, but our plans were laid a long time before oil began to be produced in any large amount.
I think if the provinces were to assist the municipalities, as I have indicated, by setting up a revolving fund for self-liquidating pro-

National Housing Act jects such as sewers, light, roads, schools, streets and water, it would go a long way towards solving that problem of servicing land.


George Prudham: Will the hon. member permit a question?


Charles Edward Johnston: Yes.


George Prudham: Is that revolving fund still in operation in Alberta?


Charles Edward Johnston: As far as I know, yes; and they have increased it to $25 million now. That was according to the 1953 program. But the $25 million was an additional aid to the municipalities. If my memory serves me correctly, I think the rate of interest was 2J per cent on that $25 million but 2 per cent on the $5 million. I suggest that the federal government should take a lesson from that example.


George Alexander Cruickshank: God help us.


Charles Edward Johnston: I beg the hon. member's pardon?


Mr. Brooks:: He said "God help us".


Charles Edward Johnston: My hon. friend was looking for divine aid? Maybe a little bit of it would do them good.
The next obstacle to housing that I mentioned a moment ago was the down payment. That was the big trouble according to the Minister of Resources and Development (Mr. Winters) when he was speaking to this Appraisal Institute of Canada on April 2. The problem that was in his mind was the fact that we are not doing anything to assist these people who are in the low income brackets, and well it might be, because there is where the difficulty lies. But I do not think as yet he has solved that problem. He might say to me that there are instances where the Central Mortgage and Housing Corporation is lending money at a cheaper rate in some localities; and I think over there in Hull was one of them, if my memory serves me correctly. But under the Central Mortgage and Housing Corporation loans are guaranteed up to 80 per cent of the lending value. That does not mean for a moment that they are financing the construction of that house.
The big question that comes in there is the lending value. For instance, a house might cost $15,000 but the Central Mortgage and Housing Corporation does not value that house at $15,000. They might say that the lending value of that house is only $10,000; and I think that in 90 per cent of the cases that is exactly what they do, because they are making themselves doubly sure when they set the appraisal value of that house. Then they lend up to 80 per cent of that value.


Then the lending institutions come along and charge 51 per cent, for interest on the loans which they make. How can people who are so poor that they cannot afford the down payment on a house pay 51 per cent interest on a loan? It just cannot be done, and the obvious truth is that they are not doing it. Therefore they are not getting homes. The minister can go out to these institutes and preach all he likes, and he can say, "There is where our trouble lies"; but what is he doing about it?
I well recall, Mr. Chairman, just after the war or in the last part of the war, what took place when there was no place for the mortgage companies to lend their money; the farmers were getting out of debt and so were the others. The government came to their aid and put up to them this housing proposition whereby they could lend their money out at a good rate of interest. Then just as soon as other fields become more attractive they cease lending for home building and put their money out on those other projects. I do not think it should be the purpose of a national housing plan to assist financial corporations. If we are going out to build houses, let us build houses and not go into the financial field.
Under N.H.A. a house may cost $11,600. The maximum loan on that house, under the present set-up, would be about $7,906 and the down payment would be $3,154. According to the bureau of statistics, about 75 per cent of the people of Canada earn less than $3,000 a year. Just where is the ordinary man going to get a down payment of $3,154 on a $11,000 home? When he does not even earn that amount in the full year, where is he going to get the money? For us to stand up here and say that this class of society can build homes is just nonsense, when they do not earn that amount for a full year's work.
According to the dominion bureau of statistics, 1951 census report, about 75 per cent of 2 million families earn less than $3,000 a year. Nineteen per cent of these earned between $2,500 and $3,000;	25 per cent
between $2,000 and $2,500; and 22J per cent between $1,000 and $2,000 and 7 per cent of these earned less than $1,000. The number in the last group consists of about 132,000 families. When you find people with incomes within these brackets you ask yourself, just how are they going to get a downpayment of $3,150 to build a house? So far as I know, any plans the government has will not meet that problem.
The next obstacle I mentioned was the shortage of mortgage money. Last year we used about $175 million. This year it is expected we shall use about $225 million.

When it comes to these mortgage companies lending money we find that they are not taking much risk. In the first place, their appraisal value is down below the actual value of the house. In the next place, the government guarantees them 25 per cent loss. What have they got to lose? But yet, according to the public accounts of this year, the government lost $686,837.04. That is quite a loss and it came about because of their guarantee. That information may be found on page 34 of the public accounts.
What is going to happen because the lending companies have refused to lend this money? Somebody suggested that they were on strike. That was a very good term to use, but the minister objected to it; therefore I will not press the point. The fact is they are not lending the amount of money that they did before, and they are beginning to tighten up still further.
If that is the only source of money, and they refuse to lend it, how are you going to build these houses for the people in the low income brackets to whom the Minister of Resources and Development referred a while ago?
I suppose it would not be right to criticize the government, the Central Mortgage and Housing Corporation or the lending companies if I did not have something to suggest. It is common practice in this house to criticize the government and then not offer some solution to the problem. I have some suggestions. I would suggest first that you get rid of that white elephant, the Central Mortgage and Housing Corporation. It has been riding on the backs of the already overburdened taxpayers long enough. It may have had a purpose in days gone by, but I think that purpose has been served, and we could get on very well without it. One of the main purposes of Central Mortgage and Housing was to see that the building standards laid down under the National Housing Act were followed out. That has never been done in the majority of cases.
I can recall when these projects first started. Wherever you found difficulty it was in the lack of proper inspection. Mind you, Central Mortgage and Housing never did take the attitude, so far as I know, and certainly the officials to whom I have been speaking never interpreted their duties in that way, that they were to supply inspectors and see that the house was built according to the plans and specifications. What they were to do was to see that the house was built to their satisfaction. They thought that was all that was necessary. When I pointed out on many occasions that inferior cement, 68108-264
National Housing Act
material and workmanship were employed in a house, Central Mortgage and1 Housing authorities said: "Well, it is to our satisfaction."
The hon. member for Red Deer spoke of a project in Namao, Alberta, the other day. The difficulty arose there where Central Mortgage and Housing was supervising. The inspection was poor. I have said on many occasions-and I have said this to the minister -I do not think the federal government can supervise building construction all over Canada. It is just too big a job. Experience has proven that Central Mortgage and Housing Corporation is unable to do the job as far as proper building inspection is concerned.
I am told-I do not know how true it is1- they have even fired some of the good inspectors.


An hon. Member:: They were too honest.


Charles Edward Johnston: I am not going to argue that point.


Ernest George Hansell: They did their work too well.


Charles Edward Johnston: I did talk to an inspector who passed a house for the government. The plans called for No. 1 flooring. The floor was covered with paper, and it was a poor No. 2 flooring. He passed that house for the government. I said to him: "Did you not see the floor?" He said: "It was covered with paper."


An hon. Member:: They paid for No. 1.


Charles Edward Johnston: Yes. That fellow was never fired. He should have been booted off the job. An old trick like that has whiskers on it. It is an old trick to have a floor covered with paper, have the government inspector come in, walk over the paper and pass the house. That was not an isolated case at all. There has never been proper inspection in the many cases that I can recall. I am going to suggest to you, Mr. Chairman, that we get rid of the Central Mortgage and Housing Corporation and in its place set up another type of organization. I recall that not long ago-


Louis-René Beaudoin: I have been searching the records long enough now to have accumulated some evidence on what has really happened in the past in the discussion of the resolution amending the National Housing Act. Before one o'clock, while the hon. member for Eglinton was speaking, a lot of argument took place on the latitude which had been allowed in the past on a resolution of this kind. Therefore I did not see fit to stop any other hon. member until I could ascertain for myself what had been the practice. I have had all the Hansards since 1949 brought in

National Housing Act
to me and I have looked them all up to see what the procedure had been in the past on the resolutions preceding an amending bill of the National Housing Act. I find that a discussion wide in scope covering the whole of the national housing problem in Canada took place only when the minister himself chose to make general observations as to the problem before he commented specifically on the measure which was to follow the resolution. I find, too, that in committee I had to intervene and ask the hon. member for Eglinton to confine his remarks to the subject matter of the resolution. Of course at that time debate was permitted on the motion for Mr. Speaker to leave the chair to go into committee of the whole on the resolution.
In the second year the bill was introduced in the Senate. It was not a money bill, and therefore when it came here it received first reading, and there was hardly any debate at all. The minister just made an explanatory statement. There was not much debate on second reading either, and a few observations on third reading. Therefore I think it would be quite proper for us now to agree to limit our observations to the resolution before the committee.
In this connection I would refer hon. members to page 1767 of Hansard for November 15, 1949, where the minister, moving second reading of Bill 142 of that session, said:
Before commenting upon the proposed legislation I should like to make some general remarks, including a few references to what has been achieved in the field of housing by the aggregate efforts of all who have concerned themselves with this important activity.
At that moment, although we had before us only an amending bill, because the minister chose to make a general statement on the problems of housing in Canada, we had a general debate. But, later on in committee, that debate was restricted to the terms of the resolution itself. My words on that occasion were to the following effect, that, as the resolution before the committee dealt with amendments to the National Housing Act, I must ask the hon. member who was then speaking to confine himself to that resolution.
In other words, these records show that in the committee on the resolution, so far as possible the debate was confined to the subject matter of the resolution. But when Mr. Speaker was in the chair, on the motion that he leave the chair, the debate had been general in scope because the minister had made a general statement.


Charles Edward Johnston: I understood the objection taken when the hon. member for Eglinton was speaking was that he was referring to a specific case. I have not been referring to specific cases at all. The resolution under
IThe Chairman.]
discussion is that it is expedient to introduce a measure to amend the National Housing Act, 1944. That is the language about which I am arguing.


Louis-René Beaudoin: The hon. member will have to add that it is to amend the National Housing Act, 1944, in certain particulars. I stopped the hon. member for Eglinton this morning when he was referring to the cost of the building which now shelters the National Housing Act administration and, secondly, when he referred to a certain project now undertaken by a lending institution and, I think, guaranteed by Central Mortgage and Housing Corporation.
I stopped him in those two instances. Since that time I have been checking the record to ascertain whether or not in committee on these resolutions debate of the whole national housing problem has taken place. I find to my satisfaction that that has not been the case.
One opportunity for debate is now eliminated because of Mr. Speaker's ruling of recent date which states that on the motion for Mr. Speaker to leave the chair there shall be no debate. Therefore in committee we must follow the procedure which has been followed in the past, at least since 1949, and that is that discussion must be strictly relevant to the resolution, and the proposed amendments contemplated by the resolution and the bill to follow.


Mr. Graydon:: Mr. Chairman, perhaps there may be cases when the ruling you have just made would be applicable, and would prove the point you have now attempted to make. It seems to me, however, that this resolution is in an entirely different position from most of those to which you have been referring, because as I see it this one does allow for a general discussion, and for the simple reason that in this resolution we are dealing with an increase in the appropriation in respect of loans provided by section 7 of the act, such increase to be from $300 million to $500 million. Then, in addition to that, there is provision whereby under part II there shall be an increase from $150 million to $250 million.
I suggest that when the minister introduces these increases in the appropriation, at the same time he opens the way for debate on matters which would be covered by that increase. It seems to me this opens the subject matter pretty wide, and I suggest that the chairman ought to be very careful in not trying to restrict discussion, in view of the fact that these appropriations are being made for those very things hon. members have been discussing.


Louis-René Beaudoin: I do not wish to prolong discussion on a matter of procedure. I fully realize that if we do not have the co-operation of hon. members-in other words, if hon. members have made up their minds that they are going to make general speeches in respect to housing on this resolution-I do not see how I can stop them. I am free to confess that; because in debating a similar resolution in the past I have known occasions where, for instance, certain hon. members have argued that unless they were given a statement of policy in the matter of rent control they were not prepared to proceed with a debate amending the National Housing Act.
Any number of arguments can be made. If hon. members wish to discuss national housing problems generally on this resolution, then I do not think I can stop them, because we will just keep on arguing every time an hon. member rises. We will hear the argument that what he has to say is relevant, and that it has to do with what takes place under the National Housing Act. But I would ask hon. members to remember this, that so far as the performance of my duties here is concerned, I am tied by two directives, the first of which is found in that standing order which says that discussions in committee of the whole shall be strictly relevant to the resolution under debate. The second is the citation from Beauchesne's third edition, to which I referred this morning, and which says that the resolution in committee is merely indicative of what the bill is going to be, and that at this stage we are merely deciding as to the advisability of making certain expenditures.
Confined within those limits, all I can do is to ask the co-operation of hon. members. If they feel they should discuss cases concerning contractors who have not built properly, or if they feel they should discuss the building of Central Mortgage and Housing Corporation on the Montreal road, or if they wish to cover the whole field covered by the National Housing Act, all I can say is that I will hold in my mind the view that they are going far afield from the amendments suggested in this resolution.
Having said that, I shall ask hon. members to carry on the debate, having in mind that they should restrict rather than increase the latitude of discussion.


Charles Edward Johnston: I shall try to keep within your ruling; I always do. Indeed, I thought I was doing exceptionally well, and that I was staying within your ruling by not referring to any special cases. I had plenty of them in mind, 1 may say.
One of the things the Prime Minister indicated some time ago was that he did not think the federal government should become
National Housing Act
landlords for the people of Canada. I agree with him wholeheartedly. But I think we are rapidly approaching the position where we are going to be landlords, unless some changes are made.
I suggest there is a way out of that difficulty. My first suggestion would be to get rid of Central Mortgage and Housing Corporation. If they have performed a duty in the past, then that duty has been fulfilled, and we should pension them off, or take whatever procedure would seem to be best fitted to the process of getting rid of them.
The second thing I think should be done is that the government should set up a revolving fund of, let us say, $500 million-and 1 am not saying what the exact amount should be-and that these sums of money should be lent to the municipalities at a rate of interest not exceeding 2 per cent. I mentioned a moment ago that Alberta had had outstanding good luck in the repayment of money to the revolving fund they had set up. Something like $460,000 had been paid back, and up to date they have not lost a cent.


Robert Henry Winters: Does the hon. member know what the Alberta government has done by way of restricting their legislation this year in that field?


Charles Edward Johnston: As I indicated a moment ago, the only information I have is from a report of the budget speech by the premier of Alberta. It seems to me that he has gone even farther than that. I should like to quote from the Ottawa Citizen of March 7, 1953, where they give an account of Mr. Manning's budget speech, which reads in part:
He also had good news for those municipalities finding it hard to keep their services in step with their growing population. He gave details of a plan for a $25 million revolving fund, part of a broader scheme to share Alberta's increasing revenues with the municipalities.
That is in addition to the $17 million I was speaking of a while ago in connection with which they had already received back $460,000 from the self liquidating projects. If a province like Alberta can put aside $25 million from their budget to provide a revolving fund to assist the municipalities in these self-liquidating projects, the federal government could set up a revolving fund of, say, $500 million to be loaned to the municipalities, through the provinces of course. I recognize immediately that there has to be some control over this money and the proper control would be through the province to the municipality.
It seems to me that that would immediately relieve the federal government of the burden of having to supervise the construction of these houses. That would then become the responsibility of the municipality. That would
4168

National Housing Act
mean that municipalities-I am thinking particularly of Calgary-would not permit the type of construction that has been allowed under the National Housing Act. I think the best thing that could happen would be to have the responsibility of seeing that these houses are properly constructed according to the plans and specifications, laid down by the federal government if you like in conjunction with the provincial governments, placed on the municipalities. The onus would be taken off the back of the Minister of Resources and Development, and I imagine that he would like to get rid of that responsibility.
On the other hand, the municipalities could set up construction committees. There is not a municipality in Canada where competent contractors and builders could not be found. Competent construction committees could be set up and would be right on the job to see that the plans and specifications were carried out in the interests of the person who was going to buy the house. You would then not have the outrageous examples we have had of poor inspection. Certainly under a system like that the government could not possibly lose more than they lost last year, when according to the public accounts they lost $686,000. Alberta lost nothing with their revolving fund. I do not think we would lose any money at all, and the responsibility would be on the municipality, where it should be, to see that the construction was carried out according to the plans and specifications.
That brings up the problem mentioned by the minister when he was speaking to the Appraisal Institute of Canada. How are you going to make it possible for people with small incomes to get houses? As I said a moment ago, the home is the best security you could have for money. The down payment could be made as low as $500 and there would still be sufficient equity in the house to cover what was owing on it at any time. Then a small monthly payment could be set to take care of the upkeep and deterioration of the property, unless the government was intending to go into a money-making scheme, and I do not think that is its intention.
I have just been handed a clipping from the Edmonton Journal of March 3, 1953, which states that last year the city of Edmonton received a loan of $1 million from the fund. In the three years the fund has been in existence Edmonton has borrowed $3,900,000. That answers the question the minister asked a minute ago. It would appear that the fund is being continued.
Let me get back to the other point. I think the monthly payment could be made quite

small, possibly no more than $25, $30 or $35 for low-priced houses. That is only an estimate. The amount would have to be figured out over a period of years. That would meet the difficulty we have been running up against over the past few years. It would certainly meet the difficulties mentioned by some of the speakers this afternoon. It would give definite relief to the municipalities; it would increase home building by the lower income groups, which is what we all greatly desire; it would result in the building of better homes; there would be a smaller loss by the federal government; we would get away from the tremendous cost of keeping up Central Mortgage and Housing Corporation; the federal government would get rid of a terrific headache and the people would get better homes. It seems to me that it would be a better plan all the way through.
I do not suppose the federal government will pay any attention to this. I may be entirely wrong in what I have said, but at least the government cannot say that we have not offered some alternative. This is not something that has been tried and has failed. Quite the contrary, this revolving fund idea has been found to be of the greatest success. As I suggested, the home is the last thing that a man will let out of his grasp if he can possibly hang on. It is one of the first things that we should see the Canadian people have. I believe that with a proper organization to carry this out we would have much greater success in our national housing program.


Robert Henry Winters: I would like to deal with one or two of the points raised by the hon. member for Bow River. I think there are misunderstandings which led to several statements he made. The amount of the loan under the joint loan technique is no longer related to the lending value; rather it is related to the agreed sales price. That was one of the points upon which the hon. member based an argument.


Charles Edward Johnston: Is that the present sales price? If so there still is no difference.


Robert Henry Winters: The agreed sales price at the present time, yes. Builders in Alberta and elsewhere are building and selling houses at prices lower than the agreed sales price, the agreed sales price being the figure agreed upon in the first instance by the builder and Central Mortgage and Housing Corporation, jointly with the lending institution, before there is qualification for the 80 per cent loan.
There are some areas in Canada where difficulty is being experienced with the agreed sales price, but with most builders and in most areas in Canada the technique is working satisfactorily and it has proved to be a good weapon in the fight against inflation.

The hon. member dealt today, as he has on many occasions-I am always glad to receive his criticism-with the inspection of houses, and he related his remarks to the standards under the National Housing Act and said they were too low.


Charles Edward Johnston: I did not say they were too low; the point was that they were not being lived up to, no matter what they were. I think the standards set by Central Mortgage and Housing Corporation and the National Housing Act are fairly good provided they are lived up to.


Robert Henry Winters: I am glad the hon. member has cleared up that point, because most of the criticism we hear is that we are requiring people to build to too high a standard rather than too low a standard. Regarding inspections under the joint loan technique it is for the lending institution to satisfy itself that the mortgage value is there in respect of the money it is lending.


Charles Edward Johnston: Where does Central Mortgage and Housing Corporation come in? I quite understand that it is for the lending institution to satisfy itself that the value is there, but where does the Central Mortgage and Housing Corporation inspection come in?


Robert Henry Winters: Under the joint loan technique, inspections are made by the lending institution. Central Mortgage, of course, are concerned to the extent that they put up 25 per cent of the mortgage money. They inspect in order to see that their participation in that mortgage money is protected, but it is not their responsibility to make an architectural or construction inspection. Under that arrangement, such is the responsibility of the owner of the house.


Charles Edward Johnston: I do not like to keep interrupting the minister all the time, but I should like to get this point cleared up. Whose responsibility is it, then, to see that the houses are build according to the plans and specifications set out under the N.H.A.?


Robert Henry Winters: It is the responsibility of the home owner to ensure that he is getting what he has bought from the builder. We have discussed this point on many occasions in this house.


Charles Edward Johnston: The owner has no say.


Robert Henry Winters: Mr. Chairman, the hon. member then dealt with aid to municipalities. I do agree with him that this is a very important matter if we are to have a large program of house building in this country. It was for that reason that we put section 35 on the statute books. We did that only after talking to all provincial governments. The
National Housing Act
hon. member holds up Alberta as the criterion and says we should take a lesson from that province. Well, Mr. Chairman, the last thing I would want to do is be critical of any provincial government. I would say, however, that if we took a lesson from Alberta in the field of housing, I think there would be many people in Canada who would not be too happy about the housing policy.


Charles Edward Johnston: I did not suggest you take a lesson from my province in the matter of building houses, because that has not been their function. It has been the function of the federal government to do that. What I did point out was the experience Alberta had in regard to this revolving fund for self-liquidating projects.


Robert Henry Winters: Obviously the hon. member is under a considerable number of misapprehensions, and this is another one of them. I do not think we should get into a debate on the matter at this particular time. I would be glad to deal more specifically with this point on my estimates, which should be under consideration very soon.
It is not the responsibility of the federal government to build houses. Under the British North America Act housing is the responsibility of provincial governments, because it is a matter of property and civil rights. The basic policy of the federal government is to enable people to build houses by making available the proper economic climate, and by doing what it can within its own sphere of influence to make credit available.
Now, the Alberta government has a revolving fund. One of the techniques the federal government has at its disposal is co-operation with the provincial governments, and we do that under section 35. As I understand it the Alberta legislation was amended this year to discontinue having money from that revolving fund flow into municipal works through section 35. If a municipality wishes to benefit by the co-operative plan under section 35 it must now go into the open market to get its money. The Alberta revolving fund is no longer available. I do not wish to be critical of the government on that point. They probably did that because they felt it was in the best interests of the people they served. I merely cite that as a matter of fact.
The hon. member is critical of Central Mortgage and Housing Corporation. I am not denying him that right to be critical. The Central Mortgage and Housing Corporation was set up to serve the interests of the people of Canada, and to the extent it is doing that I think the people of Canada will approve. So far, it is a fact that Central Mortgage and

National Housing Act
Housing Corporation has put some $343 million into the financial stream to assist housing in this country. I am satisfied in my own mind that this amount would not have gone into housing had there not been a Central Mortgage and Housing Corporation.
I think all hon. members know that under the joint loan technique, which is the major operation under the National Housing Act, the basic loan is 80 per cent of the agreed sales price and the amortization period can run to 30 years. The lending institutions, if they were operating alone, would make a loan of 60 per cent as the maximum; that is, there would be a down payment of 40 per cent required. The amortization period would be of the order of ten years. The interest rate instead of being 5J per cent as it is now, because federal money goes into that partnership arrangement on a 3J per cent interest rate, I am satisfied would be at least 6 per cent. The lending institutions put their money in now at 5i per cent on an 80 per cent basis because the pool guarantee is there for their protection. If there were no pool guarantee and each loan were made on what is called the conventional basis, I am satisfied the interest rate would be a minimum of 6 per cent as I have said.
Through the government's operations under Central Mortgage and Housing Corporation, and in addition to this vast amount of money that has flowed into housing, there has been a substantial saving to each householder in Canada or each tenant in Canada who is living in accommodation which was built under some arrangement in which Central Mortgage and Housing participated. I consider that the corporation has done a good job. It is natural 1 should feel that way because I am responsible to parliament for the operation of Central Mortgage and Housing Corporation. The more I see of their operations, the more I am satisfied that they are doing a good service for the people of Canada and that the taxpayers are getting their money's worth from Central Mortgage and Housing Corporation. I feel that the corporation is being administered in a manner that is eminently satisfactory to the vast majority of the taxpayers in this country.


George Harris Hees: Mr. Chairman, I do not believe that even by the widest stretch of imagination could this government really believe that it is dealing adequately with the present housing situation either by this amendment or by any measure which it has introduced during the past two years. I intend very briefly to show where I think the government has fallen down, and to show what additional steps I believe the Central Mortgage and Housing Corporation should take in order to
IMr. Winters.]
make it possible for the construction industry to build the houses which it is capable of building, and to enable those who desperately need housing, to purchase it.
First of all, what is the situation today? We have in Canada today a shortage of half a million unbuilt and much-needed houses. This housing shortage is growing greater every day.


Robert Henry Winters: Would the hon. member say on what he bases that estimate?


George Harris Hees: Yes; I was hoping the minister would ask that. On page 12, clause 17 of the report of the advisory committee on reconstruction, commonly known as the Curtis report-


Mr. Croll:: What year?


George Harris Hees: I was getting to the year.


David Arnold Croll: I was afraid you were not.


George Harris Hees: I would not miss such an important thing. On page 12, clause 17 of the report of the advisory committee on reconstruction, known as the Curtis report, concerning housing and planning, dated March 24, 1944, we find that the total urban housing backlog in 1944 was estimated to be 320,000 houses. I might add that this was a government-sponsored survey.
According to the figures supplied by the dominion bureau of statistics, since that year we have built 663,500 new houses. Also, from the figures supplied by the dominion bureau of statistics, we have added 710,400 new families to our population. That means that our backlog of housing has increased by 46,900 during the past eight years.


Robert Henry Winters: Might I ask if those figures of family formations are arrived at by taking the figures for each year and totalling them?


George Harris Hees: Yes.


Robert Henry Winters: Do they have regard to wastage over the years?


George Harris Hees: Yes, I have here figures supplied by the dominion bureau of statistics for each of the eight years from 1944 to the end of 1952, and they list these figures as net new family formations.


Robert Henry Winters: For each year?


George Harris Hees: Yes.


Robert Henry Winters: Then you total them by years?


George Harris Hees: This is the total for the eight years. If the minister would like, I will give him the total for each year.


Robert Henry Winters: I am just interested in knowing how you get the figure, whether you took the figures for each year and totalled them,

or whether the bulk figure has regard to wastage through emigration and so on.


George Harris Hees: Well, the word "net" in the expression "net family formations" takes that into consideration.


Robert Henry Winters: For each year?


George Harris Hees: For each single year. We total the figures for the eight years and that gives us a figure of 710,400 new families which have been added to our population in the last eight years.


Mr. Sinnott:: What about families which have left?


George Harris Hees: I was going on to say that our backlog of housing has increased by 46,900 during the past eight years. That figure, however, does not take into account the number of new houses needed to replace those which have become useless due to obsolescence. On page 12, clause 19 of the Curtis report, that figure is estimated to be 13,500 per year, and again this is an estimate given by a government-sponsored survey.
Therefore between 1944 and 1952 the total number of houses which should have been replaced amounted to 121,500. Adding that figure to the 320,000 backlog accumulated prior to 1944, and to the 46,900 surplus of new families over house construction between 1944 and 1952, we arrive at a total backlog of 488,400, or roughly half a million houses.
I would like to give as an example the situation in the year just passed, 1952. According to the bureau of statistics, during that year we produced 73,087 houses. Net new families formed during last year were 93,000. Therefore we have a surplus of new families formed over houses produced of 20,000. If we take the estimate of the Curtis report that the number of houses that should have been replaced due to obsolescence during the last year was 13,500, we find that during last year alone we should have produced 33,500 more houses than we did produce, if we were merely to keep pace with new family formations and replacement through obsolescence.
The next thing I would like to examine is the possibility for additional construction, and I would like to quote the opinions of several people who I think are best qualified to express opinions on this matter. First of all I would like to quote from what Mr. P. G. Wilmut, president of the Canadian Construction Association, said in his presidential address to the association in Montreal on January 19, 1953. He said that the Canadian construction industry should consider 125,000 houses a year as a normal minimum target to be aimed at. That opinion is concurred in by the Canadian house builders' association,
National Housing Act
and also by Dr. Firestone, economic adviser to Central Mortgage and Housing Corporation. He said in Toronto on February 19, 1951, that the productive capacity of the Canadian construction industry could conceivably rise to
130,000	houses per year.
Now, Mr. Chairman, from all this, two things I believe are apparent. First of all, we have a backlog of unbuilt and much needed houses numbering half a million. We also have a potential production capacity of from 125,000 to 130,000 houses per year. That opinion has been expressed by those best able to calculate the productive capacity of the Canadian construction industry. However, we find that during the past year we built only 73,000 houses, when we could have built 70 per cent more.
We naturally have to ask ourselves: Why did this take place? I believe it was caused by three things. First is the lack of serviced land. The second factor is that the down payment required by Central Mortgage and Housing Corporation is too high; and, third, the interest rate charged on Central Mortgage and Housing Corporation mortgages is too high and the amortization period over which loans must be paid off is too short.
I would first like to deal with the question of serviced land. A great many municipalities today simply cannot afford to provide the schools and the local improvements which are necessary to go with a housing development. I think it is common sense that you simply cannot build houses unless the municipality permits you to build the houses within the municipality. In connection with this difficulty I believe the Leader of the Opposition made a very excellent suggestion on November 24 last as recorded on page 33 of Hansard. He urged the government, and I quote his words:
To reach agreement with the provincial governments in regard to a clearly defined re-allocation of taxing powers, so that the provincial governments and municipal councils may have adequate financial resources to carry out their rapidly increasing responsibilities.
I believe if that suggestion were followed out we would overcome the difficulties with which municipalities are faced in finding resources with which they could finance the building of schools and local improvements.
The second difficulty with which I want to deal is the 20 per cent down payment which is required on all N.H.A. houses. The cheapest house one can buy through N.H.A. costs $10,000, so the down payment which one must put up is $2,000. In order to find that $2,000 I believe one must earn a minimum salary of $5,000 a year for a minimum of four years. Even then it requires the setting aside


Robert Henry Winters: I think the hon. member knows that Central Mortgage and Housing Corporation does not charge 5} per cent.


George Harris Hees: No; I mean the mortgages obtained through Central Mortgage and Housing Corporation.


Robert Henry Winters: Through the lending
institution.


George Harris Hees: Through the lending institution. This rate of interest, and the time over which it is necessary to pay off the loan, make it impossible for a person with a low income to carry the charges on a new house.
Again I should like to examine what has been done in the United States. In that country, under their national housing authority, mortgages are made available at rates as low as 4 per cent, and they can be paid off over a period of as long as 30 years. I believe this policy merits serious consideration by the government because, in the United States, it permits people with moderate incomes to carry the charges on a new house. In Canada a policy similar to that would make it possible for a man earning between $55 and $60 a week to carry the charges on a good new house.
If the government persists in following what I honestly believe is an obsolete and reactionary housing policy, I believe the situation is going to continue to grow worse every day. As I pointed out, last year the situation deteriorated by a further 33,500

house shortage. As I have also pointed out, the accumulated shortage today amounts to half a million houses. If this situation is allowed to continue to deteriorate, families with four and five children are going to be forced to continue to live in one room. I shall be pleased to take the minister, any time he comes to Toronto, to see accommodation in which families with four and five children are living in one room and paying up to $60 a month rent just because they have no other place in which to live. I do not believe these conditions are the kind in which we can permit Canadians to live.
As I say, it would be one thing if the situation were just a temporary one, but it is not that at all. The situation is getting worse every single day, and the government is showing no inclination to right the situation and to permit the building industry to build the houses which it is capable of building.
I believe the government must immediately reconsider its housing policy in view of three things: First, the chronic housing shortage which is increasing every day; second, the proved ability of the Canadian construction industry to build almost double the number of houses it is building today, if given the opportunity to do so; and third, the success which has been achieved in the United States through practical housing policies which have made housing available to families which need it most.


Agar Rodney Adamson: I should like to say a few words on this matter, Mr. Chairman, whether I say them now or on second reading of the bill. They are of a general nature, and as the debate has been fairly general I think possibly we would be saving time if I continued at this stage.
Last year when speaking on the question of housing I made four recommendations to the government which were as follows: first, that all municipal taxation be allowed as a deduction from income for taxation purposes; second, that personal expenditures on the education of one's own family be allowed as a deduction irrespective of age; third, that mortgage interest payments on the dwelling lived in by the taxpayer be allowed as a similar deduction; and fourth, the calling of a conference of all provincial ministers of education and housing with the federal government to discuss the whole question of housing.
Since that time I have tried to find out what these suggestions would mean and whether there was any support whatever for them. I took the trouble to go into my own riding and make a survey; it was a

small survey, nevertheless it was a survey. It covered some 70 householders who were in the new section of the riding. I wanted to find out what these would mean to the individuals in a new housing development.
I came up with these average figures. I might explain to the committee that this is merely a small sampling, but it is a sampling of a new development, one which has been built since the war and which contains a large percentage of veterans and a large percentage of young families.
The figures I have are as follows. The average cost of the house was $13,000. If both mortgage payments and municipal taxation had been allowed as a deduction from income, the average deduction would be of the nature of $190. I am not giving the figures to the closest dollar or the closest cent but to the nearest $10. In this group the average income tax paid was $525. If the mortgage payment were not allowed and if only the municipal taxation were allowed, the saving of the average home owner in this group would be $47.50 a year.
I mention these figures, Mr. Chairman, because I think they are indicative of what can be expected if a proposal such as this is carried out. It would mean a saving of 19 per cent in the average income tax. I asked whether there was any support for my proposal either from the building side of housing or from the lending side, and I must say that I have received quite a bit of support-not all of it directly, though some of it was actually directly-from the lending side of the picture, that is to say, from organizations whose duty it is to lend money particularly for housing purposes. In this connection I should like to quote one paragraph from the annual statement of the Chartered Trust Company, which contains the text of an address by Rolph R. Corson, who is the president of the corporation which is certainly concerned with the lending of money, particularly on mortgages. He said this at the annual meeting of the company, and I think it is interesting enough to quote the two short paragraphs to the committee. It is headed: "Inequity in income tax." It reads as follows:
All the trust companies are in the mortgage business and before I close there is one inequity in present income tax rulings that, if continued, may have an unfavourable bearing on our national economy. The trust companies have reason to remember the effect of mortgage moratoriums in the 1930's and the necessity for the removal of the contributing causes. To deal with the shortage of houses the National Housing Act was enacted. It allows people of limited means to purchase needed homes with a small down payment and give back a much larger mortgage than is considered safe by the government for a trustee
National Housing Act
investment. Today's price for houses is two or three times greater than a few years ago, and the mortgage load much heavier. For thousands of young people starting their family life, a roof overhead, no matter what its cost, is a "must". Ownership of property carries a municipal tax obligation, which is also heavier than formerly, and today's higher interest rate on a larger mortgage adds to an already heavy load.
Under present conditions this act was a move in the right direction, but it did not go far enough to accomplish its end. Municipal taxes and interest payments at least should have been allowed as an income tax deduction. Certainly the heavier load assumed by the home owner under this act should be carefully considered and lightened as much as possible. In the United States, where they also have a housing problem, they have met it more realistically as both municipal taxes and mortgage interest are allowed.
So much for the lending institutions. I come now to two resolutions passed by the Canadian association of real estate boards at their convention last fall in Toronto. The minister has probably seen this, but I will just quote the resolutions and the four-line preamble to the first one which is this:
Whereas this increase in municipal property taxation is due to the rapidly accelerating cost of education, social welfare and other items, which are not services rendered to property, and should rightfully be borne by the population as a whole, therefore
Be it resolved that the government of Canada be urged in the strongest possible terms to permit, in the national interest, the deduction of municipal property taxes from the taxable personal income of owners of single family dwellings, as a means of making home ownership economically possible for even the lowest income group.
These are two authorities which I submit have considerable experience and knowledge of the problem of housing and the provision of houses for rapidly growing communities.
With respect to this question of mortgage money, a pernicious system has grown up in districts where conditions are not completely in conformity with the national housing regulations. I may say that these regulations are pretty rigid. There are many cases where young families are building their own houses, doing a great deal of the work on them themselves, but which do not rigidly and completely conform to the regulations. It may be that they are outside the area where the lending organizations will lend money, or for some other technical reason; nevertheless they find themselves outside the regulations, and they are forced to go not to the larger lending institutions but to other sources of capital.
It has been found that a system of what you might call bonus or premium mortgages has cropped up. The system works roughly this way. A home owner wishing $6,000 goes to a source of capital and that source of capital says: "Very well, I will lend you the money at 5J or 6 per cent interest. But instead of

National Housing Act
signing a mortgage for $6,000 you will sign a mortgage for $7,500, and there will be $1,500 capital bonus to me for accommodating you with these funds." In other words there is water in the mortgage to the extent of 15 per cent, 20 per cent and sometimes even more. Quite a lot of people have come to me with that problem. I think it is pernicious, and everything should be done to stop it.
The question of serviced land is also an important one. It arises in rapidly-growing municipalities around Toronto and in many other metropolitan areas as well. A municipality finds itself virtually unable to provide serviced land, to instal the physical services Such as water mains, storm sewers, sanitary sewers, street lights, pavements, sidewalks, police and fire services and all the other amenities. They cost at the very minimum about $5,000 an acre. Assume that you can build between four and five houses on an acre. It means that you have a capital cost, before you turn a sod to build your house, of around $1,000 and possibly more.
On top of that cost there is the capital cost 6f schools. Today, depending of course on the new family formation density and many other things, I would certainly hazard as a reasonable guess that the cost of schools and the cost of servicing land therefor would add another $1,000 per acre. That is merely the provision of the physical plant. It does not take into account any question of amortization. The amortization of the school board debentures and the cost of the upkeep of the school merely adds to the interest charges of operation. Therefore, before the first sod is turned for a new house, if there is a density of four and a half or five to the acre-and that is reasonable-there is a capital cost of approximately $2,000 per house.
Some way must be found of meeting that capital cost. At the present time, with the lending powers of municipalities considerably stretched, particularly those municipalities with a high percentage of housing and a low percentage of industry, as is found in many metropolitan areas, the borrowing power or the credit of municipalities is taxed to the point where they have to pay 5, 5J and sometimes 5J or even 6 per cent for their money.
This, of course, is a direct charge on the home owner, and a direct charge on the head of the family. What can be done about it? In the United States the banking system is entirely different from ours. They have commercial banks; and then, in a separate category, they have savings banks. These savings banks are rapidly growing institutions, operating under the safeguards of the bank insur-
ance protection enacted by the federal authorities after the bank holiday in 1933. I would judge them to be wholly solvent and sound institutions.
Through the provisions under which they operate, these savings banks are in the mortgage business and are permitted to lend money. Our chartered banks in Canada are not permitted to do that; and I would not for one moment suggest that they should go into the mortgage business. But how are we going to get that money into the hands of the municipalities so that schools and serviced lands can be provided?
I am going to make a suggestion, and I make it on my own behalf. In doing so I am not speaking for anyone other than myself. My suggestion is that some consideration should be given to allowing municipalities, under strict regulation, to issue tax-free bonds. I know this suggestion flies against a great deal of conservative thought-and I use the word with a small "c". No doubt there are many objections to this procedure, but we must keep in mind that we are not dealing with a situation as it prevailed before the war. Rather we are dealing with an entirely new situation, a condition under which large amounts of surplus funds, either of corporations or of individuals, are siphoned off by corporation and individual income taxes. So the formation of capital today is not, on a percentage basis, anywhere near as great as it was before the war. So much for that subject.
The municipality today is the creature of the province. I should think that it must continue to be the creature of the province, as well as its responsibility. But because of the high incidence of taxation, because of the high-geared income and corporation tax we are finding that the municipality is being driven into a more and more difficult position. This very condition introduced in the budget this year, under which we have a 20 per cent tax credit from the income from common and preferred stocks-which are called equities-is going to mean that the average private investor will find himself less and less likely to invest in corporation bonds. And in order to equal the attractiveness or the yield of the common stock, to an investor who is in the income tax bracket anywhere above 15 per cent-and today that is a comparatively low bracket-any investor is going to have to get at least 1J per cent or probably 2 per cent more on a bond than he would get on a common stock, in order to make the yield equal irrespective of the growth possibilities of the common and sometimes even the preferred stock.

The effect of that will be felt, and I feel that the effect on the borrowing power of the municipality is going to be very serious.
I would think that, in order to sell them, the yield on municipal securities must be increased. Having said that and, as I have intimated, having spoken for myself alone,
I feel a conference should be called between ministers of education and ministers of finance of the different provinces, to see if something cannot be worked out. The old shibboleths as to what cannot be done should be forgotten or at least, for the moment, put to one side.
We have here a problem that is not being solved by our present methods. The machinery is inadequate. Insecurity, particularly if there is any slight recession in earnings or even moderate unemployment, will grow at a very rapid rate. As has been said, aside from national defence there is nothing as important today as providing for the security of tenure, the security of a man's hearth and home. Next to his life, and the security of his country, these are the most important things he has.
I believe we should look at these matters in a new light so as to try to find ways and means whereby the load will be taken off municipalities through the liberalization of terms of borrowing. But not by increasing the scope of the municipal taxing power. As the load is taken off municipalities it is immediately taken off the home owner who has to pay for the servicing of the debt.


Mr. Pearlces:: Because of attendance at another committee I was not able to follow the deliberations here this afternoon, and there is one question I should like to ask. It arises out of representations which have been made to me from the city of Victoria where there is a considerable housing problem. The brokers inform me that they are in desperate need of better access to funds provided under the National Housing Act. If they were given a more adequate supply of funds, even under the existing conditions the housing problem could be greatly improved. Are steps being taken to provide better access to funds available to the mortgage brokers?


Robert Henry Winters: The short answer to that is "yes." There has been difficulty this year with mortgage money, but to some extent the problem is solving itself. Housing starts this year are certainly far greater than they were last year at this time. There will be a provision in the bill which I propose to introduce immediately this resolution is disposed of which should help to cure that very situation.


Donald Methuen Fleming: Has the minister any information to impart to the house concerning any
National Housing Act
other matters in relation to housing policy that the government is contemplating?


Robert Henry Winters: I propose making a somewhat more detailed speech on second reading, at which time I will inform hon. members of some of the progress that has been made under the various sections of the housing act. I would anticipate that we will have a broader debate at that time.


Donald Methuen Fleming: I take it from what the minister has just said that the statement he contemplates making will be of a factual nature. My question related to any announcement in relation to policy. I understand that up to a point policy is involved in these amendments to the act, tout is there any other change of policy or any new policy in relation to housing that the government has in contemplation?


Robert Henry Winters: I would not want to be in the position of anticipating what is in the bill. I think that the question might more properly be asked after the hon. member has seen the bill.


Donald Methuen Fleming: Has the minister anything to say in connection with the Merivale road housing project in Ottawa which I mentioned earlier today?


Robert Henry Winters: I have not had an opportunity of seeing the correspondence to which the hon. member for Eglinton referred. Unfortunately he sent it to the Hansard office immediately he had used it and although he attempted to do so, he was not able to reobtain it for me. I understand that the pattern is one in which under agreement with the municipality Central Mortgage and Housing Corporation pays a certain fixed amount in lieu of taxes. There are instances where a municipality will come to Central Mortgage and say that they want more money in lieu of taxes, something more closely approximating what they would get if the houses were not crown-owned. In such case, under agreement with the municipality we pass on to the municipality the increase in rent by way of grants in lieu of taxes. The increase does not accrue to the federal government.
I should like to study the letter to which my hon. friend took objection. So far I have not had an opportunity to see it. I agree that no letter should be offensive if it can be avoided. It is certainly not our intention to put in the form of a letter or in verbal form anything which will unduly disturb the tenants.


Donald Methuen Fleming: I shall see that the minister receives a copy. I had just the one copy and it went to the Hansard reporter after I had finished using it. In this particular

Canada Grain Act
case the rents have been raised twice. They were raised in 1951 and are now in process of being raised again. In some cases the increases in a period of two years amount to as much as 50 per cent, and I think the minister will agree that that is very severe.
I shall see that a copy of the notice received by the tenants is given to the minister and I hope he will look into it personally. These tenants have not been given enough time. The notice was received on the last day of March to vacate at the end of April or sign new leases at substantially increased rent. They have had no opportunity to negotiate or treat with the officials of Central Mortgage and Housing Corporation.


Stanley Howard Knowles: May I ask just one question, and if the minister has not the answer ready perhaps he can come prepared at a later stage. In view of his surprise the other day when I asked a question about the strike of lending institutions in Winnipeg against lending money for small homes, would he tell the house at some early date how many loans for small homes have been made in Winnipeg under the National Housing Act during the last six months, that is for four-room and five-room bungalows?


Robert Henry Winters: I shall get that specific information. In the meantime I may say that on March 31, 1952, there were 699 houses under construction in Winnipeg, whereas on March 31, 1953, there were 1,247, or almost twice as many houses under construction in that city as a year ago.


Stanley Howard Knowles: The minister will note that my question the other day and my questions now relate to small homes.


Robert Henry Winters: I understand that.
Resolution reported, read the second time and concurred in.
Mr. Winters thereupon moved for leave to introduce Bill No. 339, to amend the National Housing Act, 1944.
Motion agreed to and bill read the first time.


Mr. Speaker:: It being five o'clock, the house will now consider private and public bills.



CANADA GRAIN ACT


Mr. H. R. Argue (Assiniboia) moved: the second reading of Bill No. 186, to amend the Canada Grain Act (distribution of box cars).
He said: Mr. Speaker, the purpose of this bill is to provide a fair method by which 
box cars may be allocated among elevator companies at marketing points in western Canada. The purpose of this bill is to meet a situation which has grown up in which there is no effective competition in the buying of grain from prairie producers. The bill itself is very simple. The first clause reads as follows:
Any producer, as defined In section 12 of the Canadian Wheat Board Act, 1935, may, before the first day of October in any year, enter in the car order book his acreage seeded to grain as shown in his permit book pursuant to sections 15 and 16 of the said act, and may assign that acreage among the elevator companies at his marketing point.
This would allow the farmer to take his permit book to the railway agent and, in a new section of the car order book provided for this purpose, state his seeded acreage and declare the elevator company through which he wishes to market his grain.
The second paragraph of the bill provides that the amendment would be operative only if the car order book was not being used. The car order book is part of the Canada Grain Act. The Canada Grain Act includes a provision for the car order book, which provision was obtained by western producers after many years of struggle with various federal governments. The producers feel that the Canada Grain Act is their charter.
I for one would not feel capable of altering the act from its original purposes. However,
I do believe that the provision I have suggested would provide a satisfactory method by which farmers by their own choice may provide a means of allocating box cars amongst the elevator companies. I believe this amendment would improve the act considerably.
As I say, under the present situation there is no effective competition in the buying of grain. Before we had this large surplus in western Canada, and when elevator companies had excess space available in each crop year, a farmer could go into one elevator and if he believed his grain were No. 2 but the agent would pay him only for No. 3 he could go out of that elevator and to the next elevator company to see if that agent might give him a better grade. Under the situation now prevailing often all the elevator companies at any given point are plugged. Possibly one elevator might get a couple of box cars, and the agent will announce that he is prepared to buy 4,000 bushels of wheat the following day. The farmers, whether or not they prefer to take their grain to another elevator company, are almost certain to haul their grain to that elevator because they are in need of funds to carry on their farming operations and pay their living costs.

As I say, for a number of years the situation has been entirely different from normal. One might argue that we should not amend the Canada Grain Act because the present surplus of wheat in this country is going to be taken care of in a year or so. Then we would not need this type of amendment. I say that if any member of this house makes a study of the wheat supplies on hand in the various exporting countries of the world today he cannot help but come to the conclusion that we are faced with a world glut of wheat. When I looked over the statistics I was amazed at the huge quantities of wheat on hand in the various exporting countries.
According to the latest publication of the dominion bureau of statistics, "The Wheat Review" for March, on March 1 of this year the four major exporting countries of the world had on -hand for export and carryover-that is the quantity of wheat in addition to that needed for domestic consumption, feed for livestock and seed supplies-the huge total of 1,468 million bushels. From that date until the end of the crop year, under the present international wheat agreement there is an unfilled quota of some 135 million bushels. In other words, after taking into account the quantity of wheat that is to be delivered under the present international wheat agreement, and taking into account the probable total that may be sold as class II wheat, the four major exporting countries of the world will have something like 1,200 million bushels of wheat on hand for export on July 31 of this year.
It was for this reason that I, for one, hoped that the international wheat agreement would be signed by all the countries and would become effective. Even if the wheat agreement is signed by all countries there will be on hand on July 31 of this year sufficient wheat for the exporting countries to cover more than two full years of the allocations under that agreement. If these exporting countries produce little or no wheat in the next two years for export purposes, there is still sufficient wheat available in those countries to cover two full years of operation under the international wheat agreement. I suggest, therefore, that the present surplus wheat condition in Canada, the plugged elevators, the wheat available on farms which the farmers are unable to market, is a condition that is likely to continue for a number of years ahead. If Canada and the other exporting countries get even a normal crop this year, with the surplus situation as it is, I think it is essential that something be done to improve the allocation and distribution of box cars.
As a matter of fact if Canada this year sells as much wheat as she sold in the export
Canada Grain Act
markets in the record year, Canada will wind up with a carryover of some 330 million bushels, which will be the largest peacetime carryover in the history of the country. -Canada and the world are, therefore, faced with a large glut of wheat. This situation of filled elevators, a shortage of transportation facilities and farmers ready to market grain without the facilities being available, is likely to continue for some time to come. In such a situation I feel that something more should be done to provide a better distribution of -box cars than anything that has been tried to date.
We have a transport controller. As I understand his position and the work he does, he does not allocate box cars among the elevator companies at individual marketing points. What happens is that the local elevator agents daily send to the wheat board a record of the purchases they have made and the shipments from the elevator, if any, as well as the amount of storage space available. The wheat board then sends this information to the transport controller, together with the quotas that prevail at the various marketing points. On the basis of this information the transport controller then says to the railway companies that there is a certain area in western Canada that needs box cars. Box -cars are then sent, shall we say, to 100 marketing points; but after that the distribution of box cars as between the elevator companies is entirely the responsibility of the railway companies themselves.
As so often happens you may have one elevator company, possibly a pool elevator company, to which 50 per cent of the farmers at that point wish to deliver their grain. You may have three other elevator companies that normally would allocate amongst themselves 50 per cent of the business; but when the railway companies send four box cars to that marketing point they do not give the popular elevator half of the box cars because half of the farmers want to deliver grain to the pool elevator. They say: Well, let us do it on a rough- rule of thumb basis; we will give each elevator company one box car. That immediately forces half of the pool customers to the other elevator companies. It is perfectly true that at certain points farmers will prefer to take their grain to the line elevator companies, and the same thing operates in reverse.
The bill I am proposing would allow the farmers early in the crop year, before October 1, to post their acreage in the car order book with the railway agent. Following that the railway agent at that marketing point would have to apportion the box cars among the elevator companies in the same way that farmers apportion their acreages among the elevator companies, as indicated by the entries

Canada Grain Act
in the car order book. If half the farmers with half of the seeded acreage desire to take their own grain to a certain elevator company then that elevator company, by this provision, must receive half of all box cars spotted at that marketing point.
I think anyone who believes in competition, who believes in freedom of choice, should support this bill; because in the marketing of grain now we have regimentation of the worst kind. The farmer must of financial necessity market his grain at whatever elevator may have been fortunate enough to get some box cars the night before and has a little elevator space available. This bill would allow the farmers themselves to indicate where they wish to market their grain, and as a result of that indication box cars would be allotted on that basis.
Somebody might say well, you can use the car order book system. However, I believe the Minister of Trade and Commerce (Mr. Howe) will agree with me when I say that the car order book was not brought into effect to allocate and distribute box cars among elevator companies. The purpose of the car order book provision initially was to allow the farmer to order a car, in order to deliver over the platform a carload of a certain kind of grain that he might have, and get away from the necessity of selling it through local elevator facilities.
The car order book now is being used for a purpose for which it was not intended. I do not in any way blame the farmers for using the car order book as it is now being used. Certainly it is better than leaving the distribution of box cars to the railway agents or the railway companies at a great many points.
Wherever the pool elevator company, for example, feels that it has not been getting its fair share of box cars it will ask its farmers to go to the railway station and order cars through the car order book. Immediately, then, the car order book system comes into effect. It is easy for a large farmer who has a quota of 2,000 bushels of grain to deliver to order a box car, but for the smaller farmer who has a quota of 300, 400 or 500 bushels of grain to deliver the car order book is a very cumbersome procedure indeed. Many small farmers feel that the car order book has not been established for their use and they do not attempt to use it. In other instances they try to band together with a number of other small farmers and order a car amongst four, five or six farmers.
As I say, the car order book system when used as a method of distribution of box cars amongst elevator companies is very cumber-

some. In addition it led to a lot of friction at many elevator points when first put into effect. Sometimes you find a rush of large farmers, who want to sell their grain to a certain company, going into the same station on the same day at the same time and ordering perhaps 20 cars on the car order book. Then that elevator company will get the first 20 box cars and the other elevator companies will get none. The ordinary patrons of the other elevator companies will be pretty sore at their neighbours who filled the car order book for cars for that particular company.
The car order book provision is good and it has worked well when used for its original purpose; but it was never intended to be used as a method of allocating box cars among railway companies. Railway companies and farmers who use the car order book system as a method of allocating cars do so only in desperation when they have felt that grave injustice was being done in the distribution of cars by the railway companies at an elevator point.
There is another reason why I feel this bill should be accepted by the house. If I read the judgment aright, some of the protection that prevailed under the Canada Grain Act for a great many years has been removed by the recent decision of the board of transport commissioners in the Kreutzweiser case. As I read section 112 of the act, and as I know it has been used in years gone by, a farmer had the right to drive into an elevator company with his wheat and, if there was any dispute about the grade of his grain, he had the right to ask that the elevator company purchase that load of grain subject to grade in dockage. Samples of the grain were put in a tin receptacle provided for the purpose and sent to the chief inspector of grain at Winnipeg, and the sample came back with an official grade, and the farmer was entitled to the price for that official grade.
The judgment of the board of transport commissioners reads in part as follows:
The provisions of section 112 requiring a sample to be taken and placed in the receptacle only apply, in the opinion of this board, if an agreement had been arrived at between the operator or manager and the person offering the grain for sale that the grain be purchased.
In other words, this interpretation gives the right to the elevator agent to say to the farmer: "I refuse to purchase your grain". Under that ruling I have mentioned, unless the two parties agree that the grain is to be purchased the farmer has no alternative but to accept the price offered or take his grain home. In other words by one stroke of the pen the protection that has been in

the Canada Grain Act for years has been removed by this judgment of the board of transport commissioners. I think it is a judgment that is wrong in every way. I do not think it is based on the facts of the case, and I do not believe such a board should attempt to vary the clear provisions of the Canada Grain Act.
With the right which the farmer has had for many years gone it seems to me that my argument is strengthened in advocating the adoption of such a measure as Bill No. 186, which would set up a fair method for distribution of box cars amongst elevator companies. I believe the arrangement is workable. If the farmers indicate that 60 per cent of the box cars should go to a certain company because 60 per cent of the farmers with 60 per cent of the acreage want to deliver their grain to that company, then I think the railway agent should see to it that 60 per cent of the box cars are spotted at that particular elevator. 1 do not see anything standing in the way of such a provision in the act working smoothly indeed.
In any discussions I have had with people who are conversant with the Canada Grain Act, and the marketing of grain in western Canada, only one other idea has been advanced as perhaps equal to the idea contained in this bill. That was the idea that the elevator agents should each day report to the railway company their purchases of grain, and that the future spotting of box cars should be based on the daily purchases of grain by the various elevator agents. There is only one thing wrong with that idea, and that is that if you start in the fall with two elevators each of which is empty, you will have one of the elevator companies-the one to which most farmers wish to deliver-fill up quite rapidly; then of course the box cars will come in first of all to that company which has been buying grain. But before the elevator company that had its house filled first gets any box cars at all, the second elevator house will be filled. Hence you would have each of them entitled to the same number of box cars even though farmers preferred one elevator company to the other.
As I have said, I think another advantage provided by this bill is the fact that it will restore competition in the buying of grain. Right now there is little effective competition in the purchasing of grain. It used to be that there was real competition in grain buying, a fact which affected grades and consequently prices. But when a farmer comes to town now and finds all the elevators filled but one, the chances are that he will take his grain to that elevator company and will be
Canada Grain Act
obliged to accept whatever grade may be offered for that grain.
Another reason I recommend the bill to the house is that I feel it is a satisfactory alternative to the car order book, and that as long as the car order book is not in effect the provisions of this bill would provide for the allocation of box cars on a basis that would result in a great deal less friction among the farmers and among the elevator companies concerned.


Mr. Victor Quelch (Acadia):: Mr. Speaker, this is a simple, straightforward bill and I think the hon. member for Assiniboia (Mr. Argue) has made a good case in support of it.
I am therefore going to say what I have to say in a very few words.
First of all I may say that we in the Social Credit group intend to support it because we favour the general principle that I think is embodied in the bill, namely that a farmer should have the right to deliver his grain to an elevator of his own choice. I realize that many people will say that a farmer already has that right. While it is true that in theory he does have that right, in actual practice it unfortunately does not work out that way.
At many points we find that the majority of farmers desire to deliver their grain to one specific elevator, maybe because it represents a certain company or maybe because the elevator agent at that elevator has given exceptionally good service. Hence when the crops are harvested we find that the majority of grain starts to come in to that elevator, with the result that it becomes plugged early in the season. Then the farmers are left with the option of either holding their grain or hauling it to other elevator companies.
Then we find that in years of congestion, when the elevators become plugged, it has often been the practice in the past to allocate box cars on the basis of the storage capacity of the various elevators, regardless of the fact that the only reason some of the elevators are full is that the farmers could not haul their wheat anywhere else if they wanted to get it in. We feel that the box cars should be allocated in proportion to the amount of wheat the farmers desire to deliver to any one elevator. In other words, if the farmers desire to deliver 70 per cent of their grain to any one elevator, that elevator should be receiving 70 per cent of the box cars.
I notice that a proposal similar to this was supported by the convention of the Alberta wheat pool delegates. We believe that it will provide for a fairer distribution of the box cars and will help to provide for the practical application of the principle that a

Canada Grain Act
farmer should have the right to deliver his grain to an elevator of his own choice. We therefore propose to support the bill.


Mr. William Bryce (Selkirk):: Mr. Speaker, I rise to support this bill. From time to time I have had many letters from farmers complaining about having to take their grain to an elevator which they did not wish to patronize. The explanatory note opposite page 1 of the bill reads:
The purpose of this act is to provide in a new section of the car order book a rule for the fair allocation of box cars among elevator companies at a marketing point where the car order book, as presently constituted, is not in effect. By allocating their seeded acreage among the elevator companies at a marketing point, producers themselves will determine the distribution of box cars at that point.
I think if the farmers indicate where they are going to sell their grain and so notify the elevator companies, then the box cars can be allocated on an acreage basis, and you will not have a farmer going around looking for somewhere else to sell his grain at the same point. That is, when there are six elevators and one of the elevators is doing 50 per cent of the business, it should have more cars than the other ones. As it is today, where there are six elevators and six cars come along, they get one apiece. The upshot is that the farmer who patronizes the elevator that is getting 50 per cent of the grain is obliged to go and sell his grain elsewhere.
The hon. member for Assiniboia (Mr. Argue) explained the matter well. I do not need to go into it again and repeat what he has already said. I think this is the solution to the problem which the farmer has today with a glutted market, and I support the bill.


Mr.  A. J. Baier@The Battlefords: Mr. Speaker, I intend to take only a moment or two in connection with this proposed legislation. I think the first thing I would say is that I would consider the last two or three years as rather abnormal years in so far as crops in western Canada are concerned.
I think I am correct in saying that at the annual meeting of the Saskatchewan wheat pool delegates last November or December a proposal similar to this was brought forward, and I think I am correct in saying that it was voted down. The reason for that, if I might suggest it, was that it would rob the grower of his rights under other sections of the act.
The present act gives the grower the right to order a car for the shipment of his grain and to direct where such car should be spotted, elevator or platform. I doubt whether any farmer would wish to give up this right. While this bill proposes to provide

a new section in the act, care should be taken that the actual result is not to abrogate the right now given to growers. One of the greatest rights the farmer now has is the right to bargain under section 111 of the act for the grade of his grain and for other conditions under which he might deliver it. It would appear that this right to bargain and to change his mind about where he delivers his grain would be effectively lost if this bill were accepted.
I think this bill should have extremely careful consideration. Possibly at the next session consideration should be given to a bill of this kind at the meetings of the standing committee on agriculture.


Mr. P. E. Wright (Melfort):: Mr. Speaker,
if the committee on agriculture is not called any more regularly in future than it has been called recently, I am afraid we would be a long time in getting any necessary amendments to the Canada Grain Act. I had not intended to speak because I believed the hon. member for Assiniboia (Mr. Argue) had covered the matter fully, and I agreed with his argument. But the hon. member for The Battlefords (Mr. Bater), in the speech which he made, indicated that if this amendment were passed it would abrogate the right of the growers at the present time with regard to the car order book. That is not correct, and I wish to correct him. Section 72B of part I of the bill deals with that and states quite definitely:
If, at any time, no unfilled application for a car appears in the car order book at a marketing point, the railway agent shall then apportion railway cars among the elevator companies in the proportion that the acreage has been divided among the elevator companies.
In other words, if the growers at a point Which has a car order book wish to continue that method they can do so. If they fail to use the car order book, then this other method, as indicated in Bill No. 186, will go into effect.
The car order book was put into effect originally to give the farmer a chance to get a car, as opposed to the elevator companies. It was put in there a great many years ago. It was put in the act before we had the pools in operation and before we had the farm grain companies in operation. It was put into effect before we had the quota system of deliveries, and it served a real purpose; but that purpose has been more or less superseded by the new conditions that have arisen in the last few years with regard to quota deliveries, and the fact that in western Canada today we have in operation certain grain companies which belong to the farmers, co-operatives and so on.

It is the desire of the farmers, instead of using the loading platforms, to use their own companies. Yet at the present time they are not able to do that. This bill would just give them back the right they had under the car order book, when it was first placed in the Canada Grain Act. It is a good bill, and it should be passed.


Clarence Decatur Howe: I would first like to correct the grain statistics put on the record by the proposer of this bill. If his statistics are correct I do not see how anyone would have the conscience to demand a maximum price of $2.05 per bushel for wheat. He says that there are two and one half years' supply of wheat stored today in the world. That is perfect nonsense, of course.


Hazen Robert Argue: See your own publications.


Clarence Decatur Howe: He also says the Canadian carryover next year will be 350 million bushels of wheat. That again is nonsense. The fact of the matter is that North America had very big crops last year. We are moving ours as fast as we can get transportation. We have already sold from this crop more than our usual export from a normal crop of wheat. If we could move our wheat faster we would sell more. The difficulty is in transportation rather than in sales. But it is my opinion, and I think the opinion of responsible men around the world, that the reserve stocks of wheat are not more than reasonable protection against the vagaries of nature.
It must be remembered that this continent has had seven or eight years of abnormally large crops. The law of averages works over a period, and we are due at any time for a short crop. I may say that moisture conditions over the prairies this year are not too promising. To tell the world that this great surplus exists is an invitation to sell the market down. I do not know whether my hon. friend intended it that way, but I think any grain man, if he believed my hon. friend's statistics, would not be buying wheat at $2.05, or anywhere near that price.


Hazen Robert Argue: That is your interpretation.


Clarence Decatur Howe: You gave us your own interpretation of the statistics. I think the grain men would analyse the position a little more closely.
However, we are discussing the provisions of this bill. It is quite correct to say that the car order book was designed for a different purpose from the one it serves today. It was introduced at a time when there was an open market, when the elevators were privately-owned, when many farmers felt
Canada Grain Act
they would prefer to load over a loading platform rather than patronize one of the privately-owned elevators. It was believed by the farmers that grain that had been bought by the private elevator companies was sent forward in preference to farmer-owned grain, in order to take advantage of premium markets.
The car order book was introduced so that everyone would have an equal chance in the distribution of box cars. I may say that it corrected a situation that badly needed to be corrected at that time, and it served a very useful purpose. Today the car order book is not used in many sections of Canada. It is used in others and still performs a useful service; nevertheless the purpose of using it today is to favour certain elevator companies rather than to avoid discrimination between individuals.
It is felt that if a long list of priorities could be established for any one elevator, that elevator will have preference over neighbouring elevators in the distribution of box cars, and that is so. The suggestion has been made that with five elevators at a point and cars being put into that point, each elevator gets one car, but that only the elevator that has the greatest list of requisitions gets the preference in the cars. As a matter of fact, and generally speaking the usual preference is that a pool elevator will get two cars to one car for any privately-owned elevator. I think that is the usual average.
I was told that that is about the usual average when a string of box cars are being spotted at any particular elevator point.
However, it is now proposed that the distribution of box cars will be made absolutely rigid by law. It is assumed that those who wish to register their seeded acreage will do so. If all the seeded acreage were registered from one elevator, that one elevator would do all the business and the others would do no business at all. That assumes, of course, that we have far too many country elevators on the prairies; that there are five elevators at a given point but four of them are useless. One elevator can do all the work if the farmers "wish to patronize that one elevator. That of course is an absurd premise. I do not think we have too many country elevators. I do think that all of them are needed.
The fact of registering seeded acreage at a point freezes the farmer to the elevator with which he has registered his seeded acreage. If he puts his grain into an elevator other than the one in which he has registered his seeded acreage, obviously he can get no box cars for his grain because he has

Canada Grain Act
specified in advance that the box cars must be spotted at the elevator where his seeded acreage is registered. It takes away his flexibility of delivery and in that way attempts to make a rigid distribution of box cars, which may very well not suit the conditions of the crop movement.
To use the seeded acreage as a basis is by no means reasonable in every season. It is true that the wheat board uses the seeded acreage as a basis for quota purposes. That basis may be changed. If it were changed this whole bill would become null and void. It is tied absolutely to the theory that the seeded acreage will continue to be the basis for quotas used by the wheat board. Seeded acreage is no legal basis for anything. It is simply a device used by the wheat board to establish quotas reasonably fairly over western Canada.
I cannot see that this bill would assist the situation in any way. We have appointed a transport controller to operate our transportation system in times of congestion, his purpose being to make sure that the distribution of box cars is as fair as he can make it. I think that by using his own judgment the transport controller has created a flexible system which has served the farmers well. Many farmers will testify that if they write the transport controller and say that a particular area of which they have knowledge is congested, he will immediately ask the railways to relieve that particular area.
I am firmly of the opinion that any rigidity such as is imposed by this bill, which makes it mandatory on the railways to follow the principles laid down in the bill, regardless of any local situation, would not be satisfactory. There might be grain spoiling at one point, or in one elevator, and the law would say, "You cannot give box cars to that elevator, because under the law as laid down by this bill you must give it to the elevator for which the seeded acreage would make it mandatory."
I am always willing to support legislation which I think will improve the situation in western Canada, either improve the distribution of box cars, or improve any other condition that has to do with the movement of grain to the terminals. As the minister who is responsible for the marketing of grain it is in the interests of the job I am attempting to do to see that we move grain to the terminals in the most efficient manner.
I am not going back on the purpose of the car order book. The purpose of the car order book has always been to assist individuals. This bill makes it a device to assist elevator companies in a way which
[Mr. Howe.l
was never intended, and for which it has never operated. Whether it is wise in the interests of supporting one elevator company as against another elevator company to put that rigidity in the law, my hon. friend may have his own opinions. But I am firmly of the opinion that that is not a wise extension of the car order book privilege. Therefore, Mr. Speaker, I move in amendment:
That the word "now" be left out, and the words "this day six months hence" be added to the end of the question.


Hazen Robert Argue: Mr. Speaker, both the hon.
member for The Battlefords (Mr. Bater) and the minister have raised a lot of straw men, and then have attempted to knock them down. The minister has said that this would provide a great amount of rigidity in the Canada Grain Act, in the method of allocating box cars. Is there anything more rigid than the present car order book, when the next car coming to a given marketing point on a certain day must be spotted at a certain elevator for shipment of wheat from a certain individual farmer? The present car order book is the most rigid system one could possibly imagine.
I am not complaining about its rigidity. I think that even with the rigidity attached to the car order book it has an important place to fill in the marketing of our grain. The formula I am asking to have applied would apply not all the time but only when the car order book is not being used. It would not take any right away from any producer. But when the car order book is not being used, then this particular formula, as a result of indications given by the producers themselves, would be used in the allocation of box cars.
The minister has said that perhaps grain would be spoiling at a certain marketing point. This provision does not prevent cars going to that particular marketing point. It says that when they do go to that marketing point they must be distributed on a certain basis. I can imagine the arguments against this formula being used each and every day, and can judge perhaps better than the minister could judge.
There is a provision in the Canada Grain Act-and I refer specifically to section 68 (2)- which gives the board the right to alter even the car order book formula on a temporary basis if it thinks an inequality has resulted. While I am not a lawyer, I would be quite prepared to have that paragraph applied to the whole of the Canada Grain Act, as I think it would, anyway; because if one elevator were empty it would not need 40 per cent of the box cars. I understand that. But the chances of an elevator house

becoming empty under the present situation are, in my opinion, almost impossible.
The situation is that you have plugged elevators; and when an elevator has room for 4,000 bushels of wheat, in a day or two there will be 6,000 bushels in front of the elevator house waiting to be unloaded. The farmers do not find the elevators empty. They sometimes find when they go to town with a load of grain that they have to take it home because there is no space.
Then the minister says that if there are six elevator companies at one point it is not right to say that cars are now distributed one to each company. Well, I think that method is used more often than the method of giving the pool two cars for each one that the other elevators companies are getting. We have the car order book in effect now at dozens of country marketing points. Because the pool elevator is sponsoring the use of the car order book, it feels it has been discriminated against in the allocation of box cars.
Then the minister says:	Supposing there
are four elevator companies at a marketing point. The farmers can decide to sell their grain to one, and there are three elevator companies which do not buy any grain. He says that surely we do not think there are top many elevator houses in western Canada. My answer is that if there are four elevator houses at one point, and all the farmers want to deliver their grain to the one elevator, then the other three elevators should go out of business or should sell to the one to which the farmer wishes to deliver his grain.
Surely that is the way competition works. Surely that is free enterprise. If the farmers do not wish to deliver to three elevator companies, but wish to deliver to only one of them, then under ordinary competition the one would buy out the other three and use the four elevator houses. They would all be in use, and the farmers would have the opportunity to deliver their grain to the elevator of their own choice.
I am happy to go along with everything the minister said concerning the effective work done by the transport controller in connection with the relieving of congestion. I think his allocation of box cars in the areas requiring box cars is a good one. But the transport controller does not allocate the box cars among the elevator companies at grain marketing points. He merely says, "Here is a marketing point which requires 20 cars. We would like to see those 20 cars go to that marketing point." In other words, the transport controller does not know any more than I do which elevator companies will get those 20 box cars.
Canada Grain Act
The hon. member for The Battlefords said he thought-he was not too sure about it- that the delegates to the wheat pool annual convention turned down a measure such as this. I do not believe that for one moment. What they turned down, if they turned down anything, was not this at all. In talking to people in the grain business, and people associated with the farmers, I am prepared to say that the farmers' own associations would support this bill. They might consider that certain amendments were necessary, and that the bill did not show the best draftsmanship. However, I was not attempting to draft a bill which would cover every possible contingency. All I have wanted to do is to place the idea in a bill for purposes of discussion.
I believe if this provision were added to the Canada Grain Act, and if section 62 (2) applied to this bill as it applies to the car order book section, giving the board of grain commissioners the right to remove this section when there was any inequality, it would greatly improve the present marketing methods. If an elevator company at a given marketing point cannot get sufficient grain in fair competition to keep it in business, it should not be in business and its doors should be locked. You do not have a situation in any other place where the patrons are forced to go to a given company whether they want to or not.
I know from practical experience that in certain instances this would help the line elevators, where they might have a popular agent or where farmers believed in that method of marketing. In other instances it would help the pool elevator agents. But in any event it would allow the farmer to indicate where he wished to market his grain.
I think this is a reasonable formula which should recommend itself to the house. The minister contradicted my figures on wheat supplies, 'but I point out to him that they were released by the dominion bureau of statistics in "The Wheat Review" for March, 1953, published by authority of the Right Hon. C. D. Howe, Minister of Trade and Commerce. The first paragraph reads:
Latest available estimates indicate that supplies of wheat remaining on or about March 1, 1953 in the four major exporting countries for export and carryover at the end of their respective crop years amounted to 1,468-2 million bushels, some 66 per cent greater than the 885-6 million available a year ago.
There may be some explanation for those figures, but I will tell the minister why I used them. I used them in western Canada when speaking to meetings of farmers and businessmen in an attempt to convince any

Canada Grain Act
who might be doubtful that the present large supplies of wheat made it imperative in the interests of western Canada and western wheat producers that a wheat agreement be signed. As the minister knows, there are certain people who are against an international wheat agreement. He knows that certain other people want certain prices without which they are not willing to support an international agreement. If those figures are not right, perhaps I should take a second look at my argument.


Clarence Decatur Howe: The hon. member did not
quote those figures; he quoted his own interpretation of them.


Hazen Robert Argue: Not at all. I said that 1,468 million bushels, less 135 million bushels still to be filled under the current international wheat agreement after publication on March 1, together with any additional quantities that might be sold as class II wheat, would leave a surplus of wheat which would be equal to approximately two years' demand under the international wheat agreement if all the countries should enter.


Clarence Decatur Howe: You are absolutely wrong.


Hazen Robert Argue: The minister says that, but
he can amend his own statistics if he cares to. I hope the house will turn down the amendment moved by the Minister of Trade and Commerce and support the bill.


Mr. J. A. Ross (Souris):: Mr. Speaker, I should like to say just a word on this measure. I listened to the Minister of Trade and Commerce (Mr. Howe) speak in opposition to this, but from my own personal experience the allocation of box cars last year in certain districts was not satisfactory. As he said, it is true enough that the quota applied in some districts whereas it did not apply in others. I do not want to be accused of talking out this measure, because I think it is a step in the right direction. As the minister said, it is based on the seeded acreage and it is on that basis that quotas are arrived at and set for the handling of our grain.
I am not going to get into an argument about the carryover or surplus grain, because I agree that our grain should be properly sold and marketed. Nevertheless the last two years have created a very serious situation in the delivery and marketing of our grain. We must realize that in the past few years there has been a great change in our system of harvesting. We now use combines and trucks, things we did not use some years ago. I think the proposed bill will be of assistance in marketing our grain, and therefore I propose that we should support it.

I should like to see a vote taken before six o'clock.


John Sylvester Aloysius Sinnott: Mr. Speaker, I should like to say a word before a vote is taken on this bill. I give the hon. member for Assiniboia (Mr. Argue) great credit for trying to improve the marketing of western grain. He has presented his case to the government, and I think he would be doing a great favour to the western wheat growers if he did not force this house to divide on this issue but withdrew his bill and left the matter to the consideration of the government, to see what they can do to meet the situation. He has expressed his views most strongly, for which I give him credit, but at the same time I do not think there will be any value in having a vote because it is not a government measure. If the hon. member would give the government the benefit of the doubt and allow them to consider this legislation I think he would be doing a great service.


Charles Edward Johnston: I was paired with the hon.
member for Halton (Mr. Cleaver). Had I voted, I would have voted against the amendment.


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


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


Mr. Speaker:: The hour for private and public bills having expired, the house at eight o'clock will resume the business which was interrupted at five o'clock.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock. CANADIAN BROADCASTING ACT

James Joseph McCann: that the house go into committee to consider the following resolution: That it is expedient to introduce a measure to amend the Canadian Broadcasting Act, 1936, to
Canadian Broadcasting Act provide that the Minister of Finance shall from time to time grant to the Canadian Broadcasting Corporation, out of the consolidated revenue fund, amounts equal to the taxes collected under part XI of the Excise Tax Act in respect of the goods mentioned in section six of schedule I to that act.
Motion agreed to and the house went into committee, Mr. Robinson in the chair.


James Joseph McCann: Mr. Chairman, the purpose of this resolution is to discuss the principle having to do with the manner in which the finances of the Canadian Broadcasting Corporation will be raised. I think perhaps, in introduction of the few remarks I have to make, I might call to the attention of the committee the statement which was made by my colleague the Minister of Finance on the occasion of the presentation of his budget speech. As reported at page 2133 of Hansard he said, among other things:
The government has been seeking a fair and effective source of revenue for the national system of television broadcasting being developed by the Canadian Broadcasting Corporation in accordance with the general policy that was announced by the Prime Minister (Mr. St. Laurent). The government's policy is to have the cost of the national television service paid, as far as that is practicable, by those who benefit from such service. It also wishes the C.B.C. to have a direct source of revenue, on which it can budget over a period, and not to be dependent upon annual appropriations to finance its operations. We wish to emphasize that it is a separate corporate body, under the general control of parliament but not a part of the government.
Television operations have just recently commenced and their development has been financed by loans specifically authorized in the estimates. It is now expected that, in addition to commercial television revenues, the C.B.C. will require about $6 million in the next fiscal year to meet operating costs of television, including interest on loans. This requirement will increase over the next few years, perhaps to about $10 million. Some part of these needs during the development period may properly be met from loans, and paid from future revenues, but we should start now with a plan to provide adequate revenues over the long run.
It is therefore proposed that the Canadian Broadcasting Act should be amended to provide that the corporation should in future receive from month to month the amount of revenue yielded by the present 15 per cent special excise tax on television sets and the picture tubes for such sets, and on such parts and accessories for television sets as are taxable under the Excise Act. In this way those who buy sets, or the replacement tubes for them, will be providing the basic revenue necessary for C.B.C. television services. In order to make this plan effective, it will be necessary to revise the regulations to provide that tourists returning to Canada may not include as baggage eligible for free entry television sets or the picture tubes for use in them.
Having decided upon this plan in regard to television, we have now come to the conclusion that a similar transfer of the 15 per cent special excise tax revenue can and should be made to assist in financing radio broadcasting,-
That is, of course, sound broadcasting.
-in place of the present licence fee. Although the continuation of this fee had been recommended by

Canadian Broadcasting Act the Massey commission, experience has convinced us that it is uneconomical to collect such a small individual fee from such a high proportion of Canadian families, if any satisfactory alternative is open. We believe that payment to the C.B.C. of the amount of revenue received from the 15 per cent special excise tax on radio sets and the taxable parts and accessories for them does provide a satisfactory alternative, at least for the next few years until the present statutory grant for radio broadcasting is reviewed at the end of its five-year term. Consequently we are proposing that the broadcasting act should provide for this transfer of revenue, as well as that for television, and that the order in council under the Radio Act setting the present licence fees of $2.50 should be revoked with effect from April 1.
Of course all members of the committee are aware of the fact that the Radio Act was amended yesterday, and that amendment which discontinues the $2.50 fee is in effect from April 1. The Minister of Finance continued:
I estimate that the amount of revenue to be received by the C.B.C. under these arrangements will be approximately $12 million in the next fiscal year, the amount in respect of radio probably exceeding somewhat that for television. The public will be relieved of paying something over $6 million in radio licence fees, this next fiscal year, and our expenditure in collecting such fees, anticipated at $700,000 in the estimates, will be saved.
I have just a few words of explanation to give with reference to the procedure that has been followed since that budget speech was made. The Department of National Revenue, which collects the excise tax, early in March sent out instructions to dealers that return of taxes should in the future be separate as between radio and television. Our previous custom was to lump the two together. The March tax on those sets which have been sold is not due until the end of April. These figures when they are received must be tabulated and analysed. It is expected therefore that it will not be until the end of May or early in June that accurate figures can be given as to the excise tax revenue for radio and television separately.
Unit sales, based on the ten months of 1952 and estimated for a full year, of radio units was 501,974; television units 102,844, and record players, 24,546. The excise tax collected upon combined radio and television products for the year 1951-52 was $8,252,000. During that period sales of radio products were higher than those of television. However, based on bureau of statistics figures for the first ten months of 1952, it is estimated that the sales of each of these products are about equal. Sales for this period were approximately $38 million each for radio and television; that is $78 to $80 million for both. Therefore it is reasonable to assume that the revenue from excise tax in each of these divisions will be equal. The estimated excise tax for combined radio and television 
for the year 1952-53 is about $10,500,000. This figure is based upon a ten-month period.
Yesterday the committee on radio broadcasting paid a visit to and had a meeting in the city of Toronto. They were able to have a close-up view and study of the facilities which we have in that city, and actually see the production of a television program. All hon. members found that very interesting and illuminating. It did give them a concept of the enormous expenditure that is necessary to equip a station, both from the point of view of capital expenditure and yearly maintenance. It gave them a splendid idea of where the taxpayers' money went, and how expensive it is to carry on these operations.
I have nothing further to say except to answer any questions which may be asked on the resolution. If we proceed from the resolution stage to the second reading of the bill containing the amendments which will be made to the broadcasting act, it is my intention to move that the bill be referred to the special committee on broadcasting. The bill just provides that:
The Minister of Finance shall from time to time grant to the corporation out of the consolidated revenue fund amounts that, in the opinion of the Minister of National Revenue, are equal to the taxes collected under part XI of the Excise Tax Act in respect of the goods mentioned in section 6, schedule I to that act.


Mr. MacDougall:: With respect-


Donald Methuen Fleming: Mr. Chairman, this is a government motion, and certain rights attach to the first opposition member who follows.


John Lorne MacDougall: I am going to ask a question only. In reading the finance minister's statement with respect to the presentation of the budget the minister mentioned that the elimination of the radio licence fee naturally will bring about a diminution in the number of personnel that have previously been in that department. Am I correct in assuming that?


James Joseph McCann: I think that matter has been brought up in the house before. As a matter of fact, the collection of the radio licence fees for receiver sets comes under the Department of Transport. Their authority is the Radio Act. My recollection is that the Minister of Transport has given some indication to the house, although I cannot quote accurately what he said, that a number of people who were so engaged in the department would be transferred to other posts.
With reference to people throughout the country who sold the licences, that was done on a commission basis and was a part-time occupation only. They themselves will have to obtain other employment to take the place of the part-time service they performed.


Donald Methuen Fleming: Mr. Chairman, as the minister has indicated, this resolution follows logically upon the decision taken by the house yesterday in amending the Radio Act to abolish the $2.50 fee on radio receiving sets, a decision taken with unanimous approval of the house, a decision welcomed I am sure by all, a decision long years overdue.
This present measure is, as I understand it, designed now to fill the gap created by yesterday's amendment of the Radio Act, and to provide alternative revenue to meet the needs of the Canadian Broadcasting Corporation. That need relates to the activities of the corporation with respect to both sound broadcasting and the development of television which is now just beginning.
The estimate that was made by the Minister of Finance as to the revenue which would be available under the proposed measure was $12 million. That has been broken down a little more closely since that time to these figures: anticipated revenue from the excise tax on television sets and picture tubes, $6 million; that from radio receiving sets and tubes approximately $5,750,000. It happens that the sum of $5,750,000 is the amount that was previously yielded to the Canadian Broadcasting Corporation by the $2.50 fee on radio receiving sets. This measure, therefore, if adopted will give to the Canadian Broadcasting Corporation, it is estimated, almost exactly the same revenue for its sound broadcasting activities as it is losing by the repeal of the $2.50 licence fee.
As to television, as the committee appreciates, the Canadian Broadcasting Corporation in all it has done up to the present time with respect to television has operated entirely on loans from parliament. Those loans, sir, have aggregated altogether $8 million. The first loan was $4,500,000. Then there was a second in 1950 of $1,500,000; then last year, 1952, parliament voted another $2 million loan, making in all $8 million.
The present measure, as I understand it, will put an end to the policy of loans. It will then be the duty of the Canadian Broadcasting Corporation in its television operations, on their financial side, to make provision for the repayment of those loans according to the terms agreed upon between the corporation and the government at the time those loans were made.
It may be an ingenious scheme that the Minister of Finance put forward. It may be that it is a striking coincidence that the amount expected to be yielded from the excise tax on radio receiving sets and tubes happens to be almost exactly the same as the amount hitherto received from the $2.50 licence fee on radio receiving sets. But, Mr. Chairman,
Canadian Broadcasting Act I think we will have to look a little more deeply into and beyond these superficial and rather striking coincidences in amounts.
As I understand it, it is the duty of parliament, in reference to the voting of money, to assert and to maintain strict control over parliamentary appropriations and expenditures. When the amendment of 1951 was before the house and the house was asked to vote for a period of five years an annual sum of $6,250,000 for the general financial purposes of the Canadian Broadcasting Corporation, those of us in this part of the house said that the principle of voting money for a five-year period in advance was fundamentally wrong. Whatever might be said for the parliamentary grant to the Canadian Broadcasting Corporation-and no one took objection to the grant for the year then under consideration-that was no argument whatever for a five-year grant, in advance, without any necessity of the matter being referred back to parliament year by year within that period of time.
The position we took at that time was fundamentally sound; and the majority of the house, in deciding by legislation that that matter would be placed beyond the reach of parliament for a period of five years, in my submission failed in its duty with reference to parliamentary control over public expenditures.
The measure now before us apparently is designed to repeat the same error. It may be well to ask parliament to make this sum available this year. Parliament has control of the matter, parliament has the facts before it, and parliament can act this year. It would not then be tying its hands for the future- next year, or the year after, or the third year or the fourth year. But if we are to follow the statement made by the Minister of National Revenue this evening, and read again what was said by the Minister of Finance on February 19 as reported at page 2133 of Hansard, apparently this present measure is to have effect for at least the same period as the five-year statutory grants which, thus far, have run only two years.
If that is the effect of the measure, then I say another error is being made. Because whatever may be said for these grants at the present time, it is of fundamental importance in the discharge of our duty as a parliament that we should not give away the right or attempt to pass off the obligation we owe to maintain supervision over this grant year by year.
There may be additional reasons why the matter should be reviewed each year. If the figures with which we have been furnished
4188	HOUSE OF
Canadian Broadcasting Act are borne out by experience, it happens that this year there is a quite close similarity between the amount the Canadian Broadcasting Corporation is losing by reason of the repeal of the $2.50 licence fee and the amount they are to receive through the excise tax on radio receiving sets and tubes. But that equation may not exist in the following year, or the year after that.
If I understood correctly what the minister said this evening, as well as the remarks of the Minister of Finance in his budget speech, we are to be invited to say, by way of legislation, that for the period of five years, or what remains of it, this is the grant to be made; and the matter will not have to be referred back to parliament year by year. If that is the effect of it, then I think the house is being invited by the government to commit another serious mistake.
The finances of the Canadian Broadcasting Corporation are of very great importance. Its operations are highly important, particularly at this time when it has entered upon the new field of television broadcasting. It would be a very indiscreet man indeed who would attempt to weigh the full influence and effect of television. It is a new and potent force; it is a force which enters into the homes of the nation, and will exert an influence far beyond the ability of any of us now here to comprehend. It will exert an influence upon the thinking of old and young alike in a way that has not been experienced before.
Nothing, then, could be more important in the discharge of our parliamentary duties to the nation and to its homes than that there should be frequent review of the affairs of the Canadian Broadcasting Corporation, and its administration. It has been the policy of the House of Commons, since the Canadian Broadcasting Corporation was first established, to have a committee of the house review its operations every two years. As a matter of fact, sometimes the period has been longer than two years; but in this post-war period the interval has been about two years, on a strict average.
In connection with the voting of large sums such as are involved in this bill-$12 million per annum; and perhaps more than that in the future-I say there should be an annual review. I am not saying that the committee must be set up every year. It may or may not be decided by the house, in its wisdom, to set it up every year in the future. It may continue to follow the policy of biennial committees. But when we are dealing with an amount like $12 million in relation to the operations of the Canadian Broadcasting 

Corporation, both with respect to sound broadcasting and television, then I say it is highly important that the voting of this money should come before the house every year.
If we are to follow the procedure indicated by the minister this evening, and as foreshadowed by the Minister of Finance in his budget speech on February 19, then we are putting it beyond our reach to touch this matter for the period of the five years during which the other annual parliamentary grants have effect, and without any further vote on the part of parliament. The Canadian Broadcasting Corporation under this measure will enter the new fiscal year with revenues of about $22 million. Of that, $15 million is to be used in sound broadcasting and $7 million in television. Of that $7 million, we see that $6 million will come under this bill and approximately $1 million, it is anticipated, from commercial revenues. These are large amounts; and if parliament is to do its duty then, in my submission, it should review these amounts annually.
The argument has been used-it was used in 1951 when we said that these grants should not be voted for five years in advance-that the Canadian Broadcasting Corporation needed assured revenue in order to carry out long-term planning. I am as appreciative as any member of the necessity for long-term planning in the field of sound broadcasting and that of television. In the committee on broadcasting we have been hearing a description of the plans of the Canadian Broadcasting Corporation in that regard. No one wishes to tie their hands in making plans, but parliamentary control should first be vindicated. I think the Canadian Broadcasting Corporation can have sufficient confidence in parliament and its desire to see that adequate provision is made to meet the proper expenses of the corporation to be assured that year by year parliament will provide what is shown to be required for the purposes approved by parliament.
While recognizing the necessity of providing revenue to replace that lost by the corporation as a result of the abolition of the $2.50 licence fee; while admitting the specious attraction of the present proposal which has some ingenious aspects; while recognizing that so far as may be possible the burden should be borne by those who enjoy the benefits, nevertheless I see in the present proposal something more than just a convenient way of making the necessary provision. If I understand what has been proposed,
I see here something that may be entitled to command the approval of parliament this year, but something which invites

parliament improperly to tie its hands in future years. That should not be done.
I am glad the minister has indicated that when the bill is given second reading it will be referred to the committee on radio broadcasting. That is a sensible proposal which will assure the bill being reviewed by that committee which is considering other matters closely related to the purposes of the bill. Why cannot we have a bill of this kind and .hen have an annual provision in the estimates in such form that parliament will be free to deal with it annually on its merits?


Ernest George Hansell: Mr. Chairman, before entering into a discussion of this measure I should like to rise to a question of privilege. Bill No. 337, to amend the Radio Act, was brought in yesterday and given second and third reading while the radio committee was away on another assignment in Toronto. I am disappointed that the bill was not left over until the members of that committee could have been here. Not only were the members of that committee not here to discuss the bill; the Minister of National Revenue, under whose jurisdiction is the operation of radio, was also away with the other members of the committee. We can do nothing about it. The bill received third reading by consent, which was not according to the regulations. I do feel that those responsible for the order of business might have extended to the members of that committee the courtesy of leaving the measure over until we returned. As I say, there is nothing we can do about it, but I do rise on that question of privilege.
May I change the subject by discussing for a moment or two the present resolution. I am not going to detain the house by repeating what the hon. member for Eglinton said, because there is no purpose served by saying the same thing twice. I support the hon. member for Eglinton in his argument that by making the amount statutory it is taken out of the hands of parliament year by year. We will have no control over that appropriation.
In order to partially remedy this, I suggest to the minister that the broadcasting committee should be made a standing committee. The order of reference should not be just the discussion of the operations of the Canadian Broadcasting Corporation; the committee should be permitted to examine the expenditures and give approval when there is no opportunity to do so year by year in the house.
I am not particularly opposing the measure, or at least the principle involved that those who gain advantage in a certain way should pay the bill. In a sense I think that is a proper principle. If a man owns one radio 68108-265
Canadian Broadcasting Act only he will pay so much excise tax. But if a man is wealthy enough to have one radio in his kitchen for his wife, another in the living room for his friends when they visit, another in his daughter's room so that she may lie in bed and listen to some crazy program, another in his boy's room so that he may see how many cowboys are being killed every night, he then pays more revenue.


An hon. Member:: And in his car as well.


Ernest George Hansell: As my hon. friend points out, he may also have one in his car. A man who is wealthy enough to have these radios in different rooms in his house is consequently called upon to pay a little more. I have not very much to say against that principle.
But there is something the Canadian taxpayer should know. While he may have hailed with some jubilation the discontinuance of the radio licence fee, the fact is that the government are going to get it out of him just the same. In some cases they are going to get more. In the aggregate the government will be getting about twice as much this way as they would by charging the licence fee. The taxpayer should know that all that has been done is that instead of the government dipping into the right-hand pocket of his trousers, they are now reaching around and extracting twice as much from his left-hand pocket. The government can say, well now if we reach into the right-hand pocket the taxpayer will know we are only taking out $2.50 per year, but by this measure we can now reach into the left-hand pocket of the taxpayer and he will not know how much we are taking out. The only means the taxpayer would have of knowing would be to take a pencil and try to calculate the sales tax at the manufacturer's level and any excess taxes that might be added as the article goes from the manufacturer to the wholesaler to the retailer or perhaps through some middleman, I do not know. However, the taxpayer will not know how much he is paying.
If I had my way I would have a price tag on every article showing the amount the consumer is paying for the article and the amount of tax that is added. Sometimes that is done. It was done during wartime on jewelry and a few things like that. However, the people have yet to realize what the present government's financial policy means in respect to taxation. We are taxed for just about everything we do or everything we own. You cannot own a dog without being taxed. My hon. friend tells me that if you live in Banff you cannot own a cat without being taxed.


An hon. Member:: You could move.
4190	HOUSE OF
Canadian Broadcasting Act


Ernest George Hansell: The hon. member suggests that we could move. We could move out of one place and move into another, but we might find some other tax imposed there. We might move from Alberta, which is oecoming less burdensome in taxes, but if we moved to Quebec we would have an extra sales tax. To what place could one move?


Donald Methuen Fleming: To the moon.


Ernest George Hansell: Well, if one went to the moon, as the hon. member suggests, it might be all right; but when we got up there we might find that they had a Liberal government and we would not be any better off. I suggest that the only way this matter can be rectified is for the taxpayer to say, "Well, let's try some other administration that has some different type of financial policy".


Donald Methuen Fleming: Hear, hear.


Ernest George Hansell: Now the hon. member for Eglinton spoils it all, because I agreed with him up to this point. Now he says, "hear, hear". I do not want to embarrass him but I should like his party to tell me what different financial policy they have from the Liberals.


Donald Methuen Fleming: We believe in eliminating waste and extravagance and reducing taxes.


Ernest George Hansell: The reduction of taxes is not a different financial policy.


Donald Methuen Fleming: It is very different.


Ernest George Hansell: It is not a difference in financial policy. Policy is that which runs the machine. It is not taking a bolt off the front bumper and putting it on the back one. A change such as that is just a fluctuation in the amount of taxes one way or the other. However, we will not go into that tonight. I do not want to get into any argument, Mr. Chairman, and you would only call me to order if I did.
I do urge the minister to make certain that if the authority for expenditures and appropriations is made statutory and taken out of the hands of parliament, he will have some substitute for governing that expenditure, even if it is only the radio committee. This method cannot be followed unless that radio committee becomes an annual or standing committee. That is my proposal, and I shall not say anything more during the resolution stage, Mr. Chairman.


James MacKerras Macdonnell: I should like to add a word or two. I am glad to have so much support, Mr. Chairman, and I hope I shall have it when I am finished. I really have risen to support some of the remarks


made by the hon. member for Eglinton with which I agree most wholeheartedly. First of all I should like to read to the minister one of his utterances in past years which I have treasured in my memory ever since. It made such an impression on me that I was able to give almost the exact words when I sent to the library for it tonight. It was brought to my mind because the minister began by saying that, of course, the C.B.C. was entirely separate from, and was not in any way a part of, the government.
When I read this quotation to the minister I know he will say there is nothing inconsistent in it. I am going to submit to you, Mr. Chairman, that there is a great difference in emphasis. The heart is different, and when I read this to you I think you will agree. I am quoting from Hansard for August 30, 1946, at page 5675; we used to stay here throughout the summer in those happy years:
I for one believe In state-owned, state-operated and state-controlled radio in this country-
In fairness I should add that the minister went on to say that that was the policy endorsed in 1932 by the party to which I belong. I am not going to enter into that old argument. I am just reminding the minister that in those days he was very full of that aspect of the situation. Tonight, of course, he accentuated the other one.
The first thing I wish to do is reiterate what the hon. member for Eglinton said, that this business of being asked to provide funds over the years in advance does not make sense. In my opinion it does not make any sense at all. Why do we act differently toward the C.B.C. than we do toward the Canadian National Railways? The Canadian National Railways come here year after year and state their position. They state their requirements, and there is a committee to consider that. Then their requirements are met, as is right and proper, but only after the Canadian National give an account of their stewardship. I defy anyone to say there is a difference in principle. I defy anyone to show why it is not a convenient, easy and natural course to follow in this case.
Next I wish to say that this tax, this means of raising money which we are asked to approve, while it does happen at the present time-when I say "happen" I mean happen because it is the sheerest accident-to be just about the amount previously raised, that is a sheer accident. There is no more relationship between the needs of the commission and the yield of this tax than there is between the needs of the commission and, let us say, the tax on cosmetics or on toasters. The yield from this tax is going to depend from year to year very largely on the amount of

money the taxpayer has in his pocket. The expenses of the commission are going to vary extraordinarily little. They will go on unchanged from year to year except that, of course, there will be a constant tendency to rise.
There is another thing I object to and it is this way of voting money years in advance. The money is voted in advance now, but there is nothing to prevent the commission coming back next year and asking for more; and there is nothing to prevent the government getting them more, which of course they will do if the commission's needs actually increase. On the other hand it is very, very hard for me to believe, Mr. Chairman, that we will have the commission coming along to tell us that we have given them too much money. That would only happen in a far, far better world, Mr. Chairman.
Without labouring the matter further I repeat and underline what the hon. member for Eglinton said. This is unsound in principle; it is unsound in practice; it does not make sense; and no reason that any intelligent man can make sense of has been given for it.


Ernest George Hansell: I am not rising to make another speech, but I would just ask the minister a question before he replies. Since this is a matter which comes under the Department of Finance, is it expected that an official from the finance department will be giving some evidence or will be before the radio committee when it meets on this bill?


James Joseph McCann: Mr. Chairman, in answer to that question the officials will be available if the committee sees fit to call them to give evidence.
In closing the debate I shall not take long, but I will just mention a few points which have been brought up. Probably I should first make reference to the comments and criticism of the hon. member for Greenwood.
He referred to my statement in 1946 and then contrasted it with the statement of the Minister of Finance who said that we wish to emphasize that the Canadian Broadcasting Corporation is a separate corporate body under the general control of parliament but not part of the government. He answered his question himself when he said that he felt quite sure there would be no conflict between those two opinions, nor is there the slightest conflict. I still take the position I took in 1946 when I made that statement with respect to state ownership, control and management for what is a natural monopoly for all the people of this country. There is 68108-265i
Canadian Broadcasting Act no use going back to the debate we had when the committee was set up. I dealt with the history of the matter at that time, I think.
One of the reasons which I might emphasize, and which I stated a year ago when we were having a somewhat similar debate, is that the statutory grant was recommended by the Massey commission, which went more fully into the matter of broadcasting than any other commission that we have ever set up.


James MacKerras Macdonnell: You turned down their other recommendations fast enough.


James Joseph McCann: We do not have to take all of them, necessarily, but it is well to take the best of them. At that time the commission recommended, with reference to the financing of the Canadian Broadcasting Corporation, that they be given an amount- and I think they stated what the amount should be-for a period of years in order that they could plan their work. Anyone who is familiar with the work knows that it takes a lot of long-term planning before they can actually put into execution the matters which they have in hand.
I believe, and I will agree with the hon. member for Eglinton, that the Canadian Broadcasting Corporation is of such importance, and of such growing importance, that we would be well advised to have a standing committee on radio broadcasting, or at least to have the special committee meet every year. That particular phase was also mentioned by the hon. member for Macleod. With respect to his general remarks regarding taxation-well, of course, there are taxes everywhere, even in the planet where he expects to go. I am sure he will find lots of taxes there, and I do say that when he gets to the moon, if there is a government there it will probably be a Liberal government and television will have developed to such an extent that we will be able to have a look at him and see how he is getting along.
I have no further remarks to make.
Resolution reported, read the second time and concurred in.
Mr. McCann thereupon moved for leave to introduce Bill No. 340, to amend the Canadian Broadcasting Act, 1936.
Motion agreed to and bill read the first time.


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


Some hon. Members:: Now.


Donald Methuen Fleming: No; we have to see the bill first.

Trade Marks Act


James Joseph McCann: After second reading I would move that it be referred to the committee on radio broadcasting.


Donald Methuen Fleming: It requires unanimous consent of the house to have the bill read a second time now. It is all very well to refer a bill to a committee, but we ought to know what is in the bill before we do anything.


Mr. Speaker:: Is it agreed that the bill be read a second time at the next sitting of the house?


Some hon. Members:: Agreed.


Mr. Fournier (Hull):: Last night I announced that we would proceed with Bill No. 332, an act respecting the Canadian forces. I understand that the minister is in conference with some member of the opposition in an attempt to draft an amendment to the section which was contested last night. If hon. members have no objection we will take up Bill No. 316, relating to trade marks and unfair competition.



TRADE MARKS ACT


Frederick Gordon Bradley: the second reading of Bill No. 316, relating to trade marks and unfair competition.
He said: Mr. Speaker this bill revises and consolidates the Unfair Competition Act, 1932 (22-23 George V, c. 39), which has been in force since September 1, 1932, and other statutory provisions relating to trade marks, trade names and acts of unfair competition. As, the main subject dealt with is trade marks, the short title provided for in section 1 of the bill is the Trade Marks Act.
As many criticisms had been directed against the provisions of the Unfair Competition Act, 1932, and their interpretation and application had given rise to such dissatisfaction, in the fall of 1947 the then secretary of state entrusted to an advisory committee of experts in this field of law the task of studying the representations and suggestions already submitted, of securing further views from organizations and individuals who might appear to have an interest in the matter, and of making recommendations for the drafting of new legislation or, if deemed advisable, submitting a draft statute for consideration. In addition to legal practitioners specializing in, amongst other fields, the law of trade marks, and officials administering the Unfair Competition Act, the said committee included representatives of the Canadian Manufacturers Association, the Canadian Chamber of Commerce and the patent institute of

Canada. More recently an official of the Department of Justice has also taken part in the committee's work.
At an early stage of the committee's work questionnaires were distributed to and representations received from interested persons and bodies in Canada, the United Kingdom and the United States, including the patent institute of Canada, the Canadian Manufacturers Association, the Canadian Chamber of Commerce, the board of trade of the city of Toronto, the law society of Upper Canada, the United States trade mark association, the chartered institute of patent agents of the United Kingdom and the trade marks, patents and designs federation of the United Kingdom. Copies of the questionnaires were distributed to their membership by the Canadian Manufacturers Association, the Canadian Chamber of Commerce, the patent institute of Canada and the Association of Canadian Advertisers Incorporated. A questionnaire was also published in the Canadian Bar Review and in the Ontario Weekly Notes. Notice of the activities of the committee was published in the journal of the patent office society of the United States, and mention of its work and objects was made in the daily press of Canada.
The committee has been in contact with other departments of the government of Canada having an interest in some of the proposed provisions, namely the Departments of Trade and Commerce, of national revenue (customs and excise) and of finance, the Royal Canadian Mounted Police, the statute revision commission and the Criminal Code revision commission.
The committee has had an average of half a dozen meetings a year over a period of approximately five years. A considerable amount of work was done and time devoted to the committee's task between those meetings by subcommittees or individual members of the committee. Nearly two years ago it produced a first printed draft of the bill, which it circulated amongst substantially the same organizations and individuals who had received the questionnaires, more particularly those who had indicated an interest in the subject, and which it also made available to any others who signified a desire to receive copies. Further representations were received as a result, either indicating general approval of that first draft or containing helpful criticisms and suggestions for improvement.
The same treatment was accorded to the latter submissions as had been accorded to those received by the committee upon the questionnaires circulated by it at the beginning of its work; that is, they were carefully considered and any suggestions that

appeared to the committee to be reasonable and helpful were adopted and incorporated in the committee's draft, which was submitted to parliament in the Senate in June, 1952. Subsequently further representations were received, some of which appeared to have merit, and some amendments were made and incorporated in the bill which was introduced in the Senate earlier in the present session.
I hope the foregoing will not give the impression that we pretend to have produced a bill which meets all views. On a branch of the law which is of such a technical character, and at the same time of such practical importance to commerce, industry and the legal profession, it is obviously impossible to achieve unanimity of opinion on all points and proposals. It is for these very reasons that it was intended to afford all concerned an opportunity to give full consideration to, and make representations on, this bill.
The committee has prepared a detailed explanatory report which has been printed and published. Such report may prove very useful later in the administration and interpretation of the new legislation, if adopted. One precedent for this is the Goschen report on the 1938 legislation relating to trade marks in the United Kingdom.
May I, at this point, take occasion to pay well-merited tribute to the valuable services rendered by the trade marks law revision committee who, over a period of nearly six years, have given of their services unstintingly, attended many meetings and devoted many days of their time to this work entirely without remuneration.
I should now like briefly to summarize the main changes that this bill would bring about in the existing law as follows:
1.	The elimination of the arbitrary division of trade marks into word marks and design marks, introduced by the Unfair Competition Act, 1932.
2.	A more adequate definition of what constitutes a trade mark in the light of modern commercial practice.
3.	The applicability of trade marks to services in addition to wares.
4.	Relaxation of the rigid rules applying to the assignment and licence of trade marks.
5.	Clarification of the principles governing the ownership of trade marks in Canada and the persons entitled to registration, including the right to file an application for registration prior to commencing actual use.
6.	Provision for publication of trade mark applications and for opposition procedure.
7.	In addition, an effort has been made to gather, into a compendious whole, the provisions contained in various statutes providing
Trade Marks Act
prohibitions against adoption and use of marks and symbols such as, for example, the insignia of the Boy Scouts, insignia of the armed forces and university emblems.
I should add that special care has also been taken to ensure that the provisions of the bill were in accord with Canada's obligation under the convention of the union of Paris for the protection of industrial property, including its London, 1934, amendments to which Canada adhered in 1951.
It is my intention, if the bill is given second reading, to move that it be referred to the committee on banking and commerce.


Gordon Francis Higgins: Mr. Speaker, I shall not delay the house for long on this matter. It is rather a pleasure to follow the minister because I believe this is his first formal speech in introducing a bill. It is the first one I remember at all events. I should like to say that I followed him closely.
Over the week end I took the time to read this bill. As the minister had said, it is a comprehensive bill in every way. In the form in which it is presented it appears to answer most of the questions that had been bothering me somewhat. It appears to be what a working lawyer would say is more or less a bill that will suit the profession. Judging from the remarks which were made in the Senate, the minister is quite correct when he says that it has been studied for three years by a committee of the trade mark law review committee, I believe, whose services were entirely free.
There were just two' points that struck me in reading the remarks that were made in the other place when the matter was being discussed. It was before the committee there at that time. There are certain societies and certain persons who are set forth in the act as being entitled to have their marks recognized as such. As an example I refer to the Red Cross. The only point at issue during the debate in the other place, and over which members nearly came to blows at one time- verbally, I mean-was the request of the Blue Cross organization to have their sign of the Blue Cross placed in the same category as that of the Red Cross. We had the rather unusual spectacle of one hon. member accusing another hon. member of attempting to intimidate him at that time. I am sure that would never happen literally in the other place, but it was a rather strange spectacle. The matter actually came to a vote, and as a result of the vote it was decided that the Blue Cross would be included. The following day that vote was reversed at the request of the government.

Trade Marks Act
I do not know whether hon. members of the house here will want to consider that matter. I do not advocate it myself, because I do not know enough about the Blue Cross. It may be that it should be included in the act. However, that is a matter that should be discussed. Then there is a section that complies with the terms of union of Newfoundland and Canada. The entire paragraph is included in the act, I notice, in section 65. I personally see nothing to object to in the bill as presented by the minister at this time.


Donald Methuen Fleming: May I ask the minister
whether it is his intention to move, immediately after the bill is given second reading, that it be referred to the standing committee on banking and commerce for study and report?


Frederick Gordon Bradley: Yes.


Herbert Wilfred Herridge: Mr. Speaker, like the hon. member who preceded me-and who described himself in what I thought were most interesting terms when he said he was a working lawyer-I followed with interest the work of this committee. I think it is sound procedure that the government has followed in introducing this type of legislation, of having their officials give the matter thorough study, then referring it to a committee that gave it further study, and then referring the legislation to the interested parties in the country. I think that is a democratic way of getting a cross-section of opinion and finding the weak spots in suggestions made for amendment of the bill.
Like the hon. member who has just spoken, I read the minutes and proceedings of the standing committee on banking and commerce of the other place, and with great interest. I noticed there was considerable discussion as a result of representations made by some person on behalf of the Blue Cross. He wanted the Blue Cross to receive the same recognition in the bill as does the Red Cross. I read that evidence with interest, and I heartily agree with the majority opinion of the committee at that time. I think the Red Cross is something distinct and apart. It has a place in our national and international life that cannot be equalled. All the good work of the Blue Cross cannot equal it.
I am pleased to know that when the bill receives second reading it will be referred to the banking and commerce committee of the house. I shall also look forward with great interest to reading the minutes and proceedings of that committee, because I am quite sure that the same interest will be aroused in our committee as was shown in the com-

mittee in the other place, and I hope that our committee will come to the same conclusion.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on banking and commerce.
Alphonse Fournier: that the house go into committee of supply.



EMERGENCY POWERS ACT-ORDER IN COUNCIL RE TRADE WITH MAINLAND CHINA AND NORTH KOREA

Howard Charles Green: Mr. Speaker, there is one matter I should like to place before the house before we go into supply. It has to do with the order in council passed under the Emergency Powers Act which was tabled in the house yesterday by the Minister of Transport (Mr. Chevrier). He brought in this order in council, which is No. 604, shortly before the noon recess. It is described as the "Control of trade by sea with mainland China and North Korea, order 1953".
The terms of this order in council are very far-reaching. In the first place it sets up what is a completely new licensing system for Canadian ships. As hon. members know, there are already various licences and certificates required by Canadian ships; but here we have an order in council passed under the Emergency Powers Act which sets up a completely new and additional licensing system. That provision is found in paragraph 3 of the order which reads as follows:
3 (1) No Canadian ship to which this order applies shall, on or after the 20th day of April, 1953-
That of course was yesterday. I continue: -proceed to sea from any port (whether within or outside Canada) except under the authority of and in accordance with a licence granted under this order by the minister.
In the definition section of the order in council the minister is defined as the Minister of Transport. Subsection 2 of paragraph 3 reads as follows:
No master, owner or person having the management or control of a Canadian ship shall order, permit or cause any such ship to proceed to sea in contravention of subsection 1.
And by the way, the order is made applicable to every Canadian ship having a gross tonnage of more than 500 tons. It would apply, of course, to both cargo and passenger ships. Paragraph 4 of the order in council goes on further with regard to the licence and reads as follows:
The licence required under this order shall be in addition to any other licence, certificate or authority from time to time required by the law of Canada.

Paragraph 5 reads:
A licence under this order may be general or for a specific voyage or voyages.
Further provisions of the order set out in what ways the minister may limit this licence. Paragraph 6 reads:
Any licence granted under this order may be granted subject to such limitations and conditions as the minister thinks fit to impose with respect to
(a)	the trades in which the ship may engage and the voyages which may be undertaken by the ship;
(b)	the class of cargoes or passengers which may be carried in the ship to mainland China or North Korea or within the territorial waters of those countries;
(c)	the hiring of the ship.
It will be noticed that there for the first time is a reference to mainland China or North Korea, and that is the only reference throughout the whole order in council to these territories.
The wording of the order in council is such that there must be a licence obtained in every case, but then the Minister of Transport may put a limitation or a condition in the licence with regard to the class of cargoes or passengers which may be carried in the ship to mainland China or North Korea, or within the territorial waters of those countries.
I will not read the whole order in council. There are punishment provisions which provide for a maximum fine not exceeding $25,000 or imprisonment for a term not exceeding five years or both. In addition there is a provision that a director of a shipping company shall be subject to the same fine or imprisonment if the offence takes place with his knowledge or consent, or even if he fails to exercise due diligence to prevent the commission of the offence. The penalty provisions, as hon. members will see, are exceedingly severe.
It should be pointed out that this order in council makes it obligatory for every Canadian ship leaving every port, everywhere- not only in Canada, but leaving port in any other part of the world-if she is over 500 tons, whether passenger or cargo, to obtain a licence under this order in council. The order in council was made applicable at once, without any warning. Obviously it is very far-reaching.
This order in council was passed on April 17, just last Friday, while the House of Commons was in session. No opportunity has been given hon. members to consider it. There was no chance whatever for debate before it became law; there has been no chance for the press of Canada to carry the story of this new law across the country so the people of this nation would have an opportunity to understand what the government was doing.
21, 1953
Trade with China and North Korea
This is the kind of action against which we in the official opposition cannot protest too strongly. Action was taken under the Emergency Powers Act. Hon. members will recall the debates in the house only a few weeks ago in connection with the extension for another year of the provisions of that act. We were led to believe at that time by the Prime Minister (Mr. St. Laurent) that he wanted the Emergency Powers Act continued for another year only as a stand-by power, that the act was required so the government could take whatever steps might be necessary when the house was not sitting.
We were told time and again during the debate that there was no intention to by-pass parliament. Oh, no, there was to he nothing of that kind. This Emergency Powers Act was required merely to do something after we had all gone home. The Minister of Justice (Mr. Garson) said it was needed during the period of the election, because during that time there would be no House of Commons sitting, and that the government required such powers.
Yet the ink on Hansard was scarcely dry when the Minister of Transport (Mr. Chevrier) walked into the house with a far-reaching order in council of this kind, passed under the Emergency Powers Act. I suggest to you, Mr. Speaker, that this action is in defiance of the Canadian parliament, and that it should be treated as such by members of the house and by the Canadian people generally.
Where has democracy gone in this country when a power-mad government will take action of that kind? It is not as though this were the only way the situation could be met. The government could have brought in amendments to the Canada Shipping Act setting up these requirements for a new type of licence. It may be argued that it would have been impossible to draw an amendment to confine the provision to the mainland of China and to North Korea. Yet we have that being done in legislation before the House of Commons at this very time.
I hold in my hand the revised Criminal Code. We find that section 46 thereof deals with treason and other offences against the queen's authority and person. A provision is written into this Criminal Code to deal with a situation such as that existing at this time in North Korea. Leaving aside paragraphs (a) and (b) we find that section 46 (1) (c) states that everyone commits treason who, in Canada-
(c) assists an enemy at war with Canada, or any armed forces against whom Canadian forces are engaged in hostilities whether or not a state of war exists between Canada and the country whose forces they are;
4196	HOUSE OF
Trade with China and North Korea
Words of that kind could have been used to amend the Canada Shipping Act to meet the situation dealt with by this order in council passed under the Emergency Powers Act.
Then already we have a provision in the Canada Shipping Act to meet a similar situation. I would refer hon. members to the amendments to that act passed in 1938. At that time a section numbered 703A was added. This section is described in the side-note as follows, "prohibition of shipment of articles of war to countries in a state of war." This of course was before the second world war had broken out. We were meeting the problem of the shipping of munitions to potential enemies, and this section was inserted in the Canada Shipping Act at that time.
I make reference to it because I submit that this problem could have been dealt with in the same way by a new section or sections in the Canada Shipping Act. I am not suggesting, of course, that exactly the same wording would have been used. This section 703A provided:
(1) No article to which this section applies shall be discharged at any port or place in any territory designated by the governor in council tor the purposes of this section or within the territorial waters adjacent to such territory from a ship registered in Canada, and no such article shall be transshipped on the high seas from any such ship into any vessel bound for any such port or place, and no such article consigned to or destined for any such port or place shall be taken on board or carried in any such ship.
Then the section went on to give the governor in council-that is, the cabinet-the power from time to time to-
(a)	designate any territory or territories in which there is a state of war or armed conflict, civil or otherwise, in respect of which the provisions of this section shall apply;
(b)	prescribe the time or times during which such provisions shall so apply;
(c)	exempt in the case of any territory so designated any article or class or articles referred to in the next following subsection-
Which makes reference to munitions of war.
-from the application of the provisions of this section;
(d)	provide otherwise for the carrying out of the intent of this section.
Then subsection 3 of section 703A describes the articles to which the section shall apply, and states that they shall include- -arms, ammunition, implements or munitions of war, military, naval or air stores, or any articles deemed capable of being converted thereinto or made useful in the production thereof, or provisions or any sort of victual which may be used as food by man or beast.
There are other subsections of this section which were written into the Canada Shipping Act in 1938.


Clarence Decatur Howe: In other words, we did the right thing in the wrong way; we used the wrong act.


Howard Charles Green: The Minister of Trade and Commerce says they did the right thing in the wrong way. What has happened is that this government have become so drunk with power that they do not take the trouble to draw up an amendment; they simply come to the floor of the house and throw on the table an order in council passed under the Emergency Powers Act and expect members of the House of Commons and the Canadian people to swallow it.
The actual offence is made much worse in that yesterday morning amendments to the Canada Shipping Act were actually being considered. Instead of dealing with them, the Minister of Transport (Mr. Chevrier) walked out of the house and left his parliamentary assistant to conduct the bill through the house. Another bill amending the Radio Act was treated in the same way and conducted through by the parliamentary assistant. After both bills had been passed the Minister of Transport walked into the house and asked for unanimous consent to revert to motions in order to table this order in council which should have been brought in as an amendment to the Canada Shipping Act, debated and passed in the normal way.
I submit that in this case the government has deliberately by-passed parliament. This sort of high-handed treatment must be stopped. It is time we in Canada knew whether we are to have a free parliament any longer. I move, seconded by the hon. member for Lake Centre (Mr. Diefenbaker):
That all the words after "that" to the end of the question be deleted and the following substituted therefor:
"This house, whilst in accord with a policy of imposing strict limitations and conditions on Canadian ships and cargoes and passengers carried thereon to mainland China or North Korea or within the territorial waters of these countries, desires to record its opinion that the action of the government in proceeding by order in council under the Emergency Powers Act while the house is in session was a violation of the rights of parliament and that any powers necessary to implement such a policy should have been provided by an amendment to the Canada Shipping Act."


Clarence Decatur Howe: Mr. Speaker, in the absence of the Minister of Transport (Mr. Chevrier) I should like to make a few comments about the remarks of the hon. member who has just spoken. He states that he agrees that the evil that has grown up and been recognized by all NATO countries should be stopped, but his thesis is that we should have amended the Canada Shipping Act instead


of using the act which was passed specifically hy this house to give the governor in council authority to deal with all matters affecting the cold war.


Donald Methuen Fleming: Stand-by legislation.


Clarence Decatur Howe: Keep quiet, my young friend, will you please. You can make your speech later. The hon. member states that a bill should have been introduced here, passed on to the Senate and sent down the path that any amendment to an existing act must travel. This action to prevent the movement of contraband was not taken by Canada primarily; it was taken by agreement among the NATO countries.
The first action was taken by the United States. Did they pass an act of congress? Not at all; it was done by executive action. The next government to proceed was Great Britain. Was their action taken by means of an act passed through the British parliament? Not at all; it was done by order in council, as we have done it. I cannot be sure of this, but my recollection is that council was told that the order in council passed by the Canadian governor in council was exactly the same as that passed by Britain. Executive action was taken by Greece to stop Greek ships taking part in this trade. As far as I know every NATO country has taken or is in process of taking similar action, in every case by executive action.
This house has given this government a mandate to carry out its responsibilities as one of the NATO countries with forces in Korea. We passed specific legislation authorizing the government to send troops to Korea, to send ships to Korea, to send aircraft to Korea; yet we are told that the endorsement given by the house for that purpose is not broad enough to stop contraband being carried into Korea by Canadian ships. Could anything be more nonsensical than this picayune idea that if we want to stop contraband we cannot do it by executive action? We can send troops to Korea, we can send ships to Korea by executive action; but contraband, no. The contraband must be allowed to continue until the usual processes of this parliament are carried out. If any serious result occurs that is just too bad, but it cannot be helped as the opposition has said, "Let it go until we can put a bill through the house."
My hon. friend has read from the Canada Shipping Act. Are those provisions that require action by the House of Commons? Not at all; they are provisions that require action by the governor in council. We could have passed an order in council under the Canada Shipping Act as the law provides, except for one thing-there has been no 08108-260
21, 1953
Trade with China and North Korea declaration of war against either Korea or red China.
We used the Emergency Powers Act because if there ever was a purpose for which the Emergency Powers Act was appropriate, it was meeting a situation that is causing damage to our efforts in Korea. We were told some time ago that there was a growing trade in war materials into red China and something had to be done about it. It is customary when something has to be done in a matter of this kind to do it and not talk about it. My hon. friend is using the Conservative line that has been repeated to us over and over again-you did the right thing, but you did it in the wrong way. How often have we heard that in this parliament. I venture to say it is 50 times.
Here it is again. If my hon. friend gets any comfort out of saying that we did the right thing but in the wrong way, and that is exactly what his amendment says, he is welcome to that comforting statement. We did it in the way every British country is doing it; we did it in the way every other country is doing it-by executive action. If we have overstepped our powers, I make no apology for having done so.
I say we did the right thing in the right way. We did it without too much debate about it, and it is done promptly. Canadian ships will no longer take any part in that trade, although I am happy to say that of the list of ships I saw that had been active in the trade, no Canadian ship was involved.


John George Diefenbaker: Mr. Speaker, I am sure the house listened with interest to the remarks of the Minister of Trade and Commerce (Mr. Howe) and in particular when he said that in this case the government had done the right thing in the wrong way. There is only one right way-


Some hon. Members:: He did not say that.


Clarence Decatur Howe: I quoted the opposition when I said that.


Some hon. Members:: Oh, oh.


John George Diefenbaker: The way some of these people applaud, Mr. Speaker, one would almost think it was with the spontaneity of trained seals.


Some hon. Members:: Oh, oh.


John George Diefenbaker: Mr. Speaker, there is only one right way when parliament is sitting, and that is through parliament. The minister speaks about contraband in the China seas. If the movement of contraband were to have been stopped, as it should have been, he and his government would not have been losing $12 million on the Ming Sung Cana-
4198	HOUSE OF
Trade with China and North Korea dian ships trading in the China seas. Certainly when the minister terminated his remarks and said he was pleased to be able to report there were no Canadian ships in the list, it would have been interesting to ascertain whether or not this company, the Ming Sung company, guaranteed by the Dominion of Canada, was not one of those whose ships were engaged in this illicit traffic as the result of the assistance given by the government of Canada.
Now, having said that, Mr. Speaker, I mention the emergency powers just for the purpose of saying one thing. When the emergency powers legislation was before parliament we were told repeatedly that its purpose was as stand-by legislation, in case an emergency might arise after parliament was dissolved and before the election took place. This is no emergency that has arisen within the last few hours. What is taking place in China has been going on for a year and a half. We were able to point out the situation over a year and a half ago when the Ming Sung ships, under an order in council, were flying the Canadian ensign and were permitted to have Chinese crews. They were actually engaged in illicit operations at that time. Why did the government not act then? No, Mr. Speaker, this is not a case of saying that you did the right thing in the wrong way. It is the wrong thing when parliament is sitting to proceed as the result-


Clarence Decatur Howe: Huh.


John George Diefenbaker: My hon. friend says
"huh", and the other day it was "nuts". That is my hon. friend's attitude towards parliament. All he says about parliament is that it should not be able to discuss this. A few moments ago he said that parliament would talk about it, but they acted.
In connection with the emergency powers I mention that a question has been asked several times in this house as to whether or not that act is to be used after dissolution in order to reduce taxation, as was the case in 1945. Indeed, in the last few days it has been stated, with a degree of authority that cannot be disdainfully regarded, that this act is to be used after dissolution for the purpose of bringing in a form of health insurance and hospitalization in order to get votes. The Minister of Justice said that the emergency was the election.
The emergency legislation now being used was not necessary in the present instance. Amendments have gone through parliament within the last few days. The amendments to the shipping act did not take hours or days, but took a matter of minutes. This


legislation would have been passed. We in the opposition have never stood against any legislation necessary in order to preserve or protect. If the legislation had been submitted to parliament, with the explanation that it was needed, it would have been passed.


Clarence Decatur Howe: Tell the British how to pass these things.


John George Diefenbaker: As a matter of fact I am not sure the minister is right. I have heard him make statements in the house before as to what the United Kingdom government did. As a matter of fact, he is telling us this on this occasion because there is no one who can answer him. But I can say this. The United Kingdom government has not closed down parliament the way this government has endeavoured to do on so many occasions in recent years. Parliament operates there, and members supporting the government have an independence that has never been shown by any member supporting this government. They take their stand on behalf of freedom and the maintenance of parliament. They stand up one after the other, under the direction of no minister of the crown.


James Joseph McCann: Oh, bosh; that is crazy talk.


Alphonse Fournier: How does the opposition stand up?


Mr. Blue:: We will give you a job any time; you are a showman.


John George Diefenbaker: I have never known my hon. friends to be in a state of annoyance unless some of them were being hurt. I simply conclude by saying that this is another example of the type of pretence that is so often used by this government in order to secure emergency powers. A few days ago minister after minister stood up-at least the Minister of Justice (Mr. Garson) and the Prime Minister (Mr. St. Laurent)-to state that the emergency was the purpose and the reason, and the power would only be used as a stand-by. This matter could have been brought before parliament, and the only reason it was not is the contemptuous attitude of the right hon. gentleman who says, "After all, this achieves the result, parliament or no parliament."
That is contempt of parliament. It is another example of the attitude taken by a government too long in power, too thirsty for absolute executive power, and too willing to deny parliament its right.


Major James William Coldwell: Mr. Speaker, I am going to support the amendment which has been proposed by the hon. member for Vancouver-Quadra (Mr. Green).

The minister says that the right thing was done in the wrong way.


Alphonse Fournier: We did not say that.


Major James William Coldwell: I say the right thing may have been done in the wrong way when I look at the record and see the statement made by the Minister of Transport (Mr. Chevrier) when he tabled this order in council yesterday. At page 4089 of Hansard for April 20, 1953, the minister is reported as follows:
This order is being passed pursuant to discussions which took place between the British and the Americans in Washington following the visit here of the Right Hon. Mr. Eden, and after those discussions the hope was expressed that we in Canada would pass a similar order in council.
Those are the words of the Minister of Transport. When was the Right Hon. Anthony Eden in Canada? It must have been six weeks ago, and certainly more than a month ago. All this time the government knew that it was committed to take this action. When parliament was in session, why was it not done by parliament? I am one of those who believe that when parliament is in session, parliament should pass upon legislation. This is legislation.
When the emergency powers bill was before us a short time ago, one of our thoughts was that the government wanted to use it merely as a convenient way-


Some hon. Members:: Hear, hear.


Major James William Coldwell: -to do something without having to come before parliament and explain. I do not like that way of passing legislation, because this is legislation. It is legislation with exactly the same effect as if we had passed it through this house. It is very far-reaching, and I think that the house should have been given an opportunity of discussing the matter very thoroughly and the government should have asked the house to approve this legislation.


Clarence Decatur Howe: May I point out to my hon. friend that he can move a motion in this house to have this order in council repealed. That is one of the provisions of the Emergency Powers Act.


Major James William Coldwell: We can move to have the order in council repealed, but I do not want to see it repealed.


Clarence Decatur Howe: The right thing in the wrong way.


Major James William Coldwell: I agree with the minister that it is the right thing to do provided it is done in the right way. I have very great respect for my right hon. friend the Minister of Trade and Commerce.


An hon. Member:: So have we all.
68108-266J
21, 1953
Trade with China and North Korea


Major James William Coldwell: I know the Minister of Trade and Commerce (Mr. Howe) does get things done, but I am afraid he has developed the habit of getting them done without consulting parliament.


George Prudham: You do not have to be afraid of him at all.


Clarence Decatur Howe: This is not my order in council.


Major James William Coldwell: The Minister of Trade and Commerce defended the order in council I thought pretty warmly, so warmly that perhaps he felt there was some justification in the criticism that has been levelled against the government in this regard. I feel that when a far-reaching order in council of this description is being considered, when parliament is in session, it is parliament that should pass the legislation. It should not be passed as an order in council by the government. It is aggravated by the fact that the Canada Shipping Act was before the house at the very time this order in council which deals with shipping was tabled in the house. As I say, there was lots of time to do this because Mr. Eden was here at least six weeks ago.


Clarence Decatur Howe: This does not refer to Mr. Eden's visit to Canada; it refers to his conference in Washington which took place less than six weeks ago.


Major James William Coldwell: The Emergency Powers Act was passed, and then this was passed under the Emergency Powers Act. It is true that parliament granted to the government the right to pass orders in council; but the debate in this house when we were discussing the Emergency Powers Act clearly indicated that this house, generally speaking, did not approve of the passing of important orders in council when this house was in session.


Some hon. Members:: Hear, hear.


Major James William Coldwell: I think that to a large degree the minister's own supporters feel that way, and I am going to support the amendment because I believe it is a well deserved censure of the government for doing something by order in council that should have been done by legislation.


Mr. Solon E. Low (Peace River):: Mr. Speaker, I do not want to take up very much time on this, and most of the things that could be said have been well said. During the time the Emergency Powers Act was before the house the big objection by all on this side of the house was that the government was able to use it in a manner similar to the way they are using it now. For the government to make use of the terms of the Emergency Powers Act to put through legis-

Trade with China and North Korea lation of this kind constitutes an unfair overruling of the powers of parliament.
For those reasons, Mr. Speaker, I am going to support the amendment.


Some hon. Members:: Question.


Mr. Deputy Speaker:: Are hon. members ready for the question?


Donald Methuen Fleming: Mr. Speaker, I move the adjournment of the debate.


Clarence Decatur Howe: No, Mr. Speaker. Put the question?


Mr. Deputy Speaker:: The hon. member for Eglinton (Mr. Fleming) has moved the adjournment of the debate.


Clarence Decatur Howe: Put the question, Mr. Speaker.


Donald Methuen Fleming: Mr. Speaker, I have some observations to offer on this amendment.


Clarence Decatur Howe: You have made your motion.


Mr. Deputy Speaker:: The hon. member has moved the adjournment of the debate. He must withdraw that motion if he wishes to carry on.


James Joseph McCann: He cannot withdraw it.


Mr. Catherwood:: I was paired with the hon. member for Kent, Ont. (Mr. Huffman). Had I voted, I would have voted for the motion.


Mr. Nowlan:: Since it is now 10.15, Mr. Speaker, I move the adjournment of this debate.


Clarence Decatur Howe: No; ten o'clock.


Mr. Speaker:: If the hon. member wishes to speak to the motion, then under the rules I would be required to interrupt the debate.


George Clyde Nowlan: May we call it ten o'clock?


Agar Rodney Adamson: It is after ten o'clock. Surely this house stands adjourned.


Gordon Graydon: Do we have to pass an order in council to adjourn?


Alphonse Fournier: Do I understand, Mr. Speaker, that the hon. member for Eglinton has made his speech now?


Mr. Casselman:: Under the rules, no.


Mr. Speaker:: The hon. member for Eglinton has not risen again to speak.


Alphonse Fournier: He is the one who rose to speak on this amendment.


Mr. Speaker:: The hon. member for Eglinton has not risen to speak since his motion to adjourn the debate.



BUSINESS OF THE HOUSE

Alphonse Fournier: I move the adjournment of the house. Tomorrow we will take up first the resolution of the Minister of Fisheries to approve the halibut fisheries convention between Canada and the United States of America, to provide for the carrying out of the provisions of this convention; then Bill No. 332, respecting the Canadian forces; Bill No. 340, to amend the Canadian Broad-
Business of the House
casting Act, 1936. Then we shall continue this motion to go into supply and call an item in finance and legislation, the items to stand, and then proceed with the estimates of trade and commerce, citizenship and immigration, privy council and national health and welfare.
Motion agreed to and the house adjourned at 10.15 p.m.

Wednesday, April 22, 1953