1954-06-02

[Stage Direction]
Mr. Rene N. Jutras (Provencher) presented the second report of the standing committee on agriculture and colonization.
Mr. Speaker:: I am informed that this report is a rather lengthy one and that it is not proposed to move concurrence this day. Shall the deputy clerk therefore dispense with the reading of this report?


Some hon. Members:: Dispense.


Mr. Speaker:: Agreed.


Mr. Bennett:: 1.	Seaport Crown Fish Co. Ltd., Ft. of Campbell Ave., Vancouver 4, B.C.; Kelly Douglas Co. Ltd., 3700 Kingsway, Vancouver, B.C.; W. H. Malkin Co. Ltd., 57 Water St., Vancouver 4, B.C.
2.	Fiscal Year Fiscal Year
1952-53	1953-54
Seaport Crown Fish
Co. Ltd	 $14,816.80	$13,288.18
Kelly Douglas Co.
Ltd. (Canned fish
various varieties)	222.30	139.03
W. H. Malkin Co.
Ltd. (Canned fish
various varieties)	117.60	Nil



APPROVAL OF CIVIL SERVICE COMMISSION REPORT

Hon. W. E. Harris (Minister of Citizenship and Immigration):: Mr. Speaker, the house will have noted that yesterday Your Honour tabled a report with respect to certain civil service appointments on the staff of the house. By leave of the house, I wish to move that the report of the civil service commission respecting the organization of the staff of the House of Commons laid on the table on Tuesday, June 1, 1954, be now approved.


[Stage Direction]
Motion agreed to.


DEFENCE PRODUCTION


Mr. Lennard:: 1.	How many aerial cameras were purchased by the Department of Defence Production from January 1, 1952 to December 31, 1953, and what was the total value?
2.	How many aerial cameras were contracted for during the period from January 1, to April 30, 1954, and what was the total value?


Mr. Dickey:: 1.	(a) 34; (b) $156,245.90.
2.	Nil.



SHAUGHNESSY HOSPITAL


Mr. Green:: 1.	From what firms have purchases of fish been made for Shaughnessy hospital in Vancouver, British Columbia, during the last two years?
2.	What amounts have been paid or are payable to the respective firms for such purchases?



TORONTO MEAT PACKERS-SUSPENSIONS

Mr. Hodgson:: 1.	Were the licenses of the three Toronto meat packing firms, William Puddy Beef; L. Goldman and Son; and Industrial Packers, temporarily suspended? If so, when?
2.	For what reason?
3.	Were details of such infractions of the meat packing law turned over to the mounted police? If so, on what date?
4.	Have these firms been allowed to resume operations? If so, on what date?


Mr. McCubbin:: 1 and 2. The firms listed do not operate under any federal license. The provision of beef grading service for these firms was temporarily suspended on varying dates from February 24 to 26, 1954, pending preliminary investigation of suspected irregularities in grade branding.
3.	Yes. March 8, 1954.
4.	The grading of beef under federal regulations is voluntary and the temporary suspension of this service to these firms did not involve any discontinuance of plant operations. Grading service was resumed for the three firms on March 1, 1954.



IMMIGRATION


Mr. Gagnon:: 1.	How many cases have been considered by boards of inquiry of the immigration branch since January 1, 1952?
2.	What were the names of the persons involved?
3.	Which were allowed to remain in Canada?
4.	Which were deported and for what reason?

Questions
He said: Mr. Speaker, may I ask that this question be dropped in order that it may be reworded?


Mr. Speaker:: Question No. 12 dropped.



VETERANS LAND ACT, NOVA SCOTIA

Mr. Balcom:: 1.	How many veterans have been settled under the Veterans Land Act in Nova Scotia as. full time farmers?
2.	How many veterans have been settled under the Veterans Land Act in Nova Scotia as small holders?
3.	What is the total of advances in Nova Scotia under the Veterans Land Act since its inception?
4.	How many veterans are in arrears to the extent of $100 or more, as (a) full time farmers; (b) small holders?


Mr. Bennelt:: Return at March 31, 1954:
1.	585.
2.	1,605.
3.	$9,823,654.46.
4.	(a) 29; (b) 10.



QUESTIONS PASSED AS ORDERS FOR RETURNS


DEPARTMENTAL VOTES


Mr. Starr:: 1.	(a) In what departments or corporate bodies of the federal government, or boards or councils established under any act of the federal government, were unspent allotments of money transferred to purchase, holding, special fund or other accounts in each of the fiscal years ending March 31, 1949, to March 31, 1954, inclusive? (b) What to date were the transfers in each case, giving date, amount and authority under which transfers of unspent money were made? (c) What was the total to the credit of each of the above accounts as of March 31, 1954?
2.	In how many cases, giving department vote number, and total amount of money involved in each case, were executive orders issued in each of the fiscal years ending March 31, 1949, to March 31, 1954, inclusive, temporarily or otherwise, supplementing votes of money by parliament?
3.	What cheques totalling $100,000 or over, giving date of issue, date cashed, specific amount, to whom issued, and indicating whether it was a direct payment or in trust for payment, were issued in the months of March, April or May in each of the years 1949 to 1953, inclusive, and March or April 1954, covering payment for goods or services not at the time delivered or completed, or the purchase of property for the conveyance of which deeds were not completed before the .close of the fiscal year?


Mr. Benidickson:: Return tabled.



COMPANY DIRECTORS

Mr. Knowles:: 1.	Who are the directors of (a) Dominion Brake Shoe Company Limited; (b) Monsarrat Machinery and Foundries Limited; (c) Smiths Falls Malleable Casting Company?
2.	Are any of the above directors members of the board of directors of the Canadian National Railways? If so, which ones?



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Hon. Milton F. Gregg (Minister of Labour):: Mr. Speaker, in answer to the question asked yesterday by the Leader of the Opposition, may I say that there is no legislation whereby the Minister of Labour may impose arbitration upon the two parties involved in the railway dispute to which he referred.
ILater:]


Hon. George A. Drew (Leader of the Opposition):: Mr. Speaker, as a supplementary question to the answer given by the Minister of Labour, may I ask him if the answer he has given means that the government has no intention of appointing any board or commission under any available legislation for the purpose of conducting inquiries which would have the effect of providing a basis for examination of the wage structure?


Milton Fowler Gregg: In response to that question, Mr. Speaker, I beg to tell the Leader of the Opposition that I do not propose to try to anticipate what decision will be reached by the employees of the railways in the vote on a strike which they are to take and which is coming off this summer.


George Alexander Drew: Mr. Speaker, I have a supplementary question. Does the minister not recognize that I was asking a question directed to action of the government and whether it is the intention of the government, under existing legislation such as the Inquiries Act, for instance, to appoint any board or commission which would inquire into this subject for the purpose of examining the wage structure, recognizing the problem with which we are now confronted?


Milton Fowler Gregg: If the Leader of the Opposition refers to the situation as it exists today, the answer is no.



NATIONAL PARKS


[Stage Direction]
On the orders of the day:
Mr. C. E. Johnston (Bow River):: In the
absence of the Minister of Northern Affairs and National Resources (Mr. Lesage), Mr. Speaker, I should like to state this question. Then he can be prepared to answer it the next day he comes into the house. About two weeks ago I asked the minister a question concerning the destruction of fish in the channel below the Calgary power turbine

plant at Anthracite. At that time the minister stated that he was investigating that case and would make a report later.	I
wonder whether he would look into the matter again and make a report concerning it?



CONVERTIBILITY OP STERLING


[Stage Direction]
On the orders of the day:
Mr. J. M. Macdonnell (Greenwood):: I
should like to address a question to the Minister of Finance of which I have given him notice. In view of the apparent unlikelihood of the United States making substantial progress toward liberalizing the terms of trade this year, does the minister feel disposed to alter the somewhat optimistic statement he made on his return from Australia as to the approach of convertibility of sterling.


Hon. Douglas Abbott (Minister of Finance):: I can only answer my hon. friend's question by saying that the fears which were expressed in that question are not sufficient to dampen the customary optimism of the Minister of Finance.



TURKEYS


[Stage Direction]
On the orders of the day:
Douglas Charles Abbott: 
Mr. A. W. Stuart (Charlotte):: I should like to direct a question to the Minister of Finance in connection with a statement he made concerning the importation of turkeys into Canada. Is the minister aware of the fact that the United States turkeys imported into Canada during the last Christmas season, and which were being sold for 80 cents a pound in Canada, could be purchased by the retail trade in the United States for 65 cents?


Douglas Charles Abbott: I was not aware of that.



GRANTING OF EXPORT PERMITS

[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Prince Albert):: Mr,
Speaker, I should like to ask a question of the Minister of Trade and Commerce regarding export permits. When an export permit is granted is the price per unit at which the commodity is to be sold abroad set out in the permit?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: The answer is no.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. J. W. Dufresne (Quebec West):: Mr. Speaker, may I ask the Minister of National Defence if he is ready to give me an answer to the question I asked last Friday with regard to a statement made by Commodore K. F. Adams?. <
5370	HOUSE OF
Inquiries of the Ministry (Translation):


Hon. Brooke Claxion (Minister of National Defence):: Mr. Speaker, last Friday, the hon. member for Quebec West (Mr. Dufresne) asked two questions. The first is as follows: In a press conference given in Quebec city on Thursday, May 27, was Commodore K. F. Adams, on this occasion, expressing the policy of the government?
The answer to that question is that only members of the government express the policy of the government.
The second question was:
If not, will disciplinary action be taken against this officer for making statements so absurd and ridiculous?
It is recognized by all that the speed of modern warfare and the absolute necessity of immediate communications make it essential that in the case of a sea or air battle orders between major formations be given in one language only. By virtue of an agreement among the NATO countries the language in which orders are given is the English language. It is in the light of these facts that we must consider the interview granted by Commodore Adams in answer to questions asked by some newspapermen. In answer to my request for information, his superiors stated that he did not intend to add anything else, but, even though wrong answers were not reproduced literally in the press, they have, in a certain way, left a wrong impression. Consequently, I have given instructions to have this fact brought to the attention of the officer concerned.


J.-Wilfrid Dufresne: Mr. Speaker, I would like to ask a supplementary question of the minister?
Does the hon. minister mean, in the answer he just gave to my second question, that he fully endorses the remarks made by Commodore Adams at this press conference of May 27 last?


Brooke Claxton: Mr. Speaker, I have had reports of these interviews from four newspapers; they are all different, and I think that if the hon. member will refer to the one published in the Quebec Chronicle-Telegraph, he will find a rather accurate report of what this officer said.
(Text):



WATER POLLUTION


[Stage Direction]
On the orders of the day:
Mr. A. J. P. Cameron (High Park):: I should like to direct a question to the Minister of 

Transport. Has the minister any information regarding the alleged discharge by vessels in lake Ontario of oil, causing extensive oil slicks along the waterfront adjoining Toronto, which seriously interferes with beach rights and otherwise causes substantial property damage and annoyance to the owners? Further, have any representations or discussions taken place between the Canadian and United States authorities in regard to the controlling of such discharges and minimizing the damage?


Hon. Lionel Chevrier (Minister of Transport):: I thank the hon. member for having sent me notice of his question. There is no recent information on the pollution of waters in or near Toronto so far as the Department of Transport is concerned. I must add, however, that there have been a number of serious complaints in the past, and I think my colleague, the Secretary of State for External Affairs, has also received such complaints, as a result of which the Canadian government jointly with the United States government referred the matter of pollution of the waters of lakes Superior, Erie and Huron, I believe, to the international joint commission for study. An interim report has been received from the commission but it did not cover lake Ontario as far east as Toronto. I am informed that the reference has now been amended to include lake Ontario.



NORTH SASKATCHEWAN RIVER


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, my question also has to do with the matter of pollution. I should like to ask the Prime Minister whether or not he has received representations from one or other of the premiers of the provinces asking for the convening of a gathering of federal authorities and provincial ministers with a view to discussing the serious problem of pollution, particularly in interprovincial rivers and lakes, for the purpose of arriving at some co-operative policy to meet conditions such as prevailed recently on the North Saskatchewan river?
Right Hon. L. S. St. Laurent (Prime
Minister): Yes, Mr. Speaker, there was a letter from the premier of Saskatchewan to which I replied. Having had no notice of the hon. member's question, I have not got the letter and the reply before me at the moment. As I remember it, the premier seemed to be impressed with the desirability of arrangements being made whereby the kind of situation that, unfortunately, now exists in certain parts of the eastern provinces will not be

reproduced in the western provinces in the process of their industrial development. There was a suggestion that the federal government should invite representatives of the governments of the prairie provinces to meet with it to discuss the matter.
I replied expressing the view that I thought, initially at least, it would be preferable if the premier of Saskatchewan would himself approach the premiers of Alberta and Manitoba to ascertain their views as to the desirability of that kind of meeting. I said that the federal authorities would be glad to sit in, but I felt that we should be very careful not to do anything that might carry the implication that we felt we had some sort of controlling authority over them in the determination of matters which were of provincial concern. I pointed out that at the present time we were not considering federal legislation with respect to river pollution because it would have to be legislation that would apply to the whole of Canada generally. I pointed out that what might be regarded as sufficient protection, something that would prevent the discharge of waste in running streams, would create an almost chaotic situation in the east where that was being done, as he knew, in a great many places, and that if something were to be arranged along the lines of the body that advises on the conservation of water on the eastern slope of the Rockies that was something that would be of joint provincial concern. I thought it would be preferable to approach it in a spirit of attempting to secure the kind of co-operation that would be of benefit to the whole region rather than have, at the request of one premier, something that might appear to be a summons from the federal authority to come down and discuss the manner in which they should attempt to provide against future embarrassments in that connection.
I do not remember having received any further letter from the premier of Saskatchewan since I wrote to him along those lines.


John George Diefenbaker: I want to thank the Prime Minister, and ask him this question. In view of the fact this pollution problem affects rivers and lakes in all parts of our country, does he not feel that some sort of conference with all the provinces, and at least convened by the dominion, would do something to meet a situation that is becoming more serious year by year?


Mr. St. Laurent:: I think my views coincide rather closely with those of the hon. gentleman but the most difficult problem that exists between the federal authority and the provincial authorities is to find some, if not 83276-340i
Inquiries of the Ministry permanent, attempt at a long time solution of fiscal policies. Desirable as co-operation might be in respect of the other matter, I am afraid it would be difficult to get genuine co-operation in these other matters until we have been able to arrive at something that will remove the present feelings in some parts of Canada about satisfactory fiscal arrangements between federal and provincial authorities.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. Clarence Gillis (Cape Breton South):: May I direct a question to the Acting Minister of Public Works? I sent him information concerning the background of the question. Is there any provision in the National Housing Act, either by regulation or by directive, that compels those building under the act to instal oil burning systems?


Mr. Maurice Bourget (Parliamentary Assistant to the Minister of Public Works):: wish to thank my hon. friend for having given me notice of his question. The answer is as follows: The suggestion that Central Mortgage and Housing Corporation gives oil burning equipment preferred treatment over coal burning equipment under the National Housing Act is not correct. The function of the corporation under the new act is to determine the value for lending purposes of a proposed house. In determining the value the corporation takes into account not only the land and structure but as well the equipment that is to be placed in the house. The equipment is selected by the borrower and Central Mortgage and Housing Corporation determines the loan value on the basis of the value or cost of the equipment without discrimination as to the type of fuel to be used.



ALLOCATION OF FREIGHT CARS


[Stage Direction]
On the orders of the day:
Mr. Solon E. Low (Peace River):: Will the Minister of Trade and Commerce ask the wheat board and the transport controller to take a careful look at the grain transport situation in the Peace river country, with a view to supplying the area with a fair share of available shipping space. I am advised that there are points in the country from which not one single car has been shipped in well over a month.
5372	HOUSE OF
Inquiries of the Ministry


Clarence Decatur Howe: The purpose of the wheat board and of the transport controller is to make sure that every producer has a delivery quota equal to every other producer's. I shall call the attention of the transport controller to the situation in the Peace river area, but the explanation may be that certain areas there have shipped out their full quota and are not entitled to more cars until such time as the quota is raised.


Mr. Coldwell:: May I ask a supplementary question? Is the minister aware there are points on the prairies where the farmers have not been able to deliver their five-bushel quota? I drew the attention of the transport controller to this situation and I expect it will receive his usual prompt attention.


Clarence Decatur Howe: I doubt if that situation will obtain beyond the end of this week. There is a very heavy movement from the country at the present time, and it is expected that a heavy movement of grain will continue throughout the month. We expect to take delivery of the full five-bushel quota; we expect that very shortly most points on the prairies will have their quotas increased if they have not already been allotted an increase beyond the five bushels.



INQUIRY AS TO EXPORT TO RUSSIA

[Stage Direction]
On the orders of the day:
Hon. W. Earl Rowe (Dufferin-Simcoe):: In
view of the uncertainty that still exists, despite the answers given by the different departments, about the export of pork products, can the Prime Minister give me any information as to conditions under which pork was sold to the Russian government for less than it was sold to the Canadian public?


Louis Stephen St-Laurent: I do not know of any sale of pork to the Russian government. I am not in a position to supply any additional information.


William Earl Rowe: I should like to ask a supplementary question. Were there any special conditions in the tenders that were given out by the government as to whether the pork had to be exported outside the North American continent?


Clarence Decatur Howe: The transaction referred to was not a transaction between the government of Canada and the Russian government. It was a transaction between the private
-

trade and the Russian government. I understand that the conditions of sale to the private trade, which were arranged some time ago, were that the particular product would be sold outside Canada and therefore the trade were privileged to sell it to the Russian government or anyone else.


William Earl Rowe: In any such export do the exporters not have to get a permit to export to Russia?


Clarence Decatur Howe: Yes, an area permit was given. Meat is not on the strategic list of commodities and therefore a permit was granted without question.


William Earl Rowe: Might I ask the minister if they did get a permit?


Clarence Decatur Howe: They did, of course.


William Earl Rowe: Does the minister not think that is a subsidization of the Russian government when the sale was made at less than the price in Canada?


Clarence Decatur Howe: I suggest that the trade were free to sell the pork at that price or any price they liked to any government. It was their pork.


William Earl Rowe: I just have one more question.


Some hon. Members:: Oh, oh.


William Earl Rowe: I know my hon. friends do not like the question. In view of the fact that the pork is now all sold, can the minister tell the house how much money the Canadian government lost in that pork deal?


Douglas Charles Abbott: I announced that when I brought down my budget.


William Earl Rowe: It was not all sold at that time, Mr. Speaker. I submit, in fairness, the pork was not sold at that time.


Douglas Charles Abbott: It is all in my budget speech. (Translation):



WATER POLLUTION


[Stage Direction]
On the orders of the day:
J.-Wilfrid Dufresne: Mr. Speaker, would the Prime Minister be kind enough to tell me if he received, recently, from the municipal authorities of Quebec city and more particularly from the mayor of Quebec a request for an interview for the purpose of dealing with the question, ever important for Quebec, of the St. Charles and the Lairet rivers. If so, would he tell me if that interview will take place soon?


Louis Stephen St-Laurent: Mr. Speaker, I do not recall having received such a request and there is no intention, at the present time, of having an interview to discuss the question of the St. Charles and Lairet rivers, with regard to which I have expressed, on many occasions, the opinion that it was not a federal responsibility.
(Text):



BANK OF CANADA ACT


Douglas Charles Abbott: that the house go into committee to consider Bill No. 297, to amend the Bank of Canada Act.
Motion agreed to and the house went into committee, Mr. Robinson (Simcoe East) in the chair.


The Chairman:: This bill was considered and reported by the committee on banking and commerce.
On clause 1-Definitions.


William Alfred Robinson: Shall clause 1 carry?


James MacKerras Macdonnell: Will the minister make some general comment?


Douglas Charles Abbott: Mr. Chairman, perhaps I should say a word, although there is not much I can add to the statement I made in the debate on second reading. This is the first time the Bank of Canada Act has been revised for some years. A number of technical, routine and drafting changes were made. The principal changes in policy, which I indicated in my speech on second reading, were a provision enabling the Bank of Canada to vary cash reserves of the commercial banks between 8 per cent and 12 per cent, on the conditions set out in the act. Then, there were certain changes with respect to the investment powers of the bank, and certain changes with respect to its pension fund; such provisions as an increase in the maximum remuneration to be paid to the directors, because of the fact that we now have ten provinces instead of nine, as there were when the act was brought into force. Other than that, I do not think there are any substantial proposals.
The measure was carefully studied in the committee on banking and commerce, and I must repeat what I said in connection with the Bank Act, that I appreciate warmly the careful attention given to this matter by all members in the committee in connection with both the provisions of this bill and those of the Bank Act.
Bank of Canada Act


James MacKerras Macdonnell: As the minister has said, this bill received careful attention in committee. There were before the committee the minister himself, the deputy minister, the governor of the Bank of Canada and the inspector general of the chartered banks. So far as I am concerned, I feel the matter has been very carefully gone into, and any comments I shall have to make will be reserved until we reach the appropriate sections.


Solon Earl Low: I would like to say only a word, Mr. Chairman, although it is not my intention on this first clause to make any extended speech or criticism.
We attended very carefully to the discussion on this bill as it went through the committee. I believe we gave it a most careful study, certainly the most careful of which we were capable. We did have some suggestions for amendments to one of the sections, but we will reserve our comment on the bill until we reach the section concerned.
I would add only this, that I think every aspect of the Bank of Canada Act was carefully scrutinized by the committee, and if anything has been overlooked it certainly would be something of very little consequence. I believe the act, as we now have it before us, is a good one. And, with the exception of the one small matter to which I have referred, I do believe there is very little that could be improved in it.


[Stage Direction]
Clause agreed to.
Clauses 2 to 9 inclusive agreed to.
On clause 10-Reserve.
James MacKerras Macdonnell: Mr. Chairman, clause 10 now reads:
The bank shall maintain a reserve against its outstanding notes and deposit liabilities consisting of its holdings of gold coin and bullion and foreign exchange, and the amount of the reserve held in the form of gold coin and bullion shall always be not less than twenty-five per cent of the outstanding notes and deposit liabilities of the bank.
Perhaps I should have pointed out that what I have been reading is section 23 of the original act as it is dealt with in clause 10 of the amending bill.
I would draw the attention of the committee to the fact that this reference to the gold coverage is entirely negatived in section 25 of the Currency, Mint and Exchange Fund Act, which reads as follows:
25. (1) Notwithstanding section 23 of the Bank of Canada Act, the Bank of Canada is not, unless the governor in council otherwise prescribes, required to maintain a minimum or fixed reserve ratio of gold or foreign exchange to its liabilities.
I suggest that, purely as a matter of draftsmanship, it is not sound to have that definite statement made in the Bank of Canada Act

Bank of Canada Act
while, in another act, it is rendered practically nugatory. I therefore move, seconded by the hon. member for Prince Edward-Lennox:
That clause 10 of Bill 297 be amended by inserting at the end of line 5 on page 9 a comma and the words "subject to section 25 of the Currency, Mint and Exchange Fund Act and subsection (3) of this section."


Douglas Charles Abbott: My hon. friend moved a somewhat similar amendment in the committee on banking and commerce, and I was reluctant to accept it at that time because, without any notice of the hon. member's intention to offer the amendment, I was uncertain what the exact effect of it would be on this and other acts.
However, following the meetings of the committee on banking and commerce I have had an opportunity to consider it, and I can see no objection to the amendment now offered. I shall be very happy, therefore, to accept it.


[Stage Direction]
Amendment agreed to.
William Alfred Robinson: Shall the clause as amended carry?


James MacKerras Macdonnell: No, I have another amendment. While I assure the minister it is just as worthy of his concurrence as the one I have just moved, I am not equally sure that it will receive his concurrence.
We have just passed an amendment dealing with the gold reserve clause, which means that the gold reserve clause is practically as if it did not exist. It is somewhat of a puzzle to me why it was left in there at all, in view of the changes in our thinking on money questions which have taken place since the passage of the Bank of Canada Act. It is left in I think as a concession to the past. For a long time, of course, it was regarded as essential. In a way it seems to me that to leave it in there is like a concession to one's grandmother: One does not smoke, perhaps, when she is around. I can explain it only as a kind of concession to good financing manners of the past. I want to make some comments because I do regard it as a matter of very considerable importance, and I hope that I may be fortunate enough, even if this amendment is not carried this morning, to interest people in it and to convince them that it is a matter of great importance.
We are all aware of course that it is only a short time since gold was considered an absolutely necessary backing to currency. I should like to read briefly from our own legislation, the Dominion Notes Act, chapter 41 of the statutes of 1927, which I believe was effective until 1933. This is what it says:
5. The Minister of Finance shall always hold as security for the redemption of dominion notes up to

and including fifty million dollars, issued and outstanding at any one time, an amount equal to not less than twenty-five per centum of the amount of such notes in gold.
Subsection 2 reads:
As security for the redemption of dominion notes issued in excess of fifty million dollars, the minister shall hold an amount in gold equal to such
excess.
And again from the Bank Act, which is chapter 12 of the Revised Statutes of 1927, section 136 reads:
Every bank which at any time holds in dominion notes less than forty per cent of the cash reserves which it has in Canada shall incur a penalty of five hundred dollars for each such offence.
Therefore we had a situation where the banks were forced to keep a large percentage of dominion notes in their hands, and where dominion notes were heavily backed in gold.
It is hard to believe that so short a time ago paper money was regarded with suspicion. We know that originally, when notes were issued, they were issued against a large percentage of actual commodities held by banks, and if a bank issued notes beyond their capacity to redeem them in commodities they did so at their peril; at any moment they might be called on to redeem the notes in a valuable commodity, usually gold. Though we seem to have passed beyond that, and many people regard that as almost prehistoric thinking, there are competent people, and by "competent people" I mean people with just as good brains as ours, who study the matter carefully, and who not only believe strongly in the gold standard, but believe that we are in great peril since we abandoned it.
I remember reading a symposium not long ago where distinguished advocates of both views were present. I was in great difficulty because when I read the views that were in favour of gold I was absolutely convinced by them, and when I read those that were against gold I was absolutely convinced by them. At the end I felt I had a kind of split personality. In any event, we have abandoned gold, and I am not standing up today to suggest that there should be any return to that at all. I am accepting the fact that we have managed money, but I am saying that managed money still leaves certain questions, and that it is very important now to inquire into the method of the management. I hope to show the committee that by the progress of events of the last twenty years, the intentions of the founders of the Bank of Canada have been entirely frustrated, and that what we have now is an entirely undemocratic and arbitrary manner of managing our currency. It is wholly in the hands of the government. I want to

emphasize that. I do not think I fully realized myself the extent to which it was true until the meetings of the banking and commerce committee. It is wholly in the hands of the government.
I shall quote answers given by the governor of the Bank of Canada and by the minister himself, which I hope will satisfy the committee that that is so, and if the committee is satisfied it is so, then I suggest that they should not brush this question aside as merely academic. Parliament at this time has no power. What I mean by that is, there is no occasion which arises, short of some crisis which will upset everything, whereby parliament has any occasion to consider the matter or to express an opinion.
It is interesting to observe that that means we have come full circle to the point when the sovereign has the full prerogative to issue money. Of course, coining was the royal prerogative for years, and it included the right of debasing the coin. In those days they did it by the open practice of clipping the coin; it was done so that you could see it. But in these days the printing press goes at it in a more refined and much less obvious way of clipping coins or debasing the currency, if we wish to do so.
It is rather interesting to find clear evidence of coin-clipping in Shakespeare. If you look at Henry IV you will find that Hotspur speaks of cracked coins being made current: in other words, bad money by legislation being made good. Many people, of course, including the advocates of gold in the symposium to which I referred, think that that is our situation today; that we have paper money with nothing behind it except the ukase of the government. I am not going to take the time of the committee to talk about the classic inflations that we all know about. But I am going to remind the committee just for a moment of the inflation in Germany in 1924 and again in the war just past. I will mention one incident which amused me, and which perhaps may amuse the committee, showing the ironies of the inflation just after the first war in Germany. This caught my eye, because it had been regarded by no less a person than Lloyd George as a very good illustration of the little ironies of life. A man in Austria left a patrimony to two sons, each of whom got an equal amount. One of them, a very sober, respectable individual, invested his share in high-grade securities. The other invested it all in wine. He drank all the wine but kept the bottles. Later on he was able to sell the bottles for more than the value of the gilt-edged securities which his pious and respectable brother had bought. That seemed
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to tickle Mr. Lloyd George, and it is a delightful instance of being able to eat your cake, or rather drink your wine, and have it still. I mention, just as one further illustration, what has happened to the French franc. In 1913 the United States dollar was equal to 5-16 French francs. In 1954 it is equal to 350 French francs; in other words 70 times as much.
I repeat, Mr. Chairman, that what I seek to do this morning is not to argue in favour of gold. I regard it at the present time as politically unreal. Whether it will ever come back I make no predictions. But I seek to interest the committee in the present method of management of our money, to indicate it has completely subverted the intention of those who set up the Bank of Canada, to underline the fact that it has come to be the prerogative of the crown, just as it was hundreds of years ago.
It is just twenty years since the Bank of Canada was set up. The preamble to the Bank of Canada Act says that the bank is to regulate credit and currency in the best interests of the economy and the life of the nation.
And so on. Section 7 says that the governor of the bank has the direction and control of the business of the bank. I think I shall be able to satisfy the committee from answers which I shall subsequently quote, given by the governor of the bank and the Minister of Finance, that that is a thing of the past, and that in section 7, instead of saying that the governor of the bank has the direction and the control of the bank, we should say that the Minister of Finance has the direction and control of the bank. I hope that I shall be able to satisfy the committee that that is so.
The Macmillan commission, composed, as we all remember, of two competent English men, Lord Macmillan and Sir Charles Addis, of the Bank of England, Mr. Brownlee, a former premier of Alberta, Sir Thomas White and Mr. Leman, recommended two things among others in their report, which was the basis of the setting up of the bank. One was that the bank should be privately controlled and the other was that there should be a gold reserve. That was emphasized in 1934 when the bank was formed. As I said a moment ago, that has been changed. It was changed in 1936. In 1936 the bank was nationalized. I make no complaint about that whatever. I am inclined to think that private ownership of the bank, in imitation of the status of the Bank of England, which was privately owned for so many years, though of course that has been changed now, the Bank of England is now

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nationalized

I am inclined to think that private ownership of the bank was not a very natural thing. I make no complaint whatever about its being nationalized. What I complain about is that the results which flowed from nationalization were not in the least necessary. Let me say again that the actual result, and I will come back to it later and try to establish it step by step, is that the minister can increase the money supply at his will. It is done within the four corners of the finance department. There is no occasion for public notification. It is only people who are close students of finance who have the slightest idea of what is going on.
As I have said, parliament has no say in the matter whatever. Parliament, as distinct from the government, has no more control over money increase than if parliament sat in the moon.
I am not going to take up the time of the committee to ask them to reflect on the enormous power this gives government for good or evil, a power which goes to the very basis of our lives.
Nor am I going to take up the time of the committee to dwell on inflation as it is today. We know that many people have suffered from it. I remember an occasion when a minister in this house, when high prices were criticized, said, "Well, yes, prices are high, but wages are higher." Now, that is not universally true and we all know how many people have suffered from inflation in this country. I think it was Lenin who said that the way to bring down the capitalist economy was to debauch the currency.
But despite that we have this complacency. We say it could not happen here. But in my opinion we must not think we have any kind of Divine immunity. What I want to say is that it can happen here or anywhere and we should be on our guard against it in every possible way.
Now, how has this situation come about? There are two parties concerned. First of all, there is the government. Well, I shall not repeat what we have said so often as to the increase in government power. The government has gone on taking more and more power for it is convenient and, in their view, it is businesslike to do so with as many things as possible, without coming to parliament.
We are now familiar with the phrase, "Who is to stop us?" and other things have been said in this house which I shall not repeat.
I would say this though, Mr. Chairman: I think that yesterday morning we had a new high in the disregard of this house by members of the government when serious arguments were made on an important question, 
to wit, the reform of the Senate, and when the government did not deign to say one word in reply.
We have sunk pretty low when an opposition apparently need not be answered. Indeed, the only answer was an aside which came from the other side of the house and I do not even know if it is in Hansard, to the effect that the government's answer will be given by action.
Well, there has been a long time without action and just in passing I would point out that in my opinion the fact that we were treated yesterday as people whose words were not worthy of answering registered a new low in the regard which this government has for this House of Commons to which they are responsible.


William Alfred Robinson: Order. I notice the hon. member for Greenwood stated he was making these remarks in passing. I hope that that is correct and that he will now proceed to discuss clause 10 of this bill, which deals with an amendment to a clause dealing with the reserve of the Bank of Canada.


James MacKerras Macdonnell: I am glad to be able to tell you, Mr. Chairman, that I have just passed. Now, I come to the voters. Why are they so acquiescent? I must admit that I have found most people uninterested, and when people tell me that they are not interested in politics I say to them, "Yes you are interested in politics-you may not know it, but you are."


William Alfred Robinson: Order.


James MacKerras Macdonnell: That is just in passing too, Mr. Chairman.


William Alfred Robinson: Perhaps the hon. member misunderstood me. We are discussing a clause of this bill and I must ask the hon. member to confine himself to the clause under discussion.


James MacKerras Macdonnell: Well, Mr. Chairman, I submit, with deference, that I have to lay a foundation if I am going to have a chance of persuading the minister. After all, he is not an easy man to persuade and I have got to-


Douglas Charles Abbott: You have to have a good case.


James MacKerras Macdonnell: I have got to make, as he says, a good case, and I am trying to make him realize why the voters are not interested in this, and to indicate to him why one day they may be interested, because a realization of these facts may influence him.
At any rate, Mr. Chairman, my feeling is that the voters have slipped into a situation

where they are interested only in the quantity of money, the quantity they have in their own pockets, and they have lost track of the quality of money. My aim this morning is to try to convince this committee that the quality of money is a most important matter. When my socialist friends talk about money for this and that 1 feel I would like to interest them in the idea of the quality of money, because if you give a man twice as many dollars which are worth less than half, then you have not done very much for him. I am through with that too, Mr. Chairman.
At the present time, as I have said, this all-important question is left to the judgment of a few men. We have respect for these men but they are not infallible and in my opinion they are not the only people who should have, on occasion, the right to express an opinion as to the soundness and validity of our currency. As it is now there is no occasion when all the other experts, and there are other experts, can express an opinion, and there is no need to call them in at all.
Let us be realistic about this. Do any of us believe that politics could never enter into the situation? Let us imagine a government not as responsible as this government considers itself to be, and let us admit that this supposed irresponsible government we are now talking about is coming on to an election. Is it very farfetched to assume that that could affect their attitude. In this connection a thoughtful comment was made to me that the prospect of the long-run value of money being determined by short-run considerations is frankly terrifying. That, I think, is a fair statement.
As a matter of fact, if I were prepared to trust this power to any group of men it would not be to the cabinet exclusively. If it were possible to entrust that power to any group of men I would rather have a group consisting of, let us say, general economists, labour economists, railway economists, farm economists, businessmen, bankers, and-[DOT]


Douglas Charles Abbott: Include lawyers in that.


James MacKerras Macdonnell: Yes, I would include lawyers. I thank the minister for helping me, for it makes me feel as though I am getting his sympathy.
Of course, I do not suggest that that can happen. It could not happen for, of course, the government has to take the responsibility in the end; but I am utterly opposed to the present situation, which is that parliament has no part but that the government has the exclusive power. That power is exercised in private and without notice.
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It is rather interesting to point out that in Australia they have dealt with this situation. In Canada if there is a knock-down and drag-out difference of opinion between the governor of the central bank, which was set up to regulate credit and currency, and the Minister of Finance the only recourse of the governor, as appears from the evidence before the banking and commerce committee, is to resign. Though it was not mentioned I suppose there is another course; I suppose it is possible that the governor may say, "I will not resign. I will defy you." But that is asking quite a lot.
On the other hand, in Australia in 1951, and I found this very interesting, the Central Bank Act recognized the possibility of a difference of opinion between the governor of the bank and the treasury, the institution which corresponds to our finance department, and they provided that in such an event the two views should be laid on the table of parliament so that the matter might become public and the opinion of the governor was before the people. They then had a chance of knowing what the difference was and weighing it. At the present time we in Canada may never know that there are any objections at all.


William Alfred Robinson: Order. I must confess that I am in some considerable doubt as to the relevancy of the remarks now being made by the hon. member. He seems to be talking about the influence of personnel on certain aspects of this question and clause 10, which we are now discussing, would appear to bear no relationship to that. I think I should ask the hon. member to limit himself to that discussion.


James MacKerras Macdonnell: Perhaps at this point, Mr. Chairman, I should read my amendment and I hope that may satisfy you. I myself feel strongly that the argument I am making requires the making of these particular points to be set out. I will therefore read my amendment. I move, seconded by the hon. member for Prince Edward-Lennox:
That section 10 be amended by adding as subsection thereof the following:
"The total of notes and deposit liabilities of the bank shall at no time exceed the total amount of such notes and deposit liabilities outstanding on the day that the bill receives royal assent plus 10 per cent thereof.
You will see, Mr. Chairman, that the point of that amendment is to create a situation where at a certain point parliament needs to be consulted-and that is the point-where the 10 per cent is being reached and where the authority of the executive will run out.

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William Alfred Robinson: Order. I will put the amendment. The hon. member tor Greenwood moves:
That section 10 be amended by adding as subsection-
I have a blank here. What subsection will it be?


Douglas Charles Abbott: Subsection 4.


Mr. Croll:: Subsection 3.


Douglas Charles Abbott: It will be subsection 4, Mr. Chairman.


William Alfred Robinson: The hon. member tor Greenwood moves:
That section 10 be amended by adding as subsection 4 thereof the following:
"The total of notes and deposit liabilities of the bank shall at no time exceed the total amount of such notes and deposit liabilities outstanding on the day that the bill receives royal assent plus 10 per cent thereof".
May I add that the reading of the amendment does not convince me that the previous remarks of the hon. member are strictly relevant to the clause under discussion.


James MacKerras Macdonnell: I seem to be extremely unfortunate, Mr. Chairman. I hope that perhaps what I say from now on will seem to you to be more relevant. If I am not getting on any better with anyone else in the committee than I am with you, my hopes of carrying this amendment are beginning to recede.
I now come to some of the questions and answers in the committee itself and I hope these will be considered to be relevant. If these are not relevant, I am going to have to confess that I shall have to go and try to relearn the meaning of relevance all over again. I am making the point, Mr. Chairman, that I believe it is extremely unwise that the finance department should have uncontrolled power to increase our money supply. I think you will agree that it is relevant to my amendment, which seeks to put a ceiling on the money supply. I now propose to read some of the answers I obtained in the banking and commerce committee. I asked Mr. Towers with regard to the abandonment of the gold clause in the original act. As reported at page 763 of the committee's proceedings, his reply was as follows:
It was never in effect, because it was always suspended as I recall it.
Later I asked him whether the bank now has unlimited power to create money. His answer was "yes". In answer to a later question from me as to whether there was any check on the power to issue money, as reported at page 764 Mr. Towers said this:
I referred the other day to a red light which might flash in such circumstances for instance if the governor of the central bank resigned.

I want to stress that answer. I think it is extremely important. We have now reached a point where the situation is utterly contrary to the intention of the report of the Macmillan commission and those who founded the bank, where the governor has been reduced to the position of being merely an adviser of the Department of Finance and where his answer, when asked if there is any way of controlling the issue of money, is to say, "Well, I might resign". Later on, as I shall bring to the attention of the committee, the minister fully agreed with him. He said that if the governor of the bank did not agree-1 think those were his words; I shall read them later-he thought it was his duty to resign.
In answer to a later question from me as to whether there was any check on the power to issue money Mr. Towers said:
I referred the other day to a red light which might flash . . .
Incidentally I told the governor that I thought it was a great pity if that was to be the result. I said I did not want the governor to resign. I value the governor highly, and I do not think he should be put in that position. I have already pointed out to the committee that that situation has been remedied in Australia.
As reported on the same page 764 I asked further of the governor:
In your opinion would it not be a good thing to have some kind of legislative hurdle that has to be taken before the barriers are opened beyond a certain point?
Mr. Towers replied:
I do not know of any practical way of doing it short of being on the gold standard and having provision for a minimum gold reserve.
But then he added this, Mr. Chairman, and I draw your attention particularly to it. I hope you will consider that this is relevant. He said:
The only other way in which I could think of it being accomplished would be to write into a statute that the sum total of the note and deposit liabilities of the Bank of Canada should be no greater than a sum named-an absolute amount.
Precisely my suggestion, Mr. Chairman, is put forward. I must say he did not put it forward with enthusiasm but it is put forward by the governor of the bank with this caution, which I shall now read. The governor then added:
As they are today, $2,300 million, I have forgotten the exact figure-that they should be no greater than some other amount somewhat above that, but I should think that it would be necessary to leave sufficient leeway-because parliament is not always in session-so that the damage could be done in any event, that is the damage which you fear.

I think there is a misprint there. But it is perfectly clear that the governor was saying that if there was to be any fixed limit to be put on, regard must be had for flexibility; and I would agree with that suggestion. In the committee I said to the minister that I was not wedded to 10 per cent and if he suggested, say 11 per cent, I would settle with him at once. However, I am sorry to say that he did not suggest 11 per cent.
Finally the governor of the bank said this, and I could not disagree with him. He said that I was getting into matters of policy and that the answer would have to be given by the minister. I felt that I could not quarrel with that statement. However, I also could not help feeling that the status of the governor of the bank was sadly altered from what it was in the minds of those who set up the Bank of Canada. They said that he was to be in control-with his directors, of course-of its management.
I stress what Mr. Towers said as to the possibility of just such a measure as that which I am proposing, though with the caution of flexibility which I accept. After all, the crisis is not going to come on us like an atomic bomb. If there is a money crisis there will be days, perhaps weeks and possibly months when the situation is developing. As we all know from our experience of four years ago, parliament can be called together in two or three days, or inside a week anyway.
I now come to the evidence of Mr. Abbott. As reported at page 1347 of the proceedings of the banking and commerce committee 1 recounted to him what I had asked Mr. Towers and in reply he said:
I suppose, Mr. Macdonnell, what you are asking me to comment upon is whether there should be some definite limitations in the Bank of Canada Act or the Currency Act or both on the powers of the central bank with respect to the issue of currency; as I take it you are not suggesting we should now return to a full-fledged gold standard?


James MacKerras Macdonnell: No, not at all.


Hon.   Mr. Abbott@: And your reason for making that suggestion is we might some day have an irresponsible government which would do things we would not like done. X can only answer you by saying that the issue of money, in the final analysis, is the responsibility of the government of the day, whether it is an irresponsible government or not. There are some things which can only be cured by the ballot box and I do not think-I do not know-of any limitation which could be put in the Bank of Canada Act which, by law, would prevent an irresponsible government from doing irresponsible things with respect to the credit and currency of the country. I would prefer to allow the matter-and this is only my personal view-to remain as it is at the present time because I do not know of any better alternative.
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Again I asked this question:
But would you not agree that with our so-called irresponsible government it might be useful to have a situation arise where the public is put on notice?
To that question Mr. Abbott replied as reported at page 1348 of the proceedings:
I agree with Mr. Towers: I must say if the Minister of Finance and thereby the government of the day suggested a policy which the central bank could not go along with I think the governor of the central bank should give the warning signal by resigning. I think it would be his duty to do it, but I do not believe it is either desirable, or feasible perhaps, to spell that out by legislation. That is really the only way I can answer your question.
I asked again. I was very persistent, although I do not think I was irrelevant. I said:
. . . are you satisfied with the wide-open situation where there is no limit of any kind on the power to increase the money supply.
The minister replied:
I know of no other way. Yes, I am satisfied with the present situation.
The minister was frank and forthright, as he always is. He did not even tell me he would give the matter his consideration, as he sometimes does. He says:	Leave it to
parliament and to the people. I submit, Mr. Chairman, that that is not an answer which the minister's biographer will put in the forefront of his biography.


Douglas Charles Abbott: I should hope he would.


James MacKerras Macdonnell: I think it is a very unrealistic answer. We are told that we control the C.B.C. because we get a report from them once a year, and we all know how effective that is. 1 felt that the minister's answer was vague and unsatisfactory. He said there might be circumstances which would make this unwise. But the only circumstance that he mentioned, as far as I recall, was the possibility of hoarding. I do not think that has ever been a very great danger in this country, but I am ready to admit, and I have said all along, that I do not regard my ideas on this matter as necessarily the only way out. I say that parliament should somehow or other be introduced into the picture, and if my suggestion is not the best then let us have a better way. I say again that the minister, without any notice to the public, can go ahead and increase the money supply.
1 have already put it to the committee that the original Bank Act contemplated private ownership and reserves and that both of these were changed. I am making no comment on the change but I am drawing the attention of the committee to the frank expression given by Mr. Dunning in 1936 when the change was made which points out ever

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so clearly what was contemplated and makes it clear that what was contemplated was a complete reversal, I submit, of what was indicated when the central bank act had been passed two years before. I quote from what Mr. Dunning said on June 1, 1936, as found at page 3260 of Hansard:
The matter of public ownership is in my opinion much less important than that of government control. If we study the constitution of central banks from this aspect, we shall find ample precedent for the attempt which we are making to give the government adequate control over the Bank of Canada.
In 1934 Mr. King had also used somewhat similar words, though he spoke of the public opinion of the nation. I will read his words:
There are times when it is necessary and vital that every institution in the land should be subject to the public opinion of the nation-
Could I have a better endorsement of what I am arguing? All I am arguing is that there are times when public opinion should express itself. Mr. King continued:
-and this is always the case when it is expressed in a constitutional way in parliament.
I submit again that it is this parliamentary control that I am seeking to have re-established. My proposal is not very dramatic or drastic. If it were, perhaps it might have more chance. However, it is not unprecedented. There is a measure of control at any rate in the United Kingdom over the fiduciary note issue. There is a measure of control, as I pointed out in the committee, in the United States and, what is also important, there is the frankest public discussion between the federal reserve bank and the treasury of the United States on matters of policy.
There is nothing of the kind here. The governor of the bank expresses his views in the four corners of the Department of Finance and then he is through. What would be the effect of my amendment? Merely that when we get to a certain point the people of Canada would be entitled to have a look at the position of their currency. That is all I am advocating. There is no disrespect to the finance department in saying that they are not infallible. The minister would be the first one to admit it. The minister says that he does not believe we can by legislation protect either ourselves or our descendants against our follies. I would agree with that of course, but that seems to be no answer to the suggestion that the people should be allowed at a certain point to have a look at their own affairs.


Douglas Charles Abbott: Doesn't my hon. friend ever read the weekly statements of the Bank of Canada?


James MacKerras Macdonnell: Oh yes, I do.


Douglas Charles Abbott: Good.


James MacKerras Macdonnell: That does not affect my argument in the least, not in the least. The people who read them are few and far between and even then it needs a wise man to understand exactly what is happening. My final point is: What is the danger in this suggestion? A financial crisis does not come on us like an atom bomb. I submit that what I am suggesting is obvious, that there should be no question about it, and that the only argument you can make about it is that the people of Canada are not of age and are not competent to discuss their own affairs.
My point is not of course that the ordinary man in the street is going to have a view about this which he will regard as of much value; but when the matter comes up for discussion there are all kinds of people whose views are worth while and who will be brought into the discussion. Thereby we will have the collective experience and wisdom of the citizenry of Canada and not merely the views of two or three people. As the hon. member for Eglinton said in the committee, after the minister had stated that he could not accept my amendment:
I do hope the committee will realize the effect of what the minister is saying, because he is saying in effect that if conditions should arise where it is thought that an increase beyond 10 per cent should be allowed that it should not be necessary to share that situation with parliament or to seek parliament's approval.
In one breath we have the minister saying that he thinks the matter should be left in the hands of parliament and the people and in the next breath he refuses a measure the whole purpose of which is that the people and parliament shall have a chance to express their views. At the present time the governor of the Bank of Canada is practically a captive, and what I am saying to the minister is that we should set up a stop, look and listen sign so that we may have the advice of the governor of the bank and others. At the present time when we urge certain views the governor of the bank has to say that he cannot go any further, that he cannot help us. I suggest that those who vote against this amendment are voting for the perpetuation of the power narrowly held which I have described, and they are turning down a proposal to give the people of Canada some control over the vital matter of currency, something which I predict the people will some day demand.


Mr. Cameron (Nanaimo):: Mr. Chairman, I suppose members of all political parties who have been members of the banking and commerce committee have met the fate that I and my colleagues in this group who were members of that committee have met of late,

that whenever we mention the more recondite details of banking we are just not allowed to discuss them. So you will have to forgive the hon. member for Greenwood and myself if we have this last final scamper over the peaks of high finance. I am grateful to the hon. member for Greenwood for giving us this opportunity but I must add that I cannot agree with the case that he has put before us. His case is that there should be some legal limit to the expansion of our total money supply. On the face of it that seems reasonable until we come to examine the mechanics by which our total money supply is increased or decreased. When we do that I do not see how we can escape the conclusion that this proposal is in the first place impractical and, in the second place, if it were practical, it is quite unnecessary.
So far as its impracticality is concerned, I would suggest that it is almost impossible for anyone to make an estimate, even within the fair latitude that the hon. member for Greenwood has suggested, of the necessities for any one particular period. I went to the trouble of getting figures for the total money supply in every year from 1945 until March of this year which I think will illustrate the point fairly well. You will recall, Mr. Chairman, that the hon. member for Greenwood pointed out that we went through quite a serious inflationary period in that period of years, and he suggested that if we had had this control we might perhaps have avoided some of the more unpleasant features of that inflationary period.


James MacKerras Macdonnell: I suggest that is an inference the hon. member is drawing. I do not think I used those words.


Colin Cameron: I am sorry if I am imputing something to him, but I gathered that was the idea, that we had a warning in this post-war period of the dangers of not having control over our total money supply. In 1945 our total monetary supply was $5,905 million. The following year it was $6,852 million, an increase of about 17 per cent; that is in the immediate postwar year.
Now, here is the significant part. From that time forward our increase each year has been very much less than that. The following year it was some 3 per cent; between 1947-48, it was about a 10 per cent increase. Then it dropped between 1948-49 to a 5 per cent increase; 1949-50 it became about a 15 per cent increase. The following year there was only a fraction of 1 per cent increase, and the following year again it jumped to an 8 per cent increase, and then the following year it was down to almost nil, practically no
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difference. In 1952 it was $9,302 million and in 1953, $9,345 million. Up to March of this year it has increased slightly over 1 per cent over the corresponding period last year.
I suggest, therefore, even if we wished to do so it would be very difficult indeed to place any really effective limit to which we could point. I would suggest this. For instance, who could tell-certainly not the Minister of Finance although he might perhaps have warnings before some of us-whether or not we were going to have a vast increase in investment in Canada from abroad? If we did, it would immediately necessitate a vast increase in our total monetary supply. In fact, one could relate many of these increases to just that factor. I suggest it is, in the first place, an impractical suggestion.
Then, I come to the next point, and that is as to whether or not it is necessary to do so. On the face of it, as I say, it does seem rather frightening, shall we say, when we look across the aisle to realize that at any moment the Minister of Finance may be replaced by some fallible creature. Then, where shall we be? I believe that we are giving the Minister of Finance or his office credit for rather more power than it actually possesses.


Douglas Charles Abbott: Hear, hear.


Colin Cameron: I have an idea there is far more automatism, shall I say, in this process than we readily understand or are prepared to admit. I wish I had the exact words of Mr. Towers on this point in the banking and commerce committee, but perhaps those who were there will agree that I am recalling them correctly. When we were engaged in a discussion of this point, I asked him if he would agree that from a certain point of view it would be correct to say that our total money supply was nothing more than a reflection of our economic activity at any particular period. Mr. Towers agreed that that was a point of view that could be sustained. I think it is the actual fact of the situation. I believe the money supply of the country will depend, in the final analysis, on the level of investment, either internally by government action or from abroad by foreign action, and that in order to cope with that situation the Bank of Canada will almost automatically have to increase our total money supply.
I would suggest too that there is probably nothing better calculated to undermine public confidence in our monetary system than to periodically have parliament summoned into a special session to increase the total money supply, or even every session to have the Minister of Finance come to us, perhaps with some urgency, and tell us that before the

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current week or month were out we had to take steps to increase the total money supply. This would bring to the minds of people not accustomed to dealing with these ideas some very disquieting thoughts. Many of them would hark back to the old days of inflation of currency by the printing press or even perhaps back farther to the methods described by the hon. member for Greenwood, the debasement of actual currency. I am very much afraid we would have many people stuffing currency into mattresses and into socks, and that would not have a very desirable effect upon the economy.
I would conclude, Mr. Chairman, by suggesting to the hon. member for Greenwood that even the most lighthearted government or even the most responsible government would have the greatest difficulty in actually inflating our total money supply beyond the level of our real economic activity no matter how much they might want to do it. Let us consider how they might go about it. We will suppose the present Minister of Finance, through some tragic accident, had suddenly gone mad and decided he was going to inflate the monetary supply. He was going to flood us with dollar bills and $10 bills. He issues an order to the Bank of Canada to do that. They pile them up, wherever the Bank of Canada does pile them up, or wherever it is they have them stacked up, knee high. Then, the problem arises, how are we going to infuse these bills into our economic system, because they will not inflate the monetary supply sitting there. These bills can only be infused into the economy by means of economic activity that is engaged in actual production of goods and services. So long as it is limited in that way, then I feel the danger of runaway inflation is something we do not need to seriously consider.


Solon Earl Low: I am quite sure an occasion like this does call for some consideration of the things that the hon. member for Greenwood set before us in outlining his amendment. At the outset I should like to say that I listened very carefully to all the things he did say and I hope that I got from his speech not only exactly what he was driving at but all the implications of it. I found it very difficult as I listened to him, and as I listened to him in the committee as a matter of fact, to find out exactly what it is that he and his colleagues have been driving at. It seems to me that they have been talking all the way around the idea of returning to the gold standard, but they have not had the courage to come out and say that is what they want.

In every single instance when this matter of gold reserves has come up, the Conservatives have taken that position of skirting around the edge, but afraid to say the nasty words, "gold standard".


James MacKerras Macdonnell: Would the hon. member permit a question?


Solon Earl Low: Yes.


James MacKerras Macdonnell: I would point out that the minister asked me if I had that in mind. I said emphatically no, and I will be disappointed in the hon. member if he thinks when I say no, I mean yes or even half yes.


Solon Earl Low: If that is the case, then I think it is incumbent upon the hon. member for Greenwood to tell us exactly what it is he does mean. It is certain that what he has been trying to introduce into our money policy is some mechanism that will seriously restrict the amount of money that is going to be in use in the Dominion of Canada; that is the very purpose of the amendment which he introduced today. It is a modified gold standard, if he does not call it that.
In the questioning that took place in the committee, I noticed my hon. friend and his colleagues, whenever it was possible, did question very closely about the necessity of having some sort of reserve that would afford automatic control of the money supply. Well, of course, that is nothing more or less than perhaps a modification of the straight and rigid gold standard. Let me just say this, that the gold standard could not work in Canada today without forcing the government to abandon all those things they have introduced into the economy for the purpose of stabilizing it. They would have to throw unemployment insurance, family allowances and all that sort of thing away, because a gold standard simply cannot work unless there is considerable fluctuation in internal price levels, as compared with external price levels, so that it would encourage the movement into or out of the country, as the case might be, of quantities of gold. It is just impossible.
The only alternative is a managed money system, which this country has adopted and which, I think, is infinitely superior to a gold standard in its effects upon the economy and welfare of the people generally. And so, anything that even approximately approaches a gold standard I must oppose at once.
Now, in his talk the hon. member for Greenwood-and I give him credit for being honest in his convictions, of course; I am prepared to take what he says as being

exactly what he feels and thinks-the hon. member for Greenwood complains about inflation, and he cited the situation that has developed in Canada.
Well, I notice that he very carefully avoided saying anything about deflation-not one single word did he say. But I point out to members of the House of Commons that deflation can be and often is more devastating to the country as a whole, and to the welfare of the people, than inflation. I have heard nothing from him or from his colleagues in the committee to suggest that they have the means whereby they can prevent devastating deflation. As a matter of fact, it seems to me the only things they have advocated are those things which would encourage a deflationary trend and, so far as I am concerned, I do not like that sort of thing. On the one hand, I do not want inflation; but, equally, I do not want deflation. I think we ought to be trying to find some mechanism which will prevent any undue inflation or deflation, either of which militates against the best interests of the people of the country.
What I am trying to discover, as we sail through these uncharted seas, is a means whereby we can accomplish this double purpose. The thing I think we should be trying to do is to adopt that type of government policy which will reduce to an irreducible minimum inflationary forces on the one hand and deflationary forces on the other, because both of them are devastating.
In the course of his address the hon. member for Greenwood suggested that perhaps it is unwise to leave the determination of the amount of money in the country to the Minister of Finance and his colleagues. He suggested that perhaps it would be wise to have a group of people representing economists in agriculture, economists in business and economists in law-and all that sort of thing.


James MacKerras Macdonnell: I am sure the hon. member wishes to be fair. I hope he will say I made it clear that I regarded such a proposal as utterly impossible. I raised it only as a straw man, and I think I fully knocked it down.


Solon Earl Low: Well, perhaps so. But let me suggest to the hon. member for Greenwood that we have pretty much that sort of thing now, in the set-up of the Bank of Canada. They have a great number of very capable economists, businessmen and financiers with whom they collaborate in determining what the policy shall be at any given time, and to meet such circumstances as might arise. I am sure their advice and counsel is taken very seriously.
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So far as I can see, the set-up is almost essentially what the hon. member has suggested. In the course of the years we have made a suggestion at various times for the setting up of a permanent monetary commission composed of representatives of the Bank of Canada, the chartered banks, the Department of Finance, agriculture, labour, and business generally throughout the country. Perhaps it might be an expansion of the board of the Bank of Canada, which would meet regularly to consider all of these questions with regard to the financial and monetary policy of the country. Such a permanent monetary commission in our view should be made responsible directly to the representatives of the people in the House of Commons much as the Auditor General is today, so that periodically they could be called before a committee of the House of Commons and hon. members could be kept informed.
It seems to me that a permanent monetary commission of that sort might be the answer to this whole dilemma. I can understand the concern of the hon. member for Greenwood about having the parliament of Canada consulted frequently about the monetary policy of the country, and the results of policies which have been in effect. As I say, I can understand his concern in that regard; and I think perhaps the best way of meeting it would be to have the type of permanent monetary commission I have suggested, a body which would be responsible to the House of Commons, just as the Auditor General is responsible. We could get from that commission independent reports, and periodically it could give evidence before us. In that way we could keep our finger on this matter.
The commission could be charged with the overseership of policy drafted and set up by the House of Commons; and the overseership and management by that commission could include this very important point, which I think is of such tremendous importance to the people of Canada.
There are two sets of figures available. There is the set of figures representing the production of the country available to be moved and used. There is also the set of figures available showing us month after month the total money supply. Well, most certainly it seems to me that the duties of a monetary commission might be to gear the two sets of figures together, and by so doing it would be possible for them to determine, with more or less accuracy, what the financial and monetary policy of the country is doing. Perhaps they could advise the Bank of Canada and the Minister of Finance about

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what ought to be done to meet the situation developing in the country in months ahead.
Now, that sort of thing is practicable, I believe. I am not at any time suggesting that it is possible for a small group of men to decide how much money this country needs. I think the only way that can be done is to leave it to the vast number of entrepreneurs, the producers, the business people and the like, who go to the chartered banks in the regular course of business and arrange for loans for production purposes and by the means now used determine pretty closely the money supply.
But there is another feature of it which I think has to be considered, and that is this, that there are times in this country, as there are in every other country which operates under a financial system such as ours, where, especially in peacetime, surpluses of goods and services do accumulate, and cannot be moved.
Now, if we are to leave the problem of the distribution of those unsaleable surpluses so that it will regulate itself-well, I say we just never would have them distributed, and we may go into a devastating recession or depression.
Our suggestion in those circumstances has been and still remains that the government should provide itself with a mechanism under which purchasing power can be obtained from the only source of new purchasing power, the Bank of Canada, in limited quantity. Limit it to that amount of goods and services which need to be distributed in a country-goods and services which are clearly there and which can be seen and determined quite simply. And simply see to it that that purchasing power is obtained interest free from the Bank of Canada and be used by injecting it directly into the hands of the ultimate consumers so they can thrust it quickly into effective demand to buy the goods off the market and thus themselves set the wheels of industry in motion and help to keep the plants going. That is the proposition that has been made. My hon. friend's amendment would not take care of that at all. My hon. friend's amendment would do the opposite. It would limit severely the amount of money that could be in use at any given time- It is not unreasonable to gear the money supply to the productive capacity of our country. Let the capacity demand decide what the money supply shall be.
If we have in a given period of time an increase of 10 per cent in our production in the country, is it not reasonable to suppose that we are going to need a considerable increase, perhaps up to a maximum

of 10 per cent, in the money supply so as to be able to distribute the goods? If there is a 3 per cent increase in productive capacity in our country at any given period, is it unreasonable to suppose that we shall need perhaps a maximum of 3 per cent increase in the money supply? Why, certainly any reasonable person would say, that is what we need. But if we tie ourselves to an amendment of this kind, we are not in a position at any time to increase the money supply sufficient to meet the needs of an increased productive capacity.
I think it is high time that we began to take a look at the irresponsibles. My hon. friend has talked a whole lot about irresponsible governments. I noticed that on the various occasions he looked right straight across at the Social Credit members of the committee. I would rather he would get up and say, what I am trying to provide against is the irresponsible Social Credit bunch getting in and debasing our currency. Instead of that he skirts around and talks in a sort of whisper about irresponsible governments. I like my hon. friend; I am not angry with him at all; but I should like to point out that Social Crediters have been responsible in their administration of affairs. If he can find a better administration of financial affairs than we get in Alberta where we have dominated for 20 years, then I should like him to show us.


Mr. Byrne:: Don't talk nonsense.


Solon Earl Low: Of course, my hon. friend who is sitting over there is one of the great agitators in the house. He keeps on sniping at us, but he dare not stand on his feet and debate the question. I would suggest that he get on his feet and debate it in an intelligent manner instead of sitting back and sniping the way he does day after day.


James Allen (Jim) Byrne: Pure nonsense.


Solon Earl Low: The hon. member for Kootenay East is good at that. I just point this out. Which is the irresponsible attitude? That attitude that says you have got to limit the money supply in this country by some arbitrary means inconsistent with the needs of the country, or that attitude that says, let us see to it that we adopt a policy, that we gear the money supply to the production of the country. When you have done that you cannot have either inflation or deflation. That is the position we take, and for that reason-and there are others I could mention -we simply could not support this amendment.


Douglas Charles Abbott: Mr. Chairman, this has been a most interesting debate this morning, and I am very greatly indebted to all hon. members who have taken part in it. It has been raised by the hon. member for Greenwood proposing the amendment which he did in the banking and commerce committee and which in effect of course is to insert a statutory limitation on the power of the Bank of Canada to expand currency and credit. He is suggesting that that be inserted in section 23 of the Bank of Canada Act. In substance he is substituting for the old limitation that the note and deposit liabilities of the Bank of Canada should not exceed four times the amount of its gold reserves, another limitation that they should not exceed the amount at which they stand when the bill receives royal assent plus 10 per cent.. I indicated to the banking and commerce committee that I could not accept such an amendment.
Since September of 1939 we have had of course what is commonly known as a managed currency.


James MacKerras Macdonnell: Did it begin only then?


Douglas Charles Abbott: That is my recollection; it may have been before that but certainly since September, 1939, we have had what is commonly known as a managed currency, and I think that the provisions of this section of the Bank of Canada Act have been suspended since that time.
It is a matter of opinion whether we should have an automatic limitation on the expansion of currency and credit, such as existed in the Bank of Canada Act before the war, by reason of the gold provision or such as is suggested by my hon. friend in his amendment today.
I am indebted to the hon. member for Nanaimo for the very concise exposition which he gave to the committee of the way in which a managed currency operates so far as the expansion of currency and credit is concerned. I must confess that I am in large measure in agreement with the views which he expressed as to both the impracticability and the undesirability of the amendment which has been suggested by the hon. member for Greenwood. I personally believe that it would be extremely unwise to insert this element of rigidity into the Bank of Canada Act. My friend has given me credit and has given the government credit for a great deal more power than we possess in this respect. He has suggested that the governor of the Bank of Canada, or the management of the Bank of Canada-I think he said the governor of the Bank of Canada-is a captive. If T may paraphrase Winston Churchill's statement, all I can say is he is some captive.
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The governor and the management of the Bank of Canada have certain clearly defined responsibilities and certain clearly defined rights under the Bank of Canada Act. It is open of course to parliament at any time to change those rights and responsibilities but with the exception of this amendment, my hon. friend has suggested no change in that respect. The government as such, the Minister of Finance as such, has no control over the note issue of the Bank of Canada. That is exclusively within the control of the bank itself. So far as the expansion of credit of the bank is concerned, it is true, as I indicated to the banking and commerce committee, that if the government indulged over a period of time in deficit financing and issued securities, either short or long term, which were purchased by the Bank of Canada, it would constitute a substantial expansion of credit. But I would remind my hon. friend that the government cannot borrow at all on short or long term except in virtue of authorization by this house. That should always be remembered. Therefore there is in fact a very real measure of parliamentary control, a complete measure of parliamentary control over the final result.
He has made the point that the public should know, the people of Canada should know, what is going on. I entirely agree with him, but I must confess that when you look at the weekly statements of the Bank of Canada, which are very concise statements, they indicate exactly the extent and character of the deposit and other liabilities of the Bank of Canada and the assets which the bank has. These are published in the press of this country each week, and they are compared with the figures of the week before. Now, anybody who has learned to read can look at those figures and understand what they mean. When I say "understand what they mean", it may be that people who have not taken too much interest in these matters may not appreciate their full significance; but certainly the business community, certainly the financial community, and certainly anyone who takes any interest in these things at all-and that includes members of parliament-have available to them every week exactly the extent of the expansion or contraction of the liabilities of the Bank of Canada.


James MacKerras Macdonnell: There is no place in which parliament has any exact right to intervene.


Douglas Charles Abbott: My hon. friend knows that every year parliament is required to approve the financial program of the government. At any session it is open to any member to introduce a resolution of non-confidence in the government and base it upon any matter

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o1 public policy. Therefore I say it really is not accurate to say that parliament has relinquished control of this very important matter. The whole question, in my view, included in the amendment of my hon. friend, is whether parliament should now impose this statutory limitation upon the expansion of currency and credit by the Bank of Canada, and I am opposed to it.


William Alfred Robinson: Is the committee ready for the question?


Mr. Blackmore:: Mr. Chairman, before this amendment is put to a vote I should like to give a little attention to the matter of responsibility, as it applies particularly to the Conservative party.
We all understand that there were conditions imposed upon the Right Hon. R. B. Bennett which under the circumstances were probably impossible for him to control. But let us just find out whether Mr. Bennett and the Conservatives in power in 1930 were able to do anything at all to prevent vast sums of money from being taken out of circulation in Canada with the resulting destruction of industry and the prosperity of the nation.
The Hon. C. H. Cahan, speaking on November 13, 1933, and I am speaking entirely here from memory, said that over $900 million had been withdrawn from circulation in Canada since the beginning of the depression.
Now, following up what the hon. member for Peace River said, I would like to hear the hon. member for Greenwood tell us what he would have done to keep that $900 million from being taken out of circulation, or to put it back into circulation once it had been taken out.
There you have a real job and I will warrant that the hon. member for Greenwood would not be able to say now what he would do except perhaps that he would talk to us beautifully as he so often does.
Let me turn to another matter. The hon. member spoke about inflation. No doubt he had in mind the tremendous increase in prices which has resulted in this country since 1946. That so-called inflation, which it really was not, was a deliberate rise in price which came about as the result of the Conservatives in 1945-46 demanding that controls be removed before the production of this country had reached a level which would justify the removal of controls. The government, which had held the price structure in Canada at an astonishingly stable level, with Donald Gordon in charge, was obliged by pressure from the Conservatives to remove these controls and so the price structure went skyrocketing, even although we were living in peacetime.


William Earl Rowe: That is a very fine compliment to the power of the Conservative party.


John Horne Blackmore: It is not nearly as much of a compliment as my hon. friend thinks it is. Hon. members will recall that the first move in this price rise, which so many people mistakenly called inflation, was that the steel companies of Canada, with the consent of the government, advanced their price for steel by $5 per ton.
Perhaps the hon. member for Greenwood can tell me whether that is or is not a fact. Now, just as soon as that increase of $5 per ton in steel was granted, then the steel workers demanded at once that they be given a share of the money which the steel companies made as a result of that advance in price. The result was that they struck for 82 days and finally obtained that concession.
Now, what did these two moves bring about in the Canadian economy? The price of steel, as everyone knows-


William Alfred Robinson: Order. I presume the hon. member is laying a groundwork for his argument, but I would remind him that we are discussing an amendment moved by the hon. member for Greenwood which deals with a limitation on the total of notes and deposit liabilities of the bank, and I think the hon. member should confine himself to that subject.


John Horne Blackmore: I think so too, Mr. Chairman, and that is exactly what I propose to do. The hon. member was talking about responsibility and I was just going to point out that that increase in the price of steel resulted in an increase in the cost of production in respect of practically everything else throughout the nation's industry. The increase in the steel workers' pay resulted finally in an increase in the charge structure in every industry in the nation, and the two together jacked up prices point after point to the extent where they are still rising at the present time. In addition to that, taxation was being increased at the same time. If you want irresponsibility you have it personified in the men of the Conservative party who rose and demanded the removal of price controls. For them to stand up now, despite the havoc which resulted in the Canadian economy by reason of their imprudent demand for the removal of price control, and call the resultant price rise inflation is for them to provide abundant evidence that they just do not know what they are talking about any time they speak.
Now, Mr. Chairman, I have dealt with the general aspects of the matter and I would now like to say a word or two more about responsibility. There is plenty more to be

said along this line. The hon. member for Peace River referred to the government of Alberta as an instance of responsible government. Therein the Social Credit government, never mind how they did it, which, granted it had to operate in accordance with methods of orthodox finance-and look how magnificently they did it-took a debt of $167 million, which looked impossible to deal with, and completely liquidated it. Perhaps they have not actually liquidated it completely, but at least they now have the money with which to deal with it. They now have in addition a vast amount of money saved up-and that has never been done before in the history of the Dominion of Canada.


An hon. Member:: What about the oil?


John Horne Blackmore: We will grant the oil, but let me point out that if some hon. members who have so much to say about these oil wells had been in charge of the province of Alberta they would probably have given these great treasures away as political plums to their friends, so that instead of the government being able-
[Inaudible interruption.]


John Horne Blackmore: If my hon. friend knew about one-tenth of what he thinks he knows he would be well worth listening to. The main thing we have to bear in mind is that it was by supremely good management of the oil resources of the province now being exercised by the government that this laudable result has been achieved. The government, by offering to sell drilling rights on certain lands they called crown reserves, and allowing those who desired to drill to bid the prices up, enabled the province to acquire many millions of dollars as a result of selling these drilling leases, leases which a less provident government would probably have given to their friends or divided among themselves.


An hon. Member:: One o'clock.


John Horne Blackmore: There is plenty of time for the hon. member to get up and talk.


William Alfred Robinson: Has the hon. member completed his remarks?


John Horne Blackmore: No, I will be back here later, Mr. Chairman.


William Alfred Robinson: It being one o'clock I do now leave the chair.
At one o'clock the committee took recess.
The committee resumed at 2.30 p.m.


William Alfred Robinson: When the committee rose at one o'clock we were discussing clause 10 and the amendment thereto moved by the hon. member for Greenwood.
Bank of Canada Act


John Horne Blackmore: Mr. Chairman, when I closed there was a whole collection of members across the way on the Liberal side who were clamouring for me to let them ask questions. I told them that I would be quite happy to stay here until midnight to answer their questions if they brought them along; but they have not come forth; so I presume we might as well treat their questions as being all answered.
I was dealing briefly with the question of responsibility in government. I have no desire to spend any great amount of time on it, but there were cries from various parts of the house to the effect that it was Alberta's oil which had done wonders in reforming conditions in Alberta not Alberta's Social Credit government. I just wish to give one set of figures and then I propose to go on with another aspect of the argument of the hon. member for Greenwood. Official figures indicate that on March 31, 1936, Alberta's net funded debt and guarantees amounted to $148,613,000 and that on March 31, 1948, the amount was only $121,504,000. In other words $27,109,000 had been paid by Alberta before oil in considerable amount began to come in. The real revenue from oil began to come in with the discovery of the great Leduc field in 1947. We will now leave that matter. Any time my good friends want to ask questions about Alberta, let them just come around and if they let me know beforehand we will have a good time.
The hon. member for Greenwood, in his argument in support of his position, referred to Germany as a horrible example of what starts in case the gold standard is not rigidly adhered to. Inasmuch as this is a new parliament I think we might as well have a sort of showdown on this German question. It is well to remember a thing which men like the hon. member for Greenwood apparently never take the trouble to find out, namely that Germany, previous to her famous inflation, had fought a long and exhausting war for four years and that Germany was defeated. That means that she was left at the mercy of those who had won. Any government that tries to keep its money somewhere near stable under conditions like that will experience plenty of trouble. I think the Minister of Finance will be the first man to testify to that truth. He knows how careful he has to be to keep matters under control with a very strong government, a very strong country and a very strong people in Canada.
At the close of that war there was owed by the German government a debt of 147 billion gold marks. May I draw the attention of the hon. member for Greenwood to the fact that they were gold marks, not paper
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marks? Of this debt, 58 billion was floating debt and 89 billion was funded debt. The interest on that money had to be paid every year. The total taxation which the government could raise in Germany amounted to just enough to take care of one-tenth of the floating debt alone. Let me ask the hon. member for Greenwood this question. After his careful studies of finance, of which I hope he makes a great many, just what would he have done if he had been in charge of the German government in those years? Would he have permitted default on the debt and the interest on the debt? If he was going to get the moneys to pay the debt, where would he have got the money? It might be said that he would float a loan amongst German people. But the German people had no money. Let him face that problem. I hope he does so.
What happened to Germany was much worse than what I have already pictured. The London conference forced Germany to pay one billion gold marks in August, 1921, 362 million gold marks in March, 1922 and 254 million gold marks in August, 1922. For a country that had been on a strict gold standard-so strict a gold standard that they had 60 per cent as much gold as they had notes in circulation at the opening of the war-that export of gold would have been enough to destroy utterly the confidence of the people both within the country and outside of it.
In order to meet the situation the government borrowed from the Reichsbank money to pay on the debt. Let it be remembered that this was not government-issued money. It was good bank money issued by the German Reichsbank to pay on the debt. Hon. members Who wish to check any of these figures may do so by asking for a fine book which is to be found in our library, or it used to be before the fire-called "The Story of Money" by Sir Norman Angell, published in 1929. In it they will find a chapter on German inflation which will be very enlightening and will support everything I am saying here now.
Terrible losses were sustained by Germany. In the first place her colonies were swept away. In the next place her merchant marine was swept away. In the next place much of her trade was swept away. In the next place the extremely rich Ruhr-Lorraine-Luxem-bourg industrial unit in Germany was taken away or disrupted.


William Alfred Robinson: Order. May I express the hope that the hon. member will soon relate these remarks, which are apparently directed to conditions in Germany, to the amendment which is now before us and deals with notes and deposit liabilities of the Bank of Canada.


John Horne Blackmore: Mr. Chairman, I can understand your uneasiness in respect of this matter. I am nearly finished. I believe Your Honour will agree that, when one is discussing the validity of gold as the backing of money in the Bank of Canada-which is the very thing which the hon. member for Greenwood was endeavouring to establish, or a demand for it-there is not anything one could bring into the picture with greater appropriateness or propriety than the illustration of Germany. Consequently if you will bear with me for another minute, I will go on; in fact, I will stop and let somebody else talk. I am just endeavouring to show the absolute weakness of the hon. member's position. His arguments are just not valid at all. He had a hodge-podge of sayings that are commonly accepted as true coin but they have no meaning at all when one examines into them.
I was going on with the German situation, Mr. Chairman. The treaty of peace disrupted the valuable Ruhr-Lorraine-Luxem-bourg industrial unit in Germany which meant that it destroyed between 11 per cent and 15 per cent of Germany's productive capacity. The hon. member for Greenwood made a revealing remark at one time. He said that inflation was having too many dollars chasing too few goods. In Germany you will notice that all the things I have mentioned up to the present time would affect Germany's ability to produce goods, at the same time leaving money out in circulation. Thus the stage was set for serious inflation. The treaty of peace did worse than that or it did more. It forced Germany to deliver immense amounts of railway cars, locomotives, chemicals, dyes, coke, coal and agricultural products, just the very things that Germany needed as goods to support her money.
Those things being considered, I think everyone will grant that for the hon. member to bring in the German inflation situation, in order to illustrate his case or to fortify it, was not for him to manifest the best of judgment.
I thank you for your courtesy, Mr. Chairman.


Some hon. Members:: Question.


James MacKerras Macdonnell: Of course what the minister had to say about the reports that come out monthly from the Bank of Canada-


Douglas Charles Abbott: Week by week.


James MacKerras Macdonnell: -giving information does not affect my position, which is that there should be a time at which parliament should, of necessity, enter into the situation.


Some hon. Members:: Question.


William Alfred Robinson: Perhaps I should read the amendment since it was proposed before the luncheon recess. The hon. member for Greenwood moves:
That section 10 be amended by adding as subsection 4 thereof the following:
"The total of notes and deposit liabilities of the bank shall at no time exceed the total amount of such notes and deposit liabilities outstanding on the day that the bill receives royal assent plus 10 per cent thereof."
The question is on the amendment. Those in favour of the amendment will kindly rise. Those opposed to the amendment will kindly rise.
Amendment (Mr. Macdonnell) negatived: Yeas, 16; nays, 74.


William Alfred Robinson: I declare the amendment lost. Shall clause 10 as previously amended carry?


[Stage Direction]
Clause agreed to.
Clauses 11 to 20 inclusive agreed to.
Schedule B agreed to.
Schedule C agreed to.
Title agreed to.
Bill reported, read the third time and passed.


Douglas Charles Abbott: that the house go into committee to consider Bill No. 419, respecting savings banks in the province of Quebec.
Motion agreed to and the house went into committee, Mr. Robinson (Simcoe East) in the chair.


William Alfred Robinson: May I point out to the committee that this bill has been considered and reported on by the banking and commerce committee.
On clause 1-Short title.


Douglas Charles Abbott: Perhaps I should say a word before we consider the bill clause by clause. As you have indicated, Mr. Chairman, this bill, as well as the other two, was considered in the banking and commerce committee. There is not a great deal I can add to what I said when the bill was given second reading. The bill relates to the two savings institutions which have operated in the province of Quebec since before confederation. The principal changes of policy in the bill relate to authorizing these banks to
Quebec Savings Banks Act invest in insured mortgages under the National Housing Act, some expansion in the investment powers of the banks and, as I stated on second reading, the bill also provides for a complete revision of the act for the first time since 1913.
A great many of the sections are identical in terms with the sections of the Bank Act, and whenever it is appropriate the provisions of the bill are either identical with or very similar to the sections of the act with respect to the commercial banks. The bill, in so far as any changes in substance are concerned, was carefully discussed in the banking and commerce committee, and I think that the revision job that has been done here, as was the case with the Bank Act itself, has considerably improved the bill.


James MacKerras Macdonnell: There are one or two
questions I should like to ask the minister. Before the revision, were these banks in the same position as the chartered banks with respect to being prohibited from any mortgage lending?


Douglas Charles Abbott: No, they had mortgage investment powers in what are referred to as conventional mortgages. They have had for a good many years the power to invest a proportion of their assets in mortgages because they are, as their names indicate, savings institutions. On the other hand, their investment powers in other fields are very much more limited than those of the commercial banks.


James MacKerras Macdonnell: Is there any provision whereby others than the two existing banks can get powers under the act?


Douglas Charles Abbott: No. These two institutions
are, as I have said, pre-confederation institutions. They existed before Canada became a nation in 1867. They have been continued under federal direction of course since that time because of the power with respect to banks and banking contained in section 91 of the British North America Act. At each decennial revision of the Bank Act the charters of these two institutions have been extended in the same way.


James MacKerras Macdonnell: Are they under the jurisdiction of the inspector general of banks?


Douglas Charles Abbott: Yes.


James MacKerras Macdonnell: To what extent do they
do commercial banking, particularly under a section corresponding to section 88 of the Bank Act?


Douglas Charles Abbott: Oh, they have no such powers. They do not do commercial banking at all. Their investments are largely in securities, mortgages and that sort of thing.

Quebec Savings Banks Act


[Stage Direction]
Clause agreed to.
Clauses 2 to 5 inclusive agreed to.
On clause 6-Duration of authority to carry on business.
James MacKerras Macdonnell: I think it is in clause 6
that there is a reference to 20 per cent of their liabilities in total and 60 per cent of the property value-


Douglas Charles Abbott: Which clause is this?


William Alfred Robinson: Clause 6.


Douglas Charles Abbott: Clause 6 relates to duration
of authority to carry on business. I believe there has been a renumbering in the reprint since the bill was before the banking and commerce committee. There has been no change in clause 6.


James MacKerras Macdonnell: Perhaps the inspector
general could refer the minister to the clause dealing with the limits of lending on conventional mortgages.


Douglas Charles Abbott: That does not come until
clause 64.


[Stage Direction]
Clause agreed to.
Clauses 7 to 12 inclusive agreed to.
On clause 13-Election of directors.
James MacKerras Macdonnell: Are there the same restrictions on directors in this bill as in Bill No. 338?


Douglas Charles Abbott: Yes, with the exception of the age limit which was inserted in the banking and commerce committee with respect to commercial banks.


[Stage Direction]
Clause agreed to.
Clauses 14 to 25 inclusive agreed to.
On clause 26-Offer of shares of capital stock.
James MacKerras Macdonnell: With regard to clauses 26, 27, 28 and 29, I have a general question. These provisions deal with the offering of shares of capital stock. Do they conform substantially or perhaps exactly with provisions in the Bank Act?


Douglas Charles Abbott: My understanding is that the amendments are identical with the amendments that were made in the Bank Act.


[Stage Direction]
Clause agreed to.
Clauses 27 to 51 inclusive agreed to.
On clause 52-Report to Minister of National Revenue of excess reserves for bad debts, etc.
James MacKerras Macdonnell: Clause 52 has to do with contingency reserves. Is that also similar to or identical with the provisions in the Bank Act?


Douglas Charles Abbott: It is identical in terms with the corresponding section of the Bank Act, Mr. Chairman.


[Stage Direction]
Clause agreed to.
Clauses 53 to 57 inclusive agreed to.
On clause 58-Investments.
James MacKerras Macdonnell: Clauses 58, 59 and 60 deal with investments. Is there any other change with regard to investments except the one necessitated by the housing act?


Douglas Charles Abbott: There have been certain other changes, but that is the principal one. There is also a provision which authorizes these particular savings banks to invest in the first preferred shares of Canadian corporations and the shares of chartered banks, where those corporations and banks have a satisfactory earnings record. These provisions are new and are an enlargement on the former powers of investment.


[Stage Direction]
Clause agreed to.
Clauses 59 to 69 inclusive agreed to.
On clause 70-Acquisition of real property.
James MacKerras Macdonnell: With regard to the acquisition and holding of real property, is there any change?


Douglas Charles Abbott: None. This has been the same for a good many years, Mr. Chairman.


[Stage Direction]
Clause agreed to.
On clause 71-Interest exceeding 6 per cent shall not be charged.
Mr. Fraser (Peterborough):: Clause 71 states the interest rate must not exceed 6 per cent. Will these banks be allowed to do as one banker in the committee said they were doing, to charge a service charge on their loans? I do not want to mention the name of the bank, but the charge reached 10-46 per cent.


Douglas Charles Abbott: This provision is identical
with the provisions in the Bank Act with respect to interest charged. It limits the maximum interest that a bank may make to 6 per cent. These two banks would be subject to the same limitation as any other bank in Canada in the setting of charges.


Gordon Knapman Fraser: There was a doubt as to whether the one bank that was charging the service charges was doing it legally. Can the minister say whether it was right or wrong?


Douglas Charles Abbott: Well, I am always leery about giving free legal opinions. I would not care to express an opinion. It would be a matter for either the banks' or customers' lawyers

or the courts in the final analysis to decide whether the bank was or was not complying with the provisions of this section.


Gordon Knapman Fraser: I do not agree with the minister. I feel it would be up to the inspector general of banks to step in there and say whether or not it was legal.


Douglas Charles Abbott: That may be. I understand the inspector general gave some evidence in the committee on that matter.


Gordon Knapman Fraser: Not too much.


[Stage Direction]
Clause agreed to.
Clauses 72 to 123 inclusive agreed to.
Schedule A agreed to.
Schedule B agreed to.
Title agreed to.
Bill reported, read the third time and passed.


Douglas Charles Abbott: that the house go into committee to consider the following resolution:
That it is expedient to bring in a measure to authorize the Canadian National Railway Company to make capital expenditures in the year 1954 not exceeding $209,168,695 and to make certain capital expenditures and enter into certain contracts prior to July 1, 1955; to authorize the national company to issue securities to provide amounts required for the authorized expenditures; to provide that, except as expressly provided, the aggregate principal amount of securities outstanding at any time shall not exceed $234,623,695; to authorize the governor in council to guarantee the principal and interest of securities issued by the company for the purpose aforesaid; to authorize the Minister of Finance to make loans to the said company secured by such securities and not exceeding $234,623,695 in principal amount to enable the said company to meet such expenditures and with authority to give financial aid and assistance to other companies of the national system.
Motion agreed to and the house went into committee, Mr. Robinson (Simcoe East) in the chair.


Douglas Charles Abbott: Mr. Chairman, this is the
annual resolution that precedes the introduction of the Canadian National Railways Financing and Guarantee Act. Hon. members will recall that in 1952 the form of this resolution was changed so as to include the financing of all capital expenditures, whether authorized in that act or in earlier financing and guarantee acts. This procedure has been followed again this year.
The bill to be founded on this resolution is divided into three specific parts. The
Canadian National Railways first part is to authorize the Canadian National Railways to incur capital expenditures up to $234,623,695. The second part authorizes the railway company to make capital expenditures prior to July 1, 1955, to discharge obligations incurred under this act which become due and payable after January 1, 1955, in the amount of $45 million. The third part authorizes the railway company to enter into contracts for the new equipment and for general additions and betterments in the amount of $36,555,931.
To summarize, parliament is being asked to approve financing either by way of the issue of new securities guaranteed by the government or by way of direct loan, in the amount of $234,623,695. For the convenience of hon. members, the table giving the details of this amount is as follows:
Additions and betterments (excluding
new equipment)	 $44,700,000
Branch line construction	 6,200,000
New equipment	 147,032,195
Acquisition of securities	 11,236,500
Capital expenditures, January 1, 1955 to June 30, 1955, incurred prior to January 1, 1955	 45,000,000

Less amount available from depreciation reserves	 $19,545,000

The usual authority is provided for the making of temporary loans to the railway company and Trans-Canada Air Lines to meet operating deficits to June 30, 1955. While the budget of the railway company contemplates a surplus of $500,000 for the calendar year 1954, deficits usually occur in the early months of the year.
Loans made by the government to the railway company under previous financing and guarantee acts were outstanding on April 30, 1954, as follows:
1951 act	 $ 4,416,388.02
1953 act	 $131,717,732.15
1953 act-account of 1954 deficit ...	$ 17,500,000.00
We have made somewhat unexpectedly rapid progress this afternoon. I had not contemplated we would reach this resolution as early as we have. However, I shall endeavour to give hon. members any information I can, after they have had an opportunity of studying the table placed on Hansard. Perhaps that information could be given in the committee stage of the bill. That would certainly be more convenient for me, because I would then have the assistance of officials who would be helpful in interpreting those figures.

Canadian National Railways


Mr. Knowles:: Does the table indicate the nature of the items of additions and betterments for which this money is to be spent?


Douglas Charles Abbott: It does not indicate the details of those improvements and betterments. But in committee on the bill any substantial information required can be made available. I understand the capital program was discussed in some detail before the standing committee, although I was not there.


John George Diefenbaker: Does it include any
amount set aside to provide for an extension of or increase in the basic pension for Canadian National Railways employees?


Douglas Charles Abbott: This is only the capital program. I would think that would be included in the operating budget.


James MacKerras Macdonnell: I should like to draw attention to two or three things that could be considered at the bill stage. The minister referred to a figure of $234 million. I have here the breakdown of that figure, which I shall not read in detail, but which makes up that amount. There is, however, one item in the capital budget as presented to the committee that I wish the minister would look at and which I think would require some explanation. Because, after totalling up the capital figures based on the $234 million, which appear in the minister's statement, there is a deduction item which says, "less $72 million" for which financing authority exists under the Canadian National Railways Financing and Guarantee Act of 1953. I should add that that is deducted. My understanding is that the $72 million referred to is an amount authorized last year but not expended, and that the intention of the finance department is to have each year a new statement of the amounts actually required for the year. I think that that requires some explanation.
Secondly, when we look at the bill I would like to have on the record a full explanation of what I believe to be the fact, that the capital amount required, new equipment, $147 million, is virtually or almost wholly self-liquidating, because there is a large amount charged to operating expenditures for the retirement of that each year. I should like also to have a statement as to depreciation outside that special item for equipment. I understand that, apart from that, most of the amount spent on upkeep is regarded as virtually in lieu of depreciation, and I think an explanation should be given at some length.


Douglas Charles Abbott: I shall see that the information for which the hon. member for Greenwood has asked is made available when we get into committee on the bill.

Resolution reported, read the second time and concurred in.
Mr. Abbott thereupon moved for leave to introduce Bill No. 469, to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways system during the calendar year 1954, and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company.
Motion agreed to and bill read the first time.



CROWN CORPORATIONS


Douglas Charles Abbott: the second reading of Bill No. 461, respecting the superannuation of government employees transferred to crown corporations.


William Moore Benidickson: Mr. Speaker, as I stated the other day when the resolution on this bill was being considered, it is designed to prescribe the pension provisions for, and the manner in which those pension provisions are to apply to, persons transferring their employment from the public service to a number of crown corporations. The same provisions will affect the employees of boards, commissions and other corporations who contribute under the Public Service Superannuation Act should they become employees of those crown corporations to which this bill applies.
Hitherto in accordance with the provisions of the Government Companies Operation Act, as well as of a number of other acts establishing crown companies, a civil servant who had been contributing to the superannuation account under the Civil Service Superannuation Act could continue to be a contributor and enjoy all the benefits of the superannuation act, if he left his employment in the civil service, and became an employee of one of these crown companies. It is believed that this policy was introduced to encourage the transfer of key personnel from the civil service at the time of the establishment of a crown company. As a rule it would be some time before the company would have a pension plan of its own and so these civil servants, many with several years to their credit under the superannuation act, would otherwise be transferring from an employment with a first-class pension plan to one with none at all.
While such a provision was recognized as essential at a time when a company was set

up, the need for it gradually disappears when a company becomes well established and has a good pension plan of its own. Up to the present those civil servants who have benefited in this way on becoming employees of crown companies would at least have been permanent civil servants and would normally have several years of service to their credit. Thus the retention of this right to remain under the Civil Service Superannuation Act would not be regarded as providing very many undeserved benefits up until now.
With the coming into force of the Public Service Superannuation Act on January 1 of this year, the circumstances just described are quite different. If these provisions were to be retained in these other acts it would then be possible for a person with just over a year's employment in a temporary position to transfer to a crown company and carry with him full rights under the superannuation act because he had become a contributor to the superannuation account after this one year of employment. Since an employee who transferred to one of these crown companies would transfer because it was to his advantage to do so, it is unreasonable that he should carry with him the generally greater benefits of the public service pension plan. In addition he would have the other advantages of his new position and be relatively better off than both his former and new fellow employees.
I mentioned at the resolution stage the crown corporations with pension plans of their own to which this act will apply. These are the Canadian Broadcasting Corporation, the Canadian Overseas Telecommunication Corporation, Canadian Arsenals Limited, Polymer Corporation Limited and Eldorado Mining and Refining Limited, under whose pension plan employees of Eldorado Aviation Limited and of Northern Transportation Company Limited come. As I pointed out earlier, the acts relating to the pension plans of these crown companies contain provisions regarding the continuation of transferred employees as contributors to the superannuation account.


James MacKerras Macdonnell: Of the crown companies?


William Moore Benidickson: The acts that are now being amended have hitherto contained a provision under which a person could continue under the superannuation act. Because of its close relation with the Public Service Superannuation Act it is intended that this new act will have effect from January 1 of this year because that is the day on which that act came into force. It will not affect those civil servants who became employees of crown companies before that date and 83276-341
Crown Corporations
continued to be contributors under the superannuation act. They will continue on as before.
Hon. members will recall that the new Public Service Superannuation Act provides for reciprocal transfer agreements between the government and any of these crown companies where, on the transfer of both employer and employee contributions as well as of interest on these contributions from one pension fund to the other, the employee's full service credit under his former pension plan will be transferred to his new pension plan. This would be done only if the employee agrees and where a reciprocal transfer agreement has been concluded. Some discussion has already taken place with certain of the crown corporations with a view to entering into these agreements as provided in that act.
Thus a contributor under the superannuation act who, before the age of 60, transfers his employment to one of these crown companies which is not under that act will have the choice of at least a return of his contributions or a deferred annuity related to his service up to that time and commencing at the age of 60. If there is a reciprocal transfer agreement with this crown company, that employee would have the third choice open to him of having his pensionable service transferred to his credit under the pension plan of his new employer.
In addition to the acts relating to these corporations, the St. Lawrence Seaway Authority Act is also amended in this bill so far as the pension provisions are concerned. As hon. members are aware, the St. Lawrence seaway authority has not yet been established and it is not known, therefore, what type of pension plan it will have. This bill makes it possible for the authority to be added to schedule "A" of the Public Service Superannuation Act whereby its employees would be contributors under that act. As an alternative, should it be decided to set up a pension plan of its own, this bill provides that persons who are contributors under the Public Service Superannuation Act and who become employees of the authority will continue to be contributors under that act until the authority's own pension plan is established. At that time provisions similar to those described above for these other crown companies covered by this bill will apply to those contributors.


James MacKerras Macdonnell: There are two or three questions I should like to ask. In the first place, when the bill was at the resolution stage I asked the parliamentary assistant whether there were cases which were not covered by this legislation because there was

Crown Corporations
no superannuation plan in effect in the crown corporations themselves, and I think his answer was yes, but that he believed there were special circumstances there. I should like, if possible, to have that cleared up now.


William Moore Benidickson: It was my idea to answer my hon. friend in committee.


James MacKerras Macdonnell: I beg your pardon.


Stanley Howard Knowles: Mr. Speaker, when we were on the resolution stage with respect to this legislation I indicated our wholehearted support of the principle with which this legislation deals. As I understand it, the government's desire is that as between the public service and crown corporations there should be transferability of pension rights. From what the parliamentary assistant said just now I understand that the government does not wish it to go too far; it does not wish it to go to the extent of an employee getting a double advantage in terms of pension rights because he transfers from one type of government employment to another. Obviously one can have no quarrel with that aspect of the legislation.
I do wish to say once again that we support wholeheartedly the underlying principle of this legislation, namely, that when employees transfer from one type of government employment to another it should be possible for them to carry with them the pensionable service or the pension rights which they have earned.
As I indicated the other day, and therefore I shall only refer to it in passing now, we think this is a principle that should be extended even wider. The parliamentary assistant has indicated that at one stage, in order to induce people to leave the public service for employment in crown corporations, it was necessary to do something about the pension situation. That feature applies not only as between public service and crown corporation employment, but it applies as well to a great many people at all levels of employment.
As I said the other day, there are people who are frozen to their jobs because they cannot carry their pension rights with them. There are others who are effectively denied entry into certain types of employment because their age is such they cannot become participants in a particular pension plan. If such persons were able to carry with them the pension rights that they had built up in the past that problem could be solved. I rise, therefore, Mr. Speaker, to express the hope that the government, as a matter of public policy, will give further study to this whole question and will try to draft legislation that will extend this principle on a broader basis, so that our people generally

will be able to take their pension rights with them when they transfer not only from public service to crown corporations but when they transfer from private industry to public service or vice versa, or even when they transfer from one private industry to another. As I indicated the other day, this is something that is sorely needed in respect of pension plans throughout the country generally, and I hope that we will yet see an extension of the basic principle underlying this legislation until it includes all our people.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Robinson (Simcoe East) in the chair.
On clause 1-Canadian Broadcasting Act.
James MacKerras Macdonnell: Mr. Chairman, I have
some questions to ask on this but if the parliamentary assistant wishes to make a statement I shall reserve my questions.


William Moore Benidickson: Mr. Chairman, it was not my intention to make a statement but I was going to answer a question my hon. friend raised a few moments ago, and which he raised some time ago as reported at page 5030 of Hansard. There he asked whether there were some crown corporations who have not a pension plan and if by reason of the absence of such a plan some expensive retroactive action might be necessary in the future.


James MacKerras Macdonnell: Yes, as regards the shareholders.


William Moore Benidickson: Yes, and I said it was possible that not all crown corporations had a pension plan. I have since made inquiries and I have found that the only crown corporation which has not a pension plan is the Park Steamships. There are special reasons for that, namely that it is no longer functioning as a crown corporation. There are other reasons but that is the principal one.


James MacKerras Macdonnell: I have one or two other questions, Mr. Chairman. First of all, let me say I agree fully with the hon. member for Winnipeg North Centre that there ought to be transferability in these cases. That seems eminent common sense, for they are all employed by the same employer. Would it be true to say that the pension plans in crown corporations are virtually the same, or is there a great variety?


William Moore Benidickson: That question was raised when we were on the resolution stage by the hon. member for Perth and I was proposing to answer that question too. I find that there is not exactly a consistent pattern

with respect to these pension plans, but generally speaking most features are similar, such as the rate of contribution. The rate of contribution varies somewhat sometimes between males and females, and sometimes between one corporation and another because the corporations themselves, having different functions, find that their employees want variations in the same fashion as in private business. That rate of employee contribution thus varies from between five to six per cent of salary. Then when the maximum amount of pension is to be determined there is a slight variation there also, but I find that the range runs between one and three-quarters per cent to two per cent of salary multiplied by the number of years service. Under the superannuation act the maximum number of years service that can be taken into account to determine the maximum pension is 35 years, and in the case of the Public Service Superannuation Act the rate is two per cent. Therefore, the maximum pension would be 35 years times two per cent of the salary which would be 70 per cent.


James MacKerras Macdonnell: Are the terms of retirement the same?


William Moore Benidickson: Generally yes; but, as I say, there is some variation in the maximum number of years, and the percentage calculation runs between one and three-quarters per cent and two per cent, so it is fairly close.


James MacKerras Macdonnell: The parliamentary assistant used the phrase, "in cases where there is an agreement between the crown corporation and the government." That leads me to ask a question in regard to this bill before us, subject to my not having read every word with great care. We do have special crown corporations and I shall like to know why it is not possible to deal with the matter in general. Are there special features in each case which have to be dealt with? Are we running into a situation where a civil servant may transfer to one crown corporation and he may then wish to transfer back and be unable to do so? Is there any possibility of transferring to and fro?


William Moore Benidickson: Yes; there is a possibility as provided under the superannuation act. Under this new act which came into effect on January 1 there is provision for reciprocal agreements to be made to widen these opportunities. The functions of the crown companies vary considerably and for that reason you will find that there are separate schedules in the Financial Administration Act and also schedules in the superannuation act setting out the crown companies according to functions. For example, some corporations are defined as departmental corporations, and 83276-341J
Crown Corporations
others are considered to be agency corporations. There are others of a proprietary type such as the C.B.C. and so on, and their relationship to a unified pension plan would vary somewhat in each case. In each company the employees perhaps have differing requirements.


Mr. Monteilh:: Mr. Chairman, generally speaking there are small variations between the schemes in some crown corporations and in the Public Service Superannuation Act. Does the parliamentary assistant feel that this act covers the whole situation and makes a transfer from one to the other, either from public service to crown corporation, or from one crown corporation to another, quite equitable?


William Moore Benidickson: No, Mr. Chairman. This act does not make that possible but the Public Service Superannuation Act contains the provision under which these reciprocal agreements can be arrived at and the transfer made.


James MacKerras Macdonnell: Does the parliamentary assistant mean the transfer from the public service to a crown corporation and from one crown corporation to another?


William Moore Benidickson: I meant an agreement to transfer the contribution, both employee's and employer's, as laid down in the superannuation act.


James MacKerras Macdonnell: Who manages the pension funds? In each of the crown corporations do they manage their own?


William Moore Benidickson: Yes.


James MacKerras Macdonnell: Is there any government responsibility in the event of loss?


William Moore Benidickson: I think in each case the pension plan is suggested by the board of directors, but I think under each act the approval of the governor general or the treasury board is required.


James MacKerras Macdonnell: Well, I suppose we can take it that the terms of investment are restricted to the highest securities?


William Moore Benidickson: I believe, except in one case, their plans involve insurance companies -annuity schemes with insurance companies.


[Stage Direction]
Clause agreed to.
On clause 2-Canadian Overseas Telecommunication Corporation Act.
Mr. Ferguson:: Could the parliamentary assistant tell me whether that means reinsuring the risks with insurance companies, in other words, private enterprise? If that is so, it is most gratifying.

Crown Corporations


William Moore Benidickson: I had in mind, of course, group Canadian government annuity policies as well.


Julian Harcourt Ferguson: That is good news.


[Stage Direction]
Clause agreed to.
On clause 3-Government Companies Operation Act.
Stanley Howard Knowles: Mr. Chairman, I have some questions I would like to ask on this clause and since I am on my feet immediately after my good friend the hon. member for Simcoe North (Mr. Ferguson) I would like to extend to him my best wishes for a very happy birthday. In view of what happened the other day, that will show that we are still good friends.


James MacKerras Macdonnell: That is what they do in the insurance business also.


Stanley Howard Knowles: Under this clause may I ask whether any other companies are involved in these reciprocal arrangements or reciprocal agreements or whether it is possible to have them with other companies? The parliamentary assistant referred to Canadian Arsenals, the Polymer Corporation, Eldorado and its subsidiaries. What is the situation with respect to the Canadian National Railways and Trans-Canada Air Lines?


William Moore Benidickson: The companies which would have an opportunity of making a reciprocal arrangement as provided in the superannuation act are not restricted to those referred to in the Government Companies Operation Act. Conceivably the C.N.R. would be a type of crown company which could enter into a reciprocal agreement with the superannuation act management. My hon. friend will also know that the act provides that we could enter into reciprocal arrangements with other public bodies such as governments in the provinces and municipalities.


Stanley Howard Knowles: Under that act is it possible for the government or a crown corporation to enter into a reciprocal arrangement with any private industries?


William Moore Benidickson: We have not gone that far in the act; no.


Stanley Howard Knowles: Keep thinking about it.


[Stage Direction]
Clause agreed to.
Clauses 4 to 6 inclusive agreed to.
Title agreed to.
Bill reported.
Mr. Speaker:: Shall this bill, by leave, be read a third time now?


Stanley Howard Knowles: By leave.


Mr. Speaker:: Agreed.
Bill read the third time and passed.



BUSINESS OF THE HOUSE

[Stage Direction]
niSCUSSION AS TO ORDER OF PRECEDENCE
On the order:
Second reading of Bill No. 393, an act to amend the Atomic Energy Control Act.-The Minister of Defence Production.
Walter Edward Harris: Mr. Speaker, if you do not mind would you call first the order of business having to do with the War Service Grants Act?
On the order:
House in committee of the whole on Bill No. 82, an act to amend the War Service Grants Act.


Mr. Speaker:: Is it agreed that I do now
leave the chair for the house to resolve itself into committee of the whole on this bill?


Mr. Lennard:: Mr. Speaker, is it wise to have this matter discussed now while most of those interested are sitting in the veterans affairs committee?


Colin Emerson Bennett: Mr. Speaker, I do not think there is anything contentious about this act. It was passed with one amendment unanimously in the veterans affairs committee.


Frank Exton Lennard: Very well.


Mr. Speaker:: Is it agreed that I do now leave the chair-


James MacKerras Macdonnell: Surely, Mr. Speaker, the point raised by the hon. member for Wentworth is a valid one. It is all very well to say that it is not a contentious matter. That may be our view. But surely the people who have devoted the most attention to it have the right to be here.


Walter Edward Harris: Mr. Speaker, I believe that what the parliamentary assistant has said is in accordance with the facts and that the bill was approved in the committee unanimously. But at the same time, in order to accommodate hon. members, we will go on with the bill with regard to Atomic Energy Control.



ATOMIC ENERGY CONTROL ACT


Clarence Decatur Howe: the second reading of Bill No. 393, to amend the Atomic Energy Control Act.

He said: Mr. Speaker, the purpose of the proposed amendments to the Atomic Energy Control Act of 1946 is to establish administrative machinery and procedures which will better meet the requirements of the present and future program in atomic energy. The program has passed through two stages, and is now entering upon a third.
The first stage began in 1942 with Canada's decision to join with the governments of the United States and the United Kingdom in the effort to produce an atomic bomb. Canada's contribution was twofold. First, we supplied uranium-the raw material of the bomb-from the deposits at Port Radium in the Northwest Territories. This mining operation, initially under the direction of a private company, was transferred to a crown company, Eldorado Mining and Refining Limited, in January, 1944. Second, we made available the facilities of the national research council, and in particular the services of a group of brilliant scientists on its staff. These men in association with British and European scientists undertook to find a method of producing plutonium, the fissionable material which is one of the prime ingredients of the atomic bomb. As a result of this research it became possible to design and construct a reactor at Chalk River using heavy water as the moderator and natural uranium as the fuel. This project was under the direction of the national research council. While the reactor was primarily a research tool, much of the information obtained in its design and operation has been of great value to the military program. This first stage in the atomic energy program came to a close with the end of the war.
There was a period between the end of the war and late 1946 when some hope existed that a way might be found of eliminating, or at least controlling, the use of atomic weapons. In this connection the house will recall Canada's participation in the international conference on atomic energy which was held under the auspices of the United Nations. It was not thought desirable during the period of these discussions that any change should be made in the Canadian program in either the research or the raw materials fields. When it became apparent that an international agreement could not be reached consideration had to be given to the future direction of the two phases of the Canadian program, and to the best method of administering that program. This was the beginning of the second stage.
In the raw materials field the way was clear. It was decided that Canada should
Atomic Energy Control Act continue to supply uranium for the production of atomic bombs from existing sources of supply and, moreover, that we should seek to increase the sources of supply. Similar policies were adopted by the governments of the United States and the United Kingdom. This involved, in the first instance, an expansion of the production capacity at the Port Radium mine, and an expansion of Eldorado's exploration activity. It also involved the participation of the prospector and the mining industry. The house will recall that in March, 1948 I announced that a price schedule had been established for uranium ores and concentrates which was guaranteed until March 31, 1955. I also announced that Eldorado had been designated as the procurement agent for all uranium ores and concentrates produced in Canada. I have made further announcements from time to time relating to changes in the price schedule and the duration of the guarantee. The current price schedule has been guaranteed until March 31, 1962.
In considering the post-war objectives of the Chalk River project the government was influenced largely by the fact that the NRX reactor had proved to be the most efficient reactor of its type in the world and as such offered a unique opportunity for exploring the peacetime application of atomic energy, and especially its use as an energy source for electric power. It was decided, therefore, that the program of research and development at Chalk River should be continued and expanded. In 1951 the decision was made to construct a second reactor which would have a dual purpose-production and research. This new reactor, called the NRU reactor, is of a similar type to the NRX reactor but much more advanced in design and of much higher power.
These decisions affecting the post-war program in atomic energy were reflected in the Atomic Energy Control Act of 1946. The intent and purpose of the act were set out in its preamble as follows:
It is essential in the national interest to make provision for the control and supervision of the development, application and use of atomic energy, and to enable Canada to participate effectively in measures of international control of atomic energy which may hereafter be agreed upon . . .
The act provided for the establishment of an atomic energy control board which would be responsible for the over-all direction of the program and for administering the various types of security regulation which were required in the program. However, it seemed unwise to disturb the existing arrangement whereby Eldorado had direct responsibility for the raw materials program.

Atomic Energy Control Act and the national research council had direct responsibility for the research and development program. There was no great difficulty in the case of Eldorado, since its board of directors had reported to a minister during the war years. This arrangement was continued in the post-war years. The president of Eldorado was appointed a member of the atomic energy control board, in order that the board might be fully informed as to developments in the raw materials field. In practice, therefore, the authority of the atomic energy control board in relation to the raw materials program has been confined largely to the administering of security regulations affecting the disclosure of information.
The position with respect to the Chalk River project was somewhat more complicated. It seemed desirable that the atomic energy control board should deal with questions of policy, but at the same time that operating responsibility should be retained by the national research council. The atomic energy control board entered into an agreement with the national research council whereby it delegated to the national research council responsibility for operating the Chalk River project subject to direction by the board in matters of policy including the approval of the operating and research budgets. The president of the national research council was appointed to the atomic energy control board in 1946, and became its president in 1948. This arrangement prevailed until April 1, 1952, when the Chalk River project was incorporated. The new company, Atomic Energy of Canada Limited, was incorporated under the powers of the atomic energy control board, and its board of directors reported to the atomic energy control board. The company was to have operating responsibility for the Chalk River project, but the atomic energy control board was to retain responsibility at the policy level and for the approval of operating and research budgets. The president of the atomic energy control board was appointed as president of the new company.
When these several and somewhat complicated administrative arrangements were made, it was recognized that changes might be necessary as the program developed. The administrative organization of the two phases of the program, which I have just described, was an attempt to provide adequate but flexible control during the period of transition from the wartime program with its shortterm objectives to the peacetime program with its long-term objectives.
We are now passing from this transitional or second stage of the program to a third stage. The present amendments to the Atomic Energy Control Act are intended to provide

for administrative machinery which will meet the demands of this third stage of the program.
Before I discuss the proposed amendments I should like to comment briefly on the significant developments in the program with particular reference to its long-term objectives.
The work at Chalk River has reached the point where we now believe that it should be possible to produce atomic power within a range of cost which will be economic. To be more specific, we now see the possibility of producing atomic power at a cost which will be comparable to the cost of power generated from a steam plant using coal at $8 per ton. This has important implications for both the raw materials and the research programs, implications which suggest that the time has come when the two programs should be more closely integrated.
I have mentioned previously that the two reactors at Chalk River were designed to use heavy water as the moderator and natural uranium as the fuel. The atomic power feasibility study which is now being carried out at Chalk River in co-operation with the Hydro Electric Power Commission of Ontario is aimed at the development of an outline specification for a power reactor which will also use natural uranium as the fuel. It will be obvious, therefore, that the availability of a continuing supply of uranium is an important factor in the feasibility study and the developments which must follow from that study. Fortunately, our efforts to increase the production of uranium have been successful. Eldorado has expanded its production at Port Radium and last June brought into production a new mine at Beaverlodge, Saskatchewan. At the present time the production of uranium is three times as great as it was at the end of the war. The prospector and the mining industry are also making a major contribution to the raw materials program. A discovery in the Beaverlodge area by a private company late in 1952 gives every promise of being a large producer. It is expected that this property will be in production late in 1955. Other discoveries have been made in the Blind River and Haliburton areas of Ontario, several of which will also be producers. We can now estimate that the production of uranium in 1956 will be roughly eight times as grea as it was at the close of the war. While, ai I have indicated, the immediate objective of the raw materials program is to produce uranium for military use, it is reasonable to expect that in striving for this objective we will obtain a knowledge of our uranium resources which would not otherwise be

available. The program, therefore, has a long-term as well as a short-term objective. Since it is not possible at this time to estimate the amount of uranium which will be needed for a large-scale civilian application of atomic energy we are fortunate in having a guaranteed market which will provide a stimulus to production pending the day when we will be able to establish the level of civilian demand.
The importance of atomic fuel as a source of power will depend on the cost of producing it translated into cost per kilowatt hour of electric energy generated. In one sense the problem might be said to be economic rather than technical, since it has now been demonstrated that it is possible to design and operate a reactor which produces heat. In fact the technical and economic factors are inseparable. All of the reactors now in existence were costly to build and are expensive to operate. Most of them were designed to produce plutonium for the military program. If there were to be a continuing market for plutonium it would be possible to treat the heat as a by-product and thus produce low-cost power. There are two objections to this approach. First, a reactor designed primarily for the production of plutonium would not have the most desirable characteristics as a producer of heat for the generation of power. Second, it would be unwise to assume that the military demand for plutonium will continue at the present level for an indefinite period. A cut-back in demand, or a cessation of demand, would throw the full cost of the reactor and its operation against the production of heat, with a resulting cost per kilowatt hour which would be prohibitive. Therefore, we must find a way of designing a reactor which can be made self-sustaining-economically speaking-as a producer of heat. This is the main objective of the research program at Chalk River. It is a job which requires great genius in fundamental research, and great skill in design and engineering. The organization of the Chalk River project reflects this twofold need. It consists of two divisions: a division of research and development, and a division of industrial operations. The first is engaged in fundamental and applied research in nuclear physics, chemistry and allied fields. The second operates the reactors and the other services associated with them. The activities of the two divisions are very closely related and highly interdependent.
Measured strictly in terms of dollars a research program of this breadth and magnitude must be costly. In assessing the need for the large expenditure required we must
Atomic Energy Control Act keep in mind the ultimate benefits, which it will bring to the Canadian economy.
Already we are beginning to reap some of those benefits. Radioisotopes produced in the NRX reactor for use in medical treatment and research, and industrial processes, are now available and their number and quantity will increase. The commercial products division of Atomic Energy of Canada Limited is responsible for marketing these isotopes and for developing new uses for them. This division will shortly move to a new building in Ottawa which is fully equipped with all the facilities needed for carrying out its program. It has been the policy to work closely with the medical profession and industry in the development of uses for radioisotopes. This policy will be continued and expanded.
The second benefit we hope to derive from the Chalk River project is atomic power. We can only assess the importance of this contribution in terms of the probable future power demand and the resources which will be available to meet that demand. If the current rate of annual increase in power demand, which is approximately 6 per cent, continues we shall require something like an installed capacity of 40,000,000 kilowatts by 1979, as compared with the present installed capacity of 10,000,000 kilowatts. Our total estimated hydro potential of 50,000,000 kilowatts, of which we are now using approximately 20 per cent, will certainly not all be available for use in existing industrial areas since many of the hydro sites are located in remote districts. It would appear that of the total estimated hydro potential of 50,000,000 kilowatts, some 30,000,000 kilowatts might be in use by 1979, leaving a deficiency of 10,000,000 kilowatts to be met from thermal sources. If conventional fuelburning plants were used to supply this deficiency these plants would have to provide generating capacity equivalent to 100 per cent of our present generating capacity. This would mean an eightfold increase in our present steam plant capacity.
Any assessment of the cost of existing thermal sources in terms of the Canadian power picture as a whole is complicated by the fact that in some regions coal or oil, or natural gas, or all three, are available in substantial quantities and at low costs; whereas in other regions there are no indigenous thermal fuels. In the latter areas thermal fuels must be imported or brought from great distances within Canada. It is in these areas that atomic power should fill the gap, and it so happens that certain of them have experienced the largest increase in power requirements, a condition which is likely to continue.
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Atomic Energy Control Act
While the figures I have used in this rough forecast of power requirements may be subject to future correction, the conclusion is inescapable that as our economy expands we must expect a continuing rise in power consumption. The availability of power will be a condition of our growth in the future as it has been a condition of our growth in the past, and it is within this context that the expenditures on the development of atomic power must be considered.
It is evident that if atomic energy is to make a major contribution to our power resources we must be self-sufficient at each stage in the process. We do not now enjoy this self-sufficiency. Eldorado's final product is an uranium oxide; whereas the fuel needed for the Chalk River reactors is uranium metal. At the present time the conversion of oxide to metal is carried out in the United States. That this should be so is simply a matter of economics. The volume of raw material production in Canada until recently did not warrant the production of uranium metal. With the increased production to which I have referred we think it may be possible to produce uranium metal in Canada at a satisfactory cost. As a first step in this direction Eldorado is installing a new and improved process in the Port Hope refinery. With this process it will be possible to refine a product which can be entered to a metal processing circuit without further purification. The alterations to the plant and the equipment required will cost $2,500,000. The work will begin immediately. The research and development division of Eldorado is also studying the technique of uranium metal production.
The Canadian program of atomic power development has not had the same publicity as similar programs in the United Kingdom and the United States. It should not be assumed from this that we are lagging behind in this new and important field. The quality of our effort is recognized by our British and American associates as being equal to that in the United Kingdom and in the United States. Possibly we have been overly cautious in our publicity policy. This seemed the better course until such time as the results of the research and development program could be expressed in reasonable concrete terms. We believe that time has now come. As a first step towards providing more information on the program, a power symposium was held at Chalk River last September. Certain of the papers presented at the symposium have now been published. As a second step it has been decided to set up an advisory committee on atomic power consisting of the senior executive officers of all


the power commissions and power corporations in Canada. The purpose of this committee is to inform those responsible for producing power in Canada of the nature and scope of the program at Chalk River. We would also hope that the committee would assist in evaluating the possible economic importance of atomic power in the various regions of the country.
Under the provisions of the present Atomic Energy Control Act, the atomic energy control board has two main functions. First, it has the power, either directly or through other agencies reporting to it, to conduct research and production operations in connection with atomic energy. Second, the board has the power to make regulations. The proposed amendments to the act provide that the first of these responsibilities shall be transferred to the minister who is the chairman of the committee of the privy council on scientific and industrial research. The minister may cause activities in the research and production field to be carried out by a company or companies.
It is proposed that Eldorado Mining and Refining Limited will continue to have responsibility for production and procurement in the raw materials field, and that Atomic Energy of Canada Limited will continue to have responsibility for the operation of the Chalk River project. However, the name of the latter company will be changed to Nuclear Research Limited, a name more properly descriptive of the activities at Chalk River.
In order that the program in the two fields may be more closely integrated it is proposed to incorporate a holding company which will hold the stock of Eldorado Mining and Refining Limited, and Nuclear Research Limited. This company will be called Atomic Energy of Canada Limited. The company will be responsible for the over-all direction of the program including the approval of operating and capital budgets. It will report to a minister-the chairman of the committee of the privy council on scientific and industrial research-who will hold the stock in trust for Her Majesty.
By this means the raw materials and research programs will be under the general direction of a single agency as is now the case in the United States and in the United Kingdom.
The atomic energy control board will retain its present responsibility for establishing and administering regulations subject to the approval of the governor in council. The board will also continue to report to the minister who is the chairman of the committee of

the privy council on scientific and industrial research. I hope that the day is not too far distant when many of the regulations now in effect can be removed. The existing regulations affecting the disclosure of information on atomic energy are similar to those now in effect in the United States and in the United Kingdom. The declassification of information in the three countries is dealt with by a committee of which the three countries are the members. This committee has already recommended the declassification of much technical information. So long as the need for regulation exists, it is believed that the atomic energy control board as presently constituted is the best agency for dealing with the problem.


Mr. J. A. MacLean (Queens):: Mr. Speaker, I must admit that as time has gone by in recent months I have become more and more anxious about Canada's position, as related to the United States and the United Kingdom, in the field of atomic research and development. This anxiety grew, I suppose, from reading the numerous and considerable reports of various achievements in both the United States and the United Kingdom in this field. After reading recent debates in the British House of Commons on the same subject one could not help wondering if Canada was maintaining its position relative to these other countries in this very important and highly competitive field, and if we were holding the very high position we had established during the last war.
I am pleased now to have some of this anxiety relieved by the statement of the minister. I must admit I was not counting on the characteristic he has just demonstrated, that of having hidden his light under a bushel for quite some time. However, I think the time has now come when as much publicity as possible should be given to the potentialities and possibilities of this new and great discovery, the use of atomic power for industrial purposes.
In that connection I should like to quote briefly from a news report resulting from an interview with Dr. C. J. Mackenzie, chairman of the atomic energy control board, and former president of the national research council who, in an interview with the Southam news services, made the following interesting statement:
1.	The time has now been reached when there is real danger of the people of the western world slowing down atomic research by the enforcement of too-rigid security measures.
2.	From here on, the less secrecy and the more people involved, the faster Canada and the world at large will be able to derive peacetime benefits from the atom.
Atomic Energy Control Act
I think those are very wise observations, because if we shut ourselves up in an airtight chamber of security we may not realize the progress which is being made in other parts of the world, and we may fall into the error of tending to rest on our laurels or become complacent.
It is not my intention, even if it were in order, to attempt to review the whole field *-and a very important field it is-of the activities of Canada in this matter of atomic research. However, there is one point upon which I should like to base my remarks for the next few minutes. I refer of course to the use of atomic energy for industrial purposes. I am delighted that the minister has now stated that we in Canada have reached a third stage of development in the atomic field, and that already a power committee has been set up for one purpose, among others, of making known to the main organizations in this country concerned with producing cheap electric power for industrial and civilian purposes a knowledge of the progress which has been made in relation to the use of atomic energy for those purposes.
Apparently in the United States for quite some time these possibilities have been vividly recognized, and the possibilities of the use of atomic power for industrial purposes has been greatly advanced by the high priority research done there in connection with the atomic powering of submarines. Recently in the United States they have launched a submarine which will have the capacity of sailing completely around the world without refuelling. Although I have no definite knowledge on this point, I should imagine that the power plant in a submarine of that type could be easily converted for civilian uses, provided it is economically feasible to do so.
Recently I read a news report setting out the opinion of an American expert in the power field. While, admittedly, this is only an opinion, it would be interesting to see what he said. This was his view:
Power plants using atomic energy may be competing favourably in the next ten years with those burning oil, a widely known petroleum executive predicts.
I do not want to take up the time of the house by making extensive quotations to illustrate that point; but I think it would be of interest to bring to the attention of the house the progress being made in the United Kingdom in the field of atomic power as applied to industrial uses. Sir David Eccles, speaking in the House of Commons in the United Kingdom on March 1, had this to say:
We are looking ahead beyond the race to pile up atomic weapons. Of course, at the moment the

Atomic Energy Control Act production of weapons must remain the major task of the program, but such progress has been made on the civilian side, here and abroad-and no one wants Britain to fail behind-that no time should now be lost in preparing for the day when the civilian uses of atomic energy are as important to our economy as the weapons now are to our defence.
And he goes on to say further:
Now a change is taking place, and there is no need to develop the peaceful uses of fissile materials in the dark. Parliament and industry ought now to know what is going on.
I hope that that is an opinion which is shared by the minister, because I feel it is important that parliament and the country generally should be kept as well posted as possible in the possibilities of the uses of atomic energy for peaceful purposes in the years ahead. Because I believe if we are well posted it will prevent, on the one hand, a supposition that atomic power perhaps will make obsolete all other methods of producing power. On the other hand, it would ensure against the danger of the opportunities in the atomic field being passed by, by those who are concerned with the production of atomic power and in the use of atomic radioactive products in many fields of research and in other ways as well. Sir David Eccles went on to say further:
The government believe that there is plenty of room for international collaboration on the peaceful development of atomic energy. Here is the seed of great things to come. A generation from now, we may hope, there will be power stations all over the world operated by men trained in Britain.
In connection with international co-operation in this field, it is interesting to note that the United Kingdom is now a member of an organization which has been set up in Europe, called the European organization for nuclear research, the purpose of which is to co-operate in basic research into the question of atomic power.
I was glad to hear the minister say that there is close continuing co-operation between Canada, the United States and Great Britain in this field; but I would not like to think that the possibilities of even wider co-operation on an international scale might be forgotten. There is another quotation from the same speech in the British House of Commons which I found enlightening, in which Sir David Eccles recited briefly the development which had been made with regard to research into the application of atomic energy for the production of electric power. He said:
It looks as though the most important use will be for the generation of electricity, and the house may wish to know how we see the electricity program taking shape. At present, we are building the first atomic power station in this country at Calder Hall, in Cumberland. When this prototype


has demonstrated the soundness of the design, the electricity authorities-the B.E.A. and the Scottish electricity boards-will be free to place orders for other reactors of this or improved types.
I am glad the minister has indicated that something parallel to this is anticipated in this country and will be, I hope, carried on in the near future, because certain areas of this country, especially the maritime provinces, which have been economically depressed for some time, might be put in a position to compete more favourably with the more highly industrialized areas of this country if it were possible to supply them with cheap electric power. The key to that problem might eventually, in the relatively near future, be found in the use of atomic energy for the production of power, because in the cost of this fuel transportation is not a problem. It would be possible to locate generators in areas where other types of fuel are not readily available in the immediate vicinity. Sir David Eccles went on to say with regard to another program:
But I now have to tell the house that our people are ready to go ahead with the far more powerful and dramatic project. It has been decided to build a big, fast reactor, of the "breeder" type, to which the minister of supply referred in the house on 26th January and 16th November of last year. This plant will be constructed at Dounreay, in Caithness. An enterprise of this kind requires a very large site-at least some hundreds of acres-in open country, but it must be within reach of a labour supply and the amenities of community life. It must be on the coast, both for the discharge of the effluent and to provide sea water for cooling. It also requires a very large supply of fresh water.
Dounreay meets all these requirements better than any other site. It has the further advantage that development there should make a very big contribution to the revival of the highlands.
Therefore in the United Kingdom they are already anticipating the taking of steps to correct the very conditions that exist not only in the highlands of Scotland but in certain areas of this country. I refer to the maritime provinces, and it is particularly applicable to the province from which I come.
I refer of course to the importance of international co-operation in the field of atomic research and in the sharing of knowledge in this field. The minister may say-and perhaps rightly so-that is more a question for the Secretary of State for External Affairs (Mr. Pearson); but nevertheless I think a great obligation rests with the Minister of Defence Production (Mr. Howe) to see that every facility is made available on an international scale which will forward the interests of the peaceful use of atomic energy without endangering in any way our defence program in that connection.
I was interested to read in the debates of the British House of Commons a paragraph

of a speech made by Mr. Eden in a debate on foreign affairs in connection with this very problem. This is what he said:
So far as Her Majesty's government are concerned-and who can doubt that it is the position of the Canadian government, too?-we shall do everything-
I hope Mr. Eden is right in having no doubt that it is also the position of the Canadian government. I continue:
-we shall do everything that lies in our power by contribution, direct or indirect, to bring about the success of these discussions on atomic issues. I can tell the house that we felt-I know that I did and I think my right hon. friend did also-the impact of this topic so tremendous on the whole of our thought and discussion that some of the things we have discussed-foreign office problems of detail -important though they are, seemed puny pawns in comparison with the great danger that these master chessmen present to the future of the world. I wanted to say that to the right hon. gentleman because I think it is our biggest issue in international relations.
Mr. Eden was referring to the possibility of international co-operation in the field of atomic research. I cannot express how strongly I feel, Mr. Speaker, that man's discovery of the release of atomic energy is by far the greatest step in a scientific way that civilization has made in this century. It is opening up a new era, and I hope that the government has a lively awareness of the implication which atomic energy holds both from the point of view of destruction and from the point of view of progress which can be achieved from the wise and co-operative use of atomic power in industry and in other ways. These possibilities are magnificently expressed by Sir Winston Churchill, in a speech he made in the British House of Commons not so long ago. If the house will bear with me I would like to quote from his speech because he expresses his views on the situation much better than I could. He states:
There is no doubt that if the human race are to have their dearest wish and be free from the dread of mass destruction, they could have, as an alternative, what many of them might prefer, namely, the swiftest expansion of material well-being that has ever been within their reach, or even within their dream.
By material well-being I mean not only abundance but a degree of leisure for the masses such as has never before been possible in our mortal struggle for life. These majestic possibilities ought to gleam, and be made to gleam, before the eyes of the toilers in every land, and they ought to inspire the actions of all who bear responsibility for their guidance. We. and all nations, stand, at this hour in human history, before the portals of supreme catastrophe and of measureless reward. My faith is that in God's mercy we shall choose aright.


Major James William Coldwell: Mr. Speaker, the minister this afternoon has introduced a bill which indicates that the government is proceeding toward what he termed
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Atomic Energy Control Act the third stage of Canada's atomic development. This follows quite logically from the steps that the house, the country, and the government have taken in the years which have passed.
This is an amendment to the Atomic Energy Control Act which I think is in line with the conception that the house had when the minister introduced the Atomic Energy Control Act several years ago, in I believe 1946. I think probably one of the most interesting parts of the statement he made this afternoon, outside the mechanics of the bill itself expanding the power and looking for methods of co-ordination and control in the development of this great source of energy, was the fact that already at the Chalk River plant atomic power production is in sight, and that it is in sight in an economic way so that ere long we may have the production of atomic power produced electricity based in cost on the equivalent of coal at $8 per ton.
That, it seems to me, is a very interesting announcement, and marks a very important achievement for our plant at Chalk River. Having visited that plant on two or three occasions, and having met the people who are in charge of it I have been deeply impressed by the ability and by the energy of the scientific officers who are directing the work there, and also by the enthusiasm of those young scientists who are occupied in the actual development of the project itself.
I believe that had it not been for the fact that the world discovered atomic energy in the closing days of the war, or perhaps it is more accurate to say during the war, then greater progress might have been made in the industrial use of atomic power. Unfortunately, most nations who discovered or developed atomic energy have been engaged in a race to produce atomic weapons of war, while Canada has not been engaged directly in that race. Consequently, the efficiency of our reactors, and the fact that we have now proceeded along the way to the point where the economic production of atomic energy for electrical purposes is in sight, is, I think, something of which we may be proud, and for which we may feel grateful.
I share the view that what we are going to experience in the next few years is something in the way of a new and more profound industrial revolution. Those of us who know the history of our present industrial system know that when coking coal was discovered in the early part of the eighteenth century combined with the discovery of the power of steam a little later by Thomas Watt, the results brought about an industrial revolution, and then when we had electricity

Atomic Energy Control Act and the development of electric power from coal, and subsequently from hydroelectric power, we once again saw a great forward movement of industrial production and expansion.
I think we can all agree with the closing words by Sir Winston Churchill quoted by the hon. member for Queens (Mr. MacLean) to the effect that what mankind will see in the next generation will dwarf anything that mankind has seen in any similar generation in our history. That is, of course, if we are wise enough to maintain the peace of the world, and if we are wise enough to cooperate with other nations in exchanging scientific views and the results of research among the nations.
I think one of the limiting factors over the last few years has been the fact that there has not been this free exchange of scientific information. We have had only limited exchange between Britain, Canada and the United States owing to the fact that so much of the information was classified and on the secret list. Thus we have not been able to make the exchange of information that would perhaps have been beneficial to us all.
This possibility of an industrial revolution, not only in our own country and countries like ours, but all across the world is, I think, self-evident.
As was pointed out this afternoon, the transportation of fuel for atomic energy will not require the hundreds of railway cars such as are now required in the transportation of coal, because quite small quantities of fissionable material can be transported to the ends of the world. Not only will that perhaps help areas such as the maritime provinces in Canada, and I hope that will materialize, but it will assist in many of the backward areas of the world where there is no hydroelectric power, where there is perhaps no coal, or if there is coal it is not yet developed, or its development would be very costly in terms of money and labour. Also where there is no oil or natural gas atomic energy may solve the problem of producing power required for the industrialization of what we sometimes term the backward areas, or which might better be described as the undeveloped areas of the world.
This bill which is introduced today is one to which I think we should give our support. It does, of course, give the minister even wider powers than he has today, but in the development of atomic energy I think that is quite justified.
I also wish to say that I think the idea of now centralizing the various phases of


atomic power research and development is a wise one, and the setting up of a holding company to centralize this control is also wise. The bill gives the minister power to set up subsidiary organizations as they become necessary, and I am glad to note, and I think it is the only way that atomic energy development can be undertaken, that the original conception of carrying out at least the main features of atomic development are to be kept carefully under public control. That is the situation in Great Britain.
As we move along I am sure that we shall find it economic and useful to preserve the control within the orbit of government, responsible to this parliament or to the provincial legislatures. That does not mean to say that certain results of this control and of development should not be made available to industry. I am not arguing that way at all. What I am arguing is that atomic power, as such, is too important to be allowed to pass away from the complete control of the public authority. I have been here long enough to have heard even outstanding Conservatives as well as others express regret that in former days some of the great resources of the country were allowed to slip from the public domain.
This bill carries forward the original idea which the minister and the government presented to the house in 1946. I was impressed also by what the minister said about the possibility of the demand for electric energy in the next few years. I think he said that by 1979 we would require 40 million kilowatts. That is a tremendous increase in electric power. As he said, while we have in this country a potential of hydro power which is much greater than that, nevertheless much of that potential is so far removed from the centres of population that it may not be economically feasible or desirable to use that hydro power. Consequently, if we have this alternative source requiring less in the way of heavy equipment and certainly less in the way of mining coal and transporting coal from one part of the country to another, we have an asset that may be of inestimable benefit to this expanding country. I am saying now that I share the view of the minister-and I believe it is that of most members of the house-that this country is going to expand and is going to become greater than we have yet known it.
I sometimes look back over my nearly 45 years in the country, particularly in western Canada, and remember that some 30 years ago I shared the view of a good many people, on the prairies at least, who thought that we had passed through the pioneer stage of the country and were approaching, as it were, the zenith of our production. How wrong was

that opinion of 30 years ago! In the last 10 or 15 years we have been able to see that we are only on the verge of the great expansion this country will see, with its remarkable resources.
As the minister pointed out this afternoon we are extremely fortunate indeed to have discovered, in recent years, rich deposits of uranium. Apparently they are more widespread than we thought they were. In the northern parts of the prairie provinces, and particularly in my own province of Saskatchewan, valuable finds have been made and valuable developments are taking place in the production of this source of atomic power. But at Blind River and elsewhere in Ontario and probably, from some indications, in the maritime provinces other sources may be found.
Then of course we are not limited to uranium. We now know that there are other sources which may be available to us and which may be mined in this country in the future. While at the moment we know less about those sources than we know of uranium, nevertheless they may yet be sources of great power. This country is so highly mineralized and so richly endowed by Providence, or by nature, as you will, with these valuable minerals and resources that it seems to me that Canada has a great future based upon energy derived, in part at least, from atomic power. Consequently it is important that this house should support the minister and the government in legislation of this description which preserves to the people of Canada, through the parliamentary institution, the direction and control of what, it seems to me, is in the future to be the greatest source of power bringing about an industrial revolution which the mind of man yet perhaps can scarcely conceive.
My hon. friend spoke of the blessings that this development might bring to the peoples of the world-if we can maintain peace, if we can exchange information and so on-in terms of improved standards of living, in terms of increased production and in terms of leisure. After all, if we have the means for the right use of leisure and if we educate our people to the right use of leisure and provide them, of course, as I said a moment ago, with the means to enjoy that leisure-I refer to the cultural means-the world can look forward to something better and greater than it has ever known. I believe that atomic energy will be one of the vehicles to bring about a great industrial and social revolution. As we speak of the industrial revolution of 200 years ago, so shall future generations speak of the industrial revolution in the second half of the twentieth century. In
Atomic Energy Control Act the generations that come after us I believe the great source of power that we are now developing in Canada and that has been developed in other parts of the world-if, as I say, we can only come to international agreements on the use of these resources- will give to the world an opportunity for a better life than we can even faintly visualize at the present time.


Solon Earl Low: Mr. Speaker, I find myself in support of the principle of the bill. As I understand it, the minister is asking the house to grant the government the right to set up a holding company in order to co-ordinate the research and development aspects of nuclear energy in this holding company. I think that it is a natural and logical development for what the minister said was the third phase of this type of work into which we are now entering. I believe it is wise to have this holding company reporting directly to the minister so that he can keep his finger on it constantly, because we are indeed entering into an extremely important phase of this nuclear development and research.
I was keenly interested in what the minister had to say this afternoon. From his speech it is evident that Canada retains her preeminence in the field of atomic research and development. At various times and places I believe the feeling has been expressed that maybe we were losing out somewhat, but I doubt that greatly. I have been on that committee of the house which has concerned itself with investigating our Chalk River plant and all phases of atomic energy. At Chalk River I have seen a top-flight crew of scientists and technicians.
From my conversations with all those with whom I have had a chance to talk who know anything about this field-and I am not speaking now of the scientists and technicians at Chalk River but elsewhere-I think it is admitted by all who know anything about such things that in many aspects of the development of nuclear energy Canada leads both Britain and the United States. It is because I think that is so that I believe it is important, both from the point of view of the short and long-term objectives, that we keep ourselves right up in the front line. Because I believe that the very large expenditures spoken of by the minister this afternoon that we are now making and propose to make in the future are in my view completely justified. I think we should not hesitate to spend what money is required to keep Canada in the forefront of those nations that are developing nuclear energy.
The minister said this afternoon that we are not now self-sufficient in uranium metal.
5408	HOUSE OF
Atomic Energy Control Act We are producing very largely uranium oxide which has to be converted into metal in the United States. I was pleased to learn from his speech that Eldorado is now contemplating the development of a plant and up-to-date machinery, at Port Hope I believe, for the purpose of converting the oxide into the metal. I think that is also a very wise phase of our development. Certainly there is no good reason why we should send the oxide to the United States and then bring back the metal if in a competitive way and at prices that are reasonable we can convert the oxide into the metal.
I also found what the minister had to say about atomic power development in Canada intriguing. Like the hon. member for Queens (Mr. MacLean) and the leader of the C.C.F. party (Mr. Coldwell), if I let my imagination go I could have a great time conjuring up pictures of what can happen in the future. I suppose that even now we cannot imagine the things that can be developed as a consequence of the peacetime use of nuclear energy. We think that perhaps some of the things we imagine at the moment are wild pictures, but I doubt it. I think that the possibilities are almost unlimited, and as time goes on and if we can, as has already been so well said, put our whole energy into the peacetime development of nuclear energy and apply it to our own economy and the economies of the world through the free interchange of materials and information, mankind can be the great beneficiary of things of which he little dreams today.
But there is this to be said as we go along and develop our nuclear energy and apply it to the development of power and to production purposes in this and other countries in the world. It seems to me that concurrently we will have to develop to a finer point of efficiency our distribution machinery because it certainly is not beyond the bounds of possibility that with the application of nuclear power to industry we can multiply our total production several times while at the same time reducing the amount of human power and energy required. That in itself would be a great subject for some considerable research.
It seems to me we will have to do some work along the line of perfecting our distribution machinery because if we cannot distribute what we now produce how in the name of common sense can we hope to distribute the great bulk of materials we can produce through the use of nuclear energy and power? I was glad to hear the minister say that it was his intention to set up an advisory committee on atomic power. I
IMr. Low.]

think that opens up very interesting possibilities. Surely those men and agencies throughout the country concerned today with the production of power in any way will be able to contribute much to the discussions that will take place and will doubtless be of great help in developing the policy that will apply in the future to the kind of thing that we are now talking about, power development through the application of nuclear energy.
I think the minister's idea is good. I do not want to prolong the discussion today but I do want to say that I think the minister is perfectly justified in asking for this legislation. I do not think the bill gives him undue power at all. I believe it makes it possible for him to keep his hand a little more firmly on the development that will take place, and I am quite in agreement with those who say that we will have to retain control of both research and development in the field of nuclear energy for some time to come. But I believe at the same time that every effort should be made to achieve the widest possible exchange of information within the necessary restrictions that are placed upon us because of security reasons. I think I can go along with the minister and I certainly support the principle of the bill.


Mr. H. P. Cavers (Lincoln):: Mr. Speaker, the Atomic Energy Control Act will give the atomic energy control board the power to conduct research and production operations with respect to atomic energy in Canada. It has become apparent that it would be desirable to place these operations under a board under the jurisdiction of one minister, with the board reporting to the minister. I am sure that we know that rapid strides have taken place in the last decade in connection with atomic energy. We were not aware until the statement of the minister today of the great potential that exists for Canadians. Much credit for this great development must go to Canada's able scientists under the dynamic leadership of the Minister of Defence Production (Mr. Howe). However, I feel that the words "atomic energy" will, whenever used, conjure up in the minds of most Canadians a picture of horror, total destruction and the very annihilation of life itself.
We have heard of the lethal qualities of atomic energy, of the destructive capacity of the A-bomb and the even greater volume and gigantic destructive capacity of the H-bomb. I think members of the house and people generally have expressed concern with regard to this destructive quality. In the house on April 14 last hon. members expressed their opinions on this subject and questioned the

Secretary of State for External Affairs (Mr. Pearson). On that occasion he stated, as found at page 4073 of Hansard:
The United Nations general assembly, by resolution of November 28 last year, suggested that the disarmament commission-
On which Canada is represented.
-would seek by agreement to work out arrangements for the elimination of all major weapons adaptable to mass destruction, and for effective international control of atomic energy to ensure the prohibition of atomic weapons and the use of atomic energy for peaceful purposes only.
Subsequently, on April 29, 1954, the Minister of National Health and Welfare (Mr. Martin), acting as Secretary of State for External Affairs, reported to the house that a subcommittee of the United Nations on disarmament had been formed and that Canada's Secretary of State for External Affairs would be Canada's representative on that commission. This should result in substantial progress being made in the finding of a solution to the problem of the destructive features of atomic energy. All members of this House of Commons, and citizens of Canada, will utter a prayer and express a fervent hope that atomic energy may never be used anywhere in the world for these purposes. I fear that we have placed far too great an emphasis on the wartime efficiency of this great discovery, and we have not looked to the peacetime uses of atomic energy which could bring great advantages and benefits to our people.
Today we welcome the words of the Minister of Defence Production, who has dealt practically entirely in his remarks with what might be done in the way of peacetime advantages of this great force. If the use of atomic energy could be directed along proper channels, much happiness and consolement may come to suffering humans. I gather that great efficiency can be made available to the great industrial machines of this country and the other countries of the world.
As I am not a scientist I shall not attempt to explain the chemical reaction that goes on to produce the breaking up of nuclear fission. I shall content myself with bringing to the mind of the members, Mr. Speaker, the one principal objective of the peacetime use of atomic energy, namely the production and use of radioisotopes which have been referred to by the minister this afternoon for medical, industrial and research purposes. While the use of isotopes is international, it seems best to me to discuss particularly the Canadian program. We are all proud in Canada of the atomic reactor that has been developed at Chalk River, and also of the diligence which has been applied to the production and distribution of isotopes which come from it.
Atomic Energy Control Act
What is a radioisotope? It has been defined as an ordinary element which has had its atomic masses increased by the capture of the neutron.	Its chemical and physical
properties remain the same except it decays giving off radiation.
What are the practical applications of radioisotopes? In the field of chemistry, atomic energy has a wide use in tracer studies and the separation and discovery of various elements in chemical analysis. The isotope can be used in industrial development to study foundation movements and the porosity of soil. The amount of moisture in soil can be definitely ascertained by making assays to determine the content. With regard to soil movements and disturbing equilibrium conditions, economic savings are probably to be found in preventive measures. A good knowledge of soil moisture content can simplify construction and reduce maintenance costs.
Static electricity causes time loss and fire hazard in a number of industrial operations. The use of radioactive static eliminators, developed and sold by Atomic Energy of Canada Limited, has become widespread. In the case of the ordinary printing press, these static eliminators, I am told, by providing machine-jogging for presses rather than hand-jogging will save in one day $200 or $300 a bar, the cost of the static eliminator. The cost of the bar, therefore, would be saved in the first day's operation. It is desirable to eliminate static from rotogravure operations in printing, as there is a great fire hazard because sparks from static electricity may commence a fire in the inflammable ink. Today the newspapers of Canada are now employing these bars which are also sold by Atomic Energy of Canada Limited.
Another example of the use of the portable neutron is the logging of petroleum bore-holds. I am informed that they have been found very useful in western Canada. There is, of course, the possibility of atomic energy being used in the development of electricity, and that has been dealt with fully today by the minister. It seemed fantastic that within a period of three to five years we should be able to provide for industry in this country great sources of electric energy that are urgently needed. It was reported in the newspapers the other day that the chairman of the Ontario Hydro Electric Power Commission had stated that they would be able to develop power within the course of five years. From the lips of the minister today, it would seem that this is not beyond the realm of possibility.
5408	HOUSE OF
Atomic Energy Control Act
I come now to what seems to me to have been the greatest development in atomic energy, the discovery of a form of treatment for mankind. A notable milestone in Canada's cancer program was the development by Canadian government scientists of the cobalt 60 beam therapy unit. This apparatus, which provides a new and potent weapon to combat cancer, has received world-wide recognition and places Canada among the leaders in the light against cancer. The demand for these units, both here and abroad, is greater than can be met by the crown company, Atomic Energy of Canada Limited, which is still the world's only producer of this equipment.
It is just about three years ago since the first cancer patient underwent treatment of this kind in London's Victoria hospital. While the government scientists have been working on the development of cobalt 60 apparatus, similar equipment was developed by Dr. A. E. Johns independently in Saskatoon. Shortly after, government-built units were installed in Montreal, Toronto, Vancouver and Winnipeg. Only about a month or five weeks ago a new unit was installed in the city of Hamilton. The installation of Hamilton's unit brought to six the total number of units now in use in Canada. Canadian-built equipment has been provided for hospitals in the United States at New York, Chicago and Minneapolis. Atomic Energy of Canada Limited has provided units for hospitals in London, England, and for a medical centre in Italy. Plans are now being worked out, in co-operation with provincial authorities and professional men in the cancer field, for the development of a program which will provide these units across the country. I might say that the Department of National Health and Welfare has had a great part in the distribution of these units to the various medical centres throughout Canada. It is the hope of Atomic Energy of Canada Limited that cobalt 60 units may be provided in every province, and particularly in those centres which have university students and university laboratories. The university centres may expect great progress in this field.
At the present time, as we have been told by the minister, Atomic Energy of Canada Limited is building a new and more powerful reactor which will increase the supply of cobalt available for the purpose, and it is expected that by December of this year it will be possible to step up the production of therapy units to two each month.
In my own province of Ontario there are already three units in operation. I understand that two additional ones are to be


built in the new Ontario cancer institute in Toronto. It is hoped that additional units will be provided in Windsor, Ottawa, Kingston and Port Arthur.
Only a short time ago I read in the newspapers that Mr. J. W. McConnell, an outstanding and philanthropic citizen of Montreal, had contributed one of these therapy units to the Royal Victoria hospital in that city at a cost of $80,000. I am sure that for those who are interested in the welfare of mankind, and who have the means to do it, may well contribute to this most worth-while charity. I commend Mr. McConnell for his most humanitarian act.
Great care must be exercised in the transportation of the cobalt bomb. The bomb consists of a small box about an inch and a half square filled with small pellets of cobalt that have been rendered radioactive by a year's cooking in the atomic reactor at Chalk River. It is encased in a huge lead box, about four feet long and two feet in diameter, in order that no danger will come to those who come in contact with this substance.
The treatment room is square and roomy. The operator works from a room adjacent, and is enabled to see what is going on by looking through a glass. The bomb sits in the centre of the room and the technician operates the machine from a radio-like box. Cobalt 60 radiations do not offer a positive cure for all forms of cancer. However, it* rays do provide a means of treating certain cancerous conditions more effectively than with either radium or X-ray. Moreover the new cobalt 60 units provide cancer treatments at a much lesser cost than was previously possible.
One cobalt 60 beam therapy unit costs in the neighbourhood of $60,000 to $80,000. It produces more radiation, I am advised, than medically-used radium worth millions of dollars. In contrast to the X-ray, the cobalt unit can do the work of a two-million-volt X-ray machine, which would cost about four times as much to build.
The development of the cobalt 60 beam therapy unit has brought treatment within the reach of millions of people in our community to whom otherwise this treatment would be denied. The development of this unit by the Canadian government is an achievement not only by the administrators of the plan, and the scientists of Canada, but also by the people of this country.
Today it has been my purpose to bring to the attention of hon. members, and to Canadians generally, the peacetime uses of this great force. I suppose that in a humble way we are doing something in the house today to encourage further development, and to

see that it is kept within the control of responsible authorities, in order that, in the future, people may have the benefit of these discoveries. It is in this spirit that we are endeavouring to expand and to promote the activities of Atomic Energy of Canada Limited, under the direction of one of Canada's outstanding ministers, the Minister of Defence Production.


Mr. Howard C. Green (Vancouver- Quadra):: Mr. Speaker, the hon. member for Queens (Mr. MacLean) has spoken for the official opposition on this bill. He presented the case very well, and I have no intention of trying to paint the lily.
However, there are four or five questions I would ask the minister to answer when he closes the dabate. In the first place the bill does give him a great deal more power than he has under the present act. I would ask him to explain in somewhat more detail than he did when opening his remarks the difference between control in Canada and that in the United States and the United Kingdom.
When the Atomic Energy Control Act was passed in 1946 the position was that the minister of supply in the United Kingdom had very wide powers. However I believe those powers were reduced somewhat recently, and that the trend now in the United Kingdom is in the other direction. Then we know that from the beginning they have had in the United States an atomic energy commission with very wide powers. I would ask the minister to tell us whether any member of the cabinet in the United States has powers as extensive as those which will be in the hands of the minister in Canada who will be designated by our cabinet, once this bill becomes law.
My second question has to do with the position in which the elected representatives of the people will be placed. In the United States they have a committee composed of members of the Senate and of the House of Representatives. That committee was set up in the beginning. It sits each year and, of course, has very wide powers.
In Canada we have followed the system of having a special parliamentary committee, and such a committee has been appointed twice in the last eight years. I would ask the minister to explain what he has in mind along that line for the future. Is it the intention that a special committee shall be appointed occasionally, or does he think Canada has now reached the stage in its atomic development where there should be a standing committee of the House of Commons? It may be that he has some other suggestion for keeping the membership of the house informed of
Atomic Energy Control Act what is going on in this new field. I realize of course that this is difficult. It is not as easy to work out a plan for keeping the house posted as one might think. However I would ask the minister to tell us what he has in mind in that connection.
In his remarks he said the government now plans to produce uranium metal in Canada. I think he said that we had been producing uranium oxide, but that has been sent to the United States for the final refining processes, and we bought back the finished metal uranium. Apparently the plan now is to instal such new equipment in the refinery at Port Hope that we shall be able to do the whole processing in Canada. I agree with that proposal. It is very much worth while, and I always like to see as much of this manufacturing as possible carried out in our own country. But last year the position with regard to the uranium ore was that there was not one privately-owned mine actually in production. There had been a great deal of prospecting and a great deal of publicity about uranium finds, but I was surprised to hear in the special committee on atomic energy that no privately-owned mine was actually in production at that time. The minister said today that there would be one mine producing in 1955.


Clarence Decatur Howe: There is one mine producing. Rix-Athabasca is producing at the present time.


Howard Charles Green: When the minister closes the debate I hope he will give us some further details about that situation. Is the reason that there are no more producing mines at the moment the fact that there is too tight a control on the uranium ore? Is that why we have only one producing mine at the present time, apart from the mines which are being operated by an agency of the government?
Then the minister mentioned that he has set up or is going to set up an advisory committee on power. That is a very wise move; but the last time we were informed on this question the advisers were nearly all from Ontario and Quebec. There was a very small representation of power men from the maritimes, and from the prairie provinces, but none at all from British Columbia. I do believe that this atomic energy power could be sent to the areas in Canada which are short of hydro power. That has been dealt with by two or three of the members who have spoken earlier in the debate. The hon. member for Queens mentioned the maritime provinces. Saskatchewan, too, is in great need of power.
There will have to be some definite policy adopted by the government to place this

Atomic Energy Control Act power in those areas in the country where there is a shortage. I do not believe that will ever result from an advisory committee on power which has a majority of men who are associated with the Ontario hydro or with the Quebec hydro or with the power corporations which are in the power business right here in central Canada. That is only natural, since more power is developed here and bigger corporations are here. I can quite understand that representatives from this part of the country should predominate on the advisory committee, but I am afraid that will not solve the problem of diversifying production in Canada. In some way we must adopt a policy of putting this atomic energy to use primarily in the maritimes and in Saskatchewan where they are short of hydro power. I would ask the minister to deal with that also when he closes the debate.
One other thing that should be explained is the effect on this program of international control of atomic energy. Perhaps the Secretary of State for External Affairs (Mr. Pearson) is the one who should answer that. I am not sure which minister should deal with it. Canada throughout as a nation has favoured international control of atomic weapons in any event, and quite properly so. That reflects the wishes of practically everybody in this country, and I hope it will not be long before some effective type of international control will be in effect. What will that do to our own plans here for the development and use of atomic energy? Will the international control affect only atomic weapons? Of course we are not producing them. Will it just affect the production of uranium? To what extent will it enter into the use of atomic energy for peacetime purposes? These Eire the five questions I would ask the minister to deal with when he closes the debate.
In conclusion I would say that we can all be justly very proud of Canada's position in the atomic energy field. I give great credit to the minister and to Dr. C. J. Mackenzie who has done a marvellous job in this fields and to Dr. Keys of Chalk River, and to the other men working with the ones I have mentioned who have done such a good job and have done it in such a wonderful spirit. I have never encountered a finer spirit, except perhaps in the Canadian corps in the first war, than I found up at Chalk River when we visited there on two occasions. These young Canadian scientists are doing a grand job. They are very proud of the work they Eire doing and they are rendering a wonderful service to Canada.
We are in this fortunate position because during the course of the war we became associated with the United States and the United Kingdom in the production of atomic


energy, and also of course because we have large supplies of uranium. I think Canada is the third largest producer. That was the position a year ago. Perhaps we have moved up to second in the intervening period. We got in on the ground floor in this particular field, and I am very glad to see that the minister's plans are to keep Canada in that favoured position.


Charles Edward Johnston: Before the bill receives second reading there are one or two words I wish to say about it. I was concerned when I heard the minister say that power could be produced from atomic sources which would equal the power produced from coal at about $8 a ton. I would not for a moment suggest that we should curtail the progress made in atomic energy, and particularly as it will apply to our industrial output. I think it is a sign of progress, just as much a sign of progress as is the development of our coal and gas; but it does raise a problem which is exceedingly important to this country, namely, what is going to happen to our coal mines? We have a great deal of trouble now in maintaining even a semblance of a coal industry. I read in the papers yesterday that the coal mines in Alberta are going to be reduced again this year by over 1,000 miners.
Two years ago they were reduced to the extent of about 2,000 miners. That is a considerable decrease in the number of miners who are employed in the coal mining industry. If we have the St. Lawrence project developed as expected we are going to produce another abundance of electric power for central Ontario which means that that too will enter into competition with coal from western Canada and eastern Canada as well. We have this new atomic energy program which is going to compete directly with coal as an energy producing product, and, indeed, the minister has even gone so far as to say that those in charge of these new atomic sources calculate that it will compete with the energy produced from coal at $8 a ton.
We out in western Canada certainly cannot place coal down here at $8 per ton, nor can they do so from Nova Scotia, or the provinces of Quebec or Ontario at that price. I am not suggesting to the government at this time what method they should adopt to keep the coal industry alive in view of the fact that we have this new form of energy entering into competition with the products of that industry, but it seems to me the government is going to have to assume the responsibility in some way or other for continuing to maintain our coal industry, at least at that level where we can call upon it in the event of an emergency.

The coal industry is rapidly dying out and if we were to call upon it immediately I am sure it could not even begin to meet the demand. In view of the development of atomic fuel it may be necessary to take some very drastic action in the form of subsidizing the coal industry, or we may have to curtail some of the imports of coal from the United States. It may well be that we will have to devise some method involving both these prospects. But it does seem to me, in view of the statement made by the Minister of Defence Production (Mr. Howe) in regard to the production of power from atomic energy, that something must be done to maintain the coal industry in both western and eastern Canada. This danger faces us now and unless something is done to help out that great industry we will not have it available when it may be required in order to defend our country.


Mr. Alistair Stewart (Winnipeg North):: Mr. Speaker, the hon. member for Bow River (Mr. Johnston) raised what could be a very serious problem and what in any event is a very impressive point. What he has done is to bring quite vividly before the attention of the house the cost of technological advance. I am sure there have been groups throughout all history who have been badly hurt by technological advance, but perhaps when we are in the stage of civilization such as we have reached today one can expect the government to come to the aid of those who have been so hurt.
But I do not think the hurt is going to be quite so immediate as perhaps the hon. member for Bow River fears. While it is possible that the pilot plant we have at Chalk River can produce electricity on the same basis as a company could produce with coal at $8 per ton, nevertheless I do not think this sort of production is going to be attained throughout Canada for some years to come.
I was interested in the suggestion by the hon. member for Vancouver-Quadra (Mr. Green) that there should be a committee of this house considering the matter of atomic energy. I think a committee of the house to examine the situation would be desirable; for example, it could look into the various aspects of the production and operation at Chalk River. However, I doubt very much whether it would be of great assistance apart from that.
In his speech the minister stated that perhaps the government had been overly cautious in publicity. That is the first time I have heard a cabinet minister get away with a statement like that for a long time without hoots of derision. It is true that the government has been overly cautious in publicity
Atomic Energy Control Act with the result that the people of Canada do not know what is going on. If I can speak for myself, I think members of parliament do not know what is going on. It is highly advisable that we should know and perhaps we can pick up an example from the United Kingdom.
In the United Kingdom they have a parliamentary and scientific committee. It is an entirely voluntary committee, not set up by the government; it is created by the members themselves. It is open to all members of parliament from all parties, from the House of Lords, and also to nominated representatives of certain scientific and technological organizations. This committee is its own master and it has nothing to do with the house except that its membership is restricted, as I have said, to members of the House of Commons and the House of Lords. The aims of the committee are these, and perhaps I should read them.
1.	To provide members of parliament with authoritative scientific information from time to time in connection with debates.
2.	To bring to the notice of members of parliament and government departments the results of scientific research and technical development which bear upon questions of current public interest.
3.	To arrange for suitable action through parliamentary channels whenever necessary to ensure that proper regard is had for the scientific point of view.
4.	To examine all legislation likely to affect the above and take such action as may be suitable.
5.	To watch the financing of scientific research.
6.	To provide its members and other approved subscribers with a regular summary of scientific matters dealt with in parliament.
I for one would find such a committee most useful but it is up to members of parliament themselves to set up such a committee, and perhaps those of us who are interested might get together next session with that end in view.
The sort of matters which were discussed before this committee were, for example, when Sir John Cockcroft came before it to describe the progress of atomic energy development in Great Britain, and when Professor Zuckerman described what science and technology can contribute towards overcoming shortages of essential raw materials. Then Dr. James Conant was invited to address the committee on Anglo-American scientific relations. These are all matters in which we ourselves are interested and I am convinced such a committee would be of great value to members of parliament, though we have to do that job ourselves rather than ask the government to do it for us.
There is one point I would like to make in connection with the minister's speech. I have never in my life accused the hon. gentleman of being a pessimist, for I think
5412	HOUSE OF
Atomic Energy Control Act he is the most outrageously optimistic member of the cabinet. Yet the figures of production of electricity he gave us, although startling, are pessimistic. He said that the current installed capacity of electric power is about ten million kilowatts, and 25 years from now it was estimated that it would be about 40 million kilowatts. Fantastic as that figure is I suggest it is quite conceivable that it could be much more. The right hon. gentleman said the rate of increase in consumption of power is about six per cent per annum. I think that rate of increase will increase still further as the years go by and within 25 years we are going to find ourselves, not only in Canada but in other countries, crying out loudly for power.
I am sure the minister knows as well as I do about the researches carried out into the matter of available materials for the creation of energy which exists in the world just now. An American has created a unit known as "Q". This emit is the equivalent of one billion billion British thermal units.
The figures are so vast that I can hardly conceive them, but he has made certain inquiries into the situation and his belief at the moment is that our present world consumption of energy is at the rate of some 20 Q's per century. By the time we come to the year 2,000 he estimates that consumption will be 100 Q's per century, or 100 billion billion b.t.u.'s.
Again, according to this gentleman, the known reserves of fossil energy-that is coal, oil, gas and so on-amount to about 80 Q's. Within a predictable number of years- within 75 years perhaps-we shall have used up all the known fossil reserves of energy in the world. It is therefore highly essential that we start now and examine much more carefully into the possible uses we can make of nuclear energy.
The minister said that it is expensive. I do not for a moment deny that it is. But I do not think we have been spending enough money on this aspect of governmental operations. For instance, two or three years ago there was an accident with regard to the NRX reactor and I believe- and here I am subject to correction-that the expense involved in bringing the NRX reactor back into working trim was taken out of the current budget. If that was so, did it not have an adverse effect upon the research which should have been carried on during these months and years? I think more money ought to be spent in this sort of basic research because it is vitally necessary.
I do not believe that nuclear power is going to be the last word in energy either,


because surely it is merely a transition from fossil energy to solar energy of some type or other. Very shortly our whole attention will have to be concentrated upon solar energy because there is only a known quantity of uranium in the world which can be built up, unless we manage to succeed in creating breeder plants, something which has been done in some measure in the United States but which has not yet been done in Canada, apparently, according to what the minister said. I would imagine the next step is to concentrate our efforts on creating a breeder plant. When we do that we shall then be in a position where we can approach those provinces which are especially in need of power and, with the help of the federal government and through public ownership in the provinces concerned, build breeder plants in those provinces in order to give them the power which they need.


Hon. L. B. Pearson (Secretary of State for External Affairs):: Mr. Speaker, I intervene in this discussion merely to deal with one question which has been raised by my friend the hon. member for Vancouver-Quadra (Mr. Green), namely what provision has been made for and what is being discussed in relation to international control of atomic energy.
As the house knows,-indeed it was referred to this afternoon-a proposal was made by President Eisenhower last December by which there would be international co-operation through the United Nations in the peaceful use of and the peaceful progress that might be achieved through atomic energy. That proposal, which visualized a central international agency to which the contributing countries would make available raw material, which might itself construct a reactor for scientific purposes or which might help other countries to build reactors, has been initially discussed between the United States and the U.S.S.R. on a bilateral basis. The other countries chiefly concerned, including Canada, have been informed of the results of those discussions.
At the Geneva conference there was a meeting between the secretary of state of the United States and the foreign minister of the U.S.S.R. at which the reply of the U.S.S.R. was given to the approach made by the United States on this subject. That reply was discouraging in so far as the participation of the Soviet union in this international endeavour was concerned. The question now for consideration is whether those countries who wish to participate in such an international enterprise should go ahead without the U.S.S.R.

This project, however, has nothing to do with the international control of atomic energy for destructive purposes. As my hon. friend knows and as the house knows, that subject has been under discussion for a good many years, beginning back in 1946 when the United States, which then had sole possession of the atomic bomb, made certain proposals which would have brought the use of atomic energy for destructive purposes under international control. Those proposals and others have been discussed from time to time at the United Nations but, as the house knows, no agreement has been possible in respect of them.
As I mentioned in the house last week, at the present time a subcommittee of the disarmament committee of the United Nations is pursuing these discussions in London in private and in restricted session, in the hope that in that way

in view of the developments that have occurred since we first began to consult on this problem; tragic developments indeed if they are used for wrong purposes-this might make possible the kind of progress that we had not yet achieved. As I indicated last week, these discussions are still going on.
I noticed in the press the other day one optimistic statement as to the progress that has been made in London. From my contact with these discussions-and I attended some of the meetings-and from the reports which I have since received, I have not been able to arrive at any such optimistic conclusion. The difficulties have been clarified, but up to the present time at least the gap between the two positions with respect to the international control of atomic energy has not been closed.
All I can say is that while one cannot, I think, be too optimistic, the talks are still going on. If these talks were successful and if an international agreement for the control of atomic energy could be concluded-and we must all hope that it can one day be concluded-any agreement that we have been considering up to the present would not, I think-unless it included provision for international ownership of materials and processes -interfere with national development in this field for constructive purposes. It would merely deal with the use of atomic energy for destructive purposes. But even if you did not have international ownership, such control would require some form of international inspection and control inside national territory in order to make sure that atomic energy was being used for constructive purposes only and that the provisions of the agreement were being carried out. But that kind of inspection and control, and if international
Atomic Energy Control Act ownership were not included in any agreement which we might make, should not interfere with national progress in this field.


The Acting Speaker (Mr. Applewhaite):: the Minister of Trade and Commerce speaks now, he will close the debate.
Right Hon. C. D. Hov/e (Minister of Trade and Commerce): Mr. Speaker, I should like to thank those who have taken part in this debate for their constructive approach to the subject that we have been discussing. It is a subject in which we all take great interest and is one that it is hard to break down into language that is familiar to those who have not been in close contact with the work on atomic energy.
The hon. member for Vancouver-Quadra (Mr. Green) has raised a few points that I shall try to cover. In the first place I may say that there is no doubt that the amendments we are proposing to the Atomic Energy Control Act diminish the powers and authority of the control board. That is an evolution that I think is logical. Back in 1946 when we passed the act now under discussion control loomed large. We were quite conscious of the fact that plutonium is the substance used for peaceful applications of atomic energy, but it is also the substance used for the manufacture of A-bombs.
At that time knowledge of the production of plutonium was believed to be held in the United States, the United Kingdom and Canada, so that control of information, and particularly control of the raw materials from which plutonium is made, seemed very important. At that time it seemed wise to put the experimental work on atomic energy and the production of plutonium at Chalk River under the atomic energy control board. Therefore when we incorporated the operation at Chalk River we placed the stock of the corporation with the atomic energy control board.
The present situation seems to require a different form of organization, a form of organization where all the atomic energy operations, apart from the control functions, are concentrated in a single corporate body. We are still retaining the control functions, and only the control functions, in the atomic energy control board, and it is my thought that in a year or two or three those control functions may no longer be necessary. The basic information about atomic energy is widely disseminated now. Controls that were important three or four years ago are not so important today. However, there are certain controls over the distribution of raw materials and over certain information associated with the production of atomic energy which have not been declassified as yet. Therefore the
5414	HOUSE OF
Atomic Energy Control Act control functions remain with the control board but the other operations are being assigned to a corporation which will be known as Atomic Energy of Canada Limited.
Under Atomic Energy of Canada Limited there will be two divisions, one the raw materials division, Eldorado Mining and Refining Limited. Its functions will not be changed, and the only change in the functions of the productive and experimental side will be that the name will be changed to-


Howard Charles Green: Nuclear Research Limited.


Clarence Decatur Howe: -Nuclear Research Limited. In the proposed form of organization we are following exactly the pattern of organization in the United States. In the United States all functions associated with atomic energy are centred in the atomic energy commission which is appointed by the President and reports directly to the President. In the United Kingdom there has been a change in the same direction. Recently a corporation has been formed-I am not sure of the name-which will assume full responsibility for experimental and productive functions in the field of atomic energy and will report to a member of the government. I think it will be the president of the privy council of the United Kingdom.
Therefore we are adopting a form which has been found satisfactory to both the United States and Britain, and I think it will be a more workable form than the one we have used over the past seven or eight years. My hon. friend asked whether any United States cabinet minister has powers as extensive as those contemplated under this bill. The exact situation is that the functions have been and are being carried out by the President of the United States without the intervention of a cabinet minister. It is difficult to compare the situation in the United States with the situation in Canada due to the completely different forms of government. In the United States the legislative functions are completely separate from the executive functions. While the President has direct control of the field of atomic energy, he depends on congress to pass the legislation required in that field, and the legislators in their wisdom have established a commission on atomic energy which used to be headed by Senator McMahon. I am not sure who is the chairman now. I think it is Senator Hickenlooper.
That committee reviews the work on atomic energy from time to time and amends the existing legislation as it may decide after receiving the recommendations of the President. I think my hon. friend will know that I have never resisted any desire of the House of Commons to have a committee


on atomic energy. My hon. friend and I discussed earlier this session whether we should have a committee this year. I pointed out that the principal reactor at Chalk River was under repair-I am happy to say it is now back in operation-and I suggested that perhaps we might defer the committee until the next session of parliament. If a number of members indicate sufficient interest in the subject to warrant a committee on atomic energy or on research in general, as the committee may decide, at the next session, I would be very happy to agree. I think the committees have been useful in the past, and I think next year will be a very interesting one and one that will warrant the committee's study.
Then the hon. member asked why there are not more producing mines. Mining is a field that requires time for development. The only reason I know that there are not more producing mines is that development has not proceeded in any mine, except Rix-Athabasca, to the point where commercial deliveries can be made. Rix-Athabasca happens to be adjacent to the Eldorado mine in the Yellowknife field.


Howard Charles Green: Is that Yellowknife?


Clarence Decatur Howe: The Beaverlodge field. It happens to be adjacent to the Eldorado mine at Beaverlodge and is delivering concentrates to the Eldorado mill there. There are others in the same area that in time can do likewise. But if a mine must build its own mill it is confronted with a very expensive and complicated problem of construction. The time element is the only delaying factor that I know of so far as getting into production is concerned. The fact that Eldorado is purchasing ore or concentrates is helpful in that each mine can make a contract with Eldorado for a considerable period, a period certainly sufficient to amortize the cost of getting into production, and has the help of Eldorado in working out technical processes and can obtain such advice as Eldorado can give from its own experience.
My colleague has discussed the other subject raised, the effect of international regulation, and I think that point is cleared up.


Howard Charles Green: I mentioned the question of the placing of atomic power in the power-short areas of Canada.


Clarence Decatur Howe: Yes. Every effort is being made to interest power authorities and power companies in all parts of Canada in joining in the work at Chalk River. We have been able to induce a number of power companies and commissions to delegate one of their technical men who has joined the

staff at Chalk River, and we would welcome more assistance of that kind. We need specialists in a number of fields and we would like to draw them from power companies who themselves can benefit from the knowledge obtained by their experts working at Chalk River.
The purpose of the advisory committee is to include operating men from every power company or commission in Canada. Last fall we had a symposium and invited men from all parts of Canada to attend. I believe those who did attend found it a very interesting session. The purpose of the advisory committee would be to inaugurate nuclear symposiums, and we would assemble the representatives at Chalk River from time to time to take them over the work. The scientists there would explain to them the progress in evaluating the power situation, and keep them posted on the progress being made in that field. Through that advisory committee we will give an opportunity to all parts of Canada to participate in the work.
It is true that the directors of Atomic Energy of Canada Limited were drawn from the two central provinces, although one or two of the directors have interests in other provinces. For instance, Mr. Gaherty is president of the Calgary power company and a director of power companies in Nova Scotia and Newfoundland. We chose men that we felt could make an immediate contribution to the work of the commission. If others wish to become interested and demonstrate the fact that they have something to contribute, we would be glad to enlarge the number to make it more representative geographically.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Applewhaite in the chair.
On clause 1-Company.
John Angus MacLean: I notice this clause has the effect of deleting a subparagraph in the present act and substituting a new one that will make the atomic energy control board responsible to the minister, whereas it is now responsible to the privy council committee on research.


Clarence Decatur Howe: Perhaps I could clear up that point. The present control board is responsible to the chairman of the privy council committee on research who happens to be at the moment the Minister of Defence Production. There is therefore, no change there.


John Angus MacLean: I realize that there is no change in effect, but I wondered why it was considered wise to use this terminology in defining the minister as the chairman of the
Atomic Energy Control Act privy council committee on scientific research. Would it not be more suitable if that were stated to be the Minister of Trade and Commerce? As I understand it, there is no guarantee that the Minister of Trade and Commerce will remain the chairman of the committee. My point is that in most bills parliament determines what minister will administer the act. This provision has the effect of leaving that to the governor in council when the chairman of the committee on research is appointed.
A situation may arise where the Minister of Fisheries or some other minister who is a member of that committee might be made chairman, and that might require a change in this act. It might be considered more desirable that the Minister of Trade and Commerce remain the minister responsible for this measure. Perhaps I am reading into this some confusion that does not really exist.


Clarence Decatur Howe: No, it is the intention to have the chairman of the scientific committee of the privy council to be the minister responsible for this project. We might delegate the job to another minister for a certain period. In any case, if the Prime Minister finds the chairman is not suitable, he can delegate any minister he wishes to handle the situation. The chairmanship of the committee on research does not rotate very quickly. I believe I have been chairman of that committee since the beginning of the war, and perhaps they will let me carry on for a year or two.


[Stage Direction]
Clause agreed to.
Clauses 2 and 3 agreed to.
On clause 4-Powers of the minister.
Gordon Knapman Fraser: Clause 4, paragraph (c) relates to the power to acquire, lease, requisition, and so on, any mines, deposits or claims. Will the minister say just what is being done in the Haliburton district about the prospects there? I ask that because Haliburton adjoins my riding, and in my section miles and miles of property have been staked.


Clarence Decatur Howe: Yes. Of course, that is a purely private enterprise venture. I daresay someone on the staff of atomic energy has some knowledge of the claims, but personally I doubt if sufficient work has been done on the development of claims to really know what they have there. They have good geiger-counter results, but how much development has been done, I do not know. I think it is not very much.


Gordon Knapman Fraser: The government will help them as much as possible?

Atomic Energy Control Act


Clarence Decatur Howe: Just the same as any other project.


Howard Charles Green: Is the policy of the government to acquire mines when they have been proven or to encourage private development?


Clarence Decatur Howe: The purpose is to encourage private development. The government has taken the lead in exploration. It was the government that found Beaverlodge and staked part of it. It is my own view, and I think the view of my associates in atomic energy, that the government will not extend its efforts further in that direction. It prefers to see the work done by private enterprise, and to assist private enterprise in carrying out that work.


John Angus MacLean: I have a question on the previous section. Why has the number of times the board shall meet been reduced from four to three? I suppose it is for the same reason that the change was made in the Research Council Act?


Clarence Decatur Howe: We found it rather difficult to bring the members together. There is really not enough business to warrant four meetings a year. As I said, the duties of the control board are diminishing and it is felt three times a year will be sufficient.


John Angus MacLean: I notice in paragraph (c) of clause 3 the provision is not the same as in the Research Council Act, with regard to new positions. It reads:
with the approval of the minister, fix the tenure of appointment, the duties and, subject to the approval of the treasury board, the remuneration, of officers.


Clarence Decatur Howe: Certain duties of the governor in council have more recently been concentrated with the treasury board, and today matters affecting salaries are dealt with by the treasury board. A reference to the governor in council in connection with salaries means a reference to the treasury board.


[Stage Direction]
Clause agreed to.
Clauses 5 to 7 inclusive agreed to.
Bill reported.
The Acting Speaker (Mr. Applewhaile):: When shall this bill be read a third time? Now?


Stanley Howard Knowles: By leave.


Clarence Decatur Howe: the third reading of the bill.
Motion agreed to and bill read the third time and passed.
At six o'clock the house took recess.



COMMONS AFTER RECESS

[Stage Direction]
The house resumed at eight o'clock.


Lionel Chevrier: the second reading of Bill No. 460, to amend the International Rapids Power Development Act.


Howard Charles Green: Would the minister explain this bill?


Lionel Chevrier: Yes. On December 12, 1951 the house approved the International Rapids Power Development Act. By section 4 (b) thereof it was provided that for the purpose of constructing, operating and maintaining the works to be undertaken in accordance with the schedule attached to the act-and those were works mentioned and named at that time as 238-242 single stage control scheme St. Lawrence development-the expropriation thereof and compensation arising therefrom would be handled in accordance with the provision of the power commission act of the province of Ontario.
Later an application was made by Ontario to the international joint commission. During the sitting of that commission in Cornwall, at which I was present, some objection was taken by counsel appearing for the various municipalities, and by others, to the legislation as it applied to expropriations in Ontario; whereupon counsel for Ontario undertook to look into the matter and make a statement at the next sitting of the international joint commission. The next sitting of the commission took place at Montreal on July 25, 1952, at which time counsel for the province of Ontario made this statement:
Although it is a fact that the present legislation has worked satisfactorily in practice to provide just compensation to persons whose property has been taken, used or damaged by the construction, maintenance and operation of power works in Ontario; and although access to the court of appeal from awards for the taking of land has not been challenged, the review mentioned contemplates that it is undesirable, for the purposes of the international joint commission, that several acts requiring interpretation by reference and construction, in relation to these principles, should be before the commission.
Therefore the legislative review in question is with a view to enacting an entirely new act which will contain these important principles within a single statute.
In effect what counsel said was that the present legislation is contained in several statutes, and must be interpreted by reference. In view of this particular objection it has

been decided to enact another statute. That is the statute which is known as the St. Lawrence Development Act, 1952 (No. 2). This is a simple bill, in that all it does is to substitute the words "St. Lawrence Development Act, 1952 (No. 2)" for the words "The Power Commission Act of the Province of Ontario".


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Robinson (Simcoe East) in the chair.
On clause 1.
Howard Charles Green: Is there any significance in the changing of the wording of this clause. In the bill it reads:
The provisions of the St. Lawrence Development Act, 1952 (No. 2) of the province of Ontario respecting the expropriation or taking of lands or property for the works have effect as if enacted in this act.
In the statute the clause reads:
The provisions of the Power Commission Act of the province of Ontario with respect to the expropriation or taking of lands or property apply mutatis mutandis to the expropriation or taking of lands or properties for the works, and have effect as if enacted in this act in relation thereto.
It seems to me to mean the same thing, and I am wondering why the form has been changed.


Lionel Chevrier: I inquired from the Department of Justice as to why it was changed, and they said that this is much clearer and more appropriate in the circumstances.


Stanley Howard Knowles: And it is said in fewer words.


Lionel Chevrier: That is so.


[Stage Direction]
Clause agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the bill be read a third time?


Some hon. Members:: Now.


Stanley Howard Knowles: By leave.


Lionel Chevrier: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



WAR SERVICE GRANTS ACT


Hon. Hugues Lapointe (Minister of Veterans Affairs) moved: that the house go into committee on Bill No. 82, to amend the War Service Grants Act.
War Service Grants Act
Motion agreed to and the house went into committee, Mr. Robinson (Simcoe East) in the chair.
On clause 1-Other persons to whom credit may be made available.


Howard Charles Green: I believe there were some amendments made to this bill in the special committee on veterans affairs. Would the parliamentary assistant explain what those amendments were?


Colin Emerson Bennett: Mr. Chairman, the only amendment was to section 3 of the bill. The date was changed from January 1, 1957 to January 1, 1960. The amended date brings it in line with the date within which a veteran can apply for and use his re-establishment credit. It was considered by the committee that 1960 was a more appropriate date than 1957. That was the only amendment made in committee.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
On clause 3-Time limit for making of
adjustments.
Howard Charles Green: Does the amendment have to be put now?


Walter Edward Harris: The bill is reported as amended.


Colin Emerson Bennett: I understand the committee reported the bill as amended and, as the amendment does not involve the expenditure of money, that is the correct way of doing it.


[Stage Direction]
Clause agreed to.
Clause 4 agreed to.
Bill reported, read the third time and passed.


Hon. J. W. Pickersgill (for the Secretary of Slate for External Affairs) moved: the second reading of Bill No. 373, to extend diplomatic immunities.


John George Diefenbaker: Is the minister going to say something in regard to this bill?


Mr. Roch Pinard (Parliamentary Assistant to the Secretary of State for External Affairs):: Mr. Speaker, the house will be interested in a brief explanatory statement of the background and purposes of this bill. I shall make reference to the circumstances which led to the government's decision to

Diplomatic Immunities
propose the measure and say something about the legal necessity for enacting such legislation?
It has become apparent in recent years, as a result of constitutional developments within the commonwealth, that an anomaly existed in respect of the status of the diplomatic representatives exchanged between the various countries of the commonwealth. Before 1948 commonwealth high commissioners were generally considered to rank below foreign ambassadors in the diplomatic lists maintained by commonwealth governments. There was some doubt whether high commissioners were entitled to diplomatic privileges. High commissioners, as representatives of the different governments in the commonwealth, were not in reality representatives of foreign sovereigns and consequently, in law if not in practice, were not entitled to the customary immunities which the law accords to the diplomatic agents of foreign states. The commonwealth countries were thus placed in the curious position of affording, at least in law, greater rights to the representatives of foreign countries than to those of commonwealth countries. It seemed, therefore, that as a result of the association in the commonwealth the representatives of commonwealth countries must suffer disadvantages which, however intangible, are not compatible with the close ties of friendship between the governments of the commonwealth.
Since 1948, when at the commonwealth prime ministers' conference it was agreed that the status of high commissioners should be made to conform to that of foreign ambassadors, the various governments have been taking steps in that direction. Diplomatic privileges, such as tax and cusoms exemptions, had before 1948 been accorded to commonwealth representatives. The high commissioner has since then come to be recognized as equal in rank to the ambassador in matters of protocol. High commissioners have been permitted when eligible to assume the position of dean of the diplomatic corps in the various commonwealth countries. By an exchange of telegrams late in 1949 between the various prime ministers concerned it was agreed in principle that legislation should be enacted in each of the commonwealth countries to accord, on a reciprocal basis, diplomatic immunity to commonwealth representatives, thus placing them in the same position under the law in respect of immunities as the diplomatic representatives of foreign states. Such legislation has already been enacted in most of the countries of the commonwealth with the exception of Ceylon and Pakistan where similar legislation is being considered. Because of the
reciprocal feature in such legislation and because of the desirability of its aims, the government considers it appropriate to enact a corresponding law in Canada.
I should like to emphasize that this legislation is in no way concerned with the customary diplomatic privileges, such as tax and customs exemptions, which are already enjoyed by ambassadors and high commissioners, alike. It relates solely to immunity from legal process in Canada. It is intended to protect the valid interests of commonwealth governments and to permit their representatives to carry out their proper functions as members of diplomatic and consular missions in Canada.
However, it is important to remember that immunity is not accorded for the benefit of the individual in question, but of the state in whose service he is in order that he may fulfil his official duties with the necessary independence. A person entitled to diplomatic immunity is only immune from legal process and is still expected to comply with the law of the land, criminal and civil. As a matter of practice the conduct of the members of diplomatic missions should be exemplary and the immunity should exist only to preserve the independent function of the missions and to protect them from frivolous proceedings.
The bill before the house provides that commonwealth high commissioners, their official and domestic staffs and their families, and the families of their official staffs, shall be entitled to like immunity from suit and legal process as is accorded to foreign ambassadors, their official suite and family. The bill stipulates, however, that a member of the official or domestic staff who is a citizen of Canada is excluded from immunity except in respect of things done or omitted to be done in the course of the performance of his official duties, and the members of his family are entirely excluded. The bill also provides for the like inviolability of the residence, official permises and official archives of the high commissioner as is enjoyed by foreign ambassadors in this country.
The bill also contemplates the extension of consular immunity to commonwealth officials in Canada who perform duties substantially corresponding to those of foreign consuls. Consular immunity implies immunity from criminal and civil process but only with regard to the performance of official duties; it includes inviolability of official archives. Since it was not possible to foresee all the categories of commonwealth representatives which might be involved in this extension of consular immunity, it was considered preferable to make provision for such extension by proclamation. It is envisaged that such
[Mr. Pinard.l

immunity will be extended to commonwealth officials serving in Canada but outside Ottawa, as, for instance, trade commissioners, in which circumstances they might not be considered members of the official staff of their high commissioner in Canada.
No effort has been made in the bill, which is similar to the legislation already in force in Australia, New Zealand and the United Kingdom, to define the diplomatic and consular immunities. All that is said is that the commonwealth representatives are entitled to the like immunities as are accorded to a foreign envoy, or to the members of his official and domestic staff and the families concerned. It would be for the Canadian courts to decide in each case what these "like immunities" should be. The court would probably decide these matters by referring to the customary rules of international law as applied in Canada.
The bill makes provision for reciprocity as between Canada and the other countries of the commonwealth. The Canadian high commissioners and their staffs in most of the commonwealth countries are already accorded the immunities provided for in this bill. Legislation in these countries calls for reciprocal treatment. The remaining commonwealth countries contemplate legislation along similar lines. It is therefore considered desirable, in view of the principle of reciprocity, that parliament should take action now to ensure that commonwealth high commissioners in this country shall be accorded the same treatment which Canadian representatives receive in other commonwealth countries. It is the hope of the minister that the provisions of this bill will commend themselves to all hon. members, for he considers that this measure is noncontroversial and this necessary step in the orderly development of relations between members of the commonwealth can be taken with the full and warm approval of all parties.


John George Diefenbaker: Mr. Speaker, the hon. gentleman who has just taken his seat has reviewed in some degree the situation with regard to the diplomatic and consular immunities that have prevailed for generations as between foreign countries with their representatives in other countries. It is of interest to note he has stated that in 1948 the prime ministers of the various commonwealth countries agreed upon the necessity for this legislation. Similar legislation has been introduced in certain other commonwealth countries. If it were otherwise one might conclude that this was a step in a policy of attrition to remove and
Diplomatic Immunities
diminish commonwealth bonds. However, the agreement among the prime ministers that this legislation or something similar is necessary indicates another step in the gradual and unplanned development of the commonwealth and empire which began with Lord Durham's report and had its culmination in the Statute of Westminster.
It removes a rather anomalous situation, namely that the representatives of the commonwealth did not enjoy this immunity while representatives to other parts of the commonwealth such as would be enjoyed by representatives of foreign countries. It has its statutory background, in so far as foreign countries are concerned, in a statute passed in the reign of Queen Anne when the Russian ambassador at that time was arrested for owing some civil debt and was imprisoned. The result was that ill-feeling sprang up between England and Russia and legislation was passed in order to prevent a situation such as that again arising.
Since the beginning of the first war, and it is interesting to watch this trend, there has been a change in commonwealth relations, gradual, certain, and in some cases profound. Many have felt that these changes would weaken the commonwealth. But in point of fact while the commonwealth has no charter, constitution, or constitutional machinery, these steps which apparently constitute in themselves a weakening of the relationship actually have made for a strengthening in the purpose and unity of the commonwealth.
I agree with the hon. gentleman that this legislation is non-controversial. It is simply the implementation of an agreement among the prime ministers to remove what, on the face of it, was a paradoxical situation for commonwealth representatives. It places commonwealth representatives in an analogous position in so far as freedom from civil or criminal process is concerned as that now applicable to representatives from foreign countries.
While there are a few questions that will be asked when the bill goes into committee, generally speaking I think there will be agreement that this legislation is but one step forward in unifying the commonwealth and in actually bringing together in closer relationship the various parts of the commonwealth while maintaining their freedom under the Statute of Westminster.


Stanley Howard Knowles: Mr. Speaker, I am sure that all of us in the house are glad to concur in
5420	HOUSE OF
Diplomatic Immunities
the sentiments expressed by the hon. gentleman who introduced the bill, when he expressed the hope it would have the warm approval of all groups represented here.
As has been pointed out by the parliamentary assistant to the Secretary of State for External Affairs (Mr. Pinard), and by the hon. member for Prince Albert (Mr. Diefenbaker), the technical result of this bill is to remove an anomalous or paradoxical situation that has existed with regard to the high commissioners and other representatives among the various member nations that make up our commonwealth. Likewise, as has been pointed out by those who have already spoken, this is another piece of legislation which points to the interesting and unique nature of the commonwealth to which we belong.
It seems to me that the fact that the high commissioners from other commonwealth countries will have the same status as ambassadors from other countries, and the fact that our high commissioners will enjoy that same status in other commonwealth countries, serves to emphasize the independence and autonomy of this nation under the crown now worn by Elizabeth II. It also draws attention to the fact that though we are independent, autonomous nations in every way, we are voluntarily associated together in a commonwealth which is now bound closer together because of its voluntary nature than would be the case if it were on a compulsory basis. We are indeed pleased to give our support to this bill. It is a very simple one, but it is significant; it suggests the march of history, and it gives us the opportunity to express once again our pride in the independence and autonomy of our nation, and also our pride in being a member of the commonwealth of nations, with its many peoples in all parts of the world.


Mr. E. G. Hansell (Macleod):: Mr. Speaker, I wish to say just a word or two in respect of this measure. When I first read of it and when it was brought down I noticed the title of the bill and I was rather pleased with it. We in this group have always desired to aid any measure whatsoever which would assist in bringing closer the ties of all the countries of the British commonwealth, and I think the bill does just that.
Now, I must say this, however, and simply to clear my own conscience, although this bill is not on a par altogether with previous measures which have been taken with respect to diplomatic immunity for those travelling to and from Canada. I recall that a few years ago the subject of diplomatic immunity came up with regard to members of the United


Nations. We did not oppose that measure or that principle, but I must confess that my conscience was not altogether clear with respect to that matter. As I have said before, I know this measure is not on a par with previous actions taken in regard to diplomatic immunity.
I cannot help feeling a deep responsibility, even though I am only a member of parliament, when we discover that there is growing up in our relationship with other nations, diplomatic representation by embassies and so forth which in reality have become, in some respects, nothing but hotbeds of spies. That is the truth.
I am not saying that such a thing is happening with respect to our own commonwealth countries. We are happy indeed that there is this gentlemanly and brotherly type of relationship between all nations of the commonwealth. These are brotherly ties. Even though some of these nations have been granted their independence in the last few years, nevertheless there is a strange and significant loyalty among all the countries of the commonwealth.
I must once again emphasize the fact that I believe that we can sometimes lean over backwards and go too far in this matter of diplomatic immunity. I know that what I am about to say does not come within the direct purview of this bill, but nevertheless I simply use it as an illustration. Not so long age we read of the happenings in Australia -which were similar to happenings which took place in Canada a few years ago- where one man of the Russian embassy, a high-ranking official, bolted and revealed tremendous truths concerning the operation of that spy ring within Australia, one of our commonwealth countries. You cannot read the first report of that commission which was set up in Australia to study the matter without having your hair almost stand on end when discovering the intrigue and what was happening in diplomatic circles in that country. When we offer these countries all the privileges that diplomats and embassies have, it is indeed shocking to discover that they are being used as centres from which radiate various intricate, clever and powerful rings of spies.
In that first report that was given on the recent Australian revelation it was stated that such things as code messages from Moscow had come in undeveloped films delivered to the embassy in Canberra in the diplomatic pouch. Here is what is meant by diplomatic immunity in the broad sense. These films had come in the diplomatic pouch which was not subject to search. These were films which any agent or official, if he wished, could destroy in an instant by exposing them

to the light. That is only one little incident that we glean from that one report. This whole thing emanated from the Russian embassy in Australia.
That sort of thing makes one rather wary concerning going too far in respect of this matter of diplomatic immunity. My own personal view is that when anything of that kind happens, action should be taken such as that which the Australian government took and that diplomatic relations should be broken off with any country that will abuse those privileges. As I said before, I know that that is not going to apply to our commonwealth countries. Nevertheless I use that as an illustration of a vital principle that is involved in matters of diplomatic immunity. Let us be most careful not to lean overboard or to go wild in respect of this matter of diplomatic immunity. As far as this bill is concerned, we are in favour of the measure.


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


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Robinson (Simcoe East) in the chair.
On clause 1-Short title.
John George Diefenbaker: Mr. Chairman, in order to lay a foundation for the general question of diplomatic and consular immunities, will the parliamentary assistant say what laws now on the statute books provide for immunities of foreign representatives? What is the law in this country with respect to foreign representatives, and particularly what is the statutory law in that respect?


Roch Pinard: In answer to the hon. gentleman's question I would say that, apart from the legislation which he has himself cited which today forms part of our law, there is no special legislation which will define the immunity privileges which are accorded to foreign envoys. The purpose of this bill is not to create and define the immunity privileges. Such powers as are in existence are under the rules of international law and they are in fact applied by the Canadian courts when a case arises where such an immunity privilege is being claimed by a representative of a foreign nation.


John George Diefenbaker: Is it then correct to say that the privileges and inviolability of consular and foreign representatives are fixed under the English statute of Anne's reign and also by international custom?


Roch Pinard: As I said before, it is by the application of the rules of international law mostly and also, as the hon. gentleman mentioned, it is based on this statute of Queen
Diplomatic Immunities
Anne which was passed, if I remember correctly, in 1708 and which has been considered as part of our legislation here in Canada.


John George Diefenbaker: Will the parliamentary assistant say which countries in the commonwealth asked for the adoption of legislation similar to this? Which of the prime ministers asked for this and under what circumstances?


Roch Pinard: As I have already mentioned, it was the result of negotiations and discussion among the various prime ministers at the commonwealth conference in 1948. I would not say that any one prime minister more than another took the initiative. Rather it was done as a result of the negotiations of the prime ministers together. As I have already said in the statement I made, the only two commonwealth nations that do not have similar legislation but which are contemplating it are Ceylon and Pakistan.


John George Diefenbaker: When did the United Kingdom government pass analogous legislation?


Roch Pinard: I am afraid I cannot give that information except to say that it was passed after 1949.


John George Diefenbaker: Have there been any civil cases in which civil process has been taken against any representative of the commonwealth in the last few years in our own country?


Roch Pinard: I am informed that there has been no case that has in fact gone before the courts for adjudication. There might have been immunity privileges requested but in fact there was no actual litigation in which such privileges were applied.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
On clause 3-Application of act.
John George Diefenbaker: Subsection 2 of this clause reads as follows:
The governor general in council may by proclamation designate any commonwealth country . . . as a country in respect of which this act applies.
Is that designed to cover further commonwealths that may be established?


Roch Pinard: Definitely.


John George Diefenbaker: Within the commonwealth.


Roch Pinard: That is the purpose of the section.


Ernest George Hansell: I notice that subsection 3 reads as follows:
Where it appears to the governor in council that a country in respect of which this act applies has, in relation to Canada, failed to accord immunities

Diplomatic Immunities
similar to those provided for by this act, the governor in council may, by proclamation,
(a) declare that this act does not apply in respect of that country-
What would happen if a country now coming within this legislation should abuse its privileges and immunities? What would happen then? I do not want to be an alarmist. I do not want to bring up things that may never happen, but we are dealing now with legislation that will become the law forever and a day as long as it is not repealed. I may be permitting my imagination to run riot but suppose, for instance, one of our commonwealth countries should, in the process of time, be discovered to have a communist regime. Suppose that their diplomats came here and abused their privileges. What would happen in a case like that?


Roch Pinard: If I understood the hon. member's question correctly, he first referred to abuses being committed by the nation itself and then later in his remarks referred to a particular individual of the mission concerned committing abuses of these privileges. I would qualify my answer by stating that if the abuses were committed by the nation itself in the form mentioned by my hon. friend, in other words, in that they would have a mission in Canada that had been sent here by a communist government which would have been established in that nation, that would become a problem for the government to decide whether or not the regime would be recognized. In so far as the abuse of privileges on the part of an individual is concerned, there is always the recourse of this government asking for the recall of that particular individual from Canada. Such recall is generally sought through the ambassador or, as in this case, through the high commissioner. Of course if a high commissioner is himself involved the recall is brought about by the government of Canada making a formal demand to the nation concerned.


[Stage Direction]
Clause agreed to.
On clause 4-Chief representative.
John George Diefenbaker: With respect to the immunities and the inviolability, mention was made by the parliamentary assistant of the question of taxation. What is the position of representatives so far as local taxation is concerned?


Roch Pinard: I think I have said already that we are not dealing at this time with the tax exemptions or special privileges which are given to representatives of foreign nations by orders in council based on the appropriate legislation under which they are claimed. We are dealing with immunity privileges. In other words, this is an entirely

different matter. The tax exemptions have already been accorded under the rules of international law and they are made applicable by order in council under the appropriate legislation under which similar privileges are being requested by representatives of foreign countries. I am trying to make myself clear and to distinguish between exemption from taxation and immunity privileges. It is an altogether different matter. In this case we are simply concerned with immunity from legal process.
We are also concerned of course with the right of the representatives of a mission not to be forced to give evidence in a court of law and also, as I mentioned before, with the inviolability of archives and premises. The tax exemptions to which my hon. friend refers are granted under international law in a different way. It is a totally different matter. In this case we are not concerned with tax exemptions which are granted, as I mentioned before, under international law


John George Diefenbaker: Much as I should like to accept my hon. friend's interpretation, it is not in accord with the interpretation given in Ridges' "Constitutional Law of England". At page 301 it sets forth certain privileges and immunities in these words:
Certain privileges and immunities are generally conceded to a diplomatic agent by the foreign state to which he is accredited, and . . . are as follows:
(1)	Immunity for himself, his family, and suite from criminal jurisdiction and arrest . . .
(2)	Exemption for himself, his family, and suite within certain limits from civil jurisdiction . . .
(3)	The diplomatic agent is regarded as being in an ex-territorial position, and therefore his house is free from the territorial jurisdiction, at least in so far as to prevent any interference with the performance of his duties . . .
(4)	Diplomatic agents and their property are exempt from taxation . . .
Then it goes on to say:
By courtesy, also, goods intended for their use are exempt from customs duty.
The minister says that the words "like inviolability of residence" do not include taxation. Under the constitutional meaning of that term, as interpreted by the work to which I have made reference, it does include taxation. I again ask the parliamentary assistant this question. Are representatives from the commonwealth entitled to tax exemption in this country? That is a simple question. What is the situation with regard to taxation? To what degree are they in any different position in the matter of taxation from what they would be if they were representatives of foreign countries?


Roch Pinard: First of all I wish to make a distinction in answer to that question. Section 4 reads as follows:
A chief representative is entitled to the like immunities from suit and legal process and the like inviolability of residence, official premises and official archives as are accorded to an envoy.
In other words, whatever immunities we are concerned with are those that are mentioned in section 4. It is true also that the word immunities can cover other privileges than those to which we are referring in this bill. I am not trying to be legalistic. I am simply trying to explain to the house, in answer to the hon. gentleman's question, that we are simply concerned solely with the privileges mentioned in this clause 4, that is immunity from suit and legal process. We are not concerned with these other privileges which are derived from the rules of international law and which exempt the representative of a foreign nation, for instance, from taxation on his property.
In this connection I might mention that if a property is owned by a mission, that is by the nation concerned, it is tax exempt. But if the envoy is the personal owner of his property, there is no tax exemption. In other words, the principle applied is that the tax exemption is awarded to the nation the individual represents, and not to the individual himself.


John George Diefenbaker: Do I summarize the position correctly then by saying that a commonwealth representative, in so far as taxation is concerned, will be entitled to the same exemption as if he was an envoy from a foreign state?


Roch Pinard: Under this bill we are not concerned with these taxation privileges. I cannot possibly give an answer to this question, except to the extent I have mentioned the subject. I think I would be out of order in doing so, just as I think my hon. friend was in asking the question whether or not similar privileges concerning taxation were accorded to envoys in a case such as the one I mentioned.


John George Diefenbaker: The inviolability of
residence includes the inviolability from taxation according to international law. I have simply asked-I do not know why I cannot get a simple answer-if the commonwealth representatives are now accorded equality with foreign representatives in so far as personal rights are concerned? Are they going to receive equal treatment in the matter of taxation?


Roch Pinard: I just want to add that the immunities that are accorded to the high commissioners under this legislation are none
Canadian Citizenship Act other than those that are accorded already to ambassadors from foreign nations. When my hon. friend says that inviolability of residence includes exemption from taxation, I have a doubt as to whether or not he is right. I would believe it would be difficult for someone having the privilege of inviolability of residence to say, in view of that fact, he is also entitled to exemption from taxation. I do not think it would go as far as that. I do not want to challenge my hon. friend's citation but I would not go as far as that in my interpretation.


John George Diefenbaker: All I am asking is
whether representatives from the commonwealth receive the same consideration as foreign representatives receive?


Roch Pinard: They do.


John George Diefenbaker: That is why I asked, and I have never seen so many words used in order to say no, if that was the intention.


Roch Pinard: I have said so.


[Stage Direction]
Clause agreed to.
Clauses 5 to 8 inclusive agreed to.
On clause 9-Actions begun prior to coming into force of act.
Stanley Howard Knowles: Are there any actions or proceedings which are covered by clause 9?


Roch Pinard: We have no knowledge of any now.


[Stage Direction]
Clause agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall this bill be read a third time? Now?


Stanley Howard Knowles: By leave.


Walter Edward Harris: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



CANADIAN CITIZENSHIP ACT


Walter Edward Harris: the second reading of Bill No. 445, to amend the Canadian Citizenship Act.
He said: This bill requires only a very brief explanation, Mr. Speaker. The purpose of it is to do away with the present practice of asking an applicant for citizenship to file a declaration of intention at least one year prior to his application for citizenship. The

Canadian Citizenship Act declaration of intention has been a part of the citizenship procedure since the act was passed in the house in 1946. As a matter of fact, it dates back to a period during the war when, for certain purposes, a declaration was used for the first time.
In our experience it no longer contributes to the procedure in any way and only impedes it, as a matter of fact, to the extent that some candidate for citizenship, having waited five years and having fulfilled the residence requirements, suddenly discovers he has omitted to file a declaration of intention and then must wait a further year before his application can be processed. There is a further matter of cost, Mr. Speaker, in connection with the filing of this declaration by the applicant; it costs the department some money to print these forms, and it costs a staff to maintain them. We have examined the need for the declaration over the past twelve months, and have come to the conclusion it serves no useful purpose. All the inquiries we feel should be made can be made without it.


Mr. E. D. Fulton (Kamloops):: The minister's explanation which elaborates somewhat on the explanatory note accompanying the bill seems to provide an adequate justification for the legislative proposal now before us. I cannot really believe that there would be any objection to the proposal to eliminate the necessity of filing a declaration of intention, although I believe we should ask the minister, when we come to the stage when questions may be asked, just what provision the government intends to make for ensuring that the information which might be elicited at the time of filing of the declaration will be adequately elicited later, and to ensure that sufficient precautions will be taken to establish that the applicant is indeed a qualified and suitable applicant. However those are matters of detail and as I say there seems to be no real reason why this proposal should not be adopted.
At this stage I want to point out something which I imagine has occurred to the minister, and that is that the indirect effect of abolishing this requirement of filing a declaration of intention is to remove the only surviving privilege now in existence with respect to those who are British subjects and wish to become Canadian citizens, that is subjects of Her Majesty from other parts of the commonwealth who come to Canada and wish to become Canadian citizens.
Under the present arrangement, everyone who comes to Canada and is a lawfully landed immigrant and wishes to become a Canadian citizen has to wait five years; and this includes British subjects from other

parts of the commonwealth. But a British subject does not have to file a declaration of intention. That is the only differentiation made between a British subject who wishes to become a Canadian citizen, and a nonBritish subject.
When the Canadian Citizenship Act was passed in 1946 we in the official opposition pointed out that in our opinion it did not give due recognition to the one effective approach that exists in the world today to a common or international citizenship brotherhood-the concept of being a subject of Her Majesty in whatever part of the commonwealth one might live. We urged then that persons coming from other parts of the commonwealth should not be specially privileged Canadian citizens, once they had become citizens. And I wish to make that clear, now, that at no time did we urge that we wanted any differentiation between citizens, no matter what their prior citizenship may have been. There should be no difference between Canadian citizens.
But we do think it proper to urge that recognition be given to those coming here from other parts of the commonwealth that enjoy a common loyalty with us, a common way of life and a common concept of democracy and loyalty to Her Majesty. We urged that some extra facility be granted to them by way of a somewhat less formal procedure, if you like, or some diminution of the obstacles placed in the way of their becoming Canadian citizens.
As I have said, the only thing that was done in that regard was in connection with the filing of a declaration of intention. There was that differentiation, in that British subjects were not required to file it. However, now that it is being abolished altogether there will be no mark of recognition whatsoever of the fact that an applicant for Canadian citizenship is already a British subject.
Therefore, while I cannot think of any amendment that would be in order at this stage, and would embody our thoughts so as to put them formally before the house by way of a resolution requiring a vote, I do strongly urge that the minister consider again what was urged in the past, that perhaps the time has now arrived-we think it is long past-when the waiting period for a British subject who is otherwise qualified might be shortened, as compared with the waiting period imposed upon those who do not share that common loyalty, that common concept of citizenship and, in short, do not share with us that family relationship that we like to think all subjects of Her Majesty in other parts of the commonwealth have. Now that this differentiation is being removed, I think it would be highly opportune

to bring in concurrent legislation to shorten the waiting period by at least one year, and I see no reason why in connection with British subjects it should not be shortened to a greater extent.
It is perhaps significant that this bill is being considered in the house immediately after a bill to provide diplomatic immunity for representatives from commonwealth countries, on which occasion we have been reminded of that common loyalty we share. In these days when international relationships are increasingly uneasy, anything we can do in this country to remind ourselves and people throughout the world that the British commonwealth of nations is a living and real concept, and that international brotherhood can and does exist, thus making a real contribution toward international good will and good faith, is worth doing. Not only that, but it would demonstrate in a real and practical way that we in Canada, the senior dominion of the commonwealth, are determined that so far as we are concerned this concept of a family relationship between countries of the commonwealth will be preserved and, indeed, strengthened.
It would be but a small gesture if we were to shorten the waiting period with respect to British subjects, and thus demonstrate our real loyalty to that concept. It would not do anything to make a differentiation between citizens, once they became citizens. That is not the idea at all. There would be no distinction between Canadian citizens, whatever their origin. But it would be a gesture which would mean something more than gestures usually mean, particularly in the light of the contribution that the commonwealth could make to international relations. If we were to take a firm stand it would mean that at least we in Canada are going to stand by that commonwealth and see that it means something in fact as well as in theory.


Gordon Knapman Fraser: Mr. Speaker, at this time I should like to ask a question which perhaps the minister would answer later. Has any consideration been given to attaching a photograph to a citizenship certificate?


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Applewhaite in the chair.
On clause 1.
Mr. Shaw:: Does a person domiciled in Canada who is Canadian-born and desires to secure his Canadian citizenship certificate have to complete one type of application, while a British subject, who has come from the British Isles and has resided in Canada 83276-343
Canadian Citizenship Act for five years, has to complete another type of application? Is there a difference in the amount of fee paid in each case? If so, why?


Walter Edward Harris: Mr. Chairman, replying to the last question, there is a difference in the form, but I understand the fee is the same in each case. The form of course in the first instance, where birth is in Canada, is accompanied by a birth certificate; the other recites birth in the British commonwealth.
Then, dealing with the question asked by the hon. member for Peterborough, I would say that the problem of identifying an alien who has become naturalized is dealt with in many different ways in many countries. As my hon. friend knows, we have been granting a certificate which is relatively large, thinking that it would be used only at home as part of a person's papers. From time to time, however, it is suggested that we ought to issue a smaller identification card which would certify that the holder has been granted citizenship. This would be convenient to carry around, especially in this country when one goes across the United States border. In that connection it is also suggested that we ought to have a picture of the naturalized person.
We have been examining the question of a smaller card for, I think, about three years. There are certain difficulties with which I need not trouble the committee; but it will fulfil the need I know in some cases, and if we find that we can do it without excessive cost I think we would. Under those conditions it would be desirable that there should be some identity attached to the card.


Gordon Knapman Fraser: It was suggested by a United States immigration officer that even if the picture were on the back of a small card and the government stamp pushed through so that it could not be taken off it would be sufficient, and it would help them a great deal. They have those large certificates. If it were in a card form so that they would have a much easier time and less questioning of the Canadian citizen it would be an advantage. I might say that the citizenship branch here in Ottawa is certainly very co-operative and I feel they are doing a good job.


Walter Edward Harris: Thank you.


Edmund Davie Fulton: What investigation is made now at the time of the filing of the declaration of intention? If any substantial investigations as to the qualifications and suitability of the applicant are carried out, what steps will be taken to ensure that the line of prior warning, as it were, will not prejudice the investigation which is normally made?
5426	HOUSE OF
Canadian Citizenship Act


Walter Edward Harris: As the committee knows, there is the usual examination by the county judge, but in addition to that, other inquiries are made. We found that those inquiries could be made in the three-month period between the date of the application, during the posting up of the application and the hearing. That, as a matter of fact, is one of the very reasons why we feel justified in abolishing the declaration, because we do not need the time involved in the one-year period. Those inquiries are made locally and in other places, and are usually very thorough and can be relied upon to produce the evidence that is needed to determine whether an applicant should be granted the favour that he asks.


John George Diefenbaker: Will the minister say what was the reason in the first place that the declaration of intention was embodied in the statute? What was the reason that the institution of that requirement was made an obligatory course to be followed?


Walter Edward Harris: Initially, the declaration of intention followed the pattern of the United States system of having what is known as first papers, which would provide one with a certain status which would give him a claim upon the government of the country in which he lived. As I think hon. members know, in other days anyway if not lately, the taking out of first papers in the United States was considered something that one might very well do almost immediately. This would give him access to opportunities. That I think was the thought behind it, and we carried it forward in the original act with that in mind. We found that that was not necessary in Canada in a larger sense; but by way of explanation I should say that the regulations still provide for the filing of the declaration of intention, and will continue to do so despite the passage of this particular bill. So that if anyone feels that he would like to show anyone in Canada that he has already indicated by affidavit his desire to become a Canadian citizen, that opportunity will be open to him and the department will permit that to be done, believing that if it is in the interest of the applicant it might be granted.


John George Diefenbaker: What rights, if any, flow from the signing of a declaration of intention? Does it found any right to the protection of Canada in the way of a passport or anything of that kind?


Walter Edward Harris: The rights and privileges which flow after a declaration and which have flowed in the past few years have been particularly that of being admitted to learned


societies and professional agencies so that one might compete in that particular field. Those organizations have indicated that they will accept the immigrant's application for membership if it were shown that he had filed a declaration of intention, and in that way he would not have to wait until he had received full citizenship. As I say, we are protecting that right under the regulations so that there is a direct benefit to certain persons in filing a declaration.


John George Diefenbaker: Will the minister also answer the rest of the question? Does the signing of the declaration of intention give any rights to passport protection?


Walter Edward Harris: No. Until they become citizens they travel on the passports of their own home country.


Edmund Davie Fulton: Would the minister mind saying whether he sees any objection to the proposal that the waiting period with respect to British subjects might be somewhat reduced? I understand that Australia, for instance, insists on the full five years. I, however, would not accept that as an argument that we should do it because they do it. It might be a good thing if we were to set the pattern in this regard.


Walter Edward Harris: I have not studied the question lately, but it has been before us regularly since the citizenship act was passed. The reasons for not making a distinction, other than that mentioned by the hon. member earlier, were explained fully by the then secretary of state when he introduced the bill. I think on balance it is not desirable to have among those applying for citizenship any group that would have preferred treatment in the obtaining of it. While undoubtedly British subjects find it easier to qualify, nevertheless it would seem unusual if in a citizenship act you initially set up a class who would be preferred above others. After all, citizenship surely must be equal to all without distinction.


Mr. Churchill:: With regard to what the minister has just said I wonder whether he might not reconsider this matter. The hon. member for Kamloops has presented the situation in his usual able manner and has covered the ground very thoroughly, but it is a matter of considerable importance.
I have always wondered why the British subject should have to undergo the same waiting period as anyone else coming to this country. I do not think that we want to make any distinction among immigrants, but the deferring of citizenship rights to a British subject is making a distinction unnecessarily

in the wrong quarter. There is, as the hon. member for Kamloops pointed out, the common background, the family background in the commonwealth of nations for those immigrants who come to us in large numbers from the United Kingdom and who are so welcomed.
There is the entire tradition of the British race behind them; there is the common language. The institutions are the same, and they fit so quickly and so readily into the Canadian life that it has always seemed to me to be an unnecessary restriction to impose that limitation of five years. I grant that there may be something said along that other angle that you are setting up a preference in favour of one group of immigrants rather than another, but more serious consideration should be given to this problem.
Our link with the United Kingdom and with members of the commonwealth is so strong that immigrants coming from the commonwealth should surely be received more quickly into Canadian citizenship than is set out according to the technical terms of this act. I think the act has floundered into a technicality and places unnecessary emphasis on this particular feature, and it has put our friends from the United Kingdom in a position in which they should not be placed.
After all, in view of what has been going on in this country over so many years, a country founded by two great races, but certainly receiving a great impetus from those who came from the United Kingdom, and in view of the fact that we did not impose any restrictions or restraint for generations, then I can see no reason why at this particular time, and during the past few years, we should have found means of making a distinction which was not observed in the past with regard to those who came to us from commonwealth countries, and particularly from the United Kingdom.
I think there is a great feeling on the part of the people of Canada that another look should be taken at this particular clause in the act and that it should be revised so that the immigrant coming to us from the British Isles is accepted much more readily and more quickly than is the case at the present time.


Mr. White (Middlesex East):: Mr. Chairman, I rise to support the suggestion made by the hon. member for Peterborough to the effect that a small card showing Canadian citizenship and identification similar to the birth certificate issued by the province of Ontario 83276-343J
Canadian Citizenship Act should be issued to Canadian citizens so that it could be used for identification purposes any place in the world.
I would also like to support the suggestion made by the hon. member for Kamloops and the previous speaker to the effect that another look should be taken at the requirements of those coming from commonwealth countries whose tradition of democracy, common language and customs, should not be put in the same category as those who come from countries that are probably not used to our democratic way of life or schooled in our institutions. I think the minister should give the two suggestions very serious consideration.


Mr. Noseworihy:: Mr. Chairman, I certainly support the previous speaker, but I think they should go further in speaking of giving preferential treatment to citizens from other parts of the commonwealth. I think we should probably first concern ourselves with giving even equal treatment to citizens from different parts of the commonwealth.
In this connection I wonder if the minister is in a position to tell us what consideration has been given to a brief recently presented to him on behalf of coloured immigrants from the West Indies. These people often find it impossible to get into Canada much less become citizens when they do arrive here. Is the minister in a position to tell us anything about that situation?


Walter Edward Harris: Mr. Chairman, I do not want to engage in any discussion on immigration at this point. I am sure the hon. member is incorrect when he states that when they get in they cannot become citizens. Anyone who enters Canada can become a citizen after five years' residence here if he meets the qualifications, and that applies to everyone, including the persons to whom the hon. member referred.
I will, as suggested, give consideration to the representation which has been made. I hope that what I am about to say will not start another debate. I merely want to say to the committee that I was in error when I answered the hon. member for Red Deer. The filing fee for an affidavit or application by a Canadian-born citizen is $1 and $5 for a British subject.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
Title agreed to.
Bill reported, read the third time, by leave, and passed.
[Stage Direction]
Supply-Transport SUPPLY
The house in committee of supply, Mr. Applewhaite in the chair.

[Stage Direction]
443. Departmental administration, $1,456,640.
Edward Turney Applewhaite: Resolution No. 443. Hon. members will recall that this resolution can be found at page 59 of the blue book and details on page 509. Shall the resolution carry?


Lionel Chevrier: Mr. Chairman, I find I have an explanation to make to the committee and an apology as well to certain hon. members. Yesterday there was delivered to me by the chief commissioner of the board of transport commissioners the original report on the railway grade crossing fund which matter had been under study by that board for some time. The chief commissioner of the board indicated to me that on May 17 the secretary of the board had delivered to my office a copy of that report, and I am sorry to have to say that I was not aware of this, although I should have been and I must take full responsibility for it. A copy of the report was sent to the translators by my officers and is being stencilled at the moment. During the discussion on my estimates the other day I rose when this matter was under discussion to say that the board had the railway grade crossing fund under study, and because of that I interrupted a number of hon. members, particularly the hon. member for Danforth. However, I think not too much harm followed because the hon. member and many other hon. members succeeded in getting onto Hansard what they intended to say. In any event, if they did not there is a particular item here in the estimates whereon they can discuss it at a later date. Meantime I want to apologize to the hon. member for Danforth and any other hon. members who were inconvenienced by reason of my stating that the grade crossing problem was under discussion and study by the board. At that time it was not under study by the board and I should have known so. I accept the full responsibility for that error.
I would like to add though that the report is a voluminous one, as hon. members can see. I have not had an opportunity to read it and neither have my colleagues, but I propose to ask their permission, when it is translated and stencilled, to table it and circulate copies to members before the end of the session. I do not think it will be possible to act on it at this late date.


Mr. Palleil:: I rise at this point to deal with certain matters in my own riding of Peel. Since the minister has mentioned the fact

that we have leave to discuss the matter of the grade crossing fund in its general aspect, I should like to avail myself of that opportunity at the present time to deal generally with that fund. It is statutory, and it is proper to deal with it at this time.
With respect to the first matter, I refer to the Malton airport. The minister will perhaps take satisfaction in hearing that we consider it to be one of the finest in the dominion. That is, of course, only proper since Peel is the finest county in the dominion. There is one matter that has arisen fairly recently that I should like to draw to the minister's attention, namely the proposed enlargement of the airport which has resulted in certain filings in the registry office of notices of expropriation and the like. These notices have caused considerable concern to land owners. The concern has been caused not so much by the actual filing of the notices as by the subsequent action resulting therefrom.
I am advised that after the notices were filed some negotiations took place and that subsequently some of the notices were withdrawn and the land use returned to the owners, with certain inconvenience to those owners. I would draw to the minister's attention the fact that that area is a fast developing one and that to turn back to the owners large tracts of land may well result in a rapid residential expansion which may well create a situation similar to that which was created recently around Downsview airport where representations were made by the residents with regard to nuisance and danger to their property and to themselves.
Another aspect of the expropriations is that which has arisen with respect to the owners of small holdings under the Veterans Land Act. There are a number of these owners. I am told that negotiations are going on and I suggest to the minister that he consider the advisability of expediting these negotiations so that the owners of these small holdings may know their immediate position rather quickly in order that they not be asked to expend further sums of money in completing their homes and then perhaps not receive the valuation which they themselves feel their holdings have. I would urge on the minister that this matter be completed rather quickly so that the people will not be left in a state of indecision, as are many of them at the present time.
With respect to the grade crossing fund, may I say that its history is perhaps of interest. I believe it was initiated about 1909, at which time 20 per cent of the total cost

of construction was advanced by the government for the elimination of grade crossings. Subsequently, in 1919, this advance was increased to 40 per cent, with no more than $25,000 to be expended on one work. In 1928 the government saw fit to increase the maximum for one work to $100,000. Then in 1950 an amendment provided for increasing the amount to $150,000.
In the county of Peel there are many grade crossings, some of which are active. When I say "active", I mean there are many trains crossing over them, as well as many automobiles and motor trucks. One in particular that has closely paralleled the amendments to the grade crossing fund-and when I say "paralleled" I mean the applications for some relief were made about the time of the amendments.
It is of interest to note the estimated cost of correcting the grade crossing in this one particular instance which is on the Canadian National Railways line from Toronto to Hamilton. It is perhaps one of the busiest stretches of railroad in the Dominion of Canada. In 1910 an application was first made and the estimated cost at that time was $21,000. In 1920 the matter was again reviewed and the estimated cost had risen to $73,000. Applications were again made in 1935, 1948 and 1952. At each of these latter applications, one of the objections raised was the increase in cost. A strong representation was made by the Canadian National Railways that while they did not object to the alleviation of the situation, they thought they should not be asked to pay any of the cost of this particular grade crossing.
The population in that area has increased in the few years since the war; it has doubled. According to the Canadian National Railways the rail travel is supposed to have decreased to some extent since about 1948. However, I would say that at the present time there would be in the neighbourhood of 125 trains travelling easterly along that track each day, and about the same number travelling westerly. In addition, there is a third track or a switching track. I would suggest to the minister that there would be in the neighbourhood of 100 switchings a day. Approximately 7,500 automobiles go over the crossing in a 24-hour period. The problem is a very real one.
The safety feature seems to have been taken care of there by the installation of signals and a gate and a watchman. Consider the time that is lost by travellers in motor cars making over 250 stops per day at that crossing in order to allow the watchman to lower the gates and to raise them. As to the
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delay, if you take a minute for each crossing -which would be the minimum time, I would suggest-you would have a loss of time to a large number of motorists of over four hours in the 24 hours. I suggest to the minister that in such a busy area that is a considerable loss of time and therefore of money to those people.
There are other grade crossings in the south Peel area. There is one in particular which the Department of National Defence has perhaps assisted in making more dangerous. I refer to the one that is at the junction where the same Canadian National Railways line passes the road known as the first line or Cawthra road. It has taken the name "Cawthra" from a very old family that took the lands in that area by crown grant. The Department of National Defence have purchased part of those lands for a large ordnance warehouse.
This particular grade crossing is not level, as one would normally expect grade crossings to be, but rather has a very sharp incline of the road on the north rising at an angle of about 45 degrees and then a decline at the other side at about the same angle. There is an automatic signal at the crossing which I am told has been known not to work sometimes. I suggest that that is reasonable because on occasion automatic signals do not perform properly. Since the ordnance depot has been constructed there has been a considerable increase in the vehicular traffic over the crossing. It is a narrow crossing that is dangerous to pedestrians, and I suggest that its elimination really deserves the consideration of the government, particularly in view of the fact that the increased hazard has been created by another department of the government.
With respect to the grade crossing fund itself and the elimination of grade crossings generally, having in mind the report that the minister has in his hands, I suggest that some initiative should be taken by the government rather than the municipalities being put in the position of having to make an application each time and of being met with the constant opposition of a railway such as the Canadian National to expending money for the elimination of grade crossings which are dangerous and costly in that they result in a serious loss of time to people in built-up areas.
If the minister should have the pleasure some time of visiting our wonderful county I would invite him to inspect the crossings on Hurontario street. At any time of the day he will see long lines of vehicles waiting to cross this main line of the Canadian

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National Railways. In many instances I have seen a line of waiting vehicles a mile long. Much time is lost there by people who are busy and the dollars represented by time lost by Canadian citizens would eventually pay for the elimination of that level crossing.
Having regard to the history of applications to have the level crossing eliminated, I suggest to the minister that other steps must be taken in these cases to bring about the elimination of such problems. When people have applied over a period of some forty-two years for the elimination of this crossing their application must have some merit. It is not a case of someone suddenly getting the idea of applying for the elimination of a crossing. There is a history of applications for the elimination of this crossing over a period of forty-two years, but in all instances the board has not granted the request because of the resistance of the railway involved to paying its proper share. I suggest to the minister that consideration might well be given, where it is in the interests of commerce and the travelling public as a whole, to taking the initiative in eliminating such crossings rather than leaving it to the municipalities involved to make application.
There is one further point I should like to make with respect to this line of the Canadian National Railways. A commuter service is provided, and while in the past it may have been adequate I suggest with the increased population in the area and the large number of commuters who live there and work in the city of Toronto serious consideration should be given to improving the service offered both with respect to the number of trains and the type of equipment. I suggest to the minister that having regard to the size of the city of Toronto and the population in the immediate area through which the commuter trains travel the service provided does not compare with that provided for any other city on the North American continent. It seems to be an area that has been forgotten so far as commuter service is concerned. I draw that matter to the minister's attention because I know that having been brought to his attention he will see to it that, in the best interests of the people concerned, some action is taken.


Mr. Hahn:: I wish to refer to railway crossings in the city of White Rock. White Rock has British Columbia's safest beach in many respects, and it certainly is one of the finest. Practically every Sunday between 20,000 and
30,000	people go there. However, between Washington avenue in the city itself and the beach there is the Great Northern Railway

line. Prior to 1951 there were two crossings from the main street in the city over the railroad to the beach. In 1951 the Great Northern Railway saw fit to change the track and close the crossings. As you can well imagine there was an immediate effect upon the tourist traffic to such a notable area as this beach. The people concerned have made requests on more than one occasion that the railroad crossings be placed there again so that traffic can get to the beach, thus facilitating use of the beach. The Minister of Transport was sent a letter on January 16 of this year embodying that request, and I was wondering whether or not he would like to answer it at this time.


Mr. Montgomery:: I am not going to take very long, but I think this is the proper place to bring up this matter. It has to do with the Railway Act, and I believe that the only way that the situation can be rectified is to amend the act. I bring this matter to the minister's attention because it is not so long ago that, rightly or wrongly, I headed off a bunch of petitions that were going to be sent to him with respect to overpasses and underpasses. Under section 265 of the Railway Act I understand that the board of transport commissioners does not consider that these are railway crossings towards which a contribution may be made for the elimination of danger when applications are made by municipal authorities for elimination or widening of underpasses or overpasses.
There is a serious situation in my constituency, and I call it an underpass because the highway goes under the railroad. It was built in the days when there was nothing on the road but the horse and wagon, and it was quite safe then. Now, the highway has been widened on both sides of the railroad, and the underpass is at an angle of, I would say, nearly 45 degrees to the highway. This means that any traffic coming up from the south towards the underpass cannot see the traffic approaching on the other side. I believe the act should be changed so that a portion of the money allotted for the improvement of crossings should be applicable to underpasses. Since there is no authority to do that, there is not much use saying any more.
I believe there are two other dangerous crossings in the province of New Brunswick, and I believe they are underpasses, at which several people have been killed in the past few years. I know the one in the county of Victoria is very dangerous, and we would like

to have the minister consider this matter to see whether next year there might be some amendment introduced to the act.


Lionel Chevrier: May I tell the hon. member that the report to which I referred earlier contains a reference to that which I think would meet the hon. member's position.
In answer to the hon. member's earlier question as to the grade crossing in his constituency the position is that, as is done in all of these cases, I referred it to the board for their attention. However, there is nothing the board of transport commissioners can do unless and until there is an application which comes squarely before it. Unless that application has been made either by the municipality or some other public body concerned the board cannot deal with it. Whether or not the application has been made, I do not know, but I can say that I did pass on the representations of the hon. member to the board.


Mr. Quelch:: On May 27 the minister stated that he might be able to put something on the record concerning the rates on the movement of grain moving through the Crows-nest pass. Could he do that now?


Lionel Chevrier: Could I put them on at a later date when we come to the discussion of an item concerned with those? It is rather lengthy and I would prefer to do it later if I may.


John Angus MacLean: On April 28, and again on May 4 there was a question asked on the orders of the day concerning the findings of inquiries into the unfortunate air accident that took place at Moose Jaw. On May 5 the Minister of Trade and Commerce made a statement which is recorded in Hansard on page 4419, and which reads in part as follows: -an interim report on the Moose Jaw aircraft disaster has now been received by the Minister of Transport (Mr. Chevrier). Interim reports have also been received by the Minister of National Defence (Mr. Claxton) and by myself as minister responsible for Trans-Canada Air Lines.
At another point the minister stated:
Standing instructions of both the R.C.A.F. and T.C.A. emphasized the necessity for care arising out of the proximity of the airways and the Moose Jaw training establishment.
He also stated:
Nevertheless, a special examination of existing regulations, both civil and military, has been undertaken on a joint basis to ascertain whether changes, particularly in those sections having a bearing on this accident, are required.
I wonder whether the minister is in a position to make a statement as to whether or not final reports of the investigations by the various authorities into this accident are
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now complete and available? Secondly, what action has been already taken or is contemplated towards making the recurrence of such an accident unlikely? If the minister is not in a position to give an answer now, he could do so later.


Lionel Chevrier: I can give an interim answer now but it would not add, I am sorry to say, a great deal more to what was said by the Minister of Trade and Commerce earlier. The interim report, as the hon. member knows, has been handed in but the final report is not in our hands. I cannot speak for the R.C.A.F. I do not know what the position is with reference to them. I do know, however, the matter is still under consideration. Until I have a final report, it would be difficult for me to answer the hon. member's question.


Mr. McBain:: I should like to take a
moment or two to express my appreciation to the minister, and through him to the board of transport commissioners, for the expeditious manner in which the request for a hearing on the Canadian National St. George street railway crossing was dealt with last January. May I also express my appreciation to the hon. member for Middlesex East, who so capably looked after the interests of the constituents of Elgin in this matter.
The railway crossing to which I have referred is on the outskirts of the city of St. Thomas and is located on the brow of a very steep hill. The grade is as high as 16 per cent. I refer specifically to this crossing as one of the many crossings in the county of Elgin. It was in the interests of the travelling public that prior to his sudden death the late C. D. Coyle, who was for many years a member of this house, endeavoured to secure added protection and had made the appointment for the hearing by the board of transport commissioners to which I made reference a few moments ago.
As you drive along the highways of rural Canada you find many crossings with practically no protection except the crossing sign. In fact, in Canada there are 25,000 of these crossings. Only 6-2 per cent of rural crossings in Canada have protective devices, and where those are to be found the most usual type of automatic signal is the flashing lights or bells. Subways and bridges offer complete protection, but there are not many of them. There are subways at only 2 per cent of all rural crossings, and bridges at 1-4 per cent. A few crossings have manually operated

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gates and a very few have a watchman. This type of protection is scarce because of the high cost of labour.
In the towns and cities nearly 30 per cent of the railway crossings are protected, and the devices used are usually the same as those in the rural areas. Actually, the number of protected crossings, both rural and urban, has kept pace with the increased number of crossings. In the last 30 years some 5,000 new crossings have been added to the total. The main reason why there is not complete protection at every crossing is financial.


An hon. Member:: Ten o'clock.


Edward Turney Applewhaite: I hear some hon. members calling ten o'clock. I am sure that if the hon. member has only a few remarks to make hon. members will bear with him for a few minutes.


James Alexander McBain: I shall be very brief.


Edward Turney Applewhaite: Has the hon. member unanimous consent to continue?


Some hon. Members:: Agreed.


James Alexander McBain: While there are now over
32,000	crossings in Canada, the number injured and killed was three times greater in 1950 than in 1920. Since 1920 more deaths and injuries have occurred at rural crossings than urban crossings, and the reverse was the case before 1920. The rapid increase in the number of automobiles has been mainly responsible for this situation. There are over six times as many automobiles on the roads now as there were in 1921. In addition, the greater speed of highway traffic and the increase in the amount of traffic offer extra hazards. As I stated before, only 6-2 per cent of the rural crossings have any protective devices.
In 1950 the number of people killed at rural crossings was 87, and there were 224 injured. There has however been a decrease in the number of accidents in rural areas since 1947, when there were 101 deaths and 306 injured. This may indicate the effectiveness of some of the improvements made at level crossings.
The matter of solving the level crossing problem is not as simple as one might think. It involves the matter of finance, how to divide the cost and how to spend the available money. What kind of protection is needed at railway crossings to prevent accidents? The only sure protection is a bridge or subway. By separating the highway from the railway an overhead bridge or subway does away with level crossings and eliminates the danger of a crash.
Then, how effective are the flashing lights, bells and other automatic devices? I understand the board of transport commissioners made a survey of over 1,000 crossings as a check on the kinds of protection and the number of accidents. The results were as follows: Subways and overhead bridges; no accidents. Manually operated gates; some accidents at city and town streets, and provincial highways. Automatic signals, many accidents at city and town streets, some on provincial highways and a few on rural roads. Unprotected; the greatest number of accidents on all kinds of roads, whether urban, rural or provincial highways.
Thus the evidence indicates that automatic signals offer a fair measure of protection on rural roads. On city streets, however, it appears that the traffic is so heavy as to limit the effectiveness of lights and bells. On provincial highways they are also less effective than on secondary country roads. Many of the new provincial highways have no railway crossings at all, as overhead bridge or subways were built as part of the highway scheme.
I do not propose taking up further time, but I would say to the minister that progress is being made on the St. George street crossing to which I referred. I hope we will have the continued support of the minister on that project.


Edward Turney Applewhaite: Shall the item carry?


An hon. Member:: Ten o'clock.


Ernest George Hansell: No. I have something to say.


Walter Edward Harris: I believe it would be the desire of the committee that this item be carried. If the hon. member is the only other member wishing to speak, perhaps he would do so and then we could adjourn as soon as the item is carried.


William Earl Rowe: Better adjourn now.


Edward Turney Applewhaite: I am entirely in the hands of the committee. Is it the desire of the committee that the hon. member have leave to proceed?


Ernest George Hansell: I shall cut my message short, and would not be more than four or five minutes. I do trust I am not out of order in speaking on this particular item. I refer to a certain phase of the crash which took place at Moose Jaw a few weeks ago. After looking through the estimates, this is the only item which seemed to me to offer an opportunity to discuss that subject.


Lionel Chevrier: May I interrupt the hon. member? There are at least three other
[Mr. McBain.l

places where he could discuss the subject, particularly that dealing with civil aviation.


Stanley Howard Knowles: Item 480.


Lionel Chevrier: It is item 480, I am told.


Ernest George Hansell: All right, Mr. Chairman.


[Stage Direction]
Item agreed to.
Progress reported.

Walter Edward Harris: Tomorrow and Friday we shall take the estimates. I have been doing my best to ascertain the wishes of hon. members opposite, and also to get in some matters for the convenience of the ministers. It does seem, therefore, that first thing tomorrow morning we might take the supplementary
Business of the House
estimates of the Secretary of State. Then we would pass on to justice, national revenue, fisheries, the Secretary of State, trade and commerce, legislation, and privy council, in that order. This procedure is subject only to the understanding that to meet the convenience of hon. members opposite national revenue will not be called earlier than Friday morning.


[Stage Direction]
It being five minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.
[The following item was passed in committee of
supply]:

[Stage Direction]
443. Departmental administration, $1,456,640.
5435
[Stage Direction]
Thursday, June 3, 1954