1954-03-04

Mr. Speaker:: I have the honour to inform the house that I have received the following letter from the secretary to His Excellency the Governor General:
2nd March, 1954
Sir:
I have the honour to inform you that the Right Honourable Thibaudeau Rinfret, Chief Justice of Canada, acting as Deputy of His Excellency the Governor General, will proceed to the Senate chamber on Thursday, the 4th March, at 5.45 p.m., for the purpose of giving the royal assent to certain bills.
I have the honour to be, sir.
Your obedient servant,
J. F. Delaute,
Secretary to the Governor General. (Administrative)



PRIVILEGE


Mr. E. D. Fulton (Kamloops):: Mr. Speaker, I rise on a question of privilege. On Tuesday, March 2, there was tabled in the house correspondence and so on in connection with what is known as the Johnston-Western Canada V.L.A. project near Kamloops, British Columbia. This was in compliance with an order of the house issued on February 8.
This order asked for a copy of all letters, telegrams and other correspondence, and memoranda of telephone calls, exchanged between the government or any minister, department, or agency thereof, and any other person or organization outside the dominion government service since June 1, 1953, concerning the allocation of funds for this project.
The return as tabled does not include a letter which I have reason to believe is in the possession of the Minister of Fisheries (Mr. Sinclair). I base my statement in that regard upon an article appearing in the Kamloops newspaper of January 25, which reads as follows:
Notice that a sum of $46,000 was approved and would be included in government estimates to be considered at the present session of parliament was received in Kamloops by Syd. J. Smith in a letter from fisheries minister James A. Sinclair. (Mr. Smith is president of the Liberal association of British Columbia and former M.L.A. for the Kamloops riding.)
And it continues:
The amount approved by the treasury board is specifically earmarked for the improvement and extension of V.L.A. land acquired by the federal government-
-and so on. It would appear that the letter was in detail as to the amount of the item, and what it would be used for. I would point out that the letter is not included in the return tabled the day before yesterday. I would ask the Acting Prime Minister (Mr. Howe) if he will cause the necessary activity in the cabinet to be undertaken which would result in the production of this letter as asked for in the motion passed by the house.


Hon. James Sinclair (Minister of Fisheries):: Mr. Speaker, once again I simply have to reply that personal correspondence I have with friends who are interested in public welfare in Kamloops is not to be produced here as government papers.


Edmund Davie Fulton: May I ask the Minister of Fisheries whether he regards a letter written by himself on a matter approved by treasury board for the inclusion in the estimates, and therefore confidential until the estimates are tabled, as one which might properly be regarded as personal correspondence.


James Sinclair: That is a matter entirely for my decision. The letter I wrote was as one interested in public development in British Columbia to another man who is interested in public development, and had "personal" written across the top.



PRIVATE BILLS


[Stage Direction]
Bill No. 325, to authorize Niagara Gas Transmission Limited to construct, own and operate an extra-provincial pipe line. -Mr. Hunter.
Bill No. 327, for the relief of Lucien L'Esperance, junior.-Mr. Hunter.
Bill No. 328, for the relief of Charles Edouard Dubois.-Mr. Hunter.
Bill No. 329, for the relief of Donald Clarke Allen.-Mr. Hunter.
Bill No. 330, for the relief of Jean Albert Raymond Rasson Desloover.-Mr. Hunter.
Bill No. 331, for the relief of Hazel Helena King Featherston.-Mr. Hunter.
Bill No. 332, for the relief of Jessie Ruby Dawe Greenslade.-Mr. Hunter.
[Stage Direction]
Questions
Bill No. 333, for the relief of Romuald Fregeau.-Mr. Hunter.
Bill No. 334, for the relief of Jean Nelson Williams Blampied.-Mr. Hunter.
Bill No. 335, for the relief of Horace Gervais.-Mr. Hunter.
Bill No. 336, for the relief of Margaret Ann Eddie Casselman.-Mr. Hunter.
Bill No. 337, for the relief of Marcel Prud'homme.-Mr. Hunter.


Mr. Nowlan:: 1.	In each of the calendar years, 1948 to 1953, inclusive, how much money has been expended on the wharf commonly known as "The Block" at cape Rouge, Inverness county, Nova Scotia, for (a) repairs; (b) maintenance; (c) construction or additions thereto?
2.	In each of the calendar years, 1948 to 1953, inclusive, how much money has been expended on the breakwater at Margaree Harbour, Inverness county, Nova Scotia, for (a) repairs; (b) maintenance; (c) construction or additions thereto?


Mr. Bourgef:: 
WHEAT BOARD-GRAIN HELD
Mr. Harkness:: 1.	What amount of wheat, oats and barley was held by the wheat board on the latest date for which figures are available?
2.	How much of this grain was: (a) crop year 1952-53; (b) crop year 1951-52; (c) crop year 1950-51?


Mr. Dickey:: 1.	It is not the policy of the Canadian wheat board to disclose its position with respect to holdings of wheat, oats or barley during a current crop year.
2.	See answer to No. 1.



KINGS AND ANNAPOLIS COUNTIES, N.S.  WHARVES

Mr. Nowlan:: For each of the calendar years 1952 and 1953, what was the total amount of money expended by the Canadian government or any department thereof upon the wharf or wharves at (a) Harbourville, Kings county, Nova Scotia; (b) Scotts Bay, Kings county, Nova Scotia; (c) Halls Harbour, Kings
county. Nova Scotia; (d) county, Nova Scotia? Mr. Bourgel:	Parkers Cove,	Annapolis(a) Harbourville,-	1952	1953breakwater 	
(b) Scotts Bay,-	$7,693.51	$13,531.46wharf 	
(c) Halls Harbour,-	Nil	Nilbreakwater 	
(d) Parkers Cove,-	2,408.28	6,969.34breakwaters 	1,947.63	69,081.63



INCOME TAXES


Mr. Harkness:: 1.	Were letters, similar to the ones sent to farmers in the Calgary income tax area, sent out to farmers in all provinces?
2.	If so, how many were sent out in each province?


Mr. McCann:: 1.	No. Similar letters were sent in the Edmonton district in Alberta, in Manitoba and in Ontario.
2.	They were sent from time to time to make appointments in a nearby town for farmers in the area. Statistics are not available because this was a routine procedure.



HEADACHE PILLS

Mr. Knowles:: 1.	Has the attention of the government been drawn to reports of infants suffering serious illness from poisoning due to overdoses of so-called headache pills?
2.	Have any representations been received by the government urging that steps be taken by the food and drugs division of the Department of National Health and Welfare in an attempt to eliminate or minimize the possibility of such overdoses?
3.	If so, what consideration has been given to such representations and what are the results of such consideration?
4.	If no such representations have been received, is the problem being considered by the government on its own initiative?
5.	What are the results of such consideration?


Mr. Robertson:: 1.	The attention of the Department of National Health and Welfare has been drawn to these reports by newspaper accounts only.
2.	No such representation has been made by any association or organization, but the Department of National Health and Welfare was already aware of the situation and following it closely. There have been occasional

reports over the years from individuals about unfavourable responses to several drugs, including a headache remedy.
3.	Each report is investigated and if the circumstances reveal that there is anything useful that can and should be done under the Food and Drugs Act, such action is taken. However, the size of dose makes little difference to an allergic individual and the dangers to such persons can not effectively be prevented by regulation.
4 and 5. Yes. The department is taking steps to ensure that appropriate action will be taken to correct the situation by all means available.



CORPORATION TAXES, FEDERAL AND QUEBEC

Mr. Michener:: In the last fiscal year, what was the amount by which Canadian corporation income tax receipts were reduced by the allowance of Quebec corporation taxes as a deduction?


Mr. McCann:: Information not available as the taxation division does not maintain a statistical record of the amounts by which corporation income tax has been reduced by allowable deductions for payment of Quebec corporation taxes.



MARGARINE PUBLICITY

Mr. Poulin:: 1.	Has any department of the federal government or agency under its authority issued a pamphlet or publication advising the use of margarine?
2.	If so, what is the name of such publication and under what authority is it published?


Mr. Robertson:: 1.	There is no publication issued by the nutrition division of the Department of National Health and Welfare which is concerned with margarine alone or which advises the use of margarine in distinction to other spreads. Publications issued by the nutrition division deal simply with the nutritional quality of food.
2.	See answer to No. 1 above.



OATS AND BARLEY


Mr. Argue:: 1.	Is there a differential in the Canadian wheat board selling price for oats and barley as between Fort William-Port Arthur and Vancouver and between Fort William-Port Arthur and Churchill?
2.	If so, what is the differential and for what length of time has such differential been in effect?


Mr. Dickey:: 1.	The Canadian wheat board does not have any fixed differential in its selling price for oats and barley as between Fort William-Port Arthur and Vancouver and Churchill.
2.	Depending upon market conditions, the board does, at times, ask for and receive a
Questions
premium over its Fort William-Port Arthur prices on sales of oats and barley ex Pacific coast ports and other export outlets.



ARMED FORCES


Mr. Herridge:: 1.	Have any skates been purchased for the defence services at any time since January 1, 1952?
2.	If so, how many times have such purchases been made?
3.	What was the total number of pairs of skates included in each such purchase, and what was the total price for each such purchase?
4.	From whom were these purchases made?
5.	How many pairs of such skates were allocated to each of the three services?


Mr. Blanchette:: 1.	Yes.
2.	Four.
3.	(a) 100 pairs at a total price of $1,500; (b) 36 pairs at a total price of $1,224; (c) 38 pairs at a total price of $864.50; (d) 102 pairs at a total price of $1,045.50.
4.	(a) George Bourne, Ottawa; (b) Murray & Co., Montreal; (c) H. H. Wilson, Toronto;
(d)	H. B. Kennedy, Toronto.
5.	(a) 240 pairs of skates were purchased for the army for issue to the 25th Canadian infantry brigade in Korea; (b) 36 pairs of skates were purchased for College Militaire Royal de St. Jean.



HEALTH PROGRAM PAYMENTS, HALIFAX

Mr. Balcom:: What amount of assistance was paid out under the national health program, during the last five years in connection with the development of health services and the construction of hospitals in the city of Halifax?


Mr. Robertson:: Development of health services, $528,466; construction of hospitals, $316,079.



ARCHITECTS


Mr. Fulton:: 1.	How many persons are employed as architects in the Department of Public Works?
2.	What is the total of salaries provided to be paid to such architects in the coming fiscal year?


Mr. Bourgel:: 1.	Thirty-six.
2.	$217,235.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. W. G. Blair (Lanark):: I should like to direct a question to the Minister of Labour. Will the minister state the policy, if any, of ing it closely. There have been occasional

Inquiries of the Ministry textile workers in areas such as Lanark, Hespeler, or others throughout Canada where textile factories have been closed?


Hon. Milton F. Gregg (Minister of Labour):: Mr. Speaker, I shall take my hon. friend's question as notice.



FORT WILLIAM


[Stage Direction]
On the orders of the day:
Mr. Daniel Mclvor (Fort William):: I should like to direct the attention of the Minister of Labour to a report in the Times-Journal of Monday last to the effect that building permits in January and February of this year were nearly double those of last year, and ask if he has any comment to make.


Milton Fowler Gregg: I read the extract to which my hon. friend refers by looking across at his desk. I am happy to see this evidence of an upturn in employment in his constituency, as indeed similar news is coming in from other sections in Canada.


Mr. Winch:: May I ask the minister a supplementary question. Can we therefore anticipate the same speed from now on in getting figures on unemployment?



CANADA EVIDENCE ACT


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Prince Albert):: should like to direct a question to the Acting Prime Minister. It arises out of the judgment of the Supreme Court of Canada in the Wismer case, in which an appeal by Mr. Blair Fraser was denied. Will the government give consideration to introducing an amendment to the Canada Evidence Act at the present session so that the sources of information of press and radio in any future action shall be considered confidential and inadmissible as evidence; otherwise-


Mr. Chevrier:: That is a strange position to take.


John George Diefenbaker: No, it is not; it is of the essence that the wells of information for press and radio shall not be dried up.


Right Hon. C. D. Howe (Acting Prime Minister):: I will need to consult my colleagues before answering the question.



CAPITAL PUNISHMENT


[Stage Direction]
On the orders of the day:
Harold Edward Winch: wish to direct a question to the Minister of Justice. Can he inform the house whether he will take steps to stop any death sentences being carried out until such time as parliament gives consideration to the findings of the special joint committee on capital punishment?


Hon. Stuart S. Garson (Minister of Justice):: I wish to thank my hon. friend for giving me notice of his question. The governor general in council, in his present consideration of the question of commutation of sentences of death, carries out the laws of Canada in their present form. Until parliament amends the present law with regard to capital punishment the governor in council should not, in my view, by executive action, attempt to bring about in effect a change in the law, which only parliament can lawfully make.


Harold Edward Winch: May I ask a supplementary question of the Minister of Justice. Is the minister aware that in Great Britain the operation of the statute was suspended while capital punishment was under consideration in the House of Lords?


Stuart Sinclair Garson: Mr. Speaker, my understanding of what happened in the United Kingdom is that for a short period in the year 1948 death sentences were commuted to life imprisonment. The sole reason that was given for the decision to recommend those commutations was the position resulting from the vote in the House of Commons on the clause in the criminal justice bill suspending capital punishment for five years. This was not because a royal commission or a joint committee of parliament was investigating the matter. The royal commission in England which reported on capital punishment was in fact appointed in 1949 and reported in 1953. During this period there was no suspension of capital punishment, nor were there any commutations granted for other than the usual reasons under the royal prerogative of mercy.



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. Leon Balcer (Three Rivers):: I wish to direct a question to the Minister of National Revenue. What is the reason the employees

of the taxation division of his department are not treated in the same way as the rest of the taxpayers of Canada in regard to receipts for charitable donations?


James Joseph McCann: I have not received any notice of this question. I shall answer it at a later date.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. Gordon Churchill (Winnipeg South Centre):: I should like to direct a question to the Minister of National Defence, arising out of answers given yesterday concerning the Belgian rifle. Is the minister aware that the rifle adopted and in use by the Belgian army is not the FN rifle which uses the standard NATO -30 round, but is the FN rifle which uses the -306 round, and therefore differs from the rifle adopted by the United Kingdom?


Hon. Brooke Claxlon (Minister of National Defence):: Yes.


Gordon Minto Churchill: I have another question for the Minister of National Defence. Was there a meeting at Washington in September, 1951, to discuss the adoption of a rifle for NATO countries, and at that meeting were representatives present from the United States, the United Kingdom, France and Canada?


Brooke Claxton: The meeting took place on August 2 and 3, 1951, not in September. It was attended by representatives of the countries mentioned.


Gordon Minto Churchill: May I ask the minister whether the purpose of that meeting was to discuss the adoption of a rifle?


Brooke Claxton: Yes, indeed.



HEALTH INSURANCE


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Cenlre):: Mr. Speaker, may I direct a question to the Minister of National Health and Welfare? As a resident of Ottawa East, has the minister's attention been drawn to a speech made two days ago in Toronto by Aurele Chartrand, member of the legislative assembly for Ottawa East, urging immediate action by Ontario on health insurance? Will the minister bring in the necessary legislation at an early date so that Ontario and 83276-169
The Bank Act
any other province that wishes to participate in a nation-wide plan may have health insurance?


Some hon. Members:: Order.


Hon. Paul Marlin (Minisler of National Healih and Welfare):: I have been waiting for this sort of question for a long time. I am not usually caught unawares, but I am today. I can say, however, that I have seen the speech which the provincial member for Ottawa East directed to the attention of the provincial government, and I would say to the hon. member for Winnipeg North Centre that if he will read carefully the speech of the member for Ottawa East in the Ontario legislature he will derive a great deal of profit.


Stanley Howard Knowles: Does the minister agree with that speech?



TRADE AND COMMERCE-DEFENCE PRODUCTION INQUIRY AS TO TABLING OF DEPARTMENTAL REPORTS

[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinlon):: I should like to ask the Minister of Trade and Commerce when he expects to be in position to table the reports of the Department of Trade and Commerce and the Department of Defence Production for the year 1953.


Clarence Decatur Howe: I am informed that both reports will be ready for tabling before the end of March.



THE BANK ACT


Hon. Douglas Abbolt (Minisler of Finance) moved: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to provide for the decennial revision of the Bank Act and the extension of the charters of the existing chartered banks till July 1, 1964, and to provide further for certain changes in connection with the administration of the act.
Motion agreed to and the house went into committee, Mr. Robinson (Simcoe East) in the chair.


Douglas Charles Abbott: Mr. Chairman, the bill to be based upon this resolution provides for the decennial revision of the Bank Act. It extends the charters of the eleven chartered banks for a ten-year period from July 1 of this year. In accordance with the practice

The Bank Act
on similar occasions in the past, I am recommending a new act and the repeal oi the one now in force.
At this time I wish to draw to the attention of hon. members the proposals contained in this bill for some of the more important changes in the present legislation. These are:
A provision that if parliament is not sitting during the 30 days preceding July 1, 1964, the charters will be extended until 60 days after the commencement of the next session.
A provision to increase the amount of capital which a newly-incorporated bank must have before it commences business. The present requirements were enacted in 1890 and are considered inadequate under present-day conditions.
A change relating to the issue by a bank of additional capital stock, which is intended to remove some of the obstacles which now exist.
A change regarding investments eligible for the pension fund of a bank.
A provision permitting each bank to determine the method by which ownership in shares of its capital stock may be transferred. At present this can only be done by registration on the books of the bank.
A change in the method of computing cash reserves of a bank and in the minimum ratio of cash reserves to deposit liabilities. This provision is complementary to the amendment proposed to the Bank of Canada Act which I explained at some length on second reading of that bill. Together, they are intended to give the Bank of Canada a better control of the reserves of chartered banks.
A provision which prohibits the issue of notes intended for circulation outside of Canada and terminates all note-issuing rights of the banks.
A provision complementing the amendment to the National Housing Act and permitting a bank to make loans on the security of insured mortgages.
A provision to clarify the lending powers of a bank on the security of oil in the ground and in transit. The banks have taken a very active part in the development of the oil and related industries in Canada and have been instrumental in providing them with substantial financing from time to time. The proposed revisions specify the type of loans which may be made to assist this comparatively new but very important part of our economy and the security which may be taken.
Changes in the provisions regarding amalgamations, to conform with current legislation and business practice.
Provision for payment from the consolidated revenue fund to the Bank of Canada of all unclaimed deposits of defunct banks, thereby placing with the bank all deposits of this kind.
There will be many consequential changes arising from those I have mentioned and others of less importance. I shall deal with these in greater detail, of course, on second reading and, when that stage is concluded, will move that the bill be referred to the standing committee on banking and commerce.


Mr. Macdonnell:: Mr. Chairman, the minister has outlined in considerable detail the special points which will be in the new bill, and there is just one question I wish to ask. I notice that the resolution is as follows:
That it is expedient to introduce a measure to provide for the decennial revision of the Bank Act and the extension of the charters of the existing chartered banks till July 1, 1964, and to provide further for certain changes in connection with the administration of the act.
Does that last provision cover the changes which the minister has outlined, or is there any general statement the minister would still wish to make to explain the phrase "changes in connection with the administration of the act"?


Douglas Charles Abbott: I must confess that I have given that point little thought. The resolution was drafted by the very able law clerk of the House of Commons. I am afraid that unlike my hon. friend I did not give any special consideration to the language to which he has referred. However, I can tell him that the principal changes, the changes which involve any departure from previous policy, are those which I have indicated in the brief statement I have just given.


James MacKerras Macdonnell: Without contending that
the minister should necessarily answer now, may I suggest that in the remarks he is going to make on second reading he might consider whether reference is to be made to the effect, if any, on home improvement loans under the proposed housing bill and also on farm improvement loans.


Douglas Charles Abbott: I shall be happy to do that.


Mr. Stewart (Winnipeg North):: Mr. Chairman, it is not our intention to say anything at this stage of the resolution. More will be heard from us later. I should like to ask the minister if he is in position to put on Hansard a statement similar to that
[Mr. Abbott.)

which was put on Hansard by the Right Hon. Mr. Ilsley, as appears at page 2550 of the 1944 debates of the House of Commons. That was headed "statement of current operating earnings and expenses and other information for the ten chartered banks."


Douglas Charles Abbott: Of course that information could be made available. My recollection is that the 1944 revision of the act was not preceded by a resolution-why, I do not know. Perhaps it is because of the inclusion in the Bank Act of some provisions which were formerly in the Bank of Canada Act, but it was decided by the law officers of the crown that this bill should be preceded by a resolution. I shall give consideration to my hon. friend's question and see whether I can cover that in my second reading speech or whether it might be more appropriately made available in the banking and commerce committee. The information he has asked for can be made available and will be made available if desired.


Mr. Low:: Mr. Chairman, I am going to
be just a little different from the representatives of the other two parties. I do not intend to speak at any length, but I use as justification for taking a few minutes of the time of the committee a rather important point which is involved. I hope what I shall have to say may perhaps induce the minister when he is making his statement on the motion for second reading to get to grips with the one important point I shall raise, and by that method we can perhaps deal with the question at issue and do something about it.
I was interested to learn of the scope of the changes which are proposed in the new act, and I was glad to see that something is to be done to enable chartered banks to take certain securities and make provision for financing oil development. That is an important thing in our province. It will be of importance, I believe, in several of the other western provinces also, and it seems to me necessary to make it possible for the chartered banks to assist in that development. I was also interested in some of the other things the minister said, but I shall confine myself more to the question of the change in the minimum cash reserves, as related to the change in the Bank of Canada Act.
I do not believe, Mr. Chairman, that a more important bill ever comes before parliament than the measure providing for the decennial revision of the Bank Act and the extension of the bank charters. This act, coupled with the Bank of Canada Act, lays down fundamental financial policy for Canada, and every 83276-169J
The Bank Act
aspect of that policy has a profound effect upon the lives, liberties and fortunes of every man, woman and child in the country.
For that reason the greatest care should be exercised in dealing with this measure which the minister proposes introducing today. It should be subjected to the minutest scrutiny and to most careful consideration by members of parliament both here and in the banking and commerce committee to which I understand it will be sent.
Our view in regard to all this banking legislation was very well expressed by the hon. member for Acadia when he spoke in the debate on the second reading of the Bank of Canada Act on February 25. He said in effect, though these are not his exact words, that we do not want the amendments dealing with the cash reserves of the chartered banks to be too restricted in degree to permit the government to institute what we consider to be a sound financial policy, that will encourage the optimum development of our resources and permit the equitable distribution of the goods and services resulting from that development. Most hon. members will agree, I believe he said, that during any long period of peace that has not been the case. Consequently, there is real need and room for considerable improvement.
At this point, Mr. Chairman, I hasten to say that we-I do not like to interrupt the conversations which are taking place between hon. members, Mr. Chairman, as I like to allow them their peace, but I do believe it is in the interests of all hon. members that we have some order.


The Chairman:: Order.


Solon Earl Low: I hasten to say at this point, Mr. Chairman, that we believe our Canadian branch banking system is one of the best banking systems in the world. We believe the Canadian chartered banks have done a very fine job of financing production, which is of course the major responsibility imposed upon them by their charters. We believe they have managed their affairs quite admirably and have maintained a standard of safety and liquidity which is very high by comparison with any other system in the world.
We are just as anxious as anyone else to see that our chartered banks maintain their enviable position in these and other respects which could be mentioned. We would like to see them privately-owned and we hope they will never become government-owned institutions. We do not take too seriously

The Bank Act
the declarations we sometimes hear that they will be nationalized under other administrations.
Governments of the past in Canada have given the chartered banks a virtual monopoly of money creation and issue. This monopoly of the chartered banks can and does exercise a tremendous power of control over every phase of private and national business. The manner in which they exercise that control determines to a very large degree whether our country enjoys prosperity or suffers adversity.
Authorities list about nine major factors affecting the economy which determine whether we have boom and depression or steady prosperity. I would like to name these nine factors, because I believe they must enter into any consideration we might give the Bank Act. They are these: debts, currency volume, price level, net worth, profit, production, psychology, currency turnover, which some people call rate of flow of currency, and rate of interest.
Of late years many outstanding authorities have come to believe that eight of these factors can be influenced by regulating the volume of deposit money in this country. The chartered banks are almost if not completely in control of deposit money. It is within their sole discretion to grant or refuse loans, which is the means, of course, by which deposit money is brought into existence.
It is true that the cash reserves against which loans are made are created and issued by the Bank of Canada. By varying the volume of this cash reserve the Bank of Canada can limit the volume of deposit money, but it can only use influence in the matter of increasing the volume of deposits. I stress that important point.
Deposit money becomes effective demand when it is immediately available to buy goods and services. By varying the volume of deposits, therefore, the chartered banks may create or diminish effective demand, sometimes with good and sometimes with drastic results. I would like to quote a short example of what can happen in this respect. This quotation is contained in a remarkable booklet by De Vee Lee, entitled, "Twentieth Century Economic System." Perhaps some hon. members have already seen this little booklet. This is the quotation:
When the effective demand for goods is increased so suddenly and largely that current production cannot be speeded up fast enough to keep up with it, stocks begin to diminish and prices to rise. The first impetus upwards may be given by a relatively small increase in demand from the ultimate consumer, or it may be due to psychological causes. The upward movement, when once started, is, however, carried forward by the urgent and largely increased demands of the holder of stocks, whether

manufacturer, wholesale dealer or retail trader. His action is based on fear and greed: the fear that if he does not buy now, prices will go still higher, and the hope that if he does buy now, prices will go still higher and he will reap the benefits. The result of his action is, in fact, to drive prices higher. When prices are falling, he holds off the market in the fear that if he buys now, his competitor will later buy at lower prices, and the hope that if he does hold off, prices will go lower. The effect of his holding off is to drive prices lower. This psychological factor could, it is submitted, be reversed and made to work in favour of stability.
When such uneconomic price fluctuations are set in motion, Mr. Chairman, the chartered banks, advised and assisted, of course, by the Bank of Canada, set about devising remedial action. What do they do under present circumstances? Again I would like to quote the author of "Twentieth Century Economic System" to illustrate what they do. The author states:
The technique under which the Bank of England-
And I understand the technique and procedure of the central bank of Canada is approximately the same.
-contracted the cash base of the joint stock banks, so compelling them-if they were to maintain their ratio of cash to deposits-to reduce their deposit by calling in loans, was always effective in stopping the boom and forcing down prices. The trouble arose when the prices reached the point of equilibrium and then passed it and the major slump supervened. Existing technique was incapable of stopping the fall in prices at the point of equilibrium. It was for this reason that the monetary authorities hesitated to check an upward rise in prices at its inception. They might so easily convert an incipient boom into an uncontrollable major slump.
There is the big problem under the system and policy as they now exist in Canada, how to stop a contraction of the volume of deposit money at the point of equilibrium and prevent the economy from going into a real depression. As I say, that is the real weakness of the present policy and mechanism.
I should like to take a brief look at what would happen in Canada when, after some reluctance-and I say that advisedly because I believe the Bank of Canada would approach this matter with considerable reluctance-the Bank of Canada would set about counteracting an inflationary danger by contracting the cash reserves of the chartered banks. They have that authority now under the amendment to the Bank of Canada Act. It is possible for them to contract from 12 per cent to 8 per cent or to increase from 8 per cent to 12 per cent. We do not believe that is quite enough, but at any rate for the time being it is a step in the right direction. When cash reserves are reduced by the Bank of Canada, the banks have to call in loans to enable them to meet their obligations. Producers, distributors and traders might therefore be forced to throw their stocks and their

goods onto an unwilling market in order to get the money to repay the loans. Soon a surplus of unsaleable goods might be overhanging the whole market, and very likely would be. What was a drama in the upsurge of a boom becomes a tragedy.
If effective demand could now be increased to absorb the surplus goods, of course everything would be well. But this the banks could not do under present policy. They can only increase purchasing power by making loans to producers or distributors; but the deflationary policy will already have rendered many former customers uncreditworthy. Those who are still creditworthy would not want to borrow or produce more when they could not sell what they had already produced.
That is the stalemate. What we need in our policy is a mechanism for stopping the downward movement brought on by a contraction of the cash reserves, stopping it at the point of equilibrium, in order to prevent depression. The only mechanism that can do that, as far as I can see, is one by which new purchasing power can be put directly into the hands of ultimate consumers so they can immediately make it effective demand and halt the downward trend.
I am hoping that such a mechanism will be provided in the bill which the minister brings in. He did not say anything about it today. Of course I did not expect him to go into detail at this stage, and I shall be quite content to wait until I have a chance to examine the bill. I mention this matter now in order to get the minister thinking about the thing that is in my mind and, I believe, in the minds of those whom I represent. The trouble now is that, to save their own skins in a deflationary movement ordered by the Bank of Canada, the chartered banks feel that they have to take away, as one man put it, the parasol just when it starts to rain, and the rest of us get soaked.
I shall not speak longer at this stage. We shall have more to say on second reading of the bill when we know more about what is in it. I shall close by simply stating that inasmuch as the chartered banks enjoy a monopoly of money issue, it is only reasonable to expect that when the national interest requires an increase in money supply to meet the distributive need and to keep economic activity and employment at a high level, the banks will make that money available at a reasonable rate of interest. I think that would not be expecting too much in the light of the substantial profits shown by the banks over the years.
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Mr. Pouliot:: Mr. Chairman, some years ago I brought to the attention of my hon. colleagues the fact that in order to understand our banking system one should look at the Canada Gazette and the annual reports of the banks. They are sent upon request, but I wonder how many members of parliament have asked for them. They are extremely interesting, and they represent the practical side of banking.
There are many theories about banking, debt and credit. Everyone will realize that credit is just debt. However, there are debts that are an asset from the other point of view. Assets and liabilities are convertible. What I mean by that is that when there is an asset somewhere, there is a liability on the other side. But what interests me particularly is a tabulation that was published under date of January 26, 1954, in the Canada Gazette and which appeared in the issue of February 6. It shows the liabilities of the eleven chartered banks in Canada. I have not the report of the Mercantile Bank of Canada, which is a new one, but I have the reports of the other ten chartered banks.
The total liabilities of the banks is $10,715,915,936. On the other hand, these are the liquid assets of the Canadian people. They represent deposits by and balances due to the dominion government; deposits by and balances due to provincial governments; advances from the Bank of Canada, secured; deposits by the public, payable on demand, in Canada, in Canadian currency; deposits by the public, payable after notice or on a fixed day, in Canada, in Canadian currency; deposits in Canada, in currencies other than Canadian; deposits elsewhere than in Canada; deposits by and balances due to other chartered banks in Canada; deposits by and balances due to banks and banking correspondents in the United Kingdom; deposits by and balances due to banks and banking correspondents elsewhere than in Canada and the United Kingdom; acceptances and letters of credit outstanding; liabilities to the public not included under the foregoing heads; dividends declared and unpaid; rest or reserve fund; capital paid up; and finally, total of foregoing liabilities.
This tabulation seems to be arid, but it is extremely interesting. In order to discuss the banking business sensibly we must get down to brass tacks and consider those official returns and available information about banking in general. With regard to theories of banking, I have my personal views which I shall have another opportunity to expound. But what strikes me is that our banks compare favourably with the banks of any other

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country. The dean of Canadian banks, the Bank of Montreal, was founded in the early 1800's. It has made its 136th annual report, which means that the bank has carried on business for 136 years. Very few United States institutions could compare with it. There was a time when the banks of our powerful and very rich neighbour were falling down and our banks were standing up and rendering great service to the public. Let me mention the opinion of Mr. Gordon R. Ball, president of the Bank of Montreal, about the revision of the bank charters. He said:
I earnestly hope that two basic considerations will be kept clearly in mind. One is that a competitive banking system, operating with the minimum of formal restrictions, has been amply shown by experience to be best suited to the needs of the Canadian community. The other is that both competition and flexibility can be most effective when they proceed from a position of strength. It would be doing an ill favour to the Canadian public unnecessarily to fetter the banks in the performance of their functions. And it would be no less dangerous, in pursuit of any doctrinaire notions, to push the banks into a position in which they were expected to assume risks, wholly inconsistent with their duty as guardians of other people's money, which they must be prepared at all times to pay.
This statement deserves serious consideration. Those who have read the report have found very appropriate remarks about "constructive banking", "a flexible monetary policy", "an opportunity to be seized", "the role of the United States", "Canada's responsibilities", and so on. The president of the Bank of Montreal suggests prudent optimism with regard to the future. I also commend to the attention of my hon. colleagues the remarks made by the general manager of the Bank of Montreal.
If we take the second oldest bank, the Bank of Nova Scotia, it has made its I22iiu annual report, which means that the bank has carried on operations for 122 years. This is also a very fine record, and I hope that hon. members who received the report of that bank have read it. The title of the address delivered by Mr. H. L. Enman, president of the bank, is "Canadian Development is Unequalled in Free World". This is remarkable. Think of it, sir. The president of an institution like the Bank of Nova Scotia told the shareholders of the bank at the annual meeting that Canadian development is unequalled in the free world. This is a matter for thought. He also made remarks under the headings "Canada has come a long way since before the war", "High investment and consumer buying main features of 1953", and so on.
I am not going to read all he said about the outlook because all my colleagues are familiar with what has been said, but I draw their attention to another part of the address

in which he dealt with the underlying growth of the Canadian economy. Mr. C. Sydney Frost, general manager of the Bank of Nova Scotia, delivered an address entitled "Production Growth Big Factor in Increased Bank Lending". This means that loans by the banks have been made wisely. Very often when someone goes to his bank manager to ask for a loan he is told that the matter will be referred to the head office. Naturally the banks must be cautious. They must show the prudent optimism or optimistic prudence referred to by one of these bankers. These men are human. They started at the bottom of the ladder. My hon. friends know very well that it is the practice of bank presidents to employ their sons in the banks as messengers in the first place and then in better positions, in order that they may be familiar with the whole banking structure. They meet other young men, become friends with them, and they learn their profession. They know their business, and that is the reason our banks have survived for so long.
I have referred to the two oldest banks. If we take the reports of all the other banks we will see that we have every reason to be proud of our banking system. I know that sometimes I have made requests to the banks that have been refused. They have to make such decisions, but that is no reason not to declare to the Canadian people that they must have entire confidence in our banking system inasmuch as our bankers have a free hand. For a time the Bank of Canada rendered very bad service to the lumbering industry when they cut their credit short, resulting in reduced operations. One of the reasons we have to amend the Unemployment Insurance Act is so that those engaged in forestry operations may have something to live on during the winter because those carrying on lumbering operations cannot get credit at their own banks on account of the instructions that were given by the Bank of Canada.
I have great respect for those gentlemen who consider that banking is a position of trust and confidence. They act in a very democratic fashion. They have annual meetings at which they meet their shareholders who are all invited to attend, and they give them any information asked for about the management at large of the banks. I could mention all the other banks. I have their reports here. I must not read long extracts, but I shall summarize the reports of the eleven chartered banks by saying that these men who are the pillars of finance in this country have confidence in the future of Canada and they are ready to help all

those who come with serious representations to get credit in order to promote their own businesses.
But, here again, it is impossible for the banks to accede to all requests and grant all that is asked for. It cannot be done. On the other hand, however, management of the banks in Canada has been wise; and the proof of this is that the banks have survived the years of depression and other difficulties. Now they are prosperous, and everybody knows it.
The report of the Canadian Bank of Commerce is very encouraging. Then if we look at the report of the Royal Bank of Canada we find something of particular interest in the address of the president, Mr. James Muir, and also the address of Mr. Atkinson, general manager of the bank. They have published separately reviews of conditions in Canada and in other countries. If our trade is progressing by leaps and bounds it is due, in the first place, to the initiative of the Minister of Trade and Commerce, who has done so much to help our fellow citizens who are engaged in business, and due also to the facilities and opportunities offered by the banks.
I could mention also many other banks, including the Bank of Toronto, the Canadian Bank of Commerce, and the Royal Bank. We find, too, a very interesting report from the Dominion Bank which makes reference to business conditions, mortgage lending and matters of that kind. These are things that should be looked into. Some banks publish in their annual reports lists of their branches throughout the country-and not only that, but in other countries as well. This is interesting, because they have afforded a number of facilities to Canadian exporters and importers.
The president of the Imperial Bank of Canada has said that the real output has expanded. He, too, has a message of cheer, as have also the two French-Canadian banks, namely La Banque Provinciale du Canada and Banque Canadienne Nationale.
I was also keenly interested in the report of Barclays Bank. My idea of banking is that the money deposited in banks in Canada should serve the Canadian people, and should not be sent outside. The danger with Barclays Bank is that it is a subsidiary of Barclays Bank, Limited, of London, and it is impossible to know what amount of Canadian money has been sent from Canada to the United Kingdom through that bank.
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I had a question on the order paper, which was passed as an order for return, in which I asked for information about the assets of the fire insurance companies. These are powerful companies; some of them are American, some English and some Canadian. I would like to know if the assets of these fire insurance companies, made up of money from the Canadian people, are serving Canadian business. Information on this point is of more importance than a discussion of any theory, because so long as the money coming from the pockets of the Canadian people is in the hands of the banks, it should be used to promote Canadian business. I shall have more to say about that in the debate on second reading.
If Canadian business is prosperous now it is due to several factors. It is due to the initiative of the Minister of Finance as well as that of the Minister of Trade and Commerce and other members of the government, including the Prime Minister, together with the initiative of those who are in the banks. And when I refer to the banks I do not refer only to those who work in bank offices. I refer to all those Canadian businessmen who have offices from one coast to the other, as far out as Newfoundland, men who are public spirited, who try to do the best they can with their own businesses and who, at the same time, are ready to help all Canadians with initiative who wish to make a success of any enterprise in which they are engaged.
I must add that bank customers are also an asset. The Canadian people should be very happy to have a banking system like ours, where there are no bank failures, and where the banks are good servants of the people.


Stanley Howard Knowles: Mr. Chairman, my colleague the hon. member for Winnipeg North indicated when he spoke some few minutes ago that we were prepared to have the debate on this legislation, so far as policy is concerned, take place on second reading of the bill. From what I have said I do not want it to be understood that we offer any criticism of the last two speakers for taking advantage of the opportunity to speak now. However, in view of the more extended remarks that have now been made, it seems to me that perhaps a further brief statement might be made upon our behalf.
So far as these various stages of debate are concerned, no one can lay down a hard and fast rule as to whether debate should take place at the resolution or at the bill

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stage. As a matter of fact the practice varies from one piece of legislation to another. This legislation is somewhat complicated, and we shall certainly have much more to say when the bill is before us and the debate on second reading takes place.
However, since a few statements that might be regarded as of a policy nature are being made, I think it should be made clear that it is our view, as was expressed on February 25 by my leader when the bill amending the Bank of Canada Act was before us, that public ownership and control of the commercial banks is necessary if we are going to have complete control by the people over fiscal and monetary policies. We recognize and contend that those who control fiscal and monetary policies exercise tremendous control over the lives of our people. We are glad that some steps in the right direction have been taken. I refer to the fact that we have a central bank, and I refer also to such controls as we have over the chartered banks through the medium of the Bank Act.
We feel, however, that more social controls than we have yet achieved are necessary, and that eventually at any rate this calls for public ownership of the commercial banks. We feel, too, that it calls for social or public control of the flow of investment.
As I have already indicated, we are prepared to have the major debate on the matter when we reach second reading stage, when we shall develop our position more fully. I did feel that, in view of the somewhat extended remarks that were made by the last two speakers, we should not let this stage go by without it being made very clear that our position is still the one we have taken in the past, namely public ownership, as my leader pointed out in the debate last week on the bill amending the Bank of Canada Act.


Mr. Ferguson:: I was quite interested in the remarks made by the hon. member for Temis-couata. I gathered from his remarks that he was referring to the insurance companies and banks. He tried to imply that money received by insurance companies should be all kept in this country. I am sure he is not aware of the fact that before a foreign insurance company can start doing business in this country they must deposit with the federal government a substantial sum of money, sufficient in the minds of the government and others who have had years of experience to protect the policyholders.
Foreign companies, and particularly the British companies of which he spoke, have been established here for years and have spent millions of dollars in this country. Only

recently a company took out a charter in Canada. The money of that company came from Switzerland. They purchased a large office building on St. James street in Montreal for something like $1 million. That company has already purchased bonds and securities in this country to the extent of millions of dollars. That same company has purchased the Buffalo Insurance Company of Buffalo, New York, for approximately $6 million. The Canadian company with head office in Canada is reaping the benefit of operating in the United States, and is bringing thousands and thousands of dollars back to this country.
I believe that if we tried to put the clamps on foreign insurance companies and others that are interested in investing in Canada, it would be a great mistake. They are entitled to earn a return on the money they have invested in the development of Canada. I do not think it behooves us to criticize foreign companies that choose to come here and make a start and endeavour to ultimately become something worth while and participate in the wealth of this country, if they help in the building up of the country.
Nobody can deny that the original companies, particularly the British companies, were instrumental in the building up of Canada's vast financial and other resources. They have contributed in a large way to the development of Canada. Barclays Bank was mentioned. I am sure that before Barclays Bank were permitted to operate in this country they were carefully scrutinized by the federal government. They are building up their position, and anybody who deposits money in that bank does so with his eyes open. They are not a small institution, and if they decide to take any money which may be deposited with them and invest it in some other part of the world, I am sure the stockholders and depositors will be satisfied with the returns they may receive either as depositors or stockholders.
I do not think foreign financial institutions should be criticized unless we have something positive to go on, unless we have some reason for saying that they are detrimental to the Dominion of Canada, that we do not want them here and that we want to enact laws which are going to try to make them invest in Canada every cent received.
It would be utterly impossible to cover the insurance requirements of Canada with Canadian insurance companies. We must have foreign insurance companies. Approximately $28 million a year in reinsurance money is taken by Lloyd's on insurance risks in Canada. Therefore we want to make sure those people who are taking the initial risk in investing in our financial institutions such as insurance companies and banks are protected. It would

be a mistake to try to force them to invest all their money in Canada. They have invested in Canada for hundreds of years, and Canada has reaped the benefit.


Mr. Argue:: I think the hon. member for Peace River made a very important point in his comment. That was that there is no assurance that when the nation is facing the possibility of a recession the chartered banks will do that which is in the interest of the nation at that time, namely make the borrowing of money easier. As a matter of fact the banks usually do the very opposite thing to that which is in the interest of the nation. When we are in a period of inflation it is usually quite easy for the citizens of the nation to obtain loans from the chartered banks in very large quantities.
The hon. member for Peace River came down, as I expected he would, on the side opposed to public ownership; but he did point out to the chartered banks now privately owned that if they were to fulfil their obligations to the nation they would need to exercise sound lending policies, particularly when the nation was facing a recession.


Mr. Blackmore:: That is right.


Hazen Robert Argue: The hon. member for Winnipeg North Centre restated the position of the C.C.F. movement, namely that the chartered banks of this nation should be publicly owned and controlled. If that were done there is no question in my mind but that the right kind of lending policies would be undertaken by the chartered banks, so that an impending recession and depression could be averted.
I do not expect-no one in this house does -this government to adopt a policy of public ownership of the banking system of this nation. I do, however, believe the Minister of Finance is anxious that the chartered banks, whenever the country is facing the possibility of a recession, should adopt those policies that will help avert a recession. I believe the Minister of Finance would like to see the chartered banks of Canada undertake a policy of making loans whenever prices are falling and the nation seems to be headed for a depression.
Perhaps there is another means by which such a laudable objective might be achieved. I am thinking of the vast and valuable credit movement that has grown up from one end of Canada to the other, particularly in recent years. With the adoption in this house last year of a measure to provide for a central credit union for the deposit of funds on hand in individual credit unions, I believe the credit union movement is year by year becoming more financially sound. I am hoping
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that the minister and the government, along with the credit union movement of this country, will work out some arrangement whereby the credit unions in Canada can obtain some of the rights and prerogatives now enjoyed by the chartered banks in Canada.
I know as a primary producer that even though under our present banking legislation in Canada the chartered banks are given absolute guarantees against losses on such things as farm improvement loans, nevertheless in a good many instances the chartered banks do not lend the money to producers who really need such funds, and the reason is well known. Unless a primary producer, the same as any other potential customer of the bank, can prove to the satisfaction of the bank manager that he is in a very sound financial position, the chances are that he will go away without the loan. The credit union movement, without any guarantee from the federal government, has lent money to tens of thousands of Canadian citizens who were unable to get money from the chartered banks of Canada even though that money from the chartered banks would be lent on iron-clad guarantees against loss by the federal government.
Even though the credit unions have undertaken what would be normally high-risk loans, nevertheless in my opinion they are in very sound financial condition. I think co-operative ownership is one of the best possible types of ownership. I should like to see closer co-operation between the government and the credit union movement so that step by step our credit unions may be given the same rights and guarantees that are now provided for the chartered banks. If that is done I am sure that the credit unions would then be prepared to lend money in such a way as to assist the government in a fiscal policy aimed at avoiding a depression.
I have far greater faith in credit unions and the ability of people who operate credit unions to lend money wisely at a smaller loss than I have even in our well-established chartered banks. I think that by bringing the credit unions into the same category as our chartered banks and giving them the same rights the government not only would be supporting the co-operative movement, a most valuable movement, but would have one additional and powerful means of avoiding a possible recession.


Douglas Charles Abbott: I have listened with a great deal of interest to the statements that have been made by hon. members. I hope that my not dealing specifically with the points raised will not be considered necessarily as either approval or disapproval.

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Stanley Howard Knowles: We can always hope.


Douglas Charles Abbott: I was contemplating making my major contribution to the debate on the motion for second reading and I can assure hon. members who have spoken that that contribution no doubt will be influenced by some of the views which have been voiced today.


John Horne Blackmore: Mr. Chairman, before the resolution carries I think it is fitting that we examine briefly the whole question of the impact of the banking system on Canada's economy. I should like to give some attention to the suggestion raised by the hon. member for Winnipeg North Centre and the hon. member for Assiniboia in respect of the necessity in their opinion of having government ownership of the banks to ensure that people will be able to borrow money when they need it.
I should like to ask the hon. member for Assiniboia if he had been running the banking system in Saskatchewan in 1932 and people had come to borrow money from his banks to produce more wheat, would he have loaned freely in order to produce additional wheat and bring down the wheat price still lower than it was in 1932, by increasing the production of wheat? Would he have loaned freely, bearing in mind that a great many of the people who wanted to borrow money would probably never be able to repay it with interest? Would he have loaned money, being quite certain that he would have incurred a loss for his government banks? Not by any means!
Those are two vital points in respect of banking and obtaining loans by ordinary people. May I submit that those are facts which my C.C.F. friends seem to overlook entirely. I do not know that I have ever seen a bank privately owned that would refuse to lend money on a good risk for a good purpose when it looked as though markets and prices were such that the bank in question had a chance to get its money back. I doubt very much that very many banks have been guilty of negligence in that respect. There may be some exceptions.
Fundamentally there is the point for consideration in respect of the question whether or not we should have government ownership of banks. Social Crediters maintain that we do not have to have banks government-owned to ensure desirable borrowing any more than we need to have our coal mines government-owned in order to have coal produced. If there is an effective demand for coal, if there is an effective demand for money, and it is profitable to produce, you

will get money from privately owned banks just as you will get coal from the privately owned coal mines.
While we are discussing this matter let us go just a little further afield and see what it was that was wrong back in 1932. Between some time in 1929 and some time in 1933- I do not recall the dates-$900 million and more were withdrawn from circulation in Canada because the banks called in loans and refused to lend any further. The main reason why they called their loans and refused to lend further was that prices were down so low and markets were so poor that the banks had no certainty of making money.
What should we have done in 1932 had we been adequately managing the banking and financial system along with the economy? Here is a right good chance to ask ourselves that question.


Mr. Hansell:: The C.C.F. won't have any
answer.


Alistair McLeod Stewart: Obviously the answer is to put men to work.


John Horne Blackmore: How would you do that?


Alistair McLeod Stewart: By fiscal policy.


John Horne Blackmore: By what means?


Alistair McLeod Stewart: By building homes, by building schools, by building roads, by providing employment.


John Horne Blackmore: That is fine, but all those things cost money.


Alistair McLeod Stewart: Everything in life costs money, even Social Credit.


John Horne Blackmore: If you were administering the government where would you get that money? Where would you have got the money in 1932 if you had been in authority in Canada, as the Right Hon. R. B. Bennett was? Suppose you had had, also, absolute power, as he had not, what would you have done to build those houses and put people to work? There are many fine projects that everybody can think of; even a 10-year-old child can think of what to do if you can get the money.
The Social Crediters maintain that in a condition where you have surplus production -overproduction men called it, all during those years-what you in fact have is a lack of purchasing power, underconsumption. Where you have surplus production the nation can create money debt-free through the government-the minister of finance, against *that surplus production-monetizing it, we call it. A nation can create money debt-free

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as was done under the Finance Act of 1914 and of 1923. Anyone who doubts what I say can go and read the Finance Act of 1914 and of 1923. In the light of the cold facts pertaining to those acts I doubt that anyone will attempt to tell me that what I am suggesting is unsound or contrary to Canadian legal financial procedure all the way from 1868 to 1934. I will challenge any one of the C.C.F. wise men to do that.
We have a lot of men, in the C.C.F. and elsewhere, who can use general terms such as fiscal policy, terms that can mean almost anything under the sun, but when you come to pinpoint their proposals and get right down to see what they are going to do-


Alistair McLeod Stewart: I gave my hon. friend an example, build schools, build homes, build roads.


John Horne Blackmore: But what the hon. gentleman did not tell us is where he would get the money with which to do it. Is he going to borrow the money? While this may sound like a little discussion between two groups, fundamentally we are discussing vital points with which we may be faced with utmost painfulness in two or three years right in this parliament. If we do not do a little thinking-through now, before the pressure comes on, we shall not be in the slightest degree prepared to meet the exigencies of a depression when they come. If the C.C.F. movement suggests that the government borrow from the chartered banks the money with which to build the houses, roads, hospitals, schools and all those things which we all agree ought to be built, then that is one approach. But it is impossible to tax the people for money during a depression because they have just not got it.


Hazen Robert Argue: Then print it.


John Horne Blackmore: That is going very far down the road to social credit but the social credit line is the right line, and it is the sensible attitude and approach.
If we can agree that printing money may be sound, then that would be some progress. The next question would be, how much can you safely print? How much do you need in circulation at any given time, when do you need it, and when you have printed it, how much do you put into circulation in any given area? And how?
If we are going to have a housing scheme or any of the other schemes, do we require to have our finance minister print the money, or might we better borrow printed money from the Bank of Canada at 2 per cent interest? Can someone tell me why we cannot
borrow it from the Bank of Canada at the 2 per cent interest? I challenge any of the wise men of the Liberal party to tell me why we cannot so borrow it. When the Bank of Canada was established it was capable of taking one dollar of gold and printing four one dollar bills against that one dollar of gold, so that there was only 25 cents of gold backing every dollar bill. But the Bank of Canada at that time was not under the necessity within Canada of redeeming that money in gold because after the suspension of the gold redemption clause in 1933 no ordinary citizen could acquire gold. We should bear these things in mind.
Would someone who knows please tell me why the Bank of Canada could not now take one dollar gold pieces or even one dollar Canadian bonds and produce four one dollar bills on each of them, and loan that money to the government or any other agency in Canada at an interest rate of 2 per cent, especially when that interest would go back into government funds? That is a question which requires to be answered. I would ask my C.C.F. friends to answer that question not in vague general terms but in specific accurate technical terms which will stand up to examination. I am ready to discuss the question with them at any time either in public or in private, and I am also ready to discuss these fundamental principles with the Minister of Finance or any of his wise men.
Let us go back to the question which I raised a moment ago in connection with the sum of $900 million which was withdrawn in the early thirties by the banks calling in their loans and refusing to advance more loans. Why could not that money have been put back into circulation? It is probable that considerations as regards gold had something to do with it, but such considerations should not now have anything to do with the matter as far as I can see. It is a fundamental fact that banks will not lend money to people who are not creditworthy, but except such money is available with which the people can buy the goods and services and the surpluses which at the time exist, then even greater distress is caused, whereas if that purchasing power were available it would serve to bring prices back up and provide work.
I maintain that even if every bank in Canada had been publicly owned in 1932, including the chartered banks, they still would not have dared to lend money until something was righted in the economy. What required to be corrected in the economy? The purchasing power had to be put into the hands of the Canadian people to enable them to buy that surplus production which was then

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available, depressing prices, closing factories, etc. Loans on the part of the banks would have created that purchasing power but no banker would lend the money. That money was there during the twenties and thirties, it was lying in the bankers' tills but it was not being used. Surely no sensible banker would welcome conditions such as that. He wants to lend money and he demonstrated that during the 1940's when we undertook war activities.
I suggest, Mr. Chairman, that if there is one thing the minister should do in regard to this act it is to concentrate his attention on how to manage the banking and financial system so as to make them serve the Canadian people in case we go into a depression. I would also suggest that the one thing which requires to be done in amending both the Bank of Canada Act and the Bank Act is to make provisions whereby adjustments can be made in banking and financial policy in Canada in order to meet the exigencies which will arise in case of a depression.
I have studied every financial measure now before the house and the country; I find no sign of any realization of the need for such a change. For that reason I corn-template our present banking legislation with considerable concern and anxiety. If I might make a specific suggestion I would ask the Minister of Finance in all earnestness -since this is probably the last time he will bring legislation of this kind before parliament-to make provision for the re-enacting of the Finance Act of 1923 as an instrument to be used to supplement the activities of the ordinary banking practices of the chartered banks and the Bank of Canada. If he would do that he would bring into this house and before this country today one of the most hopeful measures that could be contemplated at this time.
When the Bank of Canada Act was passed the Finance Act of 1923 was repealed, and the Finance Act of 1914 was repealed through the Finance Act of 1923. The greatest disservice that has been done to Canada in the past 75 years was done when the Finance Act of 1923 was repealed in 1934. We will never get back to a sound financial basis as far as our mechanics of finance are concerned until we re-enact the Finance Act of 1923 which will give the minister of finance the authority and the power to create money and put it into circulation.
The minister of finance had such power under the Finance Act of 1923 and he had authority to create that money against approved securities of a wide variety.

In the case of the Finance Act of 1914 the minister exercised that power. As I have already this year pointed out, he created $50 million in 1917 and bought Canadian cattle and horses and other commodities and sent them to Britain on loan, greatly to the advantage of Britain and also to the advantage of Canada, and there was no flaw in that procedure.
Sir Thomas White in reviewing the whole matter in his memorandum of dissent, set out at page 85 of the report of the royal commission on banking and currency in Canada published in 1933, tells what remarkable things were done under the Finance Act of 1914 during world war I without inflation. That man went right through eight years during several of which that act was applied. That was the view of a great Conservative minister of finance. It was Hon. W. S. Fielding, the great Liberal finance minister, who caused the act to be re-enacted in 1923, at which time he said he was quite of the opinion that this act would have to become a permanent feature in the financial system of Canada. To my C.C.F. friends I suggest that all they need is the re-enactment of the Finance Act of 1923. Then if the banks will do their part, if the Bank of Canada will do its part and if a wise minister, with a wise government behind him, will use the Finance Act of 1923 re-enacted as a means of supplementing purchasing power, we can weather a fairly severe depression or we can even prevent a depression from coming on.
Resolution reported, read the second time and concurred in.
Mr. Abbott thereupon moved for leave to introduce Bill No. 338, respecting banks and banking.
Motion agreed to and bill read the first time.



PENSION ACT


[Stage Direction]
The house resumed, from Wednesday, March 3, consideration in committee of the following resolution-Mr. Lapointe-Mr. Applewhaite in the chair:
That it is expedient to bring in a measure to amend the Pension Act to make provision for the payment of additional pension for legally adopted children; to extend the benefits of the act in certain other cases; to provide that the salaries of the chairman, deputy chairman and commissioners shall be fixed by the governor in council; and to provide further for certain changes in connection with the administration of the act.
Mr. Brooks:: At six o'clock last night, Mr. Chairman, the minister had finished his

explanation of this resolution standing in his name. I wish to take this opportunity of thanking him for the explanation he gave. I think the material in the resolution will, with some exceptions, meet with the general approval of the members of the house and the veterans across the country. The subject matter will be better understood, of course, when we have the bill before us on second reading, at which time there will be further discussion. We have also been told by the minister that the bill is to be sent to the committee on veterans affairs which is to be set up.
Last night the minister told us that there would be no change in the basic rate of pensions. Whether or not this is necessary is possibly a matter that we need not discuss at the present time. However, there seems to be no great agitation at present for an increase in rate, if we are to judge from the brief which was submitted not long ago by the Canadian Legion to the government. This matter of increase in basic rate was attended to in 1952. At that time some of us thought that the increase was not as great as it should be. As you will recall, Mr. Chairman, there was an increase of 33J per cent over and above the pension which had been set up in 1925.
The resolution is divided into a number of sections. The first section has to do with making provision for the payment of additional pension for legally adopted children. To many of us at different times it had seemed that there was here a rather anomalous situation. The children who were adopted before the pensioner received his pension for his disability were considered to be eligible for pension while those who were adopted subsequent to his receipt of pension were not considered to be eligible. This has been quite hard for a good many people to understand, particularly the pensioner involved.
It was contended, of course-and the minister mentioned this point last night- that there might be something wrong with the adoption, that the adoption procedure in years past was different from what it is at present, that there was danger of babyfarming and so on. I do not think there was too much danger of that as far as the veteran is concerned. As the minister has explained, under our present adoption laws in the various provinces in this country, this danger has certainly been obviated. My opinion is that the veteran at present-and the same would be true of the veteran in the past or the veteran in the future-if he adopts children,
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has one or more special reasons for doing so. I am sure the first reason would be that he and his wife like children. Probably they would be in the position where they had no children of their own and realized that a home without children is hardly a home at all. Another reason why the veteran and his wife would adopt children is that they wished to help out some child of their acquaintance who did not have a home, and wished to provide one for it. From experience with people I have known, veterans among others, I have found that often some near relative dies-for instance the father and mother of the children have passed away- and the children are adopted into the home of a brother, sister or some other relative.
As I said before, it was a rather anomalous situation which existed in the past and we are glad that it is being corrected. After all, when we look at the legal aspect of the matter in connection with adopted children, we find that, for instance, they receive the children's allowance and that, under the laws of this country, they have exactly the same legal rights as have other children in matters of inheritance and all other legal matters. The adoption laws in Canada are good despite some unsavoury situations which have arisen in the city of Montreal and other cities recently. We have encouraged adoption of children in this country. A thorough investigation is made to ascertain whether or not a home is fit for adopted children. All provinces have adopted a system whereby a child is not put in a home unless the people who ask for adoption are thoroughly investigated and are vouched for by suitable persons. The home surroundings and conditions are also thoroughly investigated. As I said a moment ago, I am sure there will be no objection at all to this change in our Pension Act.
The minister mentioned the section which deals with the helplessness allowance. I remember that in the committee of 1948, of which I was a member, this subject was fairly thoroughly discussed. At that time the helplessness allowance, which seemed to be and was insufficient, was increased to a minimum of $480 and a maximum of $1,400. At that time there were certain anomalous situations whereby different ranks seemed to be unfairly treated, but that situation was also cleared up to a certain extent. The reasons given by the minister last night I am sure will commend themselves to all of us, namely that many of these men in a helpless condition who are being cared for in their own homes are sent to an institution, and when they leave the institution and go back home

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no provision is made for a helplessness allowance. This situation certainly should be corrected, and I am very glad indeed that the minister is doing so.
Another change is to advance the cut-off date as far as marriages are concerned. In the past I have heard this matter argued a good many times in committees. I have heard it argued that there should be no cutoff date, and I have heard very strong and, I think, convincing arguments that there should be a cut-off date. There is a cut-off date, and it is now being changed from 1951 to 1954. The minister mentioned that it was more or less a reflection on the women of this country. I am sure we all agree that the great majority of the women of Canada are what we expect them to be and what they should be. But there has always been a certain class of people known as "gold-diggers", and the purpose of the law is to protect even the old veteran against this type. I think it is well to have a cut-off date, but whether or not 1954 is the proper date will have to be discussed further in the committee.
I remember reading not long ago that in the United States there were widows of veterans of the civil war in that country, which ended in 1866, to whom the government was still paying pensions. The civil war was over almost a hundred years ago. We can benefit by the experience of the United States, and it is just as well to protect our treasury from situations of that kind. But of course very few veterans marry because they want to pass on a pension to someone else. Very often older veterans remarry because their first wives have passed away. They have no one to look after them, and they want to have someone who will take care of them in their old age. I think that type of marriage is a sensible one, and one for which we can very well make provision in the Pension Act.
The third point I wish to discuss has to do with the third provision in the resolution, which provides that the salaries of the chairman, deputy chairman and commissioners shall be fixed by the governor in council. So far as the Pension Act is concerned, this is certainly a drastic change from the existing provision. For the benefit of the committee I should like to read the section of the Pension Act which provides for the payment of the commissioners. It is section 3, subsection 11, and reads as follows:
The chairman shall be paid a salary of twelve thousand dollars per annum, the deputy chairman shall be paid a salary of ten thousand dollars per annum, and each of the other commissioners, including ad hoc commissioners, shall be paid a salary at the rate of nine thousand dollars per

annum: such salaries shall be paid monthly out of any unappropriated moneys forming part of the consolidated revenue fund of Canada.
This provision has been in the Pension Act since its inception in 1928. I am not going to discuss here whether the amounts paid to the chairman and other commissioners are too much or too little. That is not the question at all. This is a change in the principle with respect to payment, and any criticism I have of this provision has to do with the principle and not the amounts. In my opinion this is a matter which should receive the most careful and critical study. There are other acts in which salaries are set out. For instance, there is the War Veterans Allowance Act. I would ask the minister now whether it is the intention to similarly amend the War Veterans Allowance Act.
When an amendment of this kind is being made in the Pension Act I think that to be consistent the minister will have to submit a similar amendment to the War Veterans Allowance Act. If he is going to introduce such an amendment to the War Veterans Alowance Act I should like him to tell us now whether there will be other amendments to that act. Incidentally, so far as veterans legislation is concerned, in my opinion no act requires amendment today more than the War Veterans Allowance Act. The salaries of members of the tariff board, the board of transport commissioners and judges are set out in the pertinent legislation. If a precedent of this kind is to be established, then what is going to be done in these other cases? As far as the commissioners under the Pension Act are concerned, I say that they are more or less in the same category as judges. They hear evidence and judge whether or not the applicant for a pension is entitled to it. In that capacity they act in much the same way as judges, and salaries for judges are definitely set out in the Judges Act.
The action it is proposed to take now removes from parliament the right to set salaries. I think we have already gone too far in this direction. This provision will establish the right to set salaries by order in council. It is my opinion that it is time for a halt to be called to this practice. The more this precedent is followed the easier it will be to follow it. The practice has gone on for so long now that it has become easy for the cabinet or governor in council to assume a responsibility which is really a responsibility of parliament.
Although it is not altogether analogous, I might refer to the indemnities of members of parliament. We discussed Bill No. 171 at considerable length in the house. What sort of situation would we have if the governor

in council had the power to set the indemnities of members? What sort of situation would we have if under the Salaries Act the governor in council had the power to set the salaries of the different ministers? I just point this out to show what I consider is not a healthy situation, and one to which I think we would be justified in calling a halt. I am satisfied, also, that the people of this country do not want any further legislation of this kind. They want the parliament of Canada, the people they sent here, to look after these matters. They are tired and fed up with orders in council and with the governor in council assuming the role of representatives of the people.
There are other changes in the act mentioned by the minister which have reference to administration. I believe I would be fair in saying, Mr. Chairman, that the Pension Act has been and is being well administered. I have said before, and I repeat, that I consider the minister and his department have been very fortunate in having at the head of different branches in the Department of Veterans Affairs men who are good administrators and who, I believe, and know, have been doing a good job.
Whatever changes are made in the administration should and must have careful study. This will be done in the committee, because we have always had very careful study in our committee on veterans affairs. We have before the committee men from the different departments of government, and men from veterans organizations, and all the facts are placed before us. I do not think there should be any change in the administration unless it can be shown to us that those changes are entirely for the benefit of the veterans and their dependents. They are our first consideration. I am sure they are the first consideration of the Department of Veterans Affairs, as they are of all members of the House of Commons. Certainly they are deserving of first consideration by the people of this country.
If I may I should like to revert to the question of salaries. In his opening remarks yesterday the minister said:
Mr. Chairman, in introducing this resolution I should like to state that the proposal to amend the Pension Act at this time does not arise from any changes in the basic rates of pensions paid to disabled veterans, nor does it depart from any of the major principles underlying this legislation.
I claim that this method of raising salaries of officials in the department is a departure from a major principle underlying this legislation. It is a principle that has been in the Pension Act ever since we have had
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a Pension Act; and it is there for reasons I have stated before and which I am sure will be stated by some of my colleagues in a better and more concise fashion at a later time.
In the light of these facts, Mr. Chairman, I should like to move an amendment to the resolution as introduced by the minister. I move, therefore, seconded by the hon. member for Vancouver-Quadra (Mr. Green):
That the resolution be amended by deleting all the words between the word "cases" in the fourth line, and the word "and" in the fifth line thereof.


Mr. Jones:: Mr. Chairman, I do not wish to take up a great deal of time, but I think every veteran in Canada is pleased at the progress being made in eliminating some of the sore points in the Pension Act. I am convinced it is the minister's desire to eliminate all these sore points, and for that reason I should like to take just a moment or two to discuss a point that I think should be ironed out at this time.
In his speech the minister said that-
-under the act as it exists today the wife of a pensioner who is in receipt of a pension of 50 per cent or over-that is, from 50 per cent to 100 per cent-automatically becomes the recipient of a widow's pension of $100.
I think that is fair and proper. However, I should like now to refer to a case that came to my attention recently. We will assume that a veteran is receiving a 55 per cent pension, and that upon his death his widow automatically receives $100 a month. However, if a veteran dies while receiving only a 48 per cent pension, the widow gets nothing at all-nothing whatsoever. To my mind this is unfair. In the case I have in mind the veteran had no other income. He and his wife lived on the 40 per cent pension, just managing to get along. Upon his death, however, the department turned down the widow's application for pension because the act would not permit it, the complete pension having been less than 50 per cent.
I would ask the minister to consider changing this part of the act under which the widow of a veteran receiving less than a 50 per cent pension receives nothing upon his death. I suggest it should be changed so that the widow would receive at least half the pension received jointly by the pensioner and his wife before his death. The widow should not be left with nothing whatsoever. The case I have in mind is too sad to repeat here, although I could give all the details.
I am sure however that similar situations are arising time and again across the country. Before the minister gives final approval to the bill I would ask that he give some support to those widows who are unfortunate enough

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to be the widows of veterans who received pensions less than 50 per cent. It may be that those widows are more deserving than the widows of some pensioners who were on 100 per cent pensions. I trust the minister will bear these facts in mind when we proceed further with the bill.


Mr. Thomas:: Mr. Chairman, I am sure
veterans organizations across Canada will be glad to see this legislation on the order paper, although I am sure some of them will regret that no increases have been mentioned. However, as was pointed out by the hon. member for Royal, there has not been a great deal of pressure put on in the last while in the matter of increases.
The move to place adopted children under the act is in my opinion one of the most important amendments made thus far, because the presence of children in a home is one of the greatest safeguards we could have against neuroses. Undoubtedly their presence would save a great deal of psychiatric treatment that has been found necessary in veterans hospitals. The same observation would apply to people in general, because persons with growing families do not have time to become neurotic.
The hon. member for Royal mentioned the fact that many people like to give homes to children who have no homes. It is a commendable thing, but there is no doubt in the world that no matter how much people can give to adopted children, the children can give them far more. I do think that childless veterans should be encouraged to take children rather than discouraged. Undoubtedly it would help the peace of mind of many childless veterans, and as I said a moment ago the result would be that the government would save a great deal in the long run in hospital care of some of the so-called neurotic cases.
As for the cut-off date, the minister said it was a precaution against deathbed marriages. If it is a precaution I wonder why they keep advancing the cut-off date by three years at the end of every three years. Apparently they have not had too much trouble in that respect or they would not have been advancing the date at the end of the three-year period. If that is so, perhaps the cut-off date is not necessary and other precautions are necessary. We might be able to find some better way of doing it. All the veterans across Canada will welcome the change with regard to the helplessness allowance. I know of several cases where hardship was inflicted on some of the veterans when they were taken off the helplessness allowance.
As for the cabinet taking over the responsibility for altering the salaries of the commission, I do not find too much fault with that. I have always been against order in council government, or the taking of too much power or responsibility by the cabinet. But in this case I do think there might possibly be a reason for a certain amount of flexibility. And although, as I say, I am against the principle of the cabinet taking more and more responsibility and more and more power out of the hands of parliament, I have no particular quarrel with this instance. After all, we are going to have the opportunity to discuss these things on the estimates.
When this bill is sent to the veterans committee, as the minister indicated it would be, I hope the committee will be allowed to dig into the Pension Act, to discuss it thoroughly with the members and with the various veterans' organizations, and that we shall not be held too closely to the amendments brought forward in the bill. We welcome it, but we hope that we shall have an opportunity to dig into the Pension Act as a whole rather than be confined to the amendments in the bill.


Mr. Philpotl:: I want to say a few words against this amendment and in support of the resolution. It seems to me that some parts of this resolution are extremely important. For years Canada has had the finest veterans' legislation in the entire world, and there are a good many members in this house who have watched the developments over the years and the improvements that we have gradually been able to get who are well aware that that is a fact. That is owing not only to members of one party but to members of all parties. We started out with a not too bad act in the beginning, but we gradually improved it as the years went by owing to the fact that veterans' measures were never considered to be partisan measures in this house, or for that matter in the country.
I for one was very gratified when I heard that there was to be another veterans' committee at this session of parliament. My observation, for what it is worth, is that if it runs true to form of past committees, then the committee will not have any difficulty in finding ways and means of discussing pretty nearly anything that it wants to discuss.
Today I want to mention two particular points. It seems to me that the change in the law to make orphans eligible, on the same basis as other children, for the benefits of the act is one of the finest things ever

done in this House of Commons. I for one entirely approve the sentiments expressed last week by the hon. member for Burnaby-Coquitlam when he suggested that this country, Canada, was big enough and strong enough to be made a haven for all of the homeless orphans that there were anywhere in the world who would be able to grow up in good health and become citizens and assets of Canada. It seems to me that this small piece of legislation that we are now dealing with is symbolic. It may not be a very important thing, and certainly is not a very important thing from the point of view of money, to pass a small amendment to the Pension Act so that orphan children who are legally adopted shall be on the same basis as natural-born children.
As one who in his own modest way has tried for a good long while to have this particular change made, and one who knows a number of families who have gone to the trouble of taking on the care of children not their own, I say that this is a very great thing indeed and deserves the support of the house.
With regard to the rest of the resolution having to do with the fixing of salaries and that kind of thing, I could not care less, because I have every confidence in this government that it will fix the right salaries. If they are to be fixed by the governor in council, it seems to me that that should be all right with this house and all right with the country. We now have the best veterans legislation in the world. I think it is the aim of every hon. member on all sides of the house to keep it that way.


Mr. White (Hasiings-Frontenac):: I just
wish to say a word before the resolution passes. I concur in the remarks of the hon. member for Royal and in what was said by the hon. member for Okanagan Boundary. I hope that the minister will say something before the resolution passes about the point raised by that hon. member with regard to the widows of pensioners who receive 50 per cent and over and of the pensioners who receive less than 50 per cent. Perhaps the minister can say why and how it was arrived at that the widow of a pensioner who got more than 50 per cent was entitled to a pension, whereas the widow of a pensioner who received less than 50 per cent was entitled to no pension. The only instance of any explanation that I can recall was that someone in the department made the statement that it was put at 50 per cent so that all application cases would be covered. I think the minister will agree that there are many cases where the widow of a pensioner who is receiving less than 50 per cent pension
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needs that pension far more after the pensioner dies than she did during the lifetime of her husband.
I hope that the minister has carefully read -I know he has-the brief submitted by the Canadian Legion, and that his attention has been drawn to the few clauses that deal with the Pension Act, especially section 11 (1) (a), which reads as follows:
Pensions shall be awarded in accordance with the rates set out in schedule A to this act to or in respect of members of the forces when the injury or disease or aggravation thereof resulting in the disability in respect of which the application for pension is made was attributable to or was incurred during such military service.
The minister is well aware that there are many cases that come before the pension commission in which it is found that the disability was pre-enlistment, that it was not aggravated by war service or was wilfully concealed. The comment made by the Legion in their brief is fair and clear and it expresses better than I could the reasons why the government should adopt a different position. They say at page 9:
That section 11 (1) (a) of the Pension Act be amended so that, where a pension applicant who served in an actual theatre of war is found to have disability resulting from an injury or a disease not recorded on his medical examination made on his enlistment, such injury or disease shall be presumed to have occurred or had its inception subsequent to enlistment.
I do not think the minister or any hon. member can quarrel with that suggestion. As the minister is well aware, a soldier is examined by the army's capable and competent medical staff. He is given an X-ray and is marked fit and eligible for service. Surely it is not too much to expect that any injury or disability resulting later on should be attributed to his war service. I should like to direct the attention of the minister to a question of mine which was answered yesterday by the Minister of National Revenue. The question and the answer follow:
Is a pension payable to a widow of a member of the forces under the provisions of the Pension Act capitalized for succession duty purposes?


James Joseph McCann: I shall answer this question orally. The answer is yes.
I think that answer will come as a great surprise to many members of the house, certainly to veteran members. As everyone knows, a pension is not subject to income tax and it seems to me that the widow of any Canadian killed in action should not have her pension capitalized and have to pay succession duties to the provincial and federal governments.
I should like to ask the minister what would happen where a pension is capitalized, the succession duty paid and the widow then

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remarries. Under the provisions of the act the pension is cancelled and she receives a lump sum equivalent to the pension for one year. It seems to me that this creates a serious difficulty and I would be interested in having the minister explain just what would happen in such a case. I am sure that the number of cases where succession duties would be payable would be quite small. I have spoken to members of the legal profession who have had much to do with the Pension Act and they tell me they have never yet known where an estate of this kind was large enough to be subject to succession duties. I am sure that if the minister gives this his usual careful consideration he will agree that a pension payable to a widow should not be capitalized for succession duty purposes.


Mr. Gillis:: Mr. Chairman, I am not going to debate the subject matter of this resolution because if we were to do that there would not be any necessity for a committee. I have my own opinion as to the changes that are proposed. I emphatically do not agree with the amendment proposed. I am sure the hon. member for Royal will agree that the committee which is to consider the proposed bill should have the right to consider a matter as important as this and debate it in committee. It deserves more consideration than we could give it here. If any amendment of that kind is indicated, it should be after due consideration in committee. I am going to vote against the amendment and I make that statement after consultation with other members of this group who are particularly interested in veterans affairs, including the hon. member for Kootenay West, who is under doctor's orders not to get excited at the present time.
I wanted to let the hon. member for Royal know that, because I think on further consideration he will agree that members of the committee should have an opportunity to debate the desirability of the governor in council setting the salaries of the chairman, the deputy chairman and members of the commission, or whether that should be done by the House of Commons. It is a debatable subject and I think it should be considered by the committee.
Dealing with the resolution itself, there is not very much in the Pension Act that could not be discussed under its terms. As I read it, you could bring in almost anything as they are proposing amendments in the administration of the act. While it sets out specifically one or two instances in which the act is going to be amended, it says also "in certain other cases", which would mean that we would not be restricted very much in our discussions of the Pension Act as such.

I am not going to say very much on the question of the cut-off date for veterans of world war I, as to when a veteran's wife may be considered for pension purposes. I would imagine that there comes a time in a man's life when he needs a nurse more than he does a wife. We can roll this around a bit when we are in committee.
If the matter raised by the hon. member for Okanagan Boundary has not been considered already in connection with other matters, it might be amended in the committee. The widow of a deceased serviceman is protected if his pension was 50 per cent or higher, but if it was 49 per cent, 25 per cent or 10 per cent she has no continuing right. I have always considered that that was an injustice. If a man was 40 per cent disabled his widow had to live with him while he was thus handicapped all his life. Most of them do not save very much money. When such a man passes away the widow receives a lump sum equivalent to a year's pension and that is all. Many of them are in the age group where they cannot work any more and they cannot get old age security or qualify for old age assistance. They are pretty pathetic figures, and while the pension is paid for the handicap suffered by the veteran himself, nevertheless that woman who has spent a greater part of her life living with him also shared that handicap, and whether the figure is 10, 20 or 40 per cent I do not believe it is asking too much to suggest that the government should continue with her share of the pension at the agreed percentage until such time as she passes away. That at least would provide here with some assistance instead of leaving her completely destitute, as any widow would be who has not a continuing right under that act. I would suggest the minister give some consideration to that angle.
There are many things we can discuss in that committee and I rose, Mr. Chairman, to indicate that I cannot support that amendment, because I think any amendments which might be made to this resolution or to the bill can more properly be made in committee after due consideration by members of that committee. My experience with that committee over the years has been that it is pretty sensible, very reasonable, and rather flexible as far as committees are concerned, and it is my hope that the minister will allow us to push him around this time, do important things in this committee, and have features injected into that bill which he does not anticipate at the present time.


Mr. Green:: Mr. Chairman, this resolution forecasts certain amendments to the Pension Act. I will not go over these proposed

amendments in detail because they have already been discussed by several hon. members.
The first seeks to make provision for children who have been legally adopted, and I believe that would be a very good move, and a move in fact which has been advocated for some years.
The second amendment advances the cut-off date for the marriage of pensioned veterans of world war I. We have extended that date on different occasions; indeed, I believe every time there has been a special committee on veterans affairs. That amendment to the act is also praiseworthy.
Then we have a provision for increasing the helplessness allowances, and that too is a provision which, I believe, will meet with unanimous support.
The fourth amendment dealt with by the minister relates to changes which will facilitate the administration of the act. Apparently there are some changes to be made which will facilitate the handling of administrative problems and streamline the administrative machinery. We really cannot say very much about that until we know what these changes are.
The fifth amendment deals with the question of salaries to commissioners. I shall deal with that in a little more detail in a moment or two, but meantime I would ask the minister to make it quite clear when he replies whether the special committee on veterans affairs is to be permitted to consider any part of the Pension Act.
The government notice of motion calling for the setting up of the committee is to be found at page 11 of routine proceedings and hon. members will notice that the motion refers to certain bills which have already been passed, namely the bill to amend the War Service Grants Act and a bill respecting benefits for members of the Canadian forces, and then it goes on, and these are the words I wish to stress, "such other legislation relating to veterans affairs as may be referred from time to time to the said committee."
I have had the privilege of serving on every special committee on veterans affairs since 1935 and there have been times when the minister, or the chairman of the committee acting for the minister, has taken the stand that the committee could not consider anything beyond the terms of reference. I am afraid that if this notice of motion setting up a committee is passed in the terms in which it now stands, when we try to raise some of these questions which have been raised on the floor today we will be met with the reply, from whoever happens to be chairman, that they are not contained in the bill.
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"You can deal only with the sections in regard to adopted children, the extension of the deadline, helplessness allowances and salaries, and anything else is out," we will be told.	!
That has actually happened in the committee on more than one occasion, and I think the minister owes it to the house to make it quite clear today whether he will permit that special committee to deal with anything arising under the Pension Act.
Reverting to the question of the salaries of commissioners and the amendment moved by my very good friend the hon. member for Royal, hon. members will notice that that amendment seeks to strike out of the resolution the words "to provide that the salaries of the chairman, deputy chairman and commissioners shall be fixed by the governor in council."
That amendment brings up two questions and they are questions which cannot be ignored by this house. The first relates to the independence of the Canadian pension commission; the second to the supremacy of parliament as distinguished from the cabinet. I was somewhat surprised to hear my old friend the hon. member for Vancouver South say that he could not care less what was done about this amendment, and he could not care less how these salaries were handled. These two vital principles are principles about which he has been writing in his column for a good many years. I repeat them again: the independence of the Canadian pension commission and the supremacy of parliament.
Why do I stress these two points? Let us look back at this pension legislation. The Canadian pension commission was set up in 1919 under the original Pension Act of Canada. At that time they were called the board of pension commissioners. Provision was made in that original statute for the appointment of a chairman and, I believe, two commissioners. The chairman was to be paid a salary of $7,000 and there was a salary of $5,000 for each of the ordinary commissioners. They were appointed for a set term and they were not subject to change except for cause. Furthermore, the commission was given the widest jurisdiction quite purposely from the start, and that was 35 years ago. It was set up as an independent judicial body in just the same way as our board of transport commissioners was set up, and I suggest in just the same way as the judiciary of Canada was set up. That was the original provision made for a body in Canada to deal with pensions to veterans.

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That original charter is of great importance to the veterans of Canada today. They do not want a commission that is subject to pressure by the cabinet. There is no protection at all left for the veterans of Canada if the pension commission is not to be an independent body functioning in a judicial way. The commission was not made part of a department. Under the original legislation it was attached to a department. If hon. members will turn to the Pension Act as it stands today-it is chapter 207 of the Revised Statutes of Canada, 1952-they will find that that provision is still in the act. Section 4 reads as follows:
The commission shall be attached to the department and the expenses required to be incurred for the discharge of its duties shall be paid out of the moneys provided by parliament.
There have been changes in salary. In 1920 the salary of the ordinary commissioners was increased from $5,000 to $6,000. In 1946 the salary of the chairman was raised from $7,000 to $9,000 and provision was made for the deputy chairman to get $7,500 a year and the ordinary commissioners $7,000. Less than three years ago, in 1951, there was another increase. The salary of the chairman was set at $12,000 a year, that of the deputy chairman at $10,000 a year, and that of the ordinary commissioner at $9,000. In each case those changes-certainly since I have been here-were made in the shape of an amendment to the act. There was none of this business of the cabinet making the increase. The changes were made by amendment to the act. The Legion and the national council could come before the special committee on veterans affairs and make representations and there was not any hole-and-corner business about it at all. It was all handled just in the same way we would handle an increase in the salaries of our judges.
The fixed term has now been extended to 10 years. A commissioner holds office during good behaviour for that period and can only be removed for cause by the governor in council. The jurisdiction of the commission is contained in section 5 of the act. I will read the first subsection because it indicates just how wide the jurisdiction is at the present time and how independent this commission is supposed to be. Subsection 1 reads as follows:
Subject to the provisions of this act and of any regulations, the commission has full and unrestricted power and authority and exclusive jurisdiction to deal with and adjudicate upon all matters and questions relating to the award, increase, decrease, suspension or cancellation of any pension under this act and to the recovery

of any overpayment that may have been made; and effect shall be given by the department and the comptroller of the treasury to the decisions of the commission.
What is the meaning of a change such as that which is proposed by the minister? In the first place, I suggest to the members of the cabinet that the commissioners are entitled to have statutory protection in the matter of their salaries. If the minister's change goes through, then the cabinet can reduce the salary of a commissioner if they so wish. They can pay one commissioner $9,000 and another commissioner $10,000. This change puts the commissioners completely under the thumb of the cabinet. That situation is exactly what was being avoided right from the start of this pension legislation. Then on the other hand, if the change is to be used for giving an increase to the commissioners, there again you have the commissioners under the thumb of the cabinet. As a matter of fact the minister explained clearly that increasing the salaries is what he had in mind. In his remarks, as reported at page 2646 of Hansard, he said:
Finally, as the resolution specifies, it is intended to introduce an amendment to permit the salaries of the members of the pension commission to be determined by the governor in council rather than by statute as it exists at the present time. This is really for the purpose of permitting, when it is felt that increases are justified, the commissioners to be adequately compensated without it being necessary to introduce a bill.
That change again puts the commissioners right under the thumb of the cabinet. Why was the board of transport commissioners set up in the other way? Why is it that their salaries are set out in the Railway Act? The reason is, for the one purpose of going as far as possible to make them an independent body. Why do we have our judges' salaries set by statute rather than by the cabinet? Again for the same reason, namely to make the judges of this land independent. If a change such as that which is now sought by the minister is made in the Pension Act, there is no reason whatever why the legislation governing judges' salaries should not be changed so that those salaries also should be set by the cabinet.
I repeat that my first point is that this change strikes at the independence of the Canadian pension commission and that that is a retrograde step of the worst kind. Then, Mr. Chairman, it strikes at the supremacy of parliament. Sometimes I wonder whether the cabinet have any ideas left at all of the importance of parliament, as they are always so ready to belittle parliament or to evade parliament. That is exactly what a change of this kind is doing.

Pension Act
The minister said, "Oh, we will have a chance to have a vote when the estimates are considered". How is that done? A vote is brought in and discussed in the chamber; maybe it is brought forward in the last day or two of the session when there is no adequate opportunity for discussing any vote. It is not considered at all in the other place; these votes are not gone over in that place. On the other hand, if a change has to be made by legislation, there is the opportunity to have it discussed at the resolution stage, as is being done at present; again on second reading; again when the house is in committee of the whole; and again, if necessary, on third reading. There is all the difference in the world between the effectiveness of parliament in passing a vote in the estimates and its effectiveness in passing an amendment to a bill. This change certainly takes away power from parliament. It is another example of order-in-council government. These salaries are to be set by order in council. I am surprised to hear my friend of the C.C.F. arguing in favour of order-in-council government.


Clarence Gillis: I rise on a point of order, Mr. Chairman. I do not want the hon. member for Vancouver-Quadra to put words into anybody's mouth. Nobody over here argued in favour of that proposal. I questioned the tactic of proposing the amendment here because a decision in the house will militate against any decision in that committee. The hon. member for Vancouver-Quadra knows that the place to amend this is in committee. Nobody argued in favour of that proposal.


Howard Charles Green: Mr. Chairman, I submit that is not a point of order. The answer to that suggestion is this. This question involves the rights of parliament. Here we have at stake the supremacy of parliament; and the place to deal with that matter is right here and not in the special committee on veterans affairs.


Clarence Gillis: Why send it to the committee?


Howard Charles Green: The special committee on veterans affairs never had any trouble in dealing with questions that were referred to it, and it will not have any trouble on this occasion. But this question goes a whole lot further than the question of veterans affairs. Here you have a clear belittling of the Canadian parliament. I repeat that I am surprised that members of the C.C.F. and Social Credit parties should vote against an amendment which seeks to retain the supremacy of parliament. I can only suggest that perhaps they do not understand what they are doing.


An hon. Member:: You do not know what you are talking about.


An hon. Member:: Get the stiletto out.


Howard Charles Green: It is pretty obvious that the shoe is fitting somebody. I repeat in all seriousness that this amendment brings up two vital questions, the independence of the Canadian pension commission and the supremacy of parliament. I would hope that the house would realize the importance of these two questions and vote to support the amendment.


James MacKerras Macdonnell: I want to add a word to what has been said by the hon. member for Vancouver-Quadra. As he said, this is just another instance of what we are getting so accustomed to, things being taken away from parliament. Many of us have been sitting long hours in the banking and commerce committee studying the housing bill. There we have been faced with the fact that the real meat of the bill, at any rate a very substantial part of it, namely, the regulations, is not available to us in our study. To a certain extent it is like having the play without Hamlet. We have to vote on it without knowing what is in it.
I also want to add that we have become more or less accustomed to the government cracking the whip in the house. We are getting used to it. It is painful, but nevertheless we have to put up with it. But if a matter is decided in the house there is at least the publicity, and the chance that the public will step in as they occasionally do. There have been one or two instances in the last year or two when the public have asserted themselves and when the government has had to go into reverse.
But the government is not content with the power to do things in the house, to trample on us here. They say that is not enough. Now they are going one step further, they are going to exercise power in secret, so that no one will know anything about it until it has been done.
The public will know nothing about it, the house will know nothing about it, and we will be faced with an accomplished fact. Of course it is infinitely more difficult to reverse an action which has been taken than it is when a matter comes before the house still in the formative stage. I merely wished to add a word to what the hon. member for Vancouver-Quadra has said. This is a matter of regret to me, and I think it is a most serious matter that the majority of members of the house do not appear to take it seriously and are willing to allow the rights of parliament to be eroded more and more and more.

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Stanley Howard Knowles: Mr. Chairman, first I want to say a brief word with respect to the matters that may be covered by the bill other than the one which is now receiving the greatest amount of attention. With regard to those other items, I support those who have expressed the hope that there will be a change with respect to the point at which the pension is continued to the widow in the event of the death of the veteran. As others have pointed out, it does seem most unfair that the line is drawn where it is and that widows of veterans on a 40 per cent pension are cut off completely whereas at 50 per cent the full widow's pension follows automatically. I realize it is argued that a line has to be drawn somewhere but from my experience it seems to me that the figure of 50 per cent certainly must be lowered, and I hope something will be done about that matter.
With respect to the issue which is receiving considerable attention just now, I want to make my position clear. I might also say that I do not think the hon. member for Cape Breton South needs anyone to speak for him in the house. He has established his ability to do that throughout the years, but I think that he has been misunderstood and perhaps misinterpreted by the hon. member for Vancouver-Quadra. The hon. member for Cape Breton South-and he can certainly correct me if I do not state his position aright-was not expressing his view with respect to the substance of the matter as to whether or not the salaries of the commissioners should be set by statute or by the governor in council, but rather he was expressing his view on the strategy employed by the hon. member for Royal in introducing an amendment at this time.
As I understand it, the hon. member for Cape Breton South fears, and he has been around here long enough to have fears of this kind, that if the amendment is voted on in this committee and is defeated, then when an attempt is made in the special committee on veterans affairs to have a change made in that section of the bill Liberal members will rise and say that the house endorsed the principle of the proposed change in the vote on the amendment of the hon. member for Royal.


Alfred Johnson Brooks: A pretty weak argument.


Clarence Gillis: That is exactly correct.


Stanley Howard Knowles: I submit the hon. member for Cape Breton South is entitled to that approach and that it should not be misinterpreted. As for the substance of the issue before us, I have not discussed the

matter with the hon. member for Cape Breton South to know where he stands on it, but I think I do. I certainly know where I stand. This change should not be made, and I shall vote accordingly. In my view the supremacy of parliament should be maintained and the independence of the members of the Canadian pension commission from the cabinet should be maintained. Therefore we should not have the change in the Pension Act foreshadowed in the resolution now before us.
I thoroughly agree with those who have argued that the change should not be made, and I am as strongly opposed to it as I can possibly be. Indeed, there has been far too much moving in this direction across the years. I cannot for the moment think of all the examples, but if I took the time to look them up I am sure I could find half a dozen in the last number of years where the basis of salaries formerly fixed by statute has been changed so that they are now fixed by the governor in council. I deplore very much a move in that direction both because I think it is unfair to the commissioners themselves and because I think it is unfair to parliament. Whatever happens to the amendment now before the committee-and I shall vote for it-I certainly hope that the government will reconsider the matter. If the amendment comes to a vote, we all know what will happen. The amendment was moved on the opposition side of the house and so the government members, including the hon. member for Vancouver South who in his column used to believe in the independence of parliament, will stand up and vote against it. Therefore the amendment will be defeated. Despite that fact I hope-


Elmore Philpott: Mr'. Chairman, on a question of privilege, if and when the opposition ever moves anything that my intelligence and independence tell me is worth supporting I shall be glad to support it.


Stanley Howard Knowles: The hon. member is trying to lapse into his columnist days. I suggest to the government that, despite what may happen on this vote, they should reconsider this aspect of the proposed bill and decide that this change should not be made. I urge very strongly that the change placing these salaries on a basis such that they will be set by the cabinet should not be made.


James MacKerras Macdonnell: Back your opinion by your vote.


Stanley Howard Knowles: I certainly will.


John George Diefenbaker: Mr. Chairman, I have but a very few words to say in regard to this

matter, in so far as the legislation consists of changes to be made in the Pension Act itself. I do agree with the representations that have been made by the hon. member for Royal and by succeeding members who followed him in the debate, that a change should be made at this time, and is long overdue, when a widow of a pensioner receiving less than 50 per cent disability pension is denied any pension or any share of the pension after his decease.
With regard to the other matters which will be included in the measure to be introduced, those are matters that deserve the attention and the consideration of the House of Commons. For there is one matter that does deserve attention, one that was dealt with at length by the hon. member for Vancouver-Quadra. It is the tendency, the trend on the part of this government, to centralize authority in the cabinet. And with that trend goes the inevitable litter of orders in council.
In the 14 years I have been in the house I have noticed a continuing trend, a trend under which the centre of gravity of legislation has shifted from the House of Commons to the cabinet, and to departmental heads. Year by year parliament becomes less of a governing council and more of a censor of executive acts. And we have even arrived at the point where one of the newer ministers, the Secretary of State, has made outside parliament a speech in which he has set forth in detail the degree to which parliament should be entitled to information. He gave it as his considered opinion that there were many matters upon which parliament did not deserve information. In the words he spoke the other night in his speech he indicated the attitude on the part of this government, one which has been apparent in the trend that has accelerated in recent years.
Parliamentary supremacy with an overwhelming government majority has become a memory and a fiction, with nothing left to parliament but the right to fulminate against the trend that is taking place.
I was very surprised at the stand taken by the hon. member for Vancouver South because, through the years, on many occasions his remarks in his column have been quoted in the House of Commons as championing the supremacy of parliament as against centralization of power in the hands of the cabinet.


An hon. Member:: Now he is on the government side.


John George Diefenbaker: Well, I have nothing to say regarding that-although it is amazing
Pension Act
when one realizes the regimentation of opinion that does take place with the coincidence of election to parliament.


Mr. Harris:: On either side.


John George Diefenbaker: Parliament, docile and stagnant-we wonder sometimes why there are so few members in daily attendance. Well, one of the reasons is that, after all, we have become nothing more than a sounding board to legislate and to put through whatever the government decides is for the benefit of the country.
I cannot mention any recent examples; but when members were given their freedom from regimentation to vote on legislation, it was amazingly interesting to watch that vote when one after the other supported the stand taken by the cabinet. I am going to quote from Keeton's book "The Passing of Parliament", and a statement delivered in the British House of Commons on October 23, 1950, upon which occasion the Liberal leader in the British house said this:
It was sad to see how little interest was being taken in a matter that concerned the sovereignty of parliament by members of all parties. During the last thirty years the tendency had been to surrender back to the executive powers that had been won from them over the centuries. There was a tendency to initiate a new judicial power, to create administrative laws, making the executive to a large extent judges in their own case. The sovereignty of parliament was threatened. All the time we were being called on to surrender more and more of our rights and privileges to the government of the day. This continuous erosion was far more dangerous to liberty than any attack from the other side. We were awake to that and could resist it, but the drip, drip, drip of erosion was more likely to destroy the house.
In this country it is no longer a drip. Week after week parliament is asked to surrender its power, to give up its supremacy. What is the minister's explanation for placing the pension board as a pawn in the hands of the government in the manner outlined by the hon. member for Vancouver-Quadra? What is his explanation for this change? The minister said:
Finally, as the resolution specifies, it is intended to introduce an amendment to permit the salaries of the members of the pension commission to be determined by the governor in council rather than by statute as it exists at the present time.
Wherein is the statute found ineffectual? Wherein have members of the pension board found themselves paid in lower brackets than otherwise would have been the case but for the statute? And then we have this further explanation by the minister:
This is really for the purpose of permitting, when it is felt that increases are justified, the commissioners to be adequately compensated, without it being necessary to introduce a bill.

Pension Act
Just another surrender to the all-knowing, all-powerful government. Certainly I feel the amendment introduced by the hon. member for Royal had to be introduced at the resolution stage. Where else could it be introduced? Where else could parliament speak-in a committee composed of 25 or 30 members? It is a matter that affects all parliament, every member in the House of Commons. It is a matter that must be voted upon by the House of Commons as a whole.
I have mentioned order-in-council government, and the power of the governor in council. I have here an example, one that has nothing to do with pensions, but which indicates this trend to which the hon. member for Vancouver-Quadra directed our attention so effectively a while ago. I am going to refer to it because it is a recent example of the sort of thing the governor in council will do if parliament empowers him to do it. When Newfoundland entered confederation, one of the terms in the government white paper entitled "Conference Series 1948 No. 2" was this, dealing with the sales tax on oleomargarine:
The Canadian government will be prepared to submit to parliament legislation designed to exempt oleomargarine sold in Newfoundland from the federal sales tax. in the same manner as basic foodstuffs in other parts of Canada.
That was the undertaking. Today in Newfoundland oleomargarine has no sales tax, because of the fact that the government used the power that it has under order in council. Instead of bringing the matter before parliament they took the back-door method of the order in council, and passed an order in council to the effect that there be a refund of sales tax paid by manufacturers.


Walter Edward Harris: On a point of order; I do not think my hon. friend realizes that we are about to be summoned to the other place. I suggest that if he desires to finish his remarks on the point at issue he might avoid these particular points which have nothing to do with the case we are discussing.


John George Diefenbaker: I am giving examples of this dangerous trend.


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


Some hon. Members:: No.


John George Diefenbaker: Mr. Chairman, I am placing before the committee a recent example of how this cabinet, once it secures power from parliament, uses it in a backdoor way against parliament.


William Alfred Robinson: Order. I have been listening with considerable interest to the remarks of the hon. member and I have no wish to

interrupt him when he is giving an example, but I think the example should be short and he should now proceed with his main point.


Walter Edward Harris: May I raise a point of order again? With all respect to you, Mr. Chairman, my hon. friend is referring to the passage of an order in council under the Emergency Powers Act. There is nothing in this resolution to suggest that that can be used in connection with pensions-


John George Diefenbaker: That indicates how far removed even the minister is from the facts. I did not say it was an order passed under the Emergency Powers Act. As a matter of fact, apparently he did not know about this back-door method himself. It was passed under the Financial Administration Act.


William Alfred Robinson: Order. The hon. member will realize that we are discussing in committee a certain proposed resolution to amend the Pension Act. The terms of the resolution are somewhat broad, and it is difficult for the Chair to determine questions of relevancy. Nevertheless I must rule that a discussion, for instance, on oleomargarine would not come within the terms of this resolution.


John George Diefenbaker: All right. I simply conclude my remarks by saying that the resolution contains many things that parliament will support and should support, but included in it is another of those subterranean removals of the power of parliament and an increase of the power of the cabinet over parliament. I intend to support the amendment moved by the hon. member for Royal.


Some hon. Members:: Question.


Mr. Fraser (Peterborough):: I feel that I should say a word on this, not that the chairman and the commissioners of the pension board are getting enough. I have often said in this house, and I said it especially with respect to the film board, that they should engage men and pay them good salaries; they should obtain good executives and give them good salaries. That is why I am on my feet at the present time. Over three years ago I asked the minister who is responsible for the film board whether the man that they had engaged would, inside of three years, be offered a diplomatic post.


Some hon. Members:: Order.


Gordon Knapman Fraser: He said no.


William Alfred Robinson: Order.


Gordon Knapman Fraser: It has something to do with it.


William Alfred Robinson: Order. Will the hon. member resume his seat? The hon. member who

was in the chamber knows that I interrupted the previous speaker, and he will realize that the remarks which he is making now have no bearing on the resolution which is before us and which concerns the Pension Act. I must ask him to confine his remarks to the resolution.


Gordon Knapman Fraser: I am confining them to the resolution, Mr. Chairman. This has to do with the resolution. The resolution says that the governor in council will decide what salaries will be paid. What I am getting at is this. In the other case they decided just what the salary was going to be without authority from parliament. Three years before this man retired they decided just exactly what he was going to get, and he got a diplomatic post, after the minister said he was not going to get it.


William Alfred Robinson: Order. I hope the hon. member will agree that these remarks are not within the scope of the resolution before us.


Gordon Knapman Fraser: It has to do
with the same thing, because in that case the governor in council, and that means the cabinet, decided exactly what was going to happen, and they decided three years ahead of time.


Mr. Winters:: As a matter of privilege, let me say that that is not correct.


Gordon Knapman Fraser: Why was it
that exactly three years after it happened he got the post?


William Alfred Robinson: Order. Really, I cannot
allow this discussion to continue. We must confine ourselves to the discussion of the resolution having to do with the Pension Act.


Gordon Knapman Fraser: All I am trying to show is that I said three years before it happened that it would happen. It did happen, even if the minister says it did not, and the cabinet decided three years before what was going to take place.


Some hon. Members:: Question.


William Alfred Robinson: Is the house ready for the question?
Amendment negatived: Yeas, 41; nays, 66.
Resolution reported, read the second time and concurred in.
Mr. Lapointe thereupon moved for leave to introduce Bill No. 339, to amend the Pension Act.
Motion agreed to and bill read the first time.
The Royal Assent SUPPLY
The house in committee of supply, Mr. Robinson (Simcoe East) in the chair.



DEPARTMENT OF PUBLIC WORKS

[Stage Direction]
368. Quebec, $10,890,000.
Mr. MacLean:: There are some remarks I wish to make in regard to this item. Before I commence my remarks I should like to observe that I have been very much impressed with the debate that has already taken place in regard to this item. I think that a real contribution has been made.


Stanley Howard Knowles: Here comes another one.



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by Major C. R. Lamoureux, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the Right Honourable the Deputy Governor General desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the house went up to the Senate chamber.
And being returned:
Mr. Speaker informed the house that the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bills:
An act for the relief of Dorothy Ann Stuart Story McKenna.
An act for the relief of Joyce Tulloch Foley.
An act for the relief of Ruth Annie Ricketts Perrett.
An act for the relief of Elizabeth Harriet Wyburd Ramseger.
An act for the relief of Warma Wilhelmiina Rantasalmi Wirtanen.
An act for the relief of Ruth May Rowley Grundy.
An act for the relief of Rodney David Themens.
An act for the relief of Patricia Mackell Wilson.
An act for the relief of Joseph Aurele Denault.
An act for the relief of Arthur Ryan.
An act for the relief of Mary Clenman Bernard, otherwise known as May Clenman Bernard.
An act for the relief of Lloyd Demont Noseworthy.
An act for the relief of Douglas Charles Fortune.
An act for the relief of Kenneth George Wright.
An act for the relief of Sonia Rofman Bailis.
An act for the relief of Bessie Livshitz Rudy.
An act for the relief of Monika Emilija Kasputyte Janauskas.
An act for the relief of Suzanne Marie-Therese Gens La France.
An act for the relief of Noella Cooker Prince.
An act for the relief of Rupert Evans Joyce.
An act for the relief of Lois Helen Kutzman Caplan.
An act for the relief of Fernand Constant Daemen.
An act for the relief of Mary Kazymerchyk Senyck.
An act for the relief of Rosalie Hetty Arbess Sofin.
An act for the relief of Lucille Lafortune Wilson.
An act for the relief of Wilfrid Cote.
[Stage Direction]
The Royal Assent
An act for the relief of Janca Fani Poliak Schlesinger.
An act for the relief of Sadie Marie Ansingh Grosheintz.
An act for the relief of Douglas Morrison Meldrum.
An act for the relief of Alec Lenetsky.
An act for the relief of Dorothy Lilian Asbury Davies.
An act for the relief of Nicholas Krauchuke.
An act for the relief of Esther Kohn Rosner.
An act for the relief of Marguerite Jazzar Nassar.
An act for the relief of Leona Bobby Denberg Wiseman, otherwise known as Leona Bobby Denberg White.
An act for the relief of Marianne Roos Axelrad.
An act for the relief of Margaret Jaunzen Dishler.
An act for the relief of Pearl Witzling Socolow.
An act for the relief of Jennie Chun Readman.
An act for the relief of Gizella Szabo Herczeg.
An act for the relief of Lilija Hedviga Treimane Jursevskis.
An act for the relief of John Richard Maher.
An act for the relief of Elizabeth McDonald Jones Roy.
An act for the relief of Claire Viola Frechette Ainsworth.
An act for the relief of Margaret Reta Dodge Parsons.
An act for the relief of Estella Cluett Jensen.
An act for the relief of Angelina Natale Beaucaire.
An act for the relief of Dorothy Miller Osborough Davidson.
An act for the relief of Marie Rose Gisele Houde Dionne.
An act for the relief of Olga Pscheidt Arsenault.
An act for the relief of Edward Robinson Harris.
An act for the relief of Cathrine Pieternelle Wytenbroek Knight.
An act for the relief of Anton Bliziffer.
An act for the relief of Theodore Rolfsmeyer von Berzeviczy.
An act for the relief of Agnes Broo Hammond Bailey.
An act for the relief of Emma Antoinette Rachel Lauzon McDuff.
An act for the relief of Idella Adeline Sharpe Cutler.
An act for the relief of Walter Leonard Woodward.
An act for the relief of Marion Shirley Barsky Burg.
An act for the relief of Florence Elene Thom Ward.
An act for the relief of William Jean Paul Powroz.
An act for the relief of Lewis Swailes.
An	act	for	the	relief of Shirley	Goodlin
Myrovitch.
An act for the relief of Germaine Lafond Joyal.
An	act	for	the	relief of Kenneth	Charles
Overbury.
An act for the relief of Hazel Emily Louise Hunter Naud.
An act for the relief of Pearl Agnes Harding Potvin.
An act for the relief of Samuel Goldberg.
An act for the relief of Nancy Elizabeth Borden Sise.
An act for the relief of Audrey Madeline Crothers Walklate.
An act for the relief of Joyce Gowrie Kimber Kendler.
An act for the relief of Gloria Alphonsine Timmins Ferguson.
An act for the relief of Adella Alice McNeil Slobosky.

An act for the relief of Vera Marguerite Hennigar Isenring.
An act for the relief of Sylvia Golbas Lann.
An act for the relief of Lucy Jane Cole Judd.
An act for the relief of Walter Hardy Willows.
An act for the relief of Elizabeth Temple Jamieson Grier.
An act for the relief of Herbert William Bateman-Cooke.
An act for the relief of Rita Ann Rennie Knight.
An act for the relief of Mavis Josephine Green Jackson.
An act for the relief of Henriette Duffy Cote.
An act for the relief of Jaroslav Jandera.
An act for the relief of Robert Alfred Denman Stencel.
An act for the relief of Madeleine Forcier Midock.
An act for the relief of Annie Bray Hodgson.
An act for the relief of Joseph Kovecses.
An act for the relief of Winifred Margery Taken Dillen.
An act for the relief of Hilda Foster Mills Henderson.
An act for the relief of Evelyn Beatrice Diggon Ferguson.
An act for the relief of Hellon May Dreany English.
An act for the relief of lone Larson Morris.
An act for the relief of Marie Laurette Carmen Gamache Desmarais.
An act for the relief of Dorothy Agnes Louise Grant Walker.
An act for the relief of Evelyn Maud Nash Wyse.
An act for the relief of Anita Felton Corbeil.
An act for the relief of Sonia Lippman Cohen.
An act for the relief of Margaret Stuart Peniston Rex.
An act for the relief of Phyllis Adair Barker Smith.
An act for the relief of Elizabeth Louise Emmett Lightbody.
An act for the relief of Madeleine Victoria Cousse-ment Rolland.
An act for the relief of Julia Frances Finn Radcliffe.
An act for the relief of Eileen Theresa Burgess Cowan.
An act for the relief of Christina Emmanuel Papadakis Banks.
An act for the relief of Grace Connolly Houde.
An act for the relief of Marion Elizabeth Davis Esson.
An act for the relief of Morris Goldsmith.
An act for the relief of Edith Marie Treleaven Younkie.
An act for the relief of Irene Dorothy Haselden Munn.
An act for the relief of Margaret Hosie Black Kirk.
An act for the relief of Irene Bertha Kirkpatrick Faubert dit Masson.
An act for the relief of Marie Charlotte Yvonne Gisele Giguere Larocque.
An act for the relief of Albert Pigeon.
An act to amend the Explosives Act.
An act to amend the Telegraphs Act.
An act respecting the Great Lakes Reinsurance Company.
An act respecting Canadian Pacific Railway Company.
An act to amend the Post Office Act.
An act to amend the Patent Act.
An act to implement the international convention for the northwest Atlantic fisheries.
An act respecting the Associated Canadian Travellers.
An act respecting Brazilian Telephone Company.
An act respecting the Canadian forces.
An act to amend the Salaries Act.

An act to amend an act respecting the national battlefields at Quebec.
An act to amend the Members oi Parliament Retiring Allowances Act.
An act to amend the Export Credits Insurance Act.
An act to amend the Animal Contagious Diseases Act.
At six o'clock the house took recess.

AFTER RECESS

The house resumed at eight o'clock.
[Stage Direction]
The house resumed in committee of supply, Mr. Applewhaite in the chair.
DEPARTMENT OF PUBLIC WORKS 368. Quebec, $10,890,000.
The Deputy Chairman:: House again in committee of supply, Department of Public Works, item 368, and the amendment thereto moved by Mr. Thatcher.


John Angus MacLean: When we were interrupted shortly before six o'clock, Mr. Chairman, I was commenting on the real contribution which had been made to the discussion of the national film board by various members of the committee, not only in this group but in others. I should like to refer particularly to the hon. member for Ottawa West and the hon. member for Moose Jaw-Lake Centre. They had sound observations and a worthwhile contribution to make in the way of constructive criticism. It is my intention to refer to some extent also to the speech made on this subject by the Minister of Public Works. In that connection I should like to draw attention to the fact that the minister devoted a great deal of his time to defending the construction of a new building for the national film board and a relatively small part of his time to defending the suggestion that the new building should be in Montreal. I do not know whether it was intentional but it perhaps had the effect of misleading some people into believing that since the major part of his support was given to the suggestion that a new building should be constructed, it was that suggestion that was being criticized by this party and other members of the committee. I think it is well known that practically all members of the House of Commons are of the opinion that a new building should be constructed for the national film board. That recommendation was made by various groups which had studied the problem previously. There is no question as to the necessity for a new building for the national film board. It is definitely a question of where the new building should 83276-170J
Supply-National Film Board be located. I should like to quote briefly from the speech of the Minister of Public Works in reference to this matter. As reported at page 2599 of Hansard he said:
Recommendations that the government should provide suitable and efficient auarters for the national film board have been made for some years now. Hon. members will recall that since 1950 three independent studies have been made of the board's operations. One was by J. D. Woods and Gordon, management consultants: another was by the royal commission on national development in the arts, letters and sciences, and the third was by a special committee of the house which sat in 1952.
After a firsthand examination of the conditions under which the board now functions, all those bodies recommended that better operating facilities should be provided. A specific and unanimous recommendation of the parliamentary committee was that the board's headquarters operations should be centralized in one building specially designed and constructed to meet its production, technical and distribution needs.
In fairness, I must say that the minister pointed out that none of these three bodies made recommendations as to where the new building should be located; but owing to the great amount of time he gave to the recommendations of these various bodies he left the impression-perhaps accidentally; we hope so-that it was to the construction of a new building that objection was taken.
Mr. Chairman, I should like to quote from these recommendations so that there will be no question in anyone's mind as to what was recommended by the various people who made recommendations. I quote first from the summary of principal recommendations of the Woods-Gordon report and action taken thereon, item 11:
The work of the board In Ottawa should be centralized and suitable accommodation provided.
It does not say the work of the board now carried on in Ottawa should be centralized; neither does it say, on the other hand, that the work of the board should be centralized anywhere else than in Ottawa. As I have already quoted, it says:
The work of the board in Ottawa should be centralized and suitable accommodation provided.
When the term "in Ottawa" is used, it is implied, I think, that Woods and Gordon at that time had no intention of recommending that that work should be continued at a later date in any other place. I think it is quite obvious, as I have already said, that there was no recommendation or no hint of recommendation by Woods and Gordon as to where the new building should be.
As to the royal commission on national development in the arts, letters and sciences, they made the following recommendation with regard to the film board premises:
We have observed with anxious concern that the various premises in which the film board conducts its operations are cramped, scattered, inconvenient

Supply-National Film Board and hazardous. In the interests of economy and efficiency, and in justice to film board employees, this deplorable situation should be changed.
We therefore recommend: That safe and efficient premises be provided without delay for the operations of the national film board.
I think every member of the House of Commons, or nearly so, agrees with that opinion that the national film board definitely needs a new and efficient home. But there again the Massey commission report does not hint in any way that it has considered for one moment that that new home should be anywhere else than in Ottawa. If they thought it should be somewhere else, they would have recommended that.
The third group of people who considered this problem was the special committee of the House of Commons which sat almost two years ago. In its report to the house there appears the following:
Your committee inspected the production premises at John street and found that these premises are unsuited to the purposes of the board. Your committee concurs in the recommendations made in survey of organization and business administration report of J. D. Woods and Gordon Limited in March 1950 and by the royal commission on development in the arts, letters and sciences in 1951 that the headquarters' work of the board be centralized in one building designed and constructed especially to meet the production, technical and distribution needs of the board.
There again there is no hint that the committee agreed with the statement that the new building should be constructed anywhere else than in Ottawa.


Robert Henry Winters: Mr. Chairman, I wonder if I might rise at this point and ask the hon. member if he was a member of the committee and present on the day on which it was suggested that the board's operations be moved to Montreal.


John Angus MacLean: Yes, I was. I am coming to that matter shortly. What I said, Mr. Chairman, was that in the committee's report there is no hint that they agreed with the information they were given that the board was to be moved to Montreal. Therefore, as far as these three bodies are concerned, it is clear that the question of where the new building should be located was not one of their major considerations, to put the matter mildly. However, the minister was careful to point out-and I have no objection to his having done so-that none of these bodies recommended that the new building should not be in Ottawa. With respect to the arguments advanced by the minister as to why the film board should be moved to a larger centre, I should like to quote what he said in the house on March 2, as found at page 2601 of Hansard. He said:	.
The making of motion pictures is a creative operation. The board must be staffed by people with creative minds behind whom there is a full


head of creative talent. In Canada this creative talent must of necessity come from both our French and English speaking populations. It is abundantly clear from the board's operations over the years that this pool of creative talent is more readily available in the larger centres of Montreal and Toronto than it is in Ottawa. It has been necessary to import much of it here from those centres. Of the two large cities I have mentioned. Montreal is the one with the larger pool of cultural and creative talent in both English and French.
That is an argument that must be considered, but if we are to move the headquarters of one of the activities of government from our capital to any other centre in order to accommodate certain groups of people whose services may be required from time to time it seems to me that it is a case of expecting the mountain to go to Mahomet. That argument does not take into consideration that it will be necessary for a large number of people with talent who are now working for the film board in Ottawa to be moved to Montreal if the new building is constructed there. I do not know whether or not the criticism is just, but it has been observed that that would be the largest forced migration of persons in this part of the world since the expulsion of the Acadians. I think that is putting it rather strongly.


Robert Henry Winters: You have been talking to the mayor of Ottawa.


John Angus MacLean: In any case it will mean that a large number of people will have to be moved. Their domestic arrangements will have to be dislocated, and they will have to find new housing accommodation in Montreal.


Douglas Charles Abbott: Lucky people.


John Angus MacLean: It is said that Montreal is an area where there is a large amount of both English and French talent and therefore it is suitable that the headquarters of the film board should be moved there because the board's production consists of both English and French films. It can be said that there is a vast amount of talent required in parliament and that our production is in both English and French, and therefore if you follow the argument advanced with respect to the film board to its logical conclusion the day may come when it will be necessary to move the House of Commons from Ottawa. That is again an extreme case, but I think it is following the reasoning to its logical conclusion.
With respect to when the decision was made that the film board should be moved to Montreal, the Minister of Public Works gave a quotation from the brief presented to the special committee by Mr. Irwin, the then

commissioner, which interested me. Mr. Irwin had this to say, as quoted by the minister at page 2601 of Hansard of March 2:
On February 8 last, the minister of resources and development, Hon. Mr. Winters, announced that after detailed study of fifteen possible sites in the Montreal area-
-a certain site was considered suitable. The thing that strikes me about that is that there is no mention made at that early date of examining any other sites. It seems to me that the decision had already been made by somebody prior to May, 1952, that the building would be in Montreal because apparently all fifteen possible sites that were investigated were in Montreal. None of them was in Ottawa or anywhere else. Therefore the decision must have already been made. It is true that some arguments were presented by Mr. Irwin as to the advantages of having the national film board in a large city, but here again it is a matter of degree. He does not say that these advantages pertain only to a city larger than Ottawa or that they all obtain in a city the size of Montreal. During the sittings of the special committee on the national film board of May, 1952, Mr. Irwin was asked the following question, as found at page 88 of the report of the proceedings of the committee:


Gordon Knapman Fraser: Your distribution will be made from Montreal?
The Witness: Yes.


Mr. Dinsdale:: What is the reason for locating in Montreal?
The Witness: That is a matter of policy, sir, and I do not know whether or not I should review it.


John Angus MacLean: From a technical point of view is it necessary for you to be in a large city, or is it advantageous?


William Alfred Robinson: I think that Mr. Irwin might comment on the relative use to his organization of a large city as compared with some other city. That would be a general type of auestion.
The Witness: As I understand it, sir, these are some of the considerations which lie behind the policy decision. Film production, to begin with, is a manufacturing process, the heart of which is a creative function which has to be manned by creative people. Ottawa, whatever other advantages it has, is a relatively small community and it does not attract many people of the particular kind you need to man the heart of the board's operation. I am thinking of musicians, composers, actors, writers, designers-the whole gamut of the type of people you need in motion picture making.
He went on to say that it was possible that at a future date it would be necessary for the film board to produce films for television broadcasting, and that since the main headquarters of the Canadian Broadcasting Corporation were in Montreal it would be advantageous for the film board to be there as well. I do not think it is a valid argument that because one element of our government services is moved to one place you should follow suit with something else. That can
Supply-National Film Board become a vicious thing. It is like the camel getting his head in the tent. It could then be argued at a later time that if we had a national theatre it should not be in the capital because these people with special talents are not in the capital. You could go on from there indefinitely.
The main argument made by Mr. Irwin was that in a larger city you have a large pool of talent from which you can draw. I would be interested in knowing if even now that type of talent is readily available in Montreal. I believe that in the case of recording it is more advantageous to go to New York to have music recorded for films. Therefore the argument is weakened to a certain extent.
I should like to deal very briefly, Mr. Chairman, with some of the arguments which seem pretty apparent to me as to why the film board or, as a matter of fact, most new and expensive buildings should not be located in a very large city. To begin with, the cost of land is extremely high. We have been told already that the land will cost at least $256,000, and it may cost as much as $286,000. The particular site has the disadvantage that it is near an aircraft plant where jet engines are being tested and jet aircraft flown from time to time. The new building will require special sound-proofing to make the operations of the film board possible in that locality.


Robert Henry Winters: There will be no more soundproofing required than in any other location, Mr. Chairman.


John Angus MacLean: I am sorry. I was under the impression that that had been said. If I am wrong, I stand corrected. I thank the minister for pointing that out.
There is another consideration, however, that some may consider farfetched. I warn the committee that many people will consider it farfetched, but I do not think it is. We must keep in mind that the city of Montreal is an area in which there are aircraft plants. It is a very important railway centre, and one of our most important ports. Great oil storage plants are located there, as are depots for some of the armed services. There is a large and highly skilled labour force in that city. In other words, Montreal is a choice target, perhaps one of the choicest on the North American continent, for an atomic bomb attack. I am certain that if Russia has any plans to use a hydrogen bomb, Montreal would be one of the prime targets, from a tactical standpoint.


James Sinclair: Ottawa would be No. 1.


John Angus MacLean: Ottawa may be No. 1, but I am coming to that.

Supply-National Film Board


Mr. Lennard:: No, Hamilton, the steel centre, would be No. 1.


James Sinclair: Quit bragging.


John Angus MacLean: If that is an impossibility, then a great proportion of our defence effort makes no sense. Our whole defence against the possibility of a bombing attack from the north is senseless, if that is not a possibility. Therefore it is a very real consideration which must be kept in mind. I think, too, that if we are to have a capital city in our country, the head of every department and branch of government should, if at all possible, operate from that capital.
It is true that the film board is not a department of government; nevertheless it is not very different from a department of government. Governmental departments have top civil servants who are answerable to ministers, and the same is true of the film board. I think every activity of government which has for its purpose the carrying on of some function applicable to the whole country should, if at all possible, have its operations directed from the capital.
I think therefore the arguments advanced back in the nineteenth century when Queen Victoria suggested Bytown as the nation's capital, the capital of this new country, were sound arguments. It was pointed out that Bytown was on the Ottawa river at the junction point of the two great racial groups in this country. And I think the arguments advanced in that day for selecting Ottawa as our capital are equally true today.
As I said earlier, in my opinion every activity of government should be carried on here, if at all possible. After all. if Ottawa is our capital in name it should also be our capital in fact.
The question has arisen as to whether Ottawa would be the No. 1 bombing target in Canada, in the event of an atomic attack. I think this does not enter into the argument, because I would say and recommend that if the film board building were to be built in Ottawa it should not be built right in the city, but rather at some point in the capital area removed some ten or fifteen miles from the Peace Tower. Indeed, I think that principle should be carried out in all of our large cities. We are coming to the place where we would be foolish if we were to place all our eggs in one basket, or to locate buildings where a large percentage of our industrial effort and governmental services could be wiped out by the dropping of just one atomic bomb in the right spot.

So, Mr. Chairman, in closing I should like to quote briefly from the statement made on January 19 by the Prime Minister when he said:
No decision has been reached in that regard-
He was speaking as to the location of the new building.
-but until the government comes to parliament with a definite recommendation for a definite amount to be expended for a building at a definite place there is always a possibility that changes in the recommendation may be made.
I am delighted to realize that. In all sincerity I hope that this statement still stands, and there is still a possibility of reconsidering this matter. In the name of good sense and good government, and in the interests of our national capital, I appeal to the minister to reconsider the matter so that the item may be withdrawn in its present form and a recommendation brought before the house for the building of a new national film board building in the Ottawa area. If this is done I believe it will meet with the sincere approval of the vast majority of members in the house.


Mr. Macnaughlon:: Mr. Chairman, as one member from the Montreal district who was very active in urging the government to transfer the main building of the national film board to the Montreal area, I am naturally delighted to think that the government is about to follow through.
I have read with a great deal of interest the debate which took place here on Tuesday of this week and, if I have read correctly, it would seem to me we can all agree as to the purposes of the national film board, that the job it has done up to the present time has been an excellent one, and that the Minister of Public Works is certainly to be congratulated because, having taken over the film board in 1948, when it was at a very low state-and I emphasize the word "low"-he has brought it to a position where most of us will agree that it is a credit not only to itself but to the country as a whole.
Further than that, he was responsible for bringing in Mr. Arthur Irwin, son of the Rev. Alexander Irwin, who became the chairman of the national film board after he gave up the editorship of Maclean's magazine. Under Arthur Irwin certain policies were decided upon and put into force and effect which have brought that organization to the forefront in the production of films in North America. I think that act of constructive policy will be carried out under Dr. Trueman, who is a native son of New Brunswick and a past president of the University of New

Brunswick, and who has given ample evidence of his capacity for the job which he now holds.
If I read the debates properly, I say that the only question that we seem to disagree upon at all is whether the location of the production facilities should be in the Montreal area or should be retained in the Ottawa district. It seems to me that a great deal of agitation on this subject has been whipped up and brought about by a certain few disgruntled employees of the national film board. I should like to refer to a letter which is signed "a film board wife" and which appeared in the Ottawa Citizen on Monday, February 22, 1954. Of course, I am not going to read it all, but one or two extracts will present the point of view of some of the employees-I hasten to add, I am sure not of a majority by any means. It is rather interesting, and among other things the film board wife says:
Any number of reasons have been given proving conclusively that the operation and function of the film board can be carried out far better in Ottawa than anywhere else-in fact, only in Ottawa.
Then she goes on:
There are so many things about Ottawa that we1 love.
And this might amuse the committee for a minute:
To be sentimental, the Gatineau hills across , the river, the sound of the carillon on a hot summer night, Stanley Wong's restaurant, Rockcliffe park on a Sunday morning in January, Byward market in August, Jack Kash's concerts both junior and senior, and the brave new world of the CRT, the flowers that bloom and bloom from April until November everywhere throughout the city, the lions on the post office, the gay abandon of confusion square-many intangible things.
I see she did not put the mayor of Ottawa in there. She goes on:
What lies ahead if we move to Montreal? First, we must sell our house-at a considerable loss . . . then we must try to find another one somewhere on the island of Montreal. Shall it be a jerry-built model in a row of fifty others, all exactly the same? Or shall we live in the slums and have our children play on the streets?
Then later:
Of course, the staff of the film board can huddle together in a tight little inbred bunch-but where then are the great artistic and cultural advantages of cosmopolitan Montreal which seem to bulk so large in the minds of cabinet ministers who insist we should be better off out of civil service Ottawa?
Members of the film board staff are not going to experience any spiritual uplift from working in industrial Ville Saint-Laurent, and since they will be living under worse housing conditions than in Ottawa, this cannot help but affect their work, to say nothing of the strain it will put on family relations.


Robert Henry Winters: Who signed the letter?


Alan Aylesworth Macnaughton: The wife of a film board employee.
Supply-National Film Board-
Mi. Winiers: Does it give the name?


Alan Aylesworth Macnaughton: No, the name was not signed because the editor put a note at the top of the letter:
The wife of N.F.B. employee tells what the move to Montreal means in human terms.
And then he said that obviously he did not want to give the name but that he has the name on file. The letter goes on ad nauseam.
Far be it from me to list here certain of the advantages for those of us who happen to be located in the city of Montreal; but I would say that at least in Montreal we have the advantage of a dual culture and in so far as the town of St. Laurent is concerned we have plenty of good housing, most of it constructed under the National Housing Act. We have plenty of good schools, both regular and separate, English and French and Jewish, and we have one of the oldest preparatory colleges in the Dominion of Canada, namely college St.-Laurent. We have parks and we have churches, and we also have the new member for Dollard constituency, who will certainly be there eager and willing to receive those employees.
I say, further, it is the custom of people who work for private companies and organizations that if the company decides to move its headquarters you go along and move with the company; and if you do not want to move you have the privilege of resigning and looking for a job with greater security and perhaps greater pay elsewhere.


Mr. Charlton:: That is it.


Alan Aylesworth Macnaughton: We feel that the national film board has expanded far beyond its original purposes. It is true that we are busy making films in Canada, but there is another developing market, namely, the process of making television films not only for the Canadian market but for the growing and vastly superior United States market. I am told that many United States television companies and outlets are now coming in large numbers to the national film board seeking national film board television films because they are better. Certainly, it will be the big business of the future, and part of the job of the national film board will be to produce those good films and also to sell them at a profit.
That brings us right down to the basic question at issue. The film board has grown immensely during the last few years, and the question is primarily one of production and commerce. The problem of location of the production facilities is best solved by locating in Montreal. One of my reasons for that statement is that I believe we shall produce better films because in the city of Montreal, being a large city, naturally we
2684	HOUSE OF
Supply-National Film. Board shall have greater sources of material. It will be possible to have much closer cooperation with the Canadian Broadcasting Corporation, which is becoming an increasingly larger user of television films. Furthermore, Montreal is the natural location because of its close contact with the outlets for distribution. Also in that location you have close contacts with the United States sources of supply of materials, and also close contacts to sell to the United States market.
I am informed that at the present time several crews of the national film board are now working in the Montreal area, and also that the large United States film companies, together with most of the Canadian film companies, are located in that area, as are the large film suppliers. In other words, you will have a two-way flow of raw materials and finished products. It seems to me that commercially it is a sensible thing to go to the market where you can produce better and at a much cheaper price and where your chances of outlets for sales and contact for raw material increase.
If I understood him correctly, the hon. member for Queens, Prince Edward Island, said in effect that the special committee gave no hint that they agreed the building should be erected in Montreal. That was also elaborated on by the hon. member for Bran-don-Souris. In order to set the record straight, I shall try in a few seconds to prove that during the hearing of witnesses by the special parliamentary committee that subject was dealt with. At page 33 of the record we find that Mr. Browne posed the following question:
Q. How far has that project gone?
A. The minister may wish to answer that Question.


Hon.   Mr. Winters@: We acquired land in Montreal, and plans are being prepared for a building to be built at some time on that site.
At page 36 of the same record is given a summary of a number of the recommendations of the Woods-Gordon report. The hon. member for Peterborough asked that that summary be filed. Item 11 of the recommendation reads:
The work of the board in Ottawa should be centralized and suitable accommodation provided.
Item 11 of action taken reads:
The minister of resources and development has announced that a site has been obtained in Ville Saint-Laurent, a suburb of Montreal, for a proposed new building for the board. An amount is contained in the 1952-53 estimates for the Department of Public Works for the preparation of working plans for such a building.


Then on June 3, 1952, under the heading of "Minutes of Proceedings", as reported on page 79, we find, among other things, the following:
On motion of Mr. Carter,
Ordered,-That the subcommittee on agenda draft a "Report to the House" for consideration at the next committee meeting.
Then on June 24, 1952, as reported on the same page of the report:
The said draft report was considered and with minor amendments was adopted unanimously by the committee.
On motion of Mr. Boisvert,
Ordered,-That the "Draft Report", as adopted unanimously, be submitted to the house.
So I think that the charge that members sitting on the other side were ill informed as to the intentions of the government with respect to the national film board cannot be substantiated.
I think it is obvious that in Canada we have a bilingual country. The national film board is serving, not only English but also Frenchspeaking Canadians. I maintain that the national film board needs the stimulus of a large city of dual culture. I think it is important that the employees of the national film board keep on top of the ball, that they keep close to the movie industry in this country, and that they maintain a close liaison with the new techniques in art and with the new techniques in the production of film, both for the screen and for television.
At this stage I think it might serve some purpose if I recalled to your attention the words of the former chairman of the film board, which appear on page 21 of the proceedings of the special parliamentary committee, 1952. I quote:
You have heard, gentlemen, something about our operations and our problems.
What's the purpose behind all this activity?
The Canadian Image
In so great an area as Canada, with a relatively small population, we, as Canadians, can achieve an abiding national identity only if we cherish those things we hold in common while understanding those things wherein we differ-region from region, race from race, interest from interest.
A nation is more than a geographical area. As Canada has proved, it may be more than a single racial group. A nation is a set of values, a belief, a common body of thought.
To fulfil the belief which is Canada, we must steadily nourish the paradox of unity with diversity which characterizes our life as people.
The board's films, I believe, contribute substantially to that nourishment by stimulating in Canadians pride in their achievements, by projecting their growing sense of oneness while portraying their diversities, by interpreting the parts to the whole and the whole to the parts, by holding up images of the Canadian past, the present and the long road that leads to the future.
Canada is on the march to great new achievement. In the film medium, certainly one of the most potent information media available today, only Canadian films can record and interpret those achievements.

The national film board is now truly a national board, not only portraying departmental activities of the government but interpreting Canada to Canadians, interpreting Canada to the United States, in fact interpreting Canada to the world. The national film board has left its purely governmental role and it should seek the larger horizons. With the head office still in Ottawa, but the production facilities located in Montreal, the national film board is taking a forward step to even greater success.


Mr. Regier:: Mr. Chairman, I rise to speak in favour of the amendment moved by the hon. member for Moose Jaw-Lake Centre. I am glad that this amendment does not reduce the vote to $1 because that would eliminate the work being done by the national film board, but it does reduce it by the amount necessary to move the national film board to Montreal. I do not think there is any intention in moving this amendment to say that there is not a need for a central building in which the film board could operate. I think the intent of the amendment is to prevent a move from Ottawa to Montreal. The Minister of Citizenship and Immigration made a statement on March 2, 1954, and I quote from page 2577 of Hansard as follows:
The board therefore presented to us over the past three or four years urgent requests for the construction of a suitable building.
I am sure that there is not one member in this section of the house who would oppose a grant sufficient to carry out that objective. We are vitally interested in how the move to Montreal is going to affect the operations of the national film board. We had some suspicions, and these were confirmed by the hon. member for Mount Royal, who has just admitted that he had considerable influence in bringing about this move. We all know that Mount Royal is near if not in the city of Montreal.
I rose more to refer to the satisfaction which the people of Canada obtain from the activities of the national film board rather than to specifically object or partially object to this move, which I understand is well under way with the awarding of the contract. We appreciate the activities of the film board in making many films available to Canadians living in outlying areas. Otherwise these people would see very few films during the year. The activities of the local film organizations working in co-operation with the national film board have been of great benefit to people in rural areas. I think the national film board is doing a great job and I hope it will do an even greater one in 83276-171
Supply-National Film Board breaking down the isolationist thinking which still goes on in the minds of many Canadians.
The question of bilingualism has been raised. I should be happy to see 300 films made in the western half of Canada with the use of the French language and distributed in Quebec and New Brunswick. With equal satisfaction I should like to see 300 films made this year in Quebec and in the French-speaking portion of New Brunswick with the use of the English language and distributed throughout the rest of Canada. I think through the national film board we can do much more to bring about greater unity in our dominion.
I cannot think of a finer place in which to centre such bilingual activities than the city of Ottawa, where I understand almost half of the people are French-speaking. I cannot see that moving it to Montreal will serve the cause of bilingualism. I agree there are occasions when the people of Quebec are not adequately served by the national film board, but I maintain that they will not obtain better service simply by moving the head offices of the national film board to Montreal. It has been repeatedly pointed out that this move is necessary in order to facilitate production. I observed an admission in this regard by the Minister of Public Works when he said as reported at page 2599 of Hansard of March 2:
While the major part of the board's film work will always be carried out on location in various parts of Canada-
Therefore, when hon. members speak of the production effort I do not think that it matters very much where the headquarters of the film board are located. 1 believe the major production efforts take place in the field in locations anywhere from the Pacific to the Atlantic ocean.
There is one other feature I like about the national film board and that is that it is a relief to see films which do not contain advertising. The films produced by the national film board are such that we can safely send our youngsters to see them and we can recommend them to others. We know that in the production of these films there is no ulterior motive. They are produced in an effort to show Canada to the Canadian people. There is no tinge of propaganda but only the desire to present Canadian situations to the nation.
The film today has to be recognized as a major educational medium and I would like to see, if it is at all possible, the national film board giving a little more support to
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Supply-National Film Board the starving visual-aid sections of the provincial departments of education. All our provincial departments of education have by now, I believe, visual-aid branches and I am sure they would not turn down the type of help which the film board might be able to offer. Since films have now become a major educational medium I doubt very much whether it would be safe for us to allow the manufacture of ordinary films to fall into the hands of advertisers. I doubt very much whether we can say-


Edward Turney Applewhaite: I hope the hon. member who is now speaking will not take it too personally, but perhaps I have been unduly lax in permitting this debate to go too far afield, and to that extent I apologize to the hon. gentleman if I have allowed him to go astray. However, I would remind him and other hon. members that there are on page 38 of the estimates items 245 and 246. Item 245 relates to the administration, production and distribution of films and other visual materials, and item 246 relates to the construction or acquisition of equipment. I would suggest to the hon. member and to the committee that we are dealing with estimates of the Department of Public Works in so far as construction is concerned, and particularly with the amendment moved, which seeks to reduce this estimate. I think it would be agreed by all hon. members that we should try to keep this debate to the subject of the construction of a building for the national film board, and that other matters relating to the film board should be discussed at another time.


Erhart Regier: Thank you, Mr. Chairman. Probably I did not relate what I had to say frequently enough to the matter under discussion. I am very much concerned about the effect this move will have. I would like the Minister of Citizenship and Immigration to keep the operations of the national film board right here in Ottawa where he himself could be in close contact with developments and where hon. members of this house would be in a position to watch its operations. I feel that the national film board in the future can do much for Canada. The operations of that board have been subject to attack from widely separated quarters within recent years. These attacks are, I feel, inadvisable and I believe it would help a great deal and we would be in a much better position to protect and foster this new medium of teaching citizenship if we had it near at hand where we could observe it continuously.
I suppose I must be realistic, and in view of past observations perhaps come to the conclusion that the decision has already been


made and there is little more to be done. However, I can only express the faint hope that it is a good move and I would say, even though I do support this amendment, that if I thought for a moment there was anything in the amendment that would hamper the efforts of the film board to expand and become even a better influence than it is now then I would be opposed to the amendment.


Edmund Davie Fulton: Mr. Chairman, I rise to make just one or two observations which I would be glad to have the minister answer. Perhaps I could put my observations in the form of questions. But before coming to that I think some reference should be made to the remarks made by the hon. member for Mount Royal. As I understood his remarks, if one is to draw the inferences from his speech which he certainly left there, he implied if he did not directly suggest that in the Ottawa area there is not a dual culture. He said, and these are his words as I put them down: "At least in Montreal we have the advantages of a dual culture".
I take it from what the hon. member said that, by the use of the words "at least", the inescapable conclusion is that in his view there is not a dual culture here in Ottawa. That seems to me to be a rather extraordinary-


Alan Aylesworth Macnaughton: Mr. Chairman, if I am obliged to answer the hon. member-


Edmund Davie Fulton: You are not.


Alan Aylesworth Macnaughton: -I would point out that I said no such thing.


Edmund Davie Fulton: I believe the hon. member will find when he checks his remarks in Hansard tomorrow that the words I have quoted, or words very like that, were used by him. If that is not what he intended, then I am glad to have his explanation, because I was certainly under the impression that not only here in the city of Ottawa is there a dual culture, but that in this city and the city of Hull combined it would be quite impossible to maintain that there is not a dual culture in the Ottawa area. Therefore, from that point of view, it seems to me that the so-called advantages of the move to Montreal are entirely non-existent.
The hon. member made some perhaps less serious suggestions as to the advantages which will flow from the move to Montreal. I could not help being struck and rather amused, and I suppose he intended it to be amusing, when he suggested that after all we have down there the new member for the Dollard constituency who would be very glad to welcome the transplanted employees

of the film board on their arrival in Montreal. I could not help but wonder about the other two hon. members for Ottawa, who I know are very much concerned in this matter. I wonder whether the welcome these two hon. gentlemen would extend to the film board employees, if they were allowed to remain in Ottawa, would not far outweigh any welcome which might be given by the hon. member for Dollard if they were forcibly transplanted to Montreal. However, that is a contest between the two Liberal members for Ottawa and the hon. member for Dollard, and perhaps it would be wiser to allow that particular contest to be resolved by hon. members themselves on the other side. They are all Liberal members so hon. members opposite will have to choose between them.


Stanley Howard Knowles: Some choice.


Edmund Davie Fulton: But then perhaps there was another more weighty suggestion made by the hon. member for Mount Royal, namely that the film board in Montreal would produce films for the C.B.C. television and for other television purposes. I was not able to hear in his argument any serious reasons advanced as to why it would not be possible to do that in Ottawa. I should like to point this out to him. I am sure he knows it, but I should like to emphasize for his consideration and that of the other members of the committee that Crawley Films Limited have their headquarters and their production facilities here in Ottawa. They produce fine films. They have recently won an award with their films. I have never heard them or anyone on their behalf suggest that they could produce films better, more cheaply and with better competitive advantages if they moved their production facilities to Montreal. I admit that Crawley Films is a private enterprise, and I suppose that I should not say too much in favour of private enterprise; but I suggest that it is only reasonable to assume that if private enterprise, with all the disadvantages which some of my friends in this chamber sometimes suggest attend that form of enterprise, can produce good and praiseworthy films here in Ottawa, then there is no reason on earth why the film board should not be able to do the same thing. *
The advantages of the Ottawa location have been rehearsed at great length and I am not going to say anything beyond what I have already said, except that the one unanswerable argument in favour of the motion moved by the hon. member for Moose Jaw-Lake Centre seems to me to be that to leave the production centre of the film board here would result in a saving of money to the country because the city of Ottawa has offered a free site. Therefore, even if one were to 83276-1714
Supply-National Film Board accept the argument of the minister that the sound-proofing necessary down in Ville St. Laurent is not going to be an additional expenditure-an argument which as a nonexpert in the construction business I would not venture to differ from in detail but which does seem to me nevertheless to be hard to accept-the fact is that the cost of the site would be saved; and unless the government has been an even worse judge of property than one would expect, they should be able to sell that site for something close to what they paid for it or to use it for some alternative purpose, thus avoiding the necessity of buying a new site, and to take advantage of the generous offer of a free site made here by the city of Ottawa.
The other aspect that I should like to mention-and perhaps I might mention it while the Minister of Finance is still here- is a question involving the position of the employees after they have left and have been forcibly transplanted to Montreal. I want to put this matter in the form of questions. The minister can answer as he wishes. Perhaps he can find an argument in it one way or the other. I understand that the province of Quebec has recently decided to impose a personal and corporation income tax at the rate of 12 per cent. That is a decision for them and one which I am not going to question. But it seems to me that from that it follows-and the minister can disagree if I am wrong-that if these employees of the film board are forcibly transplanted to Montreal, after having taken up residence there and become residents of that province, they will be liable to that income tax, something which seems to me to be a strong argument, reinforcing those which have already been made, against the forcible transplanting of these employees against their will.
I should like to ask the minister whether it has yet been decided that the taxpayers in the province of Quebec will be allowed a credit against federal income tax of the amount of their tax in Quebec, whether the employees of the film board will be allowed a special deduction of Quebec income tax after they are transplanted, or whether it is contemplated that they will receive an increase in their salaries equivalent to the amount that they would otherwise have to pay in extra income tax. Whichever way those questions may be answered, I think that the implications of this situation are overwhelming arguments in favour of changing the decision for the move to Montreal, and if not changing it, at least postponing it until the position of those employees with respect to the problem I have raised is clarified. I should like the minister responsible
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Supply-National Film Board for the board itself or the Minister of Finance or his assistant-whichever cares to do so-[DOT] to tell us what will be the position of the employees with respect to that matter.


Elmore Philpott: Mr. Chairman-


Edmund Davie Fulton: Is the Minister of Citizenship and Immigration in a position to reply to those questions?


Walter Edward Harris: Mr. Chairman, I am not competent to pass upon the situation that might obtain with respect to these employees, as to whether or not they will be subject to income tax in the province of Quebec. I am not even familiar with the terms of the act because it is not in my province. All I can say in answer to my hon. friend is that there is no compulsion on any member of the film board to move to Montreal.


Edmund Davie Fulton: Will the government undertake to find alternative employment for an employee if he elects to stay here in Ottawa?


Walter Edward Harris: The government does its best to assist the civil service at all times in its discharge of its duties to the public. I think that would be a sufficient answer.


Edmund Davie Fulton: It indicates that it is sufficient to the minister.


William Alfred Robinson: The hon. member for Vancouver South has the floor.


Edmund Davie Fulton: I wanted to ask if the Minister of Finance might give me an answer to the question which the Minister of Citizenship and Immigration indicated that he did not feel able to answer.


William Alfred Robinson: I have said that the hon. member for Vancouver South has the floor.


Edmund Davie Fulton: I hope the Minister of Finance will remain until he gives me an answer to the question.


Douglas Charles Abbott: My hon. friend speaks so much in the chamber that I have got into the habit recently of reading the newspaper when he is making speeches.


Edmund Davie Fulton: It is not only recently that the minister is in the habit of reading the newspaper.


Stanley Howard Knowles: There is something in the papers that he might well read.


Edmund Davie Fulton: However personal the Minister of Finance may choose to make his comment I will, if he wishes me to do so, repeat the question if he did not hear it while he was reading the paper.


William Alfred Robinson: The hon. member for Vancouver South has the floor.


Edmund Davie Fulton: Mr. Chairman-


William Alfred Robinson: The hon. member for Vancouver South.


Elmore Philpott: If it were only a question of moving the film board from Ottawa to some other city, I doubt that I would take much part in the discussion. In fact, I might be tempted to be facetious perhaps and say that the ideal solution would be quite a bit different and that it would be to build the film board in the capital but to move the whole capital, bag and baggage, to the Pacific coast. I believe that even if we made an experiment for one session-


An hon. Member:: Would you take Charlotte Whitton?


Elmore Philpott: We would even take queen Charlotte for one session. If we moved the department, bag and baggage, to the Pacific coast even for one session, I think we would never have the problem of where the capital ought to be. I think we could save so much time and money by so doing that there would be no question about it. Of course, we might lose a little bit in January and February when some of the boys played hookey in the afternoon and went playing golf.


Stanley Howard Knowles: This chamber consists of both boys and girls now.


William Alfred Robinson: Order.


Elmore Philpott: I think we might save considerable time over the long week end because not so many people would be able to take a week end from Thursday afternoon until Tuesday afternoon. Perhaps we could then cut down the length of the sessions.
Speaking seriously, Mr. Chairman, I must say that I was astonished to hear the amendment moved by such a usually hard-headed and common-sense person as the hon. member for Moose Jaw-Lake Centre. While I know it takes a good deal of ingenuity and mental agility to be at one and the same time a member of local 999 of the socialist millionaire hardware chain store magnates union and also a socialist theoretician, I must say that the ambivalence shown in this particular amendment is just a little bit too much for the genius and geniality of the hon. member for Moose Jaw-Lake Centre to bridge. What do I find? I find, for instance, that my predecessor and neighbour, the hon. member for Burnaby-Coquitlam, said a few moments ago that this amendment had to do entirely with the cost of moving the film board to Montreal. As I read the speech of the hon. member for Moose Jaw-Lake Centre he said, as found at page 2599 of Hansard for March 2:
Under these circumstances, Mr. Chairman, I wish to move that item 368 of the estimates be reduced

by $1,500,000 . . . That of course, is the amount which the government proposes to spend this year on the actual construction of the new building at Montreal.
Then I find certain rather remarkable arguments developed by the hon. member for Moose Jaw-Lake Centre when he attacks the whole idea of modernization of equipment of the national film board. At page 2598 of Hansard he said:
In the second place I think this move is extravagant, because of the nature of the building which is being erected. According to the Montreal Gazette it required eighteen months to prepare the 150 blueprint sheets which were used. The plans provide, among other things, for marble mosaic hallways, eight auditoriums, two garages, a viewing room with chairs with push button ashtrays, decorative ceilings and concealed lighting. According to the plans which have been laid down, the following is to be provided:
"An inner courtyard with a pool roughly fifteen feet long and three feet deep, with a fountain sculptured on the themes of sight, motion and sound:	light would illuminate the fountain at
night".
In other words, when you look at the plans you begin to wonder if the government is proposing to put up some kind of luxury studio, something that will make some of the Hollywood studios look a little bit dull or drab.
I submit that when we are engaged in equipping a great public enterprise that has served the people of Canada as well as the national film board has served us in past years we can afford every cent of this modest expenditure to give the national film board of Canada the finest equipment in the entire world. I for one will be very glad to make Hollywood take a back seat in that particular regard.


Julian Harcourt Ferguson: What poppycock!


Elmore Philpott: So I find it most remarkable to hear that argument advanced against the expenditure of some $10 million to give the national film board of Canada the plant and equipment to enable it to do a real job. I must say I find that a remarkable argument to come from my hon. friends immediately opposite. One week ago in this chamber we listened to speech after speech from these same members urging and prodding the government to institute a program of public works. They were asking what was the matter with the government, was it asleep on the job or waiting for spring? They wanted a great program of public works. But when we get the first item for something that everybody in Canada from coast to coast knows perfectly well that we need-


Mr. Thatcher:: Let us have it in Ottawa, not Montreal.	[DOT]


Elmore Philpott: -not on an emergency basis but to do something for the good of Canada,
Supply-National Film Board not for this year, not for next year but for twenty-five or fifty years to come, we have exactly the same group saying that this is gross extravagance and that we should not spend a dollar.


Wilbert Ross Thatcher: We want it in Ottawa and not Montreal.


Stanley Howard Knowles: Is this tomorrow's column?


Elmore Philpott: Finally, we have another remarkable argument used: I for one do not believe that the film board was made for Ottawa, nor do I believe that Canada was made for Ottawa. On the contrary, I believe that the capital was made for the country and not the country for the capital. Therefore where we locate any soldier, sailor or airman in our Canadian forces is exactly where that soldier, sailor or airman can best serve Canada. Where we locate the Canadian Broadcasting Corporation or where we locate any agency of the Dominion of Canada is where that agency can do the best job for Canada.


Wilbert Ross Thatcher: Here in Ottawa.


Elmore Philpott: As a newcomer and freshman M.P. in the house I would not presume to set myself up against the studied advice given time after time by the boards which we selected to advise us exactly how to make this great public enterprise a success. I say that is a very poor way for any party to try to assist a great public enterprise. We have had political parties of different types in this country and in different parts of the country. We have had the Conservatives in Ontario who brought forth that great public-spirited enterpriser, the late Sir Adam Beck, who probably laid the foundation for the political success of the ladies and gentlemen who sit on my left. The Liberal party brought to Canada another great public servant who put the Canadian National Railways on a sound basis and whose only fault was that he was perhaps twenty or twenty-five years ahead of his time. He was criticized by some people for trying to dieselize the road twenty-four years before the United States roads first undertook that modernization.
We have had people who have made public enterprises a success in all parts of the Dominion of Canada, but I must say that it comes as a rather remarkable argument by the hon. member for Moose Jaw-Lake Centre for him to suggest that even though it has been recommended that a public enterprise be moved to a certain part of this great country, Montreal, that recommendation cannot be carried out-


Julian Harcourt Ferguson: Put it on the record.
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Supply-National Film Board


Elmore Philpott: -because of the possibility of provincial censorship. The hon. member for Moose Jaw-Lake Centre said, as found at page 2599 of Hansard:
May I remind hon. members that a short time ago Mr. Duplessis, premier of Quebec, suggested that he was going to introduce the censoring of C.B.C television programs. Now, what assurance has the government, if the national film board does move to Montreal, that Premier Duplessis will not decide to censor their work also? I can tell the minister and the cabinet that the people of Saskatchewan will not look kindly upon Premier Duplessis, or any other provincial premier, censoring the kind of film fare they may see; yet if the board does go down to Montreal can the government say this will not take place?
I say to the hon. member that he knew perfectly well when he asked that question that it was sheer downright poppycock and nonsense, that no provincial government in Canada, whether it be the government of Quebec, Ontario, British Columbia, Alberta or Saskatchewan, can step one inch over the jurisdiction of the national parliament and national government.


Wilbert Ross Thatcher: They did with the C.B.C.


Elmore Philpott: Provincial governments have made fools of themselves in various parts of the country and at various periods of our history. I can remember that when I was perhaps twenty or twenty-five years younger than I am now a Conservative administration in Ontario did not do anything to see that people had the right of free speech even within 100 yards of the legislature in Toronto. I can remember episodes twenty or twenty-five years ago in my hon. friend's province of Saskatchewan that do not look so good when you look back on the history of those times.


An hon. Member:: Under a Liberal government.


Elmore Philpott: We had in British Columbia not very many months ago an act-


Julian Harcourt Ferguson: You are going all over the world. Why don't you get down to reality and common sense? You are talking about nothing. You have made no headway at all. We are talking about the film board. Why don't you give your life history?


Elmore Philpott: My point is this^-


Julian Harcourt Ferguson: What a windbag! You're the best we've ever had.


Elmore Philpott: Thank you for that compliment. My point is this-


William Alfred Robinson: Order. The discussion on this item has gone far afield. I suggest the


co-operation of hon. members should be given to limit themselves to the subject under discussion.


Elmore Philpott: Thank you, Mr. Chairman. I am coming to my conclusion-


Julian Harcourt Ferguson: Good.


Elmore Philpott: We have even had in Alberta administrative action by the government forbidding the showing of a product of the national film board entitled "Man-One Family". But I think that should not warp our judgment, that this board should be located wherever the best place is, in the interests of the country.
There is one argument, that whether we like it or not this country is a two-language, two-religion and two-race culture; and I think that we can live together, that we can prosper best and that we can go forward best if we accept the spirit of that situation. And one reason I think for the great success of the party on this side of the house is that, over the generations, it has accepted the spirit of that underlying basis of confederation perhaps better than some other political organizations have. And, whatever else we do or do not do, let us hope to have the national film board where it will do the best job for all the people of Canada-and by "all the people of Canada" I mean all the people of both cultures.


Edmund Davie Fulton: Mr. Chairman-


William Alfred Robinson: The hon. member for
Yorkton.


Mr. Casfleden:: Go ahead.


Edmund Davie Fulton: Mr. Chairman, I was observing closely while the hon. member for Vancouver South was making his remarks, and I noticed that the Minister of Finance interrupted the reading of his newspaper long enough to converse briefly with the Minister of Citizenship and Immigration. I wonder if the Minister of Citizenship and Immigration is now in a position to answer the question which he said earlier was really one having financial implications rather than one for his department.


Walter Edward Harris: I am sure the hon. member for Kamloops is not in a position to do mindreading, on this side of the house at least. It was I that conferred with the Minister of Finance, and not he with me; and our conversation was one which I am sure the hon. member would not like to hear.


Stanley Howard Knowles: Very smart!


Edmund Davie Fulton: There are lots of conversations over there that we do hear sometimes, but that are not very enlightening. So what

passed between the two ministers, in the light of the minister's remark, perhaps could be left for the public to judge.
However, the Minister of Finance is here, and-


Stanley Howard Knowles: -has finished his paper.


Edmund Davie Fulton: Could he tell us what the implications are of this move to Montreal, so far as employees of the film board are concerned, with respect to income tax?


Douglas Charles Abbott: I have not the faintest idea, Mr. Chairman.


Julian Harcourt Ferguson: And you care less.


Edmund Davie Fulton: Well, that is obvious. My hon. friend from Simcoe North merely draws attention to the obvious. Does the Minister of Citizenship and Immigration, then, not consider that perhaps the move to Montreal should be delayed a while, and this item therefore eliminated while the implications are being considered and the matter possibly straightened out?


Julian Harcourt Ferguson: He cares less, too. So, why talk about it?


George Hugh Castleden: I have listened with great interest to the hon. member for Vancouver South. Listening to the hon. member one would almost think that the C.C.F. group had suggested that we should not spend money on a building for the national film board. That was the basis of the hon. member's argument. I would point out to him that we have supported a building for the national film board, but we want it built here-and I think he knows that very well.
You know, Mr. Chairman, his speech reminded me of a little poem that goes like this:
You cannot hope to bribe or twist,
Thank God, the British journalist.
But seeing what the man will do unbribed, There's no occasion to.
And I think that probably fits him quite well. The protests which have followed the news that the government is moving the national film board from Ottawa to Montreal show that you can push the Canadian people too far. These protests do not come only from Ottawa. You cannot always measure public reaction or opinion with an engineer's slide rule.
To give an illustration, my constituency is located almost two thousand miles from here. I have received resolutions from very responsible groups in my constituency of Yorkton who are interested in the value of the educational work the film board is doing. To some people this interest might seem
Supply-National Film Board strange, but it is an indication of something that is very important. I am pleased to know that they have protested, and I was pleased to receive a request from them to rise in my place in the House of Commons and express their protests against this move by the government. My people are protesting against the removal of this fine organization, the film board, with its record of progress, and its establishment here in Ottawa for a number of years. It is an organization just reaching its full vigour of maturity and manhood which, suddenly, finds that it is torn up by its roots and moved to Montreal.
My people are asking the reason for all this. Why is it being done? What is behind this? Has there been a clear statement of government policy? Who started it? Have they studied the full implications of their actions? I am pleased, as I say, that the Canadian people are alert to an injustice. Naturally they imply-because they have been given no information to the contrary-that some concessions must be given to some people, or some personal privileges handed out here or there. They know that that part of Canada sends a pretty solid bloc to support the government in Ottawa at every election- irrespective of what they might do provincially, when they send a solid bloc to support the Duplessis government in Quebec.
The manner in which the government has carried out this piece of administration is, in my opinion, pretty bad, and they will reap the results.


Mr. Murphy (Lamblon West):: And that is what the hon. member for Ottawa West said.


George Hugh Castleden: The maintenance of unity is a matter of great concern to every government in Canada; that is one of the things that make the maintenance of government an unpredictable thing in this country. It is an odd experience. And this government is responsible for stirring up all kinds of suspicions that something is wrong. The people would prefer to have a forthright statement right from the beginning. They would ask the government what it intends to do and what arrangements have been made-instead of allowing all these rumours to be circulated across the country from coast to coast. The protests being made from all parts of Canada are a clear sign that something is wrong. We have tried to get forthright answers from the government ever since the session opened last November, at which time members in the opposition asked the government what was going to be done. The reply was, "Oh well, the matter has not been finalized", and "the contracts have not been let."
2692	HOUSE OF
Supply-National Film Board
The whole matter of the effect which this will have upon the established people who have helped to build the film board is an important matter. It cannot help but have an effect upon them, since it will mean tearing up by the roots what they have established over the years. It will have an effect on the education of their children, since they will be leaving places where they have established themselves and where they have felt secure, where they have been able to build the kind of home they like. The morale of these people is very easily destroyed by moves such as this.
Tonight an hon. member from Montreal said that if we decide to move they can come along or they can quit. Such an attitude is scarcely the one to adopt toward senior civil servants who have abilities and qualities which are of a high order and of the calibre required to do the kind of delicate job that is undertaken by the national film board. I can only say that the whole thing has been ill-conceived, poorly timed and miserably executed.
It is very harmful to the good work that the national film board has done and it disturbs, to a greater degree than the government probably realizes, the balance that is required in Canadian unity. It might have been avoided if this government had come out with a policy in the early stages and had given a forthright statement of policy right from the beginning to the end.
I want to tell this government that there are some things, such as the feelings of people, and ideas that lie in the minds of people, which are dear to them, and when they are hurt, it takes a long time for the wound to heal.


Gordon Knapman Fraser: When the hon. member for Vancouver South spoke he said to hon. members that what we should do is to let the members of the national film board pick out the site, do this, that and the other thing. He said that they had studied the matter and they knew all about this project. The hon. member did not tell us what a mess the members of the national film board made of the national film board before 1948 when the Gordon report was brought in. If the members of the national film board were the same as those previous to 1948, I think he would agree with me that the decision as to the change should be left to parliament.
I was glad that the hon. member for Mount Royal mentioned that, before the present minister took over, the national film board was at a very low ebb. I said that he had better not let the Minister of National Revenue hear him say that.
[Mr. Castleden.I

The minister said that the site for the film board in Montreal was going to cost $240,000. I think that is the figure he gave us the other day. The city of Ottawa offered a site free.
I have one objection to the moving of the film board to Montreal. I am afraid that by moving the national film board to Montreal its activities will not be watched as closely as they should be by the minister. He will not have the opportunity or the time to be running back and forth.
This afternoon I mentioned the director who was put in to clean up the mess. I will say this-I said it a year ago-that he did a good job; but I do object to the way in which he was engaged, with a plum hanging out on the end of the limb to the effect that if he did a good job, at the end of three years-


Robert Henry Winters: That is no more accurate this evening than it was this afternoon.


Gordon Knapman Fraser: If it was not
right, then how is it that three years before it happened I asked the minister if it was going to happen and he said no. And three years afterwards, almost to the day, the gentleman was appointed to a diplomatic post. I say, more power to him. But if he retires after five years he has a pension for life. That was quite a nice plum to hang out, and I hope that the present director of the national film board worked out a bargain with the minister that is just as good. If he did, he is a good man.


William Alfred Robinson: Order. May I also say that these remarks are about as much in order this evening as they were this afternoon.


Gordon Knapman Fraser: I agree with you, Mr. Chairman. Since you have said that, I will not say any more about it.
In the public accounts for 1953 there is an item of $306,892 for removal and travelling expenses. I just wonder what that item will be after this film board building is put up in Montreal. It will be triple that or more. It cannot help but be that much.
When he spoke the minister said that in the United States the different departments of the government were spending more than the film board spent here. The minister did not say that the different departments of the government of the United States pay their own way. They do not get buildings absolutely free. I understand that the buildings they occupy in the United States are charged up to them, but they are not charged up to the national film board here. The national film board in this country does not pay rent for the buildings or anything of

that kind. All they pay is their operating expenses and what they purchase. I should like to ask the minister a few questions. He mentioned the New York architect who had been engaged. Will the minister tell us what has been paid to that architect so far, and what arrangements have been made with him? The minister mentioned on April 9 that they did not have the plans of the building. But in Mr. Irwin's report of 1952 I find this:
The minister added that plans for the proposed building were being prepared by the Department of Public Works. It is expected that these will be available during the current fiscal year.
That was the fiscal year 1952-53. I want to know whether the minister was right or wrong when he said on April 9 that he did not have the plans.


Robert Henry Winters: Of which year?


Gordon Knapman Fraser: Of last year. The minister said in 1952 that he did not have the plans, but that they were being prepared.


Robert Henry Winters: One minor point: the Minister of Public Works said that on April 9, 1952; but there is another Minister of Public Works today. However, he was correct in the statement he made at that time.


Gordon Knapman Fraser: Well, if he was correct at that time, why did the minister not have the plans last year? I think the minister is wrong, because in the paragraph preceding the one I just read, these words appear: "Hon. Mr. Winters". I think that is the Mr. Winters sitting opposite me now.
I should like to know what it costs to rent the nine buildings here in Ottawa, as well as the two storage buildings which the minister mentioned the other night. What does the char service cost-as Minister of Public Works the minister should know this -for these buildings? I do not believe the government carries any insurance on the buildings, and if there is a fire, everything will be gone. Some of these buildings are rented and I believe some are owned. I should like to know what the upkeep charges on these buildings are. I should like to know if the department has figured out what will be the cost of the upkeep of this new luxurious building in Montreal.


Robert Henry Winters: It is not luxurious.


Gordon Knapman Fraser: It is a luxurious building in every sense of the word; it cannot be anything else at that price.


Robert Henry Winters: It is minimum accommodation.


James MacKerras Macdonnell: What about the pool?
Supply-National Film Board


Gordon Knapman Fraser: I should like to know what the upkeep cost will be. What will be the carrying charges? There will be interest on the money expended and I should like to know just what that will be. I have asked about the char service. What will be the total cost of the upkeep on the new building, and what is the total cost of the present buildings?
I have said this before, but I repeat that I sat in on the national film board meeting and I sat in on the public accounts committee. I feel that the national film board should be placed on a sound business basis in every way so the people of Canada will know exactly what is being spent. The public works department absorbs the cost of char service, rentals and everything else, and I feel that those should be charged to the national film board as well as interest charges on the money expended. I feel that it is due to the people of Canada that that should be done.
I said last year, and I shall not repeat it, that the film board is doing a good job. I said also that I thought it was on a better basis by far than it had been before. It provides something that the people of Canada need, something that they want, but they want to have this board run properly. When this matter was brought up on Tuesday there seemed to be some misunderstanding as to the distribution functions of the film board. I believe tonight one hon. member mentioned the fact that it was a great boon to the rural people.
From what I can see, from what I have heard, and from what I have read, I believe that the people in the urban centres of Canada benefit just as much as those in the rural sections. There seems to be some understanding also both in and outside the house with regard to the distribution of films and the work of the film councils that are set up. The national film board has a man in each district who is paid a salary plus living expenses. I believe these men are doing a pretty fair job. They set up the film councils. These councils have nothing to do with the board, except that the district man guides them along their way.
I know that in my own city of Peterborough those who wish to belong to the council pay $2.50 per year. They are allowed to have what films are in the library, and if they are brought from outside they pay the shipping charges or whatever it may be. It may cost them fifty cents a night for a film, or it may cost $4 or $5.
There is also a film council in the county. There is one school in which I am interested

Supply-National Film Board that pays $20 to belong. The district man comes up about once a week to show films and it is worth it. They are doing a good job. It is not only national film board films that are shown; films produced by different companies in different countries are also shown. In most cases they are educational.
I am afraid that the chairman may call me to order on this, so I had better not say anything more. I repeat, I am afraid that if this move is made to Montreal the Minister of Citizenship and Immigration, who is now responsible for the board, will not be able to keep his finger on it as he should. We do not want this film board to get out of hand, as it did, and grow up like Topsy.


Robert Henry Winters: This is an item to cover part of the cost of a new building in Montreal and I have not before me the figures on the char and other maintenance service for the buildings here in Ottawa occupied by the film board. I am speaking from memory and subject to correction, but I believe the fee to John and Drew Eberson was $35,000. I wonder if the hon. member would be satisfied if I got the other information and gave it to him when the first item of public works is before the committee.


Gordon Knapman Fraser: That will be quite satisfactory.


Ernest George Hansell: Mr. Chairman, it has become quite a habit in this house-sometimes I have fallen into it myself-that when an hon. member rises he says that he has been listening with a great deal of interest to the speeches that have been made. But I must confess tonight that I cannot pull that one this time because I have not listened with very much interest to any of the speeches that have been made on this matter of transferring the film board from Ottawa to Montreal. I was interested in the minister's reply, and I considered it a rather weak attempt to give a reason for the move. But I really have not been able to work up too much interest in the subject.
One or two hon. members have said that they have received many protests from all over the country. I am not going to doubt their word, but frankly I do not believe the people outside of Ottawa and Montreal care one snap of their fingers where this film board is located. I do not think the people in Macleod constituency care where it is located. As for receiving protests, I have not received one. I have inquired of some of my colleagues around here and they have not received any either. Of course we come from the two western provinces and the matter may be so geographically remote that we do not expect them to do much protesting.


There are one or two things I should like to say since this is an item respecting the national film board. In years gone by I have been somewhat critical of the national film board and also of the Canadian Broadcasting Corporation, while at the same time I have tried to be fair and admit that in a measure both these organizations are trying to do a good job. As far as the films turned out by the national film board are concerned, I believe they have done some pretty fine work. However, when it comes to films of a dramatic nature I do not care how much we spend on a building or how much hon. members talk about the various cultures that are to be found in Canada, and whether there is more culture in Montreal than in any other centre. I do not believe there is. I believe there is just as much culture in any other great metropolis in Canada as there is in Montreal. I follow some of the cultural programs on the radio and I must admit that Montreal has its fair share of dramatic talent, but there are other places in Canada, and I am thinking of Winnipeg, where there is equally good dramatic ability. As regards the dramatic arts, Winnipeg must rate very high indeed.


Stanley Howard Knowles: Hear, hear.


Ernest George Hansell: I do not include the political arts.


Stanley Howard Knowles: It is higher still when it comes to that.


Ernest George Hansell: As regards the city of Vancouver, I will say that it must rank pretty high when it comes to the dramatic arts. You can listen in to the radio as well as visit the "Theatre Under the Stars" during the summer and you will hear and see some pretty good productions. An hon. member here suggests Toronto, and I can say "Amen" to that. As regards the dramatic arts, I wish the film board well in their efforts, but if they are ever going to attempt to compete with Hollywood productions or some of the J. Arthur Rank productions then they have another think coming. Never in the wide world will they be able to surpass the productions of the major motion picture industries of the United States and Great Britain. However, when it comes to publicizing Canada, I believe that is where their main effort may be most effective. The series "Canada Carries On" has been of tremendous value to Canada. The series "Eye Witness" are excellent productions. But I have some limited criticism to make of the "Eye Witness" productions. I do not like the first scene of "Eye Witness" when the picture opens and you have to look twice to see what that thing

is. After you look a few times you gain the impression that it must be the lens of a camera-and it is.


Edward Turney Applewhaite: The hon. gentleman may remember that a short time ago I considered it my duty to point out to a previous speaker that we are discussing the construction of a building for the film board and not the production of films. I would be glad if the hon. member would confine his remarks to the matter under discussion.


Ernest George Hansell: Thank you, Mr. Chairman, for drawing that to my attention. I should have been wise enough to recognize that. However, you have stopped me at an extremely interesting point and I would like to know whether, if the film board is moved to Montreal, we will still have to look at that lens, and whether we will still have to look at what appears to be a relief map. When I first saw that map I thought I was looking at someone's cancerous liver, and on a second glance I found I was looking at a relief map of Canada. If that is changed, the "Eye Witness" productions will be much better.
I have only a few minutes left, Mr. Chairman. I would like to emphasize that the film board has not only the responsibility of producing good pictures, but also the responsibility of depicting, if possible, the glories of our free and democratic way of life. That, Mr. Chairman, is a tremendous responsibility. In days gone by there has been some feeling on the part of several hon. members that perhaps the film board has not been doing its job along that line. In addition, the minister has not given a reason that will satisfy me for moving the board to Montreal. I will project my own reason, and I do not know whether I am far out. I believe they want to get the board away from this parliament. I believe they regard members of parliament as being capable of learning too much if that institution is located near where we operate.


Some hon. Members:: Oh.


Ernest George Hansell: Some hon. members say "Oh," but that does not impress me in the least.


Stanley Howard Knowles: That is all some of them can say.
Supply-National Film Board


Ernest George Hansell: An organization such as the national film board is one of the most powerful media of thought and propaganda in the world, and I believe the government thinks that members of parliament should not be too close to the scene of operations lest they learn too much. I base my opinion on what I believe is a very important principle. The hon. member for Kamloops asked a few questions the other day and was unable to obtain answers.


Edmund Davie Fulton: I did not get the answers tonight either.


Ernest George Hansell: Subversives have operated in various democratic countries and my bet is, Mr. Chairman, that they have not overlooked the most powerful medium of propaganda which is operating in this country and in the world. They are not so foolish as to overlook that. One might ask "What are you inferring?" But what can I do but infer? I cannot get any information.


Joseph Warner Murphy: Ten o'clock.


Ernest George Hansell: My hon. friend from Lambton West calls it ten o'clock, Mr. Chairman, and for him I would ask you to call it ten o'clock.


Walter Edward Harris: Mr. Chairman, I wonder if it might be possible for both my hon. friends to agree to suspending the ten o'clock rule until we get a vote on this amendment.


Some hon. Members:: No.


Ernest George Hansell: As far as I am concerned, Mr. Chairman, I would be agreeable.


William Alfred Robinson: Is it agreed?


Wilbert Ross Thatcher: No, Mr. Chairman, it is not.


Edmund Davie Fulton: I put certain questions to which I am still awaiting an answer.
Item stands.
Progress reported.



BUSINESS OF THE HOUSE

Walter Edward Harris: Last evening I announced the business for tomorrow. We will take the housing act first. When it is disposed of, we will proceed with this debate.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Friday, March 5, 1954