1954-05-31

Mr. Bell:: 1.	Have any independent maritime airways companies made application to the federal transport commission in 1954? If so, what were the results?
2.	Have any of the applications involved permission to transport commodities such as fish from the maritimes to central Canada?


Mr. Langlois (Gaspe):: 1.	Yes.
Decisions on applications:-(1) Application by Eastern Provincial Airways Limited, for authority to serve the additional points Nain, Black Tickle and St. Charles river under licence No. A.T.B. 466/50(NS) and for the discontinuance of the authority to serve Burlington, Western Arm, Grey island harbour and Porcupine, all in the province of Newfoundland.
Decisions:-Application approved. Date: January 22, 1954.
(2)	Application by Maritime Central Airways, Ltd., for a licence to operate a class 1 scheduled commercial air service to transport persons, mails and/or goods, serving Moncton, New Brunswick, Goose Bay, Gander and Torbay, Newfoundland.
Decision:-Application for a class 1 service between Moncton and Goose Bay approved, and approval granted to operate a class 3 service between Goose Bay, Gander and Torbay.
Date: February 25, 1954.
(3)	Application by Eastern Provincial Airways Limited for a licence to operate a class 3 irregular specific point commercial air service to transport persons, mails and/or goods from a base at Torbay, Newfoundland, serving: Cartwright, Rigolet, Nain, Makko-vik, and Hopedale, via Goose Bay.
Decision:-Application amended and decision deferred.
Date: February 25, 1954.
(4)	Application by Alton Brown MacDonald for a licence to operate a class 4 charter commercial air service to transport persons and/or goods between points within Canada from a base at Moncton, New Brunswick, using aircraft authorized to be operated by class 4 charter air carriers in group "C".
Decision:-Application approved. Date: March 2, 1954.
(5)	(1) Application by Royal Cooper, proposing to carry on business under the firm name and style of New Brunswick Air Taxi, for a licence to operate a class 4 group "B" charter commercial air service to transport persons and/or goods between points within Canada, from a base at Moncton, New Brunswick.
Application withdrawn by applicant on March 2, 1954.
2.	The permission given covered the transport of persons, mails and/or goods.


VONDA, SASK.  PROPERTY PURCHASED
Mr. Diefenbaker:: 1.	Have negotiations taken place during the last year between the vendor and the Royal Canadian Mounted Police for the purchase of lots 5, 6 and 7, of block 9, plan E.Q. 1 in the town of Vonda, Saskatchewan?
2.	If so, what was the price asked for by the vendor and what is the present position of negotiations?
3.	If purchase has been made, what was the price paid?
4.	At what value is the property assessed by the town of Vonda?


Mr. Garson:: 1.	An offer of sale was received from Mr. Clotaire Denis, one of five persons who own the lots.
2.	$13,500. Negotiations in abeyance because price considered excessive.
3.	Answered by No. 2.
4.	$1,950.


CANS FOR CHICKEN
Mr. MacLean:: 1.	What sizes of cans are permitted in Canada for the canning of chicken?
2.	What sizes of cans of chicken are permitted entry into Canada from the United States?


Mr. McCubbin:: 1.	The regulations under the Live Stock and Live Stock Products Act relating to packing, grading and labelling of canned poultry applicable to products entering interprovincial trade are 7 and 16 ounces net weight.
2.	Imported product is not subject to any requirement with respect to container size unless it enters into interprovincial trade in Canada in which case it is subject to the same regulations as cover canned product in the same class of trade.

Questions


SALE OP CANNED PORK
[Stage Direction]
Mrs. Faircloughs
1.	Who was the successful tenderer with respect to tenders called for government-owned canned pork, January 27, 1954?
2.	At what price?
3.	What quantity was thus disposed of?
4.	What was the date of receipt of the successful tender?
5.	What other tenders were received?
6.	In accordance with the terms of tender, did the successful tenderer place a deposit of 5 per cent of the bid with the Bank of Montreal prior to 5:00 p.m., Monday, January 25?
7.	Has the purchaser taken delivery and paid for the canned luncheon pork in full?
8.	Has it been exported?
9.	If so, (a) when; (b) to what country; (c) in what quantity?
Mr. McCubbin:: 1.	Canada Packers Limited, Toronto.
2.	16.65c. per pound, F.A.S. eastern Canadian shipping point.
3.	8,837,222 pounds.
4.	January 25, 1954.
5.	Tenders, accompanied by deposits, were received from Colossal Lines Ltd., Montreal, Joseph B. Schechter, Jr., Vancouver, Frank Blum & Sons, Pittsburgh.
6.	Notification of the deposit was received verbally from the Bank of Montreal on the morning of January 26, prior to the consideration of tenders.
7.	Final transfer of title of stocks is now being completed.
8.	It was a condition of the tender that sales by the buyer were to be made off the North American continent. Beyond ensuring compliance with that provision, the government is not a party to sales made by the buyer and, therefore, is not in a position to give information with respect to such sales.
9.	See answer to No. 8.


&quot;CANADIAN ESKIMO ART&quot;
Mr. Thatcher:: 1.	What was the total cost to the government of printing the publication "Canadian Eskimo Art"?
2.	What was the purpose served by this publication?
3.	How many copies have been sold at the specific price of 25 cents per copy?


Mr. Lesage:: 1.	The final cost of printing "Canadian Eskimo Art" has not been computed as publication has not yet been entirely completed. The cost estimated by the queen's printer is $1,202.15 for 10,000 copies.
2.	This publication was primarily designed to bring to the attention of the public, both in Canada and abroad, the art of Canadian Eskimos. Canadian Eskimo art is receiving steadily greater national and international

recognition and its sale is becoming an increasingly important part of the Eskimo economy; this publication was intended, in part, to assist in the program of marketing Eskimo art. Income earned by the Eskimos through the sale of their art will reduce the amount of financial assistance that might otherwise have to be given to them from public funds.
3.	Printing of this publication has not been entirely completed and the queen's printer has not yet received stocks for sale. Already, however, orders totalling about 2,500 copies have been received. These will be sold at a price of 25 cents per copy, with the usual discount for quantity orders.



MOTIONS FOR PAPERS


Mr. Gagnon:: For a copy of all correspondence exchanged between the Department of Transport or any agency under that department and the CKCH Hull Broadcasting Company Limited and the Canadian Marconi Corporation, in connection with a project for the installation of a television station for the Hull-Ottawa district.


Mr. Chevrier:: Return tabled.



RESERVE ARMY-RECOMMENDATIONS

Mr. Diefenbaker:: For a copy of the report on and recommendations for improvements and changes in the Canadian reserve army made by a committee of senior officers to the Department of National Defence, between the months of November, 1953 and February, 1954.


Mr. Campney:: Mr. Speaker, the report
referred to in the hon. member's motion is a report made by three senior officers with respect to the Canadian reserve army. The three officers constituted a board appointed by the chief of the general staff with the concurrence of the Minister of National Defence (Mr. Claxton). The report was prepared following extensive studies and was made to the chief of the general staff in confidence to assist the department and the government in consideration of defence policy. I submit, and I think most hon. members will agree, that in such circumstances the document is not subject to production but is privileged. I might mention that the Minister of National Defence referred to this matter on May 21, when the estimates of our department were under consideration; and what he then indicated, I now only wish to confirm, namely that the government must oppose this motion.


John George Diefenbaker: Mr. Speaker, if I may speak to the motion, I suggest that this is not a motion for something that is privileged.

The attitude taken by the minister is to impose arbitrarily a blackout on information to which the house is entitled.


Mr. Speaker:: I cannot allow debate on this motion. If a notice of motion for the production of papers is considered as not being allowable by the minister on the ground of public interest, or of being privileged because the documents referred to are confidential, no debate is allowed. See standing order 51.
Is it the pleasure of the house to adopt the motion?


Some hon. Members:: No.


Mr. Speaker:: Those in favour of the motion will please say yea.


Some hon. Members:: Yea.


Mr. Speaker:: Those who are opposed to the motion will please say nay.


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the nays have it. Call in the members.


Mr. Goode:: Mr. Speaker, because of the illness of the hon. member for Medicine Hat (Mr. Wylie) I did not vote.


Mr. Hahn:: Mr. Speaker, because of the illness of the hon. member for Temiscouata (Mr. Pouliot) I did not vote.



CANADIAN NATIONAL RAILWAYS


Hon. Douglas Abbott (Minister of Finance) moved: that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to bring in a measure to authorize the Canadian National Railway Company to make capital expenditures in the year 1954 not exceeding $209,168,695 and to make certain capital expenditures and enter into certain contracts prior to July 1, 1955; to authorize the national company to issue securities to provide amounts required for the authorized expenditures; to provide that, except as expressly provided, the aggregate principal amount of securities outstanding at any time shall not exceed $234,623,695; to authorize the governor in council to guarantee the principal and interest of securities issued by the company for the purpose aforesaid; to authorize the Minister of Finance to make loans to the said company secured by such securities and not exceeding $234,623,695 in principal amount to enable the said company to meet such expenditures and with authority to give financial aid and assistance to other companies of the national system.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the house.


[Stage Direction]
Motion agreed to.
5242	HOUSE OF
Inquiries of the Ministry TRADE

[Stage Direction]
On the orders of the day:
Hon. George A. Drew (Leader of the Opposition):: Mr. Speaker, I wish to direct a question to the Prime Minister and to ask him if he can amplify the information which has been given to the press and is contained in a statement in a Canadian Press dispatch that federal officials said today that if the curbs receive presidential approval Canada will have to consider some form of economic readjustment, possibly a withdrawal of tariff concessions equivalent in physical and psychological value to the United States restrictions imposed.


Right Hon. L. S. St. Laurent (Prime Minister):: No, Mr. Speaker. I know of no such information given by Canadian officials to the press. All I would care to say at this time is that the Canadian government is aware of the latest developments in Washington relating to commodities of interest to Canada. We are, of course, very much concerned about the possibility, although I would not say the probability, of any action being taken against our exports and I may say that the United States government is fully aware of our views. We have kept almost continuously in touch with the U.S. administration on these matters generally and have emphasized our attitude in cases directly involving our trade. I am confident that in arriving at his decisions the president will take into account the wider considerations involved, including the repercussions on friendly countries. I am sure that he will be anxious to avoid actions which would seriously affect the trade of Canada and other allied countries.



FERRY SERVICE


[Stage Direction]
On the orders of the day:
Mr. Maurice Bourgel (Parliamentary Assistant to the Minister of Public Works):: Mr. Speaker, on Thursday, May 27, the hon. member for Esquimalt-Saanich (Mr. Pearkes) requested information regarding dock facilities at Steveston for Coast Ferries Limited operating between gulf islands and Steveston.
As my hon. friend is aware, this service followed the discontinuance of C.P.R. service which used a dock at Vancouver. Coast Ferries Limited without any permission whatever from the Department of Public 

Works took over the use of this dock which was constructed for the exclusive use of dredging operations in the lower Fraser river. The dock in question was constructed for that purpose alone and not for public use. Dredging equipment which will use this wharf includes two dredges, two tugs, pontoon lines and fuel barges. There can be no doubt that if the important dredging program in the lower Fraser river is to be carried out this dock must be reserved completely as a base for dredging operations and maintenance, the purpose for which it was intended.
For reasons given above, instructions have been issued that Coast Ferries must discontinue the use of this wharf with effect from midnight, June 25. This will provide the company with adequate time to review alternatives. In this connection it has been suggested that the manager of the company might like to come to Ottawa and discuss with the department various alternatives which might be utilized after the 25th of June.


Mr. G. R. Pearkes (Esquimali-Saanich):: Mr. Speaker, may I ask a supplementary question? There is a second government dock at Steveston, I believe. Could permission be granted to the company to use that other dock?


Maurice Bourget: According to the information I have, investigations are being made at the moment to see whether the facilities of this dock can be used by the ferry company.
[Later: ]


Tom Goode: Mr. Speaker, I have a question to ask the parliamentary assistant. I have written many dozens of letters to the department with regard to this ferry at Steveston. Why has not the hon. member for Burnaby-Richmond been told that the ferry can continue to use that wharf only until June 25? This is the first I have heard about it.


Mr. Knowles:: Well, well!



UNITED STATES SELLING POLICY-ACTION BY CANADIAN GOVERNMENT

[Stage Direction]
On the orders of the day:
John George Diefenbaker: I
have a further question to ask the Frime Minister arising out of the question asked by the Leader of the Opposition (Mr. Drew). Has the government made a strong protest against the attitude taken by the United States government in making provision for

the sale of oats and barley at from 10 cents to 15 cents below the domestic price in the United States? If so, what has been the reaction of the United States government to any protest?


Louis Stephen St-Laurent: The matter to which my hon. friend refers has been the subject of discussions between officials of the Department of Trade and Commerce and the representatives of the United States government. In the absence of the Minister of Trade and Commerce (Mr. Howe) on other official duties today, I would not care to go beyond saying that. I prefer to leave it to him to say what can be said at this moment about those discussions.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Solon E. Low (Peace River):: Mr. Speaker, I should like to ask the Secretary of State for External Affairs whether it would be possible, before the session closes, for him, or his parliamentary assistant or some other member of the government, to make another report on the progress made at Geneva?


Hon. L. B. Pearson (Secretary of State for External Affairs):: Mr. Speaker, if there is
an opportunity and if any progress has been made at Geneva since my last statement, I am sure I shall be glad to report to the house on it.


Douglas Charles Abbott: that the house go into committee of supply.


SENATE REFORM
George Alexander Drew: Mr. Speaker, I confess that I
could not hear whether or not the motion has been put. I rise to follow the customary practice of availing myself at this time of the opportunity to deal with a subject which has been before this house on many earlier occasions.
I propose to move an amendment, and may I say that it is in a form which will not be open to the objection that it proposes the setting up of a committee which could not complete its task before the house rises. It is also not open to the objection that we seek to tie the hands of the government with regard to procedure in relation to something 83276-332i
Suggested Senate Reform which the party from which it is formed has been advocating for a great many years. I refer to the subject of Senate reform.
This is a subject that has been discussed on so many occasions that there is little need to argue for the purpose of convincing hon. members of this house that action is long overdue. I would point out, however, that for some time-in fact, for a long time

before this present government came to power, it was the declared intention of the party to which the members of this government and its supporters adhere to bring about a reform of the other house which would make it an effective part of our bicameral parliamentary system. When our parliamentary system was established the purpose of the Senate at that time was well defined. I need not repeat the various arguments that were presented on that occasion. They are before the members of this house. Obviously I need not argue to convince the members of the government or the supporters of the government that Senate reform is needed, because members of the government have for years been arguing in support of that proposition.
The predecessor of the present Prime Minister (Mr. St. Laurent) as leader of the party to which he belonged had pledged on many occasions that Senate reform would be one of the important acts which he would undertake. An indication of the fact that this was constantly before the minds of the government, both during the time that it was headed by the late Right Hon. William Lyon Mackenzie King as well as when headed by the Prime Minister, is to be found in the pages of Hansard and in a tremendous number of speeches outside the house. In fact there was a time when Senate reform seemed to be the main plank in the platform of the party which was then led by Mr. King. As an example of the various aspects of this problem which have come before the house, I refer to Hansard for 1926-27, volume 1, page 355. There I find the following under the heading "Senate reform":


Mr. Evans:: 1.	What is the form or wording of the pledge, if any, taken from those who have been appointed senators, during the last two years with a view to Senate reform?
2.	How many have been thus pledged?


Right Hon. Mr. Mackenzie King:: 1.	An assurance of support of such measure of Senate reform, in conformity with the requirements of the constitution, as may be introduced by the Liberal administration.
2.	This assurance has been given by all who have accepted appointment to the Senate within the time mentioned.
By this question and answer it will be seen that so important was the subject in the mind of Mr. King that he followed the very
5244	HOUSE OF
Suggested Senate Reform unusual practice of asking for a pledge in advance as to what course members to be appointed to the Senate would follow in relation to the subject of Senate reform. That very unusual practice, which in the ordinary course of events would certainly be open to challenge on the ground that it denied freedom of opinion as well as freedom of speech to the members of the Senate, surely emphasizes the tremendous importance attached to this subject by Mr. King and presumably by those who supported him at that time.
Then there is a very illuminating question and answer to be found in Hansard for 1940 at page 2322, volume III. It reads as follows:


Mr. Coldwell:: I would ask the Prime Minister in view of the difficulty that has arisen, whether he will consider his long-promised reform of the Senate at the next session of parliament.


Mr. Mackenzie King:: That is something I have been considering all my life.
That illuminating answer, Mr. Speaker, which is now part of the history of parliament, does suggest that perhaps the party to which Mr. King belonged should seek to fulfil his life-long dream. It would seem appropriate that the pledge so often made should be undertaken. Obviously this matter cannot be dealt with in the present session. For that reason it is not my purpose to move, as I have on earlier occasions, for the setting up of a constitutional convention, nor is it my purpose on this occasion to propose the setting up of a joint committee of the two houses as I have on other occasions. I do so only because of the fact that I recognize that it must be the responsibility of the government to decide which course it will follow.
On different occasions when we have made these proposals the government has evaded the issue on the ground that this is a responsibility they must accept, and of course they have given other grounds as well. The matter has come up at different times so I recognize that on some occasions it has been opposed for other reasons. I hope that no one will feel that there is any other reason for not supporting the motion at this time and in this case fulfilling the life-long dream of a former prime minister of Canada.
I specifically propose that this should not be regarded as a want of confidence motion.
I specifically propose that this motion should be accepted by the government, as other motions have been, as an expression of opinion of the house that whatever steps the government deems advisable should now be taken to start the preliminary steps towards the fulfilment of this pledge which has been before us for so many years. I am sure that it is in the interests of all Canadians at this time that we should do everything we can 

to establish a feeling of confidence in the minds of the people of Canada that their parliamentary system is effective, is sound and is operating to the best advantage of the people of Canada.
After all, we have been told so often that the best answer to any propaganda on behalf of any other system is the efficiency of our own system. There may be some question about the efficiency of proceedings in this house. That, however, is something we are perfectly free to deal with and can deal with on other occasions as we have in the past. I doubt if there is an hon. member of the house, and I would hope there is not an hon. member of the other house, who will assert that the Senate as now constituted is capable of performing the functions for which it was originally intended. I hope that the members of this house have noticed that only within the past few days hon. members of the Senate have asked that they be given a greater opportunity to perform their responsibilities.
That indicates quite clearly that members of the other house are as concerned as we should be about the effectiveness of the parliamentary system which embraces both the House of Commons and the other house that is within these parliament buildings of Canada. I suggest that we should not disregard the fact that, amongst other considerations, questions arise as to the method of appointment, as to the tenure of office and as to the proportion of representation which will most effectively assure the original purpose.
Without quoting at any length the thoughts that were in the minds of those who brought about the system, I should like to quote certain words from a speech by Sir John Macdonald in the legislature in 1865, two years before confederation. It is to be found on page 35 of the reports of those deliberations. He said:
In order to protect local interests, and to prevent sectional jealousies, it was found requisite that the three great divisions into which British North America is separated should be represented in the upper house on the principle of equality.
There are three great sections, having different interests, in this proposed confederation. We have western Canada, an agricultural country far away from the sea, and having the largest population who have agricultural interests principally to guard. We have lower Canada, with other and separate interests, and especially with institutions and laws which she jealously guards against absorption by any larger, more numerous, or stronger power. And we have the maritime provinces, having also different sectional interests of their own, having, from their position, classes and interests which we do not know in western Canada. Accordingly, in the upper house-the controlling and regulating, but not the initiating, branch (for we know that here as in England, to

the lower house will practically belong the initiation of matters of great public interest), in the house which has the sober second thought in legislation-it is provided that each of those great sections shall be represented eaually.
It will be seen, Mr. Speaker, that those were considerations that were in the minds of those who were charged with the problem of drafting our constitution at that time. It was to be a house of sober second thought on legislation. One might wonder how much second thought has been evident in some legislation that has been before us. May I say without any reservation and with admiration for those who have done it, that there have been a few members of the other house who have demonstrated what that other house could do by their clear and critical analysis given to some of the legislation that has gone forward from this house. But even in the face of such able representations as have been made, may I say particularly by the Hon. T. A. Crerar in regard to the fundamental principles of the supremacy of parliament and the rule of law, the brevity of the debates that have taken place on these very important issues, following the presentation of clear and wise comment on legislation already dealt with, does raise the question as to how completely the other house is able, as at present constituted, to fulfil the extremely important tasks which were to be assigned to it.
Since the days when Sir John A. Macdonald made the remarks I have quoted, immense changes have taken place. There is a difference in the presentation, and there is a tremendous difference in the character of the country. No longer is it possible to speak of western Canada simply as an agricultural area; that is particularly true of British Columbia with its immense industrial development, as well as the other prairie provinces with their new resources. Nevertheless the principle he asserted is one which has been in the minds of those who have discussed this subject over the years, and most certainly the principle that it shall be a place for a sober re-examination of the legislation adopted in this house.
In fact, Mr. Speaker, unless the other house is to be a second chamber of review and reconsideration with a detachment that possibly might not be so easy in this house, for many reasons, then I suggest that we are paying a great deal for the form without having the reality. The mere fact that many men and women for whom all of us have the highest personal regard now occupy the seats in the other house is no answer to the demand that is being made in every part of Canada for the reform of the second house if it is to be an effective part of our parliamentary system. I, of course, feel sure we
Suggested Senate Reform need make no argument on this side to support the lifelong dream of Mr. Mackenzie King and the pledge which has been the pledge of the party to which the Prime Minister (Mr. St. Laurent) and his government belong.
I shall read the resolution I propose to move, but before I do so, I repeat that it leaves to the government the responsibility for initiating whatever steps should be taken to start the proceedings so that at the beginning of the next session we may not have vague generalities about Senate reform, such as there have been in times gone by, but we may have some concrete proposals as to how we are going to tackle this subject. May I point out also before I move this resolution that I am not prepared, nor do I believe the members of this party or hon. members of the house generally are prepared, to consider abolition of the second chamber until we have had an opportunity to examine the possibility of real reform. I do say, however, that unless there is some step taken towards reform, the demand from the people of Canada will bring about the abolition of the Senate because the people of Canada find it very difficult to understand why it is necessary to pay the amount of money that is now being paid for the maintenance of the second chamber under conditions as they now exist.
This house saw fit to increase the amount of money received by the members of the Senate at the same time as the step was taken in this house over the opposition of many hon. members in regard to that move-


Mr. Nicholson:: No opposition in the other place.


George Alexander Drew: It is for us to speak about the house in which we sit. So far as this house was concerned, there was plenty of opposition, and vigorous opposition, to the step that was taken. There was also opposition to this being done in the case of the other house, particularly at a time when no steps had been taken to reform the other house to make it an effective part of our parliamentary system under our federal constitution.
I therefore move:
That all the words after "That" to the end of the question be deleted and the following substituted therefor:
"the government should give consideration to initiating the necessary consultation and inquiry respecting reform of the Senate so that all appropriate steps may be taken, including such matters as the method by which the members of the Senate should be chosen and their tenure of office so that the Senate may more effectively discharge the constitutional function it was intended to serve as an integral part of our parliamentary system."


Mr. Speaker:: Perhaps I should point out to the Leader of the Opposition (Mr. Drew) that there is on the order paper a bill moved
5246	HOUSE OF
Suggested Senate Reform by the hon. member for Hastings South (Mr. Follwell), Bill No. 354, an act to amend the British North America Acts, 1867 to 1952, with respect to tenure of place in the Senate. This bill would simply involve that part of the amendment which says, "and their tenure of office." There is still a chance to debate that bill now on the order paper. In any event, I am not making an issue of it. I am just informing the mover of this amendment that there is such a bill with respect to tenure of office on the order paper.


Major James William Coldwell: Mr. Speaker, I rise to say something about this rather important amendment. I noted the Leader of the Opposition (Mr. Drew) said that it was introduced at this rather late date in the session in order that consideration could be given to it, and possibly a similar motion might be moved at the next session, at which time the house could consider it at length, and probably come to some understanding as to what steps would be taken by the government to bring about a reform of the other place.


George Alexander Drew: I do not wish to interrupt the hon. member, but as a courtesy I would point out that what I said was that I expressed the hope that the government would be ready to come back and recommend to us the course we should follow.


Major James William Coldwell: Yes, I accept that suggestion -although the other may be what will have to be done.
As is well known, the group for whom I speak today believes that reform of the Senate should be much more drastic than the Leader of the Opposition has in mind, and that the reform should include the abolition of the Senate, taking into consideration the steps that have to be taken and the negotiations that have to be undertaken in order to bring this about.
And may I say that such reform is not unknown in our democratic parliaments across the world. In our own country we used to have second chambers in the provinces, but in all but one they have been abolished.
I hold in my hand the constitution of the Kingdom of Norway. When this matter has been up before I have often referred to this constitution. I was unaware that the matter was going to be brought up at this session; but it so happens that about six or eight months ago I obtained a couple of copies of the constitution of Norway.
There they have a single chamber; and I submit that we could study the constitution of that country with a view to adapting the provisions of that constitution regarding review and reconsideration which the Leader


of the Opposition has said is the main function of the other place. The example given us in the constitution of Norway is one which is worthy of consideration.
This constitution, after indicating how the Storting shall be elected and set up, says this:
The Storting shall nominate from among its members one-fourth to constitute the Lagting: the remaining three-fourths shall constitute the Odel-sting. This nomination shall take place at the first ordinary Storting that assembles after a new general election, and thereafter the Lagting shall remain unchanged at all Stortings that meet after the same election, except in so far as any vacancy which may occur among its members has to be filled by special nomination.
That is, one-quarter of the newly elected parliament, as constituted by the Storting, forms itself into what amounts to a reviewing section or portion of the parliament of that country. Then it continues:
Each Ting shall hold its meetings separately and nominate its own president and secretary. Neither of the Tings may hold a meeting unless at least one-half of its members are present. Bills concerning amendments of the constitution may not be dealt with unless at least two-thirds of the members of the Storting are present.
That is the machinery. Then let us take a look at what happens to bills introduced into the Norwegian parliament. It says:
Every bill shall first be introduced in the Odelsting. either by one of its own members, or by the government through a member of the Council of State . . .
That is somewhat analogous to our governor in council.
The legislation then is introduced into the equivalent of our House of Commons, the lower house. It continues:
If the bill is passed, it is sent to the Lagting. which either approves or rejects it. and in the latter case sends it back with comments appended. These are taken into consideration by the Odelsting, which either lets the bill fall or again sends it to the Lagting, with or without alteration.
That follows very closely the present situation in Great Britain, where the House of Lords once had complete veto of legislation passed by the House of Commons. But since 1911, when the parliament bill was introduced in that country by Mr. Asquith, the powers of the House of Lords have been limited, so that a bill passed twice by the House of Commons, on the third occasion on which it goes to the House of Lords, must be automatically adopted. Here, at least in theory, the Senate has a complete veto. If the other chamber wishes, it can reject any legislation, except money bills, forwarded to it from this House of Commons.
I submit that is not democratic procedure. There is no direct responsibility to the people by members in the other place. And to have that power, one which 43 years ago was

taken away from the House of Lords in the mother of parliaments, means that we have a situation in this country which is archaic and entirely out of line with our democratic conceptions.
Then, may I proceed by reading further from the constitution of Norway, where it deals with procedure in connection with bills. It says:
When a bill from the Odelsting has twice been laid before the Lasting and has been a second time rejected by it, the whole Storting shall meet in joint session, and the bill is then disposed of by a majority of two-thirds of the votes.
Between each of these deliberations there shall be an interval of at least three days.
While that may appear to be a very short interval, it is sufficient because they meet in common session to come to a conclusion regarding it. To continue:
When a bill passed by the Odelsting has been approved by the Lagting or by the Storting in joint session, it shall be sent to the King, with a request that it may receive the King's assent.
And automatically that assent is given, as is shown by an earlier reading of the Norwegian constitution.
Here we have a modern democracy with one elected chamber divided into two parts, the second part doing the review and reconsideration which the Leader of the Opposition said this afternoon was the main function of the Senate of Canada.
And may I remind the house, and the Leader of the Opposition, that reform of the other place was, I believe, in the Liberal program adopted in the year 1919. Certainly it can be found in other programs of that party. As the Leader of the Opposition has said, from time to time members in the House of Commons have asked the government representing the Liberal party in power when this reform of the Senate was to be proceeded with. We have always had the same kind of reply.
I remember one occasion in 1925, 1926 or 1927-some time in the twenties-when the late Miss Agnes Macphail asked Mr. King when he was going to begin Senate reform, and Mr. King gave a reply which in some respects was not dissimilar to the one quoted this morning by the Leader of the Opposition. On that occasion, expressing some surprise, he said, "Well, I am reforming the Senate. As the Tory senators die I am appointing good Liberals in their places." We have now got to the stage where we have almost a single-party chamber in the other place. I believe there are today seven members of the official opposition in the other chamber. I do not say this with any disrespect to these gentlemen, but they are all
Suggested Senate Reform well on in years now and two of them I am told are in very poor health indeed. I am told that one or two of them may be taken from us at any time. Well, the situation is bad in every respect, because whenever there is a vacancy in the Senate there is a hopeful expression on some faces on the opposite side of the house, and they wonder who will be appointed to take the place of the deceased member of the other place.
Only the other day the voluntary health committee of parliament had an address from Dr. Segal, Montreal, on longevity. Someone suggested that longevity for members of parliament would be quite readily secured if they were appointed to the Senate. That seems to have been somewhat confirmed when you look over the gentlemen who sit there. I am not saying anything disrespectful to hon. members of the Senate. There are very able and very good people in the other chamber, and I want that clearly understood. But in these days, when we speak of democracy, when we speak of our democratic institutions and when we speak of responsibility to the people of Canada, how can we continue to approve of a chamber unrepresentative as far as elections are concerned, but equally unrepresentative of the various schools of thought in this country. Please bear in mind I am not making a plea for the appointment of any C.C.F. members to the other place. I say that because we believe that the Senate should be abolished. I want to make that perfectly clear; but it is quite unrepresentative of the various trends of thought politically in this country, and as such it is, it seems to me, entirely out of line with all our democratic institutions.
Someone asked, what could we do about divorce if it were not for the Senate? Well, I think that will have to be tackled apart from what we may do regarding the other place because of some of the cases that have been before the Senate committee and have slipped through this house lately. This is a reflection both on the other place, on this House of Commons and on parliament generally, so that should be no argument for continuing the present unrepresentative other house.
I should like to move an amendment, Mr. Speaker. I had only just a moment to look it over, but I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the amendment be amended by deleting therefrom all the words after the word "respecting" and by substituting therefor the following words:
"the steps to be taken to secure the abolition of the Senate."
5248	HOUSE OF
Suggested Senate Reform
The amendment, as amended, would read:
The government should give consideration to initiating the necessary consultation and inquiry respecting the steps to be taken to secure the abolition of the Senate.
I think I have said about all I want to say on the matter; but let no one say that there are no alternatives to our bicameral system. There is in the Kingdom of Norway an elective single chamber, which is divided, as it were, into a bicameral system. It is working well there, and anyone who is familiar with the Scandinavian countries knows that there are no more democratic and progressive peoples than the peoples of the Scandinavian countries. In this constitution of Norway the Norwegians give us an indication of how a reviewing and reconsidering chamber can be set up which will do all that the Senate of Canada does and be directly responsible to the people.
I am not going into the question of saving the country a great deal of money, but that is a factor that should be reconsidered. Unquestionably, the time has come when a drastic review of the Senate, in my opinion, can only be carried out thoroughly by the abolition of the Senate of Canada, and the study of reconsideration and review of legislation somewhat along similar lines adopted by the very democratic and progressive Kingdom of Norway.


Solon Earl Low: Mr. Speaker, there is not a great deal that one can say at a time like this without some rather intensive preparation, and I must say that I did not have the opportunity to do that. However, there are a few comments I should like to make, especially since the C.C.F. have introduced an amendment to the amendment which was moved by the Leader of the Opposition (Mr. Drew).
There is no doubt at all that the Senate has declined in popularity in Canada over the years. In the minds of the people they do not occupy the same position that they held years ago when this country was new and when our federal form of government was first introduced. The question of what has caused the decline should occupy our attention. Some hold that the Senate needs reforming because the Senate itself has gone bad. Other people have different views. I have given considerable thought to the question. In my mind the question is this: Is reform of the Senate the important necessity, or is reform of the government's attitude toward the Senate what is necessary? I am not so sure that the Senate itself is in need of such reform as that the government needs to change its views with regard to the work 

that should be given the Senate today. At least that is one of the big considerations in this whole matter.
When Canada first adopted the bicameral system it was thought that the Senate would fit into the federal constitution, particularly as the champion of provincial rights, and for a time the Senate did fill that function, and filled it well. It filled the function of a brake on hasty legislation so long as the complexion of the Senate was somewhat different from the complexion of the House of Commons. In these latter years of course the complexion of the Senate has become exactly that of the House of Commons, and it has remained so for quite a number of years. As a consequence, many people feel that the Senate cannot fulfil a real and useful function.
Well, let us look at this question of the use which is made of it. The Senate is prepared to undertake whatever work it can do. It has already been said we have accumulated in that house a great deal of experience, men of real stature, broad experience and good minds-and women of course. Now, why accumulate that experience and that ability in a second chamber if it is not being used properly? I hope I am not attempting to cast any reflection on the senators, indeed that is not my intention; but if we look at this thing realistically we will see that as long as the senators are given menial political tasks to do they are going to continue to decline in popularity and in the support of the people.
For example, it is far beneath the dignity of a senator, and far beneath what he should be given to do, to have him go through a constituency of this country doing the footwork of a political page boy, rounding up political support to unseat a member of this house simply because that member does not belong to the party which supports the government.
I am speaking from experience. One of them did that in my own constituency. But I do not care about that. From my own point of view, if he had stayed longer I would simply have had a bigger majority. But the point is that he was there, a member of the Senate, evidently sent by the party to whom he felt he owed allegiance, to do the menial political tasks which should be done by someone completely detached from the Senate.
As long as that sort of thing is the kind of work the government gives to senators they will continue to decline in popularity until the people of this country will demand that the Senate be abolished.

I personally believe there is a very useful function which the Senate can fill in a federal state. The leader of the C.C.F. has mentioned what is taking place in Norway. But Norway is a unitary state and there is not the problem of protecting provincial rights.


Major James William Coldwell: But the revisal committee could represent and protect the provinces in the same way.


Solon Earl Low: I suppose that could be done, but at least until we have built up something like a different political concept in its application to the federal system by the safeguarding of provincial rights I think the Senate can continue to perform a very useful function, in addition to being a check on hasty legislation. But that certainly cannot be as long as our present attitude continues toward it, and I am going to ask again why the government does not give the Senate royal commission work to do.
They are perfectly fitted to do that type of work. We in parliament decide to set up commissions and we get judges and others to go about the country carrying on investigations and making reports. "Well," someone might say, "but they are not political." But I would point out that the judges are all appointed by the government in exactly the same way as the senators, and I think senators can be just as detached from political considerations as judges, provided the commissions composed of senators are set up in the proper way and given the proper work to do.
There is a lot of royal commission and investigatory work which could be carried on by the Senate if the government would give it the work to do.
I could not support the subamendment to abolish the Senate. I think it is a wise precaution to have a second chamber in our country and I would like to see it continue. But I would certainly like to see a change in the government's attitude to it; and further I must say I support the idea, as called for in the amendment moved by the Leader of the Opposition (Mr. Drew), to institute the necessary consultation and inquiry respecting the reform of the Senate to see what can be done, though I do not think the emphasis requires to be placed so much on reforming the Senate as on reforming the government's attitude toward the Senate.
I believe that if we do it the right way we can raise the second chamber in the estimation of the people by giving it useful work to do, so that it may prove itself a useful body.
Suggested Senate Reform


Mr. J. M. Macdonnell (Greenwood):: Mr. Speaker, I would like to make a few brief comments. I am sure there are many people like myself who feel disturbed to hear the constant slighting and even contemptuous remarks about the Senate. Very often people speak as though the only useful thing to be done with it is to abolish it.
I notice the hon. member for Rosetown-Biggar (Mr. Coldwell) suggested that, and I am entirely in disagreement with him. I did not realize until this morning that the word "reform" was capable of the meaning which the hon. member for Rosetown-Biggar ascribed to it, but I am learning something because, knowing the hon. member to be a scholastic man, I was cautious enough to consult the dictionary and I found that the word "reform" does include among other meanings 'abolish'.


Mr. Speaker:: Order. I am very sorry to interrupt the hon. member but I am very much interested in that point and I wonder if he has the same dictionary as I, because according to my dictionary the word "reform" does not include "abolish". If you want to reform the church then you need not necessarily abolish the church, and I was going to say, perhaps later on, that abolishing the Senate and reforming the Senate are two different subjects.


James MacKerras Macdonnell: Well, Mr. Speaker, I will read to you what I found in this dictionary.


Stanley Howard Knowles: Drastic reform.


James MacKerras Macdonnell: Perhaps, Mr. Speaker, I read it carelessly but I will now read it out loud. The definition is as follows:
To become better by the removal or abandonment of imperfections; to abolish; cure (abuse or malpractice).
I hope I am interpreting it correctly, Mr. Speaker, and that I have not been guilty of misinforming you.


Mr. Speaker:: I am inclined to disagree with the hon. member. I do not take the same conclusion as he does from what he has read. I will now quote from the Concise Oxford Dictionary, which is on the table. It states:
Make (person, institution, procedure, conduct, oneself) . . .
Well, the Senate is an institution, so let us make an institution or body of persons become better, for the definition continues:
. . . or (of person or body of persons) become better by removal or abandonment of imperfections, faults, or errors.


James MacKerras Macdonnell: Please read on, Mr. Speaker.


Mr. Speaker:: Later on it states:
. . . abolish, cure, (abuse, malpractice).

Suggested Senate Reform
To abolish an abuse or cure a malpractice is reforming, but if we were talking about a church, for example, we would not talk of reforming the church by abolishing it.


James MacKerras Macdonnell: Mr. Speaker, you are
making a finer distinction than I proposed doing. I confess when I read the words "abolish, cure", though it is true they refer to malpractice and abuses, it struck me the word "reform" meant what the hon. member for Rosetown-Biggar suggested, though I was not at all sure whether the hon. member would include the Senate in one of the above categories from the way he spoke.
At any rate, Mr. Speaker, I accept your correction if you are indeed correcting me. I was a little afraid myself, because although I am very ready indeed to be reformed I hoped it would not have to be fatal. That was the thought that struck me when I read this definition of the word used by the hon. member for Rosetown-Biggar. At any rate, Mr. Speaker, I have learned something and perhaps you have too.
On that point I would just like to make one more comment because it seems to me that what the hon. member for Rosetown-Biggar suggested by reform, namely to abolish, should be entirely out of our contemplation, because it appears to me it would be a gross breach of faith and it would certainly be quite different from an ordinary amendment to the constitution. In order to support that, I wish to read very briefly what Sir Wilfrid Laurier had to say on this point, as reported in column 2301 of Hansard for 1906:
But one consideration which, to my mind, is absolutely conclusive and paramount, is that under our system of government, a second chamber is an absolutely needed safeguard for the smaller provinces against a possible invasion of their rights by the larger provinces.
This is really the same point which the Leader of the Opposition brought out in his quotation from Sir John Macdonald.
I would like to quote from the same speech by Sir Wilfrid Laurier where a little later on he states:
This principle having been adopted admittedly for the protection of the smaller provinces, every one will admit at once that if we were to remove that safeguard, there would be a natural discontent in the smaller provinces, so that I contend that we cannot seriously entertain, even for a moment, the idea of ever abolishing our Senate.
To come back to what I said at the outset, I think it is a bad situation when we have one branch of our government-and that a branch which in the past has been extremely useful at times-almost brought into contempt with a large number of people. As a matter of fact, many people who seem to give practically no consideration to other aspects of


our constitution are quite ready to sound off in no uncertain way about the Senate. Why has that situation come about? It seems to me it has come about because the Senate has fared very ill at the hands of Mr. King, and I very much regret to say that it has fared just as ill at the hands of our present Prime Minister. (Mr. St. Laurent).
I want to read just a word or two or rather a statement made by Mr. King in 1926, as reported at page 4030 of Hansard of June 4, 1926. In reply to Mr. Meighen Mr. King said:
I might say to my right hon. friend that the government would not like to prolong the session unduly by introducing the subject of Senate reform at this stage. My right hon. friend may be sure it will come up in due course.
One does not know what "in due course"
is.	I suppose, with a man of Mr. King's beliefs, it might be going on even yet. At any rate, I raise that point. I think anyone looking at the Senate under the hands of our present Prime Minister would feel that it is "the mixture as before", or the same procedure which personally I deeply regret. I regret most of all what the Prime Minister said on February 1 in this house, because it seemed to me that he had set aside reform of the Senate as something which, at any rate, was not going to be practical in his day. If I understood correctly what he said to the young Liberals the day before yesterday- although it was not about Senate reform; at least I think not-he seemed again to be putting off things there also in a way which I think was unfortunate. I want to read what the Prime Minister said because, as I heard
it,	I remember feeling "That is a minor disaster to our system of government". As reported in Hansard of February 1, 1954, page 1639, the Prime Minister said:
Since I have been in Ottawa I have found that there were plenty of problems that it was realistic to study and consider because I might have some responsibility in connection with forming some opinions as to the solutions they should receive. I must confess I have never felt I was going to have in my day the responsibility of having to come to a conclusion about substantial modification as to the character of our constitution.
I have heard certain modifications suggested about the way in which appointments or summonses to the other house might be made. But quite frankly, Mr. Speaker, 1 have never heard one that did not seem to me to bristle with more obstacles than promises of advantage to the Canadian public.
I am not proposing to make suggestions as to how the constitution is reformed. I might make the obvious comment that there is one thing that the Prime Minister could have done, although I must admit that it would have been contrary to the general practice followed by those before him. What he might have done is to disregard what I am afraid has been the inflexible rule that appointments

to the Senate were limited to certain select people whose quality, judged by one standard, was impeccable. As time has gone on, I feel that the necessity for a change has become more obvious. Whether there has ever before been such a great disparity with regard to numbers in the Senate, or anything approaching it, I do not know.
We have only to look back twenty years to a time when the Senate was a most useful body. When Mr. Meighen was leader and when Senator Dandurand, another distinguished figure, was on the opposite side, I believe that for five years the Senate did most excellent work. It was not of the same political complexion during all those years, as I understand it. At the beginning, I believe there was a Liberal majority and at the end I believe there was a Conservative majority. But to the everlasting credit of Lord Bennett, he left the Senate to do its own work. As I say, in it there were a number of distinguished men. People who were in Ottawa in those days tell me that it was the Senate debates and not the debates in this house that were most frequently attended. In the Senate there were a great many men of experience and distinction both in political and business life.
Sir Wilfrid Laurier has set out one inescapable reason for continuing the Senate. I think there is another equally good one. It should be continued not only to protect the rights of the smaller provinces but also to provide a place where experience of various kinds can be rendered available for the public service.
As we all know, there are a great many people who could be useful in the public service but who are not prepared to face the rigours of an election. It seems to me that there is a great deal to be said for bringing to the service of their country in this way people of distinction and experience. If you look back just twenty years I think you will find that at that time the Senate was highly regarded by people who came here to Ottawa. The Senate committees were doing good work. Even yet they do good work. Let us be fair about the matter. In spite of the difficulties of keeping democratic party life alive in the Senate, we should not overlook the fact that much good work has been done through the Senate committees.
I think I have nothing more to add, Mr. Speaker. We have had this situation before us for many years. I think the Senate has fared ill at the hands of Mr. King. I never could understand how a man with so much belief in the parliamentary system could disregard and degrade one of the arms of parliament. As I say, I have been disappointed
Suggested Senate Reform with the present Prime Minister, who seemed to me to be perhaps in an especially good position, with his strong majority, to give a lead in a different direction. I was deeply disappointed when I read those words of his which seemed to me not only to say that he did not propose to do anything in the matter but even went to the extent of saying that he felt no responsibility. I find that to be an extraordinary position, Mr. Speaker. Here we have, admittedly I believe, one arm of government which has been grievously weakened; at any rate, it has been grievously weakened in the public mind. For the Prime Minister not merely to say, as I read what he said here, that he was not going to do anything about it, but to go further and really say that he felt no responsibility in the matter, is something that disturbs me greatly.
This amendment, as the Leader of the Opposition (Mr. Drew) has stated, is phrased in such a way as not to be interpreted to be a vote of confidence. I therefore hope that it may perhaps be accepted.


Stanley Howard Knowles: Mr. Speaker, I should like to say just a few words in support of the amendment to the amendment proposed by my leader the hon. member for Rosetown-Biggar (Mr. Cold well). As he said, we are in favour of reform of the Senate provided it is that drastic reform which was suggested in our subamendment, namely its abolition.
I listened with interest to the remarks made just now by my friend the hon. member for Greenwood (Mr. Macdonnell). If I may say so, he has strengthened my belief that the time has come to abolish the Senate. He argued that there are men of distinction whose wisdom it is good to have in our legislative councils but who do not wish or do not feel able to face the rigours of an election. Mr. Speaker, it is exactly that attitude to which we are opposed. We believe that anyone who plays any part in the legislative process should be directly responsible to the people. In my view the statement made by the hon. member for Greenwood (Mr. Macdonnell) reflects the attitude that prevailed when the Canadian parliament was established in 1867. The men of that day believed in democracy. Democracy was to be trusted, but not all the way. There was the notion that somehow or other there had to be people apart from those who were elected who were in a position to check on the elected representatives of the people. In our view democracy has grown up. In our view democracy is to be trusted. In our view the day has come when all those who play a part in making the laws of this country

Suggested Senate Reform should be responsible to the people and therefore should be elected by the people. To use the language of the hon. member for Greenwood, they should all have to face the rigours of elections.
Therefore, Mr. Speaker, I support wholeheartedly the type of reform proposed in my leader's subamendment, drastic reform, abolition of the other place. Since the word "reform" is being thrown about today, I should like to make the comment that it is quite evident that at the present time the government is not actively interested in reform of the Senate. Your Honour has already pointed out, in commenting on the language of the amendment moved by the Leader of the Opposition (Mr. Drew), that there is on the order paper a bill in the name of the hon. member for Hastings South (Mr. Follwell) which would amend the British North America Acts, 1867 to 1952, with respect to tenure of place in the Senate.
As hon. members know, that bill would provide that senators appointed after the passing of the bill would have to retire at the age of seventy-five. It does not make any provision with respect to those who are members of the other house at the present time. Certainly that is about as mild a touch of reform as could be proposed. Yet that bill has been on the order paper since March 8 and has not been proceeded with, and it is interesting to recall

*


Mr. Speaker:: I do not think the hon. member should deal with the merits of calling or not calling a bill because, as he knows, sometimes bills are not called for several weeks, and then one day they are called and voted on. We have had instances of that kind recently.


Stanley Howard Knowles: Yes, we had instances of that kind a few days ago.


Mr. Speaker:: Let us discuss Senate reform. As a matter of fact I may tell the hon. member that the part of the amendment referring to tenure of place should not be considered in this debate. Those words should be removed from the amendment because there is a bill on the order paper, and I think hon. members will agree that we should not anticipate discussion of the bill already on the order paper.


Stanley Howard Knowles: All right, Mr. Speaker, I will obey your injunction not to discuss either that bill or the portion of the amendment which refers to that question. The only point I was trying to make was that the lack of interest in proceeding with that bill shows a lack of interest on the part of the present government in even the mildest touch of Senate reform.

I have one other comment I should like to make. I have before me, because I have been collecting these things throughout the years, like other hon. members, quite a number of quotations on the general question of Senate reform or Senate abolition. I have indeed many of those from Mr. King which have already been quoted by other speakers. I also have a very interesting one by another late friend of ours, Humphrey Mitchell, whom we will all remember for the very kindly way in which he dealt with matters and with members in the House of Commons. On January 29, 1935, the question of the Senate was being discussed in the house, and as found at page 102 of Hansard of that year Mr. Mitchell had this to say:
The time has long since passed when the Senate should be used as unemployment insurance tor many of those in political life. I am of the opinion that anybody charged with preparing legislation should be responsible to our people.
As Humphrey Mitchell often did, he got two very good ideas into two sentences. He objected to the idea of the Senate being unemployment insurance for worn-out or retiring politicians. He also objected to legislation being prepared by anyone not responsible to the people. I have already indicated my opposition to any part of parliament not being responsible to our people, but may I say a word about the other criticism Mr. Mitchell made, namely, that the Senate was a form of unemployment insurance for politicians.
In the meantime the Unemployment Insurance Act has come into force. We have that for other people, and it is also true that there is now a members of parliament pension plan which is supposed to keep defeated or exmembers of parliament off the streets. Therefore the Senate is no longer needed for purposes of that kind. Yet I find that a rather interesting situation obtains at the present time. The Secretary of State (Mr. Pickersgill) will recall that earlier this session I had some questions on the order paper about members of the other place. He made a very interesting answer which more or less said that I should do my own research, and of course when one gets a suggestion like that from the Secretary of State one has to carry it out. I have checked and I find that in the other place at the present time there are, unless there have been any changes within the last couple of days, 40 members who are former members of the House of Commons. There are 14 who are former members of legislative assemblies, and in addition to those 54, some of whom-


Mr. Pickersgill:: Is there not some duplication there?


Stanley Howard Knowles: No, not with respect to those two categories.


Douglas Charles Abbott: All men of legislative
experience in any case.


Stanley Howard Knowles: I may say further that I have eliminated duplication with respect to the next category, and that is just what I was about to explain. In addition to those 54, some of whom after having been M.P.'s or M.L.A.'s ran again and were defeated, there are 7 others over there who never got elected to anything. Their only qualification was that they ran and were defeated. That adds up to 61, more than two-thirds of the present membership of the other house, who meet the qualification which Humphrey Mitchell thought was not a good one, namely, that it is simply a form of unemployment insurance for people in political life.
Everyone knows the understanding of our people generally that the Senate is being used for that purpose, rather than filling any vital, effective or important role in legislating the laws of this country. We offer no reflection on any of those now in the Senate, but it seems to us that the time has come for reform of some kind and, as we have already indicated, we think the kind of reform that would really be effective would be the abolition of the other place.


Mr. G. C. Nowlan (Digby-Annapolis-Kings):: Mr. Speaker, I would not have intervened in this debate had it not been for the subamendment moved by the hon. member for Rosetown-Biggar (Mr. Coldwell). I am not sure whether you raised a point of order or suggested that there was a possible point of order. I think that there is one involved in the subamendment. I hate to differ with the hon. member for Greenwood (Mr. Mac-donnell). Certainly when it comes to being a student of dictionaries, I will accept his judgment regardless of the dictionary; but subject to that I must say that I was under the impression-and I am sure there are many decisions to this effect-that the right of abolition is not legally included in the word "amend" or any such word.
I can recall, as I am sure the Minister of Agriculture (Mr. Gardiner) can, cases under the marketing act which have arisen in the past where there were powers by way of regulation to control, alter or amend, and certain authorities took it upon themselves to abolish. I know that in the supreme court of Nova Scotia, during a case the citation of which I cannot remember, the lawyer had ample citations from the Supreme Court of Canada arising out of the Crystal Springs marketing case and some others in which the courts held that the right to alter, amend or
Suggested Senate Reform control did not include the right to repeal or abolish. I suggest, therefore, that the amendment that you have before you, the one relating to reform, does not include the word "abolish". At least, I understand that is so because I have not seen either the amendment or the subamendment. I understand the word "abolish" is included in the subamendment. If Your Honour did raise a point of order on that, I suggest with respect it is one that could very well be raised.
Be that as it may, the reason I rose to speak at this time is that if it is in order I want to put myself on record as absolutely opposed to the subamendment. The hon. member for Winnipeg North Centre (Mr. Knowles) gave us a little lecture a few minutes ago about trusting democracy and believing in democracy. We all do that, Mr. Speaker. I do not think he has any monopoly on that at all. I would point out to him that one reason we have a Senate in this country today is the fact that the part of this nation which first established democracy here, which first established responsible government at a time when the Indians were still in Ontario and Quebec, the province of Nova Scotia, insisted on the Senate before it would enter confederation. As you know, sir, we did establish responsible government there, the "family compact" was broken, and all the other things were done. I do not think it lies in the mouth of anyone to lecture those of us who support the Senate and to say we are the foes of democracy. I think the historical record is entirely the reverse.
My comments on this subject are rather disjointed because I did not know this matter was coming up this morning. Referring again to the hon. member for Winnipeg North Centre, I may say that I listened to his references about the unemployed and unemployment insurance. We can all indulge in that sort of criticism. I think it is rather glib. As a matter of fact, merely because a person may serve in this house or elsewhere and afterwards go to the other place, it does not necessarily mean he is unemployed. It may sometimes. I am sure there is someone within the sound of my voice at the moment who has served ably in this house and who now serves in the other place, but he certainly could not in any way be construed as unemployed because he has a place in the business world of this country which would require all his time if he were not spending part of it here in public service.
I feel it is unfortunate we do get these references to the gentlemen serving in the other place. We all indulge in them. Possibly I have done so myself at certain times when indulging in some glib criticism. As

Suggested Senate Reform against that, we have to recognize the fact that the other place has rendered great service. I am thinking for example of the shipping act that was referred to the other place some two or three years ago. This matter was under study for months, and they spent a great deal of time in doing work which otherwise would have had to be done here. I feel that a lot of this criticism is unwarranted. I agree with the hon. member for Peace River (Mr. Low) that it is not so much a matter of reform of the Senate as it is a matter of reform of the attitude of this government towards the Senate.
The hon. member for Greenwood (Mr. Mac-donnell) spoke directly to the Prime Minister on this matter, and I think he was justified in so doing. I realize this is a big problem, and that it has political implications. I know the leader of any political party would be faced with questions and with criticism from his supporters if he were to go outside party ranks to fill vacancies. On the other hand, the Prime Minister is also the leader of the government of this country, and a man whom we all respect although we may disagree with him on many of the policies that he advocates from time to time. As the leader of the government of this country he has the direct responsibility for changing the situation whereby one arm of this parliament is now rapidly falling into disrepute, if not contempt. It is a situation, sir, that cannot be allowed to continue. Certainly the time has come when something definite must be done.
As the hon. member for Peace River also pointed out, I think perhaps the disrespect that has fallen upon the Senate has changed their own political attitude towards things. The hon. member for Greenwood referred to a man who was at one time the leader of the government and who was in the Senate, the Right Hon. Arthur Meighen. I recall that when I happened to be president of the provincial political association in Nova Scotia we had a provincial convention coming along to select a leader. I asked Arthur Meighen if he would come down and address the meeting. He said that when he went into the Senate he felt he should divorce himself from all political work, and he refused to come to that meeting. He said also that no other Conservative senator could come. That is the attitude that was taken, and I am not citing it because it was taken by a Conservative. It was the attitude taken, and it should be the attitude taken by all senators.
I, too, have had the experience of senators passing over my trail during the election. I did not object to it. It did not do us any harm, but it certainly did not do the Senate any good. It should be stopped. There


should be reform of the Senate, and there should be a change in the attitude of the government towards the Senate, because to get into a situation where there are only seven members of the opposition in the Senate is not good. It is not good for government, and it is not good for that government sitting over there because it brings upon them criticism and it brings into disrespect the matters for which they are responsible.
Therefore, Mr. Speaker, I do say the government has a responsibility. I have spoken on this matter in various places but I am not going to inflict upon the house a recital of the ways in which I believe reform could be accomplished. There might be a change in the basis of appointment, that is, if various political groups are going to continue. I noticed that on Saturday night the Prime Minister was speaking somewhere else in reference to provincial-dominion relations and the necessity for working out a firm solution of that problem. Possibly if a change were made in the basis of appointment whereby the provinces could appoint a certain proportion of the representatives in the Senate coming from the different provinces, and it was made a condition of amendment of the constitution that a two-thirds vote of both houses were necessary, something could be worked out along that line. It is only a tentative thought but it is something that may go a long way towards a settlement of the constitutional problem with which we are confronted.
Coming to the subamendment particularly, Mr. Speaker, I want to say this. As I suggested earlier, the Senate was brought into being as constitutionally necessary for this vast country with varying regions, varying economic claims and also varying peoples. It was necessary then, and I say it is justified today. When you reach a situation where you see the premier of Ontario, for instance, suggesting that possibly the population of this province might be something like 12 million by 1965, when you see the disparity in population far greater today than it was in 1867, then my friend can talk about faith in democracy, but we do not want to see democracy centralized in one place. I, too, have faith in democracy. However I believe we all realize there are such things as pressure groups; we all realize or remember that we have a history and that a popular group somewhere might influence our judgment temporarily. It is a very good thing, therefore, to have a little check, a little review, particularly when under our constitution there are certain fields that are reserved entirely for this house. Therefore, I say that from a constitutional standpoint it is justified.

And although it is true today that the Senate does not occupy the position in public esteem which it deserves, if it is going to function properly the responsibility must rest with the government. It is not the fault of the Senate.
Constitutionally we need it. I speak as one who comes from one province which has insisted upon it. As a result of our insistence, and the insistence of others, the Senate was created. I think a very happy formula was worked out in those days, back prior to 1867, when this machinery evolved. And it has worked down through the years, and would also work very well today if there was proper co-operation from the government.
Speaking as one member in this House of Commons, I certainly cannot support the subamendment. But I do urge upon the government the necessity of bringing back that branch of parliament to its proper place. Today we hear a great deal of talk about communism and the dangers of it, but here in Canada one part of parliament is brought into disrepute and criticism. I say there is a real responsibility upon the government, not only to provide armed forces for Korea or western Germany so that we may fight externally; there is also a necessity that we maintain our own system; and that is not being done with the attitude being taken today.


Mr. W. Ross Thatcher (Moose Jaw-Lake Centre):: Mr. Speaker, I shall take only a moment. There is one point in the debate this morning that strikes me rather forcibly. I am very definitely in favour of the abolition of the Senate; but failing that, I think I can go along with the amendment moved by the Leader of the Opposition (Mr. Drew).
I am wondering, however, if instead of discussing reform of the Senate we might not be better employed by discussing reform of the House of Commons. In other words, should we not be putting our own house in order, before telling the other place what they should do?
We have had a committee on procedure sitting for some length of time.


Some hon. Members:: Order.


Wilbert Ross Thatcher: I would hope that that committee would do something.


Mr. Speaker:: Order. I do not suppose I have to use many words to convince the hon. member that his remarks should be related to the amendment and the subamendment.


Wilbert Ross Thatcher: Thank you, Mr. Speaker. The house, I am sure, will realize the point I would like to make, or that I was trying to make.
Suggested Senate Reform
There has been some comment as to the way the Senate has fallen into disrepute- I think that was the word used-in the minds of people throughout Canada. There is a very real danger that the House of Commons may fall into the same category, if we do not do something to make our procedure more efficient.
I shall sit down now.


Mr. Daniel Mclvor (Fort William):: Mr. Speaker, I think it was on Thursday the Leader of the Opposition (Mr. Drew) asked the Prime Minister (Mr. St. Laurent) if there was any more legislation to be brought down. I find that today the Prime Minister has asked us to meet in the morning so as to hurry up the passage of the legislation on the order paper. But I do not see anything on the order paper about reform of the Senate. So I think the whole debate is out of order. I am not going to say it is a waste of time, but it is out of order.


Mr. J. W. Noseworthy (York South):: Mr. Speaker, I shall discuss the amendment and the subamendment. It is rather interesting to note that, on the part of the official opposition, this debate has developed into one in opposition to the subamendment rather than one in support of their own amendment. It has become quite evident during the debate that the official opposition is much more concerned with defeating the amendment to the amendment than in supporting their own amendment.


George Alexander Drew: Mr. Speaker, on a point of order, may I state simply for the record that because a subamendment is moved it is appropriate for us to direct our remarks to that subamendment.


Joseph William Noseworthy: I can understand the concern of the Leader of the Opposition over the Senate as it is at present constituted. But 1 just wonder how much different the Senate would be today if, by chance, Conservatives had been in power for the last twenty-five years.


Stanley Howard Knowles: It is Tory enough now.


Joseph William Noseworthy: We would then have the Senate full of Conservatives instead of Liberals. Just how much better that would be is not for me to say.
The amendment calls for the reform of the Senate, but the Leader of the Opposition and his supporters are very vague as to the nature of the reform they desire. Possibly if, when the Liberals are in power, the Leader of the Opposition had the constitutional right to appoint senators, that might meet the type of reform the official opposition has in mind. At least if that were
5256	HOUSE OF
Suggested Senate Reform the case we would not have a Liberal government in power and a Senate with an overwhelming Liberal majority. But just what responsibility in a democracy can be given to a politically appointed upper house that would warrant the expense it costs the country? That is a question the official opposition should answer when they are asking for a modified reform.
The Leader of the Social Credit party has said that we should use the Senate to act as royal commissioners on royal commissions. The country just would not stand for politically appointed senators being placed in positions where they were supposed to be carrying out disinterested investigations. And why should we have to maintain a Senate in order to provide royal commissioners for investigations?
The existence of the Senate today has grown out of tradition, and not out of any basic necessity for a second chamber. That tradition grew up in Great Britain. It grew out of the days when the upper chamber had the most authority. Over the years, as the House of Commons has come to acquire more and more authority, there has been diminishing authority in the upper chamber, and that applies throughout the entire democratic world.


Mr. Speaker:: Order. Perhaps this would be a place where the hon. member might break his speech. As it is now one o'clock, I must leave the chair.
At one o'clock the house took recess.
The house resumed at 2.30 p.m.


Joseph William Noseworthy: Mr. Speaker, when we rose at one o'clock I was indicating that the origin of the Senate or upper chamber has grown out of tradition rather than out of any basic necessity for their existence. We in this country have been simply following the traditions established in older countries. I wonder, if by any chance the day of miracles returned and a Conservative government were elected at the next federal election, whether the Leader of the Opposition (Mr. Drew) would want to find a Liberal Senate interfering in any way with the legislation introduced by his government, even to the extent of re-examining and revising that legislation. I doubt very much whether the Leader of the Opposition would want to stand for that procedure.
Those who maintain that the Senate is still necessary as a safeguard and a check on the House of Commons are simply voicing their lack of confidence in the elected chamber


and in the people who elect members to this House of Commons. That appears to be the position taken by the Leader of the Opposition not only now but in former years. For instance, I hold in my hand a report of his debate in May 1950, as carried in the Globe and Mail of that date. In that he has this to say:
Now that the Supreme Court of Canada is to become the final court of appeal, and steps are also being taken to establish a procedure for amending our own constitution in Canada, this particular responsibility of the Senate assumes even greater importance than it had during the pre-confederation debates.


John George Diefenbaker: What page in Hansard?


Joseph William Noseworthy: In other words the Leader of the Opposition-


John George Diefenbaker: What page in Hansard?


Joseph William Noseworthy: The date of this is May 24, 1950, as reported in the Globe and Mail.


John George Diefenbaker: What page in Hansard is the hon. member reading from?


Joseph William Noseworthy: Apparently the Leader of the Opposition is not prepared to trust the judgment of the Supreme Court of Canada, and, in spite of what he has said about the authority of the House of Commons, he is not prepared to trust the judgment of the House of Commons. He insists-


George Alexander Drew: On a question of privilege, what the hon. member has just read is a quotation from an editorial in the Winnipeg Free Press that I read on that occasion.


Joseph William Noseworthy: I am not at all familiar with the source of the hon. member's information. It is simply given here as a quotation from the hon. member himself. I have no doubt-


George Alexander Drew: That shows the advantage of relying on Hansard.


Joseph William Noseworthy: -he expressed confidence in that theory and gave it his support. Again, he is quoted as saying:
Not only should It become an effective legislative body which the senators themselves desire, but it should also assure constitutional safeguards which will prevent any tampering in the future with those fundamental principles which are the very bedrock of our national unity.
There again apparently he prefers to rely on an appointed Senate, a group of men who are not elected, who have no call to go back and to answer for their actions to the electorate. He prefers to rely on their judgment rather than that of the House of Commons. And speaking of fundamental principles, which are the very bedrock of our national unity, I would think that one of the fundamental principles of our

entire democratic system is the right of the Canadian people to elect their own parliament and the right of that elected parliament to speak for the people. Unless the Leader of the Opposition and his supporters are prepared to show us just what authority they wish to give the Senate over the House of Commons, over the Supreme Court of Canada, we cannot support his amendment. It would certainly seem to me that the only effective reform of the Senate is its abolition. Today that chamber is costing the Canadian people well over $1 million a year in indemnities alone, and the Canadian people are far from satisfied that they are getting any return or value equivalent to the expense that is entailed by maintaining an upper chamber. I shall support the amendment to the amendment, Mr. Speaker.


John George Diefenbaker: would have thought that something would have been said by the Prime Minister (Mr. St. Laurent) regarding this very important matter. I rise for the purpose of asking him to make a statement; for after all, just a few months ago, I think it was in the month of November, he advised a labour delegation that he was thinking very seriously at that time, to quote his words, about methods of filling the Senate vacancies. At that time he indicated that serious consideration was being given by the government to assuring that the Senate should be able efficiently to discharge its constitutional responsibilities; and indeed he left the impression that a one-party Senate would not be in the interests of Canada.
Several months have now gone by. I cannot refer to what was said by the Prime Minister on February 1 last, but I do feel that since the Prime Minister is in the position of custodian of the rights of parliament by reason of his position, in his interest in maintaining the highest traditions of parliament he should give some indication of the attitude the government takes to this very important matter. The government is strangely silent, Mr. Speaker. If the former prime minister of Canada were able to communicate his views on this occasion what would he say regarding the policy that was utilized in two elections, in one most effectively, on the need and the promise of the reform of the Senate? Surely, he would expect that his successor would have views on this subject.
Some of my hon. friends say that the solution is abolition. Those are my C.C.F. friends. That is their view. Well, I saw something of reform in New Zealand in 1950. New Zealand had a second chamber, the legislative council. It remained in effect
Suggested Senate Reform during the period of the socialist administration of that country. As I recall it, during the general election of 1949, Mr. Holland, the leader of the opposition and his party, came out in favour of abolition of the legislative council. The attitude taken by the socialist party in New Zealand was that a second chamber was necessary; reforms might be necessary but that abolition was not the solution. It was something that was unspeakable under the constitutional system of that country. However, the people spoke in favour of abolition, and I was present in the gallery on the occasion of the last sitting of that legislative council of New Zealand, and my information is that today in that country active consideration is being given to the question as to how a second chamber with responsible constitutional powers should be re-established in order to maintain something of a semblance of the British system of government.
Surely the Prime Minister has something to say on this. Or, if he has not, what about the Secretary of State (Mr. Pickersgill)? After all, the Secretary of State, Mr. Speaker, joined with the former prime - minister as a kind of stepfather to family allowances. He also had views in regard to the reform of the Senate. They were expressed by him on occasion, and after all, Mr. Speaker, the constitutional viewpoint of the government should be expressed here in this House of Commons.


Louis Stephen St-Laurent: They will be expressed by action.


John George Diefenbaker: Oh, Mr. Speaker, the
views of the Prime Minister will be expressed by action. Well, if it is to be the type of action, in the matter of the reform of the Senate, which has been taking place since the right hon. gentleman became Prime Minister of this country, then there is little hope for the maintenance of the type of Senate that the fathers of confederation had in mind.
From time to time we receive reports of learned extramural discussions on constitutional development by the Prime Minister and the Secretary of State, and I think it is only fair to ask that the house and the country be made acquainted with their viewpoint. The Prime Minister says that decisions will be manifested or reflected by action. Well, there are a large number of vacancies in the Senate today. The Senate is rapidly becoming a one-party institution. That is not a good condition, and that is one of the serious situations in our country today, not only in the Senate but in the House of Commons. My hon. friend the Secretary of

Suggested Senate Reform State laughs. But I read the other day that, outside of this chamber, he gave the house a lecture on how much information an opposition should get under his idea of constitutional development, and it amounted to exactly nothing.


Douglas Charles Abbott: Not too many red herrings now.


John George Diefenbaker: Now, Mr. Speaker, we are at last getting a reaction from a minister in the government, and I only hope that the Prime Minister, as the successor to Mr. King, whose life was devoted to the hope of achieving changes in the Senate, will tell us the degree to which he regards himself as a testamentary successor charged with the responsibility of carrying out the promises which were so successful in one or more elections.
This problem, Mr. Speaker, is not one that can be decided in one or even a succession of debates in this house. What the Leader of the Opposition has endeavoured to secure in the amendment is consideration of this problem of raising the standard of this parliament to give parliament something of the position which it will not long occupy unless action is taken, not only within this house, in order to improve the procedure, but also in the other chamber, to the end that each of them will discharge their responsibilities and thereby secure the highest degree of democratic conclusion of which our system is capable.
Surely, Mr. Speaker, in a matter as important as this the Prime Minister is not going to sit silent, his cabinet is not going to sit silent, and in particular the Secretary of State, who more than anyone else speaks with authority extramurally on subjects such as this, will not deny this chamber the benefit of his views.


John Whitney Pickersgill: Mr. Speaker, I wonder if I may ask the hon. gentleman a question. If I understood him correctly, he said I had expressed some opinion outside of this house on the reform of the Senate. I am not conscious of ever having expressed an opinion in public on the subject in my life and perhaps the hon. member can refresh my memory.


John George Diefenbaker: Just recast your memory.


Mr. Speaker:: Is the house ready for the question?


George Alexander Drew: 
Mr. Fulton:: It shows that they are not very good doctors.


George Alexander Drew: The fact is that a doctor who carried out that kind of practice would not be permitted for long to carry on his professional activities.
We are proposing that the Senate be reformed. In answer to any possible suggestion that we are trying to dictate to the government what course they should follow -and that has been one objection on occasion-we say to the government that we are simply seeking an expression of opinion from this house that we now should proceed with whatever preliminary steps are necessary so that when we meet, at the beginning of the next session, this government may be ready to take that kind of action which was so long promised by this and other governments.
I wish that the government would carry their minds back to the emphasis placed upon this subject. I think it is worth while to place on the record in Hansard a quotation from the Toronto Globe of September 7, 1925, in reference to a speech by the prime minister of that day, Right Hon. William Lyon Mackenzie King. This is the quotation from the Globe:
No declaration by the Prime Minister throughout the whole of his address was more enthusiastically received by the North York electors than that in which he declared for Senate reform. Loud "hear, hear" and applause which lasted nearly two minutes greeted his declaration: "We believe one of the great necessities of the time is Senate reform."
That was in 1925, Mr. Speaker. Yet we are told today by the Prime Minister (Mr. St. Laurent), his successor, that this government will declare its position in action. What we are seeking is simply a declaration by this house-and I have expressly stated that it is not a want of confidence motion-that in the opinion of the members of this house it is time to begin on that particular important reform referred to by Mr. King in 1925 as being one of the necessities of the time, and that the members of this house should leave it to the government to follow the course they deem to be advisable to carry out the necessary discussions, consultation


Mr. Speaker:: Is the house ready for the question?


Some hon. Members:: Question.


Mr. Speaker:: Before I put the question I should like to declare the subamendment out of order on the ground that it is not relevant to the amendment and furthermore that it is the subject matter of a motion which should be moved as an amendment after this amendment has been disposed of; that is, it should be the subject matter of a different motion.


Stanley Howard Knowles: On some other occasion?


Mr. Speaker:: The hon. member for Winnipeg North Centre (Mr. Knowles) is quite right when he says "on some other occasion".


Stanley Howard Knowles: Thank you, Your Honour. We will take your suggestion.


Mr. Speaker:: I would refer hon. members to citations 344 and 364. With these I think we have disposed of the amendment to the amendment.
The amendment itself is objectionable in form. I have followed the practice established by Mr. Speaker Lemieux in his ruling of April 25, 1924; see Journals 1924, page 186. After consulting with the mover I proposed that the motion be modified so as to read in the following manner:
The government should give consideration to initiating the necessary consultation and inquiry respecting reform of the Senate including such matters as the method by which the members of the Senate should be chosen and their tenure of office so that all appropriate steps may be taken in order that the Senate may more effectively discharge the constitutional function it was intended to serve as an integral part of our parliamentary system.
If hon. members will look at citation 330 of Beauchesne's third edition, and the ruling of Mr. Speaker Lemieux that I have just mentioned, they will see that the Speaker, as Mr. Speaker Lemieux says, has the unquestioned authority to modify motions with respect to form.
I now want to deal with a few words in the amendment itself, namely "and their tenure of office". I have already informed hon. members that there is on the order paper

Suggested Senate Reform a bill of which the hon. member for Hastings South (Mr. Follwell) is the mover, and which has to do with tenure of place in the Senate and which deals specifically with this subject matter of tenure of office. At this moment I should like to make a comment on it because of future reference which may be made to this present ruling. As hon. members may see by reference to the last part of citation 330:
Any irregularity of any portion of a motion shall render the whole motion irregular.
I should like to say that although this rule would perhaps apply on other occasions, I will not apply it in this instance because these two matters, namely, the one having to do with the selection of the members of the Senate and the one respecting their tenure of office, are not essential as far as the amendment is concerned. These words could disappear altogether and the motion would still stand up by itself. I just mention this citation and these points in passing so that it will not be held that in this instance I disregarded the rule which states that if part of a motion is irregular, the whole motion might be considered to be irregular. However, the words "and their tenure of office" should be deleted.
The question is on the following motion: The Leader of the Opposition (Mr. Drew), seconded by the hon. member for Prince Albert (Mr. Diefenbaker), moved:
"That all the words after "That" to the end of the question be deleted and the following substituted therefor:
"the government should give consideration to initiating the necessary consultation and inquiry respecting reform of the Senate including such matters as the method by which the members of the Senate should be chosen so that all appropriate steps may be taken in order that the Senate may more effectively discharge the constitutional function it was intended to serve as an integral part of our parliamentary system."


Tom Goode: Owing to the absence, due to illness, of the hon. member for Medicine Hat (Mr. Wylie), Mr. Speaker, I did not vote.
Motion agreed to and the house went into committee, Mr. Robinson (Simcoe East) in the chair.
DEPARTMENT OF CITIZENSHIP AND IMMIGRATION 56. Departmental administration, $340,230.
Item stands.
DEPARTMENT OF FINANCE 104. Departmental administration, $1,843,627.
Item stands.


LEGISLATION
[Stage Direction]
The Speaker of the Senate-
198. Allowance in lieu of residence, $3,000.
Item stands.
Argue
Bell
Blackmore
Bryson
Cameron (Nanaimo)
Campbell
Castleden
Charlton
Churchill
Coldwell
Diefenbaker
Dinsdale
Drew
Ellis
Fairclough, Mrs.
Fleming
Fulton

[Stage Direction]
345. General administration, $373,405.
Stanley Howard Knowles: May I ask if this means that all the departments have now been opened?


Mr. Harris:: Yes.
Item stands.
Progress reported.



WAYS AND MEANS

['for leave to introduce Bill No. 468, to amend the Customs Tariff.\nMotion agreed to and bill read the first time.']
Douglas Charles Abbott: that the house go into committee of ways and means.



Stanley Howard Knowles: Before Your Honour leaves the chair there is a matter I wish to raise, availing myself of the right that is accorded to us to raise matters of grievance on the motion to go into committee of ways and means as well as on the motion to go into committee of supply. I hasten to assure you that it is not my intention to raise the question that you invited me to raise ten or fifteen minutes ago. I feel we have spent enough time for today discussing Their Honours in the other place.
I wish to raise a question which I feel is much more important. My question relates to the older people of Canada generally, and not just to the older ones in the other place. It is a matter of real regret to all of us in this group, as I am sure it is to many members of the house, and it is in the nature of a very real grievance, that as yet nothing has been done in this session of parliament with regard to our older people who are still, in many instances, required to get along on $40 per month. Not only has nothing been done about this matter in this session of parliament, but nothing has been done about the amount of the old age pension or the amount of the blind pension since 1949. In that year, just before the 1949 federal election, the amount of those two pensions as provided under federal statute was increased from $30 to $40 per month.
There have been other very important changes since that time. I refer in particular to the legislation enacted by the last parliament under which the means test was removed with respect to all of those 70 years of age and over, so that at that age the old age pension in Canada is universal. I refer also to the fact that at the same time legislation was enacted providing for a pension, although on a means test basis, for those between the ages of 65 and 69. Those steps were all
Old Age and Blind Pensions to the good. Those of us who had the privilege of serving on the special committee on old age security that worked out the general plan now in effect will remember that experience as one of the most satisfying we have had during the time we have been in parliament.
However, I feel it is a blot on parliament that the government has still done nothing about the amount of the pension. As I say, $40 a month is the figure that was set in 1949. This is 1954, and five years have gone by. During that time the cost of living has increased tremendously. During that time the productive capacity of this country has likewise increased tremendously. Indeed, as hon. members are aware, our gross national product today is 50 per cent greater than it was in 1949. I might indicate, to spell out that statement, that in 1949 the gross national product of this country was $16 billion, and last year it was $24-3 billion. In his budget speech for this year, the Minister of Finance (Mr. Abbott) predicted that the gross national product for 1954 would be as great as it was in 1953, if not slightly larger. In any case, speaking in round figures, our gross national product in 1949 was $16 billion and it is now something more than $24 billion.
In other words, Mr. Speaker, in the five years since the figure of $40 a month was set for old age and blind pensions, there has been an increase in the productive wealth of this country by something over 50 per cent. The proposition that we make to this house is a very simple one. We feel there is no answer to it. We feel that the very least Canada should do is to pass on to our older people an increase in the amount of the pension that we pay them proportionate to the increase in our gross national production.
In other words, we feel that the amount of the old age and the blind pension at the present time should be not less than $60 a month. I recognize there are those who will accept our basic contention that because there is this increase in our gross national product it should be passed on, but who will come back with the usual answers to the effect that this means increases in taxation. And, despite the facts we have established, they will ask the question: Where will this money come from?
From this section of the house we have made it clear time and again that money does not come out of the air. It does not grow on trees, in spite of a very interesting movie I saw to that effect once upon a time. Wealth has to be created. It is created by the labour and toil of our people in the factories, on the farms, in the mines, in forestry, in fishing and in all the other activities in which they are engaged.

Old Age and Blind Pensions
The facts of history are these, that when we have set ourselves to meeting some new and great expenditure, we have met it, not out of our poverty and not by reducing some other expenditure, but by increasing our production of wealth.
I made a comparison a moment ago between the gross national product of 1949 and that of 1954. If one were to make the same comparison between 1950 and the present time he would discover that we have increased the production of wealth in this country, since the time the Korean war began, to an extent greater than our total governmental expenditures in Canada at the present time. In other words, when we were faced with the need of increased expenditures on national defence we did not say, "That means we have to cut down on this and that." We did not say, "That means that we have to reduce other expenditures." No; people were put to work, thus greatly increasing our gross national product; and the extra costs of defence, both in respect of the Korean war and in respect of our NATO commitments, have been met out of that increased production.
In fact, as I have already indicated, the increase in our gross national product since 1950 alone is greater than the total amount of the federal budget at the present time. There have been references during the course of this session-and I note them only in passing, as part of my argument-to the unemployment situation. At the moment I am not trying to revive the debate we have had on unemployment. There are arguments of course as to what the figures are; but, just taking a minimum figure, a conservative figure, let us assume that there are still 300,000 unemployed people in Canada.
If there were a greater military commitment that had to be met, everyone knows what would happen. Those people would be put to work. Let us assume that each of them can produce as much as $2,000 worth of wealth per year in addition to what is now being produced. So, with 300,000 involved, there would be an increase in the production of wealth to the extent of $600 million.
We contend that the need to provide adequate old age security and adequate pensions for our senior citizens and our blind is the kind of project we should throw ourselves into with the same degree of determination that we display when we have been met with a need for increased expenditures for purposes of defence.
I have mentioned a figure of $600 million a year in increased production that could be had by putting our unemployed people to

work, so that I might relate it to the cost of the proposal I am laying before the house. I have suggested that our old age and blind pensions should be increased to not less than $60 a month. That calls for an increase of 50 per cent in our present expenditures on these items. Without bothering to take the time to give all the details, I find that what we are now spending both federally and provincially on old age security and old age assistance as well as on pensions to the blind adds up to something just over $400 million.
In other words, to increase those payments by 50 per cent would call for another $200 million. Well, I have suggested one way in which there could be an increase in the wealth of this country to the extent of $600 million a year, simply by putting the unemployed to work. In other words, there is available as an increase in our annual wealth from that source alone enough to pay for the increase in old age and blind pensions which I have advocated, and also to pay for the additional cost required to establish a national health insurance plan in this country.


Mr. Martin:: The hon. member knows, of course, that the fact that no one intervenes is not by any means to be taken as an acceptance of this most amazing algebraic tussle my hon. friend has gone through.


Walter Edward Harris: "Hassle" is the word.


Stanley Howard Knowles: My hon. friend can give his own speech later, if he wishes to tussle with the job of trying to justify the inaction of his government on this question of old age pensions. He knows the reason I was making that reference just now. If he replies, as I have no doubt he will, one of the things he will say-and I know his speech from beginning to end-


Paul Joseph James Martin: And I know yours.


Stanley Howard Knowles: He probably knows mine. If we know each other's speeches, then should we not agree that instead of making speeches the government might bring in the necessary legislation to increase these old age pensions, and to do the other thing to which I refer?


Paul Joseph James Martin: Mr. Speaker, I do not intend to make a speech, but I would like to ask a question. Does my hon. friend know of any government in this country that has done more for old age pensioners than this government has?


Stanley Howard Knowles: Mr. Speaker, I realize that I am getting some grey hairs; but I am not old enough to remember many years during

which we have had any government other than the one under which we have suffered all these years.


John Whitney Pickersgill: And old age pensions legislation is one of the reasons.


Stanley Howard Knowles: If the Secretary of State (Mr. Pickersgill) wants to make reference to old age pensions, I wonder if he wants me to take the time of the house to tell the whole story of how old age pensions were introduced in this country.
However, despite all these interesting questions and interjections, I refuse to forget the point I was trying to make, and that is that if the Minister of National Health and Welfare (Mr. Martin) gets into this debate he will probably say that by advocating an increase in old age pensions I am blocking something else in which he and I are both keenly interested, namely the introduction of national health insurance.
Incidentally, I should like to note here that the young Liberals are reported as favouring national health insurance. I hope we do not have to wait until they have had 34 or 35 years' experience with resolutions of that kind, as have hon. gentlemen across the way. But my point, Mr. Speaker-and you would be right in ruling me out of order in discussing national health insurance, because there was a debate on our amendment on that matter earlier in the session- my point is that the minister need not say that the cost of an increase in old age pensions would block the introduction of national health insurance, because I have suggested a way in which the national wealth of this country can be increased by $600 million a year, which is enough to cover both of them.
I would also point out that, during the course of the debate on the national defence estimates, we have suggested that a good deal of money could be saved there. And no less a military expert than the hon. member for Esquimalt-Saanich (Mr. Pearkes) has suggested that $200 million might be lopped off those estimates. I say that if that amount of money could be lopped off there, one of the places that amount or even more could be used to make our country stronger would be to spend it on these social services, such as an increase in old age pensions, and on health insurance, which I can tell from Your Honour's eye I really should not discuss at this time. I merely mention it because I do not want the Minister of National Health and Welfare to put health insurance up as an obstacle to an increase in old age pensions.
I need not tell the house that I could go on discussing this matter for some considerable time. I do not need to. Anyone who
Old Age and Blind Pensions thinks about it a moment realizes how strong is our case. During these years the cost of living has gone up; during these years salaries and wages of a great many people have gone up. Reference has already been made here to the fact that there has been an increase this year in the indemnities paid to Their Honours in the other place, and an increase in the amounts paid to us in this house, despite the objection of many of us on this side. There are rumours that the judges are going to get an increase. There have been increases all along the line, but this group of deserving senior citizens, our people 70 years of age and over, not to mention those who require the pension when they are 65, are still left at a figure that was fixed five years ago, in 1949. That figure of $40 a month is no longer defensible. The time has come to increase it.
There is one other argument that will probably be thrown about if this debate gets going, namely, that these matters should be left to the provinces. I commend those provinces that have been able to add some supplement of varying amounts to the old age pensions; but I want to say that in my view this is a responsibility that should not rest upon the provinces.


John George Diefenbaker: What are the supplements that are paid?


Paul Joseph James Martin: The sum of $15 a month in British Columbia and $2.50 in Saskatchewan.


Stanley Howard Knowles: And $15 in Alberta. If the minister wants to tell the story, let him tell the whole story. Nothing is paid in Manitoba, nothing in Ontario and nothing in any of the provinces from there east.


An hon. Member:: They have not got oil.


Stanley Howard Knowles: The whole point of what I am now saying is that the Minister of National Health and Welfare need not think that it embarrasses us to mention these supplements. My contention is that the responsibility for old age security is a federal one, and we should be taking care of that matter here so that the provinces could do other things for our older people, so that the provinces could do something about health services for our older people, and something by way of building homes for them and meeting their other needs. In other words, Mr. Speaker, it is our contention that we should see in our older people not just citizens of one province or another, but citizens of Canada from coast to coast, deserving the same fair and generous treatment from one end of Canada to the other.
My views, indeed the views of this group, are quite definite, Mr. Speaker. There are

Old Age and Blind Pensions a great many things that we feel could be included in any motion on the general subject of old age pensions, but I know what happens in this house when a motion of this kind is made. Some hon. members will say: Well, I agree with part A but I do not agree with part B; I agree with the principle but I do not agree with the amount that was suggested. Therefore, Mr. Speaker, I have tried to draft an amendment that will simply state the principle clearly so that hon. members can express themselves with regard to that principle, having in their own minds what their own ideas may be. Our idea is that the amount of the old age and the blind pension should be increased to not less than $60 a month. We feel, too, that the means test should be taken off the old age pension at age 65; we feel, too, that the means test should be taken off the blind pension completely. My amendment, however, simply calls for something that no one can deny: it refers to the need for the immediate consideration of an increase in the amount of the old age and the blind pension. Therefore, in order to lay this matter before parliament, in order to give this House of Commons an opportunity to express its views on this important question and to make its mind known to the government and to the people of Canada, I have pleasure in moving, seconded by my colleague the hon. member for Vancouver-Kingsway (Mr. Maclnnis): That all the words after the word "That" to the end of the question be struck out and the following words be substituted therefor:
"this house is of the opinion that consideration should be given to increasing the amount paid to our old age and blind pensioners under the Old Age Assistance Act, the Old Age Security Act and the Blind Persons Act."


Mr. F. D. Shaw (Red Deer):: Mr. Speaker, I do not intend to take very long to indicate to the house exactly where we stand in regard to this amendment. As indicated by the hon. member for Winnipeg North Centre (Mr. Knowles), the house is merely asked to express its opinion with respect to increasing the amounts paid to our old age pensioners under the Old Age Assistance Act, the Old Age Security Act and the Blind Persons Act. I feel, Mr. Speaker, that I am quite justified in taking a position in support of the motion, inasmuch as it is my privilege to be an Albertan. The government of my province has made provision for $15 supplementary payment, and is also providing medical, dental, optical and hospital services for many of those pensioners. Thus I feel I am quite justified in rising in my place and saying to the government that they should take the responsibility of initiating a move 

under which the pioneer citizens of Canada and our blind pensioners can secure more adequate incomes.
A moment ago the Minister of National Health and Welfare interjected, when the hon. member for Winnipeg North Centre was speaking, and asked what government has done more for old age pensioners than this government, meaning the government of Canada, the Liberal government. I am going to suggest to the minister that if all the facts are taken into consideration the government of Alberta is doing more for the old age pensioners than is the government of Canada.
It is true that the federal government is paying the total cost of old age security. If the minister would give us the total amount and then indicate to the house how much they recover under the Income Tax Act and under the sales tax act, then I would indicate to him that the picture might be considerably different from that which he sees in his own mind at the present time. Under the Old Age Assistance Act the federal government does pay 50 per cent of the basic $40, which is $20 a month where a person is receiving the maximum pension. As I indicated, my own province is paying its share of $20 a month plus $15 a month, plus the cost of medical, dental, optical and hospital services for those pensioners. As I say, if a proper analysis is made, the Minister of National Health and Welfare will find that in Alberta the people and the government of that province are assuming a greater responsibility on behalf of the pioneer citizens than is the government of Canada. I could not help but say that, because obviously the minister was quite convinced in his own mind that his own government had done more than any other government.
When we stop to consider the cost of living today and the particularly heavy cost facing those pioneer citizen pensioners who are residing in the urban centres, when we stop to realize the extent to which we have recognized the needs of other groups of people within our country, then I think we are completely justified in requesting at this time that immediate consideration be given to an increase in the amounts paid to those pioneer citizens of our country. I do not think it is necessary for one to go beyond that. We support this motion wholeheartedly, and we certainly trust that the house may find it possible to support it also.


George Alexander Drew: Mr. Speaker, I think that what we have before us is a motion that must be examined in relation to the exact wording.

It is perfectly obvious, without any comment, that certain of the views expressed by the members of the party to which the mover of this motion belongs are not consistent with those which are held by members of this party in regard to financial matters and details of that kind. Whatever may be said in regard to any other aspects, or any references outside the wording of this motion, we are called upon in this case to deal with a motion which is not affected by anything that has been said. In some cases the views put forward must be taken as part of the motion, and in this case the mover himself has divested the motion of anything other than the exact wording put before us.
I would point out that this motion calls for a consideration of the increase of the amount paid to our old age and blind pensioners under the Old Age Assistance Act, the Old Age Security Act, and the Blind Persons Act.
It seems to me there can be no question about that consideration being required. As has already been pointed out, some provinces have supplemented these payments already. I think it would be unfortunate if the impression were left that the casual interjections which have been made in regard to additional amounts paid in any way disclose the clear picture of what is done in different provinces in regard to this matter.
One province may provide one type of old age assistance, and another province may provide something different; but the fact remains that every province in some way is doing something in connection with this matter, although it may not appear to be adequate.
Most certainly there are reasons why we in this country should seek a substantial measure of agreement in regard to matters of this kind. It would be obvious that if we had a wide disparity between the amount paid in one province and that paid in another, problems might arise simply because of that fact alone, both for the governments of those provinces and for those handling the services devoted to the care of these people.
This motion calls for consideration of that problem, and it calls for consideration of a situation in which in a number of provinces more than the amount now provided is already being paid. This is something that must be dealt with by the federal government and by the provinces and it is something that should be discussed between them no matter what difficulties may be suggested in regard to other matters.
I am not aware that any great difficulty has been encountered at any time in discussions of this nature. I must say that I do not
Old Age and Blind Pensions think the other difficulties put forward here are real difficulties. I think they can be overcome very readily and a conference in fact on all our broad problems could take place in regard to this subject.
I think the time is overdue for an examination of this subject, and that consideration should be given to a plan which will provide for increased payments not only for those provinces which are now providing it, but for the senior citizens of this country generally, and for that reason I propose to support the amendment.


Mr. G. H. Casfleden (Yorkton):: Mr. Speaker, I would like to speak in support of this amendment. The minister has brought up the matter of what the other governments in Canada are doing for our senior citizens and he did so in a rather flowery manner. But I would like to draw to his attention a fact he seems to have forgotten, namely that the pension rate is set at $40 per month and that that is the limit of income for a great many hundreds of people in Canada who are too old to earn anything for themselves.
Another thing he apparently seems to have forgotten is the fact that the cost of living has gone up and his government is responsible for that. That cost of living has gone up by 20 per cent and 20 per cent, and then another 20 per cent and with each succeeding increase the value of the $40 pension has gone down until today those who are dependent on that $40 pension, whether they be old age pensioners or blind people, find that the amount of food, clothing and shelter they can purchase for that amount has steadily decreased, and the purchasing power of their pension has suffered grievously.
That $40 pension is no longer worth $40 and it does not buy anything like $40 worth of goods. If the minister went out among the people of this country, as a good many of us do, and examined how these people try to meet today's cost of living with $40, and how their rental, clothing and food costs have gone up, he would realize that many of these people are in dire straits.
I did not like the minister's reference to what other governments have done in this field. He mentioned the action taken by the governments of British Columbia, Alberta, Saskatchewan, and Manitoba; but I would like to point out to him that since we in Saskatchewan got rid of the Liberal government there we have established a social welfare service in each part of the province on a regional basis which gives effective and immediate attention to those in need. To those in receipt of the old age pension the provincial government has guaranteed full

Old Age and Blind Pensions medical and hospital services paid for by the government, complete dental treatment, and eye, ear, nose and throat treatment. In addition, any medicine they may require from a druggist is paid for with the exception I believe of about 25 per cent.
This amendment merely asks the government to do something about increasing the pension for these old age pensioners. It does not mention any amount, and if this government wishes to do something which would be of value to those old age pensioners and prevent them from suffering under the rapidly rising cost of living, it can quite easily arrange to gear that pension to the cost of living.
If the pension were geared to the cost of living, there would be some standard upon which these old age pensioners could be certain of receiving their minimum necessities.
Consideration of this matter is required now. Those who are in receipt of the old age pension of $40 are receiving no more than $20 would have bought them 10 or 12 years ago. That is not a good thing for the senior citizens of Canada. We are throwing out a suggestion to the government that they gear the pension with the cost of living so that some kind of standard can be guaranteed to these people.
I hope this amendment will be brought to a vote in this house and that every member from every part of Canada will show by his vote where he stands with regard to an increase to these people, many thousands of whom are in need because of the present circumstances and in view of the declining purchasing power of their $40 pension.


John George Diefenbaker: Mr. Speaker, I think this amendment embodies not only the view of the pensioners covered by it, namely the old age and blind pensioners, but also in general the view of the people of Canada. The amendment does not specify any amount but simply asks the government to give consideration to increasing the old age and blind pension which is something I believe the people as a whole are asking parliament to do.
For the life of me I cannot understand how any member in this house who has any realization of the difficulties of the old age pensioners today can oppose this motion. It has been said that the cost of living has gone up materially since the establishment of the present rate. That is quite true. I could go on at length and deal with this matter but I do not intend to do so. I simply mean to say this. This amendment is something which represents the soul, the


feeling, and the wishes of the people of Canada and I hope that members in all parts of the house will support it, for support it deserves.


Mr. F. S. Zaplitny (Dauphin):: Mr. Speaker, there are two good reasons why this motion should be carried. First of all, there are the reasons given by my colleagues in showing the need for an increase in the pension itself. It is not necessary for me to repeat them. I think it should be well known that if the recipients of old age security or old age assistance were having a difficult time of it in 1949, then you have only to judge the value of the dollar today as compared with that of the dollar in 1949 and its purchasing power to realize how much more difficult their position must be. The other reason is the fact that, as I believe, it is one of the finest ways in which we can keep the necessary amount of money in circulation in the form of purchasing power. We are having what is described as a recession. One of the reasons for it, as it has been in the past, is the fact that the purchasing power of the public seems to be easing off. I am not going to go into the reasons for that situation because if I did so I would be out of order in this debate. The fact remains, however, that it is necessary at all times to have as much as possible of effective purchasing power circulating in the hands of the people who need it most and who will spend it most readily. I do not know of any people in the world who would make greater immediate use of that money than would that class of people to whom we have been referring.
I want also to make a brief reference to the interjection made by the Minister of National Health and Welfare (Mr. Martin) when he sought more or less to sidetrack the issue by intimating that this government has done more than has any other government in that field. I wish to submit, Mr. Speaker, that that is not the question. If we get into a competition here as to who has done what, we shall be missing the real issue. After all, when you boil the matter down, no government has done anything for anyone in this country. Those who are doing it are the people who produce the goods and services and who through their elected representatives decide how they shall distribute them in the best interests of the country. I think it is unwise and, if I may say so, arrogant on the part of a government to say that they have done more than has someone else. They have been using the production of the country as represented by the taxpayer's dollar and have been distributing it in the way that this parliament decides.

My appeal today is not to the government and certainly not to the minister himself but to the members of this house. After all, I think it is time that once in a while we came back to realize that the government is here only at the pleasure of this house. The government was not elected by the people of Canada. The members of parliament were elected. If the government enjoys the support of the members of this house, it remains as the government. If it does not, some other government will replace it. My appeal therefore is to the private members of this house, particularly those who support the present administration, to use their own good judgment in supporting or rejecting this motion, as they see fit, not because of what the Minister of National Health and Welfare says or of what any other member of the government says. Let us for once exercise our rights as individual, free-thinking members of this house. This is not a motion which would oblige the government to resign if it were carried. It would be an expression of opinion from this house.
I wish to say only one more thing while I am on my feet. It has nothing to do directly with this motion but I believe it should be taken into consideration in conjunction with it. I believe that the Minister of National Health and Welfare has had requests and correspondence in connection with the residence requirements under the Old Age Security Act as well as, of course, under the Old Age Assistance Act. At the present time that requirement is 20 years' residence in Canada.
In the interests of saving time, I am not going to go into the details now, but I think there is a good case for the government or for this house to consider reducing that requirement quite substantially because, in practice, what happens is this. People come into Canada as immigrants at various times. They pass through the immigration authorities at the federal level. The government or the minister accepts them in good faith. They are in good health when they arrive and so on, but in a period of time-say in five or ten years-they may find themselves in a position where they have the age requirement of 65, for example, under the Old Age Assistance Act or they may even be 70 and be able to qualify under the Old Age Security Act but for the fact that they have not lived in Canada for 20 years. It is not any fault of theirs that they find themselves in that position. I submit that it certainly is not a responsibility which should be placed on the local authorities, and that is where it finds itself today. When such people find that they are not eligible for the pension, owing to not having 83276-333i
Old Age and Blind Pensions the 20 years' residence requirement, it is usually the local municipality that is burdened with the assistance they require. I think it is time that a change were made in that particular part of the act. If the minister speaks in this debate I hope he will give us the benefit of his opinion on that question.


Paul Joseph James Martin: Mr. Speaker, I intend to say only a word in order to give some indication of how the government feels about the motion in the form in which it is now presented to the house. No one, of course, will seriously argue that there is any member of this house who would not be anxious to provide increases in old age security benefits or any other social benefits. Thus no one would be justified in arguing that, in opposing this motion, the members on this side of the house or any other member of the house, exercising his sense of what he would regard as a responsible course in the context of things, should be looked upon as opposing an increase in old age pensions. Certainly that would be true of those of us on this side for, along with other members in this house, it was a government of this political party that, as we all know, introduced old age pensions in 1925 and 1926.


George Hugh Castleden: Why?


Paul Joseph James Martin: My hon. friend asks "why?" They were introduced because at that time we thought the people of this country needed that kind of assistance.
I think we must keep a perspective in this matter. We set up an old age security committee two years ago. The hon. member for Winnipeg North Centre (Mr. Knowles) was one of the active members of that committee. The existing Old Age Security Act was predicated on the conclusions and the recommendations of that committee. That committee recommended that we should establish, on the basis of a constitutional amendment in so far as was possible consistent with universal coverage, a system of contributory old age security. Of course our scheme is not fully contributory. The reason that it is not fully contributory is that we, unlike any other jurisdiction in the world, have provided for universal coverage. To deal with this particular matter in the way that is now proposed would be a violation of the recommendation of that committee; and it was a unanimous recommendation made by the members of every political party in this house.


Stanley Howard Knowles: That is not a fair statement.


Paul Joseph James Martin: At that time we stated that hereafter, in our effort to build up as practically as we could a contributory system, we
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Old Age and Blind Pensions would try to relate the principle of contribution to the principle of benefit. I for one believe that to be a sound principle. If ever I am asked to do so or if the opportunity presents itself of bringing in increased benefits for this group of people, I would do so consistent with the recommendation, in so far as the principle of contribution is concerned, made by that all-party committee in a unanimous way.


Stanley Howard Knowles: Would the minister permit a question just in exchange for the one he asked me?


Paul Joseph James Martin: Yes.


Stanley Howard Knowles: Is he not aware of the fact that it is on the record that when we agreed to that report we agreed to its principle but made it clear that as soon as it was adopted we would start fighting for an increase in the amount?


Paul Joseph James Martin: I remember my hon. friend making a statement after I pointed out just what I have now indicated, that the committee generally and unanimously, without a single exception, recommended a basic pension of $40 on a contributory basis.


Stanley Howard Knowles: To start with.


Paul Joseph James Martin: I think it is doing the cause of social welfare in Canada a great injustice to depart from that principle. It is the only social security measure we have, apart from unemployment insurance, based on the contributory principle, and I think that we are not giving our social welfare program as a whole the kind of support that I know all of us want to give it if we follow such a course as is now suggested. There are other considerations. It is all very well to suggest that this scheme will only cost $200 million. I am afraid that when my hon. friend examines it he will see that he has really underestimated the total cost of the proposal which he talked about today but which is not embodied in the amendment.
I have in mind that during the course of this session the same hon. member put forward a proposal in respect of old age security that would have added another $900 million to the expenditures of this country. I pointed out at that time that, commendable in theory as that was, it was an impractical suggestion and one that could not be entertained seriously by anyone at this time.
I would say the same is true of the proposal now made. The federal government took 100 per cent responsibility for old age security for those 70 years and over. In this fiscal year that program is costing us about $370 million. My hon. friend said that the total cost of old age security, old age
IMr. Martin.]

assistance and blindness allowance payments would be something in the neighbourhood of $400 million. Our total old age security payments, before the present old age security plan came into being, came to about $100 million. Now we have increased old age security payments for the group 70 years of age and over from about $65 million to something like $375 million. No one would suggest seriously that that does not represent a particular social welfare project of the first order. There is no country in any part of the world that has anything to compare with it.


George Hugh Castleden: You will admit that the cost of living has gone up too.


Mr. Marlin:: No, I will not. The cost of living has gone down since this measure was introduced.


George Hugh Castleden: But not since the adoption in the first instance of the $40 contributory payment.


Paul Joseph James Martin: Since this measure came into being the cost of living has gone down, not very significantly, but it has gone down. My hon. friend may complain but those are the facts.


Stanley Howard Knowles: It has gone up tremendously since the committee made its report in 1950.


Murdo William Martin: My hon. friend can examine my statement. We have gone into this very carefully, and he will find that I am stating what is really the correct situation.


Stanley Howard Knowles: How would you like to live on it?


Murdo William Martin: My hon. friend says he would not like to live on it. I want to say this to him. I have great admiration for him, and he and I are good friends, but I have told him privately and I say publicly that, in spite of his commendable zeal, that kind of remark does more to hurt the development of social security and social welfare in this country than anything else he could say in the house.


Stanley Howard Knowles: Keep your face straight
while you are saying that.


George Hugh Castleden: That is not the view of the people who have to live on it.


Murdo William Martin: I did not interrupt my hon. friend except with his permission. The implication behind that remark is that his group alone is interested in this measure. The result is that divisions are created in the country, and it is suggested that some are trying to hold back progress in this field. I suggest that is not the way to deal with this matter. At the outset of my remarks

I gave everyone credit. I recognized that everyone was sincere with respect to this measure. Certainly in view of the social measures that the government has introduced the government cannot be accused of insincerity in this regard, although those measures may not fully satisfy the hon. gentleman. We know that for many people $40 is not enough. We know that. There is no social benefit that provides full maintenance. All that a social security payment can do is provide a grant towards maintenance. This is significant and helpful assistance.
The hon. member for Vancouver-Kingsway (Mr. Maclnnis) pointed out something the other day. I do not want to refer exactly to what he said because I think I would be taking an unfair advantage in view of the context in which his remarks were made. Nonetheless he referred to the Old Age Security Act as a measure of very great assistance, and there can be no question about that. We are now paying old age assistance and blindness allowances in co-operation with the provinces. We have just had a conference with the provinces on the matter of regulations having to do with old age assistance, blindness allowances and disability pensions with respect to which we hope to see the legislation introduced in the house tomorrow.


An hon. Member:: Tonight.


Paul Joseph James Martin: Or perhaps tonight, as my hon. friend says. This amendment overlooks the role of the provinces. I would not recommend increases in old age assistance or blindness allowances to my colleagues without first of all discussing the matter with the provinces. They are paying a portion of the cost of these projects, and I know from my discussions with them that some of them are not in a position to meet the supplementary payments that are being provided by the two furthest western provinces. Therefore, apart altogether from anything else, the amendment as worded could not be supported because it calls for action in respect of old age assistance and blindness allowances which can only be taken in cooperation with the provincial governments. For that reason among others the amendment is not valid and cannot and should not be supported.
Furthermore, this is a want of confidence motion. My hon. friend may say that he has put his amendment in the simplest terms, terms that can be accepted by any hon. member. Of course that is true in so far as the way it is worded suggests. The hon. member asks that consideration should be given to this matter. The government is giving consideration to these matters all the
Old Age and Blind Pensions time, but if we adopted this motion we would be indicating something which I do not think we can do at this time.


John George Diefenbaker: Why not have a free vote?


Murdo William Martin: We would be indicating our intention to bring in legislation to provide for an increase, and since we do not presently have that intention I think it would be the wrong course to seek to mislead our people -by adopting something which we all know as this time we cannot do. For these reasons, because this is a want of confidence motion, because it is one that does not take into consideration all that has been done in this field to date, because it fails to take into consideration the position of the provinces who are paying a portion of the cost of two of these measures, and not because we are opposed to old age pensions or old age security, I suggest that this amendment cannot be accepted in this form at this time.


Mr. Angus Maclnnis (Vancouver-Kingsway):: Mr. Speaker, in view of the attitude taken by the minister I suppose there is nothing much more to be said. He says that this is a want of confidence motion. He would not have his followers in the Liberal party indicate any lack of confidence in the government no matter how much the old people of this country need further help. He indicated that he expects that the supporters of the government would rather have things as they are than that the government should do something for the old people of this country. He referred to some remark which I made here the other day. What I said was that the old age security pension was a godsend to people who had some other income. Everyone knows that. I meet perhaps as many old people in difficult circumstances as any member of this house. I know what the situation was before the old age security scheme was put into effect. People who had worked hard all their lives, had worked to educate their family and made small savings, would not apply for the old age pension because they would not go through the indignities of the means test. They lived in poverty and in misery just because of that. Today people who have their own little home and $100, more or less, coming in every month, and either one or both of them is over 70 years of age are sitting pretty, as I said before.
It is not a lavish standard of living, but it is a standard of living that enables them to maintain their self respect and take their part in the community, living as citizens should live. There are hundreds of thousands who have not got anything but the old age pension; that is true of those who are 70 and
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Old Age and Blind Pensions over and also of those in the 65-69 age bracket. The development of our economic system adds every year to that number who cannot save anything for their old age. Our system of large scale production has separated the people from the tools and the property by which once they made a livelihood. It has not only separated them from their tools and property but it has really separated them from their skills. The machine has taken away their skill. Today when people reach the age of 45 or 50, in most cases they are no longer considered efficient in industry and they have nothing upon which they can fall back because they have not been able, in 95-perhaps 99-cases out of a hundred, to put away anything substantial that will help them to maintain a decent old age.
I am really surprised at the attitude the minister takes that the government is the little white father. He speaks of how much this beneficent government has done for the people. As it was so very well put by the hon. member for Dauphin (Mr. Zaplitny), this government has not done anything for the people. The people have provided the means by which this government has paid out anything that has been paid out. There is no reason in the world why the people of this country should come hat in hand to this government or any other government to say, let us have a better division of the great wealth we have produced and are increasingly producing.
If this were a measure affecting the members of this house, what a different attitude there would be. Could they get along on $40 per month? Could they get along on ten times $40 per month? Of course not. They were in a dreadful plight. Indeed, hardhearted as I am I could not help but feel sorry for them myself, and keep from urging that something should be done for them. But the old people are not here. The old people are out of sight. We do not even have to meet them in an election campaign for a few years, consequently we can say we cannot do anything for you. It means a lack of confidence in this government. We cannot do anything because it would cost so much money. We never think of what money costs when we are doing something for ourselves. We are entitled to a standard of living that will put us beyond the temptations of life. Well, surely if that applies to us, it will apply in a few days to another class of people when a bill for increasing salaries will come before us. They have to have a decent standard of living to make sure they act decently. If that applies to us, and if it applies to those in the other category I mentioned,


surely it applies to everybody. This alibi of a want of confidence motion, this alibi that it would violate an understanding we have with the provinces is just "hooey". There is nothing in it. Let us have a vote of the members of this house. I see that some of the old progressive Liberals have left.


Stanley Howard Knowles: One by one like the Arabs they have silently stolen away.


Angus MacInnis: They have gone away,
silently or otherwise. It is just as well that people know where they stand. Let us remember that hundreds of thousands of old people in this rich country today do not know where tomorrow's food is coming from. Let us remember that if we want to do anything to remedy that situation it is within our power to do it. There is no alibi that can make up for that fact.


George Alexander Drew: I rise on a question of privilege, Mr. Speaker. In view of certain statements made by the minister, I want to point out that the motion before us contains no specific figure. The hon. member who moved it indicated it was not intended to relate to any figure when he made certain observations about his own opinions. I made it quite clear that was one of the reasons I was supporting this motion.


Mr. Speaker:: The remarks the Leader of the Opposition (Mr. Drew) has just made should not have been made on a question of privilege. Now that they are made, they are made, but I hope in the future advantage will not be taken of a point of privilege to make such remarks.


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


Mr. Speaker:: Is it the pleasure of the house to adopt the motion?
Motion agreed to and the house went into committee, Mr. Robinson (Simcoe East) in the chair.


INCOME TAX ACT
The Chairman:: We are now resuming consideration of the resolution with respect to the Income Tax Act. Shall the resolution carry?


Stanley Howard Knowles: Is the parliamentary assistant going to say anything further with regard to the paragraph in this resolution which we were discussing when we were last in committee of ways and means, which was on May 18? Mr. Chairman, although we have not yet disputed the decision that the resolution has to be voted on as one resolution, nevertheless, for convenience of
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discussion I believe we did agree to discuss it paragraph by paragraph. I think it is fair to say we were on paragraph No. 5.


William Alfred Robinson: Order. I understand that that has been the understanding, and that the committee has discussed paragraphs 1, 2, 3 and 4, and is now engaged in a discussion of paragraph 5.


Stanley Howard Knowles: Mr. Chairman, when we were discussing this paragraph last time some of us were anxious to get out of the parliamentary assistant a more detailed explanation, if not a more satisfactory one, as to why this amount was being raised. Perhaps I should indicate, so that it will be on the record, that the paragraph has to do with the amount per year that a taxpayer can deduct from his taxable income in respect of moneys paid into a pension plan. At the present time this figure is $900. It is being raised to $1,500. I did some figuring on my own, and suggest that anybody who can pay into a fund on the current basis of $900 a year is probably buying a pension or is paying on the basis of a salary of $15,000 a year; whereas, if the ceiling is raised it means that a person can pay 6 per cent of a salary as high as $25,000 a year and get deductibility at that level. It does not seem really a satisfactory explanation for the parliamentary assistant merely to say that there has been inflation since that time. That same inflation did not help very much with respect to the matter we had up just a few moments ago.


Mr. Benidickson:: Before we adjourned on May 18 I had pretty well concluded the explanation that I intended to give in connection with this item. The only additional thing that I might have done would have been to refer at some greater length to a very full indication of the policy on this subject that was given by the Minister of Finance last session. It is contained in Hansard of April 10, 1953, at pages 2702 and 2703. I am sure hon. members would prefer the opportunity of looking up that debate rather than for me to repeat now some of the explanation given there.
I did indicate that the minister had reconsidered the policy this year in a general way and had not felt that he could deviate from the policy with respect to the self-employed. I indicated the other night that in so far as the increase in ceiling was concerned, it is basically due to the fact that the increase is comparable to the increase in salaries and wages that has taken place since 1946; I reminded the committee that in 1946 this feature of our Income Tax Act was introduced and received wholehearted support from all hon. members. The ceiling of that time is comparable with what is now proposed.

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Stanley Howard Knowles: I regret to say that I still am not satisfied that this is a necessary change. Indeed, it may result in some unfairness to the public generally. As I indicated when I was on my feet a moment ago, if one can take 6 per cent, which is a normal or average rate which people pay on their salaries or wages with respect to pension plans, it means that the present ceiling of $900 per year provides for a person to get income tax deductibility of 6 per cent on a $15,000 annual salary. The proposal to raise the ceiling from $900 to $1,500 means that a person can get income tax deductibility for a 6 per cent contribution to a pension plan, that 6 per cent being related to an annual salary of $25,000.
It would depend upon what tables one uses, one's age at the time of starting to pay for a pension, what kind of pension one would buy, whether a government annuity or otherwise-you could not buy government annuities up in this bracket anyway-as to what amount of pension one would get for those payments, but I think my figures stand up fairly well, namely, that the previous arrangement provided income tax deductibility for those buying pensions up to $4,000 and $5,000 a year. The new arrangement provides income tax deductibility for those who will be purchasing pensions up to $8,000 or $9,000 a year.
I need not make the point that we in this group are very keen on pension rights for the Canadian people. That point has been demonstrated within the last few minutes, but this is a different kettle of fish we are talking about here. If it were just a case of letting people do this for themselves, one might say, why not let them do it? But the fact of the matter is that people up in these brackets, when they get income tax deductibility, really get something.
If a person is up in a pretty high income bracket that extra $600 deductibility would result in a tax saving of $300 or $400 depending on that person's particular bracket. In other words, these items which appear to concern an individual can mean rather substantial losses to the treasury and if the treasury loses money in this way then I can hear the government say, "When matters are proposed that may result in losses to the treasury that money has got to be made up in some other way." I must say I do not think the parliamentary assistant has yet made out a case for the fairness of this when it would result in a loss to the treasury, and provide for income tax deductibility for those who are in these higher brackets and who can purchase much higher pensions than most people can even dream about.


Alexander Malcolm Nicholson: Mr. Chairman, since this
matter was before the house last I have made a few calculations, as well as the hon. member for Winnipeg North Centre, and I used the Department of Labour annuity tables. I assumed that the employer would be contributing the same as the employee, and if a person at the age of 25 had the good fortune to be able to put aside $900 a year and his employer put aside $900 a year, then on the basis of the annuity tables and applying them to an individual who could pay $1,800 a year from 25 to 65 he would have an income of $12,800 a year for life at the age of 65.
When you change a person's contribution to $1,500 and add the employer's contribution of $1,500 and that is put into a government annuity that person would receive a return of $21,200 a year for life at the age of 65.
If that person waited until he was 30 before he went into this sort of plan he would have $10,000 a year under the old plan per year, and $16,800 for life at the age of 65 under the new plan. If we take the age of 35 then the amount naturally goes down and you only have $7,770 at the age of 65, though with the $1,500 you would have $13,000 a year. At the age of 40 under the old plan you would receive $5,890 a year, and under the new plan $9,830. At 45 it would mean $4,280 under the old plan and $7,130 under the new. At 50 the respective amounts would be $2,770 and $4,870.
As the hon. member for Winnipeg North Centre suggested, I think this proposed change is going to benefit a group in our society who do not really need this sort of encouragement. I think the parliamentary assistant should give us some indication as to what this is going to cost the treasury. As the hon. member for Winnipeg North Centre pointed out, when you are in these higher income brackets this sort of assistance cuts down your income tax. I wonder if the parliamentary assistant would indicate what this proposed change is going to cost the treasury in loss of revenue.


William Moore Benidickson: Mr. Chairman, the figures are not available, and statistics have not been kept in the past in that regard. This has been determined largely on the ground of principle and it is in line with the 1946 legislation.


Alexander Malcolm Nicholson: But surely there is some estimate. I cannot imagine a proposal of this sort going before the treasury board without some indication as to what the cost might be. I imagine the parliamentary assistant could give us some indication as to how many millions it will cost per year.


William Moore Benidickson: No, I am afraid I cannot help my hon. friend in that respect. He must remember, of course, that while there is some foregoing of tax at this time the income is taxable again when it is received as a pension.


Mr. Quelch:: Could	the	parliamentary
assistant say from where this proposal originated, and if it was the result of a suggestion made by any organized body?


William Moore Benidickson: The suggestion came
largely from a number of firms who are in the business of advising companies on the organization and establishment of pension funds.


Stanley Howard Knowles: Can	the	parliamentary
assistant indicate any firms which make possible the purchase of pensions or the earning of pensions at these amounts? The hon. member for Mackenzie gave a few more figures than I did, but we have both given figures based on the same tables, and the examples I gave correspond in fact to the examples given by the hon. member for Mackenzie. I was using the example of a person at the age of 40 or 45 years purchasing a pension over a 20 or 25 year period. Can the parliamentary assistant tell us of any firms which are providing pensions of $8,000, $10,000 or $15,000 a year on a contributory basis?


William Moore Benidickson: Well, Mr. Chairman, I can best refer to the government. The government is in that category, as my hon. friend knows, and some of our top salaries have increased since 1946 and that would make them applicable.


Stanley Howard Knowles: But the figures I gave are not salary figures but pension figures. Is the government paying a pension of $15,000 a year on a contributory basis? Judges receive good pensions but they are not on a contributory -basis.


William Moore Benidickson: The maximum pension paid by the government, as I recall it, would be for a maximum length of service of 35 years multiplied by two per cent. This would make 70 per cent the maximum pension payable by the government, and I think the average is based on the best 10 years over the salary period.


Stanley Howard Knowles: How many civil servants are there who are paying into the public service superannuation fund an amount in excess of $900 a year?


William Moore Benidickson: It is not practical to do so under the existing law.


Stanley Howard Knowles: How many civil servants will be able to pay into the public service 83276-334
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superannuation fund, after this is passed, if it is passed, an amount in excess of $900 a year?


William Moore Benidickson: That I do not know offhand and it is, of course, a proper subject my hon. friend could inquire into as an order for return which could be brought down.


Stanley Howard Knowles: But Mr. Chairman, is it not pretty obvious that we are being asked to pass something here without being given any indication as to who wants it, why it is wanted, and how many people want it.
I think the parliamentary assistant should not ask us to be satisfied with a reference to something in Hansard a year or so ago. I think that reference to which he drew our attention in last year's Hansard dealt with self-employed people. Is that not so?


William Moore Benidickson: I was not referring to this point in particular. What I said to my hon. friend was that he, and as far as I know all members of the house, approved of the ceiling set in 1946, and I now say that the new ceiling is not inconsistent with the ceiling which was approved in 1946.


Stanley Howard Knowles: But, Mr. Chairman, I submit the ceiling we approved in 1946 was plenty high enough for conditions in 1946 and plenty high enough for today's conditions as well, so far as these very high rates of pensions are concerned. No case has been made out for this at all, Mr. Chairman.


William Alfred Robinson: Does that complete the discussion on paragraph 5? Is so, we will proceed to discuss paragraph 6. May I point out to hon. members that the Minister of Citizenship and Immigration has moved that the Income Tax Act be amended by adding thereto the following paragraph:
7. For the exemption from taxation for the 1954 end subsequent taxation years of insurers, not less than 50 per cent of whose gross premium income was in respect of the insurance of farm property, property used in fishing or residences of farmers or fishermen.


James MacKerras Macdonnell: Mr. Chairman, first of all I want to ask a question as to the interpretation of the wording in this amendment. It reads:
For the exemption from taxation for the 1954 and subsequent taxation years of insurers-
I did not search the Income Tax Act thoroughly but I did not find the definition of that word. Can the parliamentary assistant give us the definition of that word?


William Moore Benidickson: I think my hon. friend will find that will be defined in the bill that will be brought down subsequently.


James MacKerras Macdonnell: Speaking to the merits of this amendment, may we understand exactly what this resolution means with respect to

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the farm mutuals that were previously-referred to? My understanding is that it exempts all but a small number. I should be glad if the parliamentary assistant would give us the exact statement for the record.


William Moore Benidickson: My understanding, Mr. Chairman, after a general investigation, is that there are probably something in excess of 400 mutual fire and casualty insurance companies whose business is primarily that of insuring farmers. My hon. friend will note that we have added fishermen's mutuals. I have not all the statistics with respect to the fishermen's mutuals but they are not numerous. I am informed that there are very few mutuals indeed who would find that they would be taxable under this proposal.


James MacKerras Macdonnell: Can the parliamentary assistant make that statement more exact?


William Moore Benidickson: Roughly half a dozen.


James MacKerras Macdonnell: I am not asking for the names, I am only asking the number.


William Moore Benidickson: My hesitation was owing to the fact that, as he can appreciate, I should not indicate the names because the matter has some relationship, shall we say, to the effective rate of taxation on those particular companies. It is certainly less than a score.


James MacKerras Macdonnell: Can the parliamentary assistant give us an idea as to the size so that we shall then be reassured that none of these smaller companies in which we are interested could be included.


William Moore Benidickson: It would be difficult to do that too pointedly. My hon. friend knows that we have two rates of taxation on corporations. The lower rate of 20 per cent applies to those whose profit is something less than $20,000. I do not think that any in that group would be taxable, even if they had been retaining some of this premium income.


Stanley Howard Knowles: Did I understand the parliamentary assistant to say that the number of these mutual companies not now exempted following the adoption of this amendment would be something less than a score? Would it not be something less than half a dozen? Why not go the whole way and exempt them all?


William Moore Benidickson: I said a score. I do not think it would probably be ten. Here is a point that should be considered. Our whole law as proposed will apply equally to a private stock company as well as to a mutual company. We are treating all alike, just as the law with respect to income tax in 1946 treated all companies alike.


Mr. Dinsdale:: On this point of the number of companies affected, I am wondering whether the amendment to the resolution as put forward by the Minister of Finance covers the four western mutual companies? I am interested in this subject because the western mutuals, particularly the Portage Mutual, the Wawanesa Mutual and the Co-operative mutual, as I believe they call it in Saskatchewan, are larger companies than those that have been referred to as operating in Ontario, Quebec, etc. Indeed I believe that the Portage Mutual and the Wawanesa Mutual, between them, handle about 75 per cent of the fire and casualty business in the western part of Canada. Because of their size as compared with that of the smaller mutuals which have been discussed in this chamber, it occurs to me that they might not be exempt or that they might not come under the amendment that has been put forward in connection with this budget resolution No. 6.
I want to say a word with regard to the principle involved in budget resolution No. 6. It has been a long-established principle that underwriting gains of mutuals have been untaxable. That principle was supported by the supreme court in the now well-known Stanley case a few years ago.


William Moore Benidickson: Last year.


Walter Gilbert Dinsdale: On the other hand, what is known as investment income has been regarded as a quite legitimate area for income taxation purposes. No doubt most hon. members are familiar with the principle involved. Underwriting gains fluctuate from year to year and they belong to all the members of the mutual. One year there might be a surplus if the claims were limited, and in another year a deficit might occur if the claims were larger than had been anticipated. With regard to fire and casualty insurance I understand that it is difficult to set up actuarial tables that will hold for any lengthy period of time. As to the possibility of these underwriting gains becoming unduly large or excessive, may I say that I think there is close enough supervision by government insurance inspectors and by the government insurance department to make certain that there would be no abuse in this regard.
I think it was the hon. member for Oxford, speaking some weeks ago on this matter, who referred to budget resolution No. 6 in its original form as spite legislation, or an attempt to get around the supreme court ruling. In its original form budget resolution 6 defines these underwriting gains as profit

for income tax purposes. I will just read what the original resolution states:
For the taxation of a resident mutual insurance corporation, other than a life insurance corporation, as though the surplus arising from its insurance activities on and after January 1, 1954 were a profit from a business, and declaring that a nonresident mutual insurance corporation, other than a life insurance corporation, shall be deemed to be and always to have been subject to taxation on that basis.
That is definitely getting around the long-established principle that you cannot make a profit dealing with yourself. This principle is the basis of exemption of underwriting gains from income tax for mutual fire and casualty insurance companies as well as, of course, for mutual life insurance companies. It is significant that the latter will not be affected by the original resolution or its amended form.
I make these remarks because even though there has been no indication as to the position of the four large western mutuals, it seems to me that they might not be exempt on the basis of this principle as the result of the amendment introduced by the Minister of Finance. The Wawanesa Mutual and the Portage Mutual have moved into urban business. I am not familiar with their statistics, but I imagine that a good percentage of the business of both the Wawanesa and the Portage, which are the two Manitoba mutuals, is represented by urban business. That still does not get around the principle basic to mutuals that underwriting gains are not taxable and you cannot make a profit dealing with yourself. I think this is the point that should be emphasized as we concentrate on this particular problem.
So far as the basic and fundamental purposes of mutuals are concerned, I know from personal knowledge that the Wawanesa Mutual has tried to keep as closely in touch as possible with its original intention. It has retained its headquarters in a small town with a population of 447. The head office is still located there. I feel it is an excellent example of the social advantages that accrue when a progressive and expanding company resists the pressures to move its headquarters to the more lucrative and populous urban areas and remains close to the local rural situation which it was first formed to serve.
There are 75 people out of a population of 447 who are directly employed in the headquarters of the Wawanesa Mutual. You will find among them the village bandmaster, a Sunday school superintendent, a scoutmaster and so forth, all making their effective contribution to the life of the local community. This is an excellent example of the beneficial social and community effects of decentralization of business and industry.
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Finally, I should like to say that if we adhere to the fundamental principle of mutuals involved, namely, that you cannot make a profit in dealing with yourself, the large Manitoba mutuals to which I have referred, Wawanesa and Portage, definitely come within that category. In every respect, except for the fact that they have expanded into urban business, they adhere to the principles of a pure mutual. The fact that they have 75 per cent of the fire and casualty business in the west would indicate that they retain the respect and loyalty of the bulk of the prairie farmers. They not only have their headquarters in small communities, Portage la Prairie and Wawanesa, but they are run by people who are basically farmers. From the managing director down all the directors have their roots in the local community, and so far as the Wawanesa Mutual is concerned the company is owned on a mutual basis by its 400,000 policyholders. No one in the Wawanesa Mutual has made a personal fortune. All the directors and managerial staff are receiving quite modest salaries.
Referring again to the supreme court decision, in the Stanley case I think it is basic in supporting and protecting the mutual idea in fire and casualty insurance as well as in life insurance. If we circumvent that decision now for the sake of financial expediency I suspect it is going to place the western mutuals in a rather disadvantageous position in the Canadian insurance market and will also place them in an unfavourable competitive position particularly with non-resident insurance companies.
I merely point out that all of our Canadian mutuals control only 16-78 per cent of the fire and casualty insurance business of this country. The rest is controlled by insurance interests from the United States and the United Kingdom. I should like to suggest that if our western mutuals are not excluded by the amendment from income tax payments on underwriting gains it represents definite discrimination against these fire and casualty insurance companies. In the long run any additional taxation will have to be met through increased premiums to the prairie farmers. If we are going to tax underwriting gains, it will only mean that the increased costs will be passed along to the prairie farmers in the form of higher premium rates for fire and casualty insurance. I suggest that the farmers are already carrying their share of the load in the present tightened economic circumstances. Particularly does that apply in the west which is faced with the problem of marketing its surplus grains.

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James MacKerras Macdonnell: I want to ask a question about the wording of paragraph 6. It reads as follows:
For the taxation of a resident mutual insurance corporation, other than a life insurance corporation, as though the surplus arising from its insurance activities on and after January 1, 1954, were a profit from a business-
That part has been amended. Then it goes on:
-and declaring that a non-resident mutual insurance corporation, other than a life insurance corporation, shall be deemed to be and always to have been subject to taxation on that basis.
Does that stand?


William Moore Benidickson: Yes.


James MacKerras Macdonnell: When you say "shall be deemed to be and always to have been" does that mean in effect retroactive operation?


William Moore Benidickson: In so far as non-resident companies are concerned, yes. My hon. friend will recognize that the non-resident companies, even under the Stanley Mutual case of last year, would not be subject to taxation with respect to their investment income.


James MacKerras Macdonnell: How far back will this retroactive feature go in some cases? What will be the greatest period?


William Moore Benidickson: I think the original
appeals were submitted in 1951. My hon. friend knows that the legislation, the parliamentary intent, was made known in 1946 to be effective from the 1947 taxation year.


Mr. Trainor:: I should like to ask the parliamentary assistant if mutual insurance companies are given the same tax exemption as other co-operatives, because they really are co-operatives and, if not, why not?


William Moore Benidickson: 
Owen C. Trainor: Would that regulation apply to those companies that do not come under the amendment now? Would the same arrangements that apply to other co-operatives apply to them?


William Moore Benidickson: The hon. member for Brandon-Souris suggested there may be some mutual companies who might not benefit by this proposed legislation. This might be true, of course, and I have not particular information on any individual company. Certainly if any of them return as patronage dividends their surplus of premium income over losses and expenses they will thus avoid paying income tax.


James MacKerras Macdonnell: In thinking over what the parliamentary assistant said about the retroactive feature of this legislation, I may say that we have tried to keep ourselves clear of retroactive legislation. It seems to me particularly unfortunate that this retroactive feature will apply, as I understand it now, to foreign corporations. Is that correct?


William Moore Benidickson: Yes.


James MacKerras Macdonnell: That seems to me doubly unfortunate. Have we got some special reason for doing so?


William Moore Benidickson: Yes, I think there is. Probably I could give that explanation to my hon. friend. It was thought that the law made taxable non-resident mutual companies.


Mr. Fleming:: Thought by whom?


William Moore Benidickson: It was thought by the administration. In fact I refer my hon. friend to the debates of 1946, and in so far as parliamentary intention is concerned I do not think there is any doubt about the intention. The supreme court felt it was done in a way that was not effective. It was felt that nonresident mutual insurance companies, other than life insurance companies, who carried on business in Canada would become taxable. Those companies were thought to be taxable on the portion of the underwriting profits attributable to operations in Canada, the underwriting profit being the excess of their retained premium income over claims and operating expenses.
The decision of the courts in the Stanley Mutual case was that the present law does not carry out this parliamentary intention. The proposed amendment is intended to put in the law that which was thought to be already there, and in the case of non-resident companies it is to be made retroactive. I will give the reason for making this amendment retroactive to non-resident companies. It does not have the result of changing taxation policy at all to those corporations or of increasing their tax retroactively. They will

pay what they thought they had to pay, and what was intended they should pay. Unlike the resident companies, there is no alternative method of taxation based on investment income.
The effect of the Stanley Mutual decision was that non-resident companies carrying on business in Canada, which also had investment income, would be completely exempt from tax. Taxation of this investment income falls under the general provisions relating to the taxation of income going to a non-resident.


James MacKerras Macdonnell: If I have understood correctly, when the parliamentary assistant says that they will not pay anything extra, surely what he means is that they will not pay anything more than they would have paid if what the administration had thought was the effect of the legislation had been supported by the courts. Surely another and more practical way of putting it is that having been relieved by the court in the Stanley case we now come along and in the case of our own companies change the law in such a way as to make it clear they are exempt, and at the same time we are not content with leaving the United States companies in the place they would have been or changing the laws so that it is now clear that they get no more effect from the Stanley case and must pay from now on, but we do worse than that- we go back and say that they are to pay from 1946. It seems to me if I have stated it correctly it is just playing on words to say we are not charging them any more.


William Moore Benidickson: As my hon. friend knows, in the Stanley Mutual case it was held that Canadian companies which did not refund all excess premium income would escape taxation in so far as that surplus was concerned. However, it is presumed that they would be liable for tax on their investment income. In the case of a non-resident company, there would be no taxation whatsoever on investment income and that would appear to put domestic companies in a worse position than non-resident companies.


Donald Methuen Fleming: It seems to me there is a very important principle involved in this proposal. One of the golden rules of every parliament that draws its source and inspiration from the mother of parliaments is that parliament shall not pass retroactive legislation except for remedial purposes, and that in almost every case for the benefit of the subject. If there is one case above all others where parliament should not attempt to legislate retroactively it is with respect to taxation and the impositions on the subject.
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Now, what is the explanation given for the attempt in this resolution to impose taxation and make it retroactive, retroactive over a period of years to a time when a certain amendment was introduced? The explanation given is that it was intended that these particular insurers should have been taxable at that time and since. Intended to be taxed by whom? We are told it was the administration that thought that was the effect of the legislation.


William Moore Benidickson: Parliament.


Donald Methuen Fleming: No, parliament did not. That is the whole point. What parliament intended is to be taken only from what parliament said, and parliament speaks only in terms of legislation. What is said in debate in this house is said only by individuals; it is not said by parliament. The foundation of our system of law-making is that parliament speaks only in legislative terms, and its intent is what, in effect, the courts of this land say is the meaning of the legislation enacted by parliament. We are told today that parliament should now legislate retroactively to make the law for these recent years to have been what parliament a few years ago did not say it was, as now interpreted by the court, but what the administration apparently intended at that time parliament should say; whereas the courts have said parliament did not say that.
It is a monstrous thing, it seems to me, for the government to come along now and, simply because parliament did not legislate in the way in which the government hoped it would legislate at that time-in other words, the legislation that parliament adopted at that time did not have the effect the government thought the legislation was going to have-and after the courts have put their interpretation upon that legislation, say, "We are going to date the legislation we are passing today back to the origin of this period under discussion". It seems to me that there is involved here a principle of far-reaching importance. I do hope that parliament is not going to take a step here which could prove not only very unfair in these circumstances, but could prove for the future a precedent having very damaging and far-reaching effects.
What is so important about the proposal the government is making now, that parliament must act retroactively? We have not yet heard from the parliamentary assistant any adequate statement to justify legislation of a most exceptional nature, trespassing as it does upon things that are basic in our whole parliamentary system. He has given as his excuse this, and this only, that it was

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thought at the time the present legislation was enacted in partial implementation oi the recommendations of the McDougall commission, that it would have the effect of making these companies taxable in this manner.
The courts have said that the legislation of parliament did not have that effect. And so far as the courts are concerned, and so far as the law of this land is concerned, it does not matter what is said in the House of Commons during the course of a debate. It does not matter what was said by the minister as to the government's intention. It does not matter what hon. members who spoke in the debate have said. It does not matter what was said by any members who spoke in that debate, so far as their contributions to the debate are concerned.
What does matter is what parliament said in the language of the law that was enacted. And the language of the law enacted has now been interpreted by the courts as not having the effect of making these companies taxable in this way. If there has been any omission, then it has been an omission on the part of parliament. The government does not have the right to interpret the intention of parliament. The courts are always right in insisting that parliament shall speak through only one voice, and that voice is to be found in the language of the legislation passed, not in the language of debate preceding the enactment of the legislation.
I urge the government before this goes one step farther to abandon a proposal that I think will have very damaging effects on something that is basic and fundamental in our whole parliamentary system. I urge that the retroactive features of this legislation be abandoned. Whatever is necessary in the way of legislation to take effect from the time of its enactment, or from the time of the introduction of the budget, we are here quite prepared to consider on its merits. But let us not have legislation which is going to impose retroactively a tax burden on companies going back over these recent years when the law had not yet placed that burden upon them. What right have we, sitting as legislators today in 1954, to go back and say to these companies that they shall not only be liable from 1954 on but that they shall be liable for the tax of 1953 that parliament did not apply in 1953, and that they shall be liable for the tax of 1952 that parliament did not apply in 1952, and that they should be liable for the tax in 1951 that parliament did not apply in 1951, and so on.
This is a vicious type of legislation, and I hope the House of Commons will have none of it.


James MacKerras Macdonnell: Mr. Chairman, 1 wish to add a word to what my hon. friend has said. First of all I would point out that it seems to me this is an especially unfortunate time to pass any legislation which could have the effect of raising objections in the United States, even though it is not of major importance. It seems to me that this might do us harm quite beyond the amount involved.
There is one other thing I wish to say which, it seems to me, goes along with what was said by the hon. member for Eglinton. If one looks carefully at the wording of paragraph 6 he will see that it is most extraordinary. What it says, in effect, is that what is not a profit is in fact a profit. Let me read the words which have been used to get away from the plain effect of the Stanley case. It says:
For the taxation of a resident mutual insurance corporation other than a life insurance corporation, as though the surplus arising from its insurance activities on and after January 1, 1954 were a profit from a business.
I submit that that in itself betrays the weakness in the whole situation. The legislature really comes in and says that something the courts have considered is not a profit shall be turned into a profit, through the language used here in the words, "as though the surplus arising from its insurance activities . . . were a profit". That, it seems to me, underlies and strengthens what the hon. member for Eglinton has said. The circumstances are such that it seems to me to be one of the worst cases of applying a principle which is contrary to our whole legislative background.


Solon Earl Low: Mr. Chairman, this matter is of sufficient importance that I suggest the parliamentary assistant should give us some assurance that the matter about which hon. members have been speaking is either not as it has been portrayed, or that he will take a further look at it.
If what the hon. member for Eglinton has said is true-and I have no reason to doubt it-it does seem that this would be a bad principle to have applied in other matters and to other people. For instance, if the courts in this country under legislation of this kind should find in favour of some person, then the government through action of the kind involved in this section could make it absolutely impossible for the judgment of the court to be effective.
I do not think that is right at all, and I would like to hear what justification for it the parliamentary assistant may have to offer.


William Moore Benidickson: Mr. Chairman, I think it would be well to place on record, particularly for the hon. member for Peace River who has just spoken, the very clear indication of what was involved in the proposal for taxation of these mutual companies and co-operatives in 1946. What the minister said is to be found at page 4094 of the 1946 Hansard. While this is in no way a contradiction of what my hon. friend has said, I think it is most desirable that there be placed on the record what was said at that time by the Minister of Finance.


Donald Methuen Fleming: That is still only what one minister said; it is not what parliament said.


William Moore Benidickson: It is the explanation given by the minister who was piloting the legislation in 1946. At that time the Minister of Finance said:
The main proposals with respect to co-operatives are, as the committee knows, the repeal of the exempting section 4(p) and allowance of deduction for patronage dividends.
And then I shall leave out a sentence or two which, I assure hon. members, are not pertinent at the moment. Then he went on to say:
That is to say, resolution 14 repeals the present provision exempting mutual insurance companies, while resolution 15 allows these companies a deduction from income on patronage dividends; that is to say, amounts returned to the policy holders. In effect, the companies will pay tax on the amount of profits retained by the company and transferred to general reserve which is free from the individual claims of policy holders.


Mr. Johnston (Bow River):: Is that what the act says now?


William Moore Benidickson: No, but since that time taxation has been paid on that basis.


Charles Edward Johnston: But the act
does not say that?


Frederick Samuel Zaplitny: I think the parliamentary assistant has left something out. In the particular act to which he refers an exemption was not provided for the total amount of participation dividends paid out. There was a residue, I believe, of 3 per cent which was considered to be part of the reserve, regardless of the action of the co-operative itself. Therefore there is still a portion of that which is taxable under the act.


William Moore Benidickson: My hon. friend is
referring to co-operatives. I indicated there was some slight difference between mutual insurance companies and co-operatives.


Walter Gilbert Dinsdale: With regard to the point I raised a few moments ago, I believe that the four large western mutuals to which I referred, the Saskatchewan Co-operative, the
Income Tax Act
Saskatchewan Mutual and the Portage and Wawanesa mutuals are taxed under the Excise Tax Act 2 per cent of their premium income, and they are the only four mutuals in the field who pay that special 2 per cent on their premium income, mainly because they do not come within the category of having more than 50 per cent of their business with farmers and the rural part of the population. If that is so, in the case of the tax on 2 per cent of the premium income, it would seem that they are not going to be covered by this amendment. When I spoke before I emphasized the principle that you cannot tax the underwriting gains of a mutual.
Like the hon. member for Eglinton, I think that this is a rather unfortunate, even if not a vicious, attempt to get around this principle. The eastern mutuals and similar mutuals operating in eastern Canada are already exempt from the 2 per cent premium excise tax. However, the four western mutuals are not. Is it because of their size? It is obvious, of course that the situation on the prairies, the situation in geography, and population, is somewhat different. Because of our scattered population and of great distances it was almost inevitable that prairie mutuals, the mutual type of fire and casualty company, would expand to include a larger number of members for each mutual firm. It is for that reason that I should like to know whether it is true that the companies not covered by the amendment would be the four western mutuals.


William Moore Benidickson: Of several hundred
ostensible mutual companies, I cannot indicate which ones would come under this formula, but my hon. friend refers to a principle, and that of course is fundamental to this proposal. The location of the company does not matter, whether west or east. The principle, and it is an important one, is whether or not more than 50 per cent of the business is carried on with respect to farm properties, property used in fishing, or residences of farmers or fishermen. There is no discrimination either on grounds of size or of geography.


Walter Gilbert Dinsdale: That is one principle, a principle that was enunciated by the McDougall report, and which, incidentally, was ignored up until this amendment was introduced; but I think the basic principle for mutuals is that you cannot make a profit dealing with yourself. If you start taxing underwriting gains then you are invading that field. Such was the conclusion of the supreme court in the Stanley case.

Income Tax Act


Stanley Howard Knowles: That is a very plausible statement that the parliamentary assistant made a moment ago when he said that it laid down a principle. You could lay down a principle that all members oi parliament wearing bow ties would have to pay double taxation. The trouble is you might have looked around first to see who was wearing bow ties.


Solon Earl Low: Don't say that.


Stanley Howard Knowles: I see we have another one now. Similarly, in this case, it is pretty generally known to all who are interested in this matter that the principle that has been enunciated in the amendment moved by the Minister of Citizenship and Immigration does have a certain effect. If we are going to talk about principles, the hon. member for Brandon-Souris has enunciated a more fundamental principle than the question as to where one draws the line. Drawing the line is comparable to the ridiculous principle I suggested about members who wear bow ties.
It does seem to me, even though I am not too familiar with the circumstances of the companies involved, that the hon. member for Eglinton has drawn attention to something that is being done here which could be rather vicious and far-reaching. The very language of the latter part of paragraph 6 of this resolution suggests the terrible things that the government might do if it wished to. I will put these words of the resolution on the record again:
-shall be deemed to be and always to have been subject to taxation on that basis.
My little suggestion a moment ago about bow ties was not ridiculous at all in the light of that kind of language. I recognize that this is the language of the resolution rather than the language of the bill, but I would hope that before the bill comes in very serious consideration would be given to this point, and we will not lay down as a precedent that we can decide that any company or taxpayer or person can now be regarded as always to have been taxed on a certain basis. That might call for taxing people long since dead.


Donald Methuen Fleming: This resolution should not be allowed to pass in its present form. Unless the parliamentary assistant is prepared to drop the vicious words the committee should have the opportunity of saying whether it is prepared to give approval to the resolution which on the face of it proposes to apply taxation retroactively. The only thing we have heard from the parliamentary assistant to excuse or give extenuation to a vicious use of parliamentary power of this kind is that
[Mr. Dinsdale.I
the Minister of Finance in a certain debate in 1946 said something as to the intended effect of the legislation that he was then introducing. The Minister of Finance is one person in this house. His statement as to the effect of any legislation under consideration is still not the law. Even though the law is enacted in the form in which the government introduces it, the meaning of it is still, in so far as the law is concerned, not what the government declares it to be; it is what the courts declare it to be. Here the courts have said, notwithstanding what was said by the Minister of Finance in 1946, or anyone else in that debate, or at any other time, that the legislation enacted by parliament in 1946 does not, and did not at any time, make these insurers taxable. And yet, in 1954, this house is being asked by the government to say, not simply that these companies are to be taxable from this point on in 1954 but that they are to be taxable as though this legislation had been passed in 1946, to make them taxable now where they were not up until now taxable in respect of their operations in 1946, 1947, 1948, 1949, 1950, 1951, 1952 and 1953.
Where is the justice, where is the equity in legislation of that kind? I ask hon. members opposite to weigh very carefully just what it is they are being asked to do here. They are being asked to say in terms of a legislative enactment in 1954 that what was not the law, what was not taxable at any time up until now, shall not merely be taxable from this point on, but shall be taxable for those years, 1946 to 1953, inclusive. Mr. Chairman, this is absolutely vicious, and I do urge that before this goes one stage further the government should not press it but reconsider the matter. It may be there is a matter of revenue involved here which the government hopes to have, but hopes are not enough, and it is not enough that the Minister of Finance said what the hopes were in 1946.
All that matters is what parliament said in that legislation. We have had an interpretation by the highest court in this land as to the meaning of what parliament said in legislative terms. Are we now going to change that retroactively to make taxable what is not taxable at the present time, and apply it to these seven intervening years? I hope that the government, Mr. Chairman, will not press this. I hope the parliamentary assistant will say that he is prepared either to stand this over for further consideration, or to abandon the retroactive features of the legislation.
I hope that this will not be passed even as a resolution, because I suggest that if it remains on the record of parliament as a resolution approved by the House of Commons then we will have a stain there which

will disfigure the record of this parliament and which will constitute a dangerous precedent for the future.
I will ask the parliamentary assistant if he is prepared to allow this matter to stand for consideration. Otherwise I shall be obliged to move that these obnoxious words be stricken out. Is he in a position to give such an undertaking?


Angus MacInnis: Mr. Chairman, I am not always impressed by the many dangers the hon. member for Eglinton can see in legislation, but I believe that on this occasion he is perfectly right. I think it is preposterous that a resolution of this kind, after there has been a decision of the court deciding as it did decide, and regardless of what the court has said, is now submitted. Surely that is going beyond all reason. If we can do it with a resolution of this kind is there anything we cannot do and say regardless of what any court may have said hitherto in regard to any law? Are we to say that from now on this is the law?
It is ridiculous that these people should put language of that kind in a proposal of this kind. It makes a monkey of our courts of law and of their decisions. I suggest the parliamentary assistant should at least allow this matter to stand over until after the dinner recess and then perhaps the members of the government can talk it over and see if they have any change to propose.


William Moore Benidickson: Mr. Chairman, probably we can stand this over in view of the suggestions which have been made, and we can in the meantime deal with the resolution on customs.


William Alfred Robinson: Is it agreed that the resolution with regard to income tax shall stand?


Some hon. Members:: Agreed.


William Alfred Robinson: We shall now deal with the resolution on the Customs Tariff.
Resolution stands.


CUSTOMS TARIFF
[Stage Direction]
1.	That schedule A to the Customs Tariff be amended by deleting therefrom the following enumeration of goods and rate of additional duty of customs: "Ale, beer, porter and stout, 40 cents per gallon." and by substituting therefor the following enumeration of goods and rate of additional duty of customs: "Ale, beer, porter and stout, 38 cents per gallon."
2.	That schedule A to the Customs Tariff be further amended by striking out tariff items 187, 189, 263b, 290, 343, 345a, 352a, 353(a), (b), (c) (d), (e), (f), (g), (h) and (i), 402, 409c (1), 409e
(1)	, 409f, 409m (1), 410f (1), 410o (i), 418, 426, 431h, 437 , 440i, 442, 443b, 443d (1) and (2), 445r, 446k, 451, 453a, 476a, 480a, 499a, 535e, 561, 569d, 618b, (1) and
(2)	, 660a, 696 (1), 696a, 703 (c), 704, 705a and 848 (2), the several enumerations of goods respectively, and the several rates of duties of customs, if any, set
Customs Tariff
opposite each of the said items, and by inserting the following items, enumerations and rates of duty in said schedule A:
Solon Earl Low: Mr. Chairman, I wish to say a few words on this resolution with particular regard to the government failure to take into consideration the request for the need for relief to the farmers of this country. I wish to refer to one item in particular. It has been pretty difficult for me to understand why the Department of Finance has refused year after year to put farm wagons on the free list. As I understand it, farm wagons now come into Canada free under the British preferential tariff, but under the most-favoured-nation tariff, as for example from the United States, a duty of 15 per cent is assessed against them. The item in question is 439c which reads as follows:
Farm wagons, Including four-wheeled wagons equipped to be tractor-drawn; farm sleds; logging wagons; logging sleds; and complete parts of all the foregoing.
I am advised that year after year the Canadian Federation of Agriculture has made representations to the Minister of Finance to have farm wagons put on the free list, but each time the request has been turned down. In the memorandum of suggested amendments to the Customs Tariff and Excise Tax Act presented by the Canadian Federation of Agriculture to the Minister of Finance on March 9 of this year, the federation made a submission with regard to farm wagons, trailers and sleds, and I would like to quote briefly from what they have to say as a background to my remarks. The memorandum stated:
In the general tariff reduction of August, 1944, when farm machinery and implements were freed from all customs duties no change was made in the duty on farm wagons and sleds.
That is item 439c.
The most-favoured-nation duty remained at 15 per cent ad valorem although at the same time the drawback on certain materials used in the manufacture of these items was raised from 80 to 99 per cent. The only change in tariff item 439(c) since 1946 was the amendment of June, 1948, which changed the item to include four-wheel farm wagons equipped to be tractor drawn.
In 1946 all materials and articles entering into the manufacture of farm wagons and sleds were placed on the free list.
That is under tariff item 442.
Farmers are making increasing use of two-wheel trailers drawn by tractors and motor cars for the purpose of transporting farm produce and supplies. At the present time these vehicles are dutiable under tariff item 439(b) at 10 per cent under British preference and 221 per cent under GATT. In addition they are subject to the sales tax.
There are probably no farm implements more universally used by farmers than wagons, trailers and sleds. In view of the fact that the Canadian manufacturer can import free of duty all the materials necessary for the manufacture of wagons

Customs Tariff
and sleds and some types of trailers, we cannot see any reason why they should be treated differently with respect to the tariff than all other farm machinery and implements.
And they continue:
We therefore request that tariff item 409(f) should be amended to include the following:
"Farm wagons, including four-wheeled farm wagons equipped to be tractor drawn; farm sleds; two-wheel wagon trailers for farm use only;" Complementary to the foregoing amendment to tariff item 409(f) tariff item 439(c) would need to be amended to strike out the opening words as follows: "Farm wagons, including four-wheeled farm wagons equipped to be tractor drawn."
That is the end of the quotation from the submission made to the minister by the federation. Now the Department of Finance, I understand, has received the unqualified undertaking of at least one United States manufacturer of farm wagons that the Canadian farmer's price of its wagon would be immediately reduced by the amount of duty now paid if farm wagons were placed on the free list. Consequently a move of the kind that I have suggested would undoubtedly reduce the prices of all wagons all over Canada by the amount of the duty that is now being paid. I point out to the parliamentary assistant to the minister that there are not any more than two or three manufacturers of farm wagons of any importance in all of Canada. It is therefore difficult to escape the conclusion that the duty on the American import is for straight protection purposes.
The amount of the duty on a farm wagon brought in from the United States is about $20. The elimination of the duty which would be immediately reflected, as I have said, in the purchase price to the farmer, would represent a Substantial saving to the farm purchaser. On the other hand, of course, if the matter is looked at from the standpoint of protection to the Canadian manufacturer, it is impossible for me at any rate to believe that the elimination of the duty and the consequent compulsory reduction in the Canadian price would force any of our Canadian manufacturers into bankruptcy or even into trouble.
In bringing down the budget in 1944 the minister of finance of that day, Mr. Ilsley, said this as reported at page 4184 of Hansard of that year:
With the same end in view, the government believes it appropriate to provide at once and without waiting for the completion of reciprocal arrangements with other countries for the removal of all customs duties on agricultural implements.
I draw the attention of the parliamentary assistant to those last words "the removal of all customs duties on agricultural implements". The policy declared by Mr. Ilsley in 1944 I think has been faithfully carried out by the government in most lines. That

fact makes it all the more difficult to understand why this one remaining piece of farm machinery-the farm wagon-has remained dutiable. I think it could be safely said that it is the only important piece of farm machinery that is still required to pay duty.
It is sometimes difficult to say, of course, whether certain capital equipment used by the farmers can be classified as machines or implements. However, it seems clear to me, at any rate, that what Mr. Ilsley intended by his reference in the budget speech of 1944 was that all implements or instruments used by the farmers in the process of farm production should be duty free. I should therefore like to ask the minister to add the word "apparatus" to item 409f so as to make it read:
-and all other agricultural implements, apparatus or agricultural machinery n.o.p. and complete parts of all the foregoing . . . Free.
I think that would meet the situation perfectly satisfactorily, and it would make quite a difference to the farmers throughout western Canada particularly who buy so many of these wagons.
It might be argued that it is necessary to retain the 15 per cent tariff under the mostfavoured-nation treatment in order to protect our Canadian producers. I should just like to draw the attention of the parliamentary assistant to two interesting publications. They are both put out by the dominion bureau of statistics and the Department of Trade and Commerce. I refer first to this one entitled "The Agricultural Implement Industry, 1952". On page B.5 there is a table showing the total production of various agricultural implements in Canada for the years 1951 and 1952. Those are the latest figures that I can get.
From the table I notice that for 1952 the production in Canada of farm wagon gears -that is standard ones-numbered 993 with a value of $142,324. That is all that we produced in Canada in that year. Going on to farm trucks, low-wheel type, steel or wood, we find that we did not produce any in Canada. Yet we sold that year in Canada 442 at a value of $54,852. When we come to the type called rubber-tired gears or trailers, which have become so important now to farmers fairly well all over Canada, here is what we find: Production in Canada in the year 1952 was 6,608 with a total value of $905,733. But the sales in Canada, I point out, amounted to 12,760 with a total value of $2,122,175. From those figures, Mr. Chairman, I point out that we could not possibly be doing the Canadian industry much if any harm by allowing these wagons and gears to come in from the United States duty free. If that were done it would be of tremendous

help to the farmers of the country. I appeal to the minister to give the matter his earnest consideration.


Stanley Howard Knowles: Mr. Chairman, I wonder what your plans are as to discussing the detailed items in the schedule that is attached to this resolution? There are half a dozen of them about which I want to ask questions.


William Moore Benidickson: I think we might do as we did in connection with the income tax resolution. If there are some general observations to be made, I think the chairman might welcome them at this time, and then probably call the individual items in the customs schedule, one by one.


Stanley Howard Knowles: Or page by page might be good enough.


William Alfred Robinson: I think perhaps it might be preferable to call the items page by page. So that there will be no misunderstanding, I may say that is merely for discussion purposes, not for the purpose of actually passing the items. Is that procedure agreed?


Some hon. Members:: Agreed.


Owen C. Trainor: Mr. Chairman, may we call it six o'clock?


Donald Methuen Fleming: Before you leave the chair, Mr. Chairman, may I ask if it is the intention of the parliamentary assistant to continue with the discussion of the Customs Tariff resolution at eight o'clock and to complete it before coming back to the income tax resolution?


William Moore Benidickson: I think that procedure would be preferable now that we are into customs matters.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
William Alfred Robinson: When the committee rose at six o'clock we were discussing the resolution on the Customs Tariff. Shall the resolution carry?


Stanley Howard Knowles: Not yet, Mr. Chairman.


William Alfred Robinson: I am sorry, but I understand the hon. member for Winnipeg South had the floor at six o'clock.


Owen C. Trainor: Thank you, Mr. Chairman.
I wish to call the attention of the committee and the parliamentary assistant to what I consider to be an unfair imposition in the Customs Tariff against a class of handicapped individuals. I refer to the question of the
Customs Tariff
customs duty on orthopedic shoes for children with club feet. I have already called this matter to the attention of the parliamentary assistant and the minister. The situation is approximately as follows:	Children with
club feet are treated by orthopedic surgeons by changing their shoes very frequently. If the shoes are custom-made they are duty free but if they are not custom-made they are subject to a duty.
In actual practice what happens is that the surgeon treating the child makes a tracing of the child's foot and sends that tracing to a firm of shoemakers in the United States who pick the appropriate shoe off the shelf and send it to the patient. That shoe is dutiable and it costs the parents of the child approximately $5 per shoe. You can imagine that these shoes have to be changed rather frequently, every two or three months, because the child's foot is growing rather rapidly. This, I submit, is really an imposition on the handicapped. It is not for the purpose of protecting the Canadian shoe industry because no shoe manufacturer in Canada is prepared to provide this type of shoe.
I submit that this is very unfair to a group of children who are physically handicapped and particularly to their parents. I would suggest that if the Minister of Finance is so desperately hard up for revenue that he must impose his taxes on the lame, the halt and the blind perhaps hon. members might suggest other sources to him that he may have overlooked. Maybe we could start off by suggesting that he impose a customs tariff on white canes for the blind. I suggest that it would be a very gracious and appreciated gesture on the part of the government if they would forgo this tariff on the physically handicapped. It is purely a tariff for revenue and not for the protection of Canadian industry.


Stanley Howard Knowles: Mr. Chairman, as I indicated earlier, the remarks I intended to make were to be related to specific items, and it was my intention to deal with them as we came to them page by page. However, in view of the appeal which the hon. member for Winnipeg South has made, and which I am very happy to support, perhaps I might now refer to one of the items I had in mind because it is in the same category. I refer to item 480a which deals with invalid chairs. The item is spelled out in the schedule. It is a lengthy one with certain details into which I need not go at this time. It does seem to me that the government, having gone some distance in relieving invalid chairs from customs duties, should go the whole way. I need not go into it further because

Customs Tariff
the arguments the hon. member for Winnipeg South has made with respect to orthopedic shoes and to other items that are needed by invalids and cripples apply in this case as well. I hope that even yet invalid chairs may be made free of customs duty as well as these other items.


James MacKerras Macdonnell: May I ask the parliamentary assistant if he is going to make a reply to the hon. member for Winnipeg South on the question raised by him? It does seem to me prima facie a very strong case and the amount involved must surely be trivial.


William Moore Benidickson: I think that the amounts involved are probably trivial. The hon. member for Winnipeg South is referring to an item that he and I discussed and which appealed to me as something that should be looked into. I did so, and I found it required a fair amount of additional inquiry. The hon. member for Winnipeg South submitted a customs invoice to me, and I believe the pair of shoes involved was priced at $11.50. In these days that does not indicate a particularly high priced custom-made product. However, in view of the fact that these things are sometimes ordered by medical practitioners like my hon. friend, I assured him I shall continue to look into the matter.


William Alfred Robinson: Shall the resolution carry?


Stanley Howard Knowles: Are we now going on with the details?


William Alfred Robinson: Do I understand that we have completed the general discussion?


Some hon. Members:: Agreed.


William Alfred Robinson: Then I will call page 2. Are there any comments on page 2? I am sorry. Perhaps I should call it in this way. On my page 2 I have tariff items 12b to 402.


Stanley Howard Knowles: Mr. Chairman, your pagination is a little different from mine. With respect to item 402, I wonder whether the parliamentary assistant would make a comment? I ask him to bear in mind that this kind of wire fencing is largely a farm item, and I wonder whether the provision could not be extended to make it free of duty where it is for use on farms?


William Moore Benidickson: This is a reducing item. Due to the fact that in another tariff item there was the phrase "coated or not" there was some doubt whether materials of this category should be admitted under this item. We are just making it certain that where the word "coated" was in the wire will be admitted.


Stanley Howard Knowles: That is, they will be admitted free under the British preferential tariff.


William Moore Benidickson: That is right.


Stanley Howard Knowles: What about the mostfavoured-nation tariff?


William Moore Benidickson: My hon. friend is looking at the schedule and he will find a comparison between the proposed rate and the former rate.


Stanley Howard Knowles: Perhaps at this point the parliamentary assistant would explain something which would apply not only to this item but to other items as well. In the existing rates there are listed two figures, 12J per cent and 20 per cent. Under the proposed rate there is just listed 12J per cent. Perhaps he could explain that.


William Moore Benidickson: Yes, hon. members will find that the Customs Tariff is not always allembracing, and very frequently you will find the phrase "not otherwise provided." In the righthand side of the proposed changes in the budget resolution, you will sometimes find the alternative. Usually you will find that we are going from the "not otherwise provided" to a lower tariff rate. Some of these woven or welded wire fencings may have been assessed at 20 per cent under the most-favoured-nation tariff rate and will henceforth pay on the basis of 12-J per cent.


Mr. Harkness:: This was an item that caught my attention, and the parliamentary assistant has not answered a question that was asked as to why this wire, which is almost entirely used for agricultural purposes, should not be on the free list along with some other items of agricultural equipment. There may be some of this welded wire which is used for protecting factories or something of that sort. If that is the ease, I would think it is quite possible to break this item down into two items, one the ordinary type or what is generally called Page wire, from the original manufacturers, I assume, which is almost entirely used for farm purposes, and this other wire that is used to protect factory yards and things of that sort.


William Moore Benidickson: I recall my hon. friend's participation in the debate last year, particularly on the general item 409 in the Customs Tariff. It was explained that there are a number of items that can be used equally well in agriculture as in other fields. Generally, we try to spell these things out specifically.


Douglas Scott Harkness: Apparently there is no effort to spell them out in this case, and that is my complaint. Why could not the items which are really agricultural items be separated from the ones relating to factory protection?


William Moore Benidickson: I think from reading the item my hon. friend will find that generally, in so far as the products are concerned that are subject to this change, they would not be used on the farms.


William Alfred Robinson: Does that complete the discussion on page 9? We shall proceed to page 10, comprising items 409c, e, f, and m.


Frederick Samuel Zaplitny: I find that my pages do not correspond to the ones from which you are reading because I am looking at Hansard.


William Alfred Robinson: I am now reading the items as they appear in the pamphlet copy of the ways and means resolutions.


Frederick Samuel Zaplitny: I should like to refer back to the question raised by the hon. member for Peace River in connection with agricultural apparatus. He specifically mentioned farm wagons. He suggested an amendment which I believe would meet the situation if the word "apparatus" were inserted, and in my opinion it would be better inserted after the word "agriculture" in the second last line of that item.


William Moore Benidickson: You are referring to item 409f?


Frederick Samuel Zaplitny: Yes. So, it would read, "and for all other agricultural apparatus and implements or agricultural machinery." I believe that would take care of a number of other smaller items along with such implements as farm wagons and farm sleds, about which the Canadian Federation of Agriculture made representations. I think that is the intention of parliament anyway, to place those things on the free list. I believe this would be the easiest way to do it, if that meets with the approval of the parliamentary assistant.


William Moore Benidickson: My hon. friend knows that all these matters are very intricate and involve our treaty arrangements with other countries. Prior to the summer of 1955 we will probably have a new agreement amongst a great number of our trading countries. In so far as the representations that were made by the hon. member for Peace River are concerned, I considered those over the dinner recess. I was informed that representations in this regard had come fairly late this year from the Canadian Federation of Agriculture, I think some time in March. The reply given to the brief submitted by that federation was to the effect that these things would be considered and reported upon between now and the time it is necessary to consider our position in relation to the commonly called GATT agreement which comes up for review next autumn.
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Frederick Samuel Zaplitny: Do I understand that there is something in this agreement that would prevent Canada from making this change in this particular item? I am afraid the reply was slightly vague on that point. Is there something specific in the agreement that would interfere with or be contrary to placing this item on the free list?


William Moore Benidickson: These are general things, Mr. Chairman, and I believe the hon. member for Peace River referred to wagons. He mentioned there was a reference to them in the Canadian Federation of Agriculture brief. The hon. member will understand that all these things have a general relationship to the total value of trade between one country and another. I can assure him that this will be considered in the next few months.


William Alfred Robinson: Shall we now pass on to the discussion of page 11, comprising items 410f, 41 Oo, 418, 418a, 426, 427k, 428i?


Stanley Howard Knowles: Under item 426, could the parliamentary assistant explain the difference between ozone generators and ozone airifiers?


William Moore Benidickson: The word "ozone", Mr. Chairman, is now inserted before the word "airifiers" in order to facilitate the administration in carrying out the original intention of the item. Various types of humidifiers and air conditioners were being claimed as entitled to entry as airifiers.


William Alfred Robinson: If we have completed discussion of the items on page 11, we will turn to page 12, and consider items 431h, 437, 437a, 437b, 440i, 441g, 442, 443b. The last of these deals with oven thermostats, automatic oven lighters and dual valves, for use in the manufacture of apparatus designed for cooking with gas.


Douglas Scott Harkness: With respect to this last item which deals with oven thermostats and automatic oven lighters I would point out that this, and the next item, deal with a matter discussed two or three years ago. At that time it was my contention that people who used gas for cooking were being discriminated against, so far as the tariffs charged for gas oven thermostats, controls and that sort of thing were concerned. I notice that in the next item a number of things have been added, and that there are now on the free and the 5 per cent list a number of items which were not on it before. I am glad to see that.
My only comment would be that it has come about three years too late. However I am glad it is now being done. Referring particularly to item 443b, may I say that I cannot

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understand why it appears here at all, because the rates are exactly the same as under the old item. These rates are free, 10 per cent and 30 per cent. What is the purpose of having this item in the schedule?


William Moore Benidickson: Perhaps hon. members would consider item 443b and 443d at the same time. I propose to ask the Minister of National Revenue to move an amendment to the proposals in 443d (1) and 443d (2).
I recall that last year the hon. member for Calgary North referred to this item. I think he will find an expansion in the description of gas-operated apparatus that can be included in this category. If the committee is considering both items at the same time I would remind hon. member that there is a wider application in that this time we are considering apparatus for heating water or for refrigeration or in the gas line between apparatus of this kind and the consumer's gas storage device.


Douglas Scott Harkness: I was glad to see that these other devices, the inclusion of which had been asked for in previous years, have now been included. But I still do not understand why item 443b is in at all. What is the change made to bring about its inclusion?


William Moore Benidickson: There is no change. Item 443b is in the budget resolutions because we are deleting the phrase "gas pressure regulators" which from now on will be in 443d.


Douglas Scott Harkness: What does the parliamentary assistant mean when he refers to a gas pressure regulator? Probably it is another name for something with which we are familiar.


William Moore Benidickson: Some of the previous
wording in 443b has been deleted. The hon. member will recall the debate last year with reference to thermostats.


Douglas Scott Harkness: Yes, I was coming to that.


William Moore Benidickson: They will be brought
into this section. I would ask the Minister of National Revenue to move this amendment.


Mr. McCann:: I move:
That schedule A to the Customs Tariff be further amended by striking out tariff item 443d and inserting in lieu thereof the following:
"Item 443d (1) Gas control devices, n.o.p., of a class or kind not made in Canada, for use on, or for the manufacture or repair of, or for conversion to, gas-fired apparatus for cooking, or for heating buildings, or for heating water, or for refrigeration; including such devices when for use in the gas line between such apparatus and the meter, or in the gas line between such apparatus and the consumer's gas storage device; parts of the foregoing; British preferential tariff, free; most-favoured-nation tariff, 71 per cent; general tariff, 30 per cent.
443d (2)-Gas pressure regulators for use on, or for the manufacture or repair of, or for the conversion to, gas-fired apparatus for cooking, or for

heating buildings, or for heating water, or for refrigeration; including such devices when for use in the gas line between such apparatus and the meter, or in the gas line between such apparatus and the consumer's gas storage device; and parts thereof;
(a)	When of a class or kind not made in Canada; British preferential tariff, free; most-favourednation tariff, 5 per cent; general tariff, 30 per cent.
(b)	When of a class or kind made in Canada; British preferential tariff, free; most-favourednation tariff, 10 per cent; general tariff, 30 per cent."


William Moore Benidickson: Perhaps I should make an explanation on this item because it is an amendment to the original budget resolutions. As a result of representations by Canadian manufacturers since the budget was brought down it is now proposed by this amendment not to lower the duty on gas-control devices of a class or kind made in Canada. I can assure the committee however that no tariff increase is involved in this amendment as compared with former rates.


Douglas Scott Harkness: Would the parliamentary
assistant explain the difference between the devices mentioned in 443d (1) and 443d (2). One of these refers to "gas control devices", and the other to "gas pressure regulators". They are both for the repair of or the conversion to gas-fired apparatus for cooking, or for heating buildings, or heating water. In one instance the duty will be 7i per cent under the most-favoured-nation rate, while in the other, if made in Canada, it will be 10 per cent, and 5 per cent if not made in Canada. What is the distinction between these two types of devices?


William Moore Benidickson: The first item includes valves, gauges, thermostats and the like.


Douglas Scott Harkness: What would the second item be, then, if one is gas control devices for use on cooking apparatus-


William Moore Benidickson: If they are not made in Canada.


Douglas Scott Harkness: No. I do not think that is right, Mr. Chairman.


William Moore Benidickson: The second one is a form of automatic safety device which has a control.


Douglas Scott Harkness: Does the parliamentary
assistant mean by that that these are also a form of thermostat, or are they not thermostats? Are they some other type of thing altogether?


William Moore Benidickson: I understand they are not a form of thermostat.


Mrs. Fairclough:: Do I understand that valves, gauges and thermostats are not made in Canada? There is no company in Canada making these devices?


Mr, Benidickson:: Would my hon. friend repeat the question?


Ellen Louks Fairclough: Do I understand that the items covered by 443d (1), which the parliamentary assistant has described as valves, gauges and thermostats, are not made in Canada by any company; that no company in Canada is making these devices?


William Moore Benidickson: Yes; that is one of the
reasons why we have slightly amended the original budget proposal.


Ellen Louks Fairclough: There is no company making them?


William Moore Benidickson: Yes; that is why we have added paragraphs (a) and (b) to make a difference in the tariff rate between the products made in Canada and those not made in Canada.


Ellen Louks Fairclough: Yes; 443d (1) does not change the tariff rate at all from that contained in the resolution; it is only the description that is changed.


William Moore Benidickson: Yes, but the important words are: "of a class or kind not made in Canada."


Ellen Louks Fairclough: In the first part?


William Moore Benidickson: Yes, in 443d (1).


Ellen Louks Fairclough: Yes.


William Moore Benidickson: Of a class or kind not made in Canada.


Ellen Louks Fairclough: But in 443d, in the original resolution, there are two different classifications as follows:	"When of a class or kind
not made in Canada" and "when of a class or kind made in Canada."


William Moore Benidickson: Yes, but this is a proposal to amend it.


Douglas Scott Harkness: As I understand it then, 443d (1) is intended to keep in effect the tariff rates which have been in effect rather than reducing them to 5 per cent of the mostfavoured-nation tariff from the 7J per cent, as was done in the original 443d?


William Moore Benidickson: In so far as the products are concerned that are made in Canada, yes.


Douglas Scott Harkness: Well, no, "of a class or kind not made in Canada" is the way in which the thing is headed right at the top. It applies only to a class or kind not made in Canada, and the 7* per cent, which was in effect right through is being maintained; whereas in the budget resolutions as we originally got them they were going to be reduced to 5 per cent from 7i per cent.
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William Moore Benidickson: In the budget resolutions the hon. member will find that we have proposed to lower the duty on some of these devices, including those made in Canada. The purpose of this amendment is to differentiate and spell out the difference between those made in Canada and those not made in Canada.


Douglas Scott Harkness: It would seem to me that this is a return to the sort of thing that we objected to last year and in previous years. In other words, these items in 443d (1) are the thermostats of various kinds that are used on ovens for cooking and furnaces to heat houses and hot water heaters and things of that sort. In other words, they are devices in common use in large numbers by the general population who make use of gas for cooking and heating. The proposal was to reduce the most-favoured-nation tariff from 7g per cent to 5 per cent, but now that is being deleted and it is going to be left at the 7J per cent after this change is made. In other words, it is moving backwards instead of forwards, in my view.


William Moore Benidickson: I do not entirely agree with my hon. friend on this point. I told him there was no increase in duty, and I pointed out to him-


Stanley Howard Knowles: It depends on where you start from.


William Moore Benidickson: Last year's shall we say.


Stanley Howard Knowles: Starting from the moment before the amendment was introduced tonight by the Minister of National Revenue, there is an increase.


William Moore Benidickson: There is a difference there, yes, but starting from last year-and I recall my hon. friend's participation in that debate-I want to assure him that there is a widening here for a greater number of devices that are used in the ordinary sense on domestic usage.


Douglas Scott Harkness: I agree with the parliamentary assistant that there is no increase in duty as from last year, but the thing that I have been complaining about right along is that the decrease in duty which was originally proposed in this budget resolution is being forgotten, and the duty, instead of coming down, is going to remain what it was last year.


James Joseph McCann: The item is broken down and on part of it the duty remains the same.


Douglas Scott Harkness: The point I was making is that the very item on which the duty should come down, and which we have been urging for two or three years it should come down, namely, the thermostats which are used in

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large numbers by the housewife, consumers of this country, on ovens, furnaces, and water heaters, is the very one which is not coming down. On those regulators, which I presume would be mostly used by gas companies and people of that sort so far as getting the gas from the main into the consumer's house is concerned, the duty is coming down; but the ones that the ordinary taxpayers are interested in are the very ones on which the duty is not coming down; it has been left the way it was.


William Moore Benidickson: Certainly, gas pressure regulators not made in Canada are being reduced by this budget.


Douglas Scott Harkness: It is not gas pressure regulators I am talking about; it is the thermostats that are put down here as gas control devices under 443d (1).


Ellen Louks Fairclough: May I ask the parliamentary assistant whether I am correct in assuming that the first half of the original 443d is covered in 443d (2), because some of these items are made in Canada, and some not; whereas the second half of 443d is now 443d (1), because none of these items are made in Canada? Is that correct?


William Moore Benidickson: I can simply say that on these items in both sections that are not made in Canada the duty is not being reduced.


Ellen Louks Fairclough: It looks like that now that I have had the opportunity of looking it over. It looks as though you have split the resolution in two. The second half of the original resolution is now covered in 443d (1) and the first half in 443d. The items covered by 443d (1) are not manufactured in Canada. Therefore the second rate does not apply.


Stanley Howard Knowles: May I ask the parliamentary assistant whether the items referred to in 443d (1) as set out in the amendment have been coming in from the United States at 5 per cent since April 6?


William Moore Benidickson: Yes, if they have been ruled as not made in Canada.


Stanley Howard Knowles: In other words, as compared with the rate from April 6 down to today an increase is now being proposed?


Douglas Scott Harkness: In connection with this first item again, these gas control devices, thermostats for household use, if they are not made in Canada this applies only to them. Why is there any duty on them at all? Why not let them in free and thereby save the householder a certain amount of money?


William Moore Benidickson: They are free of course under the British preferential tariff.


Douglas Scott Harkness: The point is that most of them do not come from Britain; most of them come from the United States or from other areas and they are charged a duty.


Stanley Howard Knowles: The Liberals are putting up the tariffs, and the Tories are objecting!


William Alfred Robinson: Shall the amendment carry?


Douglas Scott Harkness: No, I am waiting for an answer to the same question. Under 443d there is an item which says: "when of a class or kind not made in Canada". Why revise the most-favoured-nation tariff from 7J per cent to 5 per cent if it is not made in the country? This is an item which is used almost exclusively in domestic cooking and house heating on the consumer level. Then, why raise the tariff?


William Moore Benidickson: Well, my hon. friend will recognize that these are all matters that are subject to review in the new negotiations we will have under way.


Ellen Louks Fairclough: But why the negotiations? These articles are not competing with any Canadian manufactured articles. My word, the government has been very reluctant to give any protection to Canadian industry when they did not really have to protect Canadian industry. Why not lower the tariff?


William Moore Benidickson: The seven and a half per cent is not a high rate of duty and my hon. friend is one of those who thinks that is a small level of protection.


Ellen Louks Fairclough: The parliamentary assistant does not have to tell me what I think.


Douglas Scott Harkness: Mr. Chairman, as I see it
there is no question at all of protection on these particular articles. They are articles which are not made in Canada, nor in Great Britain, and I do not think they are made in any other country, because they do not use gas heating, and therefore the only effect of retaining this duty at 7J per cent in this case, instead of reducing it to 5 per cent as was originally intended, is to cause the householder to pay more than he would otherwise for the installation of these devices. There cannot be any question of protection involved because it is only in the case of the devices not made in Canada that this applies. The only purpose I can see for retaining it would be for revenue purposes. If that is the government's answer then well and good, but the question of protection which has been raised by the parliamentary assistant has no bearing on this matter and it is the householder who is being penalized.


William Moore Benidickson: I think hon. members are overlooking the intent of this sub-item which is to reduce the effective tariff from 74 per cent to 5 per cent on the items in this category which are not made in Canada.


Douglas Scott Harkness: But, Mr. Chairman, that is the very point we have been over time and time again. It is not reducing but leaving the 7J per cent as it is. The only thing which is being reduced is the tariff on such items as gas pressure regulators which, as far as I understand from what the parliamentary assistant said, are really installed by the gas company to ensure that when the gas reaches the house it remains at a constant pressure, but thermostats and things like that for which the householder has to pay are not being reduced.


William Alfred Robinson: Shall the amendment carry?


Ellen Louks Fairclough: No, Mr. Chairman. Apparently the government first of all decided that they would reduce the tariff on these items from 74 to 5 per cent and now they have changed their minds and decided to put it back to 74 per cent.


William Moore Benidickson: Just on part of them.


Ellen Louks Fairclough: But why? That is just the part I am talking about.


James Joseph McCann: To induce people to make them in Canada.


Ellen Louks Fairclough: But they are not being made here.


William Moore Benidickson: But we are doing this to induce people to make them in Canada.


Ellen Louks Fairclough: But I would like an answer to this, Mr. Chairman. First of all the parliamentary assistant said this item was not being made in Canada and now he says the tariff is being increased to induce people to make them in Canada. I would like to know what the position is.


William Alfred Robinson: Shall the amendment
carry?


Ellen Louks Fairclough: No, Mr. Chairman, let us have an answer.


Stanley Howard Knowles: While we are waiting for an answer I would like to make a brief comment on this, but first of all I cannot help wondering who are the protectionists in this house.


Douglas Scott Harkness: There is no question of protection involved.
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Stanley Howard Knowles: May I ask the parliamentary assistant who asked the government to raise the tariff on these gas control devices when they are imported from the United States from the figure of 5 per cent, which has been in effect since April 6, to the figure of 74 per cent now proposed.


William Moore Benidickson: There is no increase in the rate here, Mr. Chairman, compared with last year.


Stanley Howard Knowles: I recognize that but there is an increase in the rate compared with what has been in effect from April 6 down to the present time. Despite the fact that this is a rather complicated piece of paper to put in front of us we know what is going on. In 443d as proposed by the Minister of Finance on April 6 there were certain reductions made, generally speaking, in respect of two groups of devices, namely gas control devices and the gas pressure regulators. Now an amendment separates these two groups into two separate tariff items. The group under the general heading of gas pressure regulators stays as it was established by the Minister of Finance in his resolution of April 6. The other group, gas control devices, has been put back to what it was prior to April 6. In that case, where they are imported from the United States, the tariff, which was 74 per cent prior to April 6, has been 5 per cent from April 6 down to today and is now being raised to 74 per cent. My question is, who has asked for this increase from 5 per cent, as it has been since April 6, to 74 per cent from now on?


William Moore Benidickson: We are now back to the rate of last year, Mr. Chairman.


Ellen Louks Fairclough: But why?


Stanley Howard Knowles: I know, but why? I think I have described the matter as effectively as the parliamentary assistant but I am asking the question, who asked for it?


Mr. Philpoit:: He is making it as clear as mud.


Stanley Howard Knowles: The hon. member for Vancouver South is perfectly correct. He is making it as clear as mud.


William Alfred Robinson: Shall the amendment
carry?


Some hon. Members:: No.


William Moore Benidickson: Mr. Chairman, if the article is not made in Canada then hon. members by reading item 443d, paragraph 1, will realize that it is not of material consequence in this argument.

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Ellen Louks Fairclough: Mr. Chairman, I disagree. I think the hon. member for Calgary North is right. It is of consequence to the people who use these devices if you are going to slap on another 21 per cent, which is what the government is now doing. First of all the government decided they were going to reduce it from 7J to 5 per cent. There is no competition with Canadian manufactured articles. Now for no reason that the parliamentary assistant has so far put forth it is being put back from the original 5 per cent to 7i per cent. What we want to know is why. Give us a reason.


William Moore Benidickson: I find these pretty
involved matters. There are some 900-odd items as hon. members know in this Customs Tariff schedule and they are usually divided into subheadings (a) (b) (c) (d) and so on, and I am informed that the point raised is not going to change the general effect of what is proposed. I would agree to the change to 5 per cent.


Ellen Louks Fairclough: In other words, you will put this back to 5 per cent again?


William Moore Benidickson: In so far as these things that are not made in Canada are concerned; yes.


Ellen Louks Fairclough: In any event, item 443d will now read "most-favoured-nation tariff, 5 per cent". Is that the case?


William Moore Benidickson: Yes.


Ellen Louks Fairclough: We go along with that.


William Moore Benidickson: Will the Minister of
National Revenue recommend that?


An hon. Member:: Now you have it; now you don't.


William Alfred Robinson: Order. Do I understand that, by leave, the amendment proposed by the Minister of National Revenue in respect of item 443d (1) shall now read in part: "British preferential tariff, free; mostfavoured-nation tariff, 5 per cent; general tariff, 30 per cent"? Is that agreed?


Some hon. Members:: Agreed.


William Moore Benidickson: Mr. Chairman, could we carry the amendment as amended?


William Alfred Robinson: Is it the understanding that the amendment shall read in that way? Shall the amendment carry?


Ellen Louks Fairclough: Mr. Chairman, I am quite in agreement but do you realize what we have done? We have gone right back to the way it was originally.


William Moore Benidickson: No; because there is a division in the recitation of the description.


Ellen Louks Fairclough: It means the same thing, does it not?


William Moore Benidickson: No; not so far as products are concerned that are not made in Canada.


Ellen Louks Fairclough: Mr. Chairman, I am not going to try to argue on an item which was just handed to me and which is of a highly complicated nature. With this amendment taking the tariff back to 5 per cent I am quite
satisfied.


William Alfred Robinson: carry?	Shall	the	amendment


Frederick Samuel Zaplitny: Before	the	amendment
carries, may I say this. The question raised by the hon. member for Calgary North is an important one. It refers not only to this item but to all the other items with respect to which there is a tariff on goods of a class or kind not made in Canada. His question was this: If no element of protection is involved, what is the reason for the tariff at all on goods of a class or kind not made in Canada? If it is a matter for raising revenue, then of course it is an additional tax and we should be so informed. So far that question has not been answered. What is the purpose of the tariff on a class or kind of goods not made in Canada?


William Moore Benidickson: The answer is that it has some revenue value and also might encourage industry to produce this product in Canada.


Frederick Samuel Zaplitny: An additional tax.


William Alfred Robinson: Shall the amendment
carry?


Some hon. Members:: Carried.


[Stage Direction]
Amendment agreed to.
William Alfred Robinson: Shall we now proceed to a discussion of the items on page 14 consisting of-


Stanley Howard Knowles: Before you leave that page I should like to ask a question.


William Alfred Robinson: On page 13?


Stanley Howard Knowles: Yes. I should like to ask a question about item 440i. I notice that by this item the government proposes to make duty free, when they are used for the purposes of the government, flanged and dished steel boiler plate heads over five feet in diameter. I have no objection to these things being made free, but if the parliamentary assistant will refer to item 380c of the tariff schedule he will note that plates of iron or steel, hot or cold rolled, flanged, dished or curved, not otherwise provided, are dutiable at rates of 5 per cent, 22 per cent and 32 per cent. My question is this-


James Joseph McCann: What number is that?


Stanley Howard Knowles: Item 380c. I am comparing what is being provided under 440i in the resolution before us with what is in item 380c which is not before us.


James Joseph McCann: In the tariff?


Stanley Howard Knowles: That is right. My question is this. If these items are being made free of duty when they are imported for use by the government, why should not comparable items be made free of duty generally?


William Moore Benidickson: The proposed change
here is because the articles in question are for government purposes for navigation.


Mr. Weir:: Mr. Chairman, if we are going to have discussion on several items and are going to reconsider certain items, may I say that I have an item that I should like to have considered. It is in connection with item 446 but it is not item 446k which is mentioned here. Rather it is item 446a which is not in the budget resolutions that are being considered at the present time. This item has to do with-


William Alfred Robinson: Order. I do not believe
we have reached that page yet.


William Gilbert Weir: I thought you were proceeding from items 443d right down the line.


William Alfred Robinson: Do I understand that discussion on page 13 has terminated?


Stanley Howard Knowles: No. I do not want to interrupt the hon. member for Portage-Neepawa, but having regard to that page I must say that I do not think the parliamentary assistant answered my question. He just stated it over again. I recognize that these things are being made duty free when they are brought in for government use. All right. If they can be made free for government use, why could they not be made free for private use?


William Moore Benidickson: Free entry is for very restricted purposes for government purposes.


William Alfred Robinson: Have we completed our
discussion on page 13?


Some hon. Members:: Agreed.


William Alfred Robinson: Shall we then pass on to page 14 comprising items 443d, 445r, 446k, 451 and 453a?


William Gilbert Weir: Mr. Chairman, my reference is to item 446. It really has to do with item 446a which of course is not mentioned here but I think perhaps the point I have to make is applicable. It has to do with what they call an eviscerating machine for the purpose of assisting in the dressing of poultry. It is a new development largely completed in the United States and is dutiable in this country
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at 22J per cent. Our poultry trade are conscious of a likely large production of poultry this year. They find that the poultry plucked and dressed with this new equipment from the United States is coming in, in competition with them in Canada. They feel that they should be entitled to whatever assistance can be given them by having this particular tariff item reduced so that they can get it, as the case would be, at 7J per cent. I know there are some people who contend that the equipment is manufactured in Canada. May I say that it is a highly specialized type of equipment and has to do with all this fancy dressed poultry that we see on the market at the present time. While it is manufactured in Canada to a limited extent, my information is that it is not manufactured nearly to the extent that it is required at the present time, and that it is not as well made in Canada as it is in the United States. In other words, it is made for certain specialized classes of poultry but not for general use. That being the case, the trade feel that the Canadian manufacturer is not in a position to make this equipment in the quantities or of the efficiency that is required in the trade in order to compete with what is being done in the United States at the present time.
I confess that I have had long discussions with officers of the department as well as with the parliamentary assistant over this item and I am urging this request on him. I had hoped that something could be done this year in the budget resolutions with respect to the matter. I certainly think this is an item as to which we are justified in having a reduction made in the tariff. I hope the parliamentary assistant will keep that matter in mind and if it is possible to work anything in to bring about this added assistance, I hope what is requested will be done.


William Moore Benidickson: My hon. friend brought this matter to the attention of the department but I think he will be the first to acknowledge that the industry itself was rather late, in so far as budget arrangements are concerned, in drawing this matter to our attention.


William Alfred Robinson: Have we completed discussion on page 14? If so we shall pass on to page 15, comprising items-


Mr. Lennard:: No. What is the number of the item that has just been discussed? Is it item 446k?


William Gilbert Weir: The item I had in mind was 446a.


James Joseph McCann: It is not in there at all.


William Moore Benidickson: It is not there.

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William Alfred Robinson: I understood the hon. member was discussing 446k. Is there any further discussion on page 14?


Douglas Scott Harkness: Yes, the last item, 561. This is another case where there appears to be no change whatever between the old tariff and the proposed tariff. It is exactly the same but there is a little note underneath which reads "woven fabrics containing 5 per cent or less, by weight, of synthetic textile fibres", and the word "fibres" is in a different kind of type. Therefore I presume that has been inserted and that is the only reason why this item is there. Would the parliamentary assistant tell us what the significance of the addition of the word "fibres" is?


William Moore Benidickson: I am informed that it is advisable that there be a substitution of the word "fibres" for the word "yarn" simply as a matter of trade practice.


Douglas Scott Harkness: The word "fibres" instead of "yarn"?


William Moore Benidickson: That is correct.


Douglas Scott Harkness: That is the only reason for this item being here?


William Moore Benidickson: Yes.


Stanley Howard Knowles: With respect to item 480a, may I ask the parliamentary assistant to comment on the few words I said with regard to this item when we were at the general discussion stage. I note by comparing the figures on the righthand side of the page with those in the middle that there has been a move in the direction of reducing the tariff on invalid chairs. Would this not be a good item to make free right across the board?


William Moore Benidickson: I do not think my hon. friend expects me to comment on the latter part of his remarks, but I do want to explain to him that due to the change it is now possible to bring in certain accessories of these chairs, and certain other parts thereof are made in Canada.


Stanley Howard Knowles: Am I correct in reading this as meaning that there has been some reduction? In other words, it formerly read "British preferential tariff, free", and then 15 per cent which is now free, and that that is a reduction right across the board?


William Moore Benidickson: A reduction across with respect to the items in italics.


Stanley Howard Knowles: And the same answer the parliamentary assistant has just given applies to the 10 per cent and 25 per cent in the middle column which comes down to 10 per cent?


William Moore Benidickson: Yes, that is right.


Stanley Howard Knowles: And the same with respect to the general tariff. If I cannot get a comment out of the parliamentary assistant I will certainly make my own. It does seem to me that invalid chairs should not be subject to duty. It is a crying shame that we have as many taxes as this government has imposed on the cost of being ill or being an invalid or a cripple or handicapped in any way. It does seem to me it is a duty that ought to be removed.


Owen C. Trainor: This item seems to be related to the one I raised some time ago. I must say that the parliamentary assistant has not yet given me a satisfactory answer as to just why the government proposes to tax crippled children with respect to orthopedic shoes, and I should like to know why. It must be solely the question of revenue. Consequently it is a tax. Would the parliamentary assistant be good enough to give me an answer to that question?


William Moore Benidickson: Both the former item referred to by the hon. member for Winnipeg South and this item are free if purchased in Great Britain, but it is true that there are certain low levels of tariff for revenue purposes.


Owen C. Trainor: Does the parliamentary assistant know that these shoes are available in Britain? I do not know that they are available under the same easy circumstances, so far as the doctor is concerned, as they are from the United States. It is a very simple matter to bring them in from the United States. They are freely available there in every conceivable size. If this is purely for revenue then it is a tax on crippled children, and 1 wonder whether the government is prepared to concede as a principle that they will tax crippled children. It is just as plain as that.


William Moore Benidickson: I think my hon. friend is stretching the language a little bit because he knows that I indicated an interest in this particular item and drew it to the attention of the Minister of Finance, although rather late so far as the budget discussions are concerned. I assured him that it would have continued interest.


Owen C. Trainor: That is why it is inconceivable to me that in these circumstances consideration should not have been given to this before now.


William Alfred Robinson: Shall we now pass on to page 16 which includes items 569d, 579, 618b and 660a?


William Moore Benidickson: I should like to propose an amendment with respect to item 579.


Stanley Howard Knowles: Which way, up or down?


William Moore Benidickson: I think that the Minister of National Revenue will propose this amendment.


James Joseph McCann: I move:
That the words "the component of chief value being wool" be deleted from subitem (2) of item 579, and that the following words be inserted in lieu thereof:
the component of chief value being woven wool fabric weighing over twenty-five ounces per square yard."


Stanley Howard Knowles: Could we be informed as to the effect of this amendment?


William Moore Benidickson: My hon. friend asked whether it is up or down. This is in effect a lowering of the tariff.


Stanley Howard Knowles: Would the parliamentary assistant explain it? Obviously there is no change in the rates, but since the rates under 579 (2) are a little lower than the rates under 579 (1) that means that we are interested in the definition of 579 (2). Item 579 (2) provides lower rates and therefore I should like to know whether this change in definition brings more articles under 579 (2) or limits the number of articles that come under 579 (2).


William Moore Benidickson: I think it brings fewer articles under it. The real point of this item is that it is one of those cases where the attachments or parts that go into the machines were assessed at the rate of the primary machine.


Stanley Howard Knowles: Taking the parliamentary assistant's own words, if this brings fewer articles under the definition to which is attached the lower rates, where are the other articles? They must be under some other definition to which is attached a higher rate. This is typical of the way these tariff items work.


William Moore Benidickson: This is an item connected with wool fabric used for special buffing purposes, and it is required in an industry where buffing is required, I think it is the steel cutlery industry. This is a concession to that industry to enable them to bring in this specific type of woollen fabric at a lower rate of duty than heretofore.


James MacKerras Macdonnell: Just as a piece of education in tariff making, could the parliamentary assistant tell us why there is a difference between the 25 per cent in item 579 Cl) and the 10 per cent in 579 (2)?


William Moore Benidickson: Based on the question of whether or not it is a fabric that is made in Canada or not made in Canada.


Douglas Scott Harkness: Referring to item 569 (1) and (2)-
Customs Tariff


William Alfred Robinson: I wonder if I perhaps should complete item 579 before the hon. member proceeds to another item? Shall the amendment proposed by the Minister of National Revenue to item 579 carry?


[Stage Direction]
Amendment agreed to.
Douglas Scott Harkness: This item 569d (1) and (2)
refers to materials for making men's hats, particularly the bands which go around the outside of the hat and to some extent the ribbon that is used around the outside edge of the hat to give it a bound edge. The effect of the two items is to put all this material on the free list, no matter from where it comes. Can the parliamentary assistant tell us whether any of this ribbon is manufactured in Canada?


William Moore Benidickson: I am not aware that there is, and the only difference in this item, as I recall it, is the question of the measurement of the band. I believe there is a change in the stipulation from two inches to three inches.


Douglas Scott Harkness: Well, it is more than that, Mr. Chairman, because under the old tariff the rate of duty varied from 3 to 22-5 per cent under the British preferential rate and from 3 to 25 per cent under the mostfavoured-nation rate, and from 3 to 35 per cent under the general tariff. Now, it is all free. I raise the question particularly in view of a previous item we were discussing where there was nobody to be protected, and still the duty was not removed. I am wondering whether in this case there were people to be protected, and the duty had been removed and the material put on the free list.


William Moore Benidickson: Yes, Mr. Chairman, but as I indicated under the former provision we had free entry if the hat band was two inches in width. If it were greater then the second line in the schedule to which my hon. friend referred would have applied. Now, they will be all on the free list.


Douglas Scott Harkness: The width has been increased from two inches to three inches and the 22-5 per cent, the 25 per cent and the 35 per cent duties have been removed, so far as I can see. I still come back to my first question, as to whether any of this ribbon is manufactured in Canada?


William Moore Benidickson: No.


James Joseph McCann: There is only $10,000 worth imported in a year.


Douglas Scott Harkness: On this same page there is item 618b, tires and tubes, wholly or in part of rubber. Paragraph 1 of that item relates to the various types of agricultural equipment. Do all these various tariff items which

Customs Tariff
were mentioned concerning agricultural implements take in all the agricultural implements that have rubber tires?


William Moore Benidickson: I believe the only change of significance in this item, Mr. Chairman, is that the word "equipment" is being substituted for the word "replacement". The change is made in order to facilitate administration. Hon. members will recognize that the word "replacement" was rather restricted and we are widening it to "equipment" generally.


Douglas Scott Harkness: I am correct, am I not, in understanding that the item relates to any tires and tubes imported into the country for use on agricultural machinery, and that they come in duty free?


William Moore Benidickson: In a general way so far as this item is concerned. I assure my hon. friend that this is a widening for the agricultural community.


Douglas Scott Harkness: I would hope it might be a widening. I wondered whether these various items mentioned, 409b, 409c, 409d, and so on covered all the agricultural equipment that normally runs on rubber tires?


William Moore Benidickson: Generally speaking, yes.


Douglas Scott Harkness: Then we come down to paragraph 2 of this item, n.o.p.; does that relate to tires and tubes other than for use on agricultural machinery, that is for automobiles and so on?


William Moore Benidickson: Yes.


William Alfred Robinson: Shall we now pass on to page 17 comprising items 696, 696a and 703?


Stanley Howard Knowles: May I comment on item 696a? Obviously, there is no change in the rate of duty here because it is free across the board. The change is in the wording of the description of the item. The first part of it reads:
Moving picture films, sound or silent, separate sound film track, slides and slide films, positive or negative; sound discs, records and transcriptions; models, static and moving; wall charts, maps and posters; when certified by a recognized representative authority of the government of Canada-
Those last words are the words that have been added. Can the parliamentary assistant say who is or who will be the recognized representative authority of the government of Canada for purposes of passing on these items?


William Moore Benidickson: This provides an alternative certification in so far as Canada is concerned, in the absence of certification on the part of the exporting country. Until this

legislation is passed there is no one, but I would imagine it would be the national film board.


James MacKerras Macdonnell: What is the significance of the word "certified"? Certified to be what?


James Joseph McCann: They used to have to be certified by the United States but they have discontinued that.


William Moore Benidickson: The United States has shown some reluctance to perform this function, and therefore the importing country should probably have something of its own.


Stanley Howard Knowles: Whenever the necessity
arises the agency likely to speak for the government of Canada in this connection will be the national film board?


William Moore Benidickson: It is likely.


William Alfred Robinson: Shall we pass on to page 18?


James MacKerras Macdonnell: I may be dense, but I still do not quite understand what it is that is certified. Certified to be what?


William Moore Benidickson: Certified for a lower rate of duty.


William Alfred Robinson: We shall turn to page 18, items 704 and 705a.


Douglas Scott Harkness: Item 705a relates to settlers' effects. Is it restrictive or is it a broadening in setting the value of $2,500 on a car for which duty does not have to be paid? If the automobile is valued at more than that, the duty has to be paid.


William Moore Benidickson: This is a broadening, Mr. Chairman.


Douglas Scott Harkness: What was it before?


William Moore Benidickson: It was $1,500.


William Alfred Robinson: On page 19, we find items 708b and 848.


George Randolph Pearkes: Under item 708b do the goods to be exchanged have to be from the same country? If goods are sent to us, we will say from France, do the goods coming back have to be from France?


William Moore Benidickson: 
George Randolph Pearkes: In other words it would have item to be inserted in the resolution before to be a direct exchange between country and us? The schedule does not contain any :ountry-not a three-way exchange?	reference to item 710.


William Moore Benidickson: Yes.


William Alfred Robinson: Then, have we completed the discussion of page 19?


William Moore Benidickson: No, Mr. Chairman. The Minister of National Revenue has an amendment to move to item 710 (b).


Stanley Howard Knowles: It is not included in the schedule.


James Joseph McCann: I move:
That schedule A to the Customs Tariff be further amended by adding the following paragraph to tern 710(b) :
"If, in the case of sales of like goods by the exporter in the ordinary course of trade in the country of export, the value of the usual coverings is included In the invoice value of the goods they contain, then for the purposes of this item the value of the usual coverings shall be added to and be deemed to be included in the invoice value of the goods they contain and be deemed not to be charged separately on the invoice;"
That refers to the packaging.


William Moore Benidickson: Perhaps I should make in explanation. Item 710(b) is being changed io make clear that when goods are normally sold in the country of export as a package, the coverings of these goods are dutiable inder 710(c). The House of Commons will recall that sales and excise tax laws were changed by us last week to require the payment of taxes on the packaging of goods subject to these taxes, whether the goods are imported or manufactured in Canada. This s a corresponding change in the tariff.
Recently some exporters abroad have been nvoicing such goods as, for instance, choco-,ate confectionery, canned soups, lubricating >ils and perfumes in small bottles, with the value of the containers shown separately :rom the value of the goods, thus taking advantage of the low rate on containers mder item 710(b).
This is considered an abuse which was not ioreseen when item 710(b) was drafted. The imendment will make it clear that tin cans, 'or instance, containing soup, and other such containers, are clearly dutiable at the same cate as the goods they contain, as provided mder item 710 (c), if that is the prevailing practice in the country of export.


George Randolph Pearkes: Is the actual material placed iround the tin cans or the bottles still ;axable?


William Moore Benidickson: If shown separately,
litherto it has been taxed at 7J per cent.


Stanley Howard Knowles: As a matter of procedure loes this not have to be treated as a new


William Moore Benidickson: My hon. friend is correct; but he knows a decision has been in operation for some years to the effect that this is a resolution, as a whole. I do not want to remind him of any specific instance, but this is not new. Last year his leader made inquiry about a certain item, and an amendment similar to this was made.


Stanley Howard Knowles: I think the parliamentary assistant misunderstood me. I am not objecting to the item, but I do say that there should be an amendment to the schedule, not an amendment to item 710(b), because that item is not before us.


William Moore Benidickson: I suggest we are considering the schedule as a whole. The proposal advanced by the Minister of National Revenue is a specific amendment to the schedule, namely a change in item 710(b).


James MacKerras Macdonnell: The point the hon. member for Winnipeg North Centre is making is that so far as we are concerned item 710(b) is not before us. Would it not be sensible to have a substantive motion putting it in the schedule? We cannot deal with something that is not there.


William Moore Benidickson: Did not my hon. friend receive the usual written notice that is given to hon. members?


Stanley Howard Knowles: What is before us is not the whole schedule to the Customs Tariff. What is before us is the schedule the Minister of Finance put on Hansard on April 6. All I suggest is that the item the Minister of National Revenue wants to have inserted as 710(b) should be put in this schedule between two items we have in it, namely item 708b and 848.


William Moore Benidickson: The hon. member will recall that we had a discussion on this very point before any of these resolutions were discussed, and we decided as a result of the precedent established in 1951 that we were dealing in these matters with, shall we say, a resolution in chief.


Stanley Howard Knowles: All right; how do we amend the resolution in chief?


William Alfred Robinson: May I point out that the resolution provides for the striking out of certain tariff items and the insertion of others in their place. While this discussion has been taking place I notice that item 579 is to be inserted in the schedule but that it does not appear in the resolution. I was wondering if the parliamentary assistant con-

Customs Tariff
siders it should be added, and if he has considered the proper course to take with regard to the amendment now offered by the Minister of National Revenue.


William Moore Benidickson: Mr. Chairman, I would read what I have described as the resolution in chief, which is now before the committee. It reads, in part:
Resolved, that schedule A to the Customs Tariff be amended by deleting therefrom the following enumeration of goods and rate of additional duty of customs-
And so on. I submit that this is not an unusual amendment. I do of course refer to the fact that last year the same thing was done, and I believe a record of it will be found at page 3092 of Hansard for March 19, 1953. The item in which my hon. friend's leader was interested at that time was 409(f).


Ellen Louks Fairclough: I must admit there is
something to be said for changing the wording of this resolution. Inasmuch as there is no 710 (b) in schedule A it seems to me you can scarcely amend it by adding to an item that is not there. Therefore, it would seem to me it would be sensible if the resolution read that schedule A of the items be further amended by inserting the following paragraph between 708 (b) and 848. It is really an addition to schedule A; it is not a case of amending a paragraph that is already there.


William Moore Benidickson: I think my hon. friend would like some illustration of what is involved in this proposal. We have received certain representations from the Canadian Horticultural Council. For instance, they pointed out that as a result of a recent decision by the tariff board, I think prior to Christmas of last year-


Ellen Louks Fairclough: Mr. Chairman-


William Moore Benidickson: I will come to my hon. friend's point. They pointed out that as a result of a recent decision by the tariff board, an item like lettuce, shall we say, is normally sold in the United States in crates, and the exporter proposes that by taking advantage of tariff item 710 (b) they might invoice the lettuce and the crates separately. There is a difference in rates. I think the rate in the case of the produce will be 10 per cent, and the rate in the case of the packaging will be 7 g per cent. There are other illustrations. I do not think any hon. member would think that we would want to have in our schedules a wording that would provide, let us say, an import rate on canned soup that was considerably less for the can than for the soup, particularly if tin cans brought in separately had a high rate of duty. That is the purpose
[The Chairman.]
of the amendment. I think generally I answered my hon. friend's question when I pointed out that this was not an unusual amendment to a schedule in the Customs Tariff.


Ellen Louks Fairclough: No one is arguing that the content of the amendment is not all right; we all agree with it. After all, I suppose we might as well save our breath because it is the parliamentary assistant's worry whether the thing is worded properly. I am merely pointing out that it seems foolish to amend a paragraph that is not in the schedule to begin with. It is merely the wording of the preamble.


William Moore Benidickson: We are amending an
item that is referred to in the schedule.


Ellen Louks Fairclough: The minister says he is amending by adding the following paragraph to item 710 (b). Item 710 (b) is not in schedule A.


James Joseph McCann: It is in the Customs Tariff.


Ellen Louks Fairclough: It is not in these resolutions.


Mr. Mcllraiih:: It is in the Customs Tariff.


James MacKerras Macdonnell: We are not dealing with the Customs Tariff.


George James McIlraith: We are amending a resolution which amends the Customs Tariff.


William Moore Benidickson: The first words of the Minister of National Revenue were:
I move that schedule A to the Customs Tariff be amended.


Ellen Louks Fairclough: Yes.


Stanley Howard Knowles: Let us amend the Post Office Act while we are at it. It is not before us either.


William Alfred Robinson: Is it the pleasure of the committee to adopt the amendment?


[Stage Direction]
Amendment agreed to.
Stanley Howard Knowles: What page are you on now, Mr. Chairman?


William Alfred Robinson: We are on page 20 comprising items 1044 and 1052.


Stanley Howard Knowles: Just a minute; I want to go back to something before we deal with this. I want to go back to item 848 (3) and ask the parliamentary assistant what is a seamless, lapwelded and electric welded iron or steel casing, tube and drill pipe, of a class or kind not made in Canada, and what is a seamless, lapwelded and electric welded iron or steel casing, tubing and drill pipe, of a class or kind made in Canada?


William Moore Benidickson: Before we come to the answer to that question may I ask the Minister of National Revenue whether he will move an amendment to item 848 (2)?


James Joseph McCann: I move:
That the words "machinery and apparatus and parts thereof (including motive power)" be deleted from sub-item (2) of item 848, and the following words be inserted in lieu thereof:
"Machinery and apparatus and parts thereof (including motive power) of a class or kind not made in Canada."


William Moore Benidickson: It has been found that some sizes are made in Canada, but generally this is a lowering of duty from prevailing rates. There are no increases.


Stanley Howard Knowles: Do I understand from what the parliamentary assistant says that the distinction between class or kind made in Canada and class or kind not made in Canada is on the basis of size?


William Moore Benidickson: To a degree, basically determined upon whether or not it is made in Canada. We found it possible to define the item after knowledge of what is made in Canada.


Stanley Howard Knowles: But you are introducing size as a basis of distinction. Even with the qualification that the parliamentary assistant spells out now, is that not a departure from the usual practice of the department?


William Moore Benidickson: This is no change in principle. It is generally an attempt to define things in such a way that we can decide between one and the other.


Stanley Howard Knowles: But this is definition in terms of size. That will prove very interesting to the tariff board.


Ellen Louks Fairclough: Does this mean that for machinery and so on made in Canada the old rates will apply?


William Moore Benidickson: Yes.


[Stage Direction]
Amendment agreed to.
William Alfred Robinson: We shall now turn to page 20 and deal with items 1044 and 1052.


William Moore Benidickson: There is another new item not numerically mentioned in the schedule. I would again ask the Minister of National Revenue to indicate the change.


James Joseph McCann: I move:
That item 908 of schedule A to the Customs Tariff, at present providing for "manufactures of synthetic resins, n.o.p." be amended to read:
908. Manufactures of synthetic resins including floor and wall tile containing synthetic resin, n.o.p.
British	Most
Preferential Favoured-Nation General
Tariff	Tariff	Tariff15p.c.	20p.c.	30p.c.
Customs Tariff


William Alfred Robinson: Shall the amendment
carry?


William Moore Benidickson: I think hon. members would appreciate something on the record with respect to this proposed change. The Minister of National Revenue moved an amendment to item 908. That item provides for the manufactures of synthetic resins not otherwise provided at rates of 15 per cent under the British preferential tariff, and 20 per cent under the most-favoured-nation tariff. This item is now being worded to clearly indicate that floor and wall tiles are properly dutiable under this item. Until last November floor and wall tiles containing a plastic binder of synthetic resin were classified under item 711 at a most-favourednation rate of 20 per cent. In November the Department of National Revenue reclassified these tiles under various items covering plastics. These items have been set up by the budget as a result of a report of the tariff board. The change in item 908 will restore the rate of duty which applied before last November.


Ellen Louks Fairclough: Mr. Chairman, do I
understand that the general tariff of 30 per cent is the same as before?


William Moore Benidickson: Yes.


[Stage Direction]
Amendment agreed to.
William Alfred Robinson: Page 20, items 1044 and 1052. Shall these resolutions as amended carry?


William Moore Benidickson: Mr. Chairman, on item 1044 I would again ask the Minister of National Revenue to move an amendment.


James Joseph McCann: Mr. Chairman, on item 1044 I move that the word "basic" be deleted therefrom.


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


William Moore Benidickson: Mr. Chairman, I am sorry but I have a great amount of detail here and I am a little behind. With respect to drawback item 1052 I would again ask the Minister of National Revenue if he would move an amendment.


James Joseph McCann: Mr. Chairman, item 1052 deals with automobiles and machinery. I move:
That schedule B to the Customs Tariff be further amended by striking out from drawback item 1052 the following words:
Machinery and precision instruments and apparatus for heat treating, welding, sorting, testing, inspecting or correcting; control panels for use with the aforementioned machinery; precision instruments and apparatus; all the foregoing, either

Income Tax Act
new or used, of a class or kind not made in Canada and all parts thereof, not including consumable tools.
And by inserting in lieu thereof the following words:
Machinery, precision instruments and apparatus for heat treating, welding, sorting, testing, inspecting or correcting; all of the foregoing, either new or used, of a class or kind not made in Canada; accessories and attachments, including control panels, for use with the aforementioned machinery and precision instruments and apparatus; parts of all the foregoing, not including consumable tools.


William Moore Benidickson: Mr. Chairman, this is only a broadening of the item.


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


Some hon. Members:: Agreed.


[Stage Direction]
Resolutions agreed to.

William Alfred Robinson: Shall we now revert to the resolution on the Income Tax Act? We were discussing paragraph 6 and the new paragraph 7.


James MacKerras Macdonnell: Is the parliamentary assistant going to make any comment on the request made of him?


William Moore Benidickson: Yes, Mr. Chairman. I propose to say this. The income tax resolution we discussed this afternoon was allowed to stand following the objection raised by the hon. member for Eglinton, and some other hon. members referring to what was described as retroactive features in paragraph 6 of the resolution dealing with mutual insurance companies, other than life insurance companies.
In the case of resident companies the proposed amendment applies, as is customary, to the beginning of the current year. For nonresident companies the amendment will apply to previous years as well. This policy was questioned this afternoon and I should now like to repeat and to some extent amplify the explanation I gave this afternoon for this difference in treatment.
The difference arises out of the different way in which residents and non-residents have been taxed in the past and will be taxed in the future. Domestic companies have been and will be taxed on possibly both underwriting profits and investment income. Foreign non-residents have been taxable only on underwriting profit in Canada and not on investment income which has been regarded as earned by head office outside Canada. The effect of the Stanley Mutual decision was that underwriting profit was not taxable. It did not decide that investment income was exempt.

The result is, therefore, that while the non-residents who are taxed only on underwriting profits would escape Canadian tax completely, the domestic companies still remain taxable during the period 1951 to 1953 on their investment income. In some cases this tax will be greater than it would have been in the absence of the Stanley Mutual decision where they had an operating loss.
It seemed scarcely fair, therefore, that domestic companies should remain liable for tax during the 1951-53 period, while nonresidents, through being taxed on a different basis, should escape tax completely. Accordingly, the new amendment was made to apply so that no company should escape tax completely in the past years.
Non-resident companies operating generally, I believe, in the large industrial centres have accepted the Canadian tax regime and in the past have paid our taxes without question. The Stanley Mutual case arose in an entirely different milieu. It was a small local company and other groups were interested and they all wanted to test the features. So far as I know, non-resident companies, whose main interests are not directly competitive with farm mutuals, were on the sidelines. In view of this fact and the fact just mentioned, that but for the resolution in its present form they would escape tax completely while the farm mutuals and other domestic companies would still be taxable, it was decided that the new legislation should not disturb the situation under which such companies were assumed both by them and by the administration to be taxable.


James MacKerras Macdonnell: To refer to the wording of the amendment I take it that the amendment would apply to non-resident mutuals if, in fact, they came under its terms. There is nothing in this amendment to exclude them. Perhaps the question may not be practical. Perhaps the parliamentary assistant knows that they would not qualify under the 50 per cent rule. However, what I am asking is this; From my reading of the amendment I assume that this amendment as is is not limited to domestic companies. It is limited to this "50 per cent of whose gross premium income", and so on.


William Moore Benidickson: Resident or non-resident.


James MacKerras Macdonnell: So they are on the same basis there?


William Moore Benidickson: Yes.


James MacKerras Macdonnell: In the second place the parliamentary assistant has given reasons for not making the change. As I understand him, what he has pointed out is this. If the

situation is left without this retroactive feature, he suggests that actually it is going to work an injury to the Canadian companies by reason of the different method of taxing which has prevailed between the two. He also suggested that the non-resident companies-and here is where I did not quite follow him-expected to be taxed in respect of their investment reserve. However that may be, it does not seem to me that it changes the substance of the situation. Unless the parliamentary assistant can satisfy us on the point I am just going to make or unless he can satisfy us that these people are not objecting and that they feel that the matter is fair, -if he were able to do that it might alter the whole thing-it seems to me that we are in the position of going to people and asking them to reopen their accounts for seven years, with consequences that might quite conceivably be extremely serious. Again I am going on the basis of what I understood to be the facts this afternoon. If that is so, we may be causing not only serious inconvenience but perhaps even worse to these companies.
Again I suggest it is through no fault of their own that they are in this position. It is through no fault of any kind on their part. We now find that, as was settled by the Stanley case, they were not liable for the tax which it is now proposed to make retroactive for all these years. Again assuming that I have stated the facts correctly and that there is no acquiescence on their part, it seems to me that what we are doing is not showing the same principle of fair dealing and decency as between government and individual as that which we would expect as between individual and individual. Again, as I say, if my understanding of the facts is correct, when we are trying to get the Americans to behave more sensibly, for instance, with regard to administration of their own customs tariff, it seems to me to be a particularly unfavourable time for us to be giving cause for offence of this kind. I am subject to being corrected as to some of the facts but as I understood the parliamentary assistant, nothing that he said seemed to me to alter the argument made this afternoon by the hon. member for Eglinton and myself.


William Moore Benidickson: My hon. friend referred to going back seven or more years into tax statements. I think he must remember that, in accordance with the understanding they had of the taxing law, these people have paid their taxes.


James MacKerras Macdonnell: I do not understand. All these years they have paid taxes which you are now proposing to impose on them?
83276-335i
Income Tax Act


William Moore Benidickson: Generally speaking, that is correct.


Donald Methuen Fleming: Yes; but the result of the decision of the Supreme Court of Canada is that these companies have paid a tax on the assumption that they were liable. The assumption has now been proved to be invalid and it has been found that they were not taxable. What parliament is now being asked to do is to impose a tax which the Supreme Court of Canada has said has not been in existence up to the present time. No matter how we may talk around the point, the hard fact remains that parliament is now being asked to impose a tax which the Supreme Court of Canada had just finished saying had not been in existence.
Mr. Chairman, I move, seconded by the hon. member for Greenwood:
That paragraph 6 of the resolution be amended by striking out the words "and always to have been".
The effect of the amendment, if adopted, will be to eliminate this retroactive feature of the resolution. As to any need to change the present law, I indicated this afternoon that we are prepared to consider proposals on their merits as of the present time. But surely there is no justification whatever for going back and trying to impose a tax retroactively. That is the worst kind of legislation imaginable. Not only will it have an unfair effect here but it will create a damaging precedent for all time.


Some hon. Members:: Question.
Amendment negatived: Yeas, 20; nays, 44.


William Alfred Robinson: Have we completed our discussion on paragraphs 6 and 7?


Some hon. Members:: Agreed.


William Alfred Robinson: Shall the resolution carry?


Some hon. Members:: Agreed.


[Stage Direction]
Resolution agreed to.
William Alfred Robinson: Shall I report these resolutions?


Some hon. Members:: Agreed.
Resolutions reported.


Mr. Speaker:: Is it the pleasure of the house that these resolutions be now read the second time and concurred in?


Some hon. Members:: Agreed.


Stanley Howard Knowles: What about the amendments?


Mr. Speaker:: That was the question I asked a moment ago, but I am told that resolutions are never reported with amendments.

Income Tax Act


Stanley Howard Knowles: I take it, Mr. Speaker, that you are as surprised about that as I am.


Mr. Speaker:: Furthermore, I am told that there is a citation with regard to the matter. There is no reason why we should be surprised. What is the number of the citation? I do not have it before me at the moment. I think the point is now being looked into by the Clerk.


An hon. Member:: Ten o'clock.


Mr. Speaker:: I am trying to recall situations where resolutions were reported with amendments. I remember that when I was chairman of committees there were occasions when amendments were made in the committee but they were not reported. There is no use in reporting a resolution with amendments because the resolution is in fact an order for leave to introduce a bill. The resolution is studied in committee of the whole and what is done in committee of the whole is to examine how the order for leave to introduce the bill is going to be drafted. Resolutions are reported from the committee of the whole as being the product of the committee of the whole. It is not the same as in the case of a bill which is sent to committee of the whole for examination with a view to possibly being amended. A resolution is not sent there for that purpose; it is sent there to determine if it contains sufficient cause to grant leave to introduce a bill based on the resolution.
It may be that by this time some specific reference in the book has been found, but in any event I am satisfied that is the situation. In the case of amendments to bills we do ask that the amendments be read the first time and concurred in. In this case we ask that the resolutions in their original form or amended be approved by the house. I think that will cover the point if amendments were made to the resolutions.
Resolutions read the second time and concurred in.


Mr. Speaker:: By this time we have found the citation. It is citation 491 of Beauchesne, third edition. I think once more we will all applaud the efficiency of the Clerk of the House. The citation reads as follows:
If a resolution is amended in the committees of the whole, supply or ways and means, the chairman does not report it "with amendments", because
it had not been discussed in the house, when the Speaker was in the chair, prior to being referred to the committee. The resolution is not considered by the house in the same way as a bill which, under standing order 75, is read twice before committal. The terms of the resolution are submitted for the consideration of the house for the first time when the resolution is reported from committee. As the house up to that moment has not considered the merits of the resolution, the committee's amendments do not change anything that has been done by the house and no matter how much the resolution has been altered by the committee, it is reported with all its alterations, but without the mention of amendments.


Stanley Howard Knowles: In other words, we call them alterations but not amendments.



Douglas Charles Abbott: for leave to introduce Bill No. 467, to amend the Income Tax Act.
Motion agreed to and bill read the first time.


CUSTOMS TARIFF
Douglas Charles Abbott: for leave to introduce Bill No. 468, to amend the Customs Tariff.
Motion agreed to and bill read the first time.



BUSINESS OF THE HOUSE

Walter Edward Harris: Mr. Speaker, tomorrow we
shall take the amendment to the Royal Canadian Mounted Police Act, the Opium and Narcotic Drug Act, allowances for disabled persons, the Atomic Energy Control Act, the War Service Grants Act, diplomatic and consular immunities, and the Canadian Citizenship Act amendments.


Edmund Davie Fulton: May I ask the minister if he has any idea when the government will be ready to proceed with the forecast amendment to the Judges Act?


Walter Edward Harris: No, I am not in a position to to say at this moment.


[Stage Direction]
It being five minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday, June 1, 1954