1954-06-07

Hon. Lionel Chevrier (Minister of Transport) moved: the first reading of Bill No. 471 (from the Senate), to amend the Navigable Waters Protection Act.
Motion agreed to and bill read the first time.



POST OFFICE ACT


Hon. J. W. Pickersgill (for the Postmaster General) moved: the first reading of Bill No. 473 (from the Senate), to amend the Post Office Act.
Motion agreed to and bill read the first time.



PRIVATE BILL


[Stage Direction]
Bill No. 472, to incorporate Canadian Slovak League.-Mr. Reinke.


CENTRAL MORTGAGE AND HOUSING


Mr. Ellis:: 1.	How many loans have been approved by the Central Mortgage and Housing Corporation in Regina, since the proclamation of the new National Housing Act.
2.	What is the maximum lending value placed on a house and lot in Regina, with a final price to the purchaser of: (a) $10,000; (b) $11,000; (c) $12,000; (d) $12,500?
3.	What is the maximum loan that has, to date been granted on each of the categories listed in question 2?
4.	Are chartered banks permitted to require a deposit of from $300 to $400 over and above the down payment before authorizing a loan?


Mr. Bourgel:: Mr. Speaker, I have spoken to the hon. member, and he has agreed to re-word this question.


Mr. Speaker:: Question No. 8 withdrawn.



INTERNATIONAL TRADE FAIR


Mr. Lennard:: 1.	Were any subsidies paid by the Canadian government in each of the years, 1951, 1952 and 1953, to support the Canadian international trade fair?
2.	If so, what amount for each of the above
years?


Mr. Howe (Pori Arthur):: There are no individual subsidies paid. The Canadian international trade fair is financed by the government of Canada. The expenditure and revenue for each trade fair is as follows:
Fair Expenditure Revenue Net cost
1951	....$720,753.72 $415,243.14 $305,510.58
1952	___ 709,455.07	498,357.07	211,098.001953	___ 795,123.22	604,404.72	190,718.50


Mr. Fraser (Peterborough):: 1.	How much 1953 butter did the government have on hand on May 31, 1954?
2.	How much 1953 butter was sold on the reduced cost basis during May, 1954?
3.	How much 1954 butter did the government have on hand on May 31, 1954?
4.	How much 1954 butter did the government purchase in May, 1954?


Mr. McCubbin:: 1.	27,163,080 pounds.
2.	6,249,800 pounds.
3.	8,193,920 pounds.
4.	8,064,560 pounds.



QUESTION PASSED AS ORDER FOR RETURN


Mr. Fulton:: 1.	How many resignations from and transfers out of the staffs appointed to carry out the Combines Investigation Act (exclusive of "such temorary, technical and special assistants as may be required to meet special conditions" referred to in section 24 of the act) have there been in each fiscal year since March 31, 1950 to date?
2.	With respect to appointments to the positions thus vacated within this period, from what provinces, giving totals only, did such appointees come at the time of such appointment?
3.	What has been the average number of the staff maintained for the purpose of this act as defined in part 1 during this period?


Mr. Garson:: Return tabled.

Motions for Papers MOTIONS FOR PAPERS



HENDRY REPORT

Mr. Dinsdale:: For a copy of the Hendry report on the subject of welfare services for the Canadian armed forces.


Mr. Claxton:: Mr. Speaker, this motion refers to a report made by a professor in Toronto at the request of the defence research board, which was asked for by the personnel members committee consisting of the adjutant-general of the army, the chief of naval personnel and the air member for personnel of the Royal Canadian Air Force. It was intended for the information and guidance of the officers concerned. It is privileged and should not be produced.


An hon. Member:: Same old excuse.


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


Some hon. Members:: Yea.


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the nays have it.
And more than five members having risen:


Mr. Speaker:: Call in the members.



ST. LAWRENCE WATERWAY REPORT

Mr. Bell:: For a copy of the report of an economic study of the proposed St. Lawrence waterway, made in 1951 by the Department of Trade and Commerce, as referred to by the Minister of Transport at page 1666 of Hansard of December 6, 1951.
He said: Mr. Speaker, after a discussion with the minister I would request that this motion be allowed to stand.


Mr. Speaker:: Motion stands.



VETERANS BENEFIT ACT


Hon. Hugues Lapointe (Minister of Veterans Affairs) moved: that the house go into committee to consider the following resolution:
That it is expedient to amend the proposed measure respecting benefits for members of the Canadian forces, Bill 101 now before the house, by substituting for paragraph (c) of sub-clause (2) of clause 12, relating to the Unemployment Insurance Act, the following:
"(c) every person who was a member of the regular forces on and immediately prior to the 5th day of July, 1950, and thereafter without any interruption in service as such member, was on service

In a theatre of operations on the strength of the special force and was discharged from the regular forces within three years from the date he ceased to serve on the strength of the special force; and"
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the house.
Motion agreed to and the house went into committee, Mr. Applewhaite in the chair.
Resolution reported, read the second time and concurred in.
Mr. Lapointe thereupon moved that this resolution be referred to the committee of the whole on Bill No. 101.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce relating to the overseas exports of wheat. Would the minister comment on the terrifying drop to
14,600,000	bushels for the four weeks ending May 26 from 35,400,000 for the same period a year ago?


Clarence Decatur Howe: Mr. Speaker, I have had no notice of the question. I am not sure that my hon. friend's figures are correct but I will be glad to look into the matter and answer this question tomorrow.


Hazen Robert Argue: Mr. Speaker, my figures are correct.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, I would like to direct a question to the Associate Minister of National Defence (Mr. Campney) or in his absence the parliamentary assistant. Can the house be informed as to the situation relative to the strike or walkout of over one hundred employees at H.M.C. dockyard at Esquimau on Vancouver island?


Brooke Claxton: Mr. Speaker, the hon. member
gave notice of this question to the associate minister and he passed it on to me last night. The situation, as hon. members know, is that prevailing rate employees of the Department of National Defence and other government 83276-352
Inquiries of the Ministry departments have the same conditions of work and wage rates as those enjoyed by employees of corresponding civilian industries in the locality. That practice prevails as regards the dockyard workers at Esquimau. They receive the same rates and work under the same conditions as the two civilian shipyards in the vicinity.
Under the authority of treasury board minute TB 460455 dated October 30, 1953, it was provided that the superintendent of the dockyard may authorize payments of premium for what is called dirty work, that is work in boilers and so on, for which in his opinion private shipyards in the Esquimau area would pay a premium rate. On Friday, June 4, seven employees of the dockyard were ordered to perform welding work. But in their view this was dirty work and entitled them to the premium. In the view of the superintendent it was not, and in his view, had they been employed by civilian industries in the locality, they would not have received the payment of the premium.
The issue between them is purely a question of fact. The employees did not have recourse to the grievance procedure laid down. They stopped work and a number of other employees have stopped work, presumably out of sympathy for them. That is the situation.


Mr. Colin Cameron (Nanaimo):: Mr. Speaker, I would like to ask a supplementary question of the Minister of National Defence following the question asked by the hon. member for Vancouver East (Mr. Winch). Is his department taking any steps to settle this dispute?


Brooke Claxton: There is a grievance procedure in existence, and if employees would have recourse to it, that could be followed. [Later:]


Brooke Claxton: Mr. Speaker, if I may, I should like to correct the answer I gave to the hon. member for Vancouver East (Mr. Winch). In accordance with a memorandum which has just reached my hand, the seven employees did not stop work. They were suspended for refusing to do their jobs. The other employees stopped work presumably out of sympathy for their attitude.



ALLEGED SHORTAGE IN CANADA-REQUEST FOR GOVERNMENT ASSISTANCE

[Stage Direction]
On the orders of the day:
Mr. O. C. Trainor (Winnipeg South):: Mr. Speaker, I would like to direct a question to the Minister of National Health and Welfare.
5562	HOUSE OF
Inquiries of the Ministry Has the minister seen the published statement of the president of the Canadian Hospital Council, Dr. McGugan, to the effect that there is a shortage of 10,000 graduate nurses in Canada? If so, has the government under consideration any measures that would tend to alleviate this potentially dangerous situation?


Hon. Paul Marlin (Minister of National Health and Welfare):: 

HOUSING


[Stage Direction]
On the orders of the day:
Maurice Bourget: Mr. Speaker, I wish to refer to a question asked by the Leader of the Opposition (Mr. Drew), and to information requested by the hon. members for Rosetown-Biggar (Mr. Coldwell) and York South (Mr. Noseworthy), on Friday, June 4, relating to eviction notices being served by Central Mortgage and Housing Corporation on tenants and persons who have purchased houses from the corporation in Windsor. I might add also that some representations were made a few days earlier by Mr. Earl Watson of local 195 of the U.A.W. C.I.O. to the hon. members for Essex East (Mr. Martin) and Essex West (Mr. Brown).
I have made inquiries of Central Mortgage and am advised that six notices of intention to cancel agreements for sale have been served recently on purchasers of houses from Central Mortgage and Housing Corporation in Windsor. None of the notices has yet expired and no court action has been commenced. Of the six upon whom notices have been served, two have called upon the officials of the corporation and have paid their arrears in full. One of the others has paid part of the arrears and has arranged for the balance. In the fourth case the family service bureau is taking a hand as there is domestic trouble. It is expected that this case also will be satisfactorily settled. The remaining two purchasers have not yet called upon the corporation's branch office.
Three notices of termination of lease have also been served. These notices have likewise not expired, but the tenants have all paid their arrears and are being reinstated.
During the last three months there has been one eviction in Windsor. In that case the tenant paid no attention to the notice
[Mr. Trainor.l

that was served upon him, and the matter was taken to court. The tenant voluntarily vacated on June 1, as a result of the court decision. In this case the tenant was not an unemployed person and made no effort to make arrangements with corporation officials.
On March 30 the Minister of Public Works outlined the policy of the corporation in respect to purchasers and tenants in arrears. The minister pointed out at that time that where there is genuine distress arising out of unemployment the corporation will give every possible consideration to working out an arrangement suitable to both the purchaser or tenant and the corporation, but that having regard to its responsibility for the management of public funds, the corporation does not follow a policy of waiving or postponing the collection of monthly instalments on a wholesale basis. Each individual case is dealt with on its merits and only such measure of relief as the circumstances of each individual case may warrant is given.
The corporation has under management in the Windsor area over 1,000 houses. These are rented at rentals considerably below the market. In addition, the corporation has under agreement for sale some 3,000 houses. In these cases also, the repayment arrangements are most favourable to the purchasers.
In the circumstances, I believe the house will agree that the policy followed by the corporation is the only policy that can be followed consistent with its responsibilities.


Hon. George A. Drew (Leader of the Opposition):: Mr. Speaker, as a question supplementary to the answer given by the parliamentary assistant, may I ask him if he will draw to the attention of Central Mortgage and Housing Corporation the desirability of giving consideration to the general and unexpected distress in Windsor caused by the unanticipated lay-off of men by the Ford plant which will greatly affect the very situation that he has outlined and will bring into operation the policy explained by the minister in this house?


Maurice Bourget: I will be glad to do that. [Laterl:
Mr. J. W. Nose worthy (York South): Mr. Speaker, may I direct a question to the parliamentary assistant to the Minister of Public Works in the absence of the Minister of Public Works and the acting minister.


Some hon. Members:: No; he is here.
Mr. Nose worthy: In view of the further lay-offs which are reported from Windsor, will the government assure the house that

those laid off will not be evicted from any homes they are purchasing under Central Mortgage and Housing Corporation?


Hon. W. E. Harris (Acting Minister of Public Works):: Mr. Speaker, just to point out to my hon. friend that I am not absent, may I say that the answer to his question lies in the answer previously made by the parliamentary assistant.



UNITED STATES SELLING POLICY


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. It arises out of a question I asked him on Tuesday with regard to meetings in Washington in connection with the grain selling policy. Is it a fact that Mr. M. W. Sharp, associate deputy minister of trade and commerce, and William C. McNamara, assistant chief commissioner of the Canadian wheat board, have been in discussion with officials in Washington with regard to the fact that the United States is making available surplus supplies of corn, oats, barley and rye for export markets at prices below world prices and also with a view to seeing whether something of a common policy might be arrived at so that Canada's market in these grains would not be lost?


Clarence Decatur Howe: Mr. Speaker, Mr. Sharp and Mr. McNamara were in Washington last week discussing various matters with the department of agriculture and the various branches thereof. It was not my understanding that the matters referred to by my hon. friend were the subject of conversation, although they may have been. I think they were discussing sales of wheat. However, I regret to inform the house that, in spite of representations, the Americans cut their price of wheat on Friday by ten cents.


John George Diefenbaker: Mr. Speaker, what effect will that cut have on the prediction the minister made some time ago with regard to the optimistic future for the marketing of Canadian wheat at present prices?


Clarence Decatur Howe: The minister is just as optimistic now as he was when he made the statement.


Mr. Knowles:: Your optimism is all you have left.
83276-352}
Inventions by Public Servants PORK



INQUIRY AS TO EXPORT TO RUSSIA

[Stage Direction]
On the orders of the day:
Mrs. Ellen L. Fairclough (Hamilton West):: Mr. Speaker, may I ask the Minister of Trade and Commerce whether he can now clarify the point I raised on Thursday last with reference to the terms of the tender on canned pork sale? The minister will recall that I asked whether the terms were that the goods should be shipped off the North American continent or merely outside of Canada.


Clarence Decatur Howe: Mr. Speaker, I regret that I was out of the city on Friday and Saturday last and the information has not reached me. However I will certainly have it tomorrow.


Ellen Louks Fairclough: Thank you.



PUBLIC SERVANTS' INVENTIONS


John Whitney Pickersgill: the second reading of and concurrence in amendments made by the Senate to Bill No. 444, respecting inventions by public servants.


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


Stanley Howard Knowles: Mr. Speaker, naturally I have no objection to the amendments proposed by Their Honours with respect to this bill. They are set out at page 703 of our Votes and Proceedings for Thursday, June 3. Since the purpose of these amendments is to make certain corrections in the French version, I merely rise to express the hope that we will not carry forward into the French version of this bill a mistake that appears in the 17th of the proposed amendments. I refer to the spelling of the word "fonctionnaires". It should read "fonctionnaires"; not "fronction-naires".


Mr. Speaker:: I do not find the exact place where the hon. member has found the misspelled word, but if it is there as he has noticed it, it will be corrected. I think it is worth mentioning that the hon. member had perused the French version in such an expert manner as to have detected that misspelled word. I am sure that those who are responsible for the French translation will be very grateful to him and will correct this clerical

National Harbours Board Act error. There is no doubt that in spelling the word "fonctionnaires" in French the "r" must be deleted after the "f".


[Stage Direction]
Motion agreed to, amendments read the second time and concurred in.


[Stage Direction]
The house in committee on Bill No. 459, to amend the Veterans Land Act-Mr. Lapointe-Mr. Applewhaite in the chair.
On clause 1.
Mr. Brooks:: Mr. Chairman, this bill has had very careful study by the veterans affairs committee. I think there was unanimity as to the principle and application of each of the sections of the bill. Certain amendments were recommended and I understand that they are before us this morning. For that reason I do not see that it is necessary to have an extensive discussion of the bill at this time.


[Stage Direction]
Clause agreed to.
The Deputy Chairman:: I would draw to the attention of the committee that the bill has not been reprinted. According to the bill I have before me, the numbers were changed in the committee and clauses 2 to 9 would not appear to be in the hands of hon. members. However, I understand that these clauses were all adopted by the special committee on veterans affairs. I will call the clauses slowly in order that hon. members will not be caught by surprise.
Clauses 2 to 11 inclusive agreed to.


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


[Stage Direction]
The house in committee on Bill No. 421, to amend the National Harbours Board Act- Mr. Chevrier

Mr. Applewhaite in the chair.
On clause 1-Owner.
Mr. Green:: Mr. Chairman, I regret that the Minister of Transport is not in the house for the consideration of this bill. It is one which is of great importance to those portions of Canada where there are national harbours. It involves some very important principles and I believe that this is a case in which the minister should not have deputized his parliamentary assistant to handle the bill in the committee stage of the house.


I would hope that the minister could be present before the discussion has gone very far. He was here a few minutes ago and I see no reason why he should not be in the house to participate in the discussion.
There was very little debate on the measure when it was given second reading in the house. The reason for that was that the bill was complicated. It contained some drastic new provisions and those on the opposition side felt that it would be appropriate to have the bill studied in the standing committee and that a more effective debate could take place when it came back to the house. In the standing committee on railways, canals and telegraph lines we heard representations from counsel for the Shipping Federation of Canada and the Vancouver chamber of shipping.' Very serious objections were taken to certain sections of the bill. Some amendments were made which had the result of reducing the objectionable features, but in our opinion further amendments are required before the bill can be considered satisfactory.
I should like to point out the position of the national harbours board. It was set up in 1936 to manage seven of the harbours of Canada, namely, Halifax, Saint John, Chicoutimi, Quebec, Montreal, Churchill and Vancouver. It has no jurisdiction whatever over the other ports of Canada, some of which are of great importance. For example, there are the ports of New Westminster on the west coast, Sorel on the St. Lawrence and St. John's in Newfoundland. The national harbours board only has jurisdiction over seven of the ports of Canada.
I submit that the important thing about these ports is not the national harbours board but the business that flows through the ports. Representing one of the constituencies in the city of Vancouver, I can say without fear of contradiction that we do not want the national harbours board to interfere with the shipping business through our port to any greater extent than is absolutely necessary for the national harbours board to carry on its business. This is where our main objection to the bill arises. We believe that the bill gives the national harbours board far more power than it requires to carry out the management of these ports. It gives it so much power that the result may very well be to interfere with and cut down business in these Canadian ports.
It must be remembered that these ports are in competition with other Canadian ports that do not come under the national harbours board. For example, Vancouver is in stiff competition with the port of New Westminster, and we do not feel we should be

handicapped by bureaucratic restrictions which do not apply to the port of New Westminster. Furthermore, we are in very stiff competition with the west coast United States ports such as Seattle, Tacoma, Portland and San Francisco. Every curb that is put on the business of the port of Vancouver has a tendency to force business from that port into the United States ports. It must be remembered that this shipping business is an international business. The rules are international rules. This business is not conducted under rules Canadians like to make; it is carried on under broad international rules. It is of the utmost importance that there be no restrictions imposed by the Canadian government which will have the effect of diverting that shipping to other ports.
I said a few moments ago, Mr. Chairman, that the powers which still remain in this bill, after the amendments proposed by the committee, are too extensive. I propose to mention four of those powers about which we make serious complaint. In the first place, dealing with clause 1 of the bill, hon. members will find that there is a definition of the word "owner". It defines the "owner" of a vessel. Then, it defines the owner of goods. My objection is to the definition of the owner of a vessel. In the case of a vessel the owner was originally defined to include the agent, charterer or master of the vessel. In the committee the word "charterer" was qualified by adding the words "by demise", so that only the charterer by demise is to be considered as the owner. If he is the charterer by demise he has taken the ship over as a whole and is quite properly made subject to the restrictions and penalties imposed upon an owner.
However, the word "agent" still remains, and we object strenuously to having the agent treated in the same way as the owner of the vessel. These agents for vessels are not agents in the ordinary sense of the word. They merely look after the servicing of the vessel while she is in port. For example, they may arrange for the docking of the vessel, for her supplies to be purchased and also may arrange for the cargo that is to be shipped out as well as for the cargo that has been brought into the port. There are two or three different types of agents. Some are known as berthing agents and they look after the arrangements for the berthing of the vessel. Some are known as husbanding agents, who look after the various matters to which I have referred. Some are general agents, but in no case are they responsible in any way for the operation of the vessel itself. Yet, in the way
National Harbours Board Act this bill is drawn, these shipping agents are to be made responsible for whatever is done by the vessel itself.
The most objectionable section of the bill is the clause containing what will be the new section 16 (7) of the act. Under this provision the board can sue the agent for any damage done to harbour board property by a vessel, and that might involve thousands of dollars. It is absolutely unfair that the agent should be put in the position of being responsible for claims of that kind. This new section 16 of the act gives the national harbours board the power to seize a vessel if a vessel does damage to harbour board property or in case of various other eventualities. This power of seizure is of the greatest protection to the board. It is a drastic power because whenever a vessel is seized the result is a loss of thousands of dollars each day it is tied up, yet, the board is given this power to seize. In every case the ships carry insurance which protects them against claims of this kind, so the board is protected by this insurance.
It was admitted in the committee that the national harbours board has never lost one cent by reason of damage done to harbour property by a vessel, yet it is now asking the right to make the agents fully responsible for damage of this kind. I know it will be argued that the act now contains power to sue the agent; that was argued in the committee. But I point out that the power has never been exercised in the 18 years during which the board has been in existence. Furthermore, it is only a secondary recourse for the board. Under the act as it is now, the first recourse is to seize the ship, and that is what ought to be done in every case. This right to claim against an agent is only a secondary recourse, and as I say has never yet had to be exercised.
In this bill the national harbours board is going much farther in taking the widest possible power to sue the agent, whether or not it has seized the ship. If this bill goes through in its present form, the national harbours board will be able to let the ship go out of harbour, then turn around and sue the agent for any damage that has been done. The subsection in question is subsection 7 of the new section 16. It reads in this way:
Whether or not all or any of the rights of the board under this section are exercised by the board, the board may, in any case described in subsection (1), proceed against the owner of the vessel-
I point out that covers the agent because the owner is defined as including the agent.
-in any court of competent jurisdiction for the amount owing to the board (or for the balance thereof in the event of any sale contemplated by subsection (3)) and may also exercise against the owner-

National Harbours Board Act
Which again includes the agent.
-of the vessel any other right or remedy available to the board at law
That is a far wider power than the board has at the present time, and we believe that the word "agent" should be deleted from the definition of "owner" in respect of a vessel, so that the only people who would be subject to this wide power would be those who are actually responsible for the operation of the vessel.
It was suggested in committee either by the parliamentary assistant or by someone speaking on behalf of the board that agents could insure against this damage. I am informed that there is no possible way in which an agent can take out insurance against a claim of that kind. A vessel is insured for this damage and, in the marine business, that is considered sufficient to meet the situation.
Then it was suggested that the agent could make the owners of the ship put up a bond to protect the agent against any such claim. Well, that would mean that the agent would have to ask the ship owner to put up a bond of, let us say, a hundred thousand or perhaps half a million dollars.
What would be the answer of the ship owner to a request of that kind? He would say, "Well, I do not have to do this in the United States; I can send my ship to Seattle and not be bothered with providing a bond to protect the agent from damage, for which he never should be sued." The result inevitably would be that our national ports would lose business. In the case of Vancouver, the shipping agent could say to the ship owner, "In Vancouver I am liable for this damage. From now on we will use the port of New Westminster, because there is no such restriction there, and no liability set out as broad as is mentioned in the bill. We will just do our shipping business through the port of New Westminster."
Mr. Chairman, that would be completely and utterly unfair. There is no reason why agents doing business in national ports of Canada should be put in that position. Mind you, there are many shipping agents in these ports. They are reputable people who are doing business in a way recognized by the trade, and as it has been done over a countless number of years. Why should the national harbours board now ask for this further power which can have only the one effect, that of making it more onerous to do business in the national ports?
For these reasons, Mr. Chairman, I move:
That clause 1 of Bill 421 be amended by deleting the word "agent" as it appears in the first line of paragraph (ea).


In opening my remarks I said that there were four different points about which we were concerned. Three of these have to do with later sections, so I shall merely outline our objections at this time. There is a provision in the bill to give the national harbours board power to set up police forces in the different national ports. Under the bill as presented those police constables were given power to operate not only on property of the national harbours board but for 50 miles in any direction from that property. Members of the committee on railways, canals and telegraph lines realized that was ridiculous, and cut down the distance to 25 miles. For all practical purposes, I say that even 25 miles in every direction from harbours board property is just as ridiculous as 50 miles. I believe it should be cut down to, let us say, perhaps one mile.
Then there is a provision in the new section 16 (1) (d) which gives the board power to seize a vessel where it believes there has been a breach of board bylaws. This is a form of thought policing by the board; it can act if it thinks there has been a breach of the bylaws. Mind you, it does not have to prove a breach; if it thinks there has been that breach it may seize the vessel. The maximum penalty is $500. The board has this power to seize and to hold a vessel which, as I said before, means delay and expense, and perhaps the loss of thousands of dollars for each day the vessel is held.
Then, we object to a provision which refers to goods. The board now asks a general lien on all the goods of an owner, no matter when they may come over a dock, for charges which have not been paid on goods sent over the dock earlier. For example, a man may bring in goods today, and there may be, in respect of those goods, a charge which is not paid. Mind you, the board now has the power to hold the goods. We will suppose it lets the goods go; and then perhaps a year from now the same owner brings in other goods on that dock. Under this bill it asks the right to seize those goods, in priority to any other claim. Someone may have money owing on the goods, or there may be some other claim against them; but under the arbitrary power given by this measure the board will be able to seize the goods for charges which may have been incurred months before.
I shall deal in greater detail with the other objections when we reach the later sections in the bill. Meantime I am asking consideration for the amendment I have moved in which I have asked that the word "agent" be deleted.
May I point out to the minister who, I am glad to see, is now in his seat, that this bill

is not one involving party considerations at all. But it is of vital importance to those ports which operate under the national harbours board. I would hope he would accept my amendment in that spirit. We do not want unnecessary restrictions placed upon the business being done through our ports, and we believe that this liability against the agent should be deleted from the bill.


Harold Edward Winch: As a member from the city of Vancouver I am keenly interested in the bill before the committee. Most certainly before voting on its various sections I want to be completely certain in my own mind as to the implications involved.
I followed closely the explanations given in the committee meetings, where this bill was considered, and I am not either happy or satisfied that the explanations given by the parliamentary assistant and representatives of the harbours board were adequate. As I say, I was unhappy with the explanations that were given in the committee, and in the intervening time have given a great deal of thought to this bill, and in particular to clause 1, with the result that I find myself in agreement with the hon. member who has just spoken as regards the new definition of an owner. I cannot see the reasons why the government finds it necessary to bring in such a far-reaching interpretation of the meaning of owner. I can very well understand the reasons why objections are being raised in the house, and why those who are interested in shipping are very much concerned.
In the committee it was explained to us that, as already pointed out, in the many years that there have been harbour boards in Canada no financial losses whatsoever have been sustained. It is obvious therefore that the term "agent" in clause 1 is introduced not because of anything that has happened in the entire history of the harbour board in Canada. That being so, what different situation in the future do the harbour boards anticipate that necessitates the introduction of the term "agent" in the act? As I understand the act as it will read if this passes, it is conceivable that an agent could be sued for a navigation difficulty in the operation of a vessel. I for the life of me cannot see why there should be the possibility of a financial penalty on an agent for an act in which he himself is not concerned. When we bring in that kind of principle into the law of Canada we are taking a mighty serious step, and every hon. member should give consideration to what he is doing.
I do not want to repeat too much of what has been said, but I do want to add my voice to the argument against what I think
National Harbours Board Act is a very unfair principle, namely, that there should be two kinds of rights and two powers in the operations of the harbours board of Canada. If the ports that come under the operation of the harbours board are going to have the type of regulations, type of interpretations, if this act passes, then it does seem to me to be distinctly unfair that other harbours do not have to live up to the same rules, regulations and interpretations and financial responsibility.
I am not going to take the position that if this goes through, as far as the harbours of Canada under the harbours board are concerned, it would automatically mean that all the other acts that govern the other harbours should be changed accordingly, because that would be an unfair position to take, since if it is wrong for the harbours under the harbours board to have this power and regulations and extension of authority, then it would be unfair for the others. Therefore I think that the only thing to do is to see that the power is not taken in this bill under its administration. It is going to place a number of the operators who ship out of the seven harbours under the harbours board under an unfair situation.
I have been trying to make some investigation as to what it would mean, and as near as I have been able to find out-and this confirms the investigation of the hon. member for Vancouver-Quadra-there is not any insurance company that would give out the type of insurance that an agent would think he would have to have for his own protection. It is because once an act is passed it is the letter of the law that counts, and the only way to find out exactly what it is going to mean is to have a case go to court and get the interpretation of the judge. Therefore, Mr. Chairman, the interpretation which the shipping firms and their legal advisers, who are maritime lawyers, are placing on it now is just as good as the interpretation that has been placed upon it by the government and by the parliamentary assistant, who takes the position that in law the things we fear would not be done. He has no basis in fact to state that, because he does not know. Therefore, because I do think it will place agents and shipping firms in an embarrassing position at least and also I think in perhaps an impossible situation or that it will give rise to very grave concern and doubts, it is not the type of legislation that should be passed.
In view of the experience of the harbours board, in view of the experience of the government in the past when they have not had this power, there has been no indication that they need this power, and the bill should

National Harbours Board Act not go through at this time. I want to add my word in this way. I sincerely hope that all hon. members will realize that since Canada is a trading nation we have to be very careful in what we write into the statute books, and that the amendment moved by the hon. member for Vancouver-Quadra will be accepted by this house in the interest of Canada as a trading nation.


Lionel Chevrier: Perhaps I might be allowed to make a statement before this matter proceeds too far. First, let me say in answer to my hon. friend, who I understand took me to task because I was not here during the opening of this discussion of the bill, that the committee understands I am sure full well the value and importance of parliamentary assistants. I have full confidence in my parliamentary assistant. When parliamentary assistants are named it is clearly stated that they are appointed for the purpose of assuming certain duties and performing certain tasks as assigned to them by the minister, and I have assigned to my parliamentary assistant, because I have full confidence in his qualifications, the task of presenting this bill to the house. I understand from hon. members who were on the committee that he has done an excellent job, and I am pleased that colleagues from both sides of the house have so indicated to me.


Howard Charles Green: I do not think that anybody from this side indicated that.


Lionel Chevrier: I said "from both sides of the house". I do not know why it is necessary that the minister should be here for all of the bills that are discussed. However, be that as it may, I simply wanted to say that I have confidence in the competence and in the qualifications of the parliamentary assistant to deal with this just as adequately as I can.
Let me deal with the subject matter of this measure. I am sure there is a misapprehension about this bill. Surely this bill cannot be what hon. members say it is. I looked at it earlier; I discussed it with my officers, and I came to the conclusion that this was a simple bill, with perhaps one exception that I can deal with later.
There is nothing in this bill which is not already contained in the act, and anybody who rises in his place and says that the national harbours board by this amendment is taking tremendous powers, powers that it did not have before, is mistaken.
The hon. member who has just taken his seat seems to be of that opinion. Well, let me tell him at once that if he looks at clause

16 of the act he will see that at the end of it are to be found the very powers which are contained in the amending bill with reference to the owner. All this bill does is to clarify the powers which the national harbours board already has. All this bill does is to expand with one exception, as I said, the powers that the board has. It is really a bill to improve the phraseology, and all the Department of Justice was doing when they approved of this bill was to find ways of clarifying and redefining the section already contained in the act.
If my hon. friends will look at the National Harbours Board Act, the statutes of 1936, chapter 42, section 16, paragraph 2, they will find the latter part of it reads as follows:
. . . the board shall have a preferential lien upon the vessel and upon the proceeds thereof until payment has been made or adequate security has been given for such damages, whether direct or indirect, and for the amount of all such injury, damages, expenses and costs as may be awarded in any suit resulting therefrom, and the owner, charterer, master or agent of such vessel shall also be liable to the board for all such injury, damages, expenses and costs.
Therefore, if this amendment is accepted, we are withdrawing from the board the powers which were conferred upon it under the act of 1936, and it seems to me that the house certainly does not want to take away from the board the powers which already exist.
The exception to which I referred is the one having to do with the peace officers, and in this case the board felt that because of the difficult jurisdictional problem, which the parliamentary assistant has explained in committee and will explain here also, and which difficult jurisdictional problem exists in Montreal and to a large extent in Vancouver-[DOT]


Howard Charles Green: Oh, no!


Lionel Chevrier: My hon. friend says "Oh, no". I think the parliamentary assistant and I must take advice, not from my hon. friend, but from our officers who state that there are jurisdictional difficulties in the city of Vancouver.


Howard Charles Green: Mr. Chairman, unfortunately the proceedings of the committee have not yet been printed, but I am sure the minister will not quarrel with the statement that either the representative of the harbours board or his parliamentary assistant told me in committee that there had not been any trouble in Vancouver.


Lionel Chevrier: Mr. Chairman, I was not there and, of course, I must accept the word of my hon. friend; but I am sure the parliamentary assistant would not have said that with reference to the city of Montreal because

I know there are at least five it not more different jurisdictions. Occasions have arisen in the past when charges were laid and warrants had to be backed in at least four different jurisdictions. Then, on one occasion, because the person who was being apprehended ran one-half of the distance between the north and south shores of the river St. Lawrence on the Jacques Cartier bridge, he was outside the jurisdiction, and could not be apprehended.
I am quite sure a situation like that should not obtain and I am quite sure the house would not want it to obtain, particularly when it would put the national harbours board to all sorts of expense.
I did not rise to impede the passing of this bill. I rose to try to help it through, and I am convinced in my own mind that the bill, as I understand it, and with but one exception, simply clarifies and redefines the powers which already exist in regard to the national harbours board. I repeat that, because of other business, I will have to leave the house within a short time, but I have full confidence in the handling of this legislation by my parliamentary assistant.


Mr. Nicholson:: Mr. Chairman, the members of the committee which reviewed this case spent a good deal of time on it and despite what the Minister of Transport has said there were changes made in the bill.
I believe this bill has been poorly drafted. I think there are three important functions which are being affected, namely, the functions of the charterer, the owner, and the agents. I drew from my very limited experience in the shipping field by referring to a trip I made last year on a ship owned by the Stag Steamship Company of Newcastle. She was chartered by the Rank Milling Company of London and the agent in Churchill was the Montreal Shipping Company.
As this bill came before us any one of those three could be held responsible for offences of any one of the others and I think it is unfortunate that a bill should come before parliament under which the charterer, in this case the Rank Milling Company, could be held responsible for damage done to the harbours board facilities at Churchill, and for a mistake made by the captain or officers of that particular ship.
The committee was good enough to make a change which would relieve the Rank Milling Company, the charterer in this particular case, of any responsibility for damage done by the ship.
The evidence given before the committee has just come to my hand, and when this matter was before us Mr. Finlay, counsel
National Harbours Board Act for the national harbours board, set forth a case as reported at page 180, to the effect that the Montreal Shipping Company, acting as the sole agent at law, would go down to the wharf at Montreal and, let us say, through its negligence there was a fire. In that case no act of the vessel was involved, but in spite of the fact that the vessel was not involved the vessel owners could be held liable because the Montreal Shipping Company was acting as the agent.
That is the opinion of our learned counsel. I think the Stag Steamship Company with offices in Newcastle, having engaged the Montreal Shipping Company to be its agent in Montreal, should not be held responsible for a fire caused by the Montreal Shipping Company before the Begonia reached Montreal. While the Montreal Shipping Company is acting for the Stag Steamship Company I think the Stag Steamship Company should not be held responsible for negligence on the part of the Montreal Shipping Company, and vice versa.
We made some progress in the committee. I have not before me the bill as revised, but I think it was agreeable that section 16, paragraph 1 (d), should be amended so that this point could be cleared up. As I said, I think there was poor draftsmanship in this particular bill. I do not think we wish to draft legislation that holds one company responsible for offenders caused by another.
I realize that the national harbours board has a large investment in the harbour facilities across the country and I think those who damage those facilities should be held responsible. I think the harbours board should collect from those who are responsible, and I do not think the agent should be held responsible for damage caused by the vessel. I believe that the term "owner" as originally drafted in the bill to include "the agent, charterer or master of the vessel" should be altered.
I am concerned about what the passing of this bill will do to Churchill because the shipping out of that harbour is of vital importance to that part of Canada in which I live. The agent for most of the ships there has been the Montreal Shipping Company and I expect that the Montreal Shipping Company will continue to do a large volume of business in Montreal; but I am afraid that if this legislation goes through their risks in connection with the handling of ships at Churchill will be so great in comparison with the revenue they receive that they will decide not to operate there. The proposal that is made by the hon. member for Vancouver-Quadra to strike out the word "agent" in

National Harbours Board Act this section is, I think, a reasonable one. I think it is unfortunate that section 16 was worded in such a way as to say as follows:
The board may, as provided in section 18, seize any vessel within the territorial waters of Canada in any case where, in the opinion of the board, . . .
(d) the owner of the vessel has committed an oifence under this act or the by-laws, punishable upon summary conviction by a penalty payable under section 21 to the board; . . .
As is pointed out, there has been a change in that wording but I think it is unfortunate that acts come before parliament where it is assumed that the owner of the boat-in this case the Stag Steamship Company-[DOT] should be held responsible for a fire started by gasoline drums that were placed there improperly and that the board should have the power to seize the boat belonging to the Stag Steamship Company for acts for which the owners of this particular boat were in no way responsible.


The Chairman:: Is the committee ready for the question?


John George Diefenbaker: Mr. Chairman, I presume that under this section a general discussion can take place. I rise to voice the strongest possible objection to section 4A whereby the board shall have-
. . . the power to appoint police constables for the enforcement of this act and the by-laws and for the enforcement of the laws of Canada or any province in so far as the enforcement of such laws relates to the protection of property under the administration of the board or to the protection of persons present upon, or property situated upon, premises under the administration of the board, and for that purpose every such police constable is deemed to be a peace officer within the meaning of the Criminal Code and to possess jurisdiction as such upon property under the administration of the board and in any place not more than 50 miles distant from property under the administration of the board.
To me that is an example of bureaucracy gone mad. That goes further than any other legislation in this country. There has never been a statute that permitted a board to set up its own police force. The sidenote reads:
The purpose of the new section is to eliminate the current necessity for swearing in harbour police as special constables of some municipal or provincial police force or of the R.C.M.P. The status created would be analogous to that established by the Railway Act as regards railway constables.
Railway constables are not appointed by any board. Section 456 of the Railway Act provides that railway constables are appointed by:
A superior or county court judge, two justices of the peace, or a stipendiary or police magistrate, in any part of Canada, a clerk of the peace, clerk of the crown or judge of the sessions of the peace in the province of Quebec . . .

Section 4A strikes me as being a most unusual, unnecessary and unjustifiable extension of the power of appointment of police officers. What parliament is being asked to do is to give the national harbours board power to establish for itself an independent police force with jurisdiction up to 25 miles from a harbour. That provision makes individuals-whether they are involved or not subject to investigation if living within 25 miles of a harbour. That provision is a far cry from the age-old principle that police officers shall not be appointed by any administrative board; otherwise the liberty of the subject may be invaded by the whims and despotism of the board acting through its own appointees.
The explanation given in the sidenote to the effect that it creates a status analogous to that established by the Railway Act is true; but it is not true if there is any suggestion that the Railway Act allows the board to appoint those who will enforce the law. This provision amounts to a new step forward: an administrative board to enforce its own administration, it sets up its own police. Our concept of freedom denies that those who administer the law shall enforce the law. This section may be a short-cut but, if it is carried into effect, it seems to me that the rights of the citizen will be lost in a jungle of divergent jurisdictions. The minister said: After all, what is a matter of 24 miles? As I understand it, under the Railway Act the jurisdiction is half a mile.


Mr. Langlois (Gaspe):: One-quarter of a mile from the property.


John George Diefenbaker: One-quarter of a mile. This act extends the jurisdiction farther than that which can be justified. The 25 miles provision is beyond reason in any circumstances. It has always been true that when bureaucrats endeavour to make shortcuts in order to achieve what they believe to be beneficent ends, the individual's rights of freedom are always endangered. My objections are twofold. The first is that the appointment of constables should not be in the hands of a national harbours board, an administrative institution. In the second place, there is no reason whatever why jurisdiction should be extended beyond the quarter of a mile. That provision one can understand. The enforcement of the law by police officers would be defeated unless there was some opportunity to go out beyond the immediate area or confines of the area of their jurisdiction. The Railway Act indicates that the railway officials have found that a quarter of a mile to invade the jurisdiction of other authorities is sufficient leeway. I think that consideration should be given to

this matter. We do not want to start to establish in parliament the right of any board to set up its own police force. If a police force is to be set up, let it be set up in the same way as is done under the Railway Act where a superior court judge or a county court judge makes the appointments.


Thomas Miller Bell: Mr. Chairman, I have already stated my objections to this act both on second reading and in committee. I think the hon. member for Vancouver-Quadra has explained the legal and technical difficulties that are still evident in the act. I think that we should review this bit of legislation and see what has happened to it. This bill originally came from the other place. They considered it on second reading and there was considerable discussion on it there. I remember the headlines of the newspapers at the time were to the effect that the national harbours board bill had created a flurry in the Senate. The senators expressed their worries and fears about the powers contained in the bill and then referred it to a committee of the other place. We do not have a report of the proceedings of that committee, but I believe that five or six amendments were made there. In this house the bill has been discussed on second reading and dealt with in the standing committee where, after considerable discussion, three or four amendments were made. Therefore I think we should appreciate that we now have before us a bill that has had ten amendments made to it since it was originally drafted. In that respect there is a reflection on either the Department of Justice or the Department of Transport so far as this legislation is concerned.
When the government members were thumping their desks a few minutes ago, with smiles on their faces, with respect to the words used by the Minister of Transport, I could not help but think that the attitude of the government members in the committee had surprised me. I was amazed at the lack of interest in the bill on the part of some of them.


Mr. Byrne:: Oh, nonsense!


Thomas Miller Bell: It is true it is a very technical measure. I appreciate that a highly trained lawyer has difficulty in understanding it. Nevertheless, during the two afternoons that the bill was considered in the committee I was surprised, as a new member, at this business of sitting back, not making too much attempt to understand the bill and yelling "carried, carried". A representative of the shipping federation of Montreal appeared before the committee and endeavoured to explain the bill. I am not saying he was completely right
National Harbours Board Act in everything he said but he did point out some weaknesses in the legislation that were not uncovered in the debate on second reading. I must admit that I overlooked one or two of the points he made which I now think are quite valid. Yet he was not treated with too much courtesy, and I feel that the government did not hold its end up in the consideration of this bill in the committee. At the same time the harbours board officials were, as far as I was concerned, quite ready to listen to any suggested changes. They made their explanations although, as I have said, I did not agree with all of them.
I have two objections to the bill as it now stands, to which I should like to refer again. The first objection was very carefully explained by the hon. member for Prince Albert. It is interesting that, although he perhaps has not had the time to examine the bill carefully, right off the bat he picked out this very dangerous section which gives the police officers so much power and jurisdiction. It is an example of the growing tendency toward a police state of which we are seeing so much. I still object to the extensive jurisdiction. It has been reduced to 25 miles, but the principle of having jurisdiction over that area of a waterfront is very dangerous. I object to the power of appointment of police officers because we do not know where it will stop. It may not be abused but the powers will be there.
My second objection was dealt with very well by the hon. member for Vancouver-Quadra, and it concerns the interpretation given to the meaning of the word "owner" under the bill. In the old act the word "owner" was used very loosely throughout the legislation. It was probably given the common law interpretation that has extended right up to the present time, and it was admitted that there were not too many difficulties. Yet the draftsmen of the bill have come along, put the word "owner" in the interpretation section and have given it this particular meaning which includes agents. I maintain that if it were necessary to include "agent" under the definition of "owner" it should have been spelled out in each section. In that way we would be able to understand the meaning of it. It would not be so difficult for us.
As the matter now stands we have this board definition of "owner" in the interpretation section which will apply in each place where that word is used in the old act. For that reason I support the amendment now presented. Otherwise, I think we will find ourselves in considerable trouble. On the east coast, and speaking particularly of Saint John, because the Halifax members do not
5572	HOUSE OF
National Harbours Board Act seem to be worried about the shipping business even though last year was a poor one, it is my opinion that we are definitely up against it. While I appreciate that some of the amendments and new provisions in the act will be good for efficient administration,
I for one would just as soon see the act left alone if there is even a slight danger that the little shipping we have left on the east coast will be endangered in any way.


Mr. Mclvor:: I think hon. members on this side of the house who were members of the committee can only do one thing, forgive the hon. member who has just spoken for his slam. I was a member of the committee. I was interested and I give every other hon. member credit for being interested. I voted for the bill because I was convinced that it was right.


Howard Charles Green: You are easily convinced.


Daniel (Dan) McIvor: I do not think that the suggestion of the hon. member from away up yonder-


An hon. Member:: The hon. member for Prince Albert.


Daniel (Dan) McIvor: -with respect to a quarter of a mile has any sense to it. What is a quarter of a mile when you want to catch somebody? When they get outside the 25-mile limit they are gone. On the question of agent, let us suppose that a ship comes from a country where the harbours board has no jurisdiction and cannot sue the owner.
I think it is their duty to take care of the agent, and I am going to support the bill.


James Allen (Jim) Byrne: Mr. Chairman, I was a member of the committee that considered the bill and a week ago last Wednesday I had the honour to preside as chairman. Certainly the government members showed a distinct interest in the various sections of the measure. One can understand that possibly they did not take as long as some of the opposition members to understand the explanations made by the officials of the department and the harbours board, but that is no fault of the government members. I think it is simply fallacious for the hon. member to say that the government members showed no interest.
I have never heard such nonsense since I have been in the house.


Mr. Gour (Russell):: Cheap politics.


James Allen (Jim) Byrne: Liberal members have confidence in the officials and in the Minister of Transport. They know that he would not introduce a bill that would be as restrictive


to shipping as was indicated by the hon. member for Saint John-Albert and the hon. member for Vancouver-Quadra. In my opinion that is simply going too far. As I said, I was a member of the committee and I heard the questions asked. In particular the late Mr. Conacher asked a considerable number of questions and so did others. I think it is going a little too far to say that these members had no interest in the bill because they did not object and vote against it. In my opinion the hon. member for Saint John-Albert is being presumptuous.


Mr. Hahn:: The hon. member for Kootenay East, who just spoke, mentioned that it did not take them too long to understand what was taking place. We can all appreciate that there are those who have the opposite point of view, in some instances. For various reasons we cannot see completely eye to eye with all that the government proposes, or feel that every bill that is introduced is good. We do not necessarily accept it as being good. We like to investigate it a little more closely.
In so far as agents are concerned I, for one, would like a clearer definition. As I understand it, in the shipping world there are three different types of agents. We have the berthing agent, the husbanding agent and the general agent. My reason for raising the question is that I happen to be a representative of a district having a seaport, the city of New Westminster. Some will say that port is not covered by this particular act; but on page 222 of the evidence of the committee I find a question asked by the hon. member for Vancouver-Quadra. It reads as follows:


Howard Charles Green: Under this amendment they would get wide open jurisdiction as peace officers within 50 miles of harbour property, in every direction. Is that right?


J. G. Léopold Langlois: That is right.
I understand this provision has been amended to 25 miles, but even that puts New Westminster within the area. Naturally, I am interested enough in wanting this shipping from the Vancouver area, if it is possible to get it, and to see that the 25-mile limit is cut down to 10 or 5 miles so that New Westminster harbour will not come within their jurisdiction.
It is necessary, I believe, for every one of us to check some of these things a little more closely. It is only natural for the members who are on the government side to support their minister. If the Conservatives formed the government and the hon. member for Vancouver-Quadra were in the minister's position, he would expect support from his members. I can, therefore, excuse the

Liberals for going out of their way to do so in a wholehearted manner today. Unfortunately, I was not able to be present at every meeting of the committee this time, but in checking the evidence I did not notice that any one of the amendments adopted had been proposed in the first instance by any member of the committee.
I should like a clarification of this particular question, as to whether or not New Westminster harbour comes within the 25 mile limit established as the jurisdiction of the board under the act.


J. G. Léopold Langlois: There is very little that I can add, Mr. Chairman, to what has already been said by the minister this morning in outlining the reasons the proposed amendment should be supported. As I have said on many occasions in the committee, the explanatory notes to this bill clearly set out the reason for the new definition of owner. I shall quote again from those explanatory notes:
The prime purpose is to enable the board charges made under other provisions of the act to be imposed directly upon carriers and bailees of goods as contrasted with the actual owners thereof; in many instances the carriers or the bailees are the only persons with whom the board has any direct dealings.
A secondary purpose is also given in the explanatory notes. This secondary purpose is to eliminate the necessity for use elsewhere in the act of cumbersome phrases such as "agents, owners, masters or consignees, etc." of goods or vessels.
This morning the minister quoted the wording of the present section 16 of the act. To this I want to add, as I have already said on a number of occasions in the committee, that the wording that was quoted by the minister is exactly the same as we have had in our harbours statutes since 1913. I shall read a quotation that I gave in the committee from the Vancouver Harbour Commissioners Act, chapter 54, statutes of 1913, section 29 (2):
In a case coming within paragraph (c) or (d) of subsection 1 of this section-
Such paragraphs correspond exactly to paragraphs (c) and (d) of the existing section 16 (1) of the National Harbours Board Act. -the vessel may be seized and detained until the injury so done has been repaired by the master or crew or by other persons interested, and until all damages thereby directly or indirectly caused to the corporation, (including the expense of following, searching for, discovering and seizing such vessel) have been paid to the corporation; and for the amount of all such injury, damages, expenses and costs, the corporation shall have a preferential lien upon the vessel and upon the proceeds thereof until security has been given to pay the amount
National Harbours Board Act
of such damages, whether direct or indirect, and of such injury and costs as may be awarded in any suit resulting therefrom,-
And this is the important part of the section.
-and the owner, charterer, master or agent of such vessel shall also be liable to the corporation for all such injury and damages.
This language was repeated exactly in the National Harbours Board Act of 1936, and this wording still exists in the act now. The provision that I have just quoted from the Vancouver Harbour Commissioners Act of 1913, was repeated in the Saint John Harbour Commissioners Act, chapter 70 of the statutes of 1919, section 22 (2). The same wording was repeated in 1926 in the Chicoutimi Harbour Commissioners Act, chapter 6, section 17 (2), and again in the Halifax Harbour Commissioners Act, 1927, chapter 58, section 22 (2). I believe this makes it clear we are not seeking any additional powers by the introduction of this definition of owner in clause 1 of the bill.
I want to make a few remarks with regard-


An hon. Member:: One o'clock.
At one o'clock the committee took recess.
The committee resumed at 2.30 p.m.


J. G. Léopold Langlois: Mr. Chairman, when we rose at one o'clock I was explaining that no new power is being sought by the definition of "owner" in clause 1 of the bill. Let me say, speaking to the amendment of the hon. member for Vancouver-Quadra, that if we take the word "agent" from the proposed definition of "owner", we will in fact be taking something away from the board. Because, as I said before, this power permitting the board to hold the agent responsible for the damages caused by the owner of the vessel existed since 1913 in our harbours legislation. I referred to some of the harbour commission acts passed since 1913, and pointed out that the same wording was repeated in 1936, when the National Harbours Board Act was passed by the House of Commons.
I would remind the hon. member for Vancouver-Quadra that when that act was passed in 1936 he was a member of the house; yet I have seen nothing in Hansard indicating that either he or any member of his party then opposed the present wording as it appears in section 16 of the act. I might add that the wording of that section
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National Harbours Board Act was drafted before 1936, by a government which was of the same political faith as that of the hon. member.
If he refers to what was said in 1936 by the then leader of the opposition, he will find that the leader of the opposition of that day approved without any restriction whatsoever the proposed legislation creating the national harbours board as we know it today.
I do not see how any hon. member can argue that we want to make responsible for any action of the owner such agents as contractors and suppliers of fuel, or goods or any other kind of supplies that enter into the operation of a ship. It has been clearly demonstrated before the committee that the word "agent" means the legal agent of the ship, and not a contractor, a supplier of fuel or a supplier of food for that ship. I would remind the hon. member that the word "agent" is used in section 16 of the act, and has the same meaning in the proposed legislation as it has in that section.
May I refer also to the argument advanced this morning, that if this power is retained the port of Vancouver, and some other ports in Canada, might lose business. I would again point out that this power has been in existence since 1913, and was re-enacted in 1936 when the National Harbours Board Act was passed. It has not been shown that there has been any loss of business because of this section. If my hon. friend is afraid of competition from United States western ports such as Seattle and San Francisco I would remind him of the charges in respect of ships operating to and from those ports. An examination of those charges shows that, for a ship of 7,000 gross tons, the handling cost per ton of cargo at Vancouver is approximately $7.50 whereas at Seattle it is $10.24 and at San Francisco it is $9.36. So that this shows the hon. member need not fear competition from other west coast United States ports.
I should like now to deal briefly with what was said by the hon. member for Prince Albert and the hon. member for New Westminster regarding national harbours board constables who, from now on, if this legislation is passed, will become peace officers. As I explained in the debate on second reading, we wish to give to national harbours board constables a status equivalent to and comparable with that given railway constables under the Railway Act. And here I do not agree with the hon. member for Prince Albert when he says that railway constables are appointed by magistrates. They are not in fact appointed by magistrates; they are


merely sworn in by magistrates. I think the hon. member used the expression "appointed" by magistrates.


John George Diefenbaker: I would refer the parliamentary assistant to section 456 of the Railway Act.


J. G. Léopold Langlois: That deals with the swearing in of constables.


John George Diefenbaker: May I suggest that the
parliamentary assistant is not correct in his view of section 456 which reads:
(1)	A superior or county court judge, two justices of the peace, or a stipendiary or police magistrate, in any part of Canada, a clerk of the peace, clerk of the crown or judge of the sessions of the peace in the province of Quebec, within whose jurisdiction the railway runs, may, on the application of the company or any clerk or agent of the company, appoint any persons who are British subjects to act as constables on and along such railway.
I just mentioned that because I thought the parliamentary assistant had not read the section.


J. G. Léopold Langlois: My hon. friend must know that the actual appointment is made by the railway company. This morning in his remarks he mentioned that the Railway Act- gave power to the board of transport commissioners to appoint constables, but that power is not given to the board; it is given to the railway companies.
I wish to remind the committee that we had a similar provision in the act respecting the harbour and river police of the province of Quebec. Section 3 of that act, which was repealed in 1936, reads:
The governor in council may, from time to time, establish, at the ports of Montreal and Quebec respectively, a harbour and river police force, and appoint one or more superintendents of such force, with jurisdiction over such part or parts of the province of Quebec as are defined by the governor in council.


John George Diefenbaker: Who makes the appointment?


J. G. Léopold Langlois: The governor in
council.


John George Diefenbaker: In the present bill it is
not to be made by the governor in council; it is by the board.


J. G. Léopold Langlois: In answer to the
last point made by the hon. member for Prince Albert I quote section 4 of the same act respecting the harbour and river police of the province of Quebec, which reads:
The minister may, from time to time, appoint harbour and river police constables under and within the jurisdiction of such superintendents of harbour and river police.

Subsection 2 of the same section reads:
Such constables shall be subject to all lawful directions of the superintendents, and shall have and be charged with all the powers, rights and responsibilities of police constables.
The hon. member for Prince Albert this morning objected to the jurisdiction being given to these harbour board constables. I wish to remind him that under present circumstances our constables are sworn in either as provincial constables or as municipal constables, and they have, as either provincial police constables or municipal police constables, wider powers than those they are to be given in the proposed legislation. In saying that and meeting the point made this morning by the hon. member for New Westminster, I pointed out that under this proposed legislation our constables will be allowed to act only if the offence or the act is related to the national harbours board's property, and it ends there. You can readily see, Mr. Chairman, that their powers under the new bill will be much more restricted than the powers that they now have when they are sworn in as provincial police constables or as municipal police constables.
As far as the territorial jurisdiction is concerned, the hon. member for Vancouver-Quadra will recall, I am sure, that in the committee I mentioned on many occasions I had an open mind on the subject. I said however I wanted to warn the committee that on the one hand we were giving powers to those constables. I warned the committee to be careful not to take away by limiting their jurisdiction what we were giving them by making them peace officers. Here again I wish to remind hon. members of this committee that the offence must be committed in connection with some of the national harbours board's property. I wish also to make a correction of a statement which was attributed to me this morning by the hon. member for Vancouver-Quadra when he said that, before the committee, I had stated that we had had no trouble with the municipal authorities in Vancouver. Surely, I said that. I said it in answer to a question after I had stated that there was some reluctance on the part of some municipal authorities to the swearing in of harbour constables as constables of their municipalities. The hon. member for Vancouver-Quadra then asked me:	"Have you had
that trouble in Vancouver?" and I said: "No." But I said nothing which could be interpreted as meaning that there was no inconvenience in being required to have our constables sworn in as municipal police, either in Vancouver or anywhere else. I recall definitely repeating what I said in the house
National Harbours Board Act on second reading when I pointed out the difficulties, for example, in Montreal, and I said that in Montreal the national harbours board's property extended over a distance of some 25 miles and covered four different municipalities. I also recall having given the example of the harbour at Vancouver and having said that the board's property extended over three municipal districts, namely, that of Burnaby, that of Vancouver city and that of North Vancouver. I think those examples in themselves are sufficient to indicate to the committee that there are some inconveniences there, and they should be sufficient reason for supporting what is contemplated by the proposed bill, that is to make our constables peace officers who will no longer be required to be sworn in in those various municipalities.


John George Diefenbaker: The parliamentary assistant has, I submit, not answered the objection that I raised to this unusual section, namely, section 4A, which would give an administrative board the power to appoint police officers.


William Alfred Robinson: Order. I will not stop the hon. member for Prince Albert. I was just wondering, if he intends to devote himself particularly to clause 3, whether we might not make better progress if we deferred the discussion until that clause is reached. I have already allowed a certain amount of discussion on that subject, and I would not stop him, and whatever would suit the convenience of the committee would be satisfactory to me.


John George Diefenbaker: I believe the House of Commons today establishes a record for the longest session that has ever taken place, and I would be the last to add to that record; but the agreement was that there should be a general discussion at the beginning, which after all will clarify the issues. I do ask you, sir, to give consideration to a reply to the matters raised by the parliamentary assistant. He said that-


Harold Edward Winch: Would the hon. member
address the microphones; we all want to hear him.


John George Diefenbaker: He said that there were two examples. One was of appointment by the governor general, and that, of course, is not applicable at all to the objection I raised that the administrative boards should not have the power to appoint enforcement officers. The second example was that the minister, under an act now repealed, did have the power to appoint temporary constables.
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National Harbours Board Act


J. G. Léopold Langlois: I beg the hon. member's pardon, but they are not temporary constables.


John George Diefenbaker: The minister had the
power to appoint special constables. Neither of those examples answers the contention I advanced this morning that this is the first time in the history of the Canadian parliament that parliament has been asked to give power to an administrative board to appoint enforcement officers. This is a step that I view with fear and alarm. The administrative officials on a board should not have the power to appoint enforcement officers, and the reason my hon. friend has been able to give no example of this having been done before is this:	it would mean the opening
of the door to political considerations in the enforcement of the law. That is the danger.
If a board has the power to appoint police officers it has the power to dismiss them, and police officers should have the assurance that whatever they may do, even though it may not be politically appropriate, is done without fear of dismissal. That is why police officers throughout the years have been kept free from the control of any administrative board.
My hon. friend, referring to the Railway Act, said that all that the judges and other named officials had was the power to swear in the police officers. That is not correct. I do not want to reread the section, but section 456 says in part:
A superior or county court judge,-
And other officials named herein.
-may, on the application of the company or any clerk or agent of the company, appoint any persons who are British subjects to act as constables on and along such railway.
Then subsection 2 states:
Every person so appointed shall take an oath or make a solemn declaration, which may be administered by any judge or other official, authorized to make the appointment or to administer oaths-
And then follows the oath. Then section 457 says:
(1) Every constable so appointed, who has taken such oath or made such declaration, may act as a constable for the preservation of the peace, and for the security of persons and property against unlawful acts.
(a) on such railway, and on any of the works belonging thereto;
And also:
(c) in all places not more than a quarter of a mile distant from such railway.
Then it goes on to say, under section 459:
(1) A superior or county court judge or a stipendiary or police magistrate, in any part of Canada, or a judge of the sessions of the peace in the province of Quebec, may dismiss any such constable who is acting within his jurisdiction.


(2)	The company, or any clerk or agent of the company, may also dismiss any such constable who is acting on such railway.
(3)	Upon every such dismissal, all powers protection and privileges, which belonged to any such person by reason of such appointment, wholly cease.
I have not heard any explanation from the parliamentary assistant as to why parliament should advance the extra step and empower a board to appoint its own police officers. It has not been done before. A short-cut may appear advantageous temporarily; it may afford the board the opportunity to appoint a few individuals who otherwise would not be appointed; but in the interest of the preservation of the rights of the individual, and the maintenance of the inviolability of the police officers appointed, it is a dangerous course to follow.
Why not follow the procedure set out in the Railway Act? It is not a difficult one. All that has to be done is for the representative of the board to go before a superior or county court judge in, we will say, for example, Vancouver and ask for the appointment of constables. That will ensure that there will be no suggestion that the board in choosing its enforcement officers would make that person answerable for his failure to carry out the orders of the board, that we may preserve the security and, I might almost say, the sacred function of police officers. Otherwise the independence that we expect in police officers will be, either intentionally or unintentionally, subject to the control of the board appointing them. If the appointment is made by the governor general in council, or by judges or lesser judicial officers, well and good. Why depart from what is regarded as one of the most sacred principles we have in our jurisprudence, namely, that a police officer shall not be under the control of the body whose work he enforces. In that way we will be assured that not only must justice be done but that what is being done will appear to be just?
It is just as important that, in what is done, right and justice shall prevail, as it is that one shall have reason to point to the possibility or likelihood of any bias interfering with the performance of the duties resting on police officers.
To empower a board to appoint its police officers is a tremendous power, and no explanation has been given as to why there should be such a pronounced departure from the course that for the past 250 years, under British jurisprudence and in Canada since the foundation of our country, has been accepted as the proper one.

The section in its present form opens the door to a condition under which police officers, in carrying out their duties and responsibilities, could be dependent on the whim of the board which appointed them. The right to appoint implies the right to dismiss. All of us have heard of influences which have been brought to bear on police officers. It is to their honour that they have kept themselves above such influences.
Why then should police officers, charged with so important a duty as the maintenance of justice and law in our harbours, find themselves in a position where those that appoint them have the right to dismiss them? I submit with utmost seriousness that we should continue the system introduced under the Railway Act, which has not been proven to be slow in operation. It has proven to be effective. Peace officers should continue to be appointed by the public authority charged with the administration of justice rather than by administrative boards.


Lionel Chevrier: Mr. Chairman, this morning, when I made some comments in connection with the statement made by the hon. member for Vancouver-Quadra, I indicated that I did not think there was any vital change with respect to this act, save in one respect, namely the matter which my hon. friend has raised. I should like to consider the statement he has made with respect to clause 3 and to consider particularly the citation in respect of the Railway Act. I wonder whether it would not meet with the wishes of the committee if we could proceed subject to clause 3 standing. If we could proceed with the discussion of the bill and if we are successful in passing all clauses save that one, perhaps from now until then it will be possible to give some consideration to that clause; and if not, then tomorrow I am sure we shall have something to report which might meet the wishes of the committee. I am sure it is not the intention of the national harbours board or of the government to take powers which are unusual, if the committee feels that they are. With that understanding-


Howard Charles Green: Might I point out to the minister that there is also a serious objection to clause 3 in that the jurisdiction is given over an area of 25 miles in every direction from the borders of the harbours board property. We have a most decided objection to that clause.


Lionel Chevrier: May I say this. I think the whole clause should stand. We will look at the whole clause and not at only a portion of it-
National Harbours Board Act


Howard Charles Green: We would want to be sure that the minister is also considering that feature of clause 3.


Lionel Chevrier: The answer is yes.


William Alfred Robinson: Is that procedure agreeable to the committee?


Some hon. Members:: Agreed.


William Alfred Robinson: Is the committee ready for the question on clause 1?


Howard Charles Green: Mr. Chairman, this morning I moved that the definition of "owner" should be amended to strike out "agent". We do not believe that the vessel's agent should be subjected to the same restrictions and penalties as is the vessel's owner. We are not the only ones to take that stand. Before the standing committee on railways, canals and telegraph lines counsel for the Shipping Federation of Canada and for the Vancouver chamber of shipping protested strongly against the provision of this bill which makes the agent stand in the shoes of the owner in so far as liability is concerned. Since the committee finished its sittings I have had a wire from the Vancouver chamber of shipping in which they state as follows:
Vancouver Chamber of Shipping vigorously protests the wording of section two one EA particularly in regard to the inclusion of agent in the definition of owner as defined here and elsewhere.
If this bill is carried in its present form throughout the new sections and throughout what remains of the former bill the word "owner" will include "agent". There is no justification whatever in law or in equity for an agent of these vessels to be liable for damage done to harbours board property by the vessel. The agent has nothing whatever to do with the operation of the vessel. Yet this bill will make it possible for the government to collect the whole of such damage from the agent and to let the ship and the ship owner go free.
Both the minister and the parliamentary assistant have tried to answer my submission with the statement that the bill does not make any change whatever in the law. I propose just to review what the law has been, what it is at the present time, and what it will be if this new bill becomes law. In the first place, let us go to the powers given to harbour commissions which do not come under the National Harbours Board Act. I am beginning to think that a harbour that does not come under the National Harbours Board Act is lucky. I have here the statute setting up the New Westminster harbour commission. It is chapter 158 of the statutes of 1913. I would point out that New Westminster is a port with which the port of

National Harbours Board Act Vancouver is in direct competition. Here is the only power given to the New Westminster harbour commission. It is contained in section 24, which reads as follows:
The corporation may, in the following eases, seize and detain any vessel at any place within the limits of the province of British Columbia:-
(a)	whenever any sum is due in respect of a vessel for rates or for commutation of rates, and is unpaid;
(b)	whenever the master, owner or person in charge of the vessel has infringed any provision of this act, or any by-law in force under this act, and has thereby rendered himself liable to a penalty.
In other words, that statute gives to the New Westminster harbour commission power to seize and detain a vessel, but there is no power to make a claim against the agent for damage that is done.
Then we come to the National Harbours Board Act as it stands at the present time. The section I am going to quote was the same as that in the act which set up the Vancouver harbour commission. The section in the act is section 16, which reads in this way:
The board-
That is the national harbours board.
-may, in the manner hereinafter set forth, seize and detain any vessel within the limits of the territorial waters of Canada in the following cases:-
Mind you, Mr. Chairman, this power of seizing and detaining a vessel is just about the most drastic power that can be exercised under our law.
- (a) whenever any sum is due in respect of the vessel for rates or tolls or for commuted rates or tolls and is unpaid;
(b) whenever the master, owner or person in charge of the vessel has violated or has failed to observe any provision of this act, or any by-law in force under this act, and has rendered himself liable to any penalty;-
That is the second ground on which the harbours board can seize.
- (c) whenever any injury has been done by the vessel or by the fault or neglect of the crew, while acting as the crew or under order of their superior officers, to any works or property under the administration, management and control of the board; or
(d) whenever any obstruction whatever has been offered or made to the operations of the board by any vessel or by the fault or neglect of the crew, while acting as the crew or under order of their superior officers.
We have those four provisions under which a vessel can be seized or detained. Then subsection 2 goes on to provide as follows:
In a case coming within paragraphs (c) or (d) of subsection (1) ...
That is, in only two of those four cases does subsection 2 apply, Then subsection 2 goes on to give a lien, to provide for selling and

so on. Then at the end of that subsection we find the portion which both the minister and the parliamentary assistant quoted this morning:
. . . the board has a preferential lien upon the vessel and upon the proceeds thereof until payment has been made or adequate security has been given for such damages, whether direct or indirect, and for the amount of all such injury, damages, expenses and costs as may be awarded in any suit resulting therefrom,-
Then we find these words:
-and the owner, charterer, master or agent of such vessel is also liable to the board for all such injury, damages, expenses and costs.
That provision only applies in the event of seizure under two of the four provisions for seizure. Furthermore, it obviously means that the board must first seize the ship, and that of course was the argument made by counsel for the Shipping Federation of Canada. In actual practice that is what has been done. I understand there has never been a case in which a claim has been brought against an agent. Why would there be? The board has the right to seize the vessel. Not only does it have the right to seize the vessel, but if we turn to section 15 of the National Harbours Board Act we find a provision that the customs official cannot let the vessel go out of the harbour until she has received a clearance from the national harbours board. Subsection 3 of that section reads as follows:
No officer of customs shall grant a clearance to any vessel to leave,
(a)	any harbour under the jurisdiction of the board until the master thereof produces to such officer of customs a certificate from an authorized officer of the board certifying that the rates or tolls on such vessel have been paid or that none are payable thereon or that in so far as the board is concerned a clearance may be granted-
In other words, no ship can leave the port of Vancouver until she produces to the customs officials a clearance from the national harbours board. Therefore it is impossible for a ship to get away if the national harbours board is not asleep. The subsection continues:
(b)	any other harbour or port in Canada-
That means any harbour that is not one of the seven national harbours.
-if he has been notified by the board to withhold such clearance until further notified by the board that in so far as the board is concerned a clearance may be granted.
It is no wonder that the provision about suing the agent has been a dead letter and that no action has ever been taken under it. No action should be taken either because the agent is in no way responsible for the operation of the vessel. Then we come to the bill. The minister and his parliamentary assistant both say that the new bill does not give the

board any wider powers, that it will have the same powers as it has had all along. If we turn to clause 8 of the bill, which contains a complete new section 16 for the National Harbours Board Act, we find in subsection 7 the following overriding provision:
Whether or not all or any of the rights of the board under this section are exercised by the board, the board may, in any case described in subsection (D -
I point out that there is an extension in itself. Subsection 1 contains six different provisions under which the board can seize a vessel, two of which are brand new and were not in the act before. But now the board is taking the power to claim against the agent in respect of the first two provisions, something they cannot do under the act as it stands at the present time. I continue:
-proceed against the owner of the vessel in any port of competent jurisdiction for the amount owing to the board, or for the balance thereof in the event of any sale contemplated by subsection (3), and may also exercise against the owner of the vessel any other right or remedy available to the board at law.
In that new subsection there is no suggestion at all that first recourse shall be had to the vessel. The board is taking the power to sue the agent right at the start. The board can let the vessel go out of the harbour and then sue the agent for any damage that is done by the vessel. It is no wonder that the shipping agents of Canada are upset about the provision. They cannot get insurance to cover damages of that kind, they cannot in fairness be asked to demand a bond from their shipping company, and in effect they are being put in a corner and made subject to a liability for which an agent should never be made liable..
I do repeat that the legislation should be restricted to the owner, the charterer by demise who has taken over the whole vessel, and the master. They are the people who can properly be made responsible for damage done by the vessel, but there is no right whatever to make the agent liable for that damage. I have here the brief which was submitted and I want to read the paragraph which points out that these agents are not agents in the accepted sense in ordinary business on shore. It reads as follows:
Section 1, subsection 1(e) (ea) which defines the owner as including the agent and charterer does not otherwise define what is meant by the words "agent" or "charterer" except as to the qualification that it is intended to mean the agent or charterer of the vessel. It is interesting to note as regards the agent, for instance, that the words used are not "the agent of the owner", but "the agent of the vessel"; therefore it is quite clear that reference is had to what is known in common parlance as "vessels' agents" or as "husbanding agents".
National Harbours Board Act Vessels' agents or husbanding agents are not in any sense of the word the representatives of the owners of the vessel. They are simply co-ordinators of services and will, for a modest fee, provide certain services to vessels coming into a port to load and discharge cargo. They will act as agents de liaison between the master of the vessel and the stevedores who will load and discharge the vessel, the ship chandlers who will replenish her stores, the coal or oil merchant who will fill her bunkers, the shipping master who will sign off or sign on her crew, the customs officer who will grant a certificate of clearance, the tug owner who will provide towing services in and out of berth, the pilotage authority who will provide the pilot to take the vessel out to sea.
Agents who do work of that kind should not be made liable for damage by the vessel to the harbours board property. Yet with the new subsection 7 of section 16 these agents will be primarily liable for all such damage. It is to remedy that difficulty that I have moved that the word "agent" be deleted from the definition of "owner". The harbours board will still have the complete right to seize and detain the vessel and to prevent the customs people giving clearance. It still has complete rights against the owner, the charterer by demise and the master; but why drag the poor agent into this liability?


Harold Edward Winch: I should like to say a few words on this clause. Hon. members know that I am not a lawyer, but after listening to the discussion on clause 1, which I think started about 11.30 this morning, I have come to a conclusion which I should like to submit indirectly, shall I say, as a question to the minister and his parliamentary assistant. It is quite obvious that learned counsel who are members of the house do not agree on the meaning, interpretation or potentialities of clause 1 which contains the definition of "owner". It was quite obvious before the standing committee which examined the bill that there was no common ground between learned counsel of the harbours board and learned counsel representing the ship operators of Canada. There was no common ground between learned counsel before the committee and is not now on the floor of the house with respect to the interpretation, meaning or potentialities. I cannot remember counsel for the shipping federation raising any objections in the standing committee to the act as it has stood since 1936 with respect to the definition of "owner". His objection was to the dangers that his clients saw in the amending section. I cannot remember any objection being raised to the act as it has operated since 1936 by the official representative of the federation before the committee.
This afternoon we have heard the parliamentary assistant say that there is absolutely

National Harbours Board Act no extension of power in this amendment, that the harbours board has always had this power since the inception of the act. As I said, I am not a lawyer. I am just trying to apply a little common sense. If we cannot get the lawyers to agree on the interpretation or potential meaning of the provision, if there were no objections raised before the committee of this house by the representative of the shipping federation concerning the existing act, and if we have a statement by the parliamentary assistant that there is no extension of power, then why do we not let this subsection go and leave the act as it was, since it seems to have satisfied everybody. Then we could get on with the following clauses of the bill.


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


Harold Edward Winch: May I ask that consideration be given my suggestion?


Lionel Chevrier: I shall be glad to give consideration and reply to my hon. friend immediately. When the government introduces legislation, it is responsible for that legislation. When there is disagreement in the house, in a committee or elsewhere, the government has a legal adviser. In this instance, the legal adviser happens to be the Department of Justice. The Department of Justice has looked at this clause and has approved of it. Not only has the department examined and approved of it, but the legislative committee has approved of it.
There would be no purpose in adopting the suggestion made by my hon. friend, because then we would never make any headway with legislation. We have to take responsibility for legislation we introduce. We may be mistaken, but the advice the Department of Justice has given is that this clause is one which does not extend the powers beyond the original interpretation. I do not want to add more than that-


Harold Edward Winch: Then why insist on it?


Lionel Chevrier: -to the explanation the parliamentary assistant has given. We believe it clarifies the act, and we believe it makes for better phraseology in the act.


Harold Edward Winch: It is the greatest clarification by confusion that I have heard of in a long time.


Lionel Chevrier: There are lots of things my hon. friend has not heard of.


Mr. Hosking:: I had no intention of taking part in this debate. This bill has been introduced by the government because of changing conditions. Everyone knows there is more shipping in our harbours today,


owned by foreign capital or controlled by a foreign country, than there was previously. In order to bring our laws up to date, certain changes have to be made, and the government has introduced a measure to make those changes. Everyone who was a member of the committee clearly understood that, and being one of the members of that committee I had no intention of speaking about it until the member for Saint John-Albert suggested that the government members on the committee were not interested in complaining about the bill.
Naturally, we are not interested in complaining about the bill. Why should we be? Our Minister of Transport has introduced a bill to protect the taxpayers' money, and there was no one in the opposition who suggested that by this bill the board could collect money that did not belong to the taxpayers of this country. If any owner, agent or master was in control of a ship that damaged the harbour, certainly someone should pay. We as members supporting the government are anxious to see that the taxpayers' money, the money of the people whom we represent and the people who charged us with the responsibility of taking care of their assets, should be protected. Naturally, we agree. It is for that reason we have had very little to say, and certainly nothing to say that would be uncomplimentary to the bill when it was in committee.
When a new member stands up and suggests-I would not use the words suggested to me, in his ignorance-that we were uninterested, I would disagree. By our silence we have agreed with the policy adopted by the government to take care of the money the taxpayers have put up to build these harbours. We are here to see that the persons who cause damage to these installations make restitution. When we hear the hon. member for Vancouver-Quadra suggest that if a company does not pay the charges on a cargo for one trip, and comes back into the harbour again, the government should not be in a position to collect the charges at that time-


Howard Charles Green: On a point of privilege, Mr. Chairman, I was not talking about vessels then, I was talking about goods.


Henry Alfred Hosking: I am making the same point with regard to goods. If the company has not paid the charges for handling those goods, there is only one place the responsibility rests and that is with the company that had their goods handled. If at any time the ship of that company enters the harbour, they should be made to pay so the taxpayers of this country do not have to stand the loss. I never heard of anything so ridiculous as to

suggest that a company, doing business over our harbours, which escapes out of the harbour without paying its bills, should be allowed to come back into the harbour again and transact business, and that the harbours board should not have the right then to collect the just dues for the services rendered. It is the same principle as that mentioned by the hon. member for Saint John-Albert, that the taxpayers of this country have no right to collect what belongs to them. It is for these reasons I have entered this debate.


Thomas Miller Bell: I should like to say that my whole contention is not directed towards restricting the harbours board in their efficient administration. The effect of it is simply to say that we will not have ships in our harbours to worry about if this legislation goes through in its present form.


Henry Alfred Hosking: Canada is a growing country and we would still have plenty of ships here; do not worry about that.


Howard Charles Green: There is one point raised by the hon. member for Wellington South. He said that these changes were to meet new conditions. He is the only one who has that idea. Certainly, that idea was not put forward by anybody representing the harbours board or the department. There are no changed conditions to be met by the bill. There were foreign ships in our ports before the war. In fact, there was nothing else. We did not have any Canadian merchant ships left, and we are not going to have any left in another few weeks or so. The situation is just as it was before the war.
Would the minister give consideration to changing the word "agent" in clause 1 where it appears in paragraph (ea) to something like, "the legal representative of the owner." I do not think anybody would quarrel with a definition of that kind. The difficulty with the use of the word "agent" is that it means the bill picks up all these shipping agents. It would be better if the minister could get away from that and use the term "legal representative of the owner." Then, you would no longer catch the man who is the agent of the vessel, and that is the unfair feature of this provision. The man who is just the agent may be made liable for damages running into hundreds of thousands of dollars.


Lionel Chevrier: In answer to what my friend says, I could not accept that suggestion because my officers tell me it would lead to a worse situation.
Amendment negatived: Yeas, 42; nays, 69.


William Alfred Robinson: I declare the amendment lost. Shall clause 1 carry?
National Harbours Board Act


Howard Charles Green: There was an amendment moved to clause 1 in committee that of adding the words "by demise" after the word "charterer". I do not know whether the committee had the authority to make that amendment, without having it moved also in the house.


William Alfred Robinson: Shall clause 1 as amended carry?


Howard Charles Green: I would like to have an answer to that.


Harold Edward Winch: I am not certain of the procedure. We have only the existing bill before us; we do not have the bill as amended by the committee. What sections are we passing? Are we passing the sections in the bill, or the sections as amended in the committee?


J. G. Léopold Langlois: I agree that the committee approved of adding the words "by demise" after the word "charterer". We were of the opinion that we were not adding anything by saying "charterer by demise" instead of "charterer." I repeat that we are prepared to accept that amendment.


Harold Edward Winch: May I ask you a question, Mr. Chairman: Are we passing the sections in the bill now before us, as introduced from the Senate, or are we passing the sections as reported and amended by the committee?


William Alfred Robinson: I have before me the bill as reported from the committee, and containing the amendments. For instance, in subparagraph (ea) I have before me the amending words "by demise" after the word "charterer"; so that we are now dealing with the clause as amended by the committee. Shall clause 1 carry as amended?
Clause as amended agreed to.
Clause 2 agreed to.


William Alfred Robinson: By leave, shall clause 3 stand?
Clause 3 stands.
Clauses 4 and 5 agreed to.
On clause 6-Use of harbours and facilities.


Howard Charles Green: May we have an explanation as to why it should be necessary to include in lines 30 to 34 the provision that the board can contract itself out of civil liability? Why should not the board be responsible for civil liability, just as any other firm would be?


J. G. Léopold Langlois: This was explained when I spoke on second reading the other day, and it was also explained in committee. We are not adding anything through this amendment, we are just clarifying the existing position. I explained in the debate on second reading and in committee that the
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National Harbours Board Act bylaws are merely the reflection of the conditions of the national harbours board's contracts with the users of its property. As in the case of a private owner, those contracts may have conditions dealing with the liability of the owner, and restricting that liability. We claim we have had this right ever since the act was passed in 1936. This proposed amendment is only to clarify the situation. As I said, it adds no power to the board.


[Stage Direction]
Clause agreed to.
Clause 7 agreed to.
On clause 8-Seizure of vessels.
Howard Charles Green: Will the minister or the parliamentary assistant explain why the words "in the opinion of the board" have been added? This is the section which enables the board to seize vessels. As I have already pointed out today, that is a very drastic right. Hitherto the act contained no such words. The board was given power to seize only if certain conditions existed. Now the board is asking to be put in a position where, if in its opinion certain conditions exist, it can seize.
I see no reason why a governmental body should have that privilege. Surely they should have to stand behind their own actions. If a certain thing has been done, then let them seize; but what earthly right have they first of all to form an opinion that someone has done something and, on the basis of such opinion, to seize a vessel which may mean a loss of thousands of dollars. It seems to be an example of bureaucracy running wild. I can see no reason at all why the words "in the opinion of the board" should be included in the section.


Lionel Chevrier: I understand that from the legal position it makes no difference whether the words "in the opinion of the board" are there or not. So far as my officers are concerned, they do not insist. If it will please hon. members, I would have no objection to taking those words out, so that we may proceed with the bill. My colleague will move that the words "in the opinion of the board" as they appear in line 26 of section 16 be stricken out. Then perhaps we can get on with the section.


Mr. Abbott:: I shall be delighted so to move, Mr. Chairman.


[Stage Direction]
Amendment agreed to.
Howard Charles Green: Now, Mr. Chairman, there is another objection to this clause, paragraph (d). In the committee changes were made to (b) and (c) which had the effect of taking away the direct responsibility of the owner and placing it on the vessel itself. But here


in (d) we still have the word "owner" which, of course, includes the agent. Paragraph (d) is as follows:
The board may, as provided in section 18, seize any vessel within the territorial waters of Canada in any case where . . .
(d) the owner of the vessel has in respect of the vessel committed an offence under this act or the by-laws, punishable upon summary conviction by a penalty payable under section 21 to the board.
The fact about that paragraph which should be noted is that it gives the board the right to seize a vessel before there has been any proof of breach of the bylaws. It can be seized before there has been any proof that the bylaws have been broken.
The maximum fine for breaking a bylaw is $500, so that the board is trying to get in the position where it can seize and detain a vessel although there may or may not be a breach of the bylaw for which the total penalty would be only $500. Because the agent is covered by the definition of owner, the board can also seize the vessel where it is thought that the agent has broken a bylaw, let alone the owner having broken a bylaw or the vessel having broken it. There is a provision in paragraph (f) for seizure where there has been a conviction for breaking a bylaw. That surely should be enough if a bylaw has actually been broken and it has been proved to be broken. Then, I suppose one could not quarrel so much with the power of seizure. Surely there should not be the power of seizure of a vessel where there may or may not have been a breach of a bylaw and the maximum penalty is only $500.
I move:
That clause 8 of Bill No. 421 be amended by deleting clause 16 (1) (d).


Harold Edward Winch: Before the motion is put, would you read the amendment to that clause, Mr. Chairman, which was made in committee? I think a change was made to meet that objection.


Lionel Chevrier: I understand that changes were made in paragraphs (b) and (c). The parliamentary assistant tells me that he was not prepared to accept the changes in committee for reasons which he gave there.


Harold Edward Winch: Mr. Chairman, may I ask you, for information, to read from the amended bill, which you have and we have not, subparagraph (d), as you have it?


Edward Turney Applewhaite: Subparagraph (d) as reported to this committee from the railways, canals and telegraph lines committee reads:
the owner of the vessel has in respect of the vessel committed an offence under this act or the bylaws, punishable upon summary conviction by a penalty payable under section 21 to the board;


Harold Edward Winch: I think I am correct in saying that the objection raised by the hon. member for Vancouver-Quadra is taken care of by the amendment made in committee. You understand, Mr. Chairman, we are under a a grave difficulty here. We have not the amended bill before us. Perhaps the hon. member for Vancouver-Quadra had forgotten that we did move and pass an amendment in committee.


Howard Charles Green: No; as a matter of fact, when I read the paragraph just now I read it as though it contained the words "in respect of the vessel." I read those words in. The bad feature is that this paragraph enables the board to seize the vessel before there has been any conviction for a breach of a bylaw. They may seize it after there has been a breach of .a bylaw and it is proved that there has been a breach under paragraph (f); and I am not quarrelling with that right: but paragraph (d) gives the right to seize the vessel before it has been proved that there has been any breach of the bylaw. In view of the fact that the maximum fine can be only $500, the board should be prepared to drop this drastic right of seizure in respect of a small thing like that. We do not want to have our ships tied up and perhaps held for days when the most that can be done to them at the finish is to fine them $500. In the meantime they have lost perhaps $50,000 or $75,000 because they have been tied up. The power to seize under those conditions might very well be dropped.


J. G. Léopold Langlois: In reply may I point out to the hon. member that this power exists now under subparagraph 1 (b) of the existing section 16. I quote the opening paragraph of section 16 (1) (b), as follows:
The board may, in the manner hereinafter set forth, seize and detain any vessel within the limits of the territorial waters of Canada in the following cases:
(b) whenever the master, owner or person in charge of the vessel has violated or has failed to observe any provision of this act, or any bylaw in force under this act, and has rendered himself liable to any penalty:


Howard Charles Green: Under the act as it stands at present there is power to seize where there has been a conviction for breaking a bylaw. I submit that the paragraph-


J. G. Léopold Langlois: Would you mind repeating that?


Howard Charles Green: -the paragraph the parliamentary assistant has just read means that the board may seize where a person has been convicted but that is specially covered by the new subparagraph (f) which was not in the old act. Now you have the two provisions. The board can seize when the man has been
National Harbours Board Act convicted for breaking a bylaw and can seize when they think he should be convicted. I do not think it is right that the vessel should be seized before there has been any conviction.


J. G. Léopold Langlois: The words I have just quoted clearly indicate that this power to seize the vessel before the conviction is obtained exists now. I shall let the wording that I have quoted speak for itself.
Amendment negatived.


[Stage Direction]
Clause agreed to.
On clause 9-Board to have a general lien.
John George Diefenbaker: Subclause 1 (1) reads:
The board has a general lien In preference to all other rights, interests, claims and demands whatsoever upon all goods in its possession for the payment of any debt owing to the board by the person in whom title to such goods is vested, whether or not the debt was incurred in respect of those goods.
I am just asking for information. I read the section over and I wondered what the situation would be under the following circumstances. A shipping company has an agent, A. The tolls, and whatever the expenses of the harbours board are, are not paid. Six months later another shipping company has the same agent, and that agent has goods on the harbour premises. Are those goods of the other shipping company liable for a debt previously incurred for which there was no liability except under the lien?


J. G. Léopold Langlois: I think the answer
to that, Mr. Chairman, is contained in the wording itself. I wish to refer the committee to subparagraph (c) which reads as follows- I beg the committee's pardon; it is clause 17 (1):
The board has a general lien in preference to all other rights, interests, claims and demands whatsoever upon all goods in its possession for the payment of any debt owing to the board by the person in whom title to such goods is vested, whether or not the debt was Incurred in respect of those goods.
This answers quite fully the point made by the hon. member for Prince Albert.


John George Diefenbaker: No; I simply asked the question under the circumstances I outlined.


J. G. Léopold Langlois: The answer is no.


John George Diefenbaker: That is much simpler than using so many words.


Howard Charles Green: In line 22 of clause 9 we find the same words, "in the opinion of the board". There it is just as objectionable as it was in clause 8. I suggest these words should be deleted.
5584	HOUSE OF
Motor Vehicle Transport


Lionel Chevrier: In the other case we were adding the words "in the opinion of the hoard"; whereas in this case they are already there. There is no change.


Howard Charles Green: Where does that appear in the clause?


Lionel Chevrier: The words are not
underlined.


Howard Charles Green: Why is the board any more entitled to have this thought control in respect to goods than in respect to the vessels? If they have not the right to detain those goods then they should not be allowed to get away with it here by adding the words "in the opinion of the board". That suggestion is just as objectionable in this case as it was in the other.


Lionel Chevrier: Mr. Chairman, I was in error earlier when I made the interjection which I did. I think perhaps there is no difference between this case and the former one, and I would ask my colleague the Minister of National Revenue to move that the words "in the opinion of the board" in lines 21 and 22 of clause 9 of the bill be stricken out.


Mr. McCann:: I so move.


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
Clauses 10 to 14 inclusive agreed to.
William Alfred Robinson: Is it the desire of the committee to revert to clause 3?


John George Diefenbaker: No, Mr. Chairman. The minister agreed to give this clause consideration.


Lionel Chevrier: Mr. Chairman, my understanding was that we were to report progress on this now so that during the course of the evening we might give consideration to clause 3.


Howard Charles Green: The committee on veterans affairs is sitting this evening.


Lionel Chevrier: We will try to meet my hon. friend on anything that is reasonable.


William Alfred Robinson: Shall I report progress and ask leave to sit again later this day?


Howard Charles Green: Mr. Chairman, the minister has agreed to allow this to stand over until tomorrow.
Progress reported.
[Mr. Green.l



BANKING AND COMMERCE


Mr. Deputy Speaker:: Has the hon. member for Spadina (Mr. Croll) leave to revert to the presenting of reports?


Some hon. Members:: Agreed.
Mr. David A. Croll (Spadina) presented the ninth report of the standing committee on banking and commerce.



MOTOR VEHICLE TRANSPORT


Mr. Deputy Speaker:: Has the Minister of Transport (Mr. Chevrier) leave to revert to the introduction of bills?


Some hon. Members:: Agreed.


Lionel Chevrier: for leave to introduce Bill No. 474, respecting extra-provincial motor vehicle transport.
He said: Mr. Speaker, I would like to make an explanatory statement to the house on introducing this bill. The judgment of the privy council in the Winner case decided that the federal parliament has exclusive jurisdiction over interprovincial and international transportation undertakings. This jurisdiction extends not only to undertakings engaged in transport of goods or passengers between provinces, or between a province and another country, but also covers traffic movements within the province which are carried on as a part of an interprovincial or international undertaking.
Although such undertakings are subject to certain provincial laws of application, it appears that only parliament can legislate with respect to such matters as the granting of licences and the fixing of rates. It follows that federal legislation is required before control can be exercised by the province.
The purpose of this bill, therefore, is to enable provincial administrations to exercise control within each province over interprovincial and international highway transport undertaking. This would place the provinces in much the same position as before the decision of the courts in the Winner case. The act would come into force in a province by proclamation as and when that province is ready to operate under its terms.
Motion agreed to and bill read the first time.



EXCISE TAX ACT

James Joseph McCann: the second reading of Bill No. 447, an act to amend the Excise Tax Act.


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


Mr. J. M. Macdonnell (Greenwood):: Mr. Speaker, this bill is the result of the resolution which has been passed and I would like to make a few general comments on it. Hon. members will recall from the budget that the tax reductions this year which, I ventured to say at the time, you could put in your eye, are practically all contained in the Excise Tax Act. I shall not take up the time of the house at any length in dealing with this but I think we should remind ourselves of one or two things which, although they have been said again and again, require to be repeated.
We should remind ourselves of the extent of the hidden taxes which pyramid and which hurt the individual and which also put up the costs of all those who are manufacturing. We should remind ourselves that these high taxes have now produced a vicious circle so that we are finding it harder to sell abroad. We should remind ourselves that unemployment marches on and that the government has had very little to say about how it is to be dealt with.
The Minister of Finance (Mr. Abbott) suggested that businessmen sharpen their pencils and figure out how they can reduce costs, but it would have been much more practical if some of the taxes could have been reduced. At the same time the Minister of Trade and Commerce (Mr. Howe), as reported at page 2106 of Hansard, rather blithely suggested this was the year to loosen up the purse strings, in other words it was not a year for economy. As a result of those and other things we now find disturbing signs, and we have had them for some time, in the textile industry. We have also seen them in the electrical manufacturing industry, and now we have disturbing news from the motorcar industry of substantial layoffs on the part of some of the larger manufacturers.
As the hon. member for Eglinton (Mr. Fleming) pointed out in his speech, the minister seemed to be interested only in two or three-wheeled vehicles and to have nothing whatever to offer as regards four-wheeled vehicles. In other words, no reduction was made in the huge tax on motorcars and we can, I think, very easily attribute the present layoffs, which are disturbing, and which perhaps will be more disturbing, to the fact that there has been no reduction on motorcars.
Excise Tax Act
Prices are high and therefore we have distress cropping up in the motor industry as well as in the textile and electrical appliances industries.
When we come more to the details of this bill it is hard to see why some of the articles were selected at all. In fact, it seems as though the minister was in a very lighthearted mood when he made the selection. We have firearms, golf clubs, fishing reels, cameras, ash trays, tires, and tubes. Tires and tubes are more practical and more important. However, it almost looks as though the minister had been in rather a light-hearted mood, or perhaps had thought that, as there was such a small reduction anyway, it did not matter much where it was put, and that one place would be as good as another.
Mr. Speaker, I do not think it is necessary for me to take up more of the time of the house. We now have this bill implementing what was set out in the budget resolutions. The matter was debated at that time. I shall not now take up more of the time of the house.


Stanley Howard Knowles: Mr. Speaker, as the hon. member for Greenwood (Mr. Macdonnell) has just pointed out, this is one of the bills that implement the budget proposals made by the Minister of Finance (Mr. Abbott) on April 6. We feel that this bill points up the fact that the minister took the taxes off in the wrong places. This bill specifically indicates that on a certain number of luxury goods there is to be a reduction in taxes but that, as for the general sales tax across the board, which should have been reduced, no effort was made by the government to make any reduction in that direction. We therefore look upon this measure as another one of those bills that reduce the taxes in the wrong places, without cutting taxes that should have been reduced.


John George Diefenbaker: Mr
Speaker, I do not wish to prolong the discussion but inasmuch as I did not have an opportunity of saying anything with regard to the budget, I want to say a few words with respect to this bill.
The hon. member for Greenwood (Mr. Macdonnell) has stated that the unemployment situation is serious. Today an announcement was made by the wheat board to the effect that the sales price of wheat had been reduced by some ten cents a bushel, a fact which indicates a serious situation in the marketing of the products of this country and one that deserves the serious attention of the house, late though it is in the session. The hon. member for Greenwood

Excise Tax Act
referred to the unemployment situation as being somewhat intensified in recent days in the automobile industry, and the hon. member who just took his seat stated that the reductions which were made in taxation this year were reductions on those things that did not seriously affect the economy of the people. There still remain the hidden taxes on the needs of the home, including furniture, clothing, boots and shoes and the like. The reductions on those things on which they were made represent but little saving for the average man or woman in this country.
In the last few days particular attention has been given to the automobile industry. In view of the fall-away in the purchase of and the demand for automobiles and the fact that the tremendous taxes levied on automobiles have been responsible for the reduction in that demand, I suggest that consideration should be given, even at this late date, to bringing in legislation which would reduce the excise and other taxes that are levied on automobiles today, in order to meet the threatening and rising unemployment situation.
One does not want to go back to 1929; one does not want to recall those days; but, in considering the events of today, one cannot lose sight of the fact that during 1929 unemployment was touching industries similar to those which are affected today. In 1929 we had a tremendous bumper crop of wheat, as we had in 1928. No action was taken then when action should have been taken. Even as late as February, 1930, in the speech from the throne of that year, the governor general had words placed in his mouth to the effect that Canada was in an exceptionally fine position, for no part of the 1929 wheat crop had been sold. Today we are in the same position as far as the 1953 crop is concerned. I feel that even now, in these late days of the session, serious consideration should be given by the government to doing something to meet not only the agricultural situation but generally the threatening and rising unemployment problem which must be met and which can only be met now in advance of a possibly more serious situation developing in the future.


Mr. G. K. Fraser (Peterborough):: Mr. Speaker, I should like to say just a word with regard to this bill. Under it no relief, or practically none, is given to the Canadian manufacturer of watches and clocks. The excise tax has been reduced by only 5 per cent, leaving a 10 per cent excise on watches and clocks except those for use of railway men and the blind. This leaves a 10 per cent

excise tax; and on top of that we have the 10 per cent sales tax. These taxes result in a tremendous handicap to the Canadian manufacturer. On top of that, watch parts and watches are allowed into this country under an extremely low duty-what you might call a dumping duty-which does not give the Canadian manufacturer or the Canadian worker a chance to compete. I personally feel-as I know do those in the business -that this excise tax on clocks and watches certainly should be taken off altogether. Clocks and watches are not luxury items; they are a necessity. A worker has to have a clock in order to know when to get up to go to work, so that he may work all during the day and the week. At the end of the week he gets his pay cheque but his taxes are deducted. I do not think you should charge that man twice; and that is what is being done.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Robinson (Simcoe East) in the chair.
On clause 1-Application to Yukon and Northwest Territories.
Mr. Benidickson:: Mr. Chairman, I should probably make a short statement about the bill. This bill, of course, implements the budget resolutions that have been before the house. At the same time that the act is being amended the opportunity is being taken, as is customary, to propose amendments to certain administrative sections so as to keep the act up to date with changing conditions in Canadian business or within the administration. Of the 15 clauses in the bill, 8 are the result of budgetary resolutions, 5 are amendments to administrative sections of the act, and one is to restore a section accidentally deleted through an error in numbering. The remaining one is for establishing a date on which the various sections of the bill come into force.


[Stage Direction]
Clause agreed to.
On clause 2-How return to he signed.
James MacKerras Macdonnell: This is stated to be a subsection which was inadvertently repealed by the amendments of 1952-53 and should be restored. Have any situations arisen in the interval which need to be cured in any way? Is there anything that needs to be done other than the mere restoration?


William Moore Benidickson: It is the mere restoration of the clause. Administratively we have not really run into serious trouble, but it was not

intended that it should be deleted. This relates to the tax on insurance premiums section.


[Stage Direction]
Clause agreed to.
On clause 3-Calculation of sale price and duty paid value.
Gordon Knapman Fraser: Will the parliamentary assistant explain exactly how this is going to work?


William Moore Benidickson: I gave an explanation of this at the resolution stage. I think my hon. friend probably remembers that. This is another item to implement the budget resolutions. It happened that late in 1953 the tariff board ruled in an appeal that an importer could segregate the packaging material from the contents for duty purposes. This had the effect of permitting the importer to import goods subject to excise tax and pay the excise tax on the goods only and not on the packaging material. This of course was an unfair advantage in relation to the Canadian manufacturer who paid on the total price.


[Stage Direction]
Clause agreed to.
Clauses 4 to 9 inclusive agreed to.
On clause 10-Drawback.
James MacKerras Macdonnell: Will the parliamentary
assistant say something about this clause?


William Moore Benidickson: This clause is one that reorganizes and simplifies the drawback section in the act and also adds to the list of goods subject to drawback. The drawback is extended to goods supplied as ships' stores, goods to be used for the reconstruction, equipment or repair of ships, and aircraft and telegraph cable ships under certain conditions. It is a clarifying clause, and I think it spells it out a little more clearly. In addition, it will remove the necessity of using the refund sections of the act for regular remissions that take place.


James MacKerras Macdonnell: I was out of my seat for a moment and I should like, by leave, to ask the parliamentary assistant to say a word about clause 7.


William Moore Benidickson: This just makes it clear that sales and excise taxes will not be paid on these particular tariff items. Tariff item 704 is the item which permits the free entry of personal and household effects bequeathed to Canadians from any British country. Item 708 is the tariff item which gives effect to an international agreement we have with our partners in NATO under which servicemen's goods are imported duty free, and this merely makes it clear that they are also free from sales and excise taxes.
83276-353*
Excise Tax Act


William Alfred Robinson: Shall clause 10 carry?


James MacKerras Macdonnell: I should like some explanation of clause 10.


William Alfred Robinson: I understood that the parliamentary assistant replied with respect to clause 10.


James MacKerras Macdonnell: Oh, yes.


[Stage Direction]
Clause agreed to.
Clauses 11 and 12 agreed to.
On clause 13-Time limited for prosecution.
John George Diefenbaker: I should like to ask the
parliamentary assistant the meaning of this section. I do so because if I read it correctly the clause, while on the face of it appearing to fix the period of limitation at three years for summary conviction matters, in addition provides that action can be taken alternatively within one year from the date on which evidence, sufficient in the opinion of the minister to justify a prosecution for the offence, came to his knowledge. That would seem to extend the period of prosecution almost synonymously with eternity. As I see it, if the crown were in the position at the end of three years that it had no action or in its opinion could not successfully take proceedings, it could extend the investigation indefinitely until such time as the minister signified by a simple certificate that within one year of a certain date sufficient evidence had been secured or was in process of being secured, and therefore action could now be taken.
I must say that is not what one would call a limitation section. If my interpretation is correct, and I am merely submitting it to the parliamentary assistant for his consideration, it is actually a delimitation section, with the period limited only to within one year from the date on which the minister signs a certificate that evidence has come to his knowledge which in his opinion is sufficient upon which to found a prosecution. I think the essence of our law, even for the most serious offences, is that there must be a limitation to the taking of proceedings at some time.
In the case of murder, for instance, as I recall it, the person must die within one year and one day of the wrongful acts. While I wish to see every assistance given to the department to punish fraud and wrongdoing, surely the books of prosecution should not be open indefinitely as they will be under this clause when proceedings will be conditional and upon the prerequisite that the minister signs a certificate that information has finally come to the department within one year of which prosecution can take place.

Excise Tax Act


William Moore Benidickson: The only difference between this proposal and the present act is the extension frem six months to one year for the minister to have the opportunity to get his auditors' reports and for the person involved to have the opportunity to answer the minister. It is found that auditors are somewhat behind these days and six months has not been sufficient. This is modelled on the Income Tax Act. There they have a five-year period instead of three years, but they also have the twelve-month period instead of six months, and it has been found that it is necessary.


John George Diefenbaker: With deference to the hon. member, I point out that it is not quite as simple as that. The present section reads in part as follows:
. . . but where false or fraudulent acts . . . are involved in any offence committed . . . the prosecution or suit may be commenced at any time within the said period of three years or within six months after the minister or the deputy minister of national revenue for customs and excise has knowledge or notice of such false or fraudulent acts . . .
Up to the present time the only reason for delimiting the period of action has been the fraud or fraudulent acts of the individual. I would have no objection to the period of one year provided it was limited to fraud and fraudulent acts.


William Moore Benidickson: That uniformity too, I believe, is modelled on the Income Tax Act.


John George Diefenbaker: That does not answer the situation at all. The hon. gentleman says the only change we have made is to extend the present six months' period following the three years to one year, but that is not the only change. The only reason for the three years not being the final period of limitation previously was in a case where there had been fraud or fraudulent acts. I can understand the arguments of my hon. friend that the auditors are far behind and that there should be an additional six months provided in order to meet the wrongdoing of fraudulent individuals. But surely where there has not been fraud the individual should not be placed in a position where, no matter how long after the alleged offence, he could find himself in a position where he is subject to a prosecution. That is not the principle of the law. The principle of law is that a period of limitation should ordinarily be provided.
The minister says that the earlier provision is in effect in the Income Tax Act, if I heard him correctly. Would he read the corresponding section of the Income Tax Act?


William Moore Benidickson: I wonder whether we could have this clause stand and then we could look at the schedules while my assistant is checking the act.


William Alfred Robinson: Is it agreed that this clause stand?


Some hon. Members:: Agreed.
Clause stands.
Clauses 14 and 15 agreed to.
Schedule I agreed to.
Schedule II agreed to.
On schedule III.


Stanley Howard Knowles: I should like to ask the parliamentary assistant a question or two concerning schedule III. I refer in particular to that portion of schedule III that appears on page 11 of the printed bill under the subheading "charitable, health, etc.". I take it that the only items which have been added to this list, which is a list of items exempt from the sales tax, are hearing aids and parts thereof, including batteries specifically designed for use with such hearing aids. We welcome the addition of these items to the list of goods exempt from the sales tax. Has any further consideration been given to the request for sales tax exemption to charitable organizations under this subheading? Are any other charitable or health items now under consideration for sales tax exemption?


William Moore Benidickson: As I explained at the resolution stage, these matters are subject to frequent representations, particularly just prior to the introduction of the budget. The committees that do review these matters did have representation in connection with the charitable institutions. There were some suggestions about widening this group of exempted articles, but in the view of the government this was as far as it should go at this budget.


[Stage Direction]
Schedule agreed to.
On clause 13-Time limited jor prosecution.
William Moore Benidickson: I have here the section to which I was making reference. It is section 136(4) of the Income Tax Act, in the section of the act dealing with procedure and evidence. Under the heading "Limitation of prosecution", it says:
An information or complaint under the provisions of the Criminal Code relating to summary convictions, in respect of an offence under this act, may be laid or made on or before a day five years from the time when the matter of the information or complaint arose or within one year from the day on which evidence, sufficient in the opinion of the minister to justify a prosecution for the offence, came to his knowledge, and the minister's certificate as to the day on which such evidence came to his knowledge is conclusive evidence thereof.


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


Stanley Howard Knowles: By leave.


John Whitney Pickersgill: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



EXCISE ACT

John Whitney Pickersgill: the second reading of Bill No. 448, to amend the Excise Act.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Applewhaite in the chair.
On clause 1-Duties.
James MacKerras Macdonnell: Will the minister explain this?


William Moore Benidickson: I made on the resolution stage quite a full explanation of the proposal in this budget to change the method of taxing beer from a malt basis to a gallonage basis. My remarks appear at page 4835 of Hansard for May 18, 1954. Most of the changes in this act are consequent upon that change in the method of taxation.
Subsection 1 of section 1 of this bill proposes the removal from the act of marking provisions which it is felt would be better issued as regulations. This section 171 has been in the act for the last 15 or 20 years, but has been outdated by the change in the production methods of the modern breweries, as well as new methods of marketing and distribution by interlocking arrangements or reciprocal agreements. To meet these changes, it is desired to adopt labelling requirements similar to those which have been in effect for distilleries for some time and which have worked out very satisfactorily for comparable conditions.
Under section 176 of the act-which it will be seen is also being amended by section 3 of this bill-the governor in council is empowered to make such regulations as are necessary for the carrying into effect and the enforcement of the provisions of the act, and it is considered that this authority should be extended to provide for the prescribing of regulations for the marking of containers.


James MacKerras Macdonnell: Am I correct in understanding that the substance of this is that there be two methods of taxing, one by gallonage and the other by poundage, and that this is really designed to remove any discrimination by applying only one method?


William Moore Benidickson: The substance of the bill is that we adopt the gallonage method. It changes the schedules, establishing new
Excise Act
methods for taxing on a basis of gallonage, rather than the system we have had hitherto of taxing on a poundage basis, on the malt.


James MacKerras Macdonnell: Then we can take it that this bill, which seems to have a rather large number of sections to achieve a simple purpose, is to make the necessary technical changes to give effect to what the parliamentary assistant has just said.


William Moore Benidickson: With the exception of the labelling regulation, that is correct.


Gordon Knapman Fraser: Does the parliamentary assistant expect to get in more revenue in this way?


William Moore Benidickson: I explained at the resolution stage that the gallonage rate seems to be approximately the rate that was effective on the malt. I explained that when the original tax on a poundage basis was established the brewers were putting about two pounds of malt to a gallon of beer. We have found that under efficient manufacturing methods that has been becoming somewhat less. I believe it is down to roughly 1 [DOT] 8 pounds per gallon of beer. We think that the tax revenue will be about the same, with the exception I indicated that there would be an effective reduction in the rate on about 6 per cent of the beer that is brewed, which is manufactured from corn flakes and corn adjuncts. But the agricultural community felt that we were taxing them unfairly on the beer in relation to the product made from malt.


[Stage Direction]
Clause agreed to.
Clauses 2 to 6 inclusive agreed to.
Bill reported, read the third time and passed.

John Whitney Pickersgill: the second reading of Bill No. 468, to amend the Customs Tariff.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Applewhaite in the chair.
On clause 1-Schedule A amended.
James MacKerras Macdonnell: There is a tremendous amount of detail in this bill. Is the effect of it precisely to embody the schedules contained in the resolution, and to what extent if any is there a change?


William Moore Benidickson: Mr. Chairman, the only changes from the resolutions as passed by the committee of ways and means on May 31 would refer to items 146 and 147, which deal with the import duties on ale and beer. These new sections

Customs Tariff
merely parallel the new gallonage taxing rates we have just discussed. The only changes in these items are those in italics. On the first page of the schedule my hon. friend will see two items, namely items 146 and 147, and he will note that, as indicated in italics the tax is being changed to 38 cents per gallon, consistent with the action we took under the Excise Act, to provide a tax on Canadian manufactured beer and ale of 38 cents a gallon.


James MacKerras Macdonnell: That was set out in the
minister's speech?


William Moore Benidickson: Yes. Apart from that, every item in schedule A is as it was passed in committee of ways and means the other evening.


Stanley Howard Knowles: Including the amendments made in committee.


William Moore Benidickson: Yes. The schedule has been amended in accordance with the resolutions that came finally from the committee of ways and means.


James MacKerras Macdonnell: Is the parliamentary assistant referring to clause 1 or to the whole bill?


William Moore Benidickson: I am speaking about clause 1 at the moment. I propose to refer to clause 2 later.


Mr. Low:: Mr. Chairman, before clause 1 is carried let me say that when the resolution was before the committee I asked the parliamentary assistant whether consideration was being given to the removal of the tariff imposed on wagons. Although it was not possible for me to be here during the discussion, I did read what was said in the debate, and I did not find anything in connection with the suggestion I had made and which had been made for some years by the Canadian Federation of Agriculture.
I wonder if the parliamentary assistant would say something about it today, because it would seem to me that we are not following out the policy laid down by a former minister of finance, Mr. Ilsley, in 1944, wherein he declared it was the intention of the government to make duty-free all those implements and instruments used by farmers in the process of production. I pointed out the other day that wagons certainly are used by farmers in the process of producing food. Therefore, under Mr. Ilsley's policy, which doubtless was reflecting government policy, it should be included.


Stanley Howard Knowles: They have had only 10 years. Are you not rushing them?


Solon Earl Low: Perhaps so; but it would be interesting to hear what the parliamentary assistant has to say.


William Moore Benidickson: I did refer to my hon. friend's speech when I spoke later in the day, as reported at page 5285 of Hansard. One point I made was that this year the submissions from the Canadian Federation of Agriculture came in rather late. It was agreed by both sides that in another year they would meet at some time earlier, prior to the budget. So far as this specific item is concerned, I assured the hon. member that that matter would be considered for another budget.


[Stage Direction]
Clause agreed to.
On clause 2-Idem.
William Moore Benidickson: There is an amendment to be moved to clause 2.


James Joseph McCann: I move:
That clause 2 of Bill 468 be amended by inserting, immediately after "402e", the words "respecting wire of iron or steel".


William Moore Benidickson: I would like to explain that amendment. The amendment moved by the minister will correct the technical error in the drafting of clause 2. Owing to a typographical mistake, the tariff item that was originally to be No. 402c appears in chapter 60 of the Revised Statutes of 1952 as 402e. I understand that when the revised statutes were prepared there was a broken "c" and the printer thought it was an "e" and the result is we have two sections numbered 402e in the revised statutes. Then these words in the amendment are added so that the particular 402e we are changing is identified as the one "respecting wire of iron or steel." There are two, and therefore we indicate which one is being changed to be called 402c.


James MacKerras Macdonnell: I have one question.
Obviously, I do not know the technical significance or the effect of this. Sometimes these minor wordings can be very important in a certain business. Has this change been brought to the attention of people who might be concerned, so that they have had a chance to make representations? Is that not a fair thing to suggest?


William Moore Benidickson: In this particular case, Mr. Chairman, it is only of technical significance. The committee will recall that we had a change in this item in 1952, the same year that we were passing the revised statutes. The "c" was broken. The printer thought it was an "e". The error was missed. There is no change in rates; it has no significance to anybody who does business under this item.


Mr. Gillis:: Is this an amendment to
clause 2?


Edward Turney Applewhaite: Yes.


Clarence Gillis: I want to say something on clause 3.


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
On clause 3-Schedule B amended.
Clarence Gillis: I wanted to say a word or two on clause 3, with reference to schedule B, on the principle of the drawback, which is to be found on page 11 of the bill, item 1044. That item sets out that fire clay or fire brick imported into Canada for certain purposes is subject to a duty, but that duty is wiped out by permitting a 99 per cent drawback of the duty if the material is imported for those purposes. I consider that that drawback, even in those particular cases, retards and militates against the development of industry of that kind in Canada. I do not see very much sense in importing fire brick or fire clay from the United States and putting a tariff against it and then permitting a 99 per cent drawback on the material, which in effect nullifies the tariff. In my judgment that principle prevents the development of an industry of the type that we are dealing with.
I point out also that that same principle militates against the maintenance and the development of a coal industry in this country. Coal is facing a crisis, and this drawback on coal imported from the United States and used for metallurgical purposes is a principle that is preventing the expansion and maintenance of a coal industry in this country. For a great many years there has been a duty of 50 cents a ton on bituminous coal from the United States; but coal imported from the United States has a drawback of 99 per cent, which means that on all coal imported and used in Canada for metallurgical purposes the tariff is wiped out because of the drawback.
I disagree completely with that principle. If we are going to put on a tariff, then the tariff should be applied without the device that is now being used, as indicated by this part of the schedule B. There would be very little difficulty in developing a fire clay or a fire brick industry in this country. There is a substantial fire clay and fire brick industry in Canada at the present time, particularly in the maritime provinces. The device of a drawback or a refund of the tariff put on at the border, in my opinion, is a bad principle, and it injures the development and expansion of industry in this country, I do not care what industry it is. I know it has militated greatly against the best interests of the coal industry in this country, and I would suggest to the parliamentary assistant-I know he cannot do anything about it now-that this
Income Tax Act
matter should be taken under the consideration of the Department of Finance with the end in view of arriving at some other arrangement that would not put in the stop-blocks that this device puts against the development of industry in Canada.


James MacKerras Macdonnell: Will the parliamentary assistant relate this section through to the schedule in the budget resolutions?


William Moore Benidickson: Yes. In the budget resolutions it is item 3 on the last page of the ways and means resolutions, items 1044 and 1052.


James MacKerras Macdonnell: Does that mean that all the items we have here on the last page are the same as the items in the budget resolutions? There is no change. It is entirely tied into this last page?


William Moore Benidickson: That is right. The new schedule is entirely in accordance with item 3 of the ways and means resolutions.


[Stage Direction]
Clause agreed to.
Clauses 4 and 5 agreed to.
Schedules A and B agreed to.
Title agreed to.
Bill reported, read the third time, by leave, and passed.

Douglas Charles Abbott: the second reading of Bill No. 467, to amend the Income Tax Act.


James MacKerras Macdonnell: I want to make one or two general observations, Mr. Speaker. The Income Tax Act has now invaded the lives of almost everybody and is a matter of great importance to them. It seems to me a great pity that a matter which is infinitely complicated in itself seems almost more complicated by what on the face of it looks like a multiplication of statutes.
We have the Income War Tax Act; we have the Income Tax Act and then we have The Income Tax Act. These last two are extraordinarily difficult to keep separate because sometimes the "the's" get spelled with small letters instead of capital letters. I suppose it is obvious to say it is desirable that legislation should be clear, simple, definite and unequivocal.
As I said a moment ago, the subject matter here is extraordinarily complicated. I would ask the minister whether it is not possible that even further efforts might be made to simplify the situation. Will it eventually work out so that these three will not be necessary? I understand there are certain temporary features which make it hard to

Income Tax Act
deal with the situation at the moment, but it seems to me that at the present time it is a little like the antediluvian method of dealing with land titles when people had to carry the title deeds around with them in a box, otherwise they could not make a title to then-property. After that we got registration deeds and that, of course, led eventually to the land title system wherein they adopted the method we now have of dealing with ships and applied it to land.
I am not going to belabour the point but I would just ask the minister whether there is any hope that we might work out a simpler method. I am quite sure he will agree that almost anyone whose affairs are in the least bit complicated must obtain outside assistance, although I admit the Department of National Revenue does a good deal to help. Nevertheless it is still true that anyone whose affairs are complicated must obtain legal advice and, as a matter of fact, there are actually only a minority of lawyers who have mastered the intricacies of the whole act. I suppose it would be a sad day for them if things became too simple, but I imagine that even after simplification there would be plenty of difficulties with which they can deal.
I know it is difficult but I would like to submit to the minister that the problem still remains of doing something to make this complicated situation seem less complicated and somewhat more clear than it is now.


Stanley Howard Knowles: Mr. Speaker, since this is the last crack we will get at the Income Tax Act during this session I should like to say just a brief word. I submit once again my complaint that this bill amending the Income Tax Act does not include a provision to wipe out the 3 per cent floor under medical expenses allowed as deductible for income tax purposes. There is no case that is less necessary to make on the floor of this house both because the case is so clear in regard to what we ask, and because it has been made so often.
I regret the minister has not seen fit to meet our request in this connection at this session, but I hope he will do so at the next session, if he is still here. If he is not here, or if he has moved to some other type of employment, I hope his successor in the Department of Finance, whoever he may be, will make that change.
Just to make sure that the minister's successor is aware of the importance of this matter, I should like to give notice that I will again place a notice of motion calling
fMr. Macdonnell.]
for the deductibility of medical expenses right from the first dollar on the order paper at the beginning of the next session.


Gordon Knapman Fraser: Mr. Speaker, I would just like to say a word or two at this time. First of all I would suggest that the Department of National Revenue- and I see the minister is now in the house- consider putting up a district tax office in the new federal building being erected at Peterborough. As things stand at present the citizens of Peterborough have to go many, many miles down to Belleville in order to have their accounts checked, and since that is a journey of about 75 miles it is very hard for them to do that. Peterborough has a population of over 45,000 and that population is increasing all the time. It is a tremendous district and there is a good deal of income tax paid there. For that reason I feel that something should be done for the people in that district. At the present time there is a temporary income tax office installed at the old customs house for about two months before April 30.


Mr. Speaker:: Might I suggest to the hon. member that he discuss this matter when the estimates of the Department of National Revenue, the Department of Public Works, or the Department of Finance are before the house. I think he has made his point in a brief form at this moment and that ought to be sufficient in view of the fact that the principle of this bill is under discussion at this time.


Gordon Knapman Fraser: Thank you, Mr. Speaker. I did make my point and I hope something will be done about it. However, in connection with the Income Tax Act I would have liked to have seen some consideration given to those who have to purchase glasses, in view of the heavy expenditure they have to incur in that regard. In addition, no consideration has been given to the cost of ambulance service, and many people have to pay for ambulances or taxis every week in order to take them to hospital for treatment. I also think further consideration should have been given to the blind and the present earning level increased in that regard instead of being kept at its present level.


Mr. Roland Michener (St. Paul's):: Mr. Speaker, my subject deals with the question of taxation on savings for pension purposes. I raised the issue on the resolution stage when the minister was not present, though a brief reply was given to the point I endeavoured to make at that time. Since then I have taken the trouble to study with some care the answers given by the minister to some of the same problems last year.

Now, Mr. Speaker, what we are being asked to do in this bill is to increase the exemption allowed to people who are employed in regard to the contribution which they make to approved pension funds. The exemptions covered in the act extend to $900 for employees' contribution, and $900 for the employer's contribution, which is a total contribution to the pension fund of $1,800. With respect to arrears, I understand in this case the employee, if he so wishes, can pay another $900 and the employer an additional $900 making a total of $1,800, or $3,600 in all which is the amount of earnings which will be exempt from tax in the case of an employed person.
As I understand the present bill, the $900 contribution in each case is increased to $1,500, which means that a total of $6,000 of the earnings of an employed person can be put aside into a pension fund and thus be exempt from tax. For a man to be able to save that much money, after paying living expenses and meeting other taxes, I estimate that his tax bracket would have to be in the neighbourhood of 47J or 50 per cent, so that, in effect, in the case of an employed person the government is contributing half the money that that person saves and puts into a pension fund.
Now, I would like to say a few words about the views expressed by the minister last year, because I have not been convinced by what was said this year, nor by reading last year's debate, that the self-employed person is in any different position from that of the employed person. I hope the minister himself, who has always expressed some doubt or at least some concern on this point, will in time accept the argument that has been advanced by a good many people and which affects a great many people in this country.
The number of people who paid income tax in the self-employed class during the last full year for which tax statistics are available was 319,000; they are made up of primary producers, professional men, business proprietors and financial people. Those
319,000	taxpayers represent a fairly good cross-section of the industry of the country. I may say right now that the income tax they paid was $246 million in 1951. In other words, 320,000 people paid $246 million of income tax as against $543 million income tax paid by employees who are now entitled to the benefits of the tax-free saving which is allowed to those who contribute to pension funds. In other words, the amount of tax paid in the case of the self-employed was half as much as that paid by the employees. Yet the deductions which those self-employed 83276-354
Income Tax Act
people were allowed to make for their savings paid into pension funds was only 4 mills on the tax dollar paid by them. Four mills on the tax dollar was the total extent of the pension deduction made by that class of people. The employed, on the other hand, averaged 20 cents in pension deductions on every tax dollar paid by them. There is therefore a great disparity between the position of the two groups. Unless the minister and the government are thoroughly satisfied that that disparity is not unfair, I suggest that it is not too late even yet to find a means of dealing with this problem.
May I deal briefly with the points which the minister made last year. In the first place he said that this system of allowing deductions for the savings made by people during their earning years was a departure in principle from the general principle of the act, that new principle being that there is a tax postponement given on savings devoted to the purchase of retirement annuities. The adoption of this principle followed the Ives commission report which advocated a uniform system of taxing pension income when it is received as a pension and not when the money is put into the fund as a saving. That procedure has the effect of freeing from tax the income as it is earned and put into the fund but makes it taxable after retirement when that income is paid back to the pensioner in the form of his pension.
Obviously there is a great disparity in the rate of tax paid by a man who is at the height of his earning powers and is making his best salary in his middle years and the rate of tax which he will pay on a relatively small pension after he has retired. The consequence is that you are treating one class of people in one way and are treating another class of people in a different way. In other words, to ask the self-employed to pay a tax on their earnings when they are at the height of their earning capacity and then to be relatively free when that pension eventually becomes payable after they are retired and when their income is small is quite unfair, in my opinion.
The minister explained the advantage of this method. He said that it was a principle that was a departure in the first instance. But, the principle having been adopted, he found there was considerable mechanical difficulty in applying it further and going beyond the case of employed persons. As I understand the proposition, that argument simply comes down to the statement that the mechanics of tax convenience stand in the way of treating the self-employed person in the same way as the employed person is treated. I suggest to this honourable house

Income Tax Act
that that is not an answer for what is obviously a disparity or a discrimination between the two groups.
The second point that was made is that the government is interested in seeing pension plans adopted in industry. However, it does not agree that because employees have tax postponement, therefore self-employed persons should likewise have it in respect of their voluntary savings. Mr. Speaker, if saving for a pension is good for a Canadian because he is employed and paid by another, why is not saving for a pension equally good for his neighbour who makes his own living? Why call the saving of one person voluntary and the saving of the other person involuntary or something different in kind?
The third point was that the self-employed can buy endowment policies or annuities and that he receives very reasonable tax treatment. I agree that that is the case. After he has paid his tax on his income, if he has any left with which to buy an annuity, he can buy an annuity on favourable terms as to tax. But that is not really the dispute at all in this case. The question is whether he should be allowed to buy his annuity before he has paid his tax.
The fourth point was that an employee's savings are locked up in an approved pension plan. That is quite true, although I suggest that it is no more true than it would be in the case of self-employed persons if the approved annuity plans in which they could invest were not subject to anticipation. As I see it, the minister's point is that when an employed person makes his contribution into the firm's pension fund he has no right to withdraw it during the course of his employment or, in fact, until he reaches a certain age. I believe there are a great many exceptions to that provision. I myself know of some in my own experience. I refer to those who leave employment after a period of time, even under these approved plans, and withdraw the capital from the fund. However, that is by the way. The point is that the savings of a self-employed person could equally well be tied up by annuity plans which could not be anticipated. I see no insuperable technical problem in that matter. I am sure that the insurance company annuities and the government annuities could be written in terms which would prevent anticipation of the fund, except in certain emergency cases which would be so minor as not to affect the principal.
The fifth point which the minister made was that if this benefit or principle or policy of encouraging savings for old age pensions were extended beyond employees, there would be no logical stopping point short of
fMr. Michener. J
allowing this privilege to everybody, including employees not now covered by pension plans. To that argument I say "Quite so". There is and there should be no stopping point short of every person who is earning enough money to save some of it for a pension or annuity against the time when he will have to retire.
Those who are not working for firms which have had the initiative to instal pension plans are unable to get the benefit that accrues to their neighbours in an adjoining plant where there is an approved pension plan in effect. In two plants on the same street you will find that the employees are affected differently. The employee is not responsible for that condition. It is his employer who in the one case has not seen fit to instal a pension plan. As the law stands, the employee can do nothing about it. If the minister would accept my proposition and approve certain types of annuities which are the equivalent to pensions the employee whose firm did not see fit to have a plan could still make his savings, provide for his retirement and obtain his exemption just as the other employee does.
The sixth point made by the minister was that he did not know what volume of savings would be attracted. He thought that a substantial sum might be involved. I think that is so. The amount might be substantial, and I will come to the actual amount in a few minutes when I deal with the minister's next point which I give in his own words as follows:
I am not sure that at this stage of Canadas development I would like to take the responsibility for directing the savings of the Canadian people away from equities into debt securities.
What that means is, as I understand it, that if the 320,000 self-employed who now pay taxes saved $240 on an average, basing the amount on the rate of savings of a member of parliament under the parliamentary pension fund, the amount of savings which would be tax exempt would be only $76 million. To say that the economy of Canada is going to be thrown off balance or that our capital investment program is going to be upset by an amount of $76 million, and that that it is a serious matter for the government seems to me to be illogical and unrealistic. I think the minister was probably reaching for arguments at that point to satisfy the department because obviously they do not wish to undertake to deal with the problem owing to the mechanical difficulties.
It seems to me that the argument that it would seriously affect the investment balance as between equity and debt securities is quite a long shot as an answer to this serious

discrimination. Surely if the investment policy of the country is involved tax policy can act more directly to secure investment in equities as the minister has done with his very creditable arrangement for allowing deductions from tax with respect to dividends. Surely it could be done much more effectively that way than by making fish out of the self-employed and budget birds out of the employed.


Stanley Howard Knowles: You mean fryers.


Daniel Roland Michener: The minister's concern seems to be that those who are self-employed should be required to risk their capital in equity investment instead of saving it for their retirement but those who have security of employment with a firm paying their salaries are not subject to the same concern. What he says in effect is that these employed chaps had better be careful, that they had better save for their old age and the department will not now tax the money they are receiving in the pension fund which is going into gilt-edge securities. On the other hand, he says that the people who do not have the security of a steady job and who are working at their own risk had better risk their savings as well if they have any after paying income tax. He says that he thinks that they should not save anything that has not been fully taxed even if it goes into an approved form of annuity that is payable and taxable when the person is too old to work.
May I refer again to the figures as to the amounts and number of people involved. They are the best I could find. As I said before, there are about 320,000 self-employed who pay income tax. They are divided into a great many different categories. I shall not repeat the instances which I gave in my earlier remarks. I think perhaps one of the most cogent instances is the case of a nurse who is employed by a hospital working alongside a nurse who is working for a patient by the day.


Douglas Charles Abbott: Would my hon. friend permit a question? What does he include in "selfemployed"?


Daniel Roland Michener: In "self-employed" I include all those-


Douglas Charles Abbott: Farmers?


Daniel Roland Michener: Yes, farmers, fishermen, all those who are working on their own and do not receive their income in the form of a wage or salary cheque. I take it that is the category in the taxation statistics. I have the very excellent book for the year 1951 and it gives these figures. Primary producers, which would include farmers and fishermen, had a taxable income of $117 million on 83276-354i
Income Tax Act
which they paid a tax of $23 million. These statistics show how much of that total taxable income was allowed as a deduction by reason of being paid into a pension fund. In the case of that large group of producers whose taxable income was $117 million only $76,000 was allowed as a deduction from taxable income by reason of the amount being saved by some sort of a pension.
When we come to the professional group, which includes many hon. members in the house, taxable income amounted to $158 million, and the total amount which was allowed to be saved tax free was $227,000. In the case of business proprietors, small businessmen who were able to put aside something towards a pension, the amount of $314,000 was not taxed. I am not sure how they were able to save anything that was tax exempt. However, the taxation statistics for that year show that a total of $908,000 was actually allowed to self-employed persons as tax exempt by reason of it having been saved in some sort of pension scheme recognized by the income tax authorities. That is less than $1 million for 320,000 business people, a very good cross-section of the business community of the country.
I come to the amount of the exemption allowed to the employed simply because they were employed and not on any other basis of distinction. They earned and received the same kind of dollars, and the only principle of differentiation was that in the one case they were paid by an employer's cheque and in the other case the money was earned by some kind of trade or activity. The amount that was allowed by way of exemption to the employed in the same period was $95 million, which was 100 times as much as the amount allowed to the self-employed. That is out of all proportion, of course, to the numbers in these two representative groups. The number of employees was 2,444,000, which is perhaps eight times as many as the self-employed.
As I said before the principle involved appears to me to come down simply to one of the method of receiving one's remuneration for one's activity in the commercial life of the country. I do urge the minister to review this situation again, and I would be glad to suggest to him a very simple amendment to the act which would make it possible for the department to approve pension fund or annuity payments, which have the same features as approved pension plans now for industry. In this way a great number of people throughout the country who wish to provide for their old age, or for the time when they must retire, can do so on the same terms as those who are employed.

Income Tax Act


Mr. Robert McCubbin (Middlesex West):: I should like to say a word while we are discussing the amendments to the Income Tax Act. There are two points that I should like to mention. One case concerns a father who is able to send a young boy or girl through school to enter a profession or to be a high school teacher. After the child reaches the age of 16 the deduction of $150 is no longer permitted from income tax and the family allowance payments are stopped. If the child is continuing in school, the parent is able to claim $400 per year deduction from income tax. I approve of that very strongly.
However, then we have the case of another boy or girl whose parents are not able to send them on to school in the manner of the first parent I mentioned. In this case the boy or girl struggles to get through school, then takes a six weeks' course at Toronto and spends one year as a teacher. Then, this young person may return to normal school and endeavour, by means of summer courses, to improve his situation until he eventually gets his B.A. and becomes a high school teacher. My feeling is that such a young man or young woman should be able to claim the tuition fees and the amount spent for books for these summer courses as a deduction from income tax.
My own feeling is that boy or girl is endeavouring to improve his or her situation and improve the standards of the profession which he or she decides upon. The income tax department will receive more in taxes because that boy or girl made that improvement, and consequently receives higher wages.
There is another class to which I shall refer, and with respect to whom I should like to see a clarification of the act. I refer to the young farm boy who stays on the farm. This young boy has completed perhaps two or three years of high school, and returns to the farm at 15 or 16 years of age. The family allowance payments are stopped and the father is not able to claim any reduction from his income tax because the boy no longer attends school. The father enters into an agreement with the boy, verbally I will admit, by means of which the boy agrees to stay on the farm without wages until such time as he is ready to be married when the father will supply him with a farm.
When the farm is passed over to the boy at the age of 26 or 27, the income tax department steps in and says, "You have received $10,000 in this year and you must pay income tax on the amount." Now, that is unfair to this young man. He has worked for some 10 or 12 years without wages in order that he may receive the farm, and to be

taxed on that amount in one year is unfair. The boy would have no objection to having the amount spread over the period when he was working on the farm, and he is quite willing to pay income tax on that. It is unfair when he works all those years without wages and then when he receives the farm in lieu of wages to be faced with all that tax in one year. I should like the Minister of Finance to endeavour to clarify that in the interests of these young farm boys.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Robinson (Simcoe East) in the chair.
On clause 1-Insurance proceeds expended.
James MacKerras Macdonnell: I was hoping the minister might say something perhaps at this stage about the question of the intricacy of this legislation.


Douglas Charles Abbott: I had planned to do that as soon as we got into committee. It is quite true that the Income Tax Act is complex. It always has been, and as a matter of fact it perhaps becomes a little more complex each year. The reason for that, as I have had occasion to say several times, is an endeavour to introduce various relief provisions into the act. It is found from experience that certain exemptions are desirable, certain special cases need to be taken care of, and provision is made in the law for them. You will find a number of examples of that in the bill which is now before the committee. A great many of these are rather minor in character, but they are of a relief nature. Some of them have been suggested by members of parliament, some by the bar association, some by accountants associations, and so on.
There are three acts referred to here, it is true. You have the principal act and that is the, with a small "t", Income Tax Act. The Income War Tax Act must continue in force as long as there are taxes to which it applies. The other is The, with a capital "T", Income Tax Act, and that is really a transitional measure that operated from the period 1949 to 1952. I repeat that the reason for the apparent complexity of this statute is a genuine desire to ensure that the charging provisions are as fairly and equitably applied as possible.
The simplest kind of income tax act would be just to put a flat rate or a progressive rate of tax on people's income, without any exemptions or deductions, but that would be manifestly unfair. The complexity is due almost entirely to the deductions, the exemptions, the relief provisions, the exceptions and so on. I should like to say that it will become simpler in future years but I just do not believe it will.


James MacKerras Macdonnell: I suppose there are also, in addition to the relief sections, the sections that work in the opposite direction.


Douglas Charles Abbott: The ones to which I euphemistically refer as the loophole sections.


Mr. Nowlan:: I wanted to say that one quite realizes the complexity of this act. I am sure we can also sympathize with the minister when he says it is very complex, although possibly we recognize the fact he is using a euphemistic expression when he states that all these amendments are for the relief of the poor taxpayer.


Douglas Charles Abbott: Not all; I said the great majority.


George Clyde Nowlan: I have glanced rather quickly over the bill, and I think that although the minister may say the great majority are minor and probably the great majority are for relief, yet there are about 50 amendments to the various Clauses and subsections of these various acts. It does seem to me that a bill that is as complex as that should not be delayed until May 31 before receiving first reading and having the bill distributed to the members of this house. There are quite a few competent accountants in this house, and I would say we have some lawyers who have tried to earn a living by interpreting this and similar acts. I am quite sure if any one of them had taken this bill when it first came into the house and spent all the available time, except for meal hours, they would just about now have been able to arrive at some intelligent approximation of what all these sections mean. Because, when you read one clause you find that it says, perhaps, "save and except for subsection 2 of paragraph (w) of clause 4 of section 97"- and when you go there you find that you end up with everything except the Acts of the Apostles and the beatitudes-and anything else that can be thrown in, just for good measure.
The minister brings in his bill at this time. Of course we accept his statement, because he is always so frank with the house, and so good-natured. He just smiles and says, "This is all right". Sometimes I think he has been impressed by one of his parliamentary predecessors who at one time is supposed to have said, "Hold the legislation back until the hot weather comes along, and it will drive the boys home." Well, we have not had any hot weather, but time is getting on. I am simply saying that I do think a bill like this could have been brought in earlier in the session, so that those who have had some experience in dealing with these matters could have done something about it.
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Some of us will be receiving briefs from tax foundations; we will be receiving protests about this section or that section. I do not think this is the best way of dealing with it. And when we complain about something next year we are told, "Oh well, it was before you and you did not deal with it." And we certainly did not, for the very simple reason that, frankly, we did not understand it, and did not have time to have an appreciation, of it.
While I am on my feet let me say this, that the minister referred to the fact that we are maintaining the title of the Income War Tax Act.


Douglas Charles Abbott: That is a special statute.


George Clyde Nowlan: He said it is being done because of some of the old cases. When the minister replies later in the committee I would ask him to consider something which has just come to my attention. I have here a letter from a widow whose son worked for a short time in 1947, and who subsequently was drowned. He had served in the air force and had been badly wounded. She went through his papers this year, because she had dreaded the thought of looking at them before. Included among those papers she found a T-4 slip for $40. She took the matter up with the department and was told, "Our records do not go back to 1947; therefore we cannot deal with this deduction."
I submit that if you or I were in arrears in 1947 the department would very soon find some way of checking those records and dealing with the matter. Or, as the hon. member for Calgary North points out to me, we do know that in dealing with the farmers they go back to the early forties and even to the thirties. I admit that that is not connected with their records, but that it is a matter of investigation. Arbitrary action, such as I have described in the case of this widow, is hard for the taxpayers to believe. I say that the department at least should go into its files and see if it can find a duplicate of that T-4 slip. If there should be a deduction, then the widow is entitled to it, and she should not be told, "We do not keep records going back that far." Frankly, I do not believe it. I say it is an arbitrary statement which should not have been made and, personally, I think the position is worthy of more consideration.


Douglas Charles Abbott: I wish to say first of all that there has been no intention of holding back the passage of this bill. It has been ready for some time, but there have been other matters engaging the attention of the house. No one would have been better pleased than the Minister of Finance if the budget resolutions could have been disposed of some weeks ago,

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and the bills introduced. But each measure must take its turn, and this one has been brought in as quickly as possible.
My hon. friend does himself less than justice when he says that he cannot understand the provisions of this measure. With some knowledge of his years as a member of the bar I am sure that a couple of hours of reading of this bill, with the explanatory notes, would have informed him fully on the subject.


George Clyde Nowlan: That is flattering.


Stanley Howard Knowles: He might do better if he did not read the explanatory notes.


James MacKerras Macdonnell: I can assure the minister that whatever may be true of my colleague who has just spoken, a couple of hours was not enough for me. And now that my colleague has raised this point I would like to underline it to the best of my ability, because after all this bill has complications of its own, and it is more difficult by far to understand than any other legislation.


Douglas Charles Abbott: That is true in every jurisdiction.


James MacKerras Macdonnell: I would like to have taken more time, but the leader of the house has been fair in dealing with us. And when it was put up to us that he wanted to have the legislation completed-and I do not know if he will accomplish it by Wednesday night- we felt we had to co-operate. But what my colleague from Digby-Annapolis-Kings has said about trying to do justice to this bill over a week end is as true as it can be.
I do appeal to the minister and to the leader of the house to let us have this very complicated measure a good deal earlier, because one does face the real danger of having someone say to him, "Well, you were pretty stupid; you did not understand what you were doing when you passed that bill." And it is not pleasant to listen to that kind of criticism.


Mr. Harkness:: I take it that clause 1 is not one of the relieving sections to which the minister has referred.


Douglas Charles Abbott: It clarifies the existing section.


Douglas Scott Harkness: This one does not relieve; it makes it possible to collect more income tax, so far as I can see.


Douglas Charles Abbott: Oh no.


Douglas Scott Harkness: Let us say that a farmer has one of his barns burned down, and uses the proceeds of the insurance to repair his barn within a year's time. My understanding is that that is looked upon as income-and I am referring to the money he received from the insurance company.


Douglas Charles Abbott: But as an expense he can charge off the cost of repairs.


Douglas Scott Harkness: And he is charged income tax on it.


Douglas Charles Abbott: No; it is a complete offset.


Douglas Scott Harkness: I notice that the paragraph
says:
... within a reasonable time after the damage, on repairing the damage.
What does that mean? What is a reasonable time? If a farmer builds an implement shed three years later, is he going to be assessed on the cost of that because it came out of the insurance money he received three years before?


Douglas Charles Abbott: When the proceeds of fire insurance are received they must be treated as a "disposition" of assets, and they are deducted from the asset account. If they are used in their entirety to replace the building, then there is a complete offset. Let us say that $5,000 insurance money was received. That amount is taken into income account. The $5,000 expended for repairing the building is an expense, so that there is no income tax payable. One amount offsets the other. But if the $5,000 is received and only $3,000 is spent, there will be a recapture to the extent of $2,000.
With due respect to the hon. member for Digby-Annapolis-Kings, this section is merely putting in clear form what has been the recognized and existing practice in the department.


Douglas Scott Harkness: What is the "reasonable time" to which reference is made in clause l(lXii)?


Douglas Charles Abbott: Well, that would depend upon the extent of the repairs. If they are extensive it would be spread over a considerable period of time. On the other hand, if the repairs are minor they would have to be done within a shorter time. What is a "reasonable time" is a question of fact.


Douglas Scott Harkness: It is evident that the time must be more than a year because subparagraph (i) contains the expression "within the year" whereas subparagraph (ii) contains the expression "within a reasonable time after the damage". So that it is some time after a year. Does it mean any indefinite number of years?


Douglas Charles Abbott: It might run over one fiscal period into the next, depending on the loss.


James MacKerras Macdonnell: What is the principle behind this? In one way it looks as if the

minister is taxing capital gains. Is it because of the concession in respect of the premiums?


Douglas Charles Abbott: My hon. friend has put his finger on it. The premiums are allowed as an expense.


James MacKerras Macdonnell: But not able to relate the amounts involved.


Douglas Charles Abbott: No.


Mr. Monteith:: I have a question for the minister. Suppose a policy for $5,000, for argument's sake, becomes payable in one year. At the end of the year $2,500 has been spent on repairs, and the other $2,500 is to be spent in the following year. Does the $2,500 excess insurance become taxable income in the first year and the other $2,500 expenses in the second year or do both years work together?


Douglas Charles Abbott: I am advised they would be matched up. That is where reasonable time comes in. In the example which my hon. friend gave $2,500 would be matched up against repairs in the first fiscal period and the next $2,500 would be matched up to the extent of repairs of $2,500 in that period. It would be carried over.


Jay Waldo Monteith: The excess $2,500 would be allowed as a reserve and not taxable at the end of the first year?


Douglas Charles Abbott: That would be the practical effect of it, yes.


[Stage Direction]
Clause agreed to.
On clause 2-Compound interest.
Stanley Howard Knowles: Mr. Chairman, spread
through clause 2 of the bill are a number of subclauses that deal with the question of the amount allowed as deductible with respect to payments into a pension fund. I gather that the figure of $900 is being raised to $1,500 in respect of the amount that an employee pays in, and also in respect of the matching amount that an employer might pay in; I gather also that the amount that one may pay or that an employer can pay in respect of service prior to the time when one became a contributor is being increased to the same figure of $1,500 per year. As the minister probably knows, when we were on the resolution dealing with this matter we put a question to the parliamentary assistant several times, which naturally he was not in a position to answer because of his position as a parliamentary assistant. I wonder whether the minister can come through now and tell us who asked for this change?
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Douglas Charles Abbott: We had a great many representations on this. I cannot recall offhand who in particular asked for it, but it is an amendment which has my complete support. I believe in a steeply progressive income tax, and I support the principle that a deduction may be made in the case of approved pension plans of the contributions made by the employer and the employee. The figure of $900 was established some years ago prior to what we all recognize as being a very substantial rise in the general level of prices. If $900 was fair 5 years or 10 years ago, then a somewhat higher figure is fair today. Let me say this at once. I believe that we should be as fair to people of moderate or high income as we are to people of low income. The basis of our Income Tax Act is, as I say, a steeply progressive tax where your high bracket income taxpayer pays a very substantial portion of his income back in the form of taxes, and I support that. But I see no reason why one should not be equally fair in a tax provision to that class of taxpayer as any other.


Stanley Howard Knowles: Mr. Chairman, I remember when the $900 figure was written into the statute, and as I recall I made no objection to it at the time. But it did seem to me it was a pretty generous provision to make, bearing in mind the amount of pension that one can buy if he is in a position to pay $900 into a fund, and if that $900 can be matched by $900 from the employer. Everyone knows the provisions of the pension plan to which members of parliament contribute. We are paying in only $240 a year, and if we are here long enough it is possible, on the basis of that amount per year, plus the money which is put in by the government and the interest put into the fund, for a member of parliament to obtain a pension of $3,000 a year.
When you start to talk about contributions of $900 a year, matched by another $900, you can readily see, without bothering to go into the kind of figures I gave earlier, that you are talking about a much higher pension. My point is that the $900 ceiling was higher than it needed to be in 1946. It may be that we should have objected to it then so that we would not have this argument thrown at us now. But that being the case, I certainly do not think it is necessary to raise this ceiling to $1,500.
As the hon. member for St. Paul's has pointed out, it is possible in some instances for a total amount of $6,000 in the course of a year to be made income tax deductible in the case of one person. That would be $3,000

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from the employee and $3,000 from the employer. The kind of employees I know best are not making enough that that kind of money could be deducted in the course of a year for pension purposes. But the point is, as the hon. member for St. Paul's pointed out, that anyone whose pension contributions are of that size is up in an income tax bracket where there is quite a substantial saving because of the percentage that applies to his top increment of income. It does seem to me that this is going a little too high, bearing in mind, as I say, the fact that $900 is being changed to $1,500 in four places.
I think there are some flaws which the minister might point out in the argument put forward by the hon. member for St. Paul's. But generally I agree with the position the hon. member took that we should be extending this provision on a horizontal basis, taking in more people, rather than extending it on a vertical basis as the minister is doing in this provision of this bill. I still wish he could be more specific as to who asked for this change.


Alexander Malcolm Nicholson: Before the clause carries I want to support what my colleague, the hon. member for Winnipeg North Centre, has said. This is a provision that is pretty difficult for us to justify with a serious face. We were trying to get some information from the parliamentary assistant as to how much this was going to cost taxpayers. The parliamentary assistant was not able to answer that question. While the total probably is not large, it is going to give assistance to people who are in very high income brackets and who in my opinion do not need assistance. I wonder whether the minister can now give us some estimate as to how much this proposed change is going to cost the treasury of the country.


Douglas Charles Abbott: I am informed it is really almost impossible to give an accurate estimate of what this will cost. It would not be substantial, of course, because my hon. friend is quite right. There is a relatively small number of people who would be benefited by the amendment. It is only the people who have the somewhat larger incomes, and therefore would be able to pay in the larger amount. But, as I say, I can see no difference in principle between giving that kind of man fair treatment and giving it to the larger mass who have not that size of an income.


Stanley Howard Knowles: It is a question of what is fair. We think this goes too far.


Douglas Charles Abbott: My hon. friend may argue that it was not fair in the first place. But, as he himself said, he did not protest it at that time.


Daniel Roland Michener: I have not any quarrel with the clause in so far as it deals with employees except, as has been said, it seems to be giving relief upwards instead of horizontally, as I have argued for. This would be the appropriate place for an amendment, Mr. Chairman. I am saying simply as to that that there is not a very difficult technical problem involved in making the change which I have suggested. If the minister would accept the idea, it might be dealt with in general terms and left for regulation because it seems to me it is largely a mechanical problem in the department to determine proportionately what sort of savings a small businessman or a man who is self-employed, professional and other groups that I call self-employed, should be allowed to make which would be equivalent to an approved pension fund that their fellows in the employed class are making. I appreciate there is probably an administrative problem there, but it does not seem to me at all insuperable and I do urge that the effort be made.
I have an amendment here, Mr. Chairman, which I am not going to move now but I would submit it for the consideration of the minister. If the minister has made up his mind that this is something which cannot be dealt with now I certainly would not wish to urge it upon him for immediate decision because I know that there are difficulties involved. My suggested amendment deals with subsection 5 of section 2 of the bill. It amends sections in the act which now deal with employees. The addition which I suggest would deal with the taxpayer generally and the whole section would read:
"The following amounts may be deducted in computing the income tax of a taxpayer for the taxation year.
(i) The amount contributed by a taxpayer under an approved superannuation fund or plan . . .
(iii) Not exceeding $3,000 paid in the year by a self-employed taxpayer for or on account of the purchase for himself of an approved retirement annuity or pension as defined by the regulations."
If that phraseology were not broad enough it might be extended to include superannuation fund or plan, or approved annuity or pension plan, and then would follow the suggested third paragraph set out above.
The $3,000 I suggest as being a comparable figure because an employed person has a possibility of saving $3,000 which will not be taxed. The $1,500 of salary he receives and the $1,500 the employer contributes are all part of the man's salary because no employer would contribute to a pension fund an amount which his employee is not earning.

I am aware this would not solve the problem entirely but it leaves it open if the minister is so disposed to tackle it and it would perhaps assist him in working out a solution.


Douglas Charles Abbott: Mr. Chairman, this is a problem with which, as some hon. members know, I have been struggling for seven or eight years, and it is not really as simple as my hon. friend from St. Paul's would perhaps like us to think. There are mechanical difficulties, it is true, as he has pointed out, but for me that has not been the main problem.
The main problem has been how to assure fairness for all taxpayers in the country in connection with this sort of thing. We all have different ideas as to how we should make provision for our later years. Some do it by buying annuities; some work for employers who have pension plans; some buy government bonds, some prefer to invest in equities; and some like to leave their money in the bank.
In principle it might be argued that every Canadian should be entitled, if you will, to have a deduction from his current earnings with respect to savings which he makes in order to provide for his old age. But, as I have pointed out on another occasion, and my hon. friend referred to it today, under certain kinds of savings he is free to use that money for the purchase of a new automobile tomorrow if he changes his mind, or use it to buy a house, or any one of a variety of things.
What the hon. member refers to as mechanical difficulties are mostly the difficulties inherent in working out a plan which would be fair to all Canadian taxpayers. It is not nearly so bad for the man who buys an annuity as is sometimes made out. When the annuity comes due he is taxed only on the interest contained in the annuity. In the case of the approved pension plan he is taxed on the full proceeds. One of the reasons why we made this higher than $900 was, in a sense, to eliminate double taxation.
I can honestly say that nothing would please me more than to be able to find a way of providing this kind of benefit for a self-employed person. I was myself a selfemployed person and a practising lawyer, in the same manner as the hon. member for St. Paul's, and I have had representations from colleagues at the bar, from members of the medical profession and others to the effect that something of this sort ought to be done. But it is not quite so simple, and that is illustrated by the fact that even in the United States they have not been able to find a method of providing a pension deduction for the self-employed.
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James MacKerras Macdonnell: Is there any taxation system where they have been able to do so?


Douglas Charles Abbott: I do not know of any, Mr. Chairman. I understand there has been a royal commission set up in the United Kingdom to consider this point and I do not know whether their report is final, but so far as I am aware I know of no jurisdiction, with a modern income tax system such as ours, where they have been able to find a solution to this problem. I am sorry to say I have not been able to do better than my colleagues in some other countries, but we have not been able to work out a suitable plan.


James MacKerras Macdonnell: Would the minister say a word on section 2, subsection (3c), at the top of page 3 of the bill?


Douglas Charles Abbott: I think the explanatory note explains it pretty well, Mr. Chairman. This was brought to our attention in the first instance by, I think, the superintendent of the high schools for Ottawa. As the explanatory note points out, it enables teachers who leave their employment and relinquish their pension rights to come back in again and re-establish their pension position if they so desire.


James MacKerras Macdonnell: But that is still not very clear. The phrase I referred to reads "employed by Her Majesty". Does that refer to the public service? It does not seem at first blush to agree with the explanatory note.


Douglas Charles Abbott: It is to take care of those employed by a province as well as others, that is to say, "a person whose taxable income for the year is exempt by virtue of section 62". I am informed that does not apply to Her Majesty, but it does apply to a municipality or school board. Some teachers are provincially employed. I am not an expert on school teachers or their problems and I had to consult with my technical staff to make sure we are giving the teachers the benefit we are trying to give them.


Mr. Pearkes:: Does that apply to colleges?


Douglas Charles Abbott: I would think it was quite broad enough to cover them.


James MacKerras Macdonnell: I am sorry but I am still
not as clear as I would like to be and as, I am sure, the minister would like me to be. I still do not understand how Her Majesty comes to be featured in this.


Douglas Charles Abbott: I am informed that because some teachers are employed by the provinces and some by local school boards and municipalities that this refers to a person whose taxable income is exempt by virtue

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of section 62. I am learning all the time. I am told normal college teachers are usually provincial government employees.


Jay Waldo Monteith: Would it apply to private school teachers?


Douglas Charles Abbott: No.


George Clyde Nowlan: What about a definition of teacher? It is obvious it would apply to a normal college, but suppose it were a provincial university, as for example the University of New Brunswick. Now, would the staff there, employed by Her Majesty, be considered teachers or professors?


Douglas Charles Abbott: I am informed that they would be covered by section 62 which is referred to here, if they were in an approved pension plan. There have to be the two requirements. They must be members of an approved pension plan and either be employed by Her Majesty or be employed by one of the bodies which are entitled to avail themselves of section 62.


William Alfred Robinson: Shall clause 2 carry?


Jay Waldo Monteith: Mr. Chairman, I have one or two questions to ask on clause 2 but I see that it is six o'clock.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
William Alfred Robinson: Order. When the committee rose at six o'clock we were discussing clause 2. Shall the clause carry?


Jay Waldo Monteith: Mr. Chairman, I think we were discussing paragraph (3c) under subclause 6, I presume it is. I have a couple of other questions having to do with the treatment of teachers. The explanation is to the effect that the new paragraph (3c) relates to teachers who at one time w.ere members of an approved pension plan buf upon leaving that particular employment withdrew their contributions. I am wondering whether their contributions at the time they withdrew them were taxable in their hands under the act as it now stands.


Douglas Charles Abbott: I would think so, yes. I would think the answer is in the affirmative.


Jay Waldo Monteith: With respect to paragraph (3a) of subclause 6, would the minister explain that paragraph, or whatever he wants to call it, which has to do with a contract being entered into for receiving so much money on the promise to repay an increased amount.


Douglas Charles Abbott: It is section (3a), subsection (b). Is that the section my hon. friend is asking about? What is the information he requires? The section seems reasonably clear. What point is he in doubt about?


Jay Waldo Monteith: I am sorry, but it is not entirely clear to me. As I understand it, it has to do with the case where somebody borrows a certain amount of money and undertakes to pay back so much more.


Douglas Charles Abbott: Where bonds are sold at discount, for instance. That is a fairly common practice.


Jay Waldo Monteith: I understand that. I was applying it to another type of case where in certain deals the payment of a premium is promised. It is the same thing as selling bonds at discount, but the interest allowed is on the amount that is promised to be repaid. Is that it?


Douglas Charles Abbott: That is correct.


James MacKerras Macdonnell: I am still bothered about the clause at the top of page 3 of the bill which we were dealing with just before we recessed. I have two questions. The minister suggested that my difficulty with respect to whether this was limited to government employees was answered by the "or" after the words "Her Majesty" but I wonder whether that is really so unless the minister suggests that the use of the word "or" followed by "a person" etc., opens the thing up wide. My second question is this. I have not been able to find section 62, subparagraph (ii) of paragraph (i) of subsection 1. As I understand it, the act to which we are referred is chapter 148 of the Revised Statutes of Canada, 1952. I have that here, and unless I have overlooked something that is not it. If you will look at section 62 you will find that paragraph (i) of subparagraph (ii) does not fit in with that. In other words, I am not able to find the words "while he was not a contributor" and I am not able to tie it in at all. I have also tried chapter 40 of the statutes of 1952-53, but it does not seem to fit in with that either.


Douglas Charles Abbott: I will check that. Perhaps we might let that stand and I will have the reference checked. It is a question of whether or not the reference is accurate. The section relates to municipalities or school boards which are exempt the same as charitable organizations, but I will see that the crossreference is checked.


Ellen Louks Fairclough: With reference to subclause 4 of clause 2, I understand that if, under the $900 maximum, the taxpayer had

contributions in excess of the $900 he was permitted to carry forward the excess to become deductible in the following year. Is the carry-over provision to be permitted now that the maximum has been increased to $1,500?


Douglas Charles Abbott: Yes, that still obtains.


Jay Waldo Monteith: With respect to subclause 9, I wonder why the minister feels that meals should not be allowed as travelling expenses. Apparently it is still going to be permissible to charge your car expenses if you have to go out of town on business for a day but you cannot charge the cost of your meals unless you are out of town and away from your own area for more than twelve hours.


Douglas Charles Abbott: That is correct. A certain situation has developed whereby, for instance, delivery people, men who are delivering milk or other commodities of that sort, can avail themselves of the language of the section as it now stands and charge the cost of their lunch as an expense. That is not available to ordinary employees who are operating in the area in which they live. It is only intended that these expenses should be deductible as an expense from income if the employee is away from his normal place of business and is really in travel status.


Jay Waldo Monteith: I can understand the minister's predicament in this respect.


Douglas Charles Abbott: He is not in a predicament at all.


Jay Waldo Monteith: I think he is just trying to straighten out an angle of the act.


Douglas Charles Abbott: That is right.


Jay Waldo Monteith: I can quite understand that, but I think that in turn it is only going to impose a very heavy penalty on certain other taxpayers. I can name many hundreds in certain classes who are now going to be penalized because of this provision. I quite see the point but I am wondering whether some other method of getting around it could not be arrived at.


Douglas Charles Abbott: That is a matter of opinion. I think my hon. friend would agree that the man who has his lunch downtown should not be able to deduct the expense of that lunch from his income.


Jay Waldo Monteith: I am not suggesting that. What I am suggesting is that if a man travels fifty miles from here for a day's work-


Douglas Charles Abbott: He is in the clear. He can deduct his expenses. He has got to be away twelve hours.
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Mr. Murphy (Lambton West):: Suppose he only goes fifteen miles, like a milkman?


Jay Waldo Monteith: The way the explanation reads, if he is not away for more than twelve hours he cannot deduct.


Douglas Charles Abbott: That is correct.


Jay Waldo Monteith: No matter how far he may travel.


Douglas Charles Abbott: That is right.


Jay Waldo Monteith: Then I claim this is imposing a hardship on that particular type of taxpayer.


Douglas Charles Abbott: That is a matter of opinion.


James MacKerras Macdonnell: I think it is a matter of some substance. There must be a large number of such cases. Let us take a very simple one, a man who goes from Toronto to Oshawa, spends the day there and has his lunch. It seems to me just contrary to common sense to say that is not an expense that he has incurred. As a matter of fact you are inviting him-


Douglas Charles Abbott: Why should he be better off
than the man who comes downtown from his house in Rosedale to Bay street, and buys his lunch there in the middle of the day? Why should he be able to deduct the cost of his lunch when the stock salesman who comes down from Rosedale to Bay street and buys his lunch cannot do it?


Ellen Louks Fairclough: As the minister knows it has been the practice in offices that send employees out of town to do specific jobs to pay their expenses for the day. Does the minister mean that in the future those who are conducting professional activities should say to their employees, "Now, we will pay your train fare to Toronto or your plane fare to Ottawa, but when it comes to lunch you are on your own?"


Douglas Charles Abbott: There is nothing to prevent the employer from paying for his employee's lunch.


Ellen Louks Fairclough: And charging it up as an
expense of doing business?


Douglas Charles Abbott: Precisely; the employee cannot deduct it.


Ellen Louks Fairclough: In other words, the
employer may charge these expenses as part of the expense of doing business, but if a man is working on his own, he cannot do it?


Douglas Charles Abbott: If he is working on his own account, and grossing up his income, of course he can. The basic principle is, as my hon. friend knows better than most members, salary and wages by definition are taxable income. There are no deductions allowed

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unless a salary or wage earner is in a travel status and is only away for the purpose of his employer's business. The employer may pay the employee's travelling expenses, including his, to use a colloquialism, eats and sleeps. This has been the practice under the Income Tax Act for years. This is a loophole section, which is designed to prevent people who, in fact, are at home every night and who are living at home just the same as the clerk I mentioned a moment ago, from deducting the cost of their lunches under the section as it now stands. It would be a manifest injustice to others who are not entitled to avail themselves of that privilege.


Joseph Warner Murphy: Could we go just one step farther? Take a man, say a milkman, who is selling on commission. He leaves in the morning around four or five o'clock and is not paid wages but is paid so much a quart on what he sells. In what position is that individual with respect to his meals?


Douglas Charles Abbott: He cannot charge up his meals as an expense unless he is away for more than twelve hours.


Ellen Louks Fairclough: Do I understand, then, from the minister's explanation that this section does not apply to those whose remuneration is gleaned from fees or the like, but would only apply to those who are on straight salary or wages?


Douglas Charles Abbott: My hon. friend knows that the self-employed and professional man or woman can only deduct as expenses the expenses which are wholly and necessarily incurred for the purpose of earning the income. As a result, I cannot deduct the price of my lunch at Bowles restaurant if I am practising law and eat at Bowles restaurant in the middle of the day. If I were practising law, as I used to do, I could go home for lunch, but as it happens I was expected to have my lunch downtown. You cannot charge up, generally speaking, the expenses of your lunch downtown if you prefer to have it there instead of returning home.


Joseph Warner Murphy: Will the minister answer this? Take the case of the same milkman who cannot charge up his meals unless he is away for more than twelve hours. Suppose he has an employee with him and he pays this boy so much a day, I presume in addition to his meals. In what position is this man on commission with respect to that?


Stanley Howard Knowles: Mr. Chairman-


Douglas Charles Abbott: It would apply to the boy too. He would have to pay for his own lunch out of his earnings after taxes, the same as you

and I have to do. I have the answer to the hon. member for Greenwood now.


Stanley Howard Knowles: That is what I was going to give the minister.


Douglas Charles Abbott: The explanation, I am informed, is that there really should be a comma after section 62-oh, there is a comma. It is subparagraph (ii) of paragraph (i) of subsection 1, and that is subsection 1 of this section of the act.


Stanley Howard Knowles: The reference is to section 11 of the act.


Douglas Charles Abbott: That is correct.


Jay Waldo Monteith: I should like to know just what the application of that is again-sub-paragraph (ii)-


Douglas Charles Abbott: Perhaps it could be shortly put this way. It applies to either Her Majesty, and that would be the provincial government, or the whole of section 62.


Ellen Louks Fairclough: Could I ask the minister, if he has not already answered it, what is the purpose of this subclause 10 on page 3 of the bill? At first glance it rather looks as though it merely sets out what has always been the general practice. What is the change, if any?


Douglas Charles Abbott: I understand that this conforms to existing practice, but we have given depreciation to the owner of an automobile outside of section 20. Section 20 provides for recapture and this is really a supplement to cover the case of automobile depreciation. It has been taken from under section 20.


Daniel (Dan) McIvor: I was asked this question and I was not able to give a good answer. Railroad men get their expenses when they are away on the road. Supposing a bush worker is living in the city and working in the bush and only gets home on week ends. Why does he not get his expenses?


Douglas Charles Abbott: I suppose the answer is that that is a personal expense in going home to see his family on the week end.


James MacKerras Macdonnell: The minister answered
part of my original question, but he has not yet answered the other question. Is it clear that the teachers referred to are not confined to those in government employment?


Douglas Charles Abbott: Precisely; I tried to make it clear that it is intended to cover teachers whether they are employed by school boards, municipalities or by provincial governments. I hope it is comprehensive. I am assured it is.
Clause agreed to

On clause 3-Idem.


Jay Waldo Monteith: I should like to read this, if I may.


Douglas Charles Abbott: This is just to correct a
clerical error.


Jay Waldo Monteith: Yes, I quite agree but it is just a matter of pointing out the appropriateness of the remarks made by the hon. member for Digby-Annapolis-Kings a few minutes ago. This clause reads:
Where depreciable property of a taxpayer as defined for the purpose of section 20 has been disposed of under such circumstances that subsection (4) of section 20 is applicable to determine, for the purpose of paragraph (a) of subsection (1) of section 11, the capital cost of the property to the person by whom the property was acquired, subsections (2), (5) and (6) are not applicable in respect of the disposition.
Now, all I am trying to point out is that I realize the details are necessary to make all the references applicable, but I think it bears out what the hon. member for Digby-Annapolis-Kings said to the effect we should have had more time on the bill before it came before the committee to study these references.


[Stage Direction]
Clause agreed to.
Clause 4 agreed to.
On clause 5.
James MacKerras Macdonnell: Could the minister give us an illustration under clause 5?


Douglas Charles Abbott: Well, Mr. Chairman, this is to take care of a case where, when the depreciation account is first set up the property is, let us say, a two-flat property entirely rented. In the course of time the owner decides to occupy one of the flats. Under the rule as it now stands one is obliged to revalue the whole property for depreciation purposes at the time the change in the character of occupation takes place. Now, this new rule will enable a revaluation to be made only of the part which has changed. It is perhaps a loophole section. It could work both ways. It could relieve the taxpayer, or it could prevent his getting any undue advantage.


Ellen Louks Fairclough: What is the effect of the change in paragraph (g>?


Douglas Charles Abbott: Property which has been sold may include elements for fixed assets, good will, accounts receivable and the like. When those have been apportioned for the purposes of the seller, the same apportionment will apply with respect to the buyer.


Ellen Louks Fairclough: In cases where the various components of the sale are itemized and valued separately, I take it that-
Income Tax Act


Douglas Charles Abbott: They would have to be, in any case, as my hon. friend knows.


Ellen Louks Fairclough: Sometimes in bulk sales they are not. In any event I am thinking of depreciable assets. I take it that the purchaser must set up in his books the assets so acquired at precisely the same amount as set up in the books of the vendor, is that correct?


Douglas Charles Abbott: That is right, yes.


[Stage Direction]
Clause agreed to.
On clause 6.
Jay Waldo Monteith: I notice that the change is made with respect to an iron lung. I think what I have to say would be in order, although I am not sure whether I would be out of order in discussing what I shall attempt to discuss. However if I am not in order I will abide by your ruling, Mr. Chairman. This amendment comes under section 27 of the act and has to do with medical expenses. Section 27 (c) states that medical expenses may be deducted to-
-an amount equal to that portion of medical expenses in excess of 3 per cent of the taxpayer's income for the year paid either by the taxpayer or his legal representatives
(i)	within a period of 12 months ending in the year and not included in the calculation of a deduction for medical expenses under this act for a previous year, or
(ii)	in the event of the death of the taxpayer, within a period of 12 months commencing in the year and not included in the calculation of a deduction for medical expenses under this act for a previous year.
What I am getting at is this, that under paragraph (c) medical expenses paid within a 12 months' period ending in the taxation year may be deducted. That really in my estimation bonuses the person who does not pay his medical expenses when they are due. He can save up medical expenses for three years, and get a reduction of 3 per cent in that one year; whereas if he applied it in each year, as he should and paid when due, he would be getting the full deduction. In my estimation it is not equitable, and I think something should be done about it.


Douglas Charles Abbott: This was changed some years ago. It was represented to me that people found great difficulty in paying heavy medical expenses within the year in which they were incurred.


Stanley Howard Knowles: Hear, hear.


Douglas Charles Abbott: We amended the law to enable them to accumulate those expenses.	We
cannot have it both ways. My hon. friend may be right, but I do not think what we are doing is unfair. Fortunately these exceptional medical expenses are	not
incurred every year. They are exceptional;

Income Tax Act
and under the philosophy, with which my hon. friend from Winnipeg North Centre does not agree, the exemption permitted here is to provide for unusual medical expenses which hit a person and are really beyond what ordinarily would be expected in a normal year. It was as a result of widespread representations that we took out the old test of being incurred within the taxation period.


Jay Waldo Monteith: The minister may be right. I shall not follow the point further.


An hon. Member:: You had better not.


Jay Waldo Monteith: Why not? Under section 27 (d) there is a deduction of $500 if the taxpayer-
-was totally blind at any time in the year or was, throughout the whole of the year, necessarily-


William Alfred Robinson: Order. I allowed the hon. member some leeway with respect to the other matter. However, I do not believe he should discuss paragraph (d).


Jay Waldo Monteith: All right, Mr. Chairman. I was wondering, myself, whether I was in order.


[Stage Direction]
Clause agreed to.
On clause 7-"Control period".
James MacKerras Macdonnell: Would the minister give us an illustration of the operation under clause 7.


Douglas Charles Abbott: This, again, is a relieving clause. It relates to designated surplus, as my hon. friend knows. Cases were brought to my attention where a dividend was paid during the course of a fiscal year in anticipation of the fact that earnings would be sufficient in that year to provide for the payment of that dividend. But under the law as it stands that dividend could not qualify, and was taxable. That was not the real intention of the act. There were some cases where it was possible that some hardship might be the result. This is a relieving clause.


[Stage Direction]
Clause agreed to.
On clause 8-Where income from business or partnership and employment.
James MacKerras Macdonnell: Would the minister give an illustration?


Douglas Charles Abbott: This, again, is a relieving clause. We have had examples where an individual was a person in a partnership which was dissolved during the course of the year, and he then went into employment. A case might arise where he might be assessed on, let us say, as much as 18 months' income in one fiscal period. This is to enable apportionment and to relieve that hardship.


[Stage Direction]
Clause agreed to.
Clause 9 agreed to.
On clause 10-Rents or trust income from farming or fishing.
James MacKerras Macdonnell: This, I understand, is an averaging clause for farmers. It seems to me it has caused a great deal of injustice. I am not yet clear where the legislation stands. I have here a copy of the Nielsen case of a year or two ago. At that time, due to the wording of the section, apparently a farmer who had been late by even as little as a day in any of his filings was not eligible for the averaging privilege. That happened in the Nielsen case. This case approves the judgment of the court lower down. It seems to me that at that time there was the greatest possible injustice.
There has been some amelioration of the situation since that time, and I wonder if the minister would tell us what the situation is now. Because, if I understand correctly, it seems to me there is still a good deal of injustice. Surely there is such a thing as fairness, even in taxation. I have run into cases where great hardship has resulted; and it seems to me the result of that is likely to be that people will feel themselves justified in trying to evade taxation. If they feel every attempt is being made to do justice, I think their feeling will be different. I would like to know where we stand on this averaging privilege at the present time.


Douglas Charles Abbott: This is another relieving section. As my hon. friends know, farmers and fishermen have the privilege of averaging their income over a period of five years, and they can carry losses backward and forward. They can carry it back one year, and forward for a further five years.
It has been represented that in this averaging a man might have three or four fairly good years. Then, let us say, in the fifth year he might have a heavy loss of $8,000 or $10,000, which would more than offset the earnings in the preceding years. He could carry that forward. It is true that farmers, being characteristically cautious people, are not overly optimistic. Perhaps he might fear that he really would not get a chance to offset that in future years, and he has asserted that he should be able to offset the loss in the final year against the profits which he has made in the preceding four years. That is what this section is intended to do. I think it is reasonable myself. Of course the same rule would apply to fishermen.


James MacKerras Macdonnell: I am still a little troubled about this. I cannot find anything in this unless the minister can point out to me the

changes in the wording which override the judgment in the Nielsen case. Let me read briefly from it.


Douglas Charles Abbott: I understand that the difficulty in the Nielsen case was taken care of in the amendment last year. I am assured that is correct. I have forgotten what the Nielsen case was.


James MacKerras Macdonnell: I wish the minister would point out just exactly what happened because I have the section of last year here, section 16. What troubles me is this. I understand it is still the law that if a man is at all late in the year of his filing, when he seeks to average that he loses the privilege for that year, and thereby loses a year altogether. Second, if there is any year during the period when he has failed to file on time, he loses that also. I want to be satisfied because these are the offending words of this bill. These were the words that were effective in the Nielsen case, and I want the minister to point out just exactly how the difficulty is removed, and also if this is still the case, as I understand it is, that failure to file even by a day may deprive a man of the advantage of taking that year into the calculation. That seems to me eminently unjust, because a man is already penalized for his failure to file. Why should he be penalized further?


Douglas Charles Abbott: My information is that formerly if he was late in filing he lost the benefit for all the preceding years. Now the penalty is only for the year of late filing. I meant to mention that earlier the hon. member for Middlesex West raised two or three points in his remarks on second reading. One related to the position of farmers who might employ their sons and not pay them a regular wage, but later turned over a farm or some corresponding property to them. This is a matter which involves certain questions of principle. I think that under the circumstances he outlined there probably would not be income tax payable but possibly gift tax. But, in any event, that is a question that would have to be studied and I shall see that it is considered when budget matters are under consideration.
The other matter related to deductions for young people taking summer courses. There again, that is a matter of principle that will have to be examined to see whether the existing provisions of the law should be amended to cover it.


James MacKerras Macdonnell: I still want to be shown where this difficulty is cured in the legislation. I have the section here. I should like to have the effective words read.
Income Tax Act


Douglas Charles Abbott: Subsection 3 of section 42 says:
An election under subsection (1)-
That is the election to average:
-is a nullity unless the earliest of the "preceding years" is one of the six years immediately prior to the year of averaging.
I appreciate it is a bit complex, but I am told that the result of that would be that you could be late in two years and you thereby drop those two years.


James MacKerras Macdonnell: Mr. Chairman, I still want to be positively satisfied. Here is this case in which there was held to have been no right to average because they had been late in filing. I want to read the words:
The minister, upon assessing the appellant's income for the year 1949, did not average the appellant's income for the said years . . . The minister's grounds for refusing such election were set forth in the 1949 assessment notice and attached to T-7W form as follows namely: "Due to late filing of 1946-7 returns, you are not eligible for averaging for period from 1946 to 1949 inclusive."
Later in the judgment it says:
If parliament had wanted that the filing of income tax returns by a farmer be sufficient to allow him to ask for the averaging of his income for a taxation year and the four immediately preceding years the words: "As required by this part . . ." "would not appear in section 39(1), which would have read" . . . "and the taxpayer has filed returns of income for the preceding years."
At that time the man was adjudged to have no right. Those words are still in section 42 unaltered, and what the minister has just read does not seem to me to remove the requirement as to the filing, though it may cut down the number of years which he loses, but he still apparently is going to lose it in respect to one or two years. I suggest that that is utterly unfair, and that it should not be left in that shape.


Douglas Charles Abbott: My information from the deputy minister of national revenue, taxation, is that the amendment last year was made following the judgment in the Nielsen case, and the effect of that amendment is that there is a penalty of one year in the event of late filing. Prior to that the benefit with respect to all the preceding years was lost. I would have to get out last year's statute and study it and compare it with this one, but I am taking the assurance which is given me that the effect of the amendment made last year was to narrow the penalty down to the loss of one year. There must be some penalty and there should be some penalty for late filing. It is well-known that the tax returns should be filed, and every other taxpayer pays some penalty for late filing. Late filing in here means that the farmer or the fisherman, as the case may be, would lose the benefit of one year for averaging purposes.

Income Tax Act


Jay Waldo Monteith: In a case such as this what would happen? Say that in the first year of a five-year period a man was taxable he filed the return on time and paid his tax; the same in the second; the same in the third year, and in the fourth year he lost a few thousand dollars. He knew from the very first of the year that things were bad, cattle prices were down, and one thing and another, and he knew he lost a lot of money. As a consequence he said to himself: "1 have not made any money; what is the sense of my filing a return? I do not have to pay a tax. There is no penalty." Then he comes along to the fifth year of his averaging period and he finds out that he got some of that money back. He finally files the fifth year's return on time. Is he then penalized on the year in which he lost money or can he at that time file a return for the fourth year on which he lost $8,000 and was not taxable and still take that year into his averaging profit.


Douglas Charles Abbott: He loses the benefit of that year for averaging purposes, but he can carry it backward or forward.


Jay Waldo Monteith: If he carried it backward or forward what would happen in the long run?


Douglas Charles Abbott: He would of course have to file a subsequent return to establish the loss in the fourth year, but he could carry the loss back or forward.


Jay Waldo Monteith: Which in the long run would have no effect cn the five year averaging period?


Douglas Charles Abbott: He would get a benefit of it as long as he had a profit.


Jay Waldo Monteith: Over the five year averaging period?


Douglas Charles Abbott: Yes.


Ellen Louks Fairclough: Despite the loss?


James MacKerras Macdonnell: As I understand it there is now a penalty set out in the act for late filing. To me there is no semblance of justice in saying that because a man who perhaps may not be very expert in these matters has not filed on time he has to incur another penalty. That is what the situation was before the Nielsen case. He had to incur another penalty. If it was a stated penalty of $10 or $20 it would not be too bad, but it may run into a very large sum. If this further penalty is imposed it may be that a man, because of this failure to file, may lose the right for one or two years. Does the minister consider there is any justice in that?


Douglas Charles Abbott: This question, Mr. Chairman, was discussed on the amendment last year. If the amendment was inadequate last year then was the time at which my hon. friend should have raised the matter. This privilege is extended only to this Class of taxpayer; no other taxpayer gets the privilege of averaging. I think we should have some penalty for people who fail to file a return whether it be a farmer or anyone else. Perhaps the penalty is too great, although I am not expressing any opinion on that now, but I do not think it is correct to say when he fails to file his return that he is a poor ignorant farmer and there should not be any penalty. I just cannot accept that.


James MacKerras Macdonnell: The minister has not been quite fair to me. I am saying to the minister that if there should be a penalty exacted then very well let us fix it. But this penalty seems to me to have no relationship to anything. It seems to be a vindictive penalty.


Douglas Charles Abbott: I do not think it is a very serious penalty when you can carry the losses back and forth.


James MacKerras Macdonnell: No, but as I understand it he is still going to lose during that one year and it may be a very important year to him. There perhaps should be a penalty imposed having regard to whatever negligence there is, but not this penalty which seems to me to have no relation to anything reasonable at all.


[Stage Direction]
Clause agreed to.
On clause 11-Corporations.
Jay Waldo Monteith: Mr. Chairman, I would just like to say that I think this is a very sound amendment which has made it possible for a great many financial firms to complete their financial statement later than one month following the end of the year and not be penalized.


Douglas Charles Abbott: This amendment was suggested by the Canadian Bar Association and the dominion association of chartered accountants.


Jay Waldo Monteith: And what about the accountants association?


Douglas Charles Abbott: Yes, it was suggested by both the bar association and the association of accountants.


[Stage Direction]
Clause agreed to.
On clause 12-Effect of carry back of loss.
Jay Waldo Monteith: Mr. Chairman, just one
question on this clause. I realize clauses 12 and 13 are somewhat reciprocal in nature but it has occurred to me that a taxpayer early in the new year and before his instalments

for the previous year are complete may realize, and it is quite logical, that the first five months of the year constitute the best part of that year, but in this particular year they may be bad and he may have realized he is going to have quite a loss. If he stops paying instalments due to the fact that he knows he is going to have a loss which will apply to the previous year's profit he finds that he still has to pay an unpaid balance of tax. I understand that the other clause works out the other way but it has occurred to me that in quite good faith he may think he was not going to be taxable for the losses this year which would apply against the profits for the previous year. In spite of that he may be asked to pay interest, and that does not seem to me to be entirely reasonable.


Douglas Charles Abbott: This only applies to instalments on tax for the profit year and, as my hon. friend has pointed out, it is reciprocal. The principle underlying it is that he has had the use of the money in the case of underpayment of tax and, on the reciprocal provision, if the government collected too much it has had the use of the money.


Jay Waldo Monteith: I quite appreciate that. I do not know what to suggest in this respect, but it seems to me that he is in a position to be quite well aware that he is going to have money kept off him and he will still have to pay interest on the balance. It does not seem quite right.


[Stage Direction]
Clause agreed to.
Mr. Campbell:: Mr. Chairman, this amendment extends by three months the period which-


Douglas Charles Abbott: Mr. Chairman, we have already passed clause 12.


Alexander Maxwell (Max) Campbell: Have we passed clause 11?


Douglas Charles Abbott: Yes.


Alexander Maxwell (Max) Campbell: Well, there is just one small question. I was not aware that clause had been passed. In the case of seasonal construction, corporations engaged in that work do not start operations until the middle of May and they do not get any income until the latter part of June. In a case like that could not the provision be extended a little further for such a contractor?


Douglas Charles Abbott: It is pretty difficult to make special rules for special types of business. This general rule is extended to all corporations. It is a relieving provision which was inserted at the recommendation of the association of chartered accountants and the
Income Tax Act
Canadian Bar Association and I would hesitate to go any further at this time.
Clause 13 agreed to.
On clause 14-Farmers' and fishermen's insurers.


Stanley Howard Knowles: Mr. Chairman, I believe this clause is the one which gives effect to the amendment the minister had moved to budget resolution No. 6. Can the minister say whether the insurance that makes up the 50 per cent of gross premium income refen ed to in this clause can include hail insurance provided on farm property?


Douglas Charles Abbott: I understand it can, Mr. Chairman.


James MacKerras Macdonnell: Mr. Chairman, this is a clause to give effect to the amendment which the minister introduced and, as I understand it, later on we run into the question of the taxation of the reserves of these companies. This has to do with their premium income which is exempt when 50 per cent of their revenue comes in that way.


Douglas Charles Abbott: This adds to section 62. This class of insurer is exempt from taxation whether on their underwriting profits or on their so-called investment income.


[Stage Direction]
Clause agreed to.
On clause 15-Mutual insurance corporations.
James MacKerras Macdonnell: Would the minister say a word about paragraph 3 which, I take it, applies to back taxation on investment income?


Douglas Charles Abbott: That is correct. It is in line with the supreme court decision in the Stanley Mutual case, but it was only, in a sense, by way of obiter dictum. It was not necessary for the decision of the case but in this section we have spelled it out and made it quite clear.


James MacKerras Macdonnell: What is the position with regard to income from the reserves over the past years when they have not been taxed?


Douglas Charles Abbott: They have been taxed but the question was never raised in the Stanley Mutual case and the supreme court assumed they were subject to tax.


James MacKerras Macdonnell: So this was really a
validating measure?


Douglas Charles Abbott: Simply to clarify it and put it beyond peradventure.


[Stage Direction]
Clause agreed to.
Clause 16 agreed to.
[Stage Direction]
Income Tax Act
On clause 17-Employer's contribution to trust deductible.
Jay Waldo Monteith: Mr. Chairman, I understand clause 11 extended the period for estimated instalments on taxation to three months following the present arrangement, and in this amendment it states . . within sixty days thereafter ..." I am just wondering from an accountant's angle whether it was reasonable to suggest the extra three months in one clause and limit it to 60 days in the other. Why not make it 90 days or some other additional time?


Douglas Charles Abbott: As my hon. friend appreciates, this relates to one of these employees profit sharing plans and this was a term which was suggested by the organizations which made these representations. It was submitted to us that it was reasonable to allow 60 days after the end of the fiscal year to ascertain what the profits were and to pay them into the fund and that any amount so paid within that 60 days would be eligible for deduction in the previous fiscal year.


[Stage Direction]
Clause agreed to.
On clause 18-Where paid-up capital increased.
James MacKerras Macdonnell: Will the minister give us an illustration of that clause also?


Douglas Charles Abbott: The explanatory note is about as good an explanation as I can give. It is clarifying and also closes a possible loophole. The explanatory note says this:
This new subsection provides a rule deeming undistributed income on hand to have been capitalized where a corporation has written up its paid-up capital and not increasing its assets by a like amount, for example, by increasing the par value of its shares. The rule provided is similar to that in the case of stock dividends.


[Stage Direction]
Clause agreed to.
Clauses 19 to 21 inclusive agreed to.
On clause 22-Reference to "taxation year".
Jay Waldo Monteith: This clause reads as follows:
Paragraph (c) of subsection 1 of section 85B is amended by deleting the word "or" at the end of subparagraph (iii) thereof and by adding thereto, immediately after subparagraph (iii) thereof, the following subparagraph:
"(iiia) periods for which rent or other amounts for the possession or use of chattels other than a ship have been paid in advance, if the payment in respect thereof was made for a period of more than two years, . . .
There are a couple of comments I should like to make. Why differentiate in the case of a ship? And why should it be two years instead of one year?


Douglas Charles Abbott: The ship is already provided for, I am advised, under another section. This was to meet a special case, I may say,

to be quite frank. We were informed by a concern on the west coast that in connection with propane gas the containers in which this gas is sold, instead of being sold, were charged for on a rental basis. This was to enable them to get an appropriate deduction for prepayment of rent.


Jay Waldo Monteith: That relates to prepayment. That is what the minister said, was it?


Douglas Charles Abbott: That is right.


Jay Waldo Monteith: I cannot understand why it should be for a period of two years. Why not for one year or one month?


Douglas Charles Abbott: If it was only for one year, I do not think you would bother to put a special section in the act. It is where it is over the normal taxable period.


Jay Waldo Monteith: Does this apply, for instance, in a case of some corporation which owns an apartment house where somebody has paid it rent? That does not come under this section?


Douglas Charles Abbott: No; that is not a chattel.


[Stage Direction]
Clause agreed to.
On clause 23-Child not previously qualified for family allowance.
Ellen Louks Fairclough: If this amendment means what I think it means, I think it is a definite improvement to the act. By this does the minister mean that an immigrant coming into this country may elect not to receive family allowance for his children? Suppose he just had a couple of months coming to him; suppose he came, say, in October and had a couple of months the following year, rather than take the $150 exemption and the family allowance, he could refrain from accepting the family allowance for those two years and take the $400 allowance?


Douglas Charles Abbott: No; he is obliged to accept the family allowance but he has the option of repaying; that is, he has the option of making a gift to the crown. This amendment is the result of representations we had from members on all sides of the house. I think my friend the hon. member for Hamilton West was one of them; in fact I know she was. In effect there is given to the immigrant an option to choose whichever is the more favourable basis for him in the year in which he comes into the country.


Ellen Louks Fairclough: Whether he receives it or whether he turns it back, it is the same thing, is it not?


Douglas Charles Abbott: This section says, "There shall be added to the tax." As my hon. friend says, it may be that the net result is the same.


Ellen Louks Fairclough: It is the same thing. I think it is a definite improvement and that it will certainly remove one cause of grievance.


[Stage Direction]
Clause agreed to.
Clauses 24 to 31 inclusive agreed to.
On clause 32.
Mr. Nickle:: The purpose of this clause, of course-and which I strongly support, naturally-is to extend for one additional year the terms of subsection 3 of section 53. The only question in my mind is this: Should not a deduction of what are, after all, nothing more nor less than normal operating expenses of the petroleum and gas mining industry be treated as a permanent deduction by eliminating the time period? In other words, should this act not be incorporated into the permanent Income Tax Act, with no limitation as to its time of application? Can we have a comment from the minister?


Douglas Charles Abbott: That is a matter of opinion. The government has never felt that this should be done at the present time, at any rate, As my hon. friend appreciates, it is a form of incentive legislation. We have been continuing it each year from year to year. Perhaps some time it should be made a part of the permanent tax structure but that time has not yet arrived.


Carl Olof Nickle: I raised the question, Mr. Chairman because I think two of the four items of the so-called incentive legislation can fairly be called incentive subsidies. This particular section does not deal with anything of a nature of what could be called an incentive subsidy. The cost of exploration or development is obviously a normal operating expense of the industry and it is completely unlike a 100 per cent incentive allowance provided by the elimination of the first three years' income from income tax under the law, something which is clearly an incentive subsidy. To get back to my point again, it seems to me to be quite clear that we should continue anything in the nature of an incentive subsidy on a year to year basis, subject to annual review, but that something which is merely a provision for the deduction of what is no more nor less than normal operating expenses should not be subject to a time limit.


[Stage Direction]
Clause agreed to.
Income Tax Act
Clause 33 agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: By leave, shall this bill be read a third time now?


Stanley Howard Knowles: By leave.


Douglas Charles Abbott: the third reading of the bill.


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


Ellen Louks Fairclough: Mr. Speaker, before this bill carries, I should just like to say this: It seems to me to be a little bit unfair that members of this house should have a bill of this size thrown at them and be called upon to consider it in this house with only two days for perusal. For those of us who are interested in the bill it has meant a mad scramble even to read it through, much less to give it the careful study that it requires. I could not help having this point called to my mind when the minister, in reply to the hon. member for Greenwood (Mr. Mac-donnell) tonight, made the remark that if he had had any objection to the retention of one of the clauses he should have spoken about it last year. Considering the short space of time that has been given to the members of this house in which to consider this bill, I cannot see where criticism of that type is justified. Before third reading I feel I must protest, on my own behalf and on behalf of other hon. members, against the very short space of time which was given to us to consider this bill.


James MacKerras Macdonnell: I want to add a word or two. I want to say that I am very unhappy about the way that the farmers' averaging section was left. I hope the minister will take another look at it in the months ahead.


Douglas Charles Abbott: Mr. Speaker, I want to say again what I said to the hon. member for Digby-Annapolis-Kings (Mr. Nowlan) this afternoon, that no one regrets more than I do that it has not been possible to reach second reading of the income tax bill at an earlier time. The bill has been prepared for at least three weeks now but the house has seen fit to occupy itself with a good deal of other work and it has been brought on just as quickly as it has been possible to do so. It was given first reading, I believe, last week sometime, on Monday or Tuesday. It probably was not available until Wednesday or Thursday, and it is true that is not a great deal of time to examine a complicated bill of this kind. But

Canadian National Railways I cannot accept responsibility on the part of the government for that. The house has seen fit to occupy itself with other various interesting topics, and we just have not been able to reach this bill. However, the legislation has not been held up by members on the government side of the house.
Motion agreed to and bill read the third time and passed.



CANADIAN NATIONAL RAILWAYS


Douglas Charles Abbott: the second reading of Bill No. 469, to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways system during the calendar year 1954, and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company.


James MacKerras Macdonnell: Mr. Speaker, I wish to make one or two brief remarks on this measure. We have this great asset, the Canadian National Railways, and I think it is the clear duty of the house to vote moneys for capital expenditure. However, as we continue to do so I think it is well for us to remind ourselves occasionally of the increasing investment we have year by year. Therefore I propose to put certain figures on the record taken from a statement prepared by the railway in answer to a question by the hon. member for Temiscouata (Mr. Pouliot) and myself. I will read the total of borrowed capital only as shown in the statement and I will do so in five-year periods.
In 1923 there was a total of $1,406 million, in 1928, $1,609 million, and in 1933, $1,922 million. In that year debt was written off in the amount of $373 million and debt trans- ' ferred to equity capital amounted to $270 million, leaving $1,301 million. In 1942 the amount had gone up to $1,328 million. In 1947 it had gone down to $1,272 million, and in 1951 the total was $1,472 million. In 1952 there was transferred to equity capital $736 million leaving in that year $833 million. Last year the amount had risen to $931 million.
The reason I put these figures on the record is, as I said, that I think it is wise for us to remind ourselves not only of the investment we have at the present time but of the previous amounts which have been forgiven the railway from time to time. As hon. members know, the return on that amount is negligible, although that is no fault of the railway. It is really in the interests of the railway that I think it worth while to put
'*Mr. Abbott.]

the figures on the record and worth reminding hon. members of our huge investment because the railway operates under great difficulties. I believe it has capable management but, as we know, it is operating under very great difficulties along with its competitor, the Canadian Pacific. I think it would be wise for us all to bear the situation in our minds, to bear in our minds the various difficulties in competition which confront the railways by reason of other forms of transportation and to bear in mind the difficulties which confront them by reason of rapidly rising costs.
Therefore, Mr. Speaker, while I have no proposal to put before the house and while I repeat, as I said at the outset, that I think these capital grants have to be made, I also think it worth while to remind hon. members of our huge investment, of the almost microscopic return we get on it at the present time, of the reasons for that return and of the need for us all to be on guard and wide awake to the difficulties and interests of this great operation which we own, and to see to it that it gets a fair deal.


Mr. A. E. Robinson (Bruce):: Mr. Speaker, before the motion is adopted I should like to make a few remarks. We in Bruce county have been serviced by the Canadian National for a good while. In the early years the railway made a lot of money in that district but now, because of certain methods of management, the trucking industry has taken the business away from the railways. The situation now is that about every second year word goes around that our railroad service is going to be curtailed.
I have nothing against the capital expenditures involved in the bill, but if Canada is expecting the progress that our economists tell us we are going to have I should like to suggest to the minister that he convey to the railway that it would not be wise to think of curtailing service to good municipalities that in the past have paid a lot towards the deficits that the railway incurred and that such service, if not improved, should at least be continued.


Stanley Howard Knowles: Mr. Speaker, I wish to say a very few words. I rise to express the hope that the capital expenditures being provided in this bill will play some part in reversing the trend with respect to employment by the Canadian National Railways. As the house is aware, I have had occasion a number of times during the course of the session to ask the Minister of Transport (Mr. Chevrier) whether he could give any hope that layoffs by the Canadian National Railways might be discontinued. He has expressed that hope

on a number of occasions, but each time he expresses the hope more employees are laid off.
In addition to the information I have obtained from him on the floor of the house and in addition to the information that appears in the press, there is hardly a week goes by that I do not get a letter from Winnipeg telling me of still further lay-offs by the Canadian National Railways, either at the Transcona or Fort Rouge shops or in some other part of the system at Winnipeg. The situation is extremely serious so far as these employees are concerned. There are shops at Transcona where the numbers working have been reduced by half in a period of a few months. So, Mr. Speaker, as I indicated, my purpose in rising at this moment is to express the hope that the capital expenditures foreshadowed by this bill will play some part in putting a stop to these lay-offs, and that they may play some part in helping to put some of these Canadian National employees back to work once again.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Applewhaite in the chair.
On clause 1-Short title.
William Moore Benidickson: At the resolution stage, the hon. member for Greenwood asked the Minister of Finance one or two questions, and he was assured an answer would be brought down at this time. A general understanding of this legislation is facilitated in this house not only because the bill comes up annually but it does get the lively attention of one of our larger committees each year, the railways and shipping committee. This year I think they held about five sittings, and as a result they have a very substantial Hansard containing the inquiries that were put to the president of the railway and the large staff that accompanies him to the committee to cover the great variety of questions to which answers are given.
The hon. member for Greenwood the other day asked particularly for a comment upon two points. First of all he made this statement, which appears at page 5392 of Hansard for June 2, 1954:
My understanding is that the $72 million referred to is an amount authorized last year but not expended, and that the Intention of the finance department is to have each year a new statement of the amounts actually required for the year.
I think my hon. friend was seeking assurance that we are not departing this year in this annual bill from the practice of previous legislation of this kind, because I found that my hon. friend has probably outlined the basis of this legislation and the practice under it as well as anyone has done when
Canadian National Railways last year he had this to say, which does indeed describe this act of 1954. The hon. member for Greenwood last year said this, as appears at page 4516 of Hansard for April 29, 1953:
My understanding-and I think this is important -is that the policy under the bill is to make a fresh start each year, that is to say, all the unused authorities of past years are washed out and we make a fresh start each year so that there is no overlapping period and no chance of misunderstanding between the national railways and the Department of Finance as to just what are the authority and scope of the Canadian National Railways.
That is true, and I think when the president of the road submitted the capital budget to the railways and shipping committee this year, the summary of financial commitments authorized for 1954 was presented in a form that makes it a little clearer to the members what is involved. For the first time there was clearly set out in columnar form under two headings the 1954 financial authorizations- I am referring to page 1 of the capital budget which is reproduced on page 122 of the minutes of the 1954 sittings of the railways and shipping committee. There was a separation of the projects not heretofore authorized and brought forth for the first time in 1954, and then another column clearly indicating, both in connection with additions and betterments as well as branch line construction and new equipment, items that were projects previously authorized in former financing bills.
Now, the other question that was raised by the hon. member for Greenwood referred to railway policy in the matter of depreciation account. This, of course, is important because hon. members will find opposite section 4 of the bill an item of $19,900,000, which is described as the amount for depreciation accounts for this year's financing, thus reducing the gross capital requirements for the current year from $241,767,198 to a net of $221,867,198 because these moneys set aside in the depreciation account are available for capital expenditures.
As hon. members know, the national road operates certain lines in the United States, and by reason of United States law it is sometimes necessary to have separate accounting practices for the United States operations. To an extent that is true in the matter of the depreciation account. The system of depreciation also differs between equipment and road property. I should like to describe, first of all, the practice with respect to equipment depreciation. Prior to 1940 it was the general practice of the railway to charge operating expenses with the loss of equipment destroyed or worn out in service when the equipment was retired

Canadian National Railways permanently from service. But effective from 1940 the straight line depreciation on rolling stock and floating equipment was adopted. A similar practice on Canadian National lines in the United States has been in effect for some time because of the regulations of the interstate commerce commission.
Under this method a percentage of the capital cost of the equipment is charged to operating expenses annually throughout the service life of equipment, sufficient to retire the investment loss and salvage value of the worn-out units of equipment. The average service life of railway equipment is approximately 28 years. The average annual depreciation rate is approximately 3-32 per cent of the investment value. Under this system the operating expense account for each year bears a proportionate share of the equipment retirement costs irrespective of the date the equipment is retired. This is the unit method of accounting for equipment retirement and conforms to the general practice followed by class 1 roads of the United States.
In the matter of the depreciation of road property there is a difference between United States and Canadian accounts. In the United States the depreciation for national road property there is at rates approved by the interstate commerce commission for individual roads, which became mandatorily effective on January 1, 1943. The items in each primary account are treated as a group and a composite depreciation rate established. Losses on retirement are charged in their entirety to reserves. The average rate of depreciation is approximately 1-5 per cent per annum on the investment value of the various items of road property.
Now, with respect to the Canadian lines, the loss on retirement of Canadian line road property is charged to operating expenses at the time the units of property are retired from service. This is known as retirement accounting.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
On clause 3-Capital expenditures authorized.
Mr. Knight:: I should like to ask the minister about the capital expenditures. I take it this item covers the capital expenditure of building a hotel. I know that in the committee Mr. Gordon mentioned that to us. Is that a fact, and how much is that expenditure?


William Moore Benidickson: As he says, the hon. member for Saskatoon was a member of that committee. Considerable detail concerning hotel capital requirements was given to the


committee by Mr. Gordon. The information appears at page 142 of the proceedings of the committee. Quite fortunately, in connection with this bill I am assisted by my colleague the parliamentary assistant to the Minister of Transport, and he is prepared to give information respecting internal details of the railway. My recollection is that capital expenditures set out for hotels were in the neighbourhood of $5 million.


Robert Ross (Roy) Knight: Mr. Gordon at that time laid before us plans for the future in regard to office consolidation, whereby various offices would be placed in a building near the hotel. Is there anything allocated for that this year?


J. G. Léopold Langlois: It is only in the planning stage so far; no money is provided this year.


Robert Ross (Roy) Knight: There was objection in committee to this consolidation because it was felt it would offer a good bombing target. However I think those who took that stand were thinking in terms of previous wars, and forgetting that if a bomb were to land in Montreal there would be nothing left of Montreal, or the hotel, either.
From experience in my own city, I should like to endorse the expenditure of whatever moneys are required for an hotel of that sort. Due to the foresight of Sir Henry Thornton, the Bessborough hotel in my city was built at a time when the position of Canada, from the standpoint of economics, would not have appeared to justify its building. However the building of that hotel has meant a great deal to my city and province, and has offered first-class accommodation to people from all parts of Canada. I believe it can be said that it is one of the most successful hotels in the system.
However at the time it was built there was a feeling that it would be a white elephant. This has not proved to be so, because today it is one of the most profitable hotels in Canada and has added tremendous prestige to the city. If in the opinion of the railway management an hotel, on a greater scale, is necessary for Montreal, then I would support it. Secondly, if it will place the nationally-owned railways, in which we are interested, on a competitive basis with the other railway, which draws its capital from private funds, I would be in favour of it.
Further, if it will offer a considerable amount of employment it would be worth while, and the expenditure would be justified.


Mr. Thatcher:: Mr. Chairman, I approve of most of the proposed capital expenditures in this bill, but I regret I cannot agree with my colleague from Saskatoon, and perhaps

most other hon. members in the house, as to the desirability of building the hotel in Montreal. In the debate on the budget I expressed my opposition to the construction of this hotel, and I should like to reiterate that opposition tonight. As I recall, president Donald Gordon of the Canadian National Railways said that the building in Montreal was to be a luxury hotel which would accommodate 2,500 people at banquets and 4,000 people at conventions. It may be that in many respects such a building would be desirable. I agree with my colleague from Saskatoon that it would provide employment and might attract tourists. If the hotel were going to be built out of revenue, I would support the expenditure. But when one looks at section 9(2) it becomes clear that in all probability the taxpayers will ultimately have to pay for this luxury hotel. While the parliamentary assistant said the amount is only $5 million this year, eventually it will be $20 million.
I believe it was two years ago when parliament agreed to a reorganization of the capital stock of the Canadian National Railways. At that time we were told that if a billion odd dollars were changed from bonds into noninterest-bearing stock, the profit and loss position of the C.N.R. in future would be a good deal better. Actually since that time it has been better. In 1952 we made a profit of $142,000 and last year a profit of $244,000. Moreover President Gordon told the railways committee that this year probably the C.N.R. would have a substantial deficit.
I cannot believe it is sound business practice for any company to indulge in luxury expenditures at a time when it is operating at a heavy deficit. It seems to me that this is all the more so when hon. members recall that hotel expenditures of the C.N.R. in past years have not been very profitable. One of the best years the system had was in 1952. With an investment of $31,500,000 they were able to show a profit of only $535,000 and that without charging adequate depreciation. So when Mr. Gordon comes before parliament and asks for permission to build another luxury hotel, I am a bit dubious about the wisdom of granting the funds.
Let me repeat that when the C.N.R. comes before parliament and asks for expenditures to build new railways to open up the country, I support them. But I doubt very much whether the building of this luxury hotel is going to help open up the country in any way. I do not think the people in my constituency would be enthusiastic about an expenditure of this kind, nor do I think that the Canadian taxpayer will receive value for his money if the building is proceeded with.
Canadian National Railways I realize that I do not speak for this party, and also that very few members in the house would agree with me. But I did wish to express my opposition to this item.


Mr. Nesbitt:: Mr. Chairman, a little over a week ago when we were considering the estimates of the Department of Transport I made reference to a railway crossing east of Woodstock, namely the Creditville crossing. I pointed out on that occasion that it was one of the most dangerous crossings in western Ontario and had been the cause of many accidents, probably more than any other crossing. Two days after I spoke in the house another accident took place at that same crossing, causing serious injury to four persons. I bring this information to the attention of the parliamentary assistant and the minister in the hope that they will take cognizance of it.


Clarence Gillis: I would like to join with the hon. member for Winnipeg North Centre in expressing the hope that the expenditure of money as indicated by this bill might have beneficial effects, so far as the employment of Canadian National Railways workers is concerned, and particularly that it might affect beneficially those who have lost their employment in the last two years. The best barometer in the country indicating that people are thinking in terms of expansion is found in the activity of the railroads.
This budget indicates that the Canadian National Railways, in co-operation with the Department of Transport, are planning ahead for some years. Since I was a member of the committee that examined the accounts of the railways this session, I was put in the position to hear the president of the Canadian National Railways outline his program of expansion and improvements and tell us about the new equipment that they would purchase within the next year or two. It was a very encouraging and optimistic report. I cannot agree with the hon. member for Moose Jaw-Lake Centre. It seems that for a businessman, who had the courage and the optimism to expand his own business from one outlet to four or five in the hardware field, and in addition to that have the courage and the confidence in the country to go into another business, to take the attitude that he takes here toward a proposed expenditure of something around $234 million, all carefully plotted as to the benefit that it may bring to the country, is unrealistic.
He picks out an item of $5 million. That hotel in Montreal is something the president of the Canadian National Railways was talked to very carefully about by members of the committee. There is no doubt about it,

Canadian National Railways that hotel is needed in Montreal for the purpose for which it is intended. He pointed out, and any hon. member who has had the privilege of attending a national convention in Montreal over the past two or three years will agree, that there is not a hotel in Montreal that is capable of handling the kind of national and international conventions that we are getting today. They have to be divided. The words "luxury hotel" are a misnomer. It is not a luxury hotel; it is a hotel that is going to fill our need in the city of Montreal.
Mr. Gordon pointed out to the committee that the hotel is going to cater to the type of convention in that city that cannot be catered to at present by any hotel that exists there today. In addition to that he informed us that he has requests and applications from international organizations that have conventions in mind, sufficient to fill the space for the next three years. There is no doubt of it paying for itself. The fears of the hon. member for Moose Jaw-Lake Centre that the government is going to have to pay the shot on this hotel in the future are very unrealistic, to say the least. When you examine the contribution that the Canadian National Railways have made across this country you will agree that they are invaluable. You cannot measure it.
The hon. member for Saskatoon rightly said that when the Canadian National Railways built the first chain of hotels across this country many people took the same position as the hon. member for Moose Jaw-Lake Centre is taking at this time. It was an expenditure that could not be justified; it was not needed; it was unrealistic. But in the few short years since those hotels were built they certainly have proved that they were not only an asset to the country and to the system but that they filled a great need during the past several years.
Instead of opposing this expenditure in the committee, practically every member of the committee from one section of the country to the other asked for expansions in hotels that the system is operating at the present time. I know the hotel in Halifax that is operated by the Canadian National Railways is filled to capacity all the time. You could double the size of that hotel in that city at this time and fill it six days a week. The attitude that this hotel is to be a luxury hotel is a complete distortion of the fact. It is needed in Montreal; but it will also do another thing. There is a large unemployment problem across this country today. The building of that hotel, not for the purpose of creating employment, but for the purpose of filling a


need, will serve another purpose. It will stimulate the construction industry. It will use steel, and I hope the steel that it will use will be manufactured in Canada. It will stimulate practically every industry across this country, cement, steel-


Mr. Sinclair:: Hardware.


Clarence Gillis: And hardware. The hon. member for Moose Jaw-Lake Centre may get a lot of plumbing and the refrigerators. I hope he will.


Stanley Howard Knowles: They will need a lot of fish there, too.


Clarence Gillis: Yes. It will do many things; there is no doubt about that. I suggest to the hon. member for Moose Jaw-Lake Centre that in picking out these little, mediocre items of expenditures such as those he is not being the big person that he is in the business world, in the business that he himself manages.
I just thought I would say these few words because since I was a member of the committee the attitude taken by the hon. member kind of lets me and the hon. member for Saskatoon down. When we are placed on that committee the membership of our group have confidence in us, and we are not coming back to this house and recommending something that is not one hundred per cent simon pure. We have done that, and we have told the members of that group that this was a justifiable expenditure; it was in the best interests of the country; it filled the need that existed in that section. I feel a little bit hurt when my hon. friend rises in his place behind me and breathes down my neck and tells us that we were not exactly right. I think we had a better chance to examine this item than he had. I am going to be charitable to him and say that he had better take another look.


Mr. Herridge:: I am really drawn to have a few words to say on this item, particularly in view of the attitude of the hon. member for Moose Jaw-Lake Centre. I support it for the very reasons given by the hon. member for Winnipeg North Centre, the hon. member for Saskatoon and the hon. member for Cape Breton South. I am not going to repeat their arguments, but we in general support this measure because it is an extension of the field of public ownership to provide railroad and other services. It is a fact that there is more agreement from year to year on this question. We find Liberals, Conservatives, members of this group and other members supporting this policy. In fact, you find all progressive-thinking and forward-looking people supporting this kind of policy.


James Sinclair: Page the hon. member for Moose Jaw-Lake Centre.


Herbert Wilfred Herridge: I also support the measure because I have confidence in the committee. We had two well-known members of our group on that committee. They returned to our group and advised us that it was a very sensible and necessary piece of legislation. In addition, while I have personally every respect for the hon. member for Moose Jaw-Lake Centre, I have greater confidence in the business ability of the president of the Canadian National Railways. I am quite sure he would not make a recommendation of this type to the government if he were not confident that in the long run it was in the interests of the Canadian National Railways and of the people of Canada.
The hon. member for Moose Jaw-Lake Centre mentioned a luxury hotel. I think, as the hon. member for Cape Breton South said, that was rather stretching the fact. The evidence before the committee indicated it is a public service that is required in the city of Montreal if our railway is going to serve the public adequately. He mentioned that the company did not show a very big profit this year and suggested they might show a loss next year, and that it is all wrong from the business point of view to expand while you are showing losses. Well, surely, the hon. member for Moose Jaw-Lake Centre must know that this country was built up by people who were willing to expand while the companies concerned were showing losses. That was the history of the C.P.R. and I am sure I am not going to admit that any publicly-owned corporation must show less initiative and less enterprise than a private enterprise corporation.
The very same argument was used, as the hon. member for Cape Breton South said, when other hotels were built in this country. I remember reading it in the press at the time one of these hotels was built at Saskatoon, as my hon. friend to my right reminds me, and conditions were pretty bad in Canada at that time. But there were people who had confidence in this country and they proceeded with the building of various publicly-owned hotels.
I remember even in the city of Vancouver when they built a city hall during the depression and when many said it could not be done, but it was done because some people had confidence in the future of the city of Vancouver. As a result, the city of Vancouver now has one of the finest city halls in Canada. It is for all these reasons, Mr. Chairman, that I wholeheartedly support this measure and compliment the president of the 83276-355
Canadian National Railways Canadian National Railways for his initiative, forward-looking ideas and proposals.


Frederick George Hahn: Mr. Chairman, I am rather sorry to hear hon. members to my right take the attitude they have in respect to the building of a hotel. I feel that if we have so many millions of dollars to spend then that money would be better spent on opening up the country and constructing railway lines, particularly the Pacific Great Eastern from Squamish to Vancouver, and so to assist in opening up the great northern parts of Alberta and British Columbia.
However, I am not here to defend the hon. member for Moose Jaw-Lake Centre. He is quite able to do that for himself. I do not intend to say too much either as regards this hotel. I feel that a hotel may possibly be necessary in Montreal, but I think it should be the business of the Canadian National Railways to build railways first and hotels second.
The very fact that my socialist friends are so enthusiastic-and I do not blame them- when it comes to spending money which belongs to the taxpayer in keeping people employed is not altogether surprising, and I can agree with them to some extent. But I should like to remind them that the Saskatchewan government, over a period of years, has had the privilege of losing many thousands of dollars and has seen fit to close many industries they owned which could have kept some of the people in their province quite well employed. However, I am not here to fight that particular province. The government of that province will have to look after itself at the next provincial election.
I come back to the matter of the C.N.R. and the railway problem in particular. I would say that where there is any expenditure, whether it be of $5 or $20 million, we have several requirements in regard to railway extension branches which should come first, one or two of which have already been denied. In fact, I am thinking of the line from Chibougamau to St. Felicien. Part of this money could well have been spent in carrying on that line following the socialist precept that it is worth a little loss now to open up the country for a later date.
However, just to reiterate my point, I believe the railways should be the problem of the Canadian National Railways and their first task should be to open up our country and make certain Canada has a good means of transportation which will make it possible for us to progress in the way all of us hope.

Canadian National Railways


Wilbert Ross Thatcher: Mr. Chairman, I would just like to say one word. The fact that my hon. friend from Cape Breton South and the hon. member for Kootenay West support this hotel makes me all the more certain that I may be right. I know that the economy ideas which I sometimes express cause them distress. But I assure them that their economic expressions sometimes cause me distress. I suppose I had better leave it at that.
However, I would like to reiterate that I do not think the spending of $20 million on a luxury hotel, and that is what this is, as Mr. Donald Gordon said in his annual report, is a good thing for the taxpayers generally. I do not think the taxpayer is receiving full value for the dollars spent.
There is one more question I wish to ask one of the parliamentary assistants and that pertains to the expenditure of $147 million on equipment. I am in favour of this item if it is properly used. But I have been told that more and more people coming east from Vancouver and British Columbia are taking the American Great Northern railroad instead of the C.N.R. or C.P.R., because it is so much quicker to come that way. I wonder, if we get this new equipment, whether the C.N.R. can take steps to speed up the service to compete with the Great Northern railway, so that the people from British Columbia will come east on that line with equal speed. Could I have an answer to that?


William Moore Benidickson: Mr. Chairman, I think my hon. friend is referring probably to timetables about which I cannot speak, but on the general point of equipment in so far as the C.N.R. is concerned, I recall from my sojourn in the Department of Transport that it is only about two years ago that the railway was able to commence to make any capital expenditure of note on passenger equipment so great was the pressure for freight equipment, because necessarily there was the severe postponement during the war years. However, very substantial orders for new passenger equipment have been made during the last two years. As a member of the travelling public, and from what I hear from others, I think improved services are very much in evidence.


Wilbert Ross Thatcher: I do not think the parliamentary assistant understood my question. My understanding is that if a person comes from Vancouver on the Great Northern railway, which is in the northern United States, he can arrive here more quickly than by


C.N.R. or C.P.R. If we get this new equipment will it mean the C.N.R. will be able to speed up its schedule? Could I have an answer?


Mr. Fairey:: Mr. Chairman, if I may presume to give an answer to that question, I raised that very question in committee and Mr. Gordon gave us to understand that both railways were going to cut down the time between Montreal and Vancouver.


[Stage Direction]
Clause agreed to.
Clauses 4, 5 and 6 agreed to.
On clause 7

Power to aid other companies.
James MacKerras Macdonnell: Mr. Chairman, this clause reads:
The national company may aid and assist, in any manner not inconsistent with section 3, any other of the companies and railways comprised in the national system...
What other companies are referred to there?


William Moore Benidickson: The list, Mr. Chairman, is provided-


James MacKerras Macdonnell: I do not think it is necessary to read the entire list.


William Moore Benidickson: I was just going to point out where it could be found. The list can be found in the 1953 annual report, pages 34 and 35, and that list indicates the companies which would come under the definition of the "national system". This clause is a clause which has been in all previous acts, and indeed it was in last year's act in exactly the same form. It simply states that if the expenditures are not inconsistent with section 3 they can be for the purposes of the national as well as other companies in the system.


[Stage Direction]
Clause agreed to.
Clauses 8 to 12 inclusive agreed to.
Bill reported, read the third time, by leave, and passed.


[Stage Direction]
The house resumed, from Tuesday, June 1, consideration of the motion of Mr. Martin for the second reading of Bill No. 462, to provide for allowances for disabled persons.
Mr. Deputy Speaker:: Is it the pleasure of the house to adopt the motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Applewhaite in the chair.

On clause 1-Short title.
Stanley Howard Knowles: Mr. Chairman, I believe it was understood that if we got this far with this measure we would not go on with it tonight. Was that not the understanding?


Walter Edward Harris: I said that, Mr. Chairman, anticipating that the minister might not be present tonight because he had other public duties to attend to. But since he is present I think we ought to deal with the committee stage now.


Some hon. Members:: Agreed.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
On clause 3-Agreements with the provinces.
Stanley Howard Knowles: Mr. Chairman, clause 3 of this bill is the one which has the meat in it. This is the clause that specifies the age at which allowances for disabled persons can be paid. It also has in it as much as we get by way of a definition of total and permanent disability. It also has in it the means test provisions, together with provisions that make it impossible to receive this allowance at the same time as one is receiving any one of certain other items, such as an allowance under the Blind Persons Act, assistance under the Old Age Assistance Act, an allowance under the War Veterans Allowance Act or a pension under the Old Age Security Act. In addition to that, this is the clause that specifies the maximum amount of the allowance as $40. It also specifies that the federal government will pay up to only 50 per cent of the $40 a month. In other words, I have spelled out my statement that this is the clause that has the meat of this legislation in it.
I wonder whether the minister is in a position now to comment on some of the points that were raised when we were at the second reading stage. Perhaps he could start with one that was raised by members in all parties on this side of the house, namely the question of the definition. The clause reads that the allowance can be paid to a recipient who is "totally and permanently disabled as prescribed by the regulations". In this clause there are other matters that I wish to say something about, namely, the amount of the allowance, the age at which it is payable and the division between the provinces and the federal government. Perhaps the minister might first comment on the remarks made by the hon. member for Lanark, the hon. member for Red Deer, myself and others on the way in which total and permanent disability is defined. I ask him, if he will, to relate his comments to the remarks made on this 83276-355J
Disabled Persons-Allowances question in the brief presented to the government by the Canadian Welfare Council to which I made reference last Tuesday.


Edward Turney Applewhaite: Shall the clause
carry?


Some hon. Members:: Carried.


Stanley Howard Knowles: Not yet. I am amazed to find the minister so unwilling to speak.


Daniel Roland Michener: On clause 3 I have a question which I should like to raise for the minister's consideration. Subsection 2 provides that payment shall be made only in respect of a recipient who-and I then drop down to paragraph (f) which reads as follows:
(f) is not a patient or resident in a hospital, nursing home, or private, charitable or public institution, except as prescribed in the regulations.
I do not know what stage the drafting of regulations has reached, but many instances readily come to my mind where a disabled person who receives a pension would be much better off and would be better cared for in a private charitable institution than elsewhere. I have some instances of that kind in mind from my own experience. I know that some of these institutions which keep elderly people who have the old age pension look after them very well on part of the pension and leave the pensioners with a certain part of it as spending money. It is a happy arrangement for elderly people and I think it would apply equally well to disabled people who would be looked after well in these private institutions by reason of the pension which they get under this act; whereas if the pension is not permitted to be paid when they are in such homes, it seems to me that one of the purposes of the act is defeated.
I appreciate the fact that one does not wish to duplicate the expenditure of public funds for disabled persons by having them maintained at public expense in a home and also by paying a pension. But if only a modest part of the funds of a home are public funds, it seems to me that it is a proper case for paying the pension. I trust that the minister has that point in mind and will deal with it in the regulations.


Mr. Blair:: Further to the remarks made by the hon. member, may I say that this morning I had a letter which set out the case of a disabled war veteran-one who is 100 per cent disabled-who is contributing to the keep of a totally disabled wife in an institution. Something should be done under this act to deal with a matter of that kind. It does not seem fair that he should be contributing for that purpose part of his pension



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Disabled Persons-Allowances paid to him for war wounds and for other disability. He has what amounts to 100 per cent disability.
When the bill was before the house we mentioned this question of the time between the age of 16 when the family allowance stops and when this bill entitles the recipient to receive the pension at 18. I maintain that those two years are important years in the training and care of the disabled person and that those two years could be lost to some degree in the training of a disabled person or with respect to his health. Those two years are just as important as are any other years and during them they are not receiving anything.
The other point is this. If some information were given by the minister as to just what is meant by totally and permanently disabled people, it possibly would help us in this discussion. There is one other matter I wish to mention. I did not get a chance to say anything about it at the time, but there has been some discussion about who is responsible for this bill. I should like to pay tribute to one person who has worked consistently through the years. That person is Miss Eva Warden of Calgary who brought this delegation down to the house. I do not like to use the word "lobby" but she worked very hard in this matter. I believe in giving honour where honour is due; and I believe that Miss Warden should receive great credit for what she has done in promoting public opinion with respect to the bringing in of this bill.
Mr. Shaw:: Mr. Chairman, last week I expressed the hope that the minister would be able to give us some information at least to indicate the extent of the agreement that has been reached between his department and the provinces in connection with this matter of the defining of the expression "totally and permanently disabled as prescribed by the regulations". Personally I am confident, without having been told, that some measure of agreement was reached. Undoubtedly this matter came up for serious consideration. In the second place, I should like to know whether, in the course of discussing the matter, it was agreed tentatively at least to go as far as the Alberta act does in its present statute, that is, as amended at the last session. That brings me to the specific subject of the case where a person may be partially disabled physically and partially disabled mentally, but not sufficiently mentally ill to warrant being placed in an institution. Nevertheless that person is permanently disabled. I should like to

know whether or not that type of case will be included in the definition.
Clause stands.
Progress reported.



BUSINESS OF THE HOUSE

Walter Edward Harris: Mr. Speaker, we shall continue in the morning with this debate followed by the legislation with respect to benefits for the armed forces, then the National Harbours Board Act, and then the Post Office Act. As the house knows, there is a pension bill in the veterans affairs committee that is being reported with a suggested amendment which, if His Excellency concurs, would be recommended to the house tomorrow by consent, I hope, and might be dealt with at the resolution stage so that the pension bill can be dealt with in committee of the whole with the amendment.
Then we have a bill, of which notice has been given, with respect to motor vehicle transportation. It would be our hope that hon. members opposite might find it convenient to deal with that some time later in the day after they have had an opportunity to see it. If these matters are all disposed of we shall take estimates, beginning with national revenue, then secretary of state, fisheries, and mines and technical surveys.


Howard Charles Green: Mr. Speaker, the motor transport bill has not yet been distributed. The minister was kind enough to give me a copy but I understand it has not been distributed generally. Therefore it would be very difficult to go on with that tomorrow. It was my understanding also that the Post Office Act would be taken before the national harbours board bill.


Walter Edward Harris: I know that some hon. members have committee work to attend to in the morning, and if it is not found possible to have them here at the time they have particular matters to discuss we can arrange that. However, we might leave the order I have indicated for the time being. We shall see that copies of the bill with respect to motor vehicle transportation are available the first thing in the morning, if they are not now available when hon. members leave the chamber. I am sure that the intelligent consideration which you will give to it in the meantime will lead you to be able to discuss it in the afternoon.


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It being five minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday. June 8, 1954