1954-02-05

[Stage Direction]
A message from His Excellency the Governor General transmitting estimates for the financial year ending March 31, 1955, was presented by Hon. Douglas Abbott (Minister of Finance) and read by Mr. Speaker to the house.
Hon. Douglas Abbott (Minister of Finance):: Mr. Speaker, as in past years, I do not propose to make any lengthy statement concerning the estimates. I might, however, note that the only change in the form of the new year estimates from that of previous years is in the manner in which the amounts included for salaries and wages of continuing staffs are summarized in the "details of services" section of the blue book.
Whereas the staff detail for each vote was formerly broken down to show numbers of position and paylist totals for permanent and temporary employees, a different form of summary has been substituted which discloses the same information for full-time, part-time and seasonal classes of positions. This change, of course, follows logically from the coming into force, on January 1, 1954, of the new Public Service Superannuation Act, the effect of which has been to eliminate the main distinction formerly existing between permanents and temporaries, namely, the pension benefit. The new breakdown between fulltime, part-time and seasonal positions will give hon. members more information upon which they may make judgments concerning the size and character of the civil service organization.
As regards the figures themselves, the total budgetary expenditure for the new year of $4,492 million compares with a total of $4,434 million for the current year, an increase of approximately $58 million or 1 [DOT] 3 per cent.
This increase is the result of a number of changes, both increases and decreases. The total requested for national defence, defence
production and civil defence is $1,955 million which is approximately $126 million less than the amount of $2,081 million approved for the current year.
This decrease reflects a tapering off in the capital assistance program for defence industry which reached its peak in 1952-53, and the more stable character of the defence department's equipment procurement program.
For purposes other than defence total budgetary expenditure provided for in the new estimates is $2,537 million compared to $2,353 million for the current year. This increase of $184 million is accounted for principally by $43 million additional for public debt charges, $27 million more for civil salaries, $22 million more for tax rental payments to provinces, a $22 million higher contribution to the civil service superannuation account, and $17 million more for family allowance payments. Also included in this increase are an item of $15 million for the Canadian Broadcasting Corporation and another of $7 million for the Department of Transport for which no comparable items were shown in the current year's estimates, although disbursements are being made under statutory authority.
I move:
That the message from His Excellency, together with the estimates presented this day, be referred to the committee of supply.


[Stage Direction]
Motion agreed to.


Mr. J. H. Harrison (Meadow Lake):: Mr. Speaker, by leave of the house I should like to revert to the order, presenting reports by standing and select committees.


Mr. Speaker:: Has the hon. member leave to revert to "presenting reports by standing and select committees"?


Some hon. Members:: Agreed.


John Hornby Harrison: I beg leave to table the first report of the standing committee on standing orders.

Queen Elizabeth Islands PENITENTIARIES



TABLING OF ANNUAL REPORT OF COMMISSIONER

Hon. Sluarl S. Garson (Minister of Justice):: Mr. Speaker, I now place on the table printed copies in English and in French of the annual report of the commissioner of penitentiaries for the fiscal year ended March 31, 1953, which have now been received from the queen's printer. Hon. members will recall that a photostatic copy of the material contained in the report was tabled on November 23, 1953, in order to comply with the provisions of section 14 of the Penitentiary Act.



QUEEN ELIZABETH ISLANDS


Hon. Jean Lesage (Minister of Northern Affairs and National Resources):: Mr. Speaker, with the permission of the house I should like to make a statement respecting our most northern islands.
I am pleased to announce that Her Majesty the Queen has been graciously pleased to allow that her name be given to the entire group of islands which lies north of Lancaster sound and Viscount Melville sound. Henceforth this northern half of the Canadian Arctic archipelago will therefore be known as the Queen Elizabeth islands.
It seems particularly fitting that our present sovereign should allow her name to be permanently associated with this part of Canada. It was during the reign of her illustrious namesake that British seamen made their first voyages of discovery into what is now the Canadian Arctic. In the 350 years which have passed since then, our Arctic has been widely explored and mapped. Now, in the reign of Her Majesty Queen Elizabeth II, we have every confidence that we are on the threshold of a new age, if not of discovery, then of development of our Arctic lands and seas.
It was important for the sake of administrative convenience that these particular islands should have some collective name. They stretch in a great triangle whose base, along the Arctic ocean's polar pack, is almost as wide as our three prairie provinces; to see even the outer edges of the group would require a flight of 2,300 miles. And yet these islands are in many ways a unit with its own peculiar conditions and problems. The lands themselves are, of course, the most northerly in North America and the most northerly of the Queen's realms. On their 160,000 square miles dwell less than 200

of her people, but beneath their surface may lie some of the richest treasures which we possess.
Hon. members will recall that the islands of our Arctic archipelago bear the names of other members of the royal family. Prince Charles island, in Foxe basin, was discovered and named about five years ago. Victoria island, Prince of Wales island and King William island are farther north, just below Viscount Melville sound. Now, northernmost of all, are the Queen Elizabeth islands, our final frontier.


Hon. George A. Drew (Leader of the Opposition):: Mr. Speaker, the announcement by the minister in regard to the gracious acceptance by Her Majesty of the suggestion that these islands should bear her name comes at a particularly appropriate time. There is something symbolic in the fact that these islands, extending to the polar circle in the north, should receive the name of our young Queen at a time when she is enjoying the summer sunshine of Australia, on the other side of the world. It symbolizes in a dramatic way the world-embracing character of this commonwealth partnership of which she assumed leadership last year.
The minister has spoken of the fact that this carries our imagination back 350 years to the earlier days of exploration under another Elizabeth. All the land areas may have been discovered, but the horizons are wider than ever before, and owing to the miracles of science new opportunities open out in every part of the world. It is not beyond the realm of hope that these islands, which will carry the name of our monarch, may not only symbolize the extent of our territory and of the whole north, but at the same time play an important part in the structure of Canada itself.



PRIVATE BILLS


[Stage Direction]
Bill No. 178, for the relief of Dorothy Ann Stuart Story McKenna.-Mr. Hunter.
Bill No. 179, for the relief of Joyce Tulloch Foley.-Mr. Hunter.
Bill No. 180, for the relief of Ruth Annie Ricketts Perrett.-Mr. Hunter.
Bill No. 181, for the relief of Elizabeth Harriet Wyburd Ramseger.-Mr. Hunter.
Bill No. 182, for the relief of Warma Wilhelmiina Rantasalmi Wirtanen.-Mr. Hunter.
Bill No. 183, for the relief of Ruth May Rowley Grundy.-Mr. Weir.
Bill No. 184, for the relief of Rodney David
Themens.-Mr. Hunter.

Bill No. 185, for the relief of Patricia Mackell Wilson.-Mr. Hunter.
Bill No. 186, for the relief of Joseph Aurele Denault.-Mr. Hunter.
Bill No. 187, for the relief of Arthur Ryan.-Mr. Hunter.
Bill No. 188, for the relief of Mary Clen-man Bernard, otherwise known as May Clenman Bernard.-Mr. Hunter.
Bill No. 189, for the relief of Lloyd Demont Noseworthy.-Mr. Hunter.
Bill No. 190, for the relief of Douglas Charles Fortune-Mr. Hunter.
Bill No. 191, for the relief of Kenneth George Wright.-Mr. Hunter.
Bill No. 192, for the relief of Sonia Rof-man Bailis.-Mr. Hunter.
Bill No. 193, for the relief of Bessie Livshitz Rudy.-Mr. Hunter.
Bill No. 194, for the relief of Monika Emil-ija Kasputyte Janauskas.-Mr. Hunter.
Bill No. 195, for the relief of Suzanne Marie-Therese Gens La France.-Mr. Hunter.
Bill No. 196, for the relief of Noella Cooker Prince-Mr. Hunter.
Bill No. 197, for the relief of Rupert Evans Joyce.-Mr. Hunter.
Bill No. 198, respecting Commerce Mutual Fire Insurance Company.-Mr. Eudes.


[Stage Direction]
Right Hon. C. D. Howe (Acting Prime
Minister) moved:
That on Wednesday, February 17, 1954, and every Wednesday thereafter to the end of the session, government notices of motions and government orders shall have precedence over all business except the introduction of bills, questions by members and notices of motions for the production of papers.
Motion agreed to.


Right Hon. J. G. Gardiner (Minister of Agriculture) moved: that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to introduce a measure to amend the Animal Contagious Diseases Act to remove the limits on the compensation payable in respect of swine and sheep, and to provide for payment of compensation on the basis of market value.
Inquiries of the Ministry
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the house.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the orders of the day:
George Alexander Drew: Mr. Speaker, I wish to direct a question to the Minister of Trade and Commerce. In view of press reports of contracts amounting to $1,120 million which have been proposed by Russia to Britain, and having regard to the fact that this would of necessity and in large measure involve supplies which we ordinarily might expect to sell to Britain, has the minister any comment to make on that report?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, we have no authentic information beyond the newspaper reports which I read, as did my hon. friend. I looked over the list of items involved and I saw nothing which I thought would displace Canadian shipments, although shipments amounting to $1,120 million must certainly displace something. However, it is interesting to note that Russia proposes to pay in gold, which is helpful. At the moment, no action has been taken in regard to trade with Russia other than to offer normal facilities.



SUPREME COURT OF CANADA


[Stage Direction]
On the orders of the day:
Mr. M. J. Coldwell (Roseiown-Biggar):: Mr. Speaker, may I direct a question to the Minister of Justice. In view of the minister's answer to my question yesterday suggesting a submission jointly, by the governor general in council and the government of the province of Quebec, of an act of the Quebec legislature known as the freedom of worship act, to the Supreme Court of Canada, and the minister's reply that there was no authority for such joint reference, may I now ask him if the federal government will consider using the authority contained in section 55 of the Supreme Court Act for references by the governor in council as to the constitutionality of this provincial legislation?


Stuart Sinclair Garson: I wish to thank the hon. member for having given me notice of his intention to ask this

Inquiries of the Ministry question. According to news reports, steps which have been taken by counsel for the Jehovah's witnesses to test the constitutionality of the Quebec freedom of worship act are now being contested by counsel for the attorney general of Quebec. The whole matter is presently before the courts. Consideration is not being given at this time by the government of Canada to a reference of this legislation to the Supreme Court of Canada.


Major James William Coldwell: Does the minister realize that this legislation, while it does perhaps arise out of necessity in relation to Jehovah's witnesses, may have much wider application in the religious field?


Stuart Sinclair Garson: In reply to my hon. friend's supplementary question, I may say we do realize that; but the point I think is that the constitutionality of the new Quebec act, either in relation to Jehovah's witnesses or to anyone else, is being contested in the courts at the present time.



THE BUDGET


[Stage Direction]
On the orders of the day:
Mr. J. M. Macdonnell (Greenwood):: I
should like to ask the Minister of Finance whether, now that the estimates are down, it is too soon for him to be able to give some indication as to when his budget may be brought down.


Douglas Charles Abbott: It is a little bit too soon, Mr. Speaker; but I may say that it will not be quite as early as last year.



WATER POLLUTION


[Stage Direction]
On the orders of the day:
Mr. A. M. Campbell (The Balilefords):: should like to direct a question to the Minister of Fisheries. Will the minister have an inspection made of the fish life in the North Saskatchewan river to determine whether the pollution of the water in that river is killing or affecting the health of the fish in that river?


Hon. James Sinclair (Minisier of Fisheries):: Mr. Speaker, I thank the hon. member for having given me notice of this question. There is no question that under the British North America Act legislative jurisdiction over fisheries rests with the federal government. However, by agreement with the government of Canada in 1930 the three prairie provinces took over the responsibility ;

of administering their own natural resources, including fisheries. Since that date provincial officers enforce federal fisheries conservation laws. The federal government does not maintain any staff in those provinces for this purpose. Therefore the inspection of the alleged pollution of the North Saskatchewan river would primarily be the responsibility of the governments of Saskatchewan and Alberta.
There is no question whatsoever about the fact that the Fisheries Act which is enforced in those provinces by the provincial authorities contains sufficient authority. Perhaps if I just read subsection 2 of section 33 of the Fisheries Act, it will be seen how wide the powers are. Subsection 2 of section 33 reads as follows:
No person shall cause or knowingly permit to pass into, or put or knowingly permit to be put, lime, chemical substances or drugs, poisonous matter, dead or decaying fish, or remnants thereof, mill rubbish or sawdust or any other deleterious substance or thing, whether the same is of a like character to the substances named in this section or not, in any water frequented by fish, or that flows into such water, nor on ice over either such waters.
In the five provinces-British Columbia and the four Atlantic provinces-where we have direct administration of the fisheries, we have found this section to be quite sufficient to control pollution of the water and I have no doubt that if the provincial authorities get together and use this section they will find the same thing.



REQUEST FOR IMMEDIATE JOINT ACTION

[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, now that the fish population has been disposed of, 1 come back to human beings. I should like to ask the Minister of National Health and Welfare whether he received a telegram from the executive council of the Saskatchewan boards of trade in session in Regina pointing out their extreme concern over the pollution of the North Saskatchewan river and the need for immediate joint provincial and federal action to remedy a situation which is, to use the words of the telegram, "dangerous to human and animal life".


Mr. Speaker:: Order. The hon. member must ask his question, not read from a telegram.


John George Diefenbaker: All right. What I want to find out from the minister is this. Are we going to get any action there? The situation is serious and emergent.
Hon. Paul Martin (Minister of National
Health and Welfare): Mr. Speaker, I think my
hon. friend will want to remember the words

which he used yesterday when he was questioning me on this matter, to the effect that there was no reluctance on our part to give whatever co-operation we can under the constitution. My hon. friend acknowledged that fact yesterday. I have not received the communications to which he has directed my attention but I shall look forward to reading them as soon as they come in.


John George Diefenbaker: Just the same old passing the buck.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Clarence Gillis (Cape Breton South):: May I direct a question to the Acting Prime Minister. It arises out of the developing unemployment situation. To what extent does the government accept responsibility for maintaining full employment in this country?


Clarence Decatur Howe: Mr. Speaker, the government
accepts responsibility for maintaining an economic atmosphere conducive to a high level of employment. That we are doing.


Mr. Colin Cameron (Nanaimo):: Mr. Speaker, I should like to ask a supplementary question of the Acting Prime Minister following the question asked by my friend the hon. member for Cape Breton South (Mr. Gillis). Is the government now employing those fiscal and monetary measures to which the Minister of Labour (Mr. Gregg) referred on January 26, in order to maintain a high level of employment?


Clarence Decatur Howe: The answer is yes.



DEPARTMENT OF LABOUR

[Stage Direction]
REQUEST FOR INFORMATION ON SETTING UP OF women's BUREAU
On the orders of the day:
['The answer is no.']
Miss Sybil Bennett (Halton):: Mr. Speaker, before asking my question I should just like to extend my very warm thanks for this demonstration which has been made on my behalf. It is delightful and most encouraging.
I should like to direct a question to the Minister of Labour. Will the minister inform the house as to what progress has been made in setting up the women's bureau in the Department of Labour, following the statement made by the minister in the house on May 14, 1953?
Inquiries of the Ministry


Hon. Milton F. Gregg (Minister of Labour):: Mr. Speaker, I consider it an honour to be the recipient of the first question asked by the hon. member for Halton. I should like to tell her that good progress in planning has been made for setting up a women's bureau in my department along the lines of the statement I made in discussing my estimates last spring.
I am sure my hon. friend will agree that the first and most important part of that planning should be the finding of a suitable person to act as head of the bureau. Consequently the civil service commission last summer set up the position, advertised widely for applicants from both within and without the civil service and, I am told, received a great many replies. But up to date a decision has not been reached as to the result of that competition.



[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver-Quadra):: I should like to ask the Minister of Northern Affairs and National Resources a question arising out of the statement he made earlier this afternoon. Has the government under consideration any plan for attempting to arrange with the United States for an exchange of some northern territory for an outlet from British Columbia through the Alaska panhandle? I ask that question because press dispatches earlier in the week indicated that at least some of the ministers were interested in a plan of that type.


Jean Lesage: The answer is no.



NATIONAL FILM BOARD


[Stage Direction]
On the orders of the day:
Major James William Coldwell: wish to direct a question to the Minister of Public Works today. Yesterday I directed it to the Minister of Citizenship and Immigration (Mr. Harris). Will the contract for the removal of the film board to Montreal and the erection of buildings there be let before the house has an opportunity of considering the estimates necessary with regard to the buildings and removal of staff from Ottawa?


Hon. Robert H. Winters (Minister of Public Works):: Mr. Speaker, I might say that, following the statement made by the Minister of
1814	HOUSE OF
Inquiries of the Ministry Citizenship and Immigration in the house last Monday, I instructed the officials of the Department of Public Works to notify the lowest tenderer that he would be awarded a contract. That action has been taken.
With respect to parliamentary consideration of this move, I know the house is aware that parliament, on several occasions, has had the opportunity to consider every step to date. The Minister of Finance (Mr. Abbott) tabled the estimates today. In them there is an item to cover the initial stages of construction of the building in question. Subject to the wishes of the house and of the house leader, I should be glad to have the estimates of the Department of Public Works considered on the earliest possible occasion.



POST OFFICE


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Secretary of State in his capacity as the minister responsible in parliament for the civil service commission? Is the Secretary of State yet in a position to give the house the list, which the Minister of Finance (Mr. Abbott) promised shortly back on December 8, of localities where the five-day 40-hour week will be put into effect for post office employees, in order that we may have that information before we proceed further with the bill that is now before the house?


Hon. J. W. Pickersgill (Secretary of State):: The answer is that the minister has not yet received the report from the civil service commission. He will inquire when it will be ready.


Stanley Howard Knowles: Mr. Speaker, I rise on a question of privilege which, I submit, affects the rights of the members of this house. We will have before us as an order of business today a bill which the government says is based on the proposal that the five-day 40-hour week is being established for postal employees. Some of the employees are disturbed lest that five-day 40-hour week may not come into effect in localities like my own city of Winnipeg and some other cities. I ask the leader of the house whether it is in order and whether it is proper to ask the house to go ahead with a bill that is to be first on today's order of business until we have that information, so we will know the extent to which the five-day 40-hour week is to be implemented for post office employees.


Mr. Speaker:: The Postmaster General in introducing his bill and moving second reading has advocated many other reasons for the postal rate increases which are the subject matter of the bill. I do not think the hon. member, by way of a question of privilege, should insist upon having a certain report tabled on a specific point before dealing with the bill, which has already been dealt with for several hours and the consideration of which will continue today. I do not see how the hon. member is entitled to raise that matter by way of a question of privilege.


Major James William Coldwell: May I just say that one of the considerations in the bringing down of this bill was that the five-day week would involve the expenditure of more money, and I think my hon. friend is quite right in asking the minister to produce this evidence in order that we may know what the situation is. I would ask the leader of the house if he would not agree to varying the business of the day until we do get this information.


Mr. Harris:: In answer to the direct question, the leader of the house is one of many in the cabinet, and we accept the responsibility for introducing the bill, defending it and giving reasons for it. That is what is being done.


George Alexander Drew: Mr. Speaker, there has been some discussion regarding the procedure by which members of the house would be kept informed, and at the moment Your Honour has under consideration the practices and rules of the house. I would point out that a question has been asked of the minister responsible as to whether information is now available with regard to the five-day week. If it is not available, it means that the argument that has been presented by another minister is not substantiated at this time. I think the point is well taken-


Some hon. Members:: Order.


George Alexander Drew: -that unless the minister responsible for the civil service can say that it does cover every community, then the bill should not be proceeded with merely on the statement that costs are being incurred in that regard.


Douglas Charles Abbott: 
Mr. Speaker:: This is a discussion on the bill. We are now on orders of the day and questions are being asked. If other members wish to ask questions of the ministers I will recognize them. Otherwise I shall call orders of the day and the Clerk will read the first order, which is the Post Office Act. Perhaps there might be a further discussion then, but first let us read the order of the day.


George Alexander Drew: Mr. Speaker, may I submit that there have already been answers-


Some hon. Members:: Order.


George Alexander Drew: -by three ministers which indicate that the source of information cannot come from one minister.


Mr. Speaker:: With due respect to the Leader of the Opposition, may I point out that this matter was brought up on a question of privilege upon which I have already ruled. We are right back in the position we were in before that question of privilege was raised, the question period on the orders of the day. There is nothing else before the house at the moment. Orders of the day.



POST OFFICE ACT


[Stage Direction]
The house resumed, from Thursday, February 4, consideration of the motion of Mr. Cote for the second reading of Bill No. 168, to amend the Post Office Act.
Post Office Act
Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, it has been stated in the past few minutes that a number of reasons have been outlined by the Postmaster General (Mr. Cote) as to why he supports the bill to increase the postal rates. Analysing the statements that have been made by him as found in Hansard, I find that the Postmaster General put forward two basic reasons for the introduction of the bill. One is his claim that he requires to make up the sum of $13,500,000 which he maintains will be required to cover general salary increases, the cost of the five-day week and increased remuneration to mail contractors. He says that in addition the department will suffer a loss of $7,500,000 owing to the removal of stamps on cheques.
I should like to deal first of all with the $7,500,000 loss brought about by reason of stamps no longer being required on cheques. That is not a reason which should have been put forward by the Postmaster General. If this loss is, as I maintain it is, strictly the result of a cute, political trick pulled by the Liberals just before the election, then that should be their responsibility. At the time the government took that action prior to the election they were looking for kudos and backslapping because they were removing that charge and doing away with the inconvenience; but nothing whatsoever was said to indicate that the tax was going to be reimposed in another form after the election. Therefore there was, without a doubt, a general assumption on the part of the people that the loss would be made up out of the general revenue. I say it was a straight, cute political trick. It reacted entirely to the advantage of big business because the average citizen does not issue a great many cheques. It is companies, business, that issue the majority.


Mr. Speaker:: Order. I do not know whether the principle of the bill as it now stands does not offer enough scope for relevant discussion, but it seems to me that I have to intervene much more often than I wish to. The hon. member is now dealing with a certain action taken by the government on an earlier occasion. If he wishes to make a comparison or a passing reference to that as being the reason for the increase contemplated by the bill it is quite in order. I have let many others do that. But the minute he goes into the merits or demerits of the action taken by the government at the last session in removing the excise tax on cheques I think he is drifting too far away from the principle of the bill.

Post Office Act


Harold Edward Winch: Mr. Speaker, I thought I was adhering strictly to it because time after time the Postmaster General brought in this argument.


Mr. Speaker:: Order. It so happens that, while the hon. member thinks he is dealing with the principle, I happen to think differently, and that being my ruling I would ask the hon. member to relate his remarks strictly to the principle of the bill.


Harold Edward Winch: Naturally, Mr. Speaker, I have to bow to your decision, but understand my difficulty as to how an argument can be used on one side and not on the other.


Mr. Speaker:: I do not want the hon. member to leave the impression that I permit members on one side to follow a certain trend of argument and do not permit members on the other side to follow the same trend. The hon. member knows perfectly well that he was dealing with the gesture made by the government last session as being favourable to big business. He went on to say that big business does not need to have that kind of gentle gesture made towards it. It was at that moment that I intervened. Now, I believe the hon. member and I understand the situation fairly well.


Harold Edward Winch: In the arguments the Postmaster General used in support of the motion for second reading of this bill he mentioned the necessity for making up a loss of $7-5 million by an increase in the postal rate 'on first-class mail. I desired to state, Mr. Speaker, that in my estimation that loss is not one which rightfully should be given as a reason for an increase in the postal rate on first-class mail. Time after time the Postmaster General reiterated, not once but over a dozen times, his belief that those who used the mails should pay for them and that was the principle in this bill. If that is correct, then I would have expected that before this house was asked to impose a greater charge on first-class mail that principle, if it is not now in effect, would have been put into effect. That is not the situation, so the arguments that are used by the Postmaster General as to why this bill should be passed are the very reasons why we believe it should not be passed.
I refer the minister again to his own administration of this department, and to the statistics made available to this house and the public in the report of the Post Office Department. I am basing all I am going to say on the statements of the minister and the Secretary of State (Mr. Pickersgill) that those who use the mails should pay. According to the latest information I have on first-class mail at the present rate, for every 46

cents of revenue the cost of handling and distributing that mail is 29 cents. The revenue on first-class mail is 46 cents and the expense is 29 cents. We are informed that this works out at approximately $16 million of net profit on the handling of first-class mail. In such a situation where does the principle, that those who use the mails should pay, come into effect? We are being asked through the medium of this bill to authorize an increase that will bring in, according to the Postmaster General, a net revenue increase of $14 million. This net revenue increase of $14 million can only come from one source, and that is the increased postal rate on first-class mail. This is what the Postmaster General is asking, on the basis of the principle that those who use the mails shall pay. He is not satisfied with a net profit of $21 million; he wants a net profit of $35 million from those who use the first-class mail. 1 believe his own argument falls down completely.
In so far as second-class mails are concerned, the latest figures reveal that for 5 cents of revenue the cost of handling and delivering is 18-5 cents. The revenue is 5 cents and the expense is 18-5 cents, and this accounts for a deficit of approximately $16 million. The Postmaster General and the Secretary of State, in supporting this bill, say they believe in the principle that those who use the mails shall pay. I cannot see that argument, on the basis of the figures I have presented. If the Postmaster General really believes in the principle, then he should see that it is put into operation. If there is a deficit once the principle has been placed in operation, that is the time for him to come before the house with such a bill. I believe that to do so now, on the basis of this argument, is a most fantastic and ridiculous thing.
I was grateful that this debate could be adjourned last night because I desired to have the opportunity of reading the J. D. Woods and Gordon report which the Postmaster General tabled in the house yesterday and which appears as an appendix to Hansard. It is a most interesting report, although it is quite brief. Even before I read this report I was opposed to this bill, but after reading it I am more than ever opposed to it. It is quite obvious, at least to me, that something radical should be done in the post office administration branch. I cannot quite understand how this department has operated as efficiently as it has. The report, almost throughout, lays emphasis on the necessity for key personnel or the "top brass" of the organization. Just go through it very briefly, Mr. Speaker, and then try to understand

how the postal service has continued to operate. I am taking the word of the Postmaster General that J. D. Woods and Gordon is a good firm on business administration.
Let us look at the report as it appears on page 1806 of Hansard for February 4, 1954. It reads:
Operations Branch
(a)	Chief superintendent-engineering-a man should be obtained from outside the service to fill this vacancy . . .
(b)	Mechanical engineering division-This position should be filled either from outside the service or possibly by one of the engineers from one of the major post offices . . .
(c)	Methods and time study division-A start should be made immediately on the organization of this division. Either the man to head the division or one or two of his assistants should be drawn from outside the department . . .
(d)	Chief superintendent-operations-This position should be filled by the most experienced man available within the service . . .
(g)	Methods and procedures division-The organization of this division is dependent on obtaining suitable personnel to carry out the work . . .
(h)	Inquiries division-As soon as a suitable postal superintendent can be selected, this division can be formed.
Transportation branch
(a)	Chief superintendent-transportation planning and research-This position should be filled as soon as possible . . .
(b)	Chief superintendent-transportation services -This position should be filled by a man with proven administrative ability . . .
Financial branch
(a) There are three senior positions to be filled in this branch and the organization changes can take place as soon as suitable men are available. In addition there is the position of comptroller in the administration branch. It will probably be necessary to go outside the department to fill two or three or these four positions . . .
This is the way the report reads; key man after key man; reorganization after reorganization, and recommendations to go outside the department to obtain suitable men to do the job. Is it any wonder, Mr. Speaker, that we feel the Post Office Department must have done a remarkable job in the past in operating as efficiently as they have? In view of that brief report which the Postmaster General received in December 1952-I have not seen the main report-I say there is conclusive evidence that some reorganization should be undertaken by the government. I say, on the basis of this report, that they are not carrying out their own principle that those who use the mails shall pay. I believe, therefore, that this bill should most certainly be emphatically rejected by every member in this house.
(Translation):


Mr. Romuald Bourque (Outremont-St. Jean):: Mr. Speaker, I did not intend to take part in the present debate but so much fuss has been made about the report which was 83276-115
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tabled the day before last that I believe it is mv duty, as a businessman, to rise and voice my protests.
(Text):
Before proceeding further I should like to say that for the last three days hon. members have been commenting upon the report as if it were the Bible. Let me say that I have now before me a report which, as a businessman, I have just had prepared by a firm of management engineers. It is a very complete report. I have not studied it yet, but I am sure when I do study it that I possibly will not implement more than 40 per cent of what it contains.
I understand that about two-thirds of the recommendations contained in the report submitted to the Post Office Department have been implemented. This shows that it was given very close study, that it has been implemented after the study was made, and that the decisions were made by superior officers in the department.
We have just been told that one of the recommendations in the report was that some of the senior officers were to be changed. Well, in these days, in business, every day we are confronted with such things. We have to make continual changes in the administration of different corporations in which we are interested. And not only that, but in the larger corporations a complete bookkeeping system may be installed today, and in eight months' time it may be found that that system is not as efficient as it was supposed to be. As a result it is thrown out, and another one comes in.
So it is not surprising to find, in a vast department such as the Post Office Department, one which covers the whole of Canada, one which employs thousands of persons in thousands of localities, and handles mail in all parts of Canada as well as mail from the United States and other parts of the world- I say it is not surprising, in a department of this kind, to find at certain times that the degree of efficiency is not all that it should be.
Hence this report was called for and made; and we are told that to the extent of two-thirds the Postmaster General has implemented the recommendations it contained. I say he is to be commended upon his efficiency. This is particularly true when we consider the billions of letters handled by the department, and place alongside that the very slight loss that has been suffered in the last few years.
And yet some hon. members are very critical. For instance, if a letter coming to one of them is delayed, then immediately he

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attacks the department, and says all kinds of things about it. But we do not hear anything about human frailties, with the thousands of employees in the department, the number of trains it uses, the number of post offices, and the great number of articles passing through them. We hear nothing from them about the great number of hands through which a letter passes before it reaches its destination. To my mind it is nothing short of wonderful that in Canada at this time we have such a satisfactory system, with so few complaints coming in-and hon. members are in a position to know, because we receive complaints from practically all parts of Canada.
I do not want to be too long in what I say today, but I do not think the working population in Canada is going to object too strenuously to the increased postage they will be called upon to pay. I do not think the average employee writes more than ten or twelve letters a month; and if he is called upon to pay only one cent more, then I do not think the ten or twelve cents a month more, the $1.20 a year, will annoy him too greatly because he will be conscious of the fact that he is anxious to have increases in his salary, and that he has enjoyed such increases in the last few years. He will bear in mind that post office employees are also entitled to increases, and that if those employees are to receive higher pay it must be taken from the public by way of a higher postal rate.
The cost of living has increased to people in every walk of life, and I am sure that all employees in Canada will be glad to contribute their bit to enable the Post Office Department to continue the efficient service it has been giving the people of Canada.


Mr. W. M. Hamilton (Notre Dame de Grace):: Mr. Speaker, listening to the Postmaster General (Mr. Cote) last night I thought of something I received through the mail not long ago. It was a civil service notice advising that a commercial artist was required in the Department of National Defence.
I wondered about it, and discussed the matter with a colleague of mine. He gave me an answer in these words, "Well, with the estimates coming down, the Department of National Defence needs a commercial artist to paint a brighter picture." It seems to me, Mr. Speaker, that we will not find such a gentleman attached to the Post Office Department, because the Postmaster General needs no commercial artist: he paints his own picture. And he paints pictures that sometimes are not quite in accord with the facts, as many people see them.
IMr. Bourque.]
This report has been tremendously valuable, I think, in establishing certain facts. One point which has not been brought out, and which might just be mentioned, is that apparently it cost over $70,000. In my original remarks I made reference to $10,000 or $15,000; but we find in the figures for the department a total of $72,000.54 paid to this company in the last two years. I want to get my money's worth out of it, as I believe most of us do; and that is why we are using the facts contained so plentifully in that report.
Before going further I wish to make one point crystal clear, so that subsequently it will not be distorted by the Postmaster General or by anybody else. He has tried to make it seem that it is inconsistent to compliment certain aspects of his departmental operations while condemning others. He said that several times and in various ways yesterday. I say there is no inconsistency in this. I, personally, am quite happy to stand here and praise the great bulk of post office employees who are doing their work under such trying conditions, and, although being so maladministered, are still doing their best to do a good job. I praise those employees for what they are doing.
I cannot help thinking of the words, as I remember them, written around the post office building in Washington. Perhaps I am not reciting them exactly, but I believe they run something like this: "Neither hail nor heat nor snow nor darkness of night shall slow these carriers from their appointed rounds."
Most of the people in the Post Office Department are doing a good job; but I criticize in the very strongest terms the Postmaster General for his administration of the department, and for many of the ways in which it is administered under his direction. I would remind him again, so that there may be no distortion, that these are two totally different fields

the staff who do the work, and the man who is responsible for directing the department.
And just thinking back to the quotation to which I referred a moment ago, it will be recalled that there was a reference to the darkness of night. I just cannot help feeling that if there is any darkness around this department, then it is that which has been caused by the minister himself, in an attempt to defend what is obviously an indefensible measure.
First of all I should like to deal in general terms with the arguments the minister introduced yesterday.

On page 10 of the report it says:
The terms of reference were, in short, to see what improvements if any could be made in the existing postal services.
The report lists 73 recommendations under various headings so therefore we have indication that great improvements are possible. Further on page 13 the report says:
Our principal object in this survey was to consider the over-all organizational structure, not to make detailed studies of ways and means of cutting costs.
And again:
We have, however, during the course of our survey noted a number of instances where we feel confident substantial savings and improvements in service can be introduced providing the organizational structure is strengthened.
It is obvious that this report was not even designed to point out ways and means of cutting costs. That means that if those things arose as purely incidental to the report, beyond this report there must be a tremendous field in which costs can be further reduced and in which more work can be done to assure efficient administration. It is obvious that there are hundreds of thousands of dollars to be saved, that there are millions of dollars to be saved that I do not think the minister has even told us about.
Let us continue with the minister's remarks. Having had about two weeks to study our argument, the minister came back with what seemed to me to be a very poor case. We have had only overnight in which to study it, but his case is such that it takes no great strength to refute it. I should like to deal with the argument the minister introduced yesterday, and first of all I shall quote from his remarks on page 1765 of Hansard, as follows:
Let me first state that in presenting this report the firm of business consultants estimated that in terms of salaries and additional staff required, increased amounts of approximately $300,000 per annum at headquarters and approximately $400,000 in the field would be required-
I fail to find that statement anywhere in the report. I challenge the hon. gentleman to show me where that statement is contained in the Woods and Gordon report. This means that we have here a perfect example of atrocious turnings and twistings which my leader so aptly termed yesterday as a tawdry political statement. But more important than that, it indicates something else. As far as I can see, it indicates that the Postmaster General somewhere has another more secret document from which he himself could draw those figures. I am quite sure, or I would rather hope, that he did not just draw them from his hat.
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I should like to know whether this is a piece of isolated information which just came to him on a piece of paper or whether it comes from another secret document which in addition to this information contains other information which should be laid before this house and which specifically estimates possible savings as a result of the changes which the company that made the study suggests. I would like to know, in short, what the Postmaster General is hiding.
Then yesterday the Postmaster General attempted to deal with a statement I had made during the debate on the resolution. I think the easiest way to deal with this would be to read my remarks and then read his interpretation, which is completely different. I shall then tell why I said it. On January 15, as reported on page 1178 of Hansard, I said:
Before I resume my seat I have just one further question. I should like to ask the minister when we in Notre Dame de Grace are going to get our second mail delivery a day.
By the time the minister got here he referred to my remarks as follows, and I quote from page 1769 of Hansard of yesterday:
-he concluded by asking that the same postal department spend $4 or $5 million more to give the service of a second delivery a day in residential areas.
It will be seen that there is absolutely no relationship between those two statements. The reason I interjected that remark when I was speaking was that on December 4 I had written asking substantially the same question. Almost two weeks later I got a reply from the minister in which he said that the postmaster at Montreal had been asked to submit a report in that regard and when it was received I would be further advised.
It seemed to me that from December 15 to January 15 was long enough, even under present circumstances, to get a letter from Montreal to Ottawa and back, and so I asked the Postmaster General about it. The result is that my remarks were distorted and twisted to mean something which was never meant.
We have another interesting statement in the Postmaster General's remarks. He referred first to the financial statements which he publishes for the public, and then on page 1765 he is reported as follows:
We do, however, maintain for our own guidance office estimates of what these various services amount to.
And then in the same paragraph:
In recent years, however, these statements showed deficits not surpluses.

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Is that not interesting? Apparently the hon. gentleman keeps two sets of figures. As he says, there are two sets of statements, one for the public, which he publishes, and another which apparently shows a truer picture, according to the hon. gentleman, for his department, and which he does not publish. That is what he says here that he has two statements, one which is published and another which is not.
This rather reminds me of the person who was applying for a job as a bookkeeper. He was asked if he could do double entry bookkeeping, and he replied, "I do double entry bookkeeping and even triple entry bookkeeping." He was asked what that was and he said, "In my last job I kept one set of books for the boss showing the true profit; another set of books were kept for the shareholders, showing no profit; and there was another set of books for the government tax collector, showing a loss." It seems to me that the Postmaster General has got as far as double entry bookkeeping with his two sets of statements.
So far we have seen two things. We have seen that the Postmaster General has been attributing figures to the Woods-Gordon report which were not contained therein. We have seen that he has another set of statements which apparently show a different picture from those which he published. If the hon. gentleman has information which denies that which he has given this house, and which bears on the problem, let him produce it so that we can see it and make our decisions and so that the people of Canada can make their decision on the facts of the case and not on his twisted interpretation of them. I feel rather badly about that twisting of my statement yesterday, and I am sorry if I am showing it just a little bit. Those remarks yesterday were quite misleading. Referring again to the question of ways and means of obtaining money to meet the additional expenditures which the hon. gentleman listed, he said, as reported on page 1769 of Hansard:
There are two ways of obtaining the money to meet these additional and essential expenditures. One is by an increase in the postal rates; the other is by general taxation. So far I have not received from anyone in the house any other suggestion.
Let there be no doubt in the hon. gentleman's mind. If he did not read or could not understand or did not appreciate my previous remarks, I am now going to make an additional suggestion. I make the additional suggestion that he institute efficient administration in his department in order to accomplish these savings which, he says, he requires to meet his additional expenditures.

Of course, Mr. Speaker, the truth of the matter is that the hon. gentleman seems to have difficulty in even understanding what efficient administration is. Let us see why I make that statement. Yesterday the minister said, as reported at page 1766 of Hansard: The fact is, as the report repeatedly states, that the department is well administered and departmental officers have vigorously pursued a program of efficient operation over the years. What better evidence of this is required than the fact that during the past 20 years the volume of mail has increased by 178 per cent whereas the increase in total staff approximated 100 per cent?
Apparently that is the position on which the minister stands. He claims his department is well administered, and asks: "What better evidence can you require than this?" But, Mr. Speaker, the Post Office Department is engaged in the carriage of mails. The railways of this country are engaged in the carriage of passengers and freight. Let us see over the same 20-year period what the railways of this country have done. The steam railways of this country-my figures come from the Canada Year Book-have increased their combined passenger and freight mileage, passenger miles plus freight ton miles, by 211 per cent between 1931 and 1951, and during that time they have increased their staff by only 31 per cent. Here we have a comparison. We have the post office volume increased by 178 per cent and staff by 100 per cent, and we have the steam railways volume up by 211 per cent, and staff by 31 per cent. Both are engaged in fundamentally the same type of business, the carriage of commodities.
That demolishes, I believe, for all time the minister's claim, because similar instances could be introduced from many other fields showing that this vaunted record which the hon. gentleman is so proud of is inferior, owing to bad administration. He claims it is good administration which has produced this record, which, in fact, is inferior to most other industries and most other businesses.
Let me remind the minister that I am not criticizing the employees of the department. I am laying the blame on the administration of the department which is directly under the hon. gentleman who sits opposite me.
The hon. member on my left dealt at some length with the appendix which the Postmaster General tabled last night. I am not quite sure, because the minister did not indicate-and that may be rather curious-to which year that report referred. He said "December 17" on two occasions, but not once did he say which year it referred to. Surely he knows which year. However, let us look

at it. It the document he tabled, containing a set of recommendations on the implementation of the reports, was received at the end of 1952, then the estimates for the coming year, which I have in my hand and which I have had only half an hour to study, contain very few of the recommendations contained in this Woods and Gordon report. It is quite obvious that if the recommendations in that report were to be implemented by March 31, 1955, then these recommendations would show up in the estimates. The Woods and Gordon report make suggestions for changes in position, for changes in title, and for changes in administration generally. I have studied the Woods and Gordon report, I sometimes suspect, almost as well as the hon. gentleman who holds the position of Postmaster General, and I have searched for half an hour and I cannot find any indication in these estimates that the implementation of this report is going through at the present time.
If this document which he presented is dated 1953-that is quite possible-then he received the report and waited thirteen months before he even asked for a set of recommendations as to how to implement them. Let the hon. gentleman take his choice, but I do not think it reflects too great credit upon his administration.
Turning for a few minutes, Mr. Speaker, to a few points which are brought out in this report, I would like first of all to deal with the carriage of mail. It is quite apparent from the report that the department seems in the dark as to the amount of subsidies it is paying to various carriers. For example, we find this at page 50 of the report:
After a service has been in operation for a number of years the fact that it was the intention to pay a subsidy while the service was being introduced is lost sight of and future contracts are based on the existing contract. The subsidy may therefore be perpetuated long after the justification for it has ceased to exist.
Then on page 56, the report reads:
The present form of contract with the railroads results in a subsidy being paid which is not clearly recognized.
A few sentences after that we find this:
The department as a result is normally paying for space which will be required only on rare occasions.
I would draw particular attention to that statement, Mr. Speaker. What a horrible thing to have to say about that being done with the taxpayers' money. And then the hon. gentleman comes in and says, "I need more money from the taxpayers through the increase in postage rates in order to carry out such a practice."
The most obvious injustice, of course, Mr. Speaker, is in the case of air mail. In a
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previous speech in this house I pointed out that the department pays the Trans-Canada Air Lines some four times as much per ton mile as the average of other air freight which they carry. Let us examine this for a moment. The post office deals with Trans-Canada Air Lines, and Trans-Canada Air Lines is a hybrid organization. Its stock is held by Canadian National Railways which reports to the Department of Transport, sometimes-when it feels like it, I rather suspect. I have seen other occasions when it did not report when it was requested to do so. But at least in theory it reports to the Department of Transport. That is the C.N.R. On the other hand, the T.C.A., which the C.N.R. owns, reports to the Minister of Trade and Commerce and Defence Production.
Therefore, at a time when a question of rate adjustment comes up-and this is one time, frankly, when I feel just a little bit sorry for the Postmaster General-we have the hon. gentleman on one side who presumably would like to see his mail carried for the lowest amount of money, while opposed to him automatically, within this set of circumstances, we have two ministers whose interest is in carrying the mail via air mail at the greatest possible rate. We have the Minister of Trade and Commerce (Mr. Howe) to whom Trans-Canada Air Lines report and we have the Minister of Transport (Mr. Chevrier) who, through the Canadian National Railways, is going to be affected by the operating results of Trans-Canada Air Lines. The matter is extremely complicated. It took me quite a little while to figure it out. But it is also very plain that you have two ministers on one side and one minister on the other. Perhaps that is the reason-I do not know-why we see this absolutely astonishing situation in which our post office pays per ton-mile some four times as much as do other people who use the same equipment and the same type of services.
I would just remind the gentleman who is the Postmaster General (Mr. Cote) that it is possible to be so amiable about things that one becomes absolutely ineffective in protecting the interests of one's own department and in looking after the interests of the public themselves.
Let us take another interesting case. On page 41 of the report, referring to relations between the Department of Public Works and the Post Office Department, we find this:
The two departments might well consider an arrangement whereby the supervision of caretaking, maintenance and service staffs would be the responsibility of the Post Office Department . . .
In the Financial Times for January 29 we find a story with regard to towels, soap, etc., which says, "The servicing job has been

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handed over to public works". In other words, after paying our money, $70,000 of it, for a report-and I would think, on balance, it is an excellent report-made by experts in administration, we find it recommending one thing. Then eighteen months later we find the department doing the exact opposite. The report recommends that the Post Office Department take this thing over. But the exact opposite is what happens. The Department of Public Works takes it over, which is just the thing that has not been recommended by the report. Actually, it is the thing which the report says one should get away from. How can the minister sit there and think of the things he said last night and not feel shamed by these things?
There is one other thing in the report to which I should like to refer. We find the report saying this:
Under the present procedure before tenders can be invited the purchasing and stationery division must forward a list setting out the names of the suppliers who are to be asked to tender to the deputy postmaster general; he in turn passes it to the Postmaster General for approval. This practice is presumably to allow the Postmaster General to add to the list of suppliers any names he may wish. This procedure adds to the delay in calling for tenders.
I am not going to expand on that paragraph unduly, Mr. Speaker, but I think it is unfortunate that the administration of the Post Office Department should be held up in order that the Postmaster General can add the names that he wishes-and they might very well be personal friends of the government- to the list of those who are going to tender for particular contracts.
The United States has been referred to periodically in the course of this debate, Mr. Speaker. I took a great deal of pleasure last night in voting in support of a motion which proposed that the bill which is now before us might receive further study in a committee. Without trying to go to too great length, I might list some of the things which have been done in the United States before they have come to their conclusion, and I might say that they are still debating. They held public hearings on the subject last summer. They had an independent organization prepare a report on public reaction and public feeling about this matter. They set up a 10-man advisory council of the post office committee, which reported. They obtained a Senate report on the subject. There were various other incidental things. Of course they retained a prominent firm of chartered accountants to study costs, allocation of expenses, existing subsidies and so on, in order to give them adequate information.

The important point which I should like to make is this. This report which they obtained went far beyond the confines of the Woods-Gordon report; and it was made freely available to all who wished to see it without any sputterings, camouflage, delays or insinuations. Here we are being asked to decide an increase of many millions of dollars in the postage rate. Since the Postmaster General has made so many obvious slight errors up until now, I just wonder whether it is not possible that, in his calculations, he might again have made an error of a few million dollars, which error would invalidate the stand that he is at present trying -I think so unhappily-to defend.
I might say also that in the United States their committee suggested only 28 changes, one-half of those suggested in the Woods-Gordon report and, according to Advertising Age of January 25, 1954, their committee reported that "hundreds of millions" of dollars could be clipped from post office operating costs.
Even allowing for variations as between the United States and Canada, surely there is some opportunity up here for doing the same. I will give the Postmaster General one example. If he would be realistic about the printing of his stamps, he could cut his costs in that department alone in half, and that would represent about $375,000 a year. I am quoting here from an article in the Wall Street Journal which refers to investigations being done on this matter in the United States. To take one paragraph referring to this rotogravure process, it says this:
And, says the man from the engraving bureau, rotogravure stamps cost less than half as much to turn out.
And later:
To the layman, the rotogravure stamp will look as good as the current stamp, indeed far prettier.
Mr. Speaker, I think I have perhaps stayed away from the arguments that have been used in the past. I think perhaps I have introduced a little bit of new material. I think perhaps last night I found one of the reasons for the problems in the Post Office Department when the Secretary of State (Mr. Pickersgill) said that he had occupied the position of Postmaster General for a few weeks. I just want to say that I look forward with particular interest to what may be said by the gentlemen who support this government, because we have heard very little from them so far.
Perhaps it all falls into the same category as the statement made to me once by someone outside this house who had not had the benefit of a great deal of education. I am

not suggesting that there is anybody in that class in the house. But he said to me: "You know, when you ain't got an education you just got to use your brains." We on this side of the house first of all have our education, but on this measure we are also using our brains, and our brains logically lead us to the conclusion that the present request of the government for an increase in the postage rates is completely indefensible and completely unsupported by any substantial documented or intelligent evidence. For that reason I, and I would imagine my colleagues as well, am certainly opposed to this increase.


Major James William Coldwell: Mr. Speaker, I join with others in opposing second reading of the bill. I quite agree that the government has failed to give the house adequate reasons for the imposition of this additional tax on the people of Canada through an increase in the rates on first-class mail. If the figures that we have heard are correct and first-class mail has been yielding the department a very substantial revenue over and above the cost of operation, then the statement of the minister and of the government, that each service or each branch of service should pay for itself, of course falls to the ground, because so far we have not heard how the post office loses the amounts we have been told it loses, and will lose, and what that loss is in the various operations of the Post Office Department.
For example, we have not heard to what extent the carriage of second-class mail is profitable or unprofitable. I think the minister should give us that information, and I certainly do not think that this imposition should be made upon the users of the ordinary services of letter mail in order to make up deficits on second-class mail. If it is in the public interest, as has been said several times in this debate, to subsidize second-class mail-and it may be in the public interest-then it seems to me that should not be done by the users of letter postage mail but should come from general revenue.
I say to the minister that until we have complete information regarding the department and its operations we should not give consent to the second reading or passage of the bill. I should like to have seen, as I said when the matter was before the house earlier, a thorough investigation of the postal department. I do not think it hurts any department of government to come before a parliamentary committee, explain its operations, and allow hon. members to question various officials as well as the minister in
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charge. I want to say to the Postmaster General (Mr. Cote) that I am not particularly critical, shall I say, of him personally. I do not think that is the point. The point is that I am critical of the department and its operations. There are many things about the department that I and many other members of the house would like to know.
I think of the organizations that have come before parliamentary committees-Canadian National Railways, Trans-Canada Air Lines, the national film board on one occasion, the Canadian Broadcasting Corporation on several occasions. Not only do we get very valuable information in such committees, information that enables us to come to decisions as to what the organizations are doing, but we also help the organizations themselves. I think much good has come out of the various parliamentary committees on broadcasting, the film board and atomic energy; and certainly the appearance of the presidents and officials of Canadian National Railways and Trans-Canada Air Lines before a committee has helped both members of the house and the organizations themselves.
I do not think for one moment that the house should give second reading to the bill until we have more information. I think that the amendment we moved last evening was one that the government should have adopted so that an inquiry could have been held before this measure passes, becomes an act of parliament and therefore an imposition on the people made by this house. Because I believe that, I am going to suggest that we do not proceed with the bill today. Indeed, I am going to put that suggestion in the form of a motion. I move, seconded by the hon. member for Vancouver-Kings-way (Mr. Maclnnis):
That the motion for second reading of Bill No. 168 be amended by deleting therefrom the word "now" and by adding at the end thereof the words "this day six months hence."


Mrs. Ellen L. Fairclough (Hamilton West):: Mr. Speaker, I think there is quite a bit of merit in the amendment that has just been moved, and in speaking on it I should like to deal in some detail with the remarks made by the Postmaster General (Mr. Cote) in the statement which he presented to the house yesterday. He said in part, as found at page 1764 of Hansard for yesterday:
We think the readjustment of the postal tariff, increasing the postage rate, is the most equitable arrangement . . .
We have said on numerous occasions since this debate started that we do not agree with that statement at all. I might point out that the principle of equalization of rates has been

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accepted in many spheres of public service in Canada as well as in other countries. Surely that same principle can be fairly applied to the allocation of revenues and expenses among government departments, as indeed it is in some of them. I was interested in reading some comments on this very subject the other day in my home town paper, the Hamilton Spectator, in which it was said:
In fact the whole basis of present day government finance is the collection of revenue according to the individual's ability to pay and the spending of it according to the general interest of the nation.
I think we have ample evidence that this is true. The Spectator goes on to ask:
. . . why should Ottawa decide that just one department of government must be put on a paying basis -a department which performs a public service essential to the national good; a department which by increasing its charges can affect every citizen, raise the operating cost of every business and, quite possibly, interfere with that free communication which is vital to the development of a sprawling country.
The minister used as an argument the fact that it was not fair to ask the office girl or the worker or the little man to pay for the stamps of big firms like Eaton's, Morgan's, Simpson's and Dupuis Freres. That is precisely what they are doing, Mr. Speaker, under this new arrangement, because under the new rates these companies can claim the additional postage as an expense of doing business. For this reason it costs them less than 50 per cent of the additional postage because their taxes are in that category. The individual has no such advantage. What he pays out is a net loss to him. He is, in effect, therefore, doing that very thing, helping to pay for the postage of these companies which are, by reason of the nature of their operations, permitted to deduct from their cost of doing business the additional postage which they pay.
The little fellow who writes only a few letters each year is probably not in the income tax brackets. It is all very well to say this should be spread over all the people, but it is not spread over all the people. The little fellow now pays indirect taxation, sales taxes, and now the Post Office Department has decided he shall carry another levy which is not wholly paid by the industrial concerns of this country, the additional postage rate.
Later on, speaking of the four main proposals which he claimed the opposition had made, the minister said that if we should take the additional cost out of general taxes we should have a truly subsidized service. Towards the close of his remarks he said that this scheme would have illogical and dangerous consequences. Is this a new order under which we are operating? This is the

first evidence we have had that the government views with horror the idea of subsidization. Even granting the government has had a change of heart or that the Postmaster General stands alone in his new-found virtue, it must surely be admitted that, if the Post Office Department is not to have the benefit of subsidy, then by the same rule it should not be called upon to dispense gratuities to other departments of government from its revenue. As the Postmaster General reminded us yesterday, you cannot have your cake and eat it too.
It seems to me the minister also made a little play on what he referred to as "the elementary principle that one thing cannot at the same time be white and black". I think there was some reference to the sins of the opposition in regard thereto. It would appear that the opposition are not the only sinners, Mr. Speaker. Certainly the Postmaster General's remarks, and the inference being drawn from them, would indicate that the government is guilty in this regard, too. I was very much interested all the way through the statement which the Postmaster General made, and from time to time I made a few notes. Until I actually obtained the text of his statement, I am afraid that some of the implications escaped me. It is rather difficult to hear a statement read in the house and absorb the full implications at the time it is being given. I made a few notes which helped me in looking for what I considered to be the more interesting portions of the statement.
I should like to refer to one statement, which has already been mentioned briefly this afternoon by the hon. member for Notre Dame de Grace (Mr. Hamilton), and that concerns the financial picture revealed by the statements in the Postmaster General's annual report. The minister said the statements had been prepared for years along the same lines, and naturally are for comparative purposes. They do not furnish a financial picture along the lines that are usually provided in connection with commercial or industrial undertakings. Of course, that is apparent to even a casual observer.
The minister is basing his argument for an increase in rates on the figures of the department which he now admits do not reflect the true position; that is precisely what we have been saying right along. The minister is asking for an increase in rates which he cannot, under any circumstances, substantiate. Even today we had another example of this fact when several members of the government were unable to tell us just what the plans of the department and

the civil service commission were concerning the implementation of the five-day 40-hour week. If the Postmaster General and these other ministers have no idea just how the implementation is going to be effected, how can they say they need $5 million for this purpose? It is a guess, and probably a wild guess at that. I am amazed that, in the light of this, the minister has the temerity or possibly the naivete to ask this house to sanction an increase in postal rates because he feels that next year's fictitious figures will show a deficit. He does not know how much, but he comes to this house and asks for $15 million to play with, just in case we have a deficit.
The Postmaster General went on to make some other allegations. He related some of the things that we had said, and he said some things that we had not said. Speaking about the cost of operation of the department, he said that they had not calculated or taken into account the value of the services rendered to the department by the civil service commission. He went on to say what those services were. The same remark applied to the Department of Finance in connection with salary accounts, the writing of cheques and so on. He said these estimates do not take cognizance of the fact the Auditor General provides a free audit service. Do these departments not supply the same service to all other departments of government?
Let us follow this argument through to its logical conclusion. Supposing the Auditor General charged each department with the cost of auditing? I would think that by the time he got through at the end of the year there would be no need to have any estimates for the Auditor General's department, because all the other departments would have been charged with those costs. In turn, each of the departments preparing its estimates would put in an item for auditing. They do not do that. Apparently the Postmaster General thinks they should. Supposing the Department of Finance charged each other department of government with expenses in connection with salary services. In that case, the estimates of the Department of Finance would be materially reduced. All of these arguments which the minister used merely serve to point out our main contention, that the department itself does not know where it stands; yet it asks for an increase in rates.
The minister also tried to link up remarks which had been made by my leader with a reference to the situation in the United States. After telling that a speech had been made by the President of the United States, 83276-116
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in which he intimated his intention to ask for an increase in postal rates, and despite the fact that this matter has not been considered by the congress of the United States, he said:
This makes it clear that the United States government is abandoning the policy which the Leader of the Opposition (Mr. Drew) suggests we should follow.
Mr. Speaker, a little marginal note I made yesterday when the minister made this statement is, I fear, distinctly unparliamentary. So, following his example, I suppose I should make that confession, and then withdraw the unspoken remark, as he did yesterday.


Mr. Cote:: Do it discreetly.


Ellen Louks Fairclough: I do not want to be sued. The very idea of suggesting that in our opposition to the increase we are likely to build up a deficit of $770 million, or even the Canadian equivalent, on a per capita basis, of about $55 million, is simply ridiculous. Apparently the minister and his advisers know this full well, because otherwise I fancy they would be asking for an 8-cent mail rate instead of a 5-cent rate. And that is just about what would be needed to cover a deficit of $55 million.
We contend that the 5-cent rate now proposed is just as unnecessary as an 8-cent rate would be, and we say the government has yet to show good and sufficient reasons why this essential service should not be supplied to the people of Canada at rates which are now in effect.
The Postmaster General then went on to talk about the cost of making the alterations in the service which had been suggested by the J. D. Woods and Gordon report. He admonished the house to please bear this increase in mind.
Well, Mr. Speaker, expert business consultants do not suggest expenditures unless they can justify those expenditures in subsequent savings and increased efficiency- and probably both. And so to say that the cost of making these improvements is something which should be borne in mind is unrealistic. What we want to know is not what it will cost to put the improvements into effect, but what the saving will be to the department if the improvements are put into effect.
And then in glowing terms the minister painted the picture of the wonderful administration the department had enjoyed over the years. In fact he took so long to do it that the little note I wrote yesterday I am going to repeat today, and it was simply this: The gentleman doth protest too much,

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methinks. I know the minister thinks his department is pretty good, but I doubt if he thinks it is so good that it can claim credit for the increase in the volume of mail, which undoubtedly bears some relationship to the increase in population. After all, the increase in the volume of mail handled should have some staff advantages, particularly at the administrative level. While it may take two postmen to carry twice as much mail, it certainly does not take two postmasters to supervise it. And with that increase in volume there is bound to be a saving in overhead at the administrative level.
So I cannot really believe that the Postmaster General gave too much thought to his statement that the increase in volume of mail by 178 per cent, and in staff by only 100 per cent, was a great achievement and I suggest that his bragging was not very well based. I am sure anyone who has been actively engaged in industry would not think it was much of a boast.
Then he went on to say that the officials of the department, entirely without any help, had replaced the old system of handling money order accounts. Well, I presume he was referring to the system of punched card accounting which they adopted. I must say that it is very laudable to find that this modern system was put into effect. But that is only ordinary business practice. It is used by all sorts of industries and by governments where large volume passes through their hands, and where such a change would make the procedure more efficient so that it would pay for itself.
But here again he brags about the amount that has been saved, and gives the figure of $350,000. I do not doubt that at all. But if by keeping up with improved accounting methods the department can save $350,000 annually in just one operation, how much can it save if it follows the recommendation in the Woods-Gordon report that modern techniques in materials handling be adopted? We do not know the answer to that. We know it is in the report, but we do not know what could be saved.
The minister says that we cannot make sufficient savings to keep the postage rate where it is today, but how does he know that is so? He admits a saving of a third of a million dollars in one operation. In one breath he says no great savings can be made and in the next he boasts of what he has done in adopting modern methods. How inconsistent can you get? The more I read the minister's statement, the more amazed I became.

Then, going on to speak about savings, he said that in the report they do not at any point indicate that these savings are to be realized immediately. Of course, you do not realize savings immediately when you change over your system. It stands to reason that it takes time to put in new methods and to introduce new techniques. It may even cost a little more until you get your new machinery, your new equipment and new system in full operation. But eventually you will make money on it, and save.
He has said it may be several months before the changes are finally completed. Well if he anticipates that it will be several months before these changes are completed, and if he admits that he has already saved over a third of a million dollars on one change, and if he also admits that this report has made suggestions which the department is seriously considering and which he hopes to put into effect, then why raise the rates now? Why not wait? Why not wait to see what can be done? After all, the department has had deficits before. It would not be the first time it has operated on a deficit.
The whole point is that he is estimating a deficit of which he is not sure-and I maintain he could not even hope to substantiate that estimate later on. Yet he asks for an increase in the postage rate at a time when he has no idea of what the results of operations may be in the department, under new and modernized conditions. Then he said:
Thus the sweeping statements to the effect that efficient administration will permit us to make enough savings to meet the added cost are swept away by the facts.
What facts? The fact that you can save and have saved $350,000 in one operation? Does that prove that the minister cannot make a saving? I think it proves quite the reverse. Then he goes on to the question of franking, and he says that the suggested abolition of franking would cover only a small fraction of the total additional expenditures of $13,500,000, and calls this just another futile suggestion which brings no remedy to the situation.
Well, Mr. Speaker, as I recall it, the amount which the department itself estimates as being lost through franking is very close to $5 million. I believe the exact figure was $4,700,000. That is well over a third of the additional expense which the Postmaster General anticipates, and upon which he is basing his request for a 1-cent increase in the rates.
He goes on to say that the principle of franking is to give free mail communication

to those seeking, as well as to those supplying, administrative information. We know all that. And then he says the privilege is given so that free mail communication may be established between the Canadian public, the ministers and members of parliament. As I recall it, we mentioned the matter of franking, but not only the mail and communications which flow between constituents and their members and ministers. We mentioned also that this practice is indulged in rather promiscuously, if I may say so, by the various departments of government.
Who suggested in this house that franking should be abolished? As I recall it, it was the hon. member for Charlotte (Mr. Stuart) who mentioned it. Later on the hon. member for Fort William (Mr. Mclvor) suggested it. I think it is only natural that other hon. members in different parts of the house should then take up the cry. As I pointed out during the resolution stage, there is much useless mail from departmental sources. I should like to read to the house a communication I received which I think well points up this claim. This letter came to me with its enclosure a week ago, after the debate on the resolution stage. It is addressed from the Norberry school, St. Vital, Manitoba, under date of January 19, 1954, and the text is as follows:
Recently I noted that you spoke out against the proposed increase in postal rates. I too am opposed. I believe that considerable saving could be achieved at the government level. As proof I forward the enclosed book.
The book is the Canadian record of performance for purebred dairy cattle, Jersey.
Weekly, similar material arrives from the Department of Agriculture. This is an elementary and junior high school in suburban Winnipeg.
There may be some citizens who would be interested and even excited to discover that Fancy Girl, whose sire was Basil, gave milk for 305 days amounting to 3841 pounds of which 5-7 per cent was butterfat. However the teachers and pupils of this school do not seem to be included in this number. Doubtless they haven't been properly orientated or activated or whatever the word is that the progressive educationalists would use.
However this is only the record of the Jersey cows. You must know that there are other branches of the cow family and that their numbers are even more numerous, necessitating thicker and heavier books.
To date I haven't been able to discover any possible use for such material. However I could- and this is a fiendish idea-select some particularly recalcitrant boys and as punishment have them figure out which cow averaged the most pounds of milk per milking day. That ought to settle their hash. However I would run afoul of the Geneva convention.
More seriously, this information must be compiled at considerable expense to the taxpayer. Surely this expense could be reduced by producing only sufficient copies to satisfy a carefully-selected mailing 83276-1164
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list. Those who desire such information must be highly specialized and would request it. To have postmen going about the country delivering this information to institutions and individuals who have no recourse but to consign it to the wastepaper basket, is a senseless waste of public monies.
Yours truly,
V. H. L. Wyatt, Principal.
When I made my remarks at the resolution stage, I did not have a specimen at hand. At that time I said that much of the material which comes across our desks bearing the government frank is pure junk. I do not mean that this particular report is pure junk, but in so far as this recipient is concerned it is just that. If the recipient has no use for it, why have it printed and why have it sent out? Then why turn around and say to the taxpayers of this country, "We shall have to charge another cent for first-class mail because the Post Office Department is losing money". It is perfectly ridiculous.
In speaking of the franking privilege, far from saying that the privilege itself should be abolished, I said that the Post Office Department should receive credit from the other departments of government to which mail service was supplied. This is not a matter of abolishing the franking privilege, it is simply a bookkeeping matter. If the taxpayer has the right to free mail, he certainly has the right to cheap mail. To say on the one hand that you must not abolish his franking privilege and on the other hand to say to him that he has to put another cent on every letter he writes unless he writes it to the government or to his member of parliament is pure nonsense.


Alcide Côté: May I ask the hon. member if she is for or against the abolition of franking?


Ellen Louks Fairclough: I thought I had made myself clear. I do not advocate the abolition of the franking privilege, but I do advocate proper credit being given to the Post Office Department for the services they render to other departments. An amount should be credited to post office revenues representing the service received by the different departments. Likewise each department should be charged with that service. In that way you would have a clearer picture and a truer position of the finances of the Post Office Department.


John Whitney Pickersgill: Does the hon. member think that in order to keep its books properly the Post Office Department should pay rent to the Department of Public Works for the premises it occupies?

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Ellen Louks Fairclough: That could probably be worked out quite well, provided the Department of Public Works will not charge the Post Office Department the full cost of space used by other departments, such as the Department of Veterans Affairs, customs and excise branches, the income tax department, the annuities branch of the Department of Labour and other branches which use space in the so-called post office buildings at no cost.


An hon. Member:: That will settle his hash.


Ellen Louks Fairclough: In referring to rates in the United Kingdom the Postmaster General stated that the distances the mails are carried in Canada are much greater than in the United Kingdom. He went on to say:
-a large part of which is by air transport with no additional charge to the mailer.
Whose idea was that? I do not remember that this was passed by this parliament. It just became a practice. As was remarked the other day, it gave T.C.A. a considerable advantage which was reflected in its annual statement. We have been under the distinct impression that the carriage of mail by T.C.A. was intended as a direct subsidy to that organization. Perhaps, after all, it had a secondary motive, to build up an alibi for a potential increase in postal rates which now threatens to become reality.
I do not think most of the people in Canada, the average little fellows who write a few letters a month, are much interested in whether their letters are going to be carried by air or by rail. An instance was quoted yesterday by the hon. member for York-Humber (Miss Aitken) where a letter which should have reached its destination in about three days took about eleven days because it was sent around by Goose Bay and Gander.


Mr. Brooks:: It had to gander around.


Ellen Louks Fairclough: We spoke about the elimination of the stamps on cheques and the fact that in the first session after the election the postage rates were raised. I should like to speak about that for just a few minutes. In the first instance the Post Office .Department showed a surplus of $6,500,000. The Postmaster General now says that the revenue derived from the sale of stamps for cheques was $7,500,000. It would appear that at the time this policy was adopted by the government the government knew full well that there was danger of running the Post Department into the red to the tune of $1 million. But that was not considered at that time. The Postmaster General says that the first information of the discontinuance of the excise stamps on cheques and notes was 
in February, 1953. The minister goes on to show that when the stamp tax on cheques was discontinued the government was not aware that certain things would occur. It was not aware, for example, that the civil service commission intended making salary adjustments. He stated these did not commence until the fall of 1953. He also stated that at that time they apparently did not know anything about the five-day 40-hour week. I quote what the minister said:
Furthermore, no decision was made by the government in regard to the general adoption of the five-day 40-hour week in the operating service of the Post Office Department until sometime in September 1953.
That was a full month after the general election. The minister continues:
The bill authorizing a readjustment of the rates for rural mail couriers did not become law until the 14th May, 1953.
But, Mr. Speaker, the budget was brought down in February; therefore the government could not possibly not have known these things were going to happen. If the minister did not know there were persistent demands for salary adjustments and for the five-day 40-hour week, he was the only person in the country who did not know, because it was in all the newspapers, it was a matter of great comment, there were public meetings, and certainly everybody else knew about it.
I would again emphasize the fact that the minister said the bill authorizing the readjustment of the rates for rural mail couriers did not come into effect until May 14. We all know a bill does not pass through this house in an hour, a day, or a week. Certainly I was a little curious on this score, and I looked up the order paper. I found that this bill was on the order paper on January 12 and that it was formally called on January 13.


An hon. Member:: Which year?


Ellen Louks Fairclough: 1953. The bill was introduced on January 29 and it had third reading after the budget on March 31. The date on which it became law, or received royal assent, was May 14, the date quoted by the minister. If the minister seeks to imply by quoting that date that the government did not know about one of its own bills on the order paper, then I would say it seems to me to be a very curious implication indeed.
The minister stated these expenditures had not even been contemplated. But I submit, Mr. Speaker, that if they were not contemplated, and if the minister did not know they were likely to occur, then there was one thing he did know which the rest of the country did not know, and that was the date of the election.


Mr. Cole:: I did not know that either.


Ellen Louks Fairclough: Then you must have done some tall guessing. Mr. Speaker, I feel that in spite of the language of the report which the Postmaster General favoured us with yesterday; in spite of his assertion all the way through that because of these statements, which he persists in calling facts, it has been proved that there should really be no opposition at all to the increase in postal rates, the minister has failed to prove his case.
The minister concluded his remarks with this statement, as reported at page 1769 of Hansard:
I know the measure is not a popular one in some quarters, but it is at least honest . . .
1 do not know how far one can go in this house, Mr. Speaker, in using words such as "honest, dishonest" and so forth. I have heard hon. members called to order for what seemed to me very minor infractions of the rules. I have heard them called to order for imputing motives, and I have heard a good many implications made in this house by hon. members who were not called to order. But that last paragraph really threw me. "This is an unpopular measure . . ." yes, ". . . but it is at least honest."
I submit, Mr. Speaker, there is no honesty in producing reports year by year which are now admittedly not correct, and which are now admitted to present an incorrect picture of the department's operations. I submit there is no honesty in saying you need $5,000,000 to implement a five-day 40-hour week and then turn around and say: "We do not know in what part of the country this will be put into effect." It is a wild guess at best to say that this department must have an increase in postal rates which will yield about $15,000,000 when there is an admitted need for only $13,500,000; to cancel stamps on cheques which yielded $7,500,000, in the light of a surplus in the department of $6,500,000, and then say "We did not anticipate any of these additional expenses."
The government and the minister must have fully anticipated these expenses, unless they were deaf, dumb and blind. I can see no honesty in such a course. To use this as an excuse that after all it was honest is surely the feeblest excuse of all.
In his closing remarks the minister said:
I have also answered all the major criticisms, and many of the less pertinent comments of the opposition. I feel that this further constructive presentation shows without any doubt the soundness of the position of the government, and destroys alleged objections put forth by the opposition.
But, Mr. Speaker, he has not answered the criticisms, in my humble opinion. His presentation yesterday was far from constructive
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and certainly not objective, and none of the objections put forward by the opposition have been destroyed.
We were accused by the minister of sinning against some elementary principles. Let me say, Mr. Speaker, that if we have sinned in objecting to the increase in these rates I must confess we are unrepentant and will continue to object.


Mr. C. E. Johnston (Bow River):: Mr. Speaker, I think I should say a word on this bill, more especially since the hon. member for Rosetown-Biggar (Mr. Coldwell) has moved to give it the six months' hoist. Personally I agree with the hon. member's motion, and I would like to give one or two reasons why I do so.
First, the minister is asking this house for an added $13,500,000, which he claims is needed to bring about an approximate balance in his department. I believe that is the amount he mentioned. But it seems to me, Mr. Speaker, that if we are going to change the rates of taxation or the rates for carrying mail we should bear in mind the people who are going to pay these costs. When we put the full onus of that increase on the general public it is the same as adding additional taxes to the goods they have to purchase: When we add an increase in first-class mail rates it affects every human being in this dominion.
In my view the attempt to raise money in that fashion demonstrates that no thought whatsoever has been given to means of raising the money from those who can best afford to pay. The minister surely would not argue for a moment that those in the low income brackets, in the exceedingly low income brackets, can afford to pay any more than they are paying now. Yet under this bill the minister is going to do just that very thing. '
It seems to me that he should have looked around for some other means to raise that money, if it were necessary; and I am not so sure that it is necessary. For instance, with regard to our second-class mail, we subsidize newspapers to the extent of $10 million every year. The amount used to be $12 million. Maybe that is necessary; but every evening when we open our papers we find that 75 per cent of it is advertising. Why should the people of Canada as a whole be expected to subsidize second-class mail when those who put their advertisements in the paper are, in fact, being subsidized? Why should we attempt to subsidize Eaton's, the Hudson's Bay Company, real estate firms and enterprises of that sort which take advantage of second-class mail which is subsidized by the public? Yet in the very same breath we

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are adding a further increase in rates to these people in the low income brackets. The thing just does not add up.
The minister may be sympathetic-and I think probably he is-to these people in the low income brackets; but that is a mighty poor way to show your sympathy. What people are there in that class who can afford to use telegrams, long distance telephone calls and all that sort of thing to carry on their correspondence? No, they cannot do that at all. They must use the mail, and that is what it was intended for. I remember, back a few years ago, when the postage on letters was changed from 3 cents to 4 cents. That increase was put on as an emergency measure. We were told in this house that it was going to be a temporary thing and that, as soon as circumstances warranted it, that tax would be reduced again to the 3-cent level. Now we find that is not true. Instead of remaining at the 4-cent level, we find that it is going to be further increased. If the government is going to continue to make promises like that, the people will not have much faith in those promises.
Then I too must agree that the franking privileges to other departments of government should be modified. Like the hon. member who just spoke, I do not think I would be in favour of a complete cancellation of that service. However, it seems to me that the minister could so arrange his department that 95 per cent of that franking would be done away with; at least if it was charged up to the other departments, that would be of some assistance to the Post Office Department.
To say that raising this $13J million in this fashion would put the Post Office Department on a financially sound basis is not true. The Post Office Department has never paid its way. The Department of Public Works has always made a major contribution to the Post Office Department. We are therefore not attempting to put the Post Office Department on a self-sustaining basis in this regard. If the department-and I use that word advisedly-is in need of $13J million, it seems to me that it was the height of folly to take the stamps off cheques. When that repeal legislation was before us here, I remember that I spoke against it and used words to this effect. Let me take the bureau of statistics report, where they say that 75 per cent of the people of Canada earn less than $3,000 a year. How many people in that bracket, who earn $3,000 or $2,000 a year, spent much money on stamps for cheques? Not very many, I am afraid. Yet that source of revenue brought in about $7|-

million. If the minister is really sincere in this thing-and I am not questioning his sincerity-


Alcide Côté: Will my hon. friend permit me to ask a question?


Charles Edward Johnston: Yes.


Alcide Côté: Does my hon. friend suggest that we re-establi'sh the excise tax?


Charles Edward Johnston: I was just going to come to that point. If the minister really needs that money that badly I would suggest that he reimpose that stamp tax on cheques. I think it would be much more equitable to do that than to expect the people in the lower income brackets to pay this added postage cost. I said, "If he really needs it". I am in doubt myself whether he does need it.
Since the minister asked me my personal views on the question of the stamp on cheques, let me give him my personal view with regard to the subsidizing of second-class mail. I do not think we should have to subsidize second-class mail, particularly newspapers, to the extent of $10 million a year. That is a tremendous subsidy, particularly when that subsidy is passed on from the newspapers to the other large business concerns I mentioned a moment ago. I think there is a good possibility there of obtaining some of this money which the minister says he needs, rather than obtaining it in the fashion he is attempting at this time.
At any rate, I personally am in favour of the motion moved by the hon. member for Rosetown-Biggar (Mr. Coldwell), to give the minister a little bit more time to think over this measure and to see if he cannot apply the tax in such a way that it will be more equitable. I must say that I will have to support the motion for the six months' hoist.


Mr. Speaker:: It being five o'clock, the house will proceed to the consideration of private and public bills.



CURRENCY, MINT AND EXCHANGE FUND ACT AMENDMENT TO PERMIT MINTING AND MARKETING OP GOLD COINS

Mr. Rodney Adamson (York West) moved: the second reading of Bill No. 173, to amend the Currency, Mint and Exchange Fund Act.
He said: Mr. Speaker, I am delighted to see the Minister of Finance (Mr. Abbott) in his place and to welcome him back from Australia.
This act would, in fact, establish a free market for gold within Canada. It would establish a free market for gold in a country

which is not resorting to the evils of exchange control, currency restriction or any of the other trade-destroying measures that have been developed by money managers, in central governments and in the central banks since the war, and in many cases long before that. The bill sets out and describes a coin which is designated as to weight and fineness only. The fineness is 900 and the weight of pure gold contained in the coin is one troy ounce. It is similar in the amount of gold it contains to the gold coin now being minted by the firm of Rothschild and Company and put out under the name of the First Banking Corporation of Tangier. I say it is similar in weight of gold. It differs in fineness, the fineness of the Tangier coin being 916-7, which is rather greater. The coin would of course bear a Canadian insignia. The first point I wish to make, before I discuss some of my reasons for introducing the measure, is that today under our strange so-called free marketing of gold, which is certainly not free marketing in the true sense, Canadian gold from our largest single gold producer and all our base metal mines is shipped through some recognized broker to Paris or some other market, but chiefly Paris, I believe, where it is sold to somebody else. As a matter of fact I was informed that the few coins I was able to secure were actually Canadian gold shipped, refined and sold through the Rothschild organization.
It seems a great pity to me that Canadian gold should leave Canada in this form. If it were minted into a convenient coin, which I have endeavoured to describe, a great deal of it would remain in Canada. A great deal of it would be purchased by individuals and corporations, and under the terms of the bill it could be purchased by the Bank of Canada or any other designated agency, but they would have to bid for it on an open exchange. Therefore most of the gold at least would not be lost to Canada, as it is under our present marketing system.
I suggest that would be a great advantage. While I have inserted a clause in the bill whereby its importation or exportation shall be free, because I think that is essential in the establishment of any free market, nevertheless a great deal of it would remain here to be put to useful purposes rather than lost in the international sea. In addition, from what reports we have been able to obtain recently, the uses to which it is being put are inimical to the well-being of the western democracies. So much for the first point.
The second point, on which I wish to speak a little later at some length, has to do with
Proposed Minting of Gold Coins how we would know what the price would be. That is exactly the point which I consider to be important. Would the price be greater or less than $35? Frequently, when I have made these suggestions, people have asked me whether, if the Americans withdrew their guarantee to purchase all gold at $35 an ounce, they would dump gold on the market and depress the price. The only answer I have to that is to ask whether, if an individual, a corporation or a nation has an asset for which it has paid a certain price, would it be willing, in order to depress the price of the asset it has bought, to dump it on the free markets of the world.
Would the United States government, for instance, in order to depress the price of zinc, lead or copper, initiate a program of dumping their stockpiles of these metals on the already jittery base metal markets? Surely an operation such as that cannot be contemplated by any reasonable individual. They have bought these stockpiles of zinc, copper and lead. Are they prepared to dump these metals on the markets in order to depress the price? In my opinion, despite the fact that the zinc, lead and copper were bought for strategic uses, they would be no more likely to dump their stockpiles of these metals than they would dump their stockpile of gold. First of all, they would be destroying a United States government asset. They would have paid $35 an ounce for so many million ounces of gold. If they dumped it at $30 an ounce there would be a net loss to the United States of so many dollars an ounce, the amount varying in proportion to the price under $35 at which the gold was sold.
Now, it is said that Russia has resorted to these tactics. All I can say to that, Mr. Speaker, is that although we have no accurate figures, Russia is probably the second largest gold producer in the world. Her gold production has been estimated-although I give no credence to these figures-at some $200 million per annum at $35 per ounce. Not only has Russia been a major producer of gold but she has been able, through conquest, to get the gold hoards in the national treasuries of the countries she has overrun, like Roumania, Czechoslovakia, Poland, the Baltic countries, and possibly others. It is quite likely, therefore, that Russia has a considerable hoard of gold.
Apparently the new Malenkov policy in Russia is to ease the lot of the long suffering people by making what are known as consumer goods and food a little more plentiful. In order to accomplish this, and because of the failure of her collective farms, she has had to buy large amounts of food outside her national boundaries. Apparently the only
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Proposed Minting of Gold Coins medium of exchange was gold. A few years ago when gold was selling at $45 and $50 per ounce on the free market, I was surprised that Russia did not undertake the action she has taken today. I feel that the reason was internal Russian politics. I do know that for a time she was buying machinery of the most strategic sort in Switzerland. As a matter of fact, there was a delicate international situation in Europe because Russia was able to buy machine tools and other tools in France, Switzerland and elsewhere and, by devious means, get them back into Russia. I believe that has been largely stopped by international action by the western democracies.
So much for the fear that the United States will dump gold in order to destroy the $35 price. It is unrealistic, because in all my life I have never seen a Yankee who was prepared to throw away money he had spent in purchasing something. We come again to what the price would be on the free market. I suggest that the price is unimportant. It is not the price which is so important, but the stability of that price; and that is something which is extremely difficult to arrive at. The only true method by which a stable price can be arrived at is through open market transactions. If you peg the price of any commodity it leads either to surpluses or to chaotic market conditions. Shortly I propose to mention what the Randall commission said on that very point in the report released just a week ago.
We want the gold to perform a useful function. At the present time gold is taken from the producing mines in Canada under extremely difficult conditions. I ask hon. members what product could be sold today for 10 per cent less than in 1939 and have the industry producing that product still in existence. The fact that we have a gold industry is nothing short of a miracle. With the exception of three or four mines, the existence of the industry is entirely dependent upon the benevolence of the Emergency Gold Mining Assistance Act and the Canadian taxpayers.
I believe that is a most unfortunate situation. What the costs of the Emergency Gold Mining Assistance Act this year will be, I do not know. The strike situation has upset things, so we do not know how much it will cost, but it is assumed it will cost in the neighbourhood of $15 million. Now, the money of the taxpayers of Canada is just keeping the gold mining industry alive today.
I believe it is money well spent, because if that industry ceased to exist for any reason a whole series of northern municipalities would also cease to exist and would become ghost towns; and in an expanding country


like Canada, we cannot contemplate the closing down of our northern frontier. But the principle is wrong; the principle of bonusing any industry, to keep it in existence, is wrong. Neither I in this House of Commons nor, so far as I know, any of the major gold mines, or the gold industry as a whole, recommended this form of subsidy to keep the industry in existence, when the legislation was first introduced.
The mines that ship on the free market are prepared to do so without this subsidy. I have not consulted with or talked to any of my mining friends with regard to this proposed legislation, but if a free market could be established in Canada I feel sure that within a comparatively short space of time the money we are spending on the Emergency Gold Mining Assistance Act might be saved to the Canadian people. I admit that, compared with a gross national product valued at $25 billion, this $15 million is not a very great sum. But even $15 million is certainly not hay.
Consider the problem of marketing gold under the present situation. By no stretch of the imagination can this be called a free market, nor can it be so considered. What happens is that the mine, submitting bullion to a broker, says, "We have so much to submit". The broker asks at what price it is offered. It is not a bid-and-asked proposition as in normal stock exchange procedure. It is a one-way procedure; the mine takes it or leaves it; the price is set. The gold must be exported. It leaves the country, and the mine has no further say in its disposition once it passes into the hands of the broker.
I feel that this is delivering the mining industry into the hands of brokers, and I think that is a wrong procedure. It is bad in principle. I congratulate the government upon the fact that the mines may now sell fine gold without having to go through the ridiculous process of adulterating it and then having it re-refined when it hits the European market. It is marketed in countries the economies of which, to say the least, are not too stable.
A friend of mine asked me this question the other day. If you have a bearer bond or a Canada savings bond, which is a pretty good security, would you be very happy to have it in a safety deposit box in Paris or Tangier, or would you sooner have it in your own box at home? It seems to me that is a pretty good argument for the ownership of gold. If a corporation has a few thousand ounces of gold, where would they like to keep or to store it? Surely it would be in a country with a stable form of government

and with a stable economy. Surely they would like to store that gold either in Canada or the United States.
To preclude that is, I think, wrong. That is the question I put before the house in connection with the holding and ownership of gold. Gold held in a country whose economy is safe and stable is likely to be much more valuable than gold held in a country the economy of which is not safe, and whose future is anything but secure. It goes without saying that if one has a painting of one of the old masters he would sooner have it here in Canada than leave it in some country in which there might be a revolution at any time.
So I suggest it is reasonable to expect that if gold were sold within the confines of a country which, first of all, is not practising exchange control, and second is at peace and is geographically situated away from centres of strife and turmoil, a country possessing a buoyant economy and a stable form of government, it would increase in value.
So much for the price of gold. But, as I have said, the price is not the important thing. The important thing is, first of all, the usefulness to which that gold can be put and, second, the availability of the metal.
I have mentioned the Randall report. I have not read it in detail because it contains well over a hundred pages of closely written script. One of the points the Randall commission makes, to my mind one of the most important points, is the futility of trying to peg and to control the market price of any commodity. It takes issue, for instance, with the international wheat agreement. It takes issue with all schemes whereby an artificial price for a commodity is aimed at. With that I must say I am in entire agreement.
Any attempt to peg the price of copper, lead, zinc, aluminum, wheat, cotton or any commodity at a level above or below the world market price, that is the price you can get for it on the open market, is doomed to disaster. All such devices as the bill to restrict the importation of Canadian base metals into the United States, which fortunately has not been proceeded with, are doomed to failure. They may succeed for a time by the device of parity prices, by providing artificial price support; but by creating a high-level economy and a high-priced end product they can do nothing in the long run but destroy the world market for the particular product.
What is the harm in allowing people to own gold? What is wrong with it? First of all, gold is not like uranium. It is not fissionable. You cannot blow anything up with it.
Proposed Minting of Gold Coins You cannot make a bomb of it. You cannot make a narcotic of it. You cannot smoke it, You cannot injure anybody with it. Why have we in Canada denied to our citizens the right to hold and own gold? Surely it can only be the restrictions of the international monetary fund.
I have spoken at length in this house about this organization, and I do not propose to repeat what I have said, except to say that it has now been proved beyond any peradven-ture of doubt that in its inception the international monetary fund was communist-inspired. Dexter White, Coe and at least


Douglas Charles Abbott: Lord Keynes, J. L. Ilsley, D. C. Abbott and a few other communists.


Agar Rodney Adamson: Lord Keynes did not approve of it.


Douglas Charles Abbott: I was a delegate at Bretton Woods.


Agar Rodney Adamson: Lord Keynes certainly did not approve of the set-up of the international monetary fund.


Douglas Charles Abbott: I was just questioning your communist-inspired allegation.


Agar Rodney Adamson: Certainly all the people who formed the international monetary fund and its officers, or at least a large number of the original executive, were communists.


Douglas Charles Abbott: Complete nonsense.


Agar Rodney Adamson: What about Dexter White? What about Coe? They were proven to have been communists.


Douglas Charles Abbott: And who else?


Mr. Blackmore:: That is enough.


Agar Rodney Adamson: There were four, but I have not their names in front of me.


Douglas Charles Abbott: You had better have your facts before making these broad sweeping allegations.


Agar Rodney Adamson: There were four who
invoked the fifth amendment anyway. Let us look at what happened to the international monetary fund.


Douglas Charles Abbott: Communist Graham Towers was there too.


Agar Rodney Adamson: Has the operation of the international monetary fund assisted in the convertibility of currencies?


Douglas Charles Abbott: Communist Walter Tucker was down at Bretton Woods.


Agar Rodney Adamson: I am glad to know there were so many happy and foolish people down there. Has the international monetary

Proposed Minting of Gold Coins fund assisted in the convertibility of currencies? Are our currencies any more convertible today than they were at that time? Unfortunately the answer is no. Why? Because the rules set up by the fund made most difficult the convertibility of soft currencies, sterling currencies, into the so-called hard currencies.
What has been the reason? The reason has simply been that the soft currencies, which are designated as currencies which bear no relationship to gold, have been unable to be converted into hard currencies through the common denominator of gold. So no matter how the restrictions were framed they have proved of great disservice to us as a trading nation, and they have not assisted the trading of the world. This is simply because the price of gold was set and the ownership and holding of it by individuals was not allowed.
With gold, purchases can be made anywhere in the world. The Russians have proved that, the Swiss have proved that, and anyone who has travelled in the Levant in recent years knows that to be so. Through the operation of this fund we have virtually sterilized gold and made it not a useful commodity but merely a metal to be taken from one hole in the ground and put in another, there to remain inert. So much for what has happened with regard to the convertibility of currencies.
There are hard currencies, which theoretically have some relationship to gold, and there are soft currencies which apparently do not. In between them you have this great impasse, this great gulf of lack of convertibility simply because the problem, the correct equation and the proper use of gold, has not been solved.
My suggestions have met with considerable approval. The town of Timmins, for example, passed a resolution which I imagine was forwarded to the minister, in which they recommended the minting of gold coins. In that resolution they used an argument which I think is valid. The resolution states:
While the government is not in a position to have the price of gold increased, it can increase its use.
The mayor of Timmins stated, and I think this also is a valid argument, that it was time gold was freed from the restrictions placed on it by the international monetary fund. Outside of uranium it was the only metal so treated, he said. What is the danger in increasing the use of gold in Canada? What harm can it do? Can it upset world trade? Surely if we have a free market for gold in Canada it becomes possible to pay those people who sell to us in gold. They can be paid in gold through devious channels


today, but with a free market the transaction would be automatic and government agencies would not require to be consulted.
Another advantage is that people coming to Canada would be able to obtain gold for their ordinary business transactions, and it would also assist persons doing business with Canada. For example, people with insurance policies in a Canadian company would be offered the choice of having their claims met in gold at the daily rate for which gold was being offered.
I would now like to quote a paragraph from an article by an economist I believe in, Henry Hazlitt. In the fourth of his articles on this question he states, and I am quoting from the issue of Newsweek dated January 25, 1954:
A full gold-coin standard is desirable because a gold-bullion standard is merely a rich man's standard. A relatively poor man should be just as able to protect himself against inflation, to the extent of his dollar holdings, as a rich man. The reason for returning to a full gold-coin standard in several stages is to prevent too sudden a drain on gold reserves before confidence has been reestablished. A program like the foregoing would provide a faster schedule.
In the earlier part of his article he sets out a timetable for the return to a full gold standard; and a free gold market is the first stage.
Let us assume this market was established. The average individual, who is always forgotten today, would have the right to own-gold coins, export them, import them, or do whatever he wished with them. Thus, if further inflation occurred he would be able, through the ownership of gold, to protect himself against it. That is a very important point, because obviously we are passing from the lush years of the seller's market into extremely combative years when our goods will have to be sold under conditions of the keenest competition. It may be that if the unemployment situation becomes acute this government, as well as the government of the United States, will have to resort to deficit financing. I hope it does not come to that, but I am certain it will if the unemployment situation grows.
Deficit financing by any other term means inflation. It means the government issues more money than it collects. Under such conditions the ownership of gold would protect the individual, particularly the poor man. The man of means, the man of wealth, can protect himself by the ownership of real estate, common stocks, or real property, but the man with a comparatively small income is denied such protection. In my opinion, Mr. Speaker, that is the essential fifth freedom

which we and all the democracies seem to have forgotten, namely the right of the individual to protect himself against the results of arbitrary action by the central government.
Such protection is imperative. Freedom of religion, freedom of trade, freedom of worship and the other freedoms are actually part of the total freedom, which is the economic freedom which can only be provided through the ownership of gold.
If we do not do something like this, if we continue our present policy, we shall be faced with the complete decay of the gold mining industry. We are faced with the loss of our gold into the hands of those who can use it for purposes which are inimical to our welfare. I am told that a considerable amount of the rioting and the assassinating which is taking place in the Arab countries has been financed by gold. That is hardly a use to which I should like to see Canadian gold put.
As I say, we leave our northern municipalities and our mining industry at the mercy of brokers who are not interested in the welfare of Canada. We thus lose a priceless asset. At the same time we continue, under the Emergency Gold Mining Assistance Act, the expenditure of some $15 million a year, money which could be saved. We have not approached any closer to the solution of the question of convertibility of currencies. Instead of being a useful adjunct to our economy, the gold is either used against us or is sterilized. Neither course is desirable.
I have spoken at some length on this question this afternoon, Mr. Speaker. I wished as far as possible to speak without notes or a prepared script because I wanted, if possible, to explain to the hon. members of this house why I feel that our present course not only is not assisting the industry or the northern municipalities, important as they are, but is not assisting Canada as a trading nation.
I cannot see any danger in allowing gold to be traded freely in Canada. I cannot see that the ownership of gold by Canadians can do anyone any harm. On the other hand I can see that, through the free ownership of gold, you are going to provide for many Canadians a form of security against further inflation, and are going to allow them to maintain, through the holding of gold, the ownership of a tangible, finite substance, something which throughout the centuries has maintained its value and commanded a price. It is not gold which has shrunk in price. It is not gold nor the gold standard which has failed. What has failed is the belief that those money managers in central governments and central
Proposed Minting of Gold Coins banks can control world prices for products and for their currencies. This has never been done successfully, although it has been done at times over periods of years. However, it has always proved to be a disaster.
For this reason I would ask that this bill be given consideration. What harm does it do? Who does it help? Will it not assist in the convertibility of currencies? Will it not aid Canada as a great international trading nation? It is on this basis that I put forward this amendment to the Currency, Mint and Exchange Fund Act.


James MacKerras Macdonnell: I rise on a question of privilege, Mr. Speaker. While I have listened with great interest to the speech of my colleague and agree with much of it, I wish to say that I do not agree with his remark as to the communist origin of the international monetary fund.


Mr. Armand Dumas (Villeneuve):: Mr. Speaker, having the responsibility of representing a constituency in which the gold mining industry is so important, I cannot keep silent on a matter such as that which has been brought to the attention of the house by the hon. member for York West (Mr. Adamson).
May I call it six o'clock, Mr. Speaker, and move the adjournment of the debate?
On motion of Mr. Dumas the debate was adjourned.


Mr. Speaker:: As it is six o'clock, the house will revert at eight o'clock to the business which was interrupted at five o'clock.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.


[Stage Direction]
The house resumed consideration of the motion of Mr. Cote for the second reading of Bill No. 168, to amend the Post Office Act, and the amendment thereto of Mr. Coldwell.
Mr. J. A. Byrne (Kootenay East):: Mr. Speaker, I know it is an unpopular move for the government to bring forward legislation that, regardless of what form it may take, means an increase in our taxation. Therefore I suppose it is difficult for a member speaking on the government side to hope, as many of the opposition members do, to gain

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some political kudos from the particular legislation under discussion. But for the past several days I have personally heard a good deal of political hypocrisy, if I may say that without being asked to withdraw. I feel that certain things have been brought forward in this debate that call for some answer.


Harold Edward Winch: Apparently the Conservatives are wiped out.


Mr. MacDougall:: There are no Tories in
the house.


Stanley Howard Knowles: There are plenty, but they
are on the Liberal side.


James Allen (Jim) Byrne: I am not going to spend a
great deal of time on the merits or demerits of the bill, but I do wish to say that from my point of view and that of many of my constituents the postal department is rendering excellent service. I know there have been a number of complaints where mail has gone astray-I hope, Mr. Speaker, that I will be allowed extra time because my speech is being interrupted by the applause for members who are entering the house. I realize that the applause is not intended for me. As I have said, there have been a number of complaints from time to time which have been cleared up.
For the last five years I have been in a position to gain some experience with respect to mail deliveries from the east to the west and from the west to the east. I have had considerable correspondence. As a matter of fact I corresponded with my family two, three or four times a week before bringing them here. Time after time I have received letters around noon of the day following the day on which they were posted, and may I say that they were not franked but had 4cent stamps on them. They were posted in the little city of Kimberley in the interior of British Columbia, some 150 air miles from Calgary. Everyone knows the distance from Calgary to Ottawa and the transfers that are necessary before mail finally reaches the post office here. I think that is very good service.
On the other hand letters that were delayed and came by railway took two days longer, and on occasion three days, to reach here. Therefore air service is in many respects good and is not a luxury. In these days of air travel the Prime Minister (Mr. St. Laurent) could leave here yesterday afternoon, spend the night in Goose Bay and arrive in England this afternoon, but even when such things can be accomplished in this air age we have members of the opposition stand up and tell us that air mail service is a luxury.

I said the other day that the Conservative party needed a shot in the arm, and I believe that is the truest statement I have made in in the house for some time. It would seem that when the Leader of the Opposition (Mr. Drew) runs short of a sound argument in the next few years he is going to seek to intimidate members of the Liberal party because they voted for an absolutely justifiable increase in their remuneration.


Mr. Speaker:: Order.


James Allen (Jim) Byrne: He is not going to intimidate me, although he did intimidate a goodly number of his supporters. The hon. member from the adjoining riding of Kamloops (Mr. Fulton) suggested last night that I should rise in my place and make a speech like he was making. I want to say to hon. members that I would be somewhat ashamed to stand up in the house and make a speech like he made. I am not going to read a great deal of what he had to say, but from the substance of it you would imagine that the hon. member for Kamloops represented a bunch of hillbillies with no interest whatever in the outside world. At page 1791 of Hansard of yesterday he stated:
... I would think that those people would be quite willing to continue to pay the extra three cents so that the people of my riding would not be subjected to the necessity of paying an extra cent on every one of their letters in order to get them delivered-and not by air mail . . .
I wonder if the people of the riding of Kamloops are so parochial that they do not make the same use of air service for their mail as do the people of Kootenay East. I have no actual figures, but I would not be afraid to state categorically that 90 per cent of the mail sent through the post offices in my riding is for delivery outside of the riding to the prairie provinces, eastern Canada, Newfoundland, Victoria and many other places. In some cases the mail is on the airplane within ten or twenty minutes after it has been delivered to the post office. While there is a good deal of communication by mail within the municipality and the surrounding area, I am sure that a large number of people are going to benefit a great deal from the fact that all mail will be carried by air when a 5-cent stamp is placed upon it.
I said when I rose that a number of things have been said that I feel need to be answered. The hon. member for New Westminster (Mr. Hahn) referred yesterday to the speech made by the hon. member for Winnipeg North (Mr. Stewart) who implied that patronage was rampant in the postal service.


Mr. Stewart (Winnipeg North):: I did not. imply it. I said it.


James Allen (Jim) Byrne: The hon. member says that he said it. I say the hon. member should prove such a statement.


Alistair McLeod Stewart: The proof is on the record. The names are on the record.


Mr. Noseworthy:: It is proved.


James Allen (Jim) Byrne: He did say that a certain person was asked to pay $500 to keep a sub-post office. If I wanted to get someone to take over a sub-post office in my riding I would have to pay him $500, and there would be no political patronage in it. The amount of money made by a person who looks after a sub-post office is so infinitesimal that it does not amount to a hill of beans. I would say that if we did have a candidate who was so silly as to suppose such a thing, possibly he should have had his head read instead of becoming a candidate. That is stuff and nonsense.
The hon. member for New Westminster (Mr. Hahn) went even further with some nonsense that I know is not true. The hon. member now represents a riding which was formerly represented by a very close friend of mine. I was personally acquainted with him for four years, and I know him to be honest, upright, and one of the finest gentlemen ever to come from British Columbia. Long before "Bible-Billism" ever hit that province, we did send hon. gentlemen down here.


Mr. Speaker:: Order. The hon. member completed his remarks by saying that we did send gentlemen down here. This might be an implication that the member who is now representing this riding, and who is the successor of the one to whom he referred as being a gentleman, might not be of the same calibre. I know he does not want to leave that implication. While I am on my feet I might say that it would be more interesting if we were listening to speeches related to the principle of the bill.
I know that last evening a little story was told about patronage, and it was being told at a time when perhaps my attention was not being directed to the speech. The hon. member has made a rebuttal to that story, I imagine, and I believe he should come back to the principle of the bill.


James Allen (Jim) Byrne: I did not imply that British Columbia would not continue to send gentlemen here. If the hon. member feels that anything I have said calls for a withdrawal, I am only too pleased to do so. It may be true that this debate has, from time to time, strayed from the principle of the bill; but I think it should be recalled that I am the first member from British Columbia who has
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attempted to show the inaccuracies in statements that have been made by some hon. members. In this particular instance the riding of an hon. member, and by implication the member himself, in my opinion have been left in a bad light. I seek the indulgence of the house to put the record straight. At page 1787 of Hansard for February 4, 1954, the hon. member said:
Another instance that I have in mind has to do with the post office that serves my own community.
The hon. member was seeking to show that patronage is costing such a great deal that it would not be necessary to raise postal rates if we were not paying too much for buildings and so forth. Here the implication is that we are paying too much rent for a building. I continue the quotation:
Some three or four years ago we had occasion to require a larger postal outlet. The people in the community knew nothing about the post office until it practically became a reality. The fact is it was only through representation on my part, and from one or two other prominent citizens, that they took it from a proposed building-
-and so on.
Then he goes on to say:
I would say that the rents for a building such as that were excessive. When you have to pay about $5,000 a year for a post office building which is only 120 feet long and 60 feet wide, I would say you are paying too much, especially in a rural area.
The hon. member did not make it very clear which building he meant, but he did say it was the one serving his community. The hon. member has a store in this community which is some 200 or 300 feet from the postal outlet, so undoubtedly he has reference to the particular building I have in mind. The implication is made, of course as he said earlier, to substantiate the statement of the hon. member for Winnipeg North (Mr. Stewart), when he referred to political patronage. At page 1786 of Hansard the hon. member used these words:
I for one feel that the hon. member for Winnipeg North (Mr. Stewart) was certainly right on the beam when he said that. We find it apparent everywhere. We need only go to our own particular ridings and examine some of the incidents and we shall find probably no end of them.
I am just examining the one instance, the charge that an excessive rental was paid for postal accommodation. It just happened that I was not in the house while the hon. member was speaking. I read Hansard and recalled having discussed this very matter with the former member for New Westminster. I thought I had some idea of what was taking place, so I checked and got the facts. The hon. member says that no one knew anything about it. If they did not it was because they did not read. This contract was let by tender in the normal way.

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There were two tenders, and the successful tender was submitted by Mr. Thomas Binnie, in the amount of $5,964. This is $964 more than the hon. member mentioned in his statement, but in view of the fact so many of his facts are incorrect I think we can overlook that. The unsuccessful tender was submitted by a Mr. George S. Viel.
When the two tenders were received the Post Office Department asked for a report from the district field inspector. The contract was subsequently awarded to Mr. Thomas Binnie for substantial reasons which did not in any way indicate patronage.


An hon. Member:: What were the reasons?


James Allen (Jim) Byrne: The hon. member has asked for them, and I shall give them.


Joseph William Noseworthy: Which was the Liberal?


James Allen (Jim) Byrne: It is just that type of innuendo, Mr. Speaker, that brought the hon. member's party to power in British Columbia, and it will take them out. The reason Mr. Binnie received the contract was that Mr. Viel asked for $815 per month which amounted to $9,780, a substantial increase over the $5,964. I just bring this matter to the attention of the house and of hon. members opposite to indicate that, in my opinion, when they seek to intimidate members on this side of the house they should be more certain of their facts.


Stanley Howard Knowles: It has already been made crystal clear from this side of the house, Mr. Speaker, that we are opposed to the increase in postage rates involved in the bill which has been brought in by the Postmaster General (Mr. Cote). I shall, therefore, take only a moment or two to deal directly with that point. However, there is a particular aspect of this matter about which I want to say something further.
With regard to the increase in the postage rate itself, I feel that the government has not played fair with the Canadian people. In that respect I feel that the blame should be levelled not so much at the Postmaster General personally as at the government. I think perhaps he has had to take rather too much of the blame for this on behalf of the government as a whole.
The first of the two main ways in which the government has not played fair with the Canadian people is its action in taking off a tax just before the election and putting it on again just after the election, under another name. The second way in which I feel the government is not playing fair with the people of the country has to do with the

fact that nothing is being said on the government side of the house in reply to the many speeches from this side in which reference has been made to the losses being sustained by the post office in respect of periodicals and magazines. I refer in particular to those which carry huge amounts of advertising, which means that the Post Office Department is subsidizing periodicals, newspapers and magazines that are making a considerable revenue out of that advertising. These publications are carried at a tremendous loss to the post office, so far as postage is concerned.
I give the Postmaster General (Mr. Cote) credit for attempting to answer-though I do not feel he has answered satisfactorily-a number of the arguments put forward from this side of the house. Unless something has happened that has escaped my observation, I have not yet heard him deal with this question, to which I have now once more drawn attention. If my study of the matter has served me correctly, the deficit which the Postmaster General says must be met could be made up if magazines, periodicals and newspapers were made to pay their share of what it costs the Post Office Department to transmit this material. And the hon. member for Vancouver East (Mr. Winch) reminds me, from the back of the chamber, that if that were done there would be, in relation to the deficit the Postmaster General is now talking about, a surplus of $2,500,000.
So I submit that this is more than just a protest in the name of the Canadian people aeainst a one-cent increase in postage rates. Naturally people do not like increases in taxes of any kind. Protest against an increase would be natural in any case. But I feel this is something more; it is a case of the government not playing fair with the people of Canada in respect of this matter. And I think it is quite appropriate that my leader has moved that the bill be given the six months' hoist. That is what this parliament should do with it, hoist it out of the House of Commons altogether.
The bill was introduced by the Postmaster General with a speech in which he said specifically that one of its purposes is to make up for the cost of the five-day 40-hour week, which is to be implemented on April 1. We have heard that statement on at least three occasions from the Postmaster General. We had it when he introduced the resolution preceding the bill; we had it again when he moved second reading, and we also had it from another minister on December 8, 1953, when the Minister of Finance (Mr. Abbott) announced that in due course there would be this bill increasing the rates of postage.

On each of those occasions reference has been made to the fact that one of the reasons for the bill is the need to raise $5 million, the cost of implementing the five-day 40-hour week. For a while I took it as a matter of course that it would take some time for the government to work out the details in connection with the implementation of the five-day 40-hour week. For a while I kept my suspicious nature under control; but as time goes on I am finding that more difficult.
It is now nearly two months since, on December 8, 1953, as recorded at pages 692 and 693 of Hansard, the Minister of Finance told me he hoped that very shortly there would be made public a list of the localities in which the post office staffs would go on the five-day 40-hour week on April 1. I had hoped that that list would be published very shortly. Maybe my definition of "shortly" varies from that of the minister; but at any rate on January 14, 1954, as recorded at page 1139 of Hansard I asked the Postmaster General if that list was yet ready, and he had to tell me that it was not.
I waited a little while longer. Yesterday, February 4, 1954, as recorded at page 1762 of Hansard, I asked again if we might soon have information particularly with respect to the manipulative staffs working in the post office at Winnipeg. Again I was told that this information was not yet available.
Well, today, as Your Honour will recall, I asked the question again, this time putting it to the Secretary of State (Mr. Pickersgill), the minister responsible to parliament for the civil service commission. I happen to know that others have been trying to ascertain from the civil service commission whether or not certain cities, certain communities in the country, are to be included in the five-day 40-hour week arrangement. Up to the present time we have been unable to get any information in answer to that question, except the one bit of information which the Minister of Finance was able to give this afternoon when I raised the question of privilege. The information he gave to the house was something like this, that if the member for Winnipeg North Centre was concerned about his city, he could be assured that Winnipeg would be included.
Well, it will be a matter of some relief to the post office employees in Winnipeg to know that their case is covered. But it seems to me that it is not fair to the house as a whole not to give us the complete information as to the extent to which the five-day 40-hour week is to be implemented. We have been led to believe that it is the civil service commission which works out these matters. We
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found out this afternoon from the Minister of Finance that the personnel side of treasury board is working on it as well. But no one knows what the list of communities is.
This afternoon, however, the Minister of Finance was able to assure me that Winnipeg is on the list. Well, either he is jumping the gun, or he knows the communities that are on that list; and if he does, then I submit that before the house is asked to give second reading to the bill we should have that information. It is not fair to ask us in advance of that information to pass a bill which would provide money for that purpose. What position are we going to be in after the bill is passed by the house-if it is passed-if we find that the implementation of the five-day 40-hour week does not measure up to what we thought would be the case, with the proposed expenditure of $5 million?
I want to know what the situation is in some other cities. Is it going to be extended to Regina and Saskatoon? What about a large city like Montreal? Is the five-day week already sufficiently established in that city that one could be assured post office staffs there will be included; or are we going to have the experience, after this goes through and after the postal rate has been increased for this, among other purposes, of learning that a city like Montreal is not included?
I suppose members from every city in the country could rise on questions of privilege, as I did this afternoon, and worm information out of the Minister of Finance. But surely that is not the proper way to do it. As a member from Winnipeg I was glad to get that information this afternoon for the employees in my city. But I submit it is not fair to the house as a whole to ask us to go on without having complete information.
Just when the debate on second reading will be concluded, I do not know. Certainly there is no possibility of the matter being finally concluded tonight, so far as third reading is concerned, because it would require unanimous consent to go to third reading tonight. In other words I think it should be clear that since there is further time beyond today the government should play fair with the house, even if it is not playing fair with the Canadian people in the matter of raising these postal rates, by seeing to it that this list of communities and localities where the five-day 40-hour week is to go into effect is before this house before we go any further.
From what the minister said this afternoon we know that Winnipeg is one community that is on the list. That is fine, but

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let us have the entire list before we go any further. It is two months since the Minister of Finance (Mr. Abbott) said the list would be ready very shortly. I hope the period regarded as "very shortly" has now gone by, even when considered in the minister's terms.
Some of us do not accept the proposition that there is necessarily a connection between the cost of the five-day 40-hour week and the postal rates. Other civil servants have been given the five-day 40-hour week without the Canadian people having imposed upon them a special tax for that purpose. But the government has taken the position that there is a connection in this case. All right; if from the government's viewpoint there is a connection, then I submit we are entitled to full information on that point before we go any further with this obnoxious legislation.


Mr. F. E. Lennard (Wentworth):: Mr. Speaker, in rising for a moment to oppose this increase to five cents in the postal rate for first-class mail I wish to say that I do so because of the many protests I have received from my own riding.
The Postmaster General has said that this is the only way in which the increased costs of the department can be met. Postal delivery is a service which the taxpaying public has a right to expect the government to provide, and that public does not necessarily expect that the department which provides this service shall be self-sustaining. Quite apart from being self-sustaining, in the past few years it has been profit-producing.
I presume that those profits have gone into the general revenues of the government and have been used for other services which the government provides for the people of this country. Therefore I see no reason at all why the government should be in such a rush to offset any possibility of loss in the department by increasing rates before they have found out whether or not they are going to need the extra revenue.
Certainly the government does not take this attitude with regard to Canadian National Railways. Most certainly it does not take this attitude in connection with Trans-Canada Air Lines, and certainly not with regard to the Canadian Broadcasting Corporation. As a matter of fact, so far as T.C.A. is concerned the Post Office Department was called upon to accept a rather heavy charge for first-class mail, which might very well be described as a subsidy to T.C.A. which prior to that time had not been doing so well financially.
Over a period of ten years the surpluses of the Post Office Department amounted to

$70,193,330.54 and for the preceding ten years the surpluses were $22,969,606.69, making a total of more than $90 million of a surplus in the last 20 years in the operations of this department. And this was at the lower stamp rates which were in effect during that period of time.
I know from correspondence which I have had with different groups in my riding that this increase certainly is not popular. Personally I simply cannot understand why this government is advancing the rate to five cents on first-class mail. To me the raising of the rate to five cents from the three-cent rate which prevailed before the war-and at the present time it is only three cents in the United States-simply does not make sense.


Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, during the course of this debate we have heard a great deal about the advantages the new air mail service which is to come with the proposed increased rates will bring to parts of Canada such as the Yukon, Newfoundland and elsewhere. But it seems to me that the question should be raised here as to what advantages are going to accrue to some of the older parts of Canada.
In Ontario and Quebec there are a great manv people living on the sideroads in rural areas. These people live on farms which have been well established and settled for many generations. In some cases they still have to go half a mile or a mile to get their mail during the winter.
Since the end of the war there has been a great influx of immigrants and a considerable increase in our population. Many new subdivisions have been developed outside of a number of our medium-sized cities. This condition is to be found throughout western Ontario. As I say, these subdivisions in many cases are not within the city limits and therefore do not receive daily mail delivery. Quite often you will find 20 or 30 houses on a side-road with 20 or 30 mail boxes down at the end of that road. Those people have to go down to collect their mail, sometimes having to travel half a mile or so.
I cannot see how the new postal rates are going to bring any great advantage to those people. It is alleged that the people who use the service should pay for it. These people will be using first-class mail, yet they will gain no advantages from the increased rates, while the people in some of the newer parts of Canada will gain considerable advantage. That does not seem to me to be reasonable.
During this debate we have had a multiplicity of figures given as to why there should or should not be an increase in the postal rates. The minister has given some figures,

as have hon. members of the opposition. From the reports which we have it would appear that in each of the years 1951, 1952 and 1953 the Post Office Department had a surplus of about $6 million. The minister has estimated that there will be a loss of around $7,500,000 this year because of the elimination of the stamps on cheques.
The Woods-Gordon report recommends many savings that could be effected within the department if certain economies were put into effect. The hon. member for Vancouver East (Mr. Winch) has suggested that the people who are going to pay this increased first-class rate are going to pay more than their share. We all know that from an accounting point of view it is quite possible to adopt various viewpoints. For instance, we all know that it is perfectly proper accounting practice to value fixed assets in different ways, to allocate costs in different ways and so on. I mention that in passing merely to show that often it is quite possible to show a profit or to show a loss if one so desires.
It would seem that the minister is not too sure what are the receipts and expenditures of the Post Office Department. For instance, last spring the minister's predecessor apparently felt the revenue was sufficient so that the tax on cheques was no longer necessary, and that tax was accordingly removed.
This fall we have the situation that the hon. minister has changed his mind again, and it is necessary now to increase postal rates to make up the deficit. Surely between last spring and last fall the figures of estimates and expenditures would have been available to the minister. If not, then it is quite possible on that basis that by the coming spring we will have no need to increase the rates at all.
In view of the fact that last spring the department took off a tax because it was not considered necessary, and then this fall it put on another tax because a certain amount of revenue is now considered necessary, and in view of other figures we have had presented from all sides of the house, which are most confusing, it would seem to me, Mr. Speaker, that the correct thing to do would be to wait and see. It may be that by the end of this year it will not be necessary to raise the postal rates. In fact it would seem, from all we have heard, that it would be entirely unnecessary to raise the rates. In any event, should there be a deficit at the end of this year the minister could always bring in this bill again and increase the rates next year if necessary.
As the hon. member for Vancouver East (Mr. Winch) pointed out earlier today, the removal of the stamp tax on cheques certainly
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benefited large businesses, and there is no doubt that the increase in the postage rate will certainly affect those with small incomes who cannot deduct such charges as expenses.
In closing these brief remarks, Mr. Speaker, I think I should emphasize once again that the policy of wait and see should be adopted at the present time and this tax introduced at a later date when it is proved to be necessary.


Mr. A. M. Nicholson (Mackenzie):: Mr. Speaker, although there have been some very critical remarks regarding the postal service, I believe it is remarkable that we have as good a postal service as we now enjoy when we consider some of the handicaps which have been mentioned during this debate.
Last night I received a letter from an 86-vear-old friend of mine which was posted in Edmonton at 7.30 p.m. on February 3. By 7.00 p.m. Edmonton time on the 4th of February it was on my desk. The writer of this letter settled in Saskatchewan 50 years ago. It is quite remarkable that during his lifetime he should be in a position to post a letter in Edmonton one day and have it delivered here in Ottawa in less than 24 hours.
Having said that, however, I must say that I am supporting the amendment moved by the leader of this group. I want to emphasize what has been said by several members on this side of the house, namely that first-class mail is being operated, according to figures issued a year ago, at a profit of $20,700,000, and on the other hand second-class mail for some years has been losing 13J cents out of every dollar, or a total loss of $16 million.
When one considers that that subsidy has been a factor in building up some of the immense fortunes made in the newspaper field I believe the government is not really being fair with the Canadian people in leaving the rates on that class of mail unchanged. In this connection, and to demonstrate my point, I need only mention the Thomson syndicate which operates not only in Canada but which recently bought the Scotsman in Edinburgh for several million dollars last year; the Southam group; the Toronto Star; the Toronto Globe and Mail; the Sifton group; and the hon. member of the Senate who died recently leaving $1,750,000. I do not know how much of that was made in the newspaper business, but he certainly did not lose anything in that field.
When these large fortunes have been made partly through the advantage accruing from the very low cost of second-class mail, I think the government has no right to place this tax on the Canadian people by increasing the letter rate by one cent.

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The next point I want to deal with, and it has not been dealt with adequately, is the action of Liberal candidates in dragging the affairs of the Post Office Department into politics. I received a letter from a Mr. John Fletcher of Kelvington and in this letter dated January 12, 1954 he enclosed a clipping from a local newspaper. That report states there is an item in the estimates of $110,000 for a new post office building at Kelvington.
Permit me to recapitulate. During the recent election campaign Mr. Ferrie, who represented the Mackenzie constituency in the last narliament, was able to ask, "What did Nicholson bring back to this constituency? I have brought back two post offices, one at Kelvington and one at Carrot River".
I bear Mr. Ferrie no ill will whatsoever. Indeed, I am greatly indebted to him for having given me a chance to relax for a few years. When you have been here eight or nine years you really should have a change. However, I was at one of Mr. Ferrie's meetings at a time when he mentioned that he was able to bring a post office to Kelvington, and one to Carrot River. I think hon. members will agree that no hon. member, regardless of party, should seek support on the basis that he decides where post offices should be built.
When this report appeared in the Kelvington paper to the effect that there was to be an item of $110,000 in the estimates this year, I was somewhat disturbed. In his letter to me Mr. Fletcher stated:
The enclosed notice was in last week's Kelvington Radio. I was in to the editor's place yesterday renewing my paper and he showed me the letter he had received with this notice. It was on House of Commons stationery and signed by G. M. Ferrie and had no postage. Besides the insult to you of sending the notification by the defeated member he is still using the franking privileges of a member . . .


Mr. Speaker:: Order. The hon. member, I think, is stepping into a field which is extraneous to the matter now before the house. There was reference made earlier on both sides of the house to this matter, but I think we ought not to continue bringing into this debate matters which are related to political patronage. To a person who would come into the house, not knowing what was before the house, it would appear that we are dealing with the first item of the estimates of the Postmaster General.


Alexander Malcolm Nicholson: Mr. Speaker, if it were not for the fact that a defeated member of this parliament gave information which appears in today's estimates, before hon. members had access to that information-


Mr. Speaker:: Order. That has nothing to do with the increase in postal rates contemplated by this bill. I would ask the hon. member-I would plead with him-not to argue any more with me, because I feel I have stated the position correctly and he should accept my ruling.


Alexander Malcolm Nicholson: Mr. Speaker, in view of the fact that I mentioned this letter I think I should explain that I learned the editor of the paper, receiving this-


Some hon. Members:: Order.


Alexander Malcolm Nicholson: Mr. Speaker, I think-


Some hon. Members:: Order.


Mr. Speaker:: I am listening to the hon. member.


Alexander Malcolm Nicholson: In view of the fact that I said the letter was sent by a defeated member of parliament without a postage stamp I think I should be permitted to explain.


Mr. Speaker:: I just want to know if the hon. member refers to an abuse of franking privileges. If so, this is not the time to bring the matter up.


Alexander Malcolm Nicholson: I think if the post office department uses the services of a defeated member of parliament, who in turn sends his mail without postage, that certainly is a matter of concern and should be considered before we approve any increase in postage rates. I think I should be permitted to say that the editor of the paper had been given this advance information. I am saying-and I think I should be permitted to say-that this letter no doubt went through the post office, with Mr. Ferrie's information that there was to be a post office at Kelvington, without anybody willingly making a mistake. In the light of the fact that we have a staff in the Post Office Department who are capable of making decisions we should not have information, which today comes to us officially through the estimates, sent out in January. I believe the minister should explain why it is necessary to use the services of Mr. Ferrie to get-


Mr. Speaker:: Order. I think I have been fair with the hon. member.


Charles Delmar Coyle: He has said-


Mr. Speaker:: I do not think the minister should give a rebuttal at this moment. I believe the hon. member has had ample opportunity to present his argument that mail franking privileges should not be given to neonle who are not supposed to use them, and therefore the department would save thereby.

That has been his point. I have listened to him very patiently. I hope that he is now through with it.


Alexander Malcolm Nicholson: Mr. Speaker, I am through with that point, but I should like to have had the privilege of telling how expensive it is to have the inspectors-


Alcide Côté: You do not even have the envelope.


Alexander Malcolm Nicholson: That is what I said. I am letting that matter go. I am not pressing it at all.


Alcide Côté: You are better with the bouquets.


Alexander Malcolm Nicholson: No. I suggest that you should not have to clear through Mr. Ferrie, who in turn has to clear through-


Mr. Speaker:: Order.


Alcide Côté: I think my hon. friend is now slipping a little bit too much, and that he should be brought back on the right track.


Alexander Malcolm Nicholson: I was going to refer to a case here-I have here sessional paper 159- to explain what the procedure is in connection with these post office matters in my constituency. For example, when a postmaster was short on April 16-


Mr. Speaker:: No. The hon. member must be reasonable. If he intends to discuss the principle of this bill by bringing in all kinds of little cases affecting the operations of the Post Office Department generally, I would advise him to wait until the estimates or some other measures giving him an opportunity to discuss these questions are before the house, but not to do so at the moment.


Alexander Malcolm Nicholson: Thank you, Mr. Speaker; I shall conclude. I do think there is a point that the minister should accept. When the minister has in his department men who have had experience for so many years, he should not have to depend upon the judgment of a defeated member of parliament.


Charles Delmar Coyle: We do not.


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


Mr. Hahn:: Mr. Speaker, I am not sure that I am completely in order in replying to the hon. member for Kootenay East (Mr. Byrne) in answer to the charges he laid in respect to the post office question, but I should like to answer him at this moment if I may do so.


Mr. Speaker:: I do not want my ruling at this moment to be detrimental to the interests of the hon. member, but my suggestion to him is to wait for a better opportunity.
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He was out of order in bringing up patronage matters earlier. My leniency toward him caused me to be lenient toward the hon. member for Kootenay East, who was also out of order when he replied to the hon. member.
May I ask him to delay this argument about the allocation of contracts or post office matters in New Westminster for another time. The estimates of the department will come before the house, and that is the time when these matters are discussed. The hon. gentleman will understand that if I allow him to give a rebuttal now, as the hon. member for Kootenay East has spoken to the amendment and has not spoken to second reading, when the amendment is disposed of he may decide to discuss this matter again. Then if another amendment to the main motion is moved later, the hon. gentleman will come back again and we will be discussing not the increase in the postal rates but the problem to which the hon. gentleman has referred having to do with post office patronage in New Westminster.
I think the hon. member might agree with me. What I am asking him to do is to postpone his remarks for another occasion.


Frederick George Hahn: Mr. Speaker, I do not wish to appear to be out of order, but I do not like the reflection which the hon. gentleman cast upon my riding. I shall answer that reflection at a later date.


Mr. E. G. McCullough (Moose Mountain):: Mr. Speaker, there can be no doubt that public opinion is increasing against the proposal of the minister to increase postal rates. I think he has had a verbal licking in the house here. When he brings in the 5-cent postage stamp I hope he will put plenty of glue on it so it will stick to the letters, because the arguments advanced in this house certainly are not convincing as to the justification for the increase which he proposes.
I would say that the evidence or rather the figures we have before us, and the reasons given by the Postmaster General for this needed increase, certainly do not conform to the principle he himself laid down. As reported at page 1102 of Hansard, at the conclusion of his remarks at the introduction of his resolution, he said:
I believe everyone will also agree that the most equitable arrangement is for the cost of service to be borne by the users, and this is exactly the object of the present resolution.
I maintain that the increase in postage rates on first-class mail at this time will not be effective in that way, because people who wish to use ordinary first-class mail do not

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want to have to subsidize second-ciass mail such as periodicals and newspapers, and are very resentful over this action on the part of the government, which just prior to the election removed the excise stamp from cheques and now are imposing a new tax upon the Canadian people.
I particularly want to register my protest against this increase in postage rates for the simple reason that many of us are quite resentful of the fact that we are paying for or are subsidizing second-class mail such as periodicals, which carry a great deal of advertising matter and certainly no essential information to our people. I agree that in this country our newspapers and periodicals perform a very useful service in distributing knowledge and information to our people; but I went down to the reading room here and looked through some of the periodicals which enjoy the privilege of being subsidized by our Canadian taxpayers. In one magazine I found that there were no less than 32 full pages of liquor advertisements. That magazine enjoys a subsidy from the Canadian taxpayers.
I do not believe that situation is fair or just to our Canadian taxpayers. Furthermore, I should like to bring to the minister's attention the fact that when we find some places, particularly in our rural areas, where services are being cut, it does not seem opportune for the minister to introduce this increase in postage rates.
I should like to bring to his attention a matter in my own constituency, where we have just recently had a curtailment of mail service. 1 refer specifically to the case of the C.P.R. Reston-Wolseley line, where we formerly had the services of a mail clerk. Recently I had a letter from a constituent who, incidentally, was one of the key Liberal supporters and organizers in that constituency. He told me that I could refer the full contents of his letter and the postscript to any authority in the post office branch that I cared to, and he indicated in the letter that the mail clerk has been taken off that route which entails a cut in mail service on the Reston-Wolseley line. There are points where mail is delayed to the extent of a week.
Therefore I want to join with those who support the action of the leader of the C.C.F. party in moving the six months' hoist, which will have the effect that the bill will not come up again this session. I think it is even in the interests of the government and in the interests of justice and fairness to all concerned that the government should reconsider this measure before trying to force it through the house.


Mr, Claude Ellis (Regina City):: Mr. Speaker, before the vote is taken I should like to say a few words. At the resolution stage I did not make any contribution to the debate other than to ask a question of the Postmaster General. I asked him to explain an apparent inconsistency in the entire government argument for an increase in postal rates. In the minister's statement the other day he completely ignored what I believe to be the fundamental question involved in the entire bill which seeks to increase postal rates. At page 1764 of Hansard for yesterday the minister said:
As I said in the debate on the resolution, if we adopt the principle that postal revenue need not meet expenditures but that the revenues of the department should be supplemented by tax money, then we should have a truly subsidized service.
The implication there is that at the present time we do not have a subsidized service. The implication is that at the present time the post office is paying its way, but that the establishment of a subsidized system is going to come about if we do not increase the postal rates. Many hon. members have pointed out to the minister that at the present time when a man places a 4-cent stamp on a letter, that stamp not only pays for all the services which the sender of the letter receives but does more. Up until this year-perhaps it might also happen next year; we do not know-it has taken care of the deficit on second-class mail service, and it provided the post office with a surplus of over $6 million last year.
If the minister is logical in his assertion that the post office must pay its own way, then I say that the person who places a 4cent stamp on a letter today is paying for the service he receives. As a matter of fact a 3-cent stamp today would be a fair charge to the sender for the carrying of his letter. Now the government proposes to increase the rate to five cents, and as yet the minister has failed to explain this inconsistency. If the Post Office Department is going to be required to pay its operating expenses out of its revenues, then I want to ask the minister to explain to the house how he can justify the continuance of the subsidy on second-class mail.
The minister has not mentioned a word about the subsidy. It is accepted; it is not even questioned by the government. It is going to continue, and the senders of first-class mail who now pay three or four cents on their letters are going to be required to pay four or five cents. In other words they are now going to be asked to bear an additional burden in order to maintain a subsidy on second-class mail.

It seems to me that this is the crux of the whole matter, notwithstanding all the reasons that have been advanced for the increase in postal rates. Certain members to my right have suggested that there is a subsidy to Trans-Canada Air Lines. I was interested in reading an editorial in the Toronto Star of February 2 headed "Air Mail Cheapest by T.C.A." The editorial points out that the T.C.A. tariff for carrying air mail is $1.39 per ton mile, that the tariff charged by the private air lines, the largest of which is Canadian Pacific, averages $3.06 per ton mile, and that the lowest tariff charged by a private air line in this country is $2.79 per ton mile. In other words, T.C.A. is carrying mail at less than half the cost that is being paid by the Post Office Department for the transportation of mail by private carriers.
I have heard at least two or three members make reference to a subsidy to Trans-Canada Air Lines, but I notice they are never much concerned about subsidies to private air lines. All the reasons that have been advanced skirt the main issue, which must of course be the question of what is going to be done about second-class mail. In the statement made by the minister when he introduced the bill and in the statement he made yesterday he completely ignored the question of second-class mail. Before we are called upon to vote on this matter we should have a statement from the minister explaining how he can justify the position the government is taking, that the Post Office Department must meet its current expenses out of revenues, in view of the continued existence of the subsidy on second-class mail.
There is one other point I should like to mention. The Minister of Finance (Mr. Abbott) is in his seat. When the minister was giving estimates of the increased cost next year he estimated the cost of introducing the five-day 40-hour week at $5 million. There must be some basis upon which that estimate was made. Surely the Post Office Department must have had some idea of how many and what post offices would be involved. Apparently the Minister of Finance was able to assure the hon. member for Winnipeg North Centre (Mr. Knowles) this afternoon that Winnipeg was one of the cities.


Douglas Charles Abbott: Regina is there too.


Mr. Ellis:: That is all I wanted to know.


Stanley Howard Knowles: What about Montreal?
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Mr. Proudfooi:: I was paired with the hon. member for Chicoutimi (Mr. Gagnon). Had I voted, I would have voted against the amendment.


Mr. Speaker:: Shall we have the second
division now?


Some hon. Members:: Agreed.


Mr. Speaker:: Does the minister wish to
reply? If the minister speaks now he will close the debate. Or is it agreeable to proceed with the second division now?


Some hon. Members:: Agreed.


Ellen Louks Fairclough: Does not the minister
intend to answer any of the questions we have asked?


Mr. Speaker:: If the minister speaks he
will close the debate.


Alcide Côté: Mr. Speaker, at this time of evening I shall attempt to answer some of the arguments which have been made, and I shall endeavour not to indulge in any repetition. I shall deal first with some of the remarks made by the Leader of the Opposition (Mr. Drew), since they cover most of the objections raised on the other side of the house.
With some heat, the Leader of the Opposition seemed to object to what he repeatedly termed a political speech on my part. What I had done was quote from the Woods-Gordon report, give a clear-cut statement of the financial position of the department and make, I think, some proper observations in regard to the tactics of the opposition. He, and he alone, however, seemed to resent my doing so.
I repeat that there was no thought in my mind of making a political speech, in the ordinary sense of the term; but his reply was, I submit, political from beginning to end. After trying to create an atmosphere of confusion he then proceeded to flog a dead horse in discussing the tabling of the Woods-Gordon report. When I listened to his remarks, made in a loud and scolding tone, I thought I must have been guilty of something improper-only to find that, in fact, what he was doing was commending me for my action in tabling the report.
I am suggesting to him that the next time he agrees with me, he should not do it so violently. May I ask him also not to keep on repeating, and by his repetition encourage the idea, that there is nothing illegal about posting letters in the United States in order

to evade paying the proper rate of postage in this country. As I informed the house earlier Canada, along with some 90 other countries, is signatory to the universal postal union conventions and documents; and under the terms of these international agreements and by regulations having the full force of law, it is absolutely illegal for anyone to attempt to evade postal rates in one country by depositing his mail in another. The penalties which I have mentioned would undoubtedly apply.
Moreover, United States postal authorities would not countenance such a practice. If the Leader of the Opposition, instead of reading "Alice in Wonderland" and quoting from it, would turn to section 5 (1) (j) of the Post Office Act he would see how wrong he is in what he had to say on this question of depositing mail in another country. I shall help my hon. friend in that respect by quoting this paragraph. It says that the Postmaster General may-
(j) make and give effect to any postal agreement or arrangement with the government or postal authorities of any country or independent postal administration and pay out of postal revenue any remuneration or indemnity thereby provided.
That is exactly what we did. As I said before, Canada is bound by that treaty under the universal postal union. What I said before really applies. The Post Office Act does, I admit, make dull reading; but if, again, my hon. friend wishes to be authoritative he will have to give up his light reading, at least for a time.
His reference once more to Sir William Mulock, a tribute which good Liberals always enjoy, overlooked one fundamental point-that increased volume would net profits only if the per item rate is in itself profitable. It reminds me of the merchant who was going bankrupt and could not understand why. He knew he was losing money on each item he sold, but he was always hoping that the volume of business he was doing would permit him to make a profit.
Another, and not the last, item on which the Leader of the Opposition attempted to misinterpret what I said was when he said I had claimed that the opposition supported the idea that $13,500,000 added revenue could be obtained only in the way I suggested. Never at any time did I say anything of the kind. Once more may I suggest that the Leader of the Opposition give up reading "Alice in Wonderland" and pay more attention to what is said in the house.


Mr. Hodgson:: If the minister is going to complain about the Leader of the Opposition he should stop reading his own speech.


Charles Delmar Coyle: I had only the lunch hour to gather what was said on the other side of the house, and this was the only way I could answer hon. members because they kept repeating and repeating the same arguments. I tried to find something which I could answer, and that was why I gathered these notes of the arguments used by my hon. friends on the other side. If I can judge by what I have not only heard but seen in the last few days, this was the general custom followed by all my hon. friends on the other side.


Clayton Wesley Hodgson: The Leader of the Opposition did not read his speech.


Charles Delmar Coyle: Mr. Speaker, what I am reading now is the result of the work I did. If my hon. friend would adopt the same principle he might be more interesting in this house.
I repeat that it was worth while to listen to what was said in this house. If that had been done, perhaps by the Leader of the Opposition, he could with advantage read Hansard and find out exactly what I did say, which was that everyone agreed that the $13,500,000 had to be paid out; that everyone agreed with the increased salaries to postal employees and with the shorter hours. I then went on to spell out in detail the items making up this cost and to summarize what the opposition had suggested as an alternative to the straightforward method of increasing postage rates.
The Leader of the Opposition tried to make some point of the fact that the government paid its telephone bills and other charges for similar services. I am sure no one would suggest that the government could do anything else, particularly when telephone service is provided by private concerns. But in the case of the Post Office Department, for other departments to pay their postage would simply be taking money out of one pocket and putting it in another, a bookkeeping device which would not change the over-all picture in any particular.
I cannot understand my hon. friend's excitement about a reference to using taxes to meet increased postal charges. He denied emphatically ever having suggested anything of the kind. Once more, I did not say that he himself had made the suggestion. I said that this had come from the opposition. It was, therefore, exceedingly amusing to find his stalwart supporter, the hon. member for York-Humber (Miss Aitken), repeating most emphatically this same suggestion a little later on. I think this is a complete answer to my hon. friend.
Then if I follow correctly the order of his remarks he came again to the idea that while
Post Office Act
we lost some $7,500,000 in the stamp tax we did have substantial savings in the cost of handling these items. I had already informed him that the costs were in the neighbourhood of $30,000, so the balance sheet of this particular item would be: lost revenue, $7,500,000; gain in lowered cost of handling, $30,000; net loss, $7,470,000. In other words we would be losing 99-6 per cent and managing to hold the other -4 per cent.
There was one thing I was glad to note, however, in the remarks of the Leader of the Opposition. He disagreed with the junior addition to his ranks, the hon. member for Notre Dame de Grace (Mr. Hamilton), who had earlier sneered at and derided the tribute paid by the Woods-Gordon company to departmental officials. I thank the Leader of the Opposition for his tribute to these same men, and commend his attitude to his back-row supporter.
I come now to the question of abolishing the post office savings bank and the repeated suggestion that there would be a clear saving of $377,000. There would indeed be a saving of this amount to the Post Office Department, but may I submit that it does not follow there would be a saving of that amount or perhaps of any amount to the government at large.
The savings bank is widely used and I am sure is an appreciated service. Some $37 million stays on deposit over many years and this money is made available to the government, thus lowering the amount it may need to raise by way of loan. The difference between the $377,000 cost of operation and the cost of short-term bank loans, with any administration costs, would be the only saving possible by the abolition of the bank.
While I am on the subject of the bank, which was also mentioned by many others, it is interesting to know that if the government does decide to implement this particular recommendation we will be able to assure depositors who might be somewhat disappointed by our action that the opposition were all enthusiastic for this course of action.
With regard to the reference to the $200,000, and some other items mentioned in the Woods-Gordon report, which could be saved in Toronto alone, again we have in the observations of the opposition the idea that Toronto is just one relatively small district, and that we can multiply manyfold the suggested savings to such a degree that $13,500,000 will be realized in a very short time. In actual fact approximately one-fifth of postal costs are incurred in Toronto, since about one-fifth of the whole mail handled passes through that area.

Post Office Act
If we accepted, then, the estimated savings nf the Woods-Gordon report and apply these same savings everywhere, we could not hope to realize any more than a small fraction of the $13,500,000. To make this small fraction a little more proportionate than that term would indicate, may I suggest that a maximum saving of $2 million might be possible, not an insignificant amount by any means but still a long way short of the $15 million we will realize and need under the proposal now before the house.
Now I come to one phase of the remarks of my hon. friend opposite which pained me greatly, that is, the outspoken commendation he gave to the methods employed by the hon. member for Notre Dame de Grace in gathering information about the Woods-Gordon report. He counsels and encourages hon. members to follow such a course, but I am sure others were shocked by the action and perhaps even more shocked by the attitude of the Leader of the Opposition with respect to it. Just to make it quite clear to him that there are other views in this house, and not confined to this side, I may tell him that I have had personal reactions from members of his own party quite contrary to what he said in this house.


Mr. Fulton:: On a question of privilege, I submit that the Postmaster General or any other member is not entitled to make reference to private conversations with members of this house.


An hon. Member:: Why not?


John Whitney Pickersgill: When did that become a rule of the house?


Alcide Côté: I do not think-


Edmund Davie Fulton: Mr. Speaker, on a question of privilege-


Mr. Speaker:: The hon. member has raised a question of privilege. I listened to it, but I should like to listen to what comments the minister has to offer.


Alcide Côté: If my hon. friend wants me to-


Edmund Davie Fulton: If I may argue the point for a moment before the minister replies. I suggest that the reason I think this is the rule will be readily apparent. If private conversations are to be used as a basis for points raised in debate, any confidence in private discussion between members on either side of the house will be completely destroyed. If the minister is complaining of a breach of confidence, I suggest to him that here is the greatest breach of confidence that has been made in this house for many years.


Mr. Speaker:: There is no rule to the effect that an hon. member must not reveal what

he has been told by others. It is up to him; it is his responsibility. If, of course, he does divulge private conversation, and in all courtesy he should not, he will have to bear the responsibility.
I may say on this point that what I was worried about was not so much the comment made by the minister in regard to the remarks of hon. members opposite, but rather the fact that he was reviving a matter which I thought had previously been discussed and settled. That matter was perhaps revived in a way by the Leader of the Opposition at the commencement of debate on the second reading of this bill, but I was hoping that not too much importance would be placed on that because if we revive the matter again and again there is no point in settling it once.


Alcide Côté: Mr. Speaker, I agree with you. I had the same thing in mind. I did not want to revive the subject. I wanted only to say a few words, since the Leader of the Opposition had mentioned the matter at the opening of the debate.
I do not want to go all over the arguments which have been repeated. I want only to answer one question which was directed to me by the hon. member for Kamloops (Mr. Fulton). He asked me if I would extend to him the same courtesy I extended to the hon. member for Notre Dame de Grace. He knows I always try and will always endeavour to extend the same courtesy to every hon. member in this house; but he will not blame me if, from now on, I am very cautious of those who come into my office with a dictaphone machine during my absence.


Major James William Coldwell: Mr. Speaker, may I ask the minister a question which has been referred to by several hon. members. Will he tell us what the gain or loss is in connection with carriage of second-class mail?


Mr.   Coie@: In committee.


Major James William Coldwell: Will we deal with that in committee?


Mr.   Coie@: Yes.


Douglas Charles Abbott: You might also tell hon. members at the same time what the gain or loss is in providing free premises, heating and services for the Post Office Department.


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


Some hon. Members:: Yes.


John Hugh Proudfoot: Mr. Speaker, I was paired with the hon. member for Chicoutimi (Mr. Gagnon). Had I voted, I would have voted for the motion.


Mr. Speaker:: I declare the motion carried.
Bill read the second time and the house went into committee thereon, Mr. Applewhaite in the chair.
On clause 1-Rates on letters.


Walter Edward Harris: Mr. Chairman, would you
report progress and ask leave to sit again?
Progress reported.



BUSINESS OF THE HOUSE

Walter Edward Harris: On Monday we shall continue with this bill in committee as it now is. Then we shall take third reading of the amendment to the Senate and House of Commons Act; then second reading of the amendment to the Salaries Act. There are on the order paper two resolutions, one in the name of the Minister of Agriculture having to do with the Animal Contagious Diseases Act and one in the name of the Minister of Fisheries having to do with the international convention with respect to the northwest Atlantic fisheries. Those resolutions will be taken in that order. Then there are two bills in the name of the Minister of Mines and Technical Surveys (Mr. Prudham), one with respect to the boundary between the provinces of Ontario and Manitoba and one with respect to the Explosives Act. Then there is second reading of the amendment to the Canadian Forces Act. We shall take them in that order on Monday and Tuesday.


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

[Stage Direction]
Monday, February 8, 1954