1954-01-14

[Stage Direction]
On the orders of the day:
Mr. Clarence Gillis (Cape Breton South):: Mr. Speaker, may I be permitted to address a question to the Secretary of State for External Affairs. Has the minister's attention been drawn to an article appearing in the New York Times of January 1, 1954, bearing the caption "U.S. Soldier and Seaman recount Soviet Prison Terror"? Has the department checked the accuracy of this statement and, if so, would the minister care to comment?


Hon. L. B. Pearson (Secretary of Stale for External Affairs):: The hon. member for Cape Breton South was kind enough to give me notice of this question. I have seen the article to which he refers, and another press report about the same date which referred more specifically to a Group Captain Roy L. Linden, or Linder, of the Royal Canadian Air Force. In each case the reference is to a member of the Canadian armed forces. The Department of External Affairs therefore checked with the Department of National Defence when the story first appeared.
We were told that no member of the Canadian armed forces of similar rank or name to that mentioned in the press accounts has been listed as missing. However, the department is making further inquiries to see whether any light can be thrown on the report.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Prince Albert):: should like to direct a question to the Secretary of State for External Affairs. Has any decision been reached by the Canadian government yet with reference to the Indian request for the reconvening of the United Nations assembly? Is the minister in a position to tell us the attitude taken by Her Majesty's government of the United Kingdom and by the United States government with reference to these matters?


Lester Bowles Pearson: No decision has been taken with regard to this matter, but one will naturally be taken within the next few days. Before reaching a decision we have made some inquiries of the Indian government as to what they expect to be on the agenda at this session of the United Nations assembly that is being called, and we are also consulting with our friends with respect to this matter. We will be able to make a decision within a few days.



INQUIRY AS TO PROGRESS OF TREATY


[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinton):: May I
ask the Minister of Trade and Commerce if he will give the house some report on the progress of the negotiations being carried on with Japan, looking toward a trade treaty, and if he will tell the house what instructions the Canadian representatives have received from the government, under which they are working.


Right Hon. C. D. Howe (Minister of Trade and Commerce):: All I can say is that the
negotiations are proceeding. The instructions given to our committee are to work out a trade treaty which will be advantageous to Canada. The work has been closely supervised. I can assure my hon. friend that as soon as the treaty is ready for signature it will be tabled in the house. I do not know that I can give any further information at this time.


Donald Methuen Fleming: Is there any indication as to when it is expected the treaty will be completed?


Clarence Decatur Howe: I think it will be perhaps the latter part of March.



ST. LAWRENCE RIVER    POSSIBLE FLOODING IN LONGUEUIL AREA

[Stage Direction]
On the orders of the day:
Mr. Augusle Vincent (Longueuil):: Mr. Speaker, I should like to ask a question of the Minister of Transport. Is the minister aware of the rising waters of the St. Lawrence river in the vicinity of Montreal, and

Inquiries of the Ministry also of a newscast over station CKAC at 6.30 p.m. on January 12, suggesting that the government icebreakers would not move above Sorel? This statement has caused considerable alarm in the city of Longueuil over possible damage to be caused by floods.
Would the Minister of Transport tell the house whether or not he is aware of the situation and, if so, what is being done by the Department of Transport to prevent flood damage at Longueuil?


Hon. Lionel Chevrier (Minister of Transport):: I thank the hon. member for having given notice that he would ask his question. The position is as follows. Yesterday, January 13, the level of the water at Montreal was 14-9 feet. That is normal winter level. It rose one foot this morning, and there is nothing abnormal about that condition. The officials of the department advise me that they do not anticipate under present circumstances any flooding in the Montreal area.



STEEP ROCK IRON MINES


[Stage Direction]
On the orders of the day:
Mr. Sianley Knowles (Winnipeg North Centre):: May I ask the Minister of Transport whether Steep Rock Iron Mines Limited is trying to get a line of railway built from Atikokan across to the main line of the Canadian Pacific Railway? If so, what is the government's attitude toward such a proposal?


Lionel Chevrier: When an application is made by the Canadian Pacific Railway or Steep Rock Iron Mines Limited to the government, it will consider the application and its decision will then be made known.
Thus far no application has been made.



AMOUNT DELIVERED FROM AUGUST 1 TO DECEMBER 31

[Stage Direction]
On the orders of the day:
Mr. H. P. Mang (Qu'Appelle):: I should like to direct a question to the Minister of Trade and Commerce with respect to how much grain has been delivered during the period August 1 to the end of the year or up to the present time, and to what extent the three bushel quota objective had been met up to December 31.


Clarence Decatur Howe: When I spoke in Winnipeg some time ago I said I felt confident that deliveries of grain to country elevators could


be made to the extent of 300 million bushels. The amount of grain delivered in the country from August 1 last until the end of the calendar year was actually 341 million bushels. I might say that the average deliveries in the same period over the last ten years have been 328 million bushels, so deliveries this year have been well above average in spite of the congestion.
The deliveries under the three bushel quota have been completed at all delivery points, as far as I am aware. I have been advised that this is the case. Good progress is being made toward the delivery of the second two bushel quota, as well as the supplementary quotas. Deliveries are still being made in considerable volume and cars are being loaded in the country at the rate of about 1,000 a day.


Mr. Argue:: I should like to ask a supplementary question. Can the Minister of Trade and Commerce say when the very severe restrictions on the shipments of wheat out of local country elevator points is likely to be lifted or altered so the two bushel quota may be marketed? Is the minister aware that for all practical purposes there is now an embargo on the shipment of wheat out of country elevators?


Clarence Decatur Howe: The minister is very well posted on these matters. The embargo on shipment applies to points where the five bushel quota and the supplementary quotas have been delivered. Obviously it is not fair to let these points deliver further grain until all points have reached the same position. There is also a slow-down on the delivery of wheat except where the wheat is delivered under the original three bushel quota. The reason for this is that it is not desirable to use all the elevator space at the lakehead for wheat. There will be demands for barley and oats when the season opens, and it is desired to keep the stocks in reasonable balance. However, I may say that considerable quantities of wheat are being delivered to the lakehead under the regulations now outstanding. The purpose of the regulations is simply to give a fair chance at available storage to every shipper in western Canada.



DUMPING


[Stage Direction]
On the orders of the day:
Mr. G. C. Nowlan (Digby-Annapolis-Kings):: I should like to direct a question to the Minister of National Revenue of which I have not given him notice. Perhaps he will take this as notice. Has his department

received complaints with respect to the importation or dumping of United States vegetables in the maritimes provinces? If so, has his department taken any action with respect to it?
Kon. J. J. McCann (Minister of National Revenue): I shall take the question as notice and give a reply later.



ST. LAWRENCE RIVER MAINTENANCE OF ICE BRIDGES BETWEEN SOREL ISLANDS AND MAINLAND

[Stage Direction]
On the orders of the day:
Mr. Lucien Cardin (Richelieu-Vercheres):: I should like to direct a question to the Minister of Transport with reference to the matter brought up today by the hon. member for Longueuil (Mr. Vincent). Is the government giving any consideration to the maintenance of the ice bridges between the islands of Sorel and the mainland? If so, how long does he propose to maintain these bridges?


Lionel Chevrier: Yes, it is my understanding that the bridges between the islands of Sorel and the mainland will be maintained until January 21. Thereafter it is the intention to have the icebreakers proceed up the river.



INQUIRY FOR RETURN


[Stage Direction]
On the orders of the day:
Mrs. Ellen L. Fairclough (Hamilton West):: May I ask the parliamentary assistant to the Minister of Agriculture when I may expect an answer to a question of mine which was passed as an order for return on December 7?


Mr. Robert McCubbin (Parliamentary Assistant to the Minister of Agriculture):: We
were just looking at the question this morning. An answer will be forthcoming before very long.



NATIONAL BATTLEFIELDS


Hon. Jean Lesage (Minister of Northern Affairs and National Resources) moved: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend an act respecting the national battlefields at
National Battlefields at Quebec Quebec to increase the amount that may be paid to the commission from $100,000 to $125,000 during each of the four years commencing April 1, 1954.
Motion agreed to and the house went into committee, Mr. Robinson (Simcoe East) in the chair.


Mr. Dufresna:: There are a few questions I should like to ask the minister regarding the increase in the amount from $100,000 to $125,000. Can the minister tell me how many members there are on the battlefields commission at Quebec?
(Translation):


Jean Lesage: The commission is composed of the following members: Lieutenant Colonel L. J. Adjutor Amyot, since March 31, 1939; the Hon. Wilfrid Bovey, since July 31, 1947; Lieutenant Colonel Oscar Gilbert, since May 2, 1938; Reverend Arthur Maheux, since July 31, 1947; Mr. James Y. Murdoch, Q.C., of Toronto, since January 19, 1949; Mr. William Stobo, since January 19, 1949; Lieutenant Colonel Raymond Garneau, of Quebec, since September 5, 1951. Those commissioners have been appointed by the federal government. On December 23, 1924, the government of the province of Ontario appointed the Hon. William H. Price, of Toronto, and the government of the province of Quebec had appointed, on May 4, 1908, the Hon. Alexandre Taschereau, who died on July 6, 1952, leaving a vacancy.


J.-Wilfrid Dufresne: Could the minister tell me whether the commissioners receive an indemnity or some kind of expense allowance during the year?


Jean Lesage: Mr. Chairman, the commissioners do not receive any indemnity. As far as expense allowances are concerned, I must say that I am unable to answer the question at this time. I shall make inquiries in that connection and will give an answer when the bill comes up for second reading.


J.-Wilfrid Dufresne: Does the minister intend to make new appointments or to replace some of the present commissioners?


Jean Lesage: Mr. Chairman, the federal government cannot make other appointments, because there are no vacancies. The hon. member for Quebec West (Mr. Dufresne) is much more friendly than I am with the authorities of the province of Quebec and the only vacancy on the commission must be filled by the government of the province of Quebec.


J.-Wilfrid Dufresne: Mr. Chairman, I shall not discuss my relations with the government of the province of Quebec and I shall let the

National Battlefields at Quebec said authorities make the appointment they deem advisable in that connection.
Could the minister tell me exactly what purpose the increase requested in the resolution will serve?


Jean Lesage: Mr. Chairman, in 1948, the
act was amended by parliament with a view to granting a subsidy of $100,000 to that commission for a ten-year period ending March 31, 1958. Since 1948, however, when that amendment was brought in, maintenance costs have increased by more than 25 per cent. In other words, the wage level, the cost of necessary stores and supplies have increased by more than 25 per cent, so that during the last few years, the commission has been unable to pay its workers salaries equivalent or equal to those prevailing in the Quebec district for the same kind of work. Moreover, the area of the battlefield park, which was in 1948, I think, 157 acres, has since been increased to 232 acres.


J.-Wilfrid Dufresne: According to what the
hon. minister just said, Mr. Chairman, salary increases are being considered. It is exactly the point I had in mind, because I have received representations to the effect that the wages paid by the battlefields commission to its workers not only did not constitute a fair remuneration for the work done, but also, and more particularly, were lower than the cost of living. Is that the meaning of this request for this extra $25,000 made by the minister on behalf of the battlefields commission? Should this be the case I would like to congratulate him on this proposed increase to the workers employed by that body. I hope that this is the case. I am quite willing to add an extra $5,000 in order to ensure that our workers are well paid.


Jean Lesage: Mr. Speaker, I hope that there will be no misunderstanding. It is not up to the Minister of Northern Affairs and National Resources to set the salaries of the workers employed by the battlefields commission. That is up to that body itself, within the limits of its budget. And that depends largely on the amount of the annual grant it receives from parliament.


J.-Wilfrid Dufresne: Such being the case, Mr. Speaker, I would like the hon. minister to use his influence with the commissioners so that they will give as much as possible to our workers.


Mr. Dupuis:: It would be better than to
consult the Quebec provincial government which does not pay its employees.

(Text):


Mr. Poulioi:: Mr. Chairman, there is one thing I regret with regard to the Quebec battlefields. These battlefields are located on the Plains of Abraham in the western part of the city of Quebec near the Quebec jail. What astounds me is that the monument to the memory of Wolfe and Montcalm, which bears a fine inscription in Latin, is not located on the battlefields but is to be found in the governor's garden west of the Chateau Frontenac, a distance of approximately two miles from the battlefields. There is no monument to the memory of Wolfe and Montcalm on the battlefields. They have been honoured by a monument located in this other place, which may have been the right place before Sir Wilfrid Laurier established the Quebec battlefields commission. I suggest that a new monument should be erected on the Quebec battlefields to commemorate the memory of both the victorious and defeated generals.
There is a monument to the memory of Montcalm located on Grande Allee in Quebec city, half-way between the Wolfe and Montcalm monument and the battlefields. I wonder if it would not be possible to transfer that monument to the battlefields. I know it would be quite impossible to transfer the monument to Wolfe and Montcalm in the governor's garden in Quebec city to the battlefields, but there should be a decent and appropriate monument commemorating these famous deeds of the past.
If there are any direct or collateral descendants of Wolfe or Montcalm now living in Canada they should be given preference for appointment as trustees or members of the Quebec battlefields commission, without any consideration of political partisanship.


Jean Lesage: Mr. Chairman, I shall certainly look into the possibility of transferring this monument. However, I should like to point out that there is a monument to the memory of Wolfe at the main entrance to the battlefields, and there is also a monument to General Montcalm near the battlefields on Grande Allee, across the street from the Saint-Coeur de Marie church. However, I shall certainly look into the matter.


J.-Wilfrid Dufresne: As a suggestion has been made by the hon. member for Temiscouata, would it be possible for the hon. member for Quebec West to make another one?


An hon. Member:: Move the battlefields.


J.-Wilfrid Dufresne: We will not move them to New Brunswick; we want to keep them in

Quebec. There is in Quebec city a committee which is working to get the necessary funds to erect a monument to a great Canadian and former prime minister of Canada, Sir Wilfrid Laurier. Sir Wilfrid Laurier created the battlefields commission of Quebec, and I would suggest to this committee that the monument to Sir Wilfrid Laurier should be erected on the battlefields.
Resolution reported, read the second time and concurred in.
Mr. Lesage thereupon moved for leave to introduce Bill No. 167, to amend an act respecting the national battlefields at Quebec.
Motion agreed to and bill read the first time.



POST OFFICE ACT


Hon. Alcide Cote (Postmaster General) moved: that the house go into committee to consider the following resolution:
That it is expedient to amend the Post Office Act to increase the rates of postage on letters posted in Canada from the 1st day of April, 1954,
(a)	on each letter for delivery within the postal area in which it is posted, from three cents to four cents for the first ounce or fraction of an ounce, and from one cent to two cents for each additional ounce or fraction of an ounce, and
(b)	on each letter posted within one postal area for delivery in another postal area from four cents to five cents for the first ounce or fraction of an ounce, and from two cents to three cents for each additional ounce or fraction of an ounce.


Stanley Howard Knowles: Mr. Speaker, will you put the question, please, and call for the yeas and nays on this motion?


Mr. Speaker:: First of all I have to put the motion. Those in favour of the motion please say yea.


Some hon. Members:: Yea.


Mr. Speaker:: Those opposed please say
nay.


Some hon. Members:: Nay.
And more than five members having risen:


Mr. Speaker:: Call in the members.


Mr. Goode:: I was paired with the hon. member for Medicine Hat (Mr. Wylie).
The house went into committee, Mr. Applewhaite in the chair.


Alcide Côté: Mr. Chairman, this resolution proposes an amendment to the Post Office Act to increase the rates of postage in the way indicated in the resolution itself, namely:
(a)	on each letter for delivery within the postal area in which it is posted, from three cents to four cents for the first ounce or fraction of an ounce, and from one cent to two cents for each additional ounce or fraction of an ounce, and
(b)	on each letter posted within one postal area for delivery in another postal area from four cents to five cents for the first ounce or fraction of an ounce, and from two cents to three cents for each additional ounce or fraction of an ounce.
It has been the policy throughout the years for the postal service to pay its way and not be a burden on the general taxpayer. As a matter of fact, through the years we have usually had a slight paper surplus. Now we are faced with certain heavy additional expenditures which the department has to meet. The five-day forty-hour week will cost the Post Office Department $5 million. The salary increase which went into effect on December 1 will cost the Post Office Department $7 million. The improvements authorized by parliament for rural mail carriers will cost the Post Office Department $1,500,000. These three items alone amount to $13,500,000. Expected net revenues from the increase in postage rates will be approximately $14 million, leaving only $500,000 to take care of possible normal increases in the price of

basic materials and services which are essential for the operation of the postal service.
I think everybody will agree that the heavy additional expenditures aforementioned must be paid. Therefore increased revenues are necessary. If these additional funds are not obtained through a reasonable increase in postage rates they will have to be obtained in some other way. 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.


Ellen Louks Fairclough: Mr. Chairman, I think it was made apparent to the house when this proposal was announced by the Minister of Finance that we would be opposed to any increase in postal rates at this time. I recall that at that time the Leader of the Opposition spoke briefly and in the course of his remarks said that the claims made by the Minister of Finance with respect to the feeling of the people of Canada that the department should pay its own way were not, in his opinion, true, and could not be proved. In part I should like to review his words on that occasion. He said, as will be found at page 692 of Hansard for December 8, 1953:
Throughout the years the speeding up of business communication, the speeding up of personal communication, the speeding up of human contacts, whether it be by mail, telephone, telegraph or any other means of communication, has in itself been an essential part of the material advancement of society. There are few aspects of our social and business contacts which mean more to our people than the efficient delivery of mail at a cost which is consistent in every way with the general public interest. I would have hoped that before a decision of this kind was made, which creates still further differentials between our own postal costs and those of our neighbours in the United States, we might have had some consideration of the possibility of dealing with this problem in another manner.
The Postmaster General has now said that this is the only way in which the increased costs of the department can be met. I should like to reiterate the opinion of my leader expressed on December 8. It is our opinion that mail delivery is a service which the taxpaying public has a right to expect the government to provide, and that the taxpaying public does not necessarily expect that the department which provides this service shall be self-sustaining. Quite apart from being self-sustaining, it has in the past few years been profit-producing. These profits,
I presume, have gone into the general revenues of the government and have been used for other services which the government provides for the people of the nation. Therefore I see no reason at all why the government should be in such a mad 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 the Canadian National Railways. It does not take this attitude with respect to Trans-Canada Air Lines, and certainly not with regard to the Canadian Broadcasting Corporation.


Mr. Lennard:: I should say not.


Ellen Louks Fairclough: 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, if one wished to be cynical, might very well be described as a backhanded subsidy to T.C.A. which prior to that time had not been doing so well in the revenue department.
There are other matters to consider with respect to the revenues of the Post Office Department. Those people who consider that the department should be self-sustaining might very well take a look at the report of the Postmaster General for the year 1946 which, as far back as that time, drew attention to the tremendous cost to the department of the franking privilege enjoyed by government departments generally. In the report for that year appears this statement:
The franking privileges enjoyed by various government departments deprived the department of revenue, approximating $4,700,000 . . .
As far back as 1946 the amount was nearly $5 million. I draw the attention of the committee to the amount estimated by the Postmaster General in the latest report. It is only an estimate, I suppose what one might call an informed estimate; nevertheless in the report which came into our hands not long ago the Postmaster General concedes that for the fiscal year ended March 31, 1953, the franking privilege alone still costs the Post Office Department well over $4 million, actually $4,129,770.
I am always amused by these estimates which manage to get down to within $10 of what they are supposed to be. If an estimate is going to be made, then I wonder why they do not just say four and a quarter million dollars, or something like that. If there are figures to substantiate the estimate, why not give them in detail?


John George Diefenbaker: That is a "guesstimate".


Ellen Louks Fairclough: My hon. friend says that it is a "guesstimate". It is true that the revenue calculations of the department would be materially altered, whether any actual cash transfer took place or not, if the department were credited with the amount of postage which would normally accrue to it
Post Office Act
from those various departments of government which load the mails with all sorts of material, some of which is necessary and some of which is straight propaganda. From personal experience I know that the mail from government departments which comes to the desks of business people in this country is so voluminous that it cannot even be scanned and, most appropriately, finds its way into the waste paper basket. Some of it, Mr. Chairman, is pure junk.


Donald Methuen Fleming: Ministers' speeches.


Ellen Louks Fairclough: Yet it passes through the mails under departmental franks. I suggest that before considering any increase in postal rates these amounts should be calculated accurately by the departments concerned and credited to the revenues of the Post Office Department.
In the report for last year, to which I have just referred, the revenue is shown at almost $130 million and the expenditures at almost $123 million, leaving a profit of about $6,500,000. As a matter of fact the actual amount is $6,471,053.31. Despite the fact that it was expected the department would have much less revenue last year than it had the year before, this was the result. As a matter of fact at one time another "guesstimate" was made that the profit would be reduced from the approximately $6,500,000 of the year before to something like $4 million last year. In spite of that, however, the profit was only about $150,000 less than it had been in the preceding year, and this despite the fact that a great deal of the first class one-ounce mail had gone by air to distant parts of Canada and, as I said before, had thereby given an indirect subsidy to Trans-Canada Air Lines, one which they sorely needed.
What interested me more than anything else in the remarks of the Minister of Finance was the fact that the blame for what the minister described as this necessary increase in the postage rates was based largely upon the intention of the government to inaugurate a five-day forty-hour week among its employees. The Post Office Department is not the first department whose employees have been placed on the five-day basis. I cannot recall that in any other instance a department has been told that it must produce revenue sufficient to pay for this change in the working conditions of its employees. Because the Post Office Department is the only one producing revenue in this way, apparently it is to be saddled with the cost of changing working conditions in that department so they will be in line with other departments of government and with industry generally throughout the country.

Post Office Act
The minister has said that it will cost $5 million to put this plan into effect, and that it will cost another $7 million to increase the wages of the employees in the department. Well, he had a profit last year of $6,500,000. The franking privilege costs almost $5 million. Then it is proposed to drop about $650,000 by reducing the air mail rates from 7 cents to 5 cents. On the basis of the number of pieces, shown in last year's report at 32,808,019, this would amount to $650,000.
These sums add up to $12,250,000. The minister has been talking about having only another half million dollars to play with. I think if there is any playing to be done he might consider that the average taxpayer, the average person who uses the mails, would like to join in the game. Certainly that is true so far as the individual is concerned. We know that the excise tax was taken off cheques, but this did not affect a great many of the people in Canada.


Alcide Côté: We lost seven and a half millions on account of that.


Ellen Louks Fairclough: Very well; but how many people did it affect? There are many people in this country who do not issue a cheque from the beginning to the end of a year, a great many of them.


Alcide Côté: I presume my hon. friend does not suggest that we should restore the excise tax to that extent?


Ellen Louks Fairclough: I am merely trying to give the picture that I have found in the last little while. I am stating the individual did not benefit to any great extent or to any marked degree by the abolition of the stamp tax on cheques. The individual, speaking generally, will not benefit to any marked degree by the reduction of the air mail rate from 7 cents to 5 cents, because the number of letters which the average individual will mail in the course of a year in respect of which air mail service would be helpful would not be very great.
True, air mail speeds up the service for business mail; but most business houses now use air mail anyway, wherever they think it is necessary. It seems ridiculous that a letter can travel across this country and be delivered in Vancouver at the same cost as a letter delivered in the next town-and that it will arrive there probably a full day ahead of the letter sent to the next town. Certainly that has been our experience, in this part of the country at least. It is not at all uncommon to find a letter taking two or three days to move from one address to another in a city. It is not at all unusual to have mail taking three or four days to reach a neighbouring town.
It seems to me I recall some newspaper comment to the effect that if you want your mail to reach its destination in a hurry you had better get into your car and deliver it personally. We have just about reached the point where we are subsidizing mail delivery of those pieces which go to the far corners of the country by increasing the postage rates on the mail delivered within reasonably short distances of the point of mailing.
I do not think this drop in the air mail rate is even going to benefit business to any marked degree because, after all, it is an expense chargeable against the revenue of the company, and of the net profit of that company the proprietors pay a sizeable portion to the income tax department. When the whole thing is calculated the business itself will not be affected very materially. Likewise they will not be affected very materially because the first-class mail rate goes up. They do not have to worry. The common attitude is that it does not matter, Mr. Abbott takes half of it anyway. Therefore it all boils down to the fact that the individual in this country gets caught between the opinion of the government that this department must pay for itself and the nonchalant attitude of business generally on the matter of increased rates.
All of this, or a large part of it, comes about because it has been finally recognized that the salaries paid to the employees of the department were too low, and the conditions under which they worked were not in accord with conditions generally in the country.
I might point out that although the postage rates are being increased in this country, we are shortly to consider some other legislation of another department which has a bearing on these matters also. I drew to the attention of the Postmaster General in 1953, when the estimates were under discussion, the fact that a letter carrier earning $2,850, which at that time was the maximum, was not considered a good financial risk by Central Mortgage and Housing Corporation for a loan on a house in order to put a roof over his, family. I believe the maximum has now been raised to $3,060, but he still will not be able to buy a house under Central Mortgage and Housing Corporation because the requirements are such that his maximum salary falls far short of the minimum which must be made in order to qualify for a loan.
We used to be able to buy many things for a nickel in this country. There are no longer many things you can buy for a nickel. My friend beat me to it-you can now post a letter for a nickel, or you will be able to do so after April 1. If there is one thing that will cost us too much it is nickel postage.

Even the four-cent rate failed to give us the service which the people of this country have a perfect right to expect from a department which is charged with the responsibility of maintaining the lines of communication across this nation and internationally.
It is not so long ago that in an effort, so it was said, to economize within the department the two-a-day delivery was abolished on residential walks in municipalities and urban centres, and one-a-day deliveries took their place. I suppose this one-a-day delivery has a great deal to do with the poor mail service we are now receiving in urban centres, because if the letter is cleared in the post office after the one delivery has gone for that day, then of course it stays there for another 24 hours.
Many peculiar situations arose as a result of that move. It was found that a great many places of business were situated on residential walks. Since that time some of those defects have been rectified. In places where it was found that a great many businesses were on residential walks some adjustment was made and the two-a-day delivery was reinstituted in those instances.
However, during the time these people were receiving one daily mail delivery, with a consequent disruption in their business processes, some of them, in an attempt to correct the situation themselves, tried to obtain post office boxes. To their dismay they could not even obtain post office boxes in the city of Hamilton because the post office was all filled up. Therefore they had no alternative but to sit and wait for 24 or 48 hours for their mail to be delivered to them. In some instances this meant that cheques in the mail, which should reach the banks, were delayed for a matter of 48 hours. And if it should happen that the cheques were received on Saturday, the banks were closed and naturally they had to pay interest charges on the overdraft, if they had one, for the ensuing three days, during which time they should have been able to make their deposit, as the customer intended when he mailed the cheque.
I suppose this does not sound like a terrible increase, when you add one cent to an existing rate; but I should like to point out, Mr. Chairman, that on drop letters the raising of the rate from 3 cents to 4 cents for the first ounce and from 4 cents to 6 cents for the second ounce means an increase of 25 per cent in the former case and 50 per cent in the latter. In the matter of other mail, raising the rate from 4 cents to 5 cents for the first ounce and from 6 cents to 8 cents on the second ounce means 25 per cent in the first instance and 33J per
Post Office Act
cent in the second. It would be a very reckless businessman who would increase his prices to that extent in one jump.
As I said before, we have suffered by reason of the decision of the department to put in the one-a-day delivery in urban centres. We have had less service; we have had higher postage rates; we have had delays, which I mentioned before. It practically boils down to the fact that the only appropriate thing about the proposals which have been made is the date on which they are to take effect, because the people of Canada are certainly going to have a proper April fool.
There is no guarantee of better service. Not so long ago I asked whether the two-a-day delivery would be reinstituted. The minister is quoted as having said that he could not see it in the immediate future. There is no guarantee that the Post Office Department will benefit by the allocation to it of revenues which should normally reach this department; there is no guarantee that Trans-Canada Air Lines will be allowed to flounder along on its own revenue without leaning heavily on the Post Office Department. The only thing we have is just an increase in rates on April fool's day.


Mr.   Cole@: I want to give some explanations. I think it would be practical for all of us to study the whole problem. At the end of the year we expect to have a deficit of $1 million. This deficit will be brought about because we have lost $7,500,000 through the removal of the excise tax on notes and cheques. Formerly we received that amount of revenue through the sale of stamps to the general taxpayers. I am giving this explanation so we can understand the deficit we are going to have. We had a surplus last year of $6,500,000 but we are now faced with a revenue loss of around $7,500,000. That is the explanation for the deficit of $1 million which we expect to have at the end of this year.
So we start with a deficit of $1 million. That is why I have given these figures, so hon. members may better understand the situation. We have to face the payment of over $13,500,000.


Stanley Howard Knowles: Before the minister leaves that point may I ask if we are to understand that one purpose of this increase is to make up for the loss which arose from that preelection move of taking off the stamp tax?


Alcide Côté: It might be a good political move to put it that way, but let us be realistic about it. We have to pay $7 million for increased salaries to all the employees of the department. We have to pay the increased cost

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brought about by the institution of the five-day week, and that amounts to $5 million. We have to pay $1,500,000 as an increase to the mail carriers. Those three items alone total $13,500,000. Even if we still had the $6,500,000 we would not have enough.
I do not want to take just one item and say we want it for that. We want it to pay the whole amount. This brings me to the answer to the other question put by my hon. friend. She said that I said it was the only way to do it. I did not say that. I said that in my personal view it was the only equitable way to do it. There may be a difference of opinion in that connection, but I cannot see any other equitable way. If the general taxpayer were to be charged with this $14 million or $15 million it would mean that those who were not using the mails would have to pay for those who were using them. It would mean that if my hon. friend sent only one letter a year she would be contributing toward those who buy stamps in great quantities. The ordinary worker would be contributing for the stamps used by big companies like Simpson's, Eaton's and Morgan's. I do not think that would be a fair way to do it, just to take it out of the general taxation fund in order to pay the cost of operating the post office.
That is the way I put it. I say again that I do not say that is the only way. I repeat what was said by the Minister of Finance (Mr. Abbott), that it had been the habit to do this in the past and it is the most equitable way.
I do not contend that the postal service is the best possible; I do not claim that it is perfect in all respects. It is administered by humans, and errors occur for which we are responsible. But every time we find errors we try to correct them. As a matter of fact we invite everyone to point out any errors that may exist, but the fact remains that there are some errors for which we are not responsible.
Let me relate a true story. Recently a man was expecting a cheque, the same thing my hon. friend referred to in connection with other circumstances. When he did not receive that cheque through the mail he called the sender and asked why he had not sent his cheque. The sender said he had sent it, and the other man said he had not received it. The sender then said that he would check the matter, and he called the postmaster. The postmaster asked where he had mailed his letter and he said he had mailed it in the mail box in front of a certain store. The postmaster thought that was strange, because

there was no mail box there, and he suggested that they go to look. They both went to that place, and they found that the sender had mailed this letter enclosing the cheque in the municipal garbage can.
They then asked permission from the mayor to open that garbage can, because it had not been emptied for the past few days. They obtained that permission and took the box to the waterfront, because it was Saturday night, where they opened it. They found the letter in question and they also found 19 other letters which had been posted in that municipal garbage can.


Mr. Hamilton:: You had better clean up your mail boxes so they do not look like garbage cans.


Alcide Côté: That was an error for which we were not responsible. We are doing our utmost to give the best possible service under the circumstances. If hon. members will look over the reports for the past 30 years they will find that expenditures have been trebled. During that period we have given the best service within our means. We are receiving every day suggestions for the improvement of the service, but many of these entail the expenditure of money. Today we are not against the principle of spending more money, but we must meet the necessary expenditure. We have to meet those expenditures up to the limit. Sometimes we are prevented from doing something we want to do because we have not sufficient money.
My hon. friend mentioned the second daily delivery. She knows my personal views on that matter. I hope that eventually we will be able to do that, but again that would mean an additional expenditure of between $4 and $5 million. We are giving two deliveries a day to the business centres, and it is only when the percentage of business places on a carrier's walk falls below 25 per cent that we give only one.
My hon. friend says this is not the only department with a five-day week. However, I think it is the only department where so many people are employed. Actually we have about 50,000 employees, without counting some 25,000 extra workers hired to take care of the Christmas rush. The five-day week means a terrific amount of reshuffling, switching of hours, hiring of new employees and instructing them how to do their jobs. That is why we have to spend up to $5 million more on that account.
I give these facts only as explanation. The main point is that we are faced with these expenditures. I do not think any hon. member will say that we should not make these

expenditures. I think all will agree that we should pay the increased salaries as of December 1. I do not believe anyone will deny the necessity of implementing the five-day forty-hour week. I do not think anyone will deny that improvements should have been made in connection with the mail carriers which necessitates an expenditure of $1,500,000.
Those three items alone account for $13,500,000. If we agree that those expenditures should be made, then we have to have the funds to make them. We propose to get those funds by means of this increase, as we think it is the most equitable way to do it. If it were done in any other way we would be asking those who do not use the mail to pay for those who do.


John George Diefenbaker: How much revenue was lost by the removal of the tax on cheques?


Alcide Côté: I stand subject to correction, but I think it was about $7,500,000. This was first imposed as an excise tax. I would like to reserve the right to correct this figure if I am wrong, but I think I am close to the right amount. That whole amount was between $9 and $10 million a year, but this was a holdover from the first world war. This was an excise tax. At the beginning only blue stamps were used, but gradually the public at large began using postal stamps. There was no direction to that effect within the department, but when this tax was taken off we found we were losing $7,500,000.


Ellen Louks Fairclough: The minister has made quite a protest against the remarks I made, but at no time did I indicate that we were not in favour of protecting the employees in the postal department. As a matter of fact I made it quite clear that their working conditions should be brought into line with conditions existing in other branches of the civil service and in business generally throughout the country. What the minister has undoubtedly overlooked is that I very definitely said I saw no reason why the employees of the Post Office Department should be blamed for the increase in the postal rates when all the other civil servants have enjoyed the forty-hour week and increases in pay and so on, and I do not think it is-


Alcide Côté: I agree with my hon. friend. I believe she does not v/ant to blame anybody, but I do not want to blame anyone either.


Ellen Louks Fairclough: But I do not see why the blame should be placed-


Alcide Côté: This is not to blame. This is a set of facts, and there is no blame attached to anyone.
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Ellen Louks Fairclough: You might as well have raised the postal rates when you increased the salaries of the other civil servants. You did not come into the house and say that because other civil servants had received an increase in salary you would have to put up the postal rates.


The Chairman:: Order.


Mr. Winch:: This is a very important motion which we now have before this committee for discussion, and it is one that deserves the utmost attention of all hon. members. It certainly demands that the minister supply the fullest possible information as to why he thinks this increase in the postal rates is required. I was very disappointed in the paucity of his remarks in introducing the motion because there must be a great many particulars and statistics, policies and policy changes, that go to make up the picture. They should be supplied if we are to have a complete understanding as to the necessity for the increase in the postal rates.
I sincerely hope that before this discussion is through we will get not too many stories, much as I enjoyed the story by the minister a few moments ago, but rather factual information for consideration by members of this house. I was very intrigued with the statement made by the Minister of Finance on Tuesday, December 8, when the minister said, as will be found at page 691 of Hansard:
It is the view of the government that the people of Canada expect the post office to pay for its operations out of postal revenues and not out of taxes.
That same position was taken by the minister this afternoon, and I was looking forward to hearing from him just on what basis in fact they reached that conclusion; or are they merely indulging in wishful thinking when they say that the people of Canada expect the postal services to be on a selfsustaining basis?
I would assume that when the government go to the extent of introducing a motion that calls for the introduction of legislation that will mean a 25 per cent increase in postal rates they would have made a survey to find out if that was the prevailing opinion. Ii they did so I would like to know just where they made that survey and who conducted it, because I doubt very much if there ever was any survey. As a matter of fact it is almost axiomatic that there was not a survey. Therefore the Minister of Finance and the minister who introduced this motion are merely expressing their own opinion in the hope that they can get away with an increase of 25 per cent in the postal rates.

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The minister gave us the information a few minutes ago that the introduction of the five-day forty-hour week would cost the department an additional $5 million over a twelve-month period. I think, Mr. Chairman, we are entitled to some details from the government as to the composition of this $5 million; that is, on what basis and on what policies are the government going to introduce this five-day forty-hour week. It is quite obvious that it is not going to apply to all employees because, if I can refer back to the statement of the Minister of Finance on December 8, the minister had this to say as will be found on the same page of Hansard from which I have already quoted:
. . . the policy of readjusting the working week of operating staffs in the post office, customs and various other operating branches of the public service to the five-day forty-four week where that is the prevailing practice in the locality . . .
I think that makes it fairly obvious, subject to any correction from the minister, that it is his intention in the Post Office Department to follow the policy line that was laid down in circular letter 1953-28, a copy of which was published in the Canadian Civil Servant on page 9. This circular was sent to the deputy heads of government departments in Ottawa, and its purpose was to consolidate all the circular letters issued heretofore regarding the year round five-day week. It was an attempt to clarify some of the previous instructions.
In view of the statement by the Minister of Finance before the Christmas recess, and in view of the fact that we have had no indication from the minister at the present time that the five-day forty-hour week in the postal service is going to be on any different basis, we will have to take it that it is on the same basis as that outlined in circular letter 1953-28 on the other services.
That leads to an interesting situation that has not yet been explained by the minister, and it is important that we should know how this $5 million is made up. I have endeavoured to have a breakdown made, not so much of those who will be covered but of those who will not be covered, and it was done by those in the postal service at my request. I may not have the figures exactly correct, but I am sure the minister will understand that. I think they are approximately correct.
There are in the neighbourhood of 162 grade 9 post offices in Canada. Under the policy as outlined by the Minister of Finance, which is I believe the one which is now going into effect, only 12 of these 162 post offices will go on the five-day forty-hour week; and they have an average staff, I believe, of 6.

There are 46, or thereabouts, grade 10 post offices in Canada with an average staff of 25. Out of that 46 only 22 will be covered under this new policy. There are 33 grade 11 post offices with an average staff of 40. Twenty-one out of that 33 will be covered. There are 16 grade 12 post offices in Canada with an average staff of 170. Twelve will be covered. From grade 13 to grade 18 we find that all the post offices will be covered by this new policy.
As I understand it, this is the situation, and I hope the minister will correct me afterwards if I am wrong; I know he will. Of grade 9 to grade 18 post offices in Canada there are in the neighbourhood of 274, and only 84 are covered by this order if you follow the circular letter which outlines the policy in the other departments of government. That raises the question of what is going to happen to those in the grades not covered. Are their colleagues in other post offices on the five-day forty-hour week going to get the same take-home pay as when on the forty-four-hour week? That point should be noted. If they are, is any additional compensation going to be granted to those employees in the post offices that are not going to be covered by the five-day week? Is that part of the $5 million? Is there any such policy or plan in the mind of the minister? I maintain that is information which will help us in making up our minds on this matter.
I strongly feel that the minister should take all the members of this committee really into his confidence. Knowing as he must have known that people will not look with favour upon an increase of 25 per cent in postal rates, what has been done to see whether, with the maintenance of efficiency in service, economies could be made in the Post Office Department? Has there been a full-scale inquiry into the operations of the Post Office Department in Canada? It seems to us that before such a far-reaching policy was introduced by the government there should have been a full-scale inquiry into the operations of the Post Office Department; and by that I do not mean an inquiry by post office officials who, fair and decent as they may be and undoubtedly are, would unquestionably be a little bit prejudiced, human nature being as it is, because they are the ones who are operating the postal service in this country and who have been and are responsible for it.
I would respectfully suggest to the minister right now that before this matter proceeds any further there should be established by the House of Commons either a committee or a royal commission to make a thorough and searching examination of all phases of post

office operations with a view to seeing whether, basically, it is necessary to place an additional charge on first-class mail.
Moreover, I believe the minister should take us into his confidence as to what other discussions might be going on right now in the department with a view to trying to pass on these additional costs he mentions, and perhaps put them on the shoulders of the workers themselves. I am informed, I think I can say on quite reliable authority since I obtained the information in Vancouver and it was confirmed here in Ottawa, that the departmental officials-I do not say the minister, because I do not know whether he has been consulted on it yet-are considering whether or not they should wipe out the night differential, which is the time an employee has to put in if he is not on the day shift. As it is now, he does not have to put in his full eight hours; but I am informed that the department is considering a plan to remove that night differential. I think we should be told by the minister whether or not that is correct. If that is so, the government is not only trying to make up this deficit it is telling us about by increased postage, but it is also trying to make up still more by certain policy changes in the Post Office Department.
I think the minister should also tell us whether it is not a fact that the heads of his department are now considering a plan of reclassification of the clerical staffs in the post offices throughout Canada. If so, that too can have a great bearing on the cost of the Post Office Department. These things should be known before members of this house are asked to accept, through increased postal rates, the entire anticipated cost as outlined a few moments ago and reiterated by the minister.
The matter goes beyond that, Mr. Chairman. I mentioned an inquiry because we believe it is vitally necessary. I want to add to the words of the hon. member for Hamilton West on this matter of second-class mail and methods of distribution. I think it goes without question that the second-class postage rate does not meet the actual cost of service and that, basically, the second-class mail is subsidized by the first-class mail. The only reason I can think of why printing firms, newspaper firms and book publishers are subsidized is as a result of what might be termed an accepted principle that a well-informed public is good for democracy and good for Canada. Therefore we assist in getting newspapers, magazines and books into the hands of the people.
If it is a right principle that we should subsidize second-class matter, then let us do it
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on an honest basis out of the general revenue of the country, and not make it a charge on our postal service. Let us do it right out in the open, say it is a good thing and make it a charge on the general fund. Why should those who want to deal in first-class mail be penalized because of our subsidy to private-enterprise firms? In my estimation that principle applies also to another matter raised by the hon. member for Hamilton West, and brings to mind a phase of operations upon which we should be completely informed by the minister. What kind of check have you made on your postal distributive system? Are you doing it in the most efficient way?


Mr. Michener:: Will the hon. member permit a question? The hon. member referred to the subsidy on second-class mail. Does the hon. member disagree with a subsidy for second-class mail?


Harold Edward Winch: I disagree with the method of the subsidy. I say if we are going to subsidize let it be a charge, according to ability to pay, out of the general funds of the country, and not a charge on those who are sending out first-class mail. That is rank, outright discrimination and should be abolished.
As I was saying, what kind of study has the minister himself made of the postal distributive system in Canada? Are you using the most efficient methods? Are you getting the mail delivered at the lowest possible rate commensurate with good service? I should like to hear from the minister on that matter.
There are a great many things in Canada that should be explained before this resolution gets out of this committee. Are you, indirectly again, subsidizing private companies? Mention was made by the hon. member for Hamilton West of Trans-Canada Air Lines. I should like to mention Canadian Pacific Air Lines and the Canadian Pacific Railway. If it is necessary for lines of transportation to be subsidized then let us do that honestly out of general revenues and admit it, and not hide such subsidies in the Post Office Department. It is an unnecessary charge and it is unfair.
My hon. friend wants to know what I have in mind. It is for him to state how the mail is delivered. Before I left the city of Vancouver to come back to the house I got in touch with the Post Office Department and asked them if I were to send a letter air mail from Vancouver to Calgary how it would get to Calgary. I thought the answer would be by T.C.A. because T.C.A. flies directly from Vancouver to Calgary and has more than one flight a day, which flights take less than three hours. I want to give the minister

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the information I was given. I was told that it would go by Canadian Pacific Air Lines. If that is correct I do not know of any direct C.P.A. flight from Vancouver to Calgary. There are two C.P.A. flights a day from Vancouver to Calgary via Penticton, Castlegar, Cranbrook and Lethbridge. It is an all-day flight.


An hon. Member:: Maybe they do it cheaper.


Harold Edward Winch: My hon. friend says maybe
they do it cheaper. Let me tell him that if Canadian Pacific Air Lines can operate an all-day flight over three times the distance cheaper than T.C.A. can fly from Vancouver to Calgary, then it is time we did something about the operation of T.C.A.
Has my hon. friend ever thought of finding out how train mail proceeds from Vancouver to Prince George? The main line of the Canadian National Railways across Canada ties in at Red Pass with the Grand Trunk line running north to Prince George, which is operated by the C.N.R. That seems to be the logical route, does it not? Check up and find out whether the mail always goes that way or whether or not it goes by another railroad and then has to be transferred to a train that eventually gets to Red Pass in order for that mail to proceed to Prince George. These things should be checked.
I can tell the minister that a number of years ago-I cannot remember exactly, but it is eight or ten years ago, maybe longer-
I was on a C.P.R. train going west through British Columbia. The Chase river bridge, east of Kamloops, had collapsed. Mail was coming down from northern British Columbia to Red Pass on the C.N.R. transcontinental line to Vancouver. The Canadian National line was not out of operation. It went straight through to Vancouver and passed through Kamloops. I was there, Mr. Chairman, and mail bags destined to Vancouver were taken off the C.N.R. train and transferred to the C.P.R. station and remained there until the Chase river bridge was again in use and the C.P.R. could take the mail to Vancouver. I was there, Mr. Chairman, and I saw the mail bags unloaded.
Have you made a study of these things? Are you sure? If there are reasons for them,
I know the minister will explain the reasons.
I expect and anticipate that he will do so. If I am making wrong assumptions I stand ready to be corrected at any time. These things do not look right. I am not going to give any more illustrations, but I could do so all across Canada. I know there are members who can tell you of incidents in their own provinces. There is the case in one province where, instead of mail being carried 30 miles by C.N.R. from one spot in order to [Mr. Winch 1
proceed thence by air mail, it is taken 300 miles in the other direction by the C.P.R. and comes back by air.


Alcide Côté: Can you give me the details?


Harold Edward Winch: Yes, and I am sure other hon. members will give the minister details.


Alcide Côté: I am ready to co-operate with
my hon. friend. If anybody, not only members but anyone who is interested in the mail service, will tell me about any defects I shall be glad to inquire into any cases that are pointed out to me and correct them according to the circumstances.


Harold Edward Winch: I am sure the minister will get that information this afternoon.


Mr. Mcllraiih:: On the record?


Harold Edward Winch: On the record, by the member who mailed the letter. Do you want anything better than that?


An hon. Member:: Friends of the C.P.R.


Harold Edward Winch: What is going on across Canada? What is the state of your distributive organization throughout Canada? Is it on the most efficient basis-


Mr. Mclvor:: Yes.


Harold Edward Winch: -and yet providing service at the lowest possible cost? I say these things have not been established by the minister. I say no inquiry has been made by a committee or royal commission or by outside efficiency experts.


Alcide Côté: That has been done.


Harold Edward Winch: Then the minister should give us the information.


Alcide Côté: It is actually being implemented.


Harold Edward Winch: You say so. I do not know. I have not seen the report. Perhaps we question your judgment. We do not know until you give us the facts. Unless the minister gives us the facts and produces the evidence-


Alcide Côté: I am asking you to give us the facts.


Harold Edward Winch: You are introducing this bill, not the opposition. You have to produce evidence as to why this measure is required, and my hon. friend has not done that.


William Alfred Robinson: Order. I think the debate might proceed in a more orderly fashion if the hon. member who has the floor would address the chair.


An hon. Member:: And the minister.


William Alfred Robinson: And the minister.


Harold Edward Winch: Mr. Chairman, I can assure you that at all times I am addressing the chair but I am looking the other way.


An hon. Member:: Wrong-way Corrigan.


Harold Edward Winch: This is a pretty important thing. Basically it is a back-door way of bringing in additional taxation. That is all it amounts to. It is increasing the taxes of the people of Canada.


John George Diefenbaker: There is not much back door to it.


Harold Edward Winch: 
Mr. MacDougall:: Oh, go ahead.


Mr. Gauthier (Portneuf):: Do not take yourself so seriously.


Harold Edward Winch: I am glad that these hon. members are at least taking note of what I am saying. However, if I may I shall wait until I have the attention of the minister. The article is as follows:
Should the postal service be self-supporting-pay its own way, or most of it? Should balancing the account books be more important than providing inexpensive service?
"No", has always been the answer of the American people, who have rejected this concept every time it has been pushed.
Newspapers and magazines comprise second-class mail. They are carried by the post office at second-class rates because, from the beginning of the republic, the idea has prevailed that the people must be kept informed if the nation is to remain unified and free. One open question involves the relationship between second-class service and first-class service. The United States postal service was established primarily for the collection and delivery of first-class mail, and this is still its main function. First-class mail comes first, gets the fastest and safest handling at every stage, and determines the sizes and locations of post offices and routes. Second-class mail, by its very name, gets handling which is secondary to letter mail.
It has always been an erroneous theory in the history of the postal service that it was established or sustained on the principle that it should be selfsupporting. Not for many years has anyone seriously challenged the historic philosophy of a postal system based on service rather than cost. This magazine believes that, before upsetting a system which has proved to be so successful for so long, the people and their representatives should wait for the Carlson committee's report and then consider it carefully.
I shall conclude by saying that I agree with these last words in the editorial:
Let us not hastily cast away the greatest information exchange the world has ever known.
I suggest to the government and the minister that they listen very carefully to the words in this editorial, and recognize that the postal service is a service to the public, just as is the furnishing of roads and other public services. No one expects those services to be self-supporting; yet transportation and communications are some of the most vital requirements in a society. A cheap postal service is the backbone of democracy. Unless

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we get more information, let us turn down the motion until a great many more facts are known and an inquiry has been completed.


Mr. Fair:: Mr. Chairman, I have listened attentively to the debate which has taken place thus far and the statements of hon. members. I expect we will hear a good deal more before the resolution is passed, and more again before the bill is passed after its introduction.
I was somewhat surprised to hear my hon. friends to the right put up the case they did this afternoon because we know that for a great many years we have heard them refer to the Post Office Department as one of the great examples of public service and public administration.
I am not sure whether all the arguments have been placed before the committee. I had intended to state many of the things said by the hon. member for Hamilton West and the hon. member for Vancouver East; but, because they have made those observations I shall not waste time by repetition. No doubt many others will wish to speak before the bill is introduced.
I believe the administration of the Post Office Department can be improved. It may be that many experts have gone over the situation; but, to my knowledge, some of the things they have done were very foolish when they have had the result of cutting out the mail service to some people while at the same time giving others an advantage in that service.
I believe we can modernize and streamline the administration of the Post Office Department. Before the legislation becomes law we should, in my view, look into some of the points made this afternoon by the hon. member for Vancouver East. He gave instances where mail is routed for the benefit of certain carriers. For instance, isolated areas in the Peace river country send their mail to Edmonton for delivery in Vancouver. At the same time, while we have a Canadian National train going to Vancouver every day, we find the mail is sent to Calgary so that the Canadian Pacific can carry it-and possibly make delivery a day later.
Conditions of that kind should be looked into. While I believe we should have adequate mail service, I also believe we should cut out waste before making any addition to our taxation so far as postage rates are concerned. A 50 per cent increase is a stiff one; it is hard to take. While my sympathies are with the minister at this time, in anticipation of the number of questions he will be asked to answer, my sympathies must be transferred to the taxpayers of this country 
who on April 1 will have to pay their taxes. That date will sneak up on us and we will not know the first thing about it. We are now asked to pay this additional taxation.
In the United States postcards are mailed for two cents. I sent some while I was down there, and became familiar with that fact. We know that in Canada we have to pay three cents. In the United States first-class mail carries a rate of three cents, while in Canada the rate is four cents.
I wonder if any investigation has been made of the system operating in the United States. If not, perhaps we could take a leaf out of their book, because in other matters we seem to follow them to some considerable extent.
I should like to say a word on behalf of those parts of the country, from the Atlantic to the Pacific, which in the past have been sadly neglected. I have special reference to the rural post offices as well as the post offices in the small towns. I have received complaints from postmasters who have made applications to the Post Office Department for equipment such as work tables, cancelling machines and the like. An inspector has come along from Edmonton and approved those applications; but when they reached Ottawa they were turned down.
Little things like that would not amount to much, so far as expense is concerned. I would suggest, further, that rural and small town postmasters should be paid decent wages instead of the ones they are receiving at the present time. I have received many complaints in that connection. Then, in those cases where rents are being paid for the use of buildings to house the postal service, I suggest the rates be looked into and elevated to their proper amount, or to a point where they will bear some relationship to other rents paid in those areas. Perhaps these things do not matter very much to some hon. members or to the department. Those of us who live in these districts know very well what is happening.
Take the extra help provided to the post office. I was told last summer by one postmaster that he is allowed 50 cents an hour to pay experienced post office help when he needs extras. I am advised by the hon. member for The Battlefords that they received two cents an hour increase at Christmas. That is not enough. We do not find anybody, even the workmen doing the roughest kind of labouring work in this city or in any other city, working for 50 cents an hour, or for double that amount even. It is time that these things were looked into.

In iconnection with rural mail, at the present time I have a constituency which covers approximately 7,500 square miles. We do have rural mail service in part of that territory, but in all that territory, with the exception of two rural routes out of the Camrose territory, we have two mails a week. I wonder whether that is good enough for our people, namely, the farmers who are producing the greatest share of wealth in this country. I do not believe it is. They should be taken into consideration when the minister is spending the additional money that he hopes to collect on account of this rate increase.
I do not suppose I should speak longer on this question at this time. A great deal more will be heard on it before the bill is passed. If we must have additional money may I suggest to the government that in order to cut down on car accidents and prevent further loss of life we might transfer some of the taxes obtained from liquor and tobacco. It would also prevent a number of fires that are occurring in this country. These two methods of taxation might be looked into to take the place of the proposed increase. I am not in favour of this increase if there is any other way to obtain the needed revenue. But I do feel that we should continue to have good mail service in this country.


Daniel (Dan) McIvor: May I make a few remarks? I congratulate the minister on having the courage to bring in an unpopular piece of legislation, even though it is honest and needed.


Mr. Castleden:: Right after the election.


Daniel (Dan) McIvor: There are not many people
in Canada who think that our post office is not doing a fine job. I do not think I wrote a letter this year that did not get to its destination, but we want to do everything in such a hurry; we want a letter to get to its destination just a few minutes after we write it.
I know there are a lot of people who did not pay the tax on the cheques, but there are a lot of people in Canada who do not send many letters by air mail or otherwise. The Post Office Department is like any other business; those who use the post office should pay for the service.
When my hon. friend from another part of Ireland was speaking, and he is a real friend of mine, he said he was not going to support this measure if a better way to raise the money could be found. Well, I can suggest another way of helping the post office out. Today we are asking the post office to 83276-71
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carry every department of government and to carry every member of the House of Commons and pay for our franking. Let us drop franking and we would have no worry. I do not think that is a very popular suggestion, since I did not see anybody pounding his desk.
Let us think of the Postmaster General and the officials behind him. In my eighteen years' experience I have found the Postmaster General very efficient, and I trust him to be efficient in the future. I would rather pay an extra cent on my mail outside the house than have my franking privilege cancelled.
The Postmaster General will give the facts; he has them, and his officials have them. They have been efficient. I have suggested another way of dealing with our rural mail carriers, but I was not heeded. I shall be at it again on some future occastion, but that is not the question before us at the present time. This resolution should carry one hundred per cent, and I will support it. Thank you.


Mr. Coldwell:: May I just say one word, Mr. Chairman? A few minutes ago the hon. member for Vancouver East made some criticism of the manner in which mail is carried between various points, and he referred to an air mail letter that was posted within some twenty-five miles of a city and carried three or four hundred miles away in order that it might be air mailed. I can tell the Postmaster General that I told the hon. member for Vancouver East that story. Several years ago I posted an air mail letter at Asquith, Saskatchewan, which is served by both the Canadian Pacific and Canadian National Railways. The Canadian National Railways had a train running into Saskatoon that same afternoon, and I said to the postmaster: "That letter of course will get out from Saskatoon this evening on the air mail east?" He said: "No; that letter will go to Edmonton to be air mailed east". The Postmaster General and his officials will know of what I am about to say, for I took it up with them several years ago. In the same vicinity you have the Canadian National Railways with its main line running from the east through Saskatoon via Edmonton direct to Vancouver, and yet at the intermediate points at which this train stops-Biggar, for example-no mail is carried. This train carries no mail west of Biggar for the post office because it is sent by the Canadian Pacific Railway line which stops all the way between Saskatoon and Edmonton and then down the C.P.R. line to Calgary and to Vancouver. These are matters that have come

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to my personal knowledge. 1 took the latter up with the department and I do not know whether it has been rectified or not.


Alcide Côté: That was some years ago.


Major James William Coldwell: Yes. I hope it has been rectified. It does seem to me that what the hon. member for Vancouver East suggested, namely, a thorough inquiry into the manner in which the mail is carried and the disposition of contracts to the carriers, should be authorized in order to see if it would not facilitate the service first, and second, whether we might not get better rates perhaps because of the shorter hauls. That is something that should be very carefully considered by this house. I want to support the hon. member for Vancouver East who made that suggestion. I am not criticizing the efficiency of the local post offices or of the postal officials. On the whole we have a very efficient staff in our post offices and we always meet with the utmost courtesy and consideration. I would not have it thought for one moment that any criticism of the work of the department was a reflection on the people connected with that service in behalf of the department itself; but I do say to the minister, I believe this whole matter of how contracts have been allocated for the carrying of mail should be carefully gone into and that every attempt should be made to eliminate favouritism or the subsidization of one company in preference to another. Where it is convenient and more expeditious I submit also that an established bus line should be used.
I have another case of this kind in my mind. A few years ago I took up the matter of having the mail from the southern portion of my constituency moved more expeditiously. A bus line runs from Saskatoon right through Kyle and thence down to Swift Current. It seemed most logical to most people that the thing to do, since there were only two trains a week, was to have the mail carried by that bus line. Instead the mail was given to a private contractor in Swift Current who makes a special trip up to Kyle and then back to Swift Current. It may be my imagination or perhaps evil thought that as the bus line happened to be publicly owned by the province of Saskatchewan there was an aversion to dealing with a publicly-owned institution. To a good many other people that also seemed to be the case.
I believe that the whole matter of the carrying of the mail and contracts should be thoroughly investigated, as well as other facets of the Post Office Department. We want the best service we can get. I believe we
(Mr. Coldwell.]
have a good staff, and poor service reflects on a good staff. We should not allow that reflection to remain if we can possibly avoid it.


Alcide Côté: Mr. Chairman, I appreciate very much what has just been said by the leader of the C.C.F. party. I am glad he has thrown some light on what happened a few years ago. As was suggested by the hon. member for Vancouver East, after many months of work a report was submitted by J. D. Woods & Gordon Limited, a well-known firm in Toronto who are experts in this line. They studied the whole system and gave a managerial report thereon. Their work was started before I came into the department and the report was received only after I had been there a few months. The implementation of their recommendations was started a short while ago and is still being carried on.
I think the hon. member for Vancouver East has confused C.P.A. with T.C.A. As a matter of fact, air mail is not carried from Vancouver by C.P.A.; it goes by T.C.A. With other cases which may be brought to my attention, I shall look into this. As I said before, we try to correct any errors or defects that are pointed out. Every official in the department has instructions to speed up such matters and try to find ways of correcting any defects.
This discussion is very interesting and the debate may point out some weaknesses in the organization. But it does not change our problem. This resolution is to amend the Post Office Act to increase the postal rate. We may not like doing that; I do not like it myself, but I do not see any other way out. As I think I have said already, I do not think there is any other way that would be equitable.
If we are to deal with this matter realistically I think we will realize that the. individual who does not use the mail should not be asked to pay for those who use the mail in a big way. It would not be fair to ask the stenographer in the House of Commons or a worker to bear a share of postage costs of large firms who must face such costs in the carrying on of their business. So far no one has convinced me that this argument is wrong.
So long as we accept the principle that we must pay our expenditures, whether we like it or not I think we will have to go along with it. It is not an easy thing to do. As was suggested a few minutes ago, it is not a popular thing. However, I am not here to do just the popular thing, I am here to do my duty and I feel it my duty to introduce

this resolution because I think it is in the interests of this parliament and of the Canadian public.


William McLean Hamilton: Mr. Chairman, listening to
the explanations just given by the minister this afternoon I could not help going back to a remark made by a colleague of mine who said that the minister was such a charming man that the explanations he gave always convinced him that he was right until he could get away to think about them, at which time he came back to his original opinion.
This is an important matter we are dealing with. Our whole social organization has come to depend to a large degree upon the mail. Business in all its branches, the whole nervous system of the modern state, depends upon the quick transmission of information and ideas. We could not have arrived where we are today if it had not been for a reasonably effective international postal system. But this means that the indirect effect of any change in our postal system, even though it be small, is sometimes quite extensive or almost completely incalculable.
The Post Office Department is our largest civil government department, and this has been so throughout most of our history. The minister seems to feel that there are some
50,000	employees in the department, but I think the figure is just under 44,000. In the light of other things I have seen in this house, I am not surprised at the possibility of there being another 6,000 employees in the Post Office Department which the minister knows nothing about.
Of necessity our postal service must be a government monopoly. I do not think anyone could see anything wrong in that since the logic of the facts demands that that be so. But there is one thing we must remember. We should be as cautious with a government monopoly as with any other kind of monopoly. We must examine its actions very carefully in this house because we can be quite sure that there is no combines investigation legislation to look into the actions of the Post Office Department. I hope to show later on in my remarks this afternoon what can happen when you have two government monopolies working together, one in the field of transporting the mail and the other in the field of charging for the handling of the mail. It makes a very interesting and sorrowful picture from the viewpoint of the taxpayers of Canada.
The history of this department is a proud and interesting one. As you go back you find that the first carriage of letters in Canada occurred shortly after the British capture of Quebec. Interestingly enough, we 83276-71*
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find that at that time a letter posted in Montreal on Monday evening arrived in Quebec on Wednesday morning. From various indications I have seen, we have not made a great deal of progress since, at least on that particular route. However, at that time there was another service which was definitely inferior to anything we have today because it took almost thirty days to get a letter from Quebec to Halifax. I congratulate the Postmaster General on having improved that service.
Even as early as 1800 the subject of post office surpluses was a subject for debate, primarily on the question of whether they arose from one class of mail or another, and since I will be dealing with these surpluses in detail in my remarks it is interesting to note that the history of this contentious subject goes back as far as that.
There is another little item of history of direct interest to us today and that is the fact that the early post offices before confederation were operated under the direction of the Postmaster General in London, and he instructed his deputies in Canada to operate only those routes which were economically profitable. The result was that the various provinces, in order to give what they considered adequate service, were driven to making grants-in-aid so that certain other routes could be operated. It is interesting to note that an authority on the subject, Mr. A. D. Smith, in his book "The Development of Rates of Postage", states, on this question of grants-in-aid:
This development is noteworthy. It has always been found in Canada that for a large part of the country the circumstances are such a postal service adequate to the necessities of the inhabitants cannot be self-supporting, but the legislature has never hesitated to make grants from general taxation in order to provide means of communication.
If the minister has read this book I want to forestall him. I admit immediately it was published just before 1920, but the history of the department, as I shall show in a moment, bears out the statement made by this authority.
The question of the amount of the increase in rates is interesting. Instead of examining it from the viewpoint of the present rate to the proposed rate, let us look at it between 1942 and the date of the proposed rate. In 1942 our local rate was 2 cents for the first ounce. It is now proposed to make it 4 cents-an increase in the past twelve years of 100 per cent on local mail. In 1942 the long distance rate was 3 cents. It is proposed to make it 5 cents, an increase of 665 per cent.

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It seems to me, Mr. Chairman, that this increase far outstrips the increase over that period in the cost of living, and the increase we have seen in almost any other field of endeavour, or the increases which business has seen fit to put into practice. These increases are tremendous.
Even as late as 1951 we had a 100 per cent increase in our third-class mail-the second-class mail situation is hardly susceptible to debate here in so far as rate increases are concerned because of its complexity.
Now, let us turn for a moment and look at the fascinating financial history of the Post Office Department. We find that from 1869 to 1901 the department had a clear record -a deficit every year. From 1902 to 1932 it had twenty-two surpluses totalling $30,970,000, and nine deficits totalling $21,480,000. In other words, in this intermediate period in the second thirty years of its operation it was coming somewhere near breaking even.
From 1934 to 1953, the last twenty years, the department has had eighteen surpluses, totalling $94,658,000 and it has had two tiny deficits totalling $1,495,000. I will have occasion to refer to this later on, but I cannot emphasize this point too much, that the post office has turned from a department which was on a break-even basis-it was offering services to the public of Canada on an even keel-to a department which year after year after year has piled up surpluses and it has amassed money which it is putting into the treasury of Canada.
I also want to put on the record, Mr. Chairman, the figures for the past five years. In 1953 there was a surplus of $6,470,000-I am giving round figures-in 1952 the surplus was $6,649,000; in 1951 somebody made a mistake and there was a deficit of $1,327,000; and in 1950 there was a surplus of $1,889,000; and in 1949 a surplus of $2,976,000.
Let us examine the effect of an increase which happened in the past in the Post Office Department so that we can evaluate the possible effect of this proposed increase.
In 1943 the rate for both local and out-oftown first-class mail was raised to the present rate although other rates remained the same as is proposed under the new procedure. The gross revenue of the department, which had been going up slowly but steadily, and which had increased $3,698,000 the previous year, jumped $13,829,000 the first year of this increase, and the surplus, which had been $4,127,000 the previous year, was $12,586,000 the next year.

If you want to see it even more clearly, the surplus for the five years preceding the rate increase averaged $2,028,000, and for the five years following the rate increase the surplus averaged $10,707,000. There was five times as great a surplus arising out of this tiny one-cent increase in the letter rate.
Now, to get to just one or two other figures on which I will subsequently draw, we have the fascinating case of the carriage of air mail by Trans-Canada Air Lines, the government's private airways. Every month the post office pays the Trans-Canada Air Lines $487,000 for air mail carriage in Canada and the United States. I am dealing only with domestic air mail and not overseas. Just to get the figures on the record, let us see what happens to T.C.A. as a result of these payments. In 1952 T.C.A. received a total revenue of $44,012,000 of which $5,844,000 was for air mail. Their profit was $1,625,000. In other words, if the revenue from the air mail was deducted-I will develop this subsequently to show just how much larger this revenue to T.C.A. is than it should be-T.C.A.'s revenue would consistently show an operating loss, because in the past five years-I do not want to take time to put the figures on the record -the revenue from the carriage of air mail has been from three to five times the amount of profit T.C.A. has made.
For those of us who want to do a job of evaluating the post office system it is difficult to study it adequately because it is not completely operated and accounted for in the way that would be adopted with regard to an ordinary business. For example, certain costs of the department are not charged to them. The most outstanding example is the cost of its buildings. It gets them free from the Department of Public Works. On the other hand, the department is burdened with the perfectly legitimate costs of other departments, to the tune of over $4 million a year through the use of franking. In the third place, when you come to discuss individual types of mail carriage, you find that you cannot differentiate very successfully between first and third-class, air mail, local and longdistance, since stamps of the same denomination or a combination thereof might be used for any type of carriage.
Another factor is that 32 per cent of our long-distance mail is now carried by air, of which 7 per cent is paid for at air-mail rates and 25 per cent is paid for at regular rates but is carried by air. Then, to increase these complications, we have the business of the excise tax, a tax which apparently comes off before an election in one department and in one field and goes on following an election in

another field and in another way. In my short tenure in this house or in the study I have made of the matter, I have never before seen anything which was more closely related than is this business of taking a tax off before an election and putting it back on immediately following an election. I certainly was glad to see the tax come off. I agree that the excise tax should be off cheques. But when, previously, has a minister of the government had the audacity to stand up in the house and say, regarding a measure of the government introduced immediately preceding an election and which had cost the government revenue, that that revenue was going to be recaptured by introducing another tax at the first session of the house following the election? I do not think that has ever been done before in our history. I do not think anybody has ever had the audacity to do it.
Despite the complications, we certainly know that the rate structure of the post office is designed to charge more for one type of letter than for another. The book to which I referred earlier says this:
The penny rate for the ordinary letter, though so moderate, is considerably in excess of the average cost even of long-distance letters. Its maintenance, therefore, depends not on economic, but on general political and financial considerations. The question is, what general considerations shall be allowed to govern the rate? Shall it be fixed on the simple basis of cost and revenue or shall it be fixed at such a level as to yield a surplus revenue?
We can see this in the case of newspaper rates, or the second-class rates, because in those cases the post office has a deficit. I quote here from the evidence of the deputy postmaster general given before a committee of this house last year:
The newspapers, even after an increase was put into effect in 1951 for handling them, still pay next to nothing for the service they get. This handling brings about a deficit of about ?13J million annually.
There is nothing wrong with the fact that there should be a deficit for the handling of newspapers through our post office. It is right that the government of Canada, at the expense of the taxpayers, should do everything possible to see that information is disseminated as widely as possible and is carried from one end of this country to the other. We must keep our people informed. We must distribute these newspapers and magazines because of their cultural interest. We must do it because we have, with public funds, brought into being a great radio and television system which we are subsidizing, and this system is certainly in competition with the newspapers and the magazines. There is every reason in the world why this $13J million should be spent for what it is being
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spent for, but there is absolutely no reason why it should be charged to other users of the post office services. We should not load one class of mail with the costs of another class but we should rather bring out into the open and pay from general government revenues any special costs of this kind in the operation of a department.
Certainly the Post Office Department is trying to stay within its revenues. That fact can be seen very clearly. I refer again to the evidence of the deputy postmaster general when he appeared before that committee on rural routes last year and when he said:
We have followed the policy of trying to stay within revenues. You can never do so exactly. Sometimes we get a profit and sometimes a loss, but by and large the policy is to try and have services paid for by users rather than impose it as a tax through income tax or other devices.
A policy of trying to stay within revenues! Mr. Chairman, if a policy of trying to stay within revenues is one that results, over a twenty-year period, in a total surplus of some $90 million, either the policy is wrong or the interpretation of it is wrong. I do not know which it is, but I certainly know that when you make $90 million over a period of twenty years, and when you make $6 million and sometimes $12 million a year through the operation of your department, you are going far beyond the principle which has been set out by the minister this afternoon and by others of his associates in information such as this which we have set out before us. I admit that the deputy minister is quite right when he says he can never stay within revenues exactly, but I think $90 million is much too far away from being exact.
As to air mail, this resolution proposes to eliminate all air mail postage special rates and to carry all forward letters by air where delivery can be speeded. This is a commendable idea but it is not as significant as it may seem. In the first place a great deal of the mail can be handled more expeditiously by train or by surface transportation than by air. I need only mention all the mail between Montreal and Toronto or within 300 miles of any central point, where it is loaded onto the train at night, is sorted while it is travelling and is delivered more quickly the next day.
We have already noted that almost one-third-32 per cent-of our mail is now going by air and that only 7 per cent of our air mail is actually prepaid as air mail. So do not let us think by any manner of means that this is a useful gesture or one which means a great deal. Let us not think that the Messiah has come down from on high and

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is now taking off the seven cent tax on air mail, something which will benefit every one of the citizens of Canada. It may be presented in such a way but it certainly is not so. In fact, I think that in the light of the things I have set forth it is highly unlikely that any really sound improvement or advantage is going to come from the proposed reduction in the air mail rate. Let us examine the weaknesses of the agreement with Trans-Canada Air Lines. It costs the Post Office Department at the present time approximately $1.20 a ton mile to ship mail by T.C.A. T.C.A. will carry freight at approximately 30 cents a ton mile, so the Post Office Department is paying four times as much for exactly the same type of cargo as commercial business or the man who is shipping freight by air. What does this show us in the over-all operation of this air line? How does the Post Office Department become implicated in it? It becomes implicated in it because in 1952, 59 per cent of the freight and express paid only 36 per cent of the air line's revenue from freight express and mail. Everything else was loaded on the post office.
Not only is this inequitable, not only is it most unfair, not only is this one of the major reasons why the department is in the position it is today, but it is an example of what happens when two nice little government monopolies get together. The government-operated air line needs some revenue at this point so it can make a good showing and not have a loss. Therefore the minister concerned comes along and presumably makes a private deal, certainly not one in the eyes of the public, with the minister responsible for the Post Office Department. They probably spend fifteen or twenty minutes over the thing. They work out their mutual problems, and we end up with the taxpayers being loaded with this burden which is transferred down through the Post Office Department.
As far as I can see, there has been absolutely no public discussion of this agreement, and this is in such marked contrast to what has taken place south of the border that I think it should be brought out into the open. I do not think any of us on this side of the house like these little private government deals by which two departments work out something so that they can put the best face on things as far as the public is concerned and so that they can bail themselves out when they get into difficulty. Here is a book of 400 pages entitled "Air Mail Payment and the Government" which is concerned solely with the practice in the United States. I should like to quote a few words from page 102 as to their rate-making technique with

respect to the charges which are made to the post office for the carrying of mail. The extract reads as follows:
The examiner studied the record of the hearing with a view to making a "proposed report''. Fortunately for the examiners the record was usually short in comparison with the records of long drawn out rate cases in other utilities. The longest record contained 1,975 pages, the shortest about twenty-five, and the average case only about 250.
I would love to know the length of the record by virtue of which the agreement between T.C.A. and the Post Office Department was made and how much examination was given to the facts of the case. I do not think that is the sort of thing that can be brought out publicly and laid before this house. I do not think anyone would dare because I do not see how it is possible for them to defend a case in which post office mail is carried at four times the rate for exactly similar commodities being airlifted for private firms or other organizations.


Mr. Hardie:: Will the hon. member permit a question? He quoted a T.C.A. rate of 30 cents a ton mile. Is that the air cargo rate or is that the express rate?


William McLean Hamilton: That is the air freight rate. The other is an estimate made from the Post Office Department report and the T.C.A. report.


Mervyn Arthur Hardie: I presume that air cargo is carried at that rate when space is available, but the rate paid by the Post Office Department is paid by it so that mail will be given immediate consideration on all aircraft. Is that not true?


William McLean Hamilton: As I understand it, air mail is carried on Trans-Canada Air Lines in two ways. If it is prepaid, in other words, at the seven-cent rate, it automatically goes by air. If it is not prepaid it is treated on the same basis as air cargo, and since only 7 per cent of air mail is prepaid whereas another 25 per cent is carried at normal postal rates I would assume that the situation with respect to air cargo and air mail is very similar. However, I have no doubt that the Postmaster General will be good enough to explain that to us as time goes on.
I should like to say just a word, because I did cover the matter previously in an earlier speech, on the question of deliveries of mail. What a miserable situation it is that great areas of our country, major portions of our cities, important business communities, important sections of important business communities, should be denied adequate mail delivery, and should be told that they have to get by with one delivery a day.

Streets where you have store after store after store and business after business after business adjacent to each other are, in many cases, denied twice daily delivery. They have to work out other methods. They have to supplement the work of the Post Office Department with the work of their own staffs in order to be able to get their mail on time and deal with it adequately.
This and many other things are a reflection of what seems to be a general decline in the standards of the post office service in the last number of years. I do not think that it is necessarily a decline due to the members of the staff at the lower level, because most of them have been in their positions for many years. But the decline is taking place and we must search for the cause somewhere. Since the only place where there seems to be some change is in the top people in the department, and particularly the minister, perhaps we should examine the minister. However, I would suggest that if the minister feels so inclined he might be brave enough to let us have access to the Woods-Gordon report to which he has referred. As I understand it, that was a study of certain aspects of the operation of the post office, and I believe it has never been tabled in the house.


Alcide Côté: It was a managerial report. We only have a few copies, but if my hon. friend will come to my office I will be glad to let him see it.


William McLean Hamilton: I think we might get a great deal of interesting information from it and I shall be delighted to see it. Thank you for the offer.
Summarizing what I have tried to set before the house today, may I say that, first, the government has used the post office to pile up huge surpluses in the past twenty years in direct contradiction of the policy of the Post Office Department in previous years; second, the government, for reasons best known to itself, has forced the post office to subsidize the operation of Trans-Canada Air Lines in order that Trans-Canada Air Lines might show a profit; third, the government, through excessive use of the franking privilege by its various departments, is burdening the post office with costs of other departments; fourth, that the users of first-class mail are being forced to pay more than the cost of their service in order to subsidize losses on other classes of mail which are quite legitimate, but which should be properly charged to the general revenue of the government; fifth, that this government is not giving adequate or sufficient postal service at the present time; and, sixth, that
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the government and the Postmaster General seem to have made no demonstrated case at the present time that the proposed increases are required.
For these reasons I am opposed most definitely to the legislation now before the House of Commons.


Stanley Howard Knowles: Mr. Chairman, I rise at this moment only on a question of privilege. I wish to make it clear that I do not raise this point of privilege in any feeling of anger- perhaps it is more one of sorrow than of anger. But I do think the record should be kept straight.


The Deputy Chairman:: Order. Before the hon. member states his point of privilege, is it not a fact that a question of privilege should be raised when the house is sitting and Mr. Speaker is in the chair?


An hon. Member:: Quite right.


Stanley Howard Knowles: I draw to your attention the fact that this point of privilege which I wish to raise has to do with an incorrect statement concerning this afternoon's vote; in other words it has to do with the very matter we are discussing right now. And, from the laughter on the other side of the house, I should think that most members know what I have in mind.
The afternoon issue of the Ottawa Journal states that it was the P.C.'s who forced the vote which we had a while ago on the question of increasing the postal rates. We are fully aware of the fact that the Conservatives are just as much opposed to this increase as we are, and have expressed strong views against it. But let the Journal keep the record straight. Surely they know that it was the C.C.F. which forced the vote against this measure.


Mr. Noseworthy:: Mr. Chairman, I am sure every member in the house agrees with the minister that probably more revenue is needed by the Post Office Department by reason of the introduction of the forty-hour week and the increased remuneration for postal employees. We have no quarrel with him on that point.
Our quarrel is with the principle he laid down that the Post Office Department should be a paying concern, that everyone agrees with that principle, and with the ideas in that connection he expressed. We disagree with him in what he describes as the equitable waj of bearing the cost of the Post Office Department. He says the most equitable way is for the users of a service to pay for that service. We know that in the session

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of 1951, when the Postmaster General came before the house and pointed out that there was a deficit of something more than $20 million in the service rendered by his department to the newspapers and periodicals by way of second-class material, and at that time proposed to raise the postal rates, everyone in the house agreed that those who were using the service-that is, the newspapers and periodical publishers-should not be required, by way of increased postal rates, to make up on newspapers and periodicals the deficit then existing.
We recognized that there was a service to the community at large. The question is: should the users of first-class mail be saddled with that deficit? In 1950 and 1951 the reports given by the Post Office Department set out graphically a breakdown of the postal dollar received and spent. That information is omitted from the 1953 report, and I am going to ask the minister to give us similar information for that year. We see that in 1951, out of every postal dollar received, 53 cents came in from ordinary first-class letters. Only 35 cents of the postal dollar was spent in connection with servicing that first-class mail. Here was a surplus of 18 cents on every postal dollar, or roughly $36 million surplus in that year. The users of the first-class mail service paid into the Post Office Department approximately $36 million more than the first-class mail service cost the Post Office Department. In that same year there was a deficit from the service given in respect of newspapers and periodicals amounting to about $28 million.
I do not know what change has taken place. We raised the rates slightly for newspapers and periodicals; but in recognition of the fact that it was in the best interests of our society that we should subsidize that particular service, the government modified its original bill and raised the rates less than it had intended originally. This was by way of a concession to the principle that we were justified in subsidizing that particular post office service.
Is there anything equitable in asking the users of first-class mail to bear the brunt of that subsidy? In that same year of 1951 we see that two and one-half cents out of every postal dollar was spent on franking, making a total of something over $4 million. There, again, are we justified in asking those who are using the ordinary mail service and who are sending first-class mail to bear the cost of the franking privileges exercised by the government? Are we justified in asking those people to pay an extra $4 million for the government franking service and about $20 million by way of a subsidy to the newspapers and periodicals?

If we are to accept the principle that those who use the postal service should pay for it, then we would certainly have to increase drastically the rates paid by, for instance, Life magazine, to mention only one. But that principle has never been recognized. As I have said, I feel there is no call at this time to add another $14 million to the amount to be paid by the users of the first-class mail privileges in order to pay the subsidy which the Post Office Department is paying to the newspapers and periodicals, by the franking privilege and in other ways.
Will the minister tell us what the revenue from ordinary letter mail was in 1953; what the expenditure on ordinary mail was; what the revenue from newspapers and periodicals was and what the cost to the post office of that service was, so that we may get that picture straight for 1953 as it was given for 1950 and 1951?


Mr. Thatcher:: Very briefly 1 should like to join with hon. members who have this afternoon protested against the increase in postage rates. In my opinion the Postmaster General did an excellent job of presenting the arguments for a very weak case.
What does this legislation ask for? Specifically, it asks parliament to increase the general postage rates by one cent. Actually the legislation is much more significant than it appears to be on the surface. Apparently for the first time since the last election, the government is going to embark on a new program of heavier taxation. Today the government is asking parliament to approve legislation, which in effect will force the hard-pressed Canadian taxpayer to dig down in his pockets for another $14 million.
What is the reason that the minister gives us for bringing in this legislation? He argues that the post office must be kept self-sustaining. He says that if it is to be self-sustaining, he must have another $14 million. Personally, I cannot accept that point of view without qualification.
Of course everybody would like to see the post office balance its books; but it seems to me that the main function of the post office is to provide essential public service, and not be a revenue producer. I believe that when this tax bill or any other tax bill comes before parliament we as members should look to the over-all financial picture, and not just to the revenue and expenditure position of one specific department. If today we look at the over-all picture, what do we find? Does this government need an extra $14 million in revenue? The answer is a very emphatic "no".

I remind the committee that tor the past seven years the government has had very heavy and very substantial surpluses. These surpluses have reached the approximate total of $2-5 billion. I also remind the committee that these surpluses have been achieved, despite the fact that at the end of each fiscal year the minister has been able to bury a few hundred million dollars in such funds as the "civil service superannuation fund", "the reserve for possible loss on the ultimate realization of active assets" and others. There is every indication that these annual surpluses are continuing.
If any hon. member will look over the accounts it will be obvious to him that we shall have another large surplus this year. According to the reports from the Department of Finance, in the first seven months of this fiscal year, Canada had a surplus of $266 million. In other words, up to the end of October the minister took $266 million more from the taxpayers than he needed. Yet despite that fantastic surplus the government today has the audacity to come to parliament and say: "We need another $14 million". I say that this postage increase is unwarranted; it is unnecessary and in my opinion would be harmful to the best interests of the country. It should be rejected by this parliament. If the minister needs more revenue for the post office, let him take it from the huge surplus which the over-all revenue accounts are bound to have at the end of the fiscal year.


Jean-François Pouliot: Before this resolution carries I have a few remarks to make. At first sight it must be unpopular on account of the fact that taxes are always unpopular. It is very easy to deliver a speech saying that there is great taxation and that there should be less. But last year there was less taxation in the Post Office Department, because stamps were removed from cheques, drafts, notes, and so forth. It is true that it was a measure that was initiated by the Department of National Revenue, and that we were supposed to affix national excise stamps to negotiable instruments; but most people used postage stamps for that purpose. If the abolition of that tax did not affect the post office apparently, it did materially; and since the tax that represented the postage stamps on negotiable instruments no longer exists it means that last year there was a reduction of taxation in the Post Office Department. That is the first point.
The second point is this. How many people will be affected by this measure? A very small number. It is true that the new tax will have to be paid by those who write 83276-72
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letters; but how many people have an extensive correspondence? How many people write more than one or a few letters daily? In each constituency there is a large number of people who think a lot before writing a letter. They put their hand ceremoniously on the pen handle and they dip it in the inkstand and write the letter, and they also affix the stamp ceremoniously on the letter. They do not write many letters. I know that sometimes I have to wait a long time to receive an answer to my letters, although they are sent by Her Majesty's mail from the House of Commons. It happens so often that frequently I have to supply a stamped envelope to get an early answer. It is not because people are neglectful; it is because they have not the time to write. How often do we apologize, sir, in answering a letter, for the delay. Sometimes we meet friends and then we are quite embarrassed. We say to them: "You sent me quite a nice letter. I apologize for being so long in answering you, and I hope you will pardon me." Everybody knows that that is so. It happens to everybody. To be honest, sir, how many of your constituents and mine have an extensive correspondence, a correspondence that can be compared with that of any hon. member in the House of Commons? There are very few. Therefore the tax will not be a heavy imposition on a large number of Canadians. That is the second point.
The third point is that those who have heavy mail will have the opportunity to charge the cost of the stamps against their income tax returns. Any company or individual spending $1,000, $2,000, $5,000 or more for the purchase of postage stamps can deduct that amount, along with other office expenses, from income for income tax purposes. This expenditure will not affect revenue or profit; it will not be deducted from revenue but from income for income tax purposes.
My fourth point is that no serious complaint has been made of the administration of the Post Office Department. I am satisfied that the letters that I send reach their destination and that the letters sent to me come to me. It is easy to complain that the service is not satisfactory because it takes so long for a letter to go from one point or another. The fault may lie with the people writing the letters waiting until after the mail carrier has gone before mailing their letters.
In the larger communities the number of deliveries per day has been reduced from two to one. That may create some inconvenience, but the mail is delivered as early as possible. Large corporations, companies

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and many individuals engaged in business have post office boxes from which they can get the*jr mail any hour of the day as it comes off the isains. This is most convenient.
Because of the requests of the unions the work week is not as long as it was before. As a result the department requires more men. I have written many times to the Postmaster General asking him to adjust the payments made to the mail carriers, and I suppose all hon. members have done the same thing. All this costs money. I regret that I did not receive a favourable answer early enough and as a result have had to write quite often and thus my file dealing with the adjustment of mail contracts has grown fatter and fatter.
These people need to be well paid. When the minister was faced with a decrease of revenue in his department he sponsored legislation to adjust mail carrier contracts. That move was supported by all parties in the house. There was no objection to it, but now we have to pay for it. We cannot eat our cake and have it too.
I do not think anything serious has been said this afternoon against the proposal except the fiery speech of the hon. member from Montreal who tried to create the impression that it was the Progressive Conservative party rather than the C.C.F. which had initiated the vote this afternoon.
I listened to the remarks of the hon. and gracious member for Hamilton West. My knowledge of the English language is rather limited, but I think I understood her to indicate that she was not supporting the minister's resolution. Her remarks were quite technical in nature and I could not possibly memorize them and therefore I am not in a position to answer her.
To conclude, as it is about time to do so, I wonder if there is any other country where a letter carrying an ordinary stamp goes air mail. I was struck with the statement of the minister that he hopes in future to have all letters carried by air. As I say, I wonder if that is done by any other country. If not, then Canada is in advance of all countries in the postal union.
This is most important because of the great distances between our coasts, between Newfoundland, Nova Scotia and British Columbia. We should be able to keep in touch with each other in the easiest manner and shortest time. This has been done and I congratulate the minister upon his accomplishments. I believe that in spite of what has been said, much of which I have not understood, everybody is satisfied.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Stanley Howard Knowles: Mr. Chairman, I believe that those of us on this side of the house would like to express to the Postmaster General our sympathy for him in having to present this resolution to the house, and having the task of piloting it through. After all, it did so happen that the announcement that there would be this increase in the postage rates was made by the Minister of Finance on December 8, 1953, when the Postmaster General was not even here. He was down in New York at the United Nations representing Canada. Then, two days later, on December 10, another colleague of his, the Minister of Citizenship and Immigration, moved the resolution at its first stage, that stage when the approval of the Governor General was announced, and that put the resolution on the order paper to be dealt with later. Now, when it is dealt with, it is the Postmaster General who has the unpopular task of trying to sell the house this proposal for an increase in the postage rates.
During the attempt the Postmaster General made this afternoon to defend this increase he referred a number of times to the fact that there had been a loss in post office revenue because of the removal of the tax on cheques, which was effected in the budget of last year. When the Postmaster General was pressed as to what that loss was he said, subject to correction, that it was around $7 million or perhaps $7J million. Later I understood him to suggest that the figure might be $10 million altogether and I take it when he was quoting that figure he had in mind the loss in the purchase of postage stamps for use on cheques as about $7J million and the rest of that loss as due to the discontinuance of the little blue excise stamps, which I take it came from another department.


Alcide Côté: 
Stanley Howard Knowles: The minister and I have said exactly the same thing. In so far as the Postmaster General's department is concerned the loss in revenue from the cancellation of that tax was of the order of $7

million, and the additional loss arises from the tact that the blue excise stamps are no longer being purchased.
But may I draw to the attention of the Postmaster General and to other members of the house the fact that there has not yet been a full year's experience without the stamps on cheques. As a matter of fact, when the Minister of Finance presented his budget last year, on February 19, he gave an estimate as to what would be the loss in revenue for a full twelve-month period from the cancellation of that tax on cheques. That estimate of the Minister of Finance can be found at page 2134 of Hansard, dated February 19, 1953, and the figure given by the minister was $12 million. I realize there is a difference between $12 and $14, but these figures are awfully close together. Here we have the Minister of Finance telling us last February, just before an election, that he was prepared to cancel the stamp tax on cheques at a loss of $12 million. As soon as the election is over the same Minister of Finance announces he will recoup that loss by asking the Postmaster General to collect an additional $14 million a year by an increase in the postal rates.
I suggest, Mr. Chairman, that we on this side of the house who are drawing attention to this fact are pointing to something that is very real, namely, the way in which this government juggles with figures and juggles with these taxes, particularly at election time. Actually what we have here is the removal of a tax just before an election and putting it on again just after. To put it on under precisely the same name would be a little too raw even for this government, so the name is changed.


Some hon. Members:: Oh, oh.


William Alfred Robinson: I wonder if the hon. member would direct his attention to the imposition of this tax and not to the removal of another.


Stanley Howard Knowles: Mr. Chairman, I am merely following the remarks of the Postmaster General himself. He said several times and said it again just now that one of the reasons it was necessary to put on this extra tax and raise an extra $14 million was because of the loss sustained due to the fact that people no longer have to buy stamps to put on cheques. Even before you rose, sir, I had made my point, but perhaps I can make it again. What we have here in the imposition of this increase in the postage rates is simply the reimposition of a tax that was taken off just before the election.


Mr. Forgie:: Is not that good bookkeeping
to place the liability where it belongs?
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Stanley Howard Knowles: The hon. member wants to know if it is good bookkeeping. It is political bookkeeping; it is cyclical bookkeeping, related to the election.


James Moffat Forgie: Could the hon. member point
to anything that is good on this side of the house?


William Alfred Robinson: Order.


Stanley Howard Knowles: Some day I will take a week off and try to find something.


James Moffat Forgie: The noisy geese that gabble
o'er the pool.


Stanley Howard Knowles: At any rate, Mr. Chairman, the uneasiness felt on that side of the house is a recognition by Liberal members that what we are charging is perfectly correct, that this is simply to make up for a loss that was sustained just before the election, and the purpose of that was pretty clear.


An hon. Member:: For political purposes.


Stanley Howard Knowles: Mr. Chairman, I think that
those who in taking part in this debate, like the hon. member for Moose Jaw-Lake Centre, have underlined the fact that government finances have to be looked at in their entirety in order to place things in the proper light are perfectly correct. There is no use talking about a deficit that has to be recouped by a tax like this when the government is still piling up surpluses.
The Postmaster General makes the argument that the people who use the mails should be the ones who pay for it. If he is going to use that argument I would, draw particular attention to the use that is made of the postal service by newspapers and periodicals, for which they do not pay the full cost. I will not go further than that. One of my colleagues will have some interesting and very pertinent statistics to lay before the house on that point.
But at any rate the minister says that if the post office is financed in such a way that there is a deficit, that has to be made up out of general revenue, and that that would be a case of making the people who did not use the mails pay for those who did. May I suggest that there is a very close relationship between the incomes of people and the question of whether they use the mails. When you talk about people who do not write very many letters, they are the people whose incomes are low. They are not paying directly into the general funds of the country because they have not sufficient income to put them in the income tax bracket. If deficits are incurred by the post office which have to be met out of the general revenue, I suggest that the burden of those deficits will fall on those who are in the income tax

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brackets, both individuals and corporations, and that that is a fairer way in which to deal with the financing of a service of this kind.
Earlier this afternoon the Postmaster General said that nobody had tried to meet that argument. I think I have met it. I think that this matter should be looked upon not as a commercial operation that has to stand on its own feet but rather as a service to the nation to be treated as one of many services, with the financing of it to be looked at in the light of the whole picture.
The Postmaster General tells us that the increased postage rate will result in this increased revenue of $14 million. In arriving at that estimate I wonder whether he has taken into account the fact that there will be some falling oil in the use of the mails. As the cost of any product goes up, there is a tendency for less of that product to be purchased.
Another question I raise is this. The Postmaster General says that there will be $14 million increased revenue to the Post Office Department by virtue of these increases in postal rates. I do not know what percentage of the postal business is done by business firms as compared with that done by private individuals but I imagine that business mail constitutes the lion's share of the mail of this country. But even if only half of the mail is business mail, that means that $7 million out of this $14 million which is anticipated will be paid by business firms. Most business firms are already paying corporation income tax. Therefore you have to assume that there will be these further exemptions claimed, perhaps for that additional $7 million, and if the rate of taxation is 30 per cent, 40 per cent or 50 per cent, you are going to lose another $2 million, $3 million or $31 million in income tax by virtue of this extra charge that is made by the imposition of this increased rate. Hence the gain to the Post Office Department will be a loss to the Department of National Revenue in the collection of income tax and we shall have some more juggling which may well result, of course, when another election comes around, in a reduction of the postage rate once again.
There is one other comment I wish to make with regard to this increase, and it arises out of the fact that the hon. member for Notre Dame de Grace this afternoon referred to the fact that in 1942 the postage rate on first-class letters going from one city to another was only 3 cents. He pointed out that the rate was raised in that year from 3 cents to 4 cents, and now it is being raised again from 4 cents to 5 cents. There is in that

procedure a bit of a trick which hon. members should recognize. When the rate was raised from 3 cents to 4 cents in 1942 in the case of letters going from one area to another or from 2 cents to 3 cents in the case of letters within the same area, that raise was made not by the Postmaster General of that day and not by the Post Office Department. It was made by Mr. Ilsley. The then Minister of Finance put that extra cent on as a tax to raise money for purposes of the war. I well remember how Mr. Ilsley made it clear time and time again that the charge for mailing letters, in so far as post office revenue was concerned, had not been increased but that a war tax of one cent had been put on the 2 cent rate making it 3 cents, and on the 3 cent rate making it 4 cents.
The fact that that one cent was a tax obtained right down until 1951. It is only two and a half years ago, when the Post Office Act was being amended, that that increased amount-that tax-was built into the actual postage rate. Down until 1951 the official postage rate was still 2 cents and 3 cents, with one cent tax; but in 1951 the 2 cents was raised to 3 cents and the 3 cents was raised to 4 cents. Now, only two and a half years later, we are getting this further raise to 4 cents and 5 cents. I suggest, Mr. Chairman, that all of the statements that have been made about the percentage of increase involved in these higher wages are well put. In fact, I believe that the story is even worse than members have suggested thus far and that this is a resolution which this committee should turn down.


Mr. Small:: Mr. Chairman, as I followed the reasons for the increase in the postal rates advanced by the Postmaster General, they are the five-day week or the forty-hour week at a cost of $5 million; the increase in wages that is involved in the amount of $7 million, and for the rural mail $1,500,000, amounting to approximately $13,500,000. He has endeavoured to assess the approximate cost of the service for the next year. As to the introduction of the five-day week or the forty-hour week, I do not think that matter is as serious a one as he is trying to portray it to this committee. The purpose behind the five-day week or the forty-hour week is to create more employment, to do away with overtime, and to do away with matters that cause excessive cost. By putting on more men you will improve the service and it will not be at too great a cost.
The matter of increased wages of $7 million involves, as has been stated by the Postmaster General, some 50,000 people. If you will scan the record, you will find it is not the first

time that the salaries of the postal service have had to be increased in the period of the last twenty years, and as to any increase that has been made in the past, the revenues have been sufficient to take care of it. Why should there now be such great alarm about an increase in wages? If the revenue in the past has taken care of the increase, why should it not take care of it in the future? That consideration applies likewise to the rural mail in the matter of wages.
In making his presentation to the committee the Postmaster General elaborated on the fact that an investigation was going on with regard to improvement of the services. That is something that remains to be seen. In his plea for an increase in rates he said that there would be very few who would not agree with him. I think it has been well established here that there is a great deal of disagreement with him. I think it is quite evident to everyone present that the inadequacy of the services has been established, particularly with regard to those who live in or who are representing what may be called suburban constituencies. I represent one that is one-third suburban.
The service is far from what is desired as to postal collection boxes, the lack of distribution services and post office substations where people call for their mail and have to line up to get it. Sometimes when they go there the post office is closed. These things have been well established this afternoon and tonight and they indicate that there has been some error in judgment in the introduction of increased postage rates at the present time. I would think it would be sound business practice before asking for an increase in rates to have a well established service that was giving satisfaction, but that is far from the case. In almost any constituency in this great dominion you will find that the same complaints exist.
Before introducing increased rates to pay for a service that we are not getting, I say that we should examine what has been said this afternoon and tonight. In the last ten years there was another increase in rates. It was an increase of practically 33 per cent and now the department comes back with a 25 per cent increase. There has been almost a hundred per cent increase in rates. If people were receiving satisfactory service, probably there would not be so much objection, but the government is adding insult to injury by asking the people to pay for something that they are not getting.
There are one or two observations I should like to make with respect to the report of the
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department. At the bottom of page V there is a reference to the employment of J. D, Woods and Gordon Limited, management consultants. I suppose they were called in. to improve the efficiency of the department, but if cutting deliveries in half and trying to find other ways to get more work out of the staff of the postal department, instead of hiring more men, is any criterion of the new methods to be introduced, I think they had better re-examine the situation. Certainly people are not satisfied with the delivery service either in cities or in rural sections. Mind you, there are one or two improvements that might be made, and I do not say that they will not be able to do a good job; but if they are attempting to try to improve the service by curtailing employment, then they are on the wrong track.
Later I will present evidence of a postmaster general who did not look at the situation in that way. On page 1 of the report you will find that they set out a new method of creating decreases. There is reference to a credit balance of $6,471,000 as against $6,648,000 last year. Suppose there was a decrease of $177,891: that decrease is only apparent; for the fact remains that there was a surplus and not a deficit. It is a new method of establishing a decrease which I have not noticed in any other report.
In going over the whole report there is one thing that stands out, the post office savings bank, which is referred to on page 10 in these words:
This is a service which the Post Office Department maintains without receiving any financial recompense.
A wonderful service is being provided for the citizens of this great dominion, but it likewise comes within the same category as second-class mail covering newspapers and magazines. The cost should not be charged against the postal department but should come out of the consolidated revenue fund. The gentlemen who have been retained to introduce improvements might look at these matters. They may be small and insignificant but when they are added together they will reduce the expenses of the Post Office Department.
I cannot see why civil defence training should be a burden of the department. Apparently the idea is to establish a nucleus or committee, or whatever you like to call it, within the department, and I do not think that should be charged against it. The cost of any matter involving defence or civil defence should be transferred to the Department of National Defence. All these things are piled

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up against the Post Office Department and they should be removed and put in their proper perspective.
There is one matter that is rather amusing. The report contains illustrations of the postage stamps that are in vogue at the present time with explanations about the premiers and so on. The report states that on July 26, 1952, a seven-cent postage stamp was issued depicting the Canada goose in flight. I suppose it is symbolic. The Canada goose represents Canada and the citizens of Canada. I suppose it signifies to the people of Canada that this is the goose that lays the golden egg and they should take care not to kill it.


Stanley Howard Knowles: The people of Canada are the goose that was cooked.


Robert Hardy Small: 
Mr. Regier:: Mr. Chairman, when I left for home last month I had given this matter of the increase in postal rates some thought. To me, at the time, it did not seem to be a vital matter. However, I was not home very long when my electors in no uncertain terms let me know the great measure of importance they attached to this move. They do not look upon it in the light that others look upon it; they take an altogether different view.
A little while ago an hon. member asked the question whether any good is ever found

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on his side of the house. In answer to that question I should like to convey to the Postmaster General what I have been asked to convey to him by a good number of electors back home. There is amazement over the fact that for many, many years tens of thousands of people have given us faithful and efficient service, rain or shine. I do not think there is any other public service in the world that gives such faithful devotion to their responsibilities as do our postal employees. To me that is as good an answer as any to the lie we find being propagated within our nation that the profit motive is essential for one man successfully to serve his fellow men.
As a student in high school days I remember the then leader of the opposition, the late William Lyon Mackenzie King, speaking in our local community in the province of Saskatchewan. He was severely critical of the Conservative administration. Out of his pocket he took an envelope, held it up and showed it to the large audience. He waved it around. He said: "When I was head of the government and the Liberals were in power, on this letter we had a two-cent rate. Today you pay three cents." At that time, even as a student in high school, I thought that he was being most unfair, because we were in the middle of the hungry thirties, and even a high school student could understand the need of a government resorting to all measures at their disposal to obtain the necessary revenue. However, as the Liberals have often done, they fooled the nation. They attacked the Tories in power for high taxes, and once elected they have imposed still higher taxes. The result is that we have not a return to the two-cent rate, but an increase in the rate from three cents to four cents.
I realize that the time has come when even the Liberals admit that they will have to wait a long long time before we ever have a Tory government in power again to raise the postal rate. Therefore I suppose they feel that they have to raise it themselves.


Stanley Howard Knowles: They are more Tory than the Tories.


Erhart Regier: The minister asked for some advice on other possible sources of revenue. That takes me back again to my electors. My electors have a very strong feeling that the postal rate ought not to be raised as long as we are subsidizing advertising in the nation. There is a feeling that if we were to raise the rates on advertising material going through the mail to anywhere near a fair share of the cost we would be accomplishing a number
[Mr. Regier.}
of useful things. Firstly, we would be relieving the postal service of much of the heavy load; secondly, it would yield more revenue to the Post Office Department; and thirdly, it might persuade some of the commercial firms in Canada to spend a little less money on advertising. We have reached a rather unhealthy situation when we consider the amount of human energy that goes down the drain on largely useless advertising. Yesterday I received the annual report on small loan companies and money lenders. I noticed that a relatively small organization such as the Household Finance Corporation spent in the year 1952 over half a million dollars on advertising, per cent of their expenditures. The income tax division might be able to help out with some revenue by eliminating some of the advertising exemptions from income tax.
I represent what is often known as a suburban riding, and there are a few things on which my people back home would like to hear a declaration of policy. They would like to know when is a community entitled to its own identity as a postal area. I know there is at least one community, that has a population of 63,000, yet it has not its own postal identity. We have another community with a population of 13,000 which has not its own postal identity. And yet right beside it we have a community with a population of
3,000	which has a post office. In my riding we have another community with a population of 5,000 and it has its own post office. The people feel that a policy should be established, and it should not depend on the economic situation and attitudes of postmasters who have hitherto served the area. We feel there is a time when a community ought to be entitled to postal services of its own. I know the hon. member for Burnaby-Richmond has been working on this same difficulty for a number of years, and all I can say is that I hope he has the ear of the government, shall I say, and that something will come out of it.
Another thing that worried the people back home was a report in the newspapers at the time that under the free franking privileges one office had sent out 15,000 Christmas cards. I know the hon. member for Fort William commented on this earlier and said that it was not a popular subject. There may be a feeling abroad that not all economies that might be resorted to are being resorted to.
Then there is the matter of service. We do not think that it is necessary to have a central post office serving almost half a million people close its wickets on Saturday

afternoon. We feel that we can have a five-day, forty-hour week, and an arrangement can be made with the staff so that at least some wickets can be open on Saturday afternoon in one of the largest cities in the Dominion of Canada.
I know these are small things. There is another matter that has often worried me. Lately I have seen new buildings being erected in Canada and being leased by the Post Office Department. I can easily understand why a small community might find it advisable to lease or rent a place for postal service. However, I find it rather hard to understand why we should have to rent new buildings that apparently have been expressly built for the purpose of being leased to a department of the federal government. Surely, if it is worth someone's while to erect a building and lease it to the Post Office Department, it should be worth our while to erect our own buildings in such places. I am afraid that the electors back home insist that as long as we are subsidizing advertising to the extent that we are we should not be in accord with the proposed increase in postal rates.


Mr. Stuart (Charlotte):: Mr. Chairman, I assure you that my remarks will be brief. After listening to the discussion today it seems to me that we have had the same old story. The procedure would appear to be proper but they are going about it in the wrong way. During the past year I listened to debates in this house with regard to increasing the remuneration of mail carriers and I noticed that those on my left together with members of the government supported the stand taken by the government. When the five-day week was being discussed it also had the support of the House of Commons. After listening to this debate today it would appear to me as though it was a case of some hon. members wanting to have their cake and eat it too. With that I cannot agree.
I feel that the Post Office Department should pay its way. My reason for saying that is that it is not the little fellow, whom we always seem to be worrying about, who pays the shot in the case of postage; it is the big fellow who pays it. The family that mails out two or three letters a week will find that the extra cent will amount to only about $1 or $1.50 at the end of the year. It is the big businessman who will be affected by this legislation and he is the man that should pay for it. He is the man I want to see pay for it.


Mr. Fulton:: He is the man who will not pay for it because he deducts it from his income tax.
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Andrew Wesley Stuart: I did not interrupt the hon. member for Kamloops.


Edmund Davie Fulton: I did not make a speech.


Andrew Wesley Stuart: The suggestion has been thrown out that the citizens of this country have made no contribution toward the Post Office Department. I want to take a shot in the dark and make an estimate that billions of dollars, not just millions, are represented by public buildings which have been paid for by the citizens of this country and which are used by the Post Office Department rent free. If I am wrong, I should like to be corrected.


An hon. Member:: You are right.


Andrew Wesley Stuart: Those buildings are provided by the Department of Public Works; they are heated by the Department of Public Works and are to be found from Vancouver to Newfoundland. If the cost of those structures and their maintenance were added to our postage, where would we be? That is the contribution made by the citizens of this country and it represents billions of dollars in public buildings so that the Post Office Department may carry on in the proper environment.
I support this legislation. It has been said here tonight by previous speakers that in the last ten years postal rates have advanced as much as 58 per cent. I would like those hon. members to tell me of a single thing in Canada that has not advanced 58 per cent in the last ten years. If we want the forty-hour week or the five-day week the only way it can be provided is to increase personnel, and that means more salaries and greater expenses.
Where is the money going to come from? Are the taxpayers generally going to have to dig down and pay it in the form of income or some other tax, or should it be provided for by postage rates? Again I say that it should be paid by the people who are using the service.
I have heard some criticism tonight about there being only one mail delivery in the cities. When I look at some of the rural areas in my constituency and see they have only three deliveries a week, and sometimes not that many, I wonder just how far the people in the cities are going to push us around. We who live in rural areas like to have our mail just as much as the people in the cities. Many 'of those people are within a block of the post office and they cannot

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walk down to get their mail. Some poor fellow must strap it over his shoulder and carry it to them. One delivery a day is not sufficient, they want two.
We hear a lot said about what must be done for the little fellow in the back country, but I have not heard him mentioned today. That little fellow seems to be completely forgotten. If my C.C.F. friends are really serious in what they have said today, let them all get together and agree to do away with our franking privileges. Let us pay for our own postage. I am prepared to do that; I am prepared to do away with the franking privilege and pay my shot. I think that would be a good procedure for us to follow as members of parliament. Let us do away with the franking privilege and pay our own postage. Some hon. members may have more mail than I have. If I do not have as much I may save a few cents, but let us be honest and sincere. Let us dig down in our pockets and pay for this ourselves. When we have done that we will have shown the way.


Edmund Davie Fulton: Make a motion to that effect and we will second it.


Andrew Wesley Stuart: It would appear that when a few facts are stated it gets under the skin of some hon. members. I am just stating facts.


Edmund Davie Fulton: Let the hon. member make a motion and we will second it. Let him put up or shut up.


Andrew Wesley Stuart: When some of the protectionists in the house are speaking they argue that there should be protection in Canada against the United States with its enormous population. Here we have a reverse situation. This country is larger than the United States and a mail service must be provided. Is it not natural that it should cost more in a country of 15 million people than in one of 150 million and of a lesser size? All over this country they are asking for air mail; they do not want the horse and buggy system they had 50 years ago. Those are the people who should pay for it.
Let me give one example. In the little town where I live there is just one company of any size, but they mail out 5,000 letters per week. The operators of that company are personal friends of mine. This legislation will affect them financially but they have never come to me complaining about this legislation. Those are the people who should pay for this service because it is a service like this that helps to build up their business.
I am prepared to pay for it myself. I feel that if hon. members are sincere they should get together and say, "Let us do away with

this franking privilege; let us dig down in our own pockets and pay for our postage, as the other citizens in the country do". I am reminded of a debate that took place here some time ago and which of course I cannot mention. It would appear to me that there are members in this house who want to have the de luxe services that they describe but who are not willing to pay for them.
If we want these services they should be paid for. I believe that the cost of this service should come from the people who use it. The person who does not use the mail should not have to reach down into his pocket in order to provide revenue to maintain the Post Office Department. If it were just before an election I might expect something like this.
I do not think I can speak for all the people in my county as to how they feel in this regard, but I can say sincerely that I have not had one request or letter from a single person in my county asking me to oppose this measure. I notice the hon. member who spoke just before me said that when he got home they were running in at both doors and coming in through the windows.


An hon. Member:: And through the side doors.


Andrew Wesley Stuart: They were all asking him to oppose this legislation. But that does not apply where I live because I have not had one single bit of correspondence or one single request. I am quite prepared to pay my proportion of this increased cost. I am quite prepared to give up my franking privileges in order to show that I really believe what I am saying.


Donald Methuen Fleming: Mr. Chairman, I suppose it is a mark of the weakness of this government proposal that it fell to one of the most popular of the ministers to take the responsibility for sponsoring it in the house. I am sure that no hon. member, whether he sits to your left or to your right, Mr. Chairman, envies the very popular Postmaster General the task which his colleagues have assigned to him today. Some of the pre-election chickens are coming home to roost.


An hon. Member:: A lot of them came back.


An hon. Member:: This one is a turkey.


Donald Methuen Fleming: I intend to be very brief because the ground on this matter has been effectively and comprehensively covered today in some of the preceding speeches, and I am thinking particularly of my colleagues, the hon. member for Hamilton West and the hon. member for Notre Dame de Grace.

Let there be no doubt in anyone's mind, Mr. Chairman, that we fully support the advance in wage rates for the employees of the Post Office Department. As a matter of fact, we urged it long before it was made. It was a belated and not too adequate measure of justice to these employees.
But one can say all that and more on the subject and say the case that the government is putting before the house today is completely unproven. The government is trying to support this motion on the ground that a deficit is going to occur unless the rates are increased. Mr. Chairman, they have not proved their case and what business have they coming before this house and saying, "We anticipate a deficit", until that situation has arisen? They are altogether too eager. This is a habit born long ago and bred in the members who have grown up in this government, that they think they have a right to increase all rates whether it be for government services or for taxes. It is so easy for them to increase the rates that are imposed on the people. It is a bad habit; it is a vicious habit; and it is to be hoped that the house is not going to tolerate much more of it.


Hector Dupuis: It is a preventive measure.


Donald Methuen Fleming: Mr. Chairman, there is an interesting reflection of the kind of mentality that has obsessed this government for years. There are a great many ills that they anticipate by going ahead at every turn and without any pretext or justification increasing the rates upon the people of Canada. The hon. member for St. Mary, who has just interrupted, completely reflects the mentality of this government, a mentality that obsesses those who have sat on your right for altogether too long.
Now the government has staked its case upon its powers of anticipation, looking in the crystal ball and seeing there a deficit that might accumulate, and rushing of course to anticipate such a situation and to take strong measures to make sure there will be no possibility whatever of the people of Canada riding along without an increase in rates if the government can find a pretext or excuse for raising the rates.


Jean-François Pouliot: When we look across the house we do not see a crystal ball but a political football.


Donald Methuen Fleming: Let me assure my good friend from Temiscouata that every time I look at him I see the best looking crystal ball in the house.


Jean-François Pouliot: But you are not a mind reader.


Mr. Adamson:: The government is the lady in waiting.
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Donald Methuen Fleming: Mr. Chairman, the Postmaster General exhibited not a little ingenuity today. It was the same type of ingenuity that was exhibited by the Minister of Finance when he made the preliminary announcement of this increase in rates about a month ago. He said that the postal department must be made to pay for the services. There must be no deficit. The suggestion was that there is something very scientific about the way the postal rates are struck, that the government tries to make sure that the service must pay for itself. It is a scientific approach: that is the impression they seek to create.
Well, Mr. Chairman, just how scientific is it? One has only to look back on these figures which were put on the record this afternoon by the hon. member for Notre Dame de Grace to see how far the results of this method have proven that there is no science whatever in the approach to it. It has been a very rough and ready method that has been followed at all times in regard to the relationship between postal rates on the one hand and the cost of operating the postal department on the other. Otherwise how can one account for these huge surpluses that have accrued year after year?
What is more, Mr. Chairman, if the method were scientific it would apply to every class of postal material. If that were the case then every class of postal material would bear its own cost. But that is not the principle. You know perfectly well, Mr. Chairman, that there is one class of postal material that has been subsidized for decades.
Let us have no more nonsense about the scientific approach and trying to make the postal services, the cost on one hand and the revenues on the other, balance out. That picture just does not fit the facts, and it does not fit history if you look at the approach to this matter in times past. If you approached it in a scientific manner you would have to consider all the other real costs referred to today, rent and overhead, on the one hand, and on the other hand what revenue the department should receive on account of free postage to government departments. Well, I do not think we need to spend any more time on this nonsense of equating or balancing the cost of the postal service with the revenue.
But the timing of this measure, Mr. Chairman, should not escape comment. My heart was wrung, Mr. Chairman, when listening to the words that fell from the lips of the hon. member for Charlotte just now. My heart was wrung when he pictured how the taxpayer was going to be burdened with the

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cost of carrying the deficits of the Post Office Department. As if the man who is using the postal services now is apparently some bloated plutocrat, and therefore a bloated plutocrat who should not receive the benefit of the service at less than the cost. That would be altogether wrong. He pictured the bloated plutocrat who puts a stamp on an envelope and who, according to the hon. member for Charlotte, should not have any consideration, and whom the taxpayers of course should not be called upon to subsidize.
Well, Mr. Chairman, it is an extraordinary thing, but I always thought that the taxpayer in this country was on the whole the man who was able to pay. It did not have anything to do as I understood it before with the ability to put a four-cent stamp on an envelope. I thought it had to do with the ability to pay income tax; the ability to pay excise tax; and the ability to pay customs duty, the kind that the hon. member for Charlotte in this house several years ago indicated he was not in the habit of paying when he brought back into his constituency goods that he acquired in the United States.


Agar Rodney Adamson: Why does he not go across and post his letters in the United States?


Donald Methuen Fleming: We were so appropriately reminded this afternoon by the Postmaster General with his usual pleasantness, his disarming pleasantness which we all greatly admire, that after all the treasury of this country had forgone the revenue of $7J million last spring just before the election and that now apparently that loss of revenue must be made up.
Well, Mr. Chairman, that is why I venture to comment that the chickens are coming home to roost; those election chickens, because we warned the members of this house at the time and we told people outside the house that if there was any appearance of reduction on the part of this government in the imposition of taxes upon the Canadian people it would be a very chimerical form of reduction-here today and gone tomorrow. So, Mr. Chairman, we are beginning to see the unfolding of the government's plan: taking off the stamps on cheques and making great fellows of themselves before the election. They were a tax-reducing government last summer but come the fall, Mr. Chairman, and with the winter setting in they are a rateraising government. These points have been covered. I am sure I do not need to spend any more time on them.
In closing I wish to say just a word on the subject of service. I do this with not a little feeling because I recall that not many years ago the service given by the Canadian
[Mr. Fleminfi.l
Post Office Department was as good as was to be found anywhere in any government service. It was a matter of boasting and pride on the part of the Canadian people. But that time has gone. The Canadian people take no pride in the kind of service they have been receiving under the management of this government. The men who are doing the delivering are doing an excellent job; in rain and shine, cold weather and hot, they are going the rounds. There have been times when they have been called upon by this government to bear shockingly unfair burdens. Two years ago some of us had to fight for these carriers, at the time the one-delivery-a-day service was instituted, to complain about the shockingly heavy burdens which the carriers were obliged to bear under that system. These men have done and are doing their work well. The fault lies with the management of this department.
The reduction of service to one delivery a day was a mistake. I am sure every member of the committee who is prepared to recall the facts of this situation will not be slow to remember that many people receive their mail today long after the close of the banks, in the late business hours of the day. The service in recent years has deteriorated to a shocking degree. Let us hope, Mr. Chairman, that no time will be lost in improving this service substantially. If there is any Liberal member in this committee who is prepared to stand up in his place in this chamber and say that the postal delivery service in his riding is satisfactory, I think we would be interested to hear him.
Mr. Chairman, I should like to give you some recent examples which have come into my experience. This afternoon the Postmaster General invited hon. members who have complaints to lay them before him. I think he will agree that any time I have had complaints I have taken them to him immediately by correspondence. Sometimes he has been able to find the reason for the delay and sometimes he has not been able to do so. However, so far as he is concerned, I am satisfied that he has at all times done his best to track down the reason for these delays. But these particular pieces of mailing material to which I am about to refer are some that have come to me recently, indeed since the house adjourned in December, and they are the sort of thing that I would have sent to the minister had this debate not provided an opportunity for bringing them directly to his attention.
I have here, first of all, a cover consisting of a House of Commons envelope that bears the postal mark of the House of Commons

post office and the date of December 15, 1953.
I received that communication on December 29, fourteen days later. As you will see, Mr. Chairman, it was posted in ample time to have been delivered long before the great rush of Christmas matter. I will say that this one is addressed to Mr. D. M. Fleming, M.P., Toronto. In case that be thought to be an inadequate address, may I say that I think we might improve our rules around here for addressing material that is going to members who live in a large metropolitan area. The fact of the matter is that the address which this envelope bears is the address given in the official government directories and it is the address used in the parcelling room downstairs for any mail that goes to the member in question. Hence there cannot be anything very wrong about the address. That one took from December 15 to December 29, fourteen days, to be delivered.
The next one is in a House of Commons envelope with a four-cent stamp on it. It was sealed. It was postmarked from the city of Quebec on December 21. It was addressed to Mr. Donald Fleming, M.P., Toronto. It was delivered on January 11, 1954, twenty-one days after it was posted. It took three weeks for that communication, with a four-cent stamp on it, in a sealed envelope, to be carried from Quebec city to Toronto and to be delivered there.
The third one I have in my hand also comes through the parliamentary post office. The second one did not. This one is touching because it contained a Christmas card that was sent to me by one of the Liberal members from a Toronto riding. It was postmarked by the House of Commons post office on December 21.


Mr. Drew:: Was it franked?


Donald Methuen Fleming: It was franked. The postmark is dated December 21. It was delivered to me on January 6. It took sixteen days to come from Ottawa to Toronto and be delivered there.
As to the last one, Mr. Chairman, there cannot be any question about the address on it. This next piece of postal material to which I should like to refer is a card. It is one of the regulation cards sold by the department, on which a two-cent stamp is adequate provided the material on the card is printed; and this is printed. This card was postmarked Toronto, December 30, 1953. It has a two-cent stamp on it. It is the ordinary postal card sold by the post office. It is addressed to Mr. and Mrs. D. M. Fleming, 259 Glencairn avenue, City, 12. It has a Toronto postmark, December 30, 1953. That card was delivered January 5. It did not go outside of the city of Toronto. It took a
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whole week to get to 259 Glencairn avenue. As you will see, Mr. Chairman, this was long after the Christmas rush of mail had all passed. May I now turn to the other side of the card. It reads as follows:
The Eglinton Riding Women's Progressive Conservative Association will hold their regular meeting and New Year's party Tuesday, January 5, 1954, at 8 p.m.


Alcide Côté: I am really sorry.


Donald Methuen Fleming: Being an innocent sort of
politician, Mr. Chairman, I do not suppose there is anything more than coincidence about this matter; but I do say that it is a curious coincidence that, having been placed in the post office and having received the postal mark in the Toronto post office on December 30, it arrived at my house on the day of the meeting. But that is not the whole story. A number of people telephoned me the next day to tell me that their cards arrived on January 6, the day after the meeting.


Mr.   Cole@: May I ask my hon. friend to
give me those postal items so that I may inquire as to the reasons for the delays.


Mr. Rowe:: The meeting is now over.


Mr.   Cole@: Of course I would not be able
to revert and allow my hon. friend to attend the meeting, but I will do my best to find out the reasons for the delays.


Mr. Nicholson:: I want to say, Mr. Chairman, that during the years I have been in parliament I have not experienced the sort of thing outlined by the hon. member for Eglinton. There was an incident in my constituency at the time of an election. The postmaster delayed distributing a parcel of election literature until after the election. When this matter was reported to the post office authorities, they investigated, took action, and there was a new postmaster there, although the postmaster who had offended had been a prominent supporter of the Liberal party. I think on the whole the Canadian people have reason to be proud of the outstanding service performed by the Post Office Department for many years. I have had very happy associations with the postal personnel in my constituency and the post office officials in Ottawa. Nevertheless I think this is a very unfortunate piece of legislation to bring before parliament. I have two opinions to express for what they are worth and I present them in the hope that the Post Office Department will be relieved of the blame that unfortunately will be attached to it for this very unpopular increase in postage rates.
While I was in Ottawa from 1940 to 1949 I made some study of the very large number

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of post offices in Canada where there was very little revenue. In the 1952 report of the Postmaster General I notice that there are 160 post offices in my own province of Saskatchewan where total sales of postage stamps for the previous year were less than $100-$11.50, $13, $12.64, $16.06, $9.20, and so on. I think it would be difficult to argue that, where postage sales are less than $1 a month, there is very good reason in this day and age for continuing considerable public expenditures in maintaining offices in these communities. I realize that patronage enters into the picture, that supporters of the government are given post offices, and that it probably is not easy to change the practice. But before asking all the taxpayers of Canada to accept such a heavy burden as is involved in a 25 per cent increase on the four-cent rate and a 33 J per cent increase on the three-cent rate we should have a look at the very large number of post offices in Canada that might have been justified fifty years ago but certainly are not justified today when so many people have cars and when there are obviously so few people making use of these services.
The second point I want to mention is found in the report that the Postmaster General presented in 1952. There are two pies offered in this report. I am sorry that they do not appear in the 1953 report. One pie is receipts, the other disbursements. In the first case newspapers and periodicals pay for a five cent piece of pie. They give a five cent pie to the Post Office Department but when they want to eat their pie they want an 18J cent piece. I submit to hon. members that it might have been argued fifty years ago that newspapers should be subsidized by the Post Office Department, but in this day and age when daily newspapers have fallen into the hands of a few very wealthy corporations that control not only chains of newspapers but radio stations, I think there is no justification for asking the Post Office Department to take a five cent pie from newspapers and periodicals and dish out an 18J cent pie. On the basis of the year's revenue there is a loss of over $16 million in connection with this one item.
As the hon. member for Burnaby-Coquitlam mentioned, in view of the fact that so many of these papers and periodicals carry such a heavy volume of advertising I think we cannot justify subsidizing to this extent. I for one take strong objection to the very large amount of liquor advertising now appearing in so many Canadian periodicals. I object to having such periodicals come to my home at public expense inasmuch as the Post Office
rMr. Nicholson.]
Department is subsidizing them to the tune of $16 million per year. I do not have these figures from the minister, but on the basis of the picture of the pie appearing in his report, taking the amount of receipt for that year as $122 million-I am sure he will correct me if I am wrong-it is my conclusion that the loss in connection with these two items for the year reviewed in his report is $16 million.
In the same pie we notice ordinary letters, and this affects the people who are taking the rap in this latest increase. The figure is 46 cents and it only costs 29 cents to buy their piece of pie. That is, there was a profit of 17 cents on every dollar of revenue from ordinary letters. This gave a profit of $20,700,000 on this particular operation of the Post Office Department. Therefore the people who are going to take the rap if this legislation passes, and the handling of whose letters shows a profit of $20 million, will have an increase of a further 25 per cent on the four-cent rate and 33J per cent on the three-cent rate, which cannot be justified.
I have a good deal of sympathy for the Postmaster General. Very few members on his own side of the house have indicated that there has been much criticism in the country. It takes a long time for us to get a reaction here, but I am very sure that this move will be most unpopular throughout the country. The Postmaster General will have a letter from me in a day or so seeking information so that I may reply to the parish priest at Perigord, Saskatchewan, who writes that the postmistress there has an inadequate salary of $40 a month. She has five children and is giving excellent service. He wonders why we ask a widow, I presume, with five children, to work for $40 a month.


An hon. Member:: She should be getting that a week.


Alexander Malcolm Nicholson: I know that the Postmaster General will reply by saying that unfortunately the total revenue at Perigord is not as high as it should be for the postmistress to get a higher salary. But I suggest that the people at Perigord do a large volume of business with Eaton's in Winnipeg, Simpson's in Regina, and a great many of the mail order houses, and these country post offices have to exist if the city mail order houses are to show profits. I am sure the Postmaster General is going to find it very difficult to satisfy a large number of postmasters across the country who are giving outstanding service and who are receiving a very low annual remuneration.

Therefore on the basis of the fact that wealthy newspapers and periodicals in Canada using the mails are subsidized to a large extent, and in view of the fact that the three cent tax on cheques should be reimposed before there is any increase in postage rates, I cannot support this measure.


Tom Goode: Mr. Chairman, I am sorry that I was not in the house when the hon. member for Burnaby-Coquitlam was speaking. I am not too sure what he said but I am quite sure of his intent. He may have said something that I will repeat but it may be that the Postmaster General will attach more importance to it if it is said twice today. I speak about the municipality of Burnaby in British Columbia where we have the second largest aggregation of population in the province. We have some 60,000-odd people with four different post office addresses and yet no post office address of our own. When you send a letter to North Burnaby or South Burnaby you address it to North Burnaby, Vancouver, or South Burnaby, Vancouver. For part of West Burnaby letters go to the Vancouver office and those for East Burnaby go to New Westminster. If you ever saw a puzzle in your life that is one.
I am quite sure that the Postmaster General does not know of this situation, and I am quite sure that something will be done now that the hon. member for Burnaby-Coquitlam and I have spoken about it. What we want there before we start paying too much in extra postal charges is a post office of our own. I think 60,000 people are entitled to it. We have a larger gathering of population than in the city of Victoria, and we think we should have this identification of our own.
In regard to this matter of postage, and the increase in rates, it might be that the hon. member for Eglinton has some complaint to make. We could all get up and say that in our ridings we have had half a dozen, or perhaps 20 or 30 mistakes made during the Christmas rush. I have had people write to me and say that they have had half a dozen letters come to them two or three weeks after they were posted. But when one comes to think that in the city of Vancouver there were about 40 million pieces of Christmas mail to handle, he must conclude that the job was done in an excellent manner.
It seems to me too much is being said from the opposition side with regard to the increase in postage. To my mind a five-cent letter is good value, if it is delivered promptly. I am quite sure the Postmaster General's department is doing the best job of which they are capable. Indeed, they are doing a fine
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job. And if everyone on the opposition side would speak honestly and according to his conscience, I think they would agree with me, too.
Sure, there are complaints-and there will be complaints about every government department, so long as the government is in business. But in my opinion-and I have no wish to curry favour with the Postmaster General, because I have nothing much to ask of him-he and his department are doing an excellent job, and I hope that he will continue to do the job he is doing today.


Mr. Macdonnell:: Mr. Chairman, the ground has been so fully and so well covered that I have no intention of making a speech. I rise merely to give a friendly warning to the government. It may be surprising that I should do this, but I do it in the manner in which the late Humphrey Mitchell, whom many of us will remember, always issued his warnings: in a kindly way.
I just want to remind the government that a five-cent piece once lost them an election and to suggest to them that possibly they had better beware of the danger that a five-cent stamp may do the same thing.


George Hugh Castleden: Mr. Chairman, may I say a word with regard to this increase in the postal rate. In what I shall say I believe I am expressing the opinions of the majority of people in my constituency.
The vast majority of those people in their small homes do not use the air mail facilities to any great extent. Most of them have few letters to write each week but they realize that Canada is today paying one of the highest postage rates of any country in western civilization. They look with considerable regret on the fact that the government at a time like this, so soon after an election, is prepared to turn around and place an extra tax upon them. They remember that it is only a few months ago that the government came out, shortly before the election, as the great benefactor of the people. At that time they took the excise tax off cheques. They were posing as a tax-reducing government, one that the people should support.
Now, within 140 days after the election is over, the government is seeking to increase the postal rate, and the rank and file of people in my constituency recognize what the government is doing and why it is doing it. If this increase was required, why could it not have been made known eight or ten months ago? This boost in rates is obvious; the people understand it, and they do not like it.	.

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Then, they do not like it for the further reason that they know second-class mail is being subsidized while the little fellow who writes the first-class mail is having to pay the shot. The increased costs which this government is encountering all along the line did not develop overnight. For years the party to which 1 belong has raised its objections in the House of Commons to the removal of price controls, thus permitting the cost of doing business and the cost of living to continue skyrocketing.
We tried to warn the government that if it did that there would have to be increased costs along with it, and that many of those costs would become permanent. Now we see the cost of living going up, the cost of doing business going up and wages will have to go up. In the light of these facts the government has to come back to tax the people.
The same is true of the increased cost of production of those commodities which our people have to sell. Those production costs have gone so high because the government would not hold the line. When price controls were in force, and when costs could have been kept down, the government did not permit that condition to continue. At this time, with possible recession facing us, and with constant difficulties in selling our products, the government is continuing with these increases. This is just one further evidence of that process.
It is the same story all along the line. The attempt now is to make this increase a permanent one. The Canadian people are now asked to pay for what the government failed to do when it should have been watching costs and keeping them in line.


Mr. Ellis:: Mr. Chairman, reference has been made to the increase in wages for postal employees. I cannot think of any group of employees in this country to whom wage increases were so long overdue. I think it rather shameful that the government should seek to use this rather modest wage increase, and the undertaking to have the 40-hour week in certain localities, as an excuse throughout the country for this increase in postal rates.
Some reference has been made to the postal service. If there has been any inefficiency, it is not too difficult to understand when we consider the poor working conditions and the very low wages which have been paid to the postal workers over the past few years. I believe we will have increased efficiency when those workers receive better wages and when there are better working conditions.
[Mr. Castleden.l
One important principle is involved here, just as important as the increase itself. Two ministers of the government have stated that the people of Canada expect the post office to pay for itself. There are two ways of looking at the Post Office Department. Either it will be considered as a public service to provide a very valuable service for the people in this far-flung country or it is going to be considered simply as a commercial venture.
If the government takes the stand that the Post Office Department must pay for itself, then I must ask, in all sincerity, how it can reconcile, on the one hand, the fact that it subsidizes second-class mail, with the argument, on the other, that the post office must pay its own way. You cannot have it both ways. If you believe the post office should be operated strictly along business lines, then logically you must expect the publishers of newspapers and periodicals throughout the country to pay the cost of transmitting their materials through the mails.
I am not going to debate the question as to whether that is advisable or not. What I am saying is that if you accept the principle of subsidizing second-class mail, then you cannot in the next breath offer the argument that the post office ought to pay its own way. You cannot have it both ways. Either the post office is going to pay its way, in which case second-class mail must bear its fair share of the cost of transportation throughout the country, or it will not pay its way.
I suggest that before we have a vote we should have an explanation from the government as to what its attitude is. We must have a clear understanding. If the post office is to be regarded as a commercial venture, one which is to be self-supporting, then I must ask the minister in all sincerity how he justifies a subsidy on second-class mail.


Henry Philip Mang: I should like to add only a few words in this discussion. Throughout the country we have had in the past decade a great deal of commercial prosperity. As this prosperity has increased, so has the use of the mails increased. In these local post offices spread throughout the rural parts of Canada these public servants, the postmasters in the small areas, towns, villages, hamlets and so on, have found that their work has increased. I am hoping that they will get some small share of this increase in postal rates to compensate them for the extra work they have to do. The days upon which the bags and bags of Eaton's and Simpsons-Sears' catalogues arrive the work of these men assumes such proportions that even in a small village of 185 people they almost

have to hire a drayman to deliver them. That means a tremendous amount of work. Father, mother, brother and sister are recruited on that particular day to help get these catalogues into their particular cubby holes and heaven help the local postmaster if that catalogue is not there at the proper time. The problem is of such proportions that postmasters phone each other ahead and say: "Eaton's catalogue is here; get ready!" These men have been rendering a great deal more service than they have in the past. The only way we can recompense them is by giving them extra pay, and I am hoping that when this increase goes through they will get consideration in the distribution of the extra money.
With respect to the other point, I find myself in a peculiar position. I am supposed to be on a side of the house that is presumed to represent big business and big corporations, and so on. The burden of this increase is going to fall on big business, and on those people who send out circulars, advertising, catalogues and so forth. Very few farmers in western Canada write many letters. Very few rural people write letters. They do not like to write them, even if they have the time. Even if the income tax department sends them a registered letter they sometimes neglect to answer it. They just do not do much writing. But the people who will be affected by these costs are the people best able to bear it, the corporations and big business generally. And they are the very ones who are trying now to give that section of business life in Canada protection.
I just thought I would put in a plug for the small country postmasters who can only get their salaries increased to even a small degree by the addition of further increases of this kind. Nobody is going to miss it very much. I am in agreement with the principle that this government has been following in that it is trying to show the people that what they ask for in service they must pay for, and I think that is a very good principle.


Mr. Nickle:: I should like to get in the last extra word here. This discussion today, Mr. Chairman, has been very much like the unfolding of a mystery story along the lines of those written by Erie Stanley Gardner and Mickey Spillane. I have been very interested in listening to the debates today and to get into that mystery of the Canadian post office. As a matter of fact, to use the analogy of a mystery story, what we have unfolded here today has been the story of the hidden subsidy of the post office, and who subsidizes whom, how and why.
Post Office Act
In that regard, Mr. Chairman, it came as a surprise to me, and I am sure it will to the people of Canada, that in the first of our many subsidies connected with the Canadian post office we have those who for many years past have been attaching a three-cent excise stamp or postage stamp to every cheque that they issued. As a result that subsidy has been paid by those who write cheques in order to help subsidize the post office operation, to the tune, I understand from the minister, of some $7,500,000 a year.
The next subsidy that became apparent today in the discussion seems to be the subsidy which has been paid and continues to be paid by the Post Office Department to help support that other arm of government, the Trans-Canada Air Lines. One hon. member brought out some figures which indicated that from the post office revenues the Trans-Canada Air Lines are receiving $5 million or more a year. The T.C.A. is being paid that amount by the post office to carry mail at a rate some four times the rate charged by the same Trans-Canada Air Lines for the transporting of normal air cargo.
Then there appears to be a third type of subsidy, namely, the subsidy that is being paid by the post office to help along other government departments, the franking privilege. That amounts to somewhere around $4 million or $5 million a year, which should properly be charged to all departments of government rather than against the users of the postal service of this country.
We then come to a fourth subsidy, namely, the subsidy paid by the post office to help provide Canadians with their newspapers and periodicals, the second-class mail. It was mentioned today that in the handling of second-class mail the post office shows a deficit of some $28 million a year.
Then we have another subsidy, namely the subsidy paid by the post office to subsidize third-class mail, circulars and the like. Perhaps we should include in the third-class mail such things as Christmas cards. I understand that they come in that category, provided they are unsealed. Since that type of business comes at a particular time of the year, I think it might rank as one of the small things that government might very well do for the people who make government possible. Then we come to another subsidy again. It has been disclosed here as the subsidy which the taxpayers through the Department of Public Works are passing on to the Post Office Department by the provision of postal buildings to the Post Office Department across the country.

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We now come, sir, to the increase in postal rates, and here we have another new type of subsidy, or rather an extension of former types of subsidy. Those who load the mail with love letters and the like are now going to be asked to increase the subsidies they will pay to help keep this post office on an *even keel. Well, Mr. Chairman, it seems to me that we have a conglomeration of subsidies: the Post Office Department subsidizes Trans-Canada Air Lines, and other departments of government with the franking privilege, and the Department of Public Works subsidizes the Post Office Department in the provision of buildings; the newspapers and periodicals are being subsidized through rates which certainly do not meet the cost of providing this service; and now we have this new proposal for increased postal rates which are presumably going to yield something like $14 million in extra revenue in order to permit the Post Office Department to break even. Now that we have eliminated one subsidizer, the writer of cheques, who no longer has to put that three-cent stamp on a cheque, we find that the Post Office Department has lost $7,500,000 in the past year. But, Mr. Chairman, in the attempt to break down the new revenue of $14 million which it is expected will come from this proposed increase in postal rates, I have been wondering who is actually going to pay this cost, so I should like to take one specific case of a business of which I have some personal knowledge. This business is located in the west and uses the first-class mail a great deal. Its cost of postage is going to increase slightly over $3,000 a year, but that company is not going to lose $3,000 a year. As it turns out, it can take a tax write-off on the extra postage it is going to be charged of $1,500 through reduced corporation taxes. Then the shareholders of the company with their present taxable position will find that on their personal taxes on the dividends accruing they will save another $600. In other words, in the case of this particular company, while there will be an increase in the payment to the Post Office Department of $3,000, approximately $2,100 will come out of the hands of the federal government through reduced tax income.
The result is that the company will actually pay only about $900 or 30 per cent of the total increased postal charges while the federal government will be providing the other 70 per cent. In the case of individuals who write the occasional letter they will find their postal costs increased 25 or 40 per cent, but that will not amount to very much money.
Is the Post Office Department in a position to give us an estimate as to what proportion
[Mr. Niekle.l
of this $14 million added revenue is going to be offset by reduced tax income to the federal government, in effect being paid by other government departments? In other words, to what extent is this $14 million which is to go to the Post Office Department going to be another subsidy paid by other departments of government?
It seems to me that it would be far better if instead of increasing the postal rates at this time the government reviewed carefully all these hidden subsidies that are now reflected in the operations of the Post Office Department. If the handling of second-class mail, newspapers and periodicals at present rates is justified as a form of subsidy, then that subsidy should be included openly in the accounts of this government instead of being paid for by the users of first-class postal service.
Let us look at all these other subsidies. When we have added them all together, the subsidies paid by the post office and the subsidies paid to the post office, let us try to determine whether the Post Office Department cannot be self-sufficient and operate at a profit without the increased postal rates proposed in this measure.


Mr. Hahn:: Mr. Chairman, I do not wish to take up too much of the time of the committee, but lest it be thought that by not speaking I was indicating I was for increased rates I think I should at this time let the Postmaster General know what my attitude is as well as the attitude of a number of people in the Westminster area toward this proposed increase.
If this proposed increase is put into effect, and I imagine it will be, there will be additional revenue to the Post Office Department.
I submit that that revenue should be passed on to the civil servants. The new rates of pay provided earlier in the session were a great help to the civil service and to the post office officials especially, but if the public is going to be milked for an additional cent or more in postage then any additional revenue derived from such increase should be passed on to those particular civil servants.
Possibly one reason why we do not have too good a postal service lies in the fact that in my area at least the Post Office Department has lost a number of its best civil servants who were able to obtain more money from private industry. Casual labour in Vancouver receives $1.35 an hour; contract labour receives around $1.59 an hour; while the letter carriers were paid $1.28 an hour. The new increase, while commendable, does not bring these men up to that particular rate.

It is the business of politicians to shape the policies and statutes of the country, but the carrying out of legislation is the job of the civil service. I suggest that the wage scale of the civil service should be as high as that of private industry so that we can keep our services as efficient as possible. Perhaps this increase would be warranted if that were kept in mind.


Stanley Howard Knowles: When the Minister of
Finance made his announcement on December 8 I asked him if he could make available in some appropriate manner a list of the localities in which the five-day week would be put fully into effect. If I may paraphrase the minister's answer, it was to the effect that he hoped very shortly to make public a statement along the lines of the one for which I had asked. Can the Postmaster General state whether that list has yet been made public or whether it is to be made public soon?


Alcide Côté: I am not in position to answer my hon. friend tonight, but I shall investigate the matter. My officials are working with the civil service commission and the Minister of Finance. I cannot cover all the ground which has been covered by many hon. members today but I shall peruse what has been said and I will try to give all the information I have been asked to give.


William Alfred Robinson: Shall the resolution carry?


Ellen Louks Fairclough: Do I understand that the minister is not going to make a statement while we are at the resolution stage?
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Alcide Côté: I do not want to duplicate anything I might say. I made a statement; I could make a long speech now and then on the second reading make another long speech. I do not want to impose two speeches on the same subject on the members of the house.


Stanley Howard Knowles: It would be better to withdraw the resolution.


Alcide Côté: Hon. members have asked so many questions today that I am not in a position to answer all of them now. I assure the hon. member for Hamilton West that I shall give her all the information she has asked for today.


William Alfred Robinson: Shall the resolution carry?


Ellen Louks Fairclough: Mr. Chairman-


William Alfred Robinson: Shall the resolution carry?


Some hon. Members:: No.
Progress reported.



BUSINESS OF THE HOUSE

Mr. Harris:: Tomorrow we will continue this debate; then the housing bill; then the bill to amend the acts respecting the Northwest Territories; and then begin our study in committee of the whole of the Criminal Code.


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

[Stage Direction]
	
	
	
	
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[Stage Direction]


Friday, January 15, 1954